[10-Q] Ohio Valley Banc Corp Quarterly Earnings Report

Rhea-AI Filing Summary

Ohio Valley Banc Corp reported stronger profitability for the quarter ended June 30, 2025, recording net income of $4.21 million versus $2.97 million a year earlier and earnings per share of $0.89 versus $0.63. The improvement was driven largely by higher net interest income of $14.54 million compared with $11.96 million, supported by loan growth to $1.101 billion and higher taxable securities income.

Credit provisions rose meaningfully, with a provision for credit losses of $1.15 million this quarter and an allowance for credit losses of $10.856 million. Liquidity metrics shifted as cash and cash equivalents declined to $54.63 million from $83.11 million at year-end, while total deposits remained essentially stable at $1.277 billion. Shareholders' equity strengthened to $160.76 million, aided by a $2.46 million unrealized gain on available-for-sale securities that improved other comprehensive income.

Positive

• Net income rose to $4.21 million in Q2 2025 from $2.97 million a year earlier, improving profitability
• EPS increased to $0.89 from $0.63, reflecting stronger earnings per share
• Net interest income grew to $14.54 million versus $11.96 million, supporting higher core revenue
• Loan balances increased to $1.101 billion from $1.062 billion, contributing to interest income growth
• Shareholders' equity strengthened to $160.76 million, aided by unrealized gains on AFS securities

Negative

• Provision for credit losses rose sharply to $1.148 million this quarter from $0.181 million a year ago
• Cash and cash equivalents decreased to $54.63 million from $83.11 million at December 31, 2024, reducing liquidity buffers
• Allowance for credit losses increased to $10.856 million, reflecting heightened credit reserve needs
• Concentration risk exists with lending focused primarily in southeastern Ohio and western West Virginia, per disclosures

Insights

Financial Analyst

TL;DR: Solid quarter—net interest income and loan growth drove a sizable year-over-year earnings gain despite higher credit provisioning.

Net income increased materially to $4.21 million driven by a 21%+ rise in net interest income to $14.54 million. Loan balances expanded to $1.101 billion, supporting interest revenue, and shareholders' equity rose to $160.76 million. The bank reported improved market-sensitive gains in other comprehensive income from available-for-sale securities, which helped capital. While provision expense increased, the operating result remained robust for the quarter, reflecting successful margin capture in a higher-rate environment.

Risk Analyst

TL;DR: Earnings are stronger but rising provisions and lower cash raise credit and liquidity monitoring needs.

The provision for credit losses jumped to $1.148 million this quarter from $0.181 million a year ago and the ACL increased to $10.856 million, signaling higher credit caution. Cash and cash equivalents declined to $54.63 million from $83.11 million, reducing immediate liquidity buffers, though deposit balances remained stable. Regional concentration in southeastern Ohio and western West Virginia and increased off-balance-sheet commitments also warrant ongoing oversight of funding and credit concentrations.

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United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 000-20914

OHIO VALLEY BANC CORP.

(Exact name of registrant as specified in its charter)

Ohio	31-1359191
(State of Incorporation)	(I.R.S. Employer Identification No.)

420 Third Avenue, Gallipolis, Ohio	45631
(Address of principal executive offices)	(ZIP Code)

(740) 446-2631

(Registrant’s telephone number, including area code)

_____________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, without par value	OVBC	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,  a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐			Accelerated filer  ☐
Non-accelerated filer  ☒			Smaller reporting company  ☒
			Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of common shares, without par value, of the registrant outstanding as of  August 14, 2025 was 4,711,001.

OHIO VALLEY BANC CORP.

Index

		Page Number
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Shareholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

2

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

OHIO VALLEY BANC CORP.

CONSOLIDATED BALANCE SHEETS

 (dollars in thousands, except share and per share data)

		June 30, 2025 (Unaudited)				December 31, 2024
ASSETS
Cash and noninterest-bearing deposits with banks		$	16,805			$	15,704
Interest-bearing deposits with banks			37,822				67,403
Total cash and cash equivalents			54,627				83,107
Securities available for sale			265,342				268,120
Securities held to maturity, net of allowance for credit losses of $1 in 2025 and 2024			6,493				7,049
Restricted investments in bank stocks			5,007				5,007
Total loans			1,101,267				1,061,825
Less: Allowance for credit losses			(10,856	)			(10,088	)
Net loans			1,090,411				1,051,737
Premises and equipment, net			20,842				21,229
Premises and equipment held for sale, net			497				507
Accrued interest receivable			4,941				4,805
Goodwill			7,319				7,319
Bank owned life insurance and annuity assets			42,416				42,048
Operating lease right-of-use asset, net			935				1,024
Deferred tax assets			6,065				7,218
Other assets			5,463				4,242
Total assets		$	1,510,358			$	1,503,412
LIABILITIES
Noninterest-bearing deposits		$	331,373			$	322,383
Interest-bearing deposits			945,389				952,795
Total deposits			1,276,762				1,275,178
Other borrowed funds			37,177				39,740
Subordinated debentures			8,500				8,500
Operating lease liability			935				1,024
Allowance for credit losses on off-balance sheet commitments			637				582
Other liabilities			25,587				28,060
Total liabilities			1,349,598				1,353,084
CONTINGENT LIABILITIES			—				—
SHAREHOLDERS’ EQUITY
Common stock ($1.00 stated value per share, 10,000,000 shares authorized;  5,490,995 shares issued)			5,491				5,491
Additional paid-in capital			52,321				52,321
Retained earnings			128,188				121,693
Accumulated other comprehensive income (loss)			(6,547	)			(10,484	)
Treasury stock, at cost (779,994 shares)			(18,693	)			(18,693	)
Total shareholders’ equity			160,760				150,328
Total liabilities and shareholders’ equity		$	1,510,358			$	1,503,412

See accompanying notes to consolidated financial statements

3

OHIO VALLEY BANC CORP.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(dollars in thousands, except per share data)

		Three months ended June 30,								Six months ended June 30,
		2025				2024				2025				2024
Interest and dividend income:
Loans, including fees		$	17,984			$	16,130			$	34,679			$	31,380
Securities
Taxable			2,295				947				4,450				1,832
Tax exempt			28				34				56				68
Dividends			93				95				189				193
Interest-bearing deposits with banks			639				1,446				1,465				2,863
			21,039				18,652				40,839				36,336
Interest expense:
Deposits			5,988				6,102				12,121				12,001
Other borrowed funds			382				431				775				869
Subordinated debentures			134				156				268				313
			6,504				6,689				13,164				13,183
Net interest income			14,535				11,963				27,675				23,153
Provision for credit losses			1,148				181				1,564				932
Net interest income after provision for credit losses			13,387				11,782				26,111				22,221
Noninterest income:
Service charges on deposit accounts			723				731				1,443				1,456
Trust fees			100				101				203				205
Income from bank owned life insurance and annuity assets			243				226				483				451
Mortgage banking income			40				40				77				79
Electronic refund check / deposit fees			135				135				675				675
Debit / credit card interchange income			1,279				1,223				2,428				2,368
Tax preparation fees			38				26				634				633
Other			290				219				551				530
			2,848				2,701				6,494				6,397
Noninterest expense:
Salaries and employee benefits			6,194				6,186				12,206				12,353
Occupancy			493				537				1,014				1,006
Furniture and equipment			338				326				688				660
Professional fees			500				507				1,000				993
Marketing expense			279				221				558				446
FDIC insurance			164				161				347				309
Data processing			969				788				1,894				1,595
Software			587				541				1,128				1,162
Other			1,525				1,596				3,032				3,080
			11,049				10,863				21,867				21,604
Income before income taxes			5,186				3,620				10,738				7,014
Provision for income taxes			976				648				2,122				1,249
NET INCOME		$	4,210			$	2,972			$	8,616			$	5,765
Earnings per share		$	0.89			$	0.63			$	1.83			$	1.21

See accompanying notes to consolidated financial statements

4

OHIO VALLEY BANC CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(dollars in thousands)

		Three months ended June 30,								Six months ended June 30,
		2025				2024				2025				2024
Net Income		$	4,210			$	2,972			$	8,616			$	5,765
Other comprehensive income (loss):
Change in unrealized gain (loss) on available for sale securities			2,462				(15	)			5,051				(615	)
Related tax (expense) benefit			(543	)			4				(1,114	)			136
Total other comprehensive income (loss), net of tax			1,919				(11	)			3,937				(479	)
Total comprehensive income (loss)		$	6,129			$	2,961			$	12,553			$	5,286

See accompanying notes to consolidated financial statements

5

OHIO VALLEY BANC CORP.

CONSOLIDATED STATEMENTS OF CHANGES

IN SHAREHOLDERS’ EQUITY (UNAUDITED)

(dollars in thousands, except share and per share data)

Quarter-to-date		Common Stock				Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Total Shareholders’ Equity
Balance at April 1, 2025		$	5,491			$	52,321			$	125,062			$	(8,466	)		$	(18,693	)		$	155,715
Net income			—				—				4,210				—				—				4,210
Other comprehensive income, net			—				—				—				1,919				—				1,919
Cash dividends, $0.23 per share			—				—				(1,084	)			—				—				(1,084	)
Balance at June 30, 2025		$	5,491			$	52,321			$	128,188			$	(6,547	)		$	(18,693	)		$	160,760
Balance at April 1, 2024		$	5,491			$	52,321			$	116,614			$	(11,896	)		$	(16,748	)		$	145,782
Net income			—				—				2,972				—				—				2,972
Other comprehensive loss, net			—				—				—				(11	)			—				(11	)
Cash dividends, $0.22 per share			—				—				(1,055	)			—				—				(1,055	)
Shares acquired for treasury, 82,673 shares			—				—				—				—				(1,931	)			(1,931	)
Balance at June 30, 2024		$	5,491			$	52,321			$	118,531			$	(11,907	)		$	(18,679	)		$	145,757

Year-to-date		Common Stock				Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Total Shareholders’ Equity
Balance at January 1, 2025		$	5,491			$	52,321			$	121,693			$	(10,484	)		$	(18,693	)		$	150,328
Net income			—				—				8,616				—				—				8,616
Other comprehensive income, net			—				—				—				3,937				—				3,937
Cash dividends, $0.45 per share			—				—				(2,121	)			—				—				(2,121	)
Balance at June 30, 2025		$	5,491			$	52,321			$	128,188			$	(6,547	)		$	(18,693	)		$	160,760
Balance at January 1, 2024		$	5,470			$	51,842			$	114,871			$	(11,428	)		$	(16,748	)		$	144,007
Net income			—				—				5,765				—				—				5,765
Other comprehensive loss, net			—				—				—				(479	)			—				(479	)
Cash dividends, $0.44 per share			—				—				(2,105	)			—				—				(2,105	)
Common stock issued to ESOP, 20,542 shares			21				479				—				—				—				500
Shares acquired for treasury, 82,673 shares			—				—				—				—				(1,931	)			(1,931	)
Balance at June 30, 2024		$	5,491			$	52,321			$	118,531			$	(11,907	)		$	(18,679	)		$	145,757

See accompanying notes to consolidated financial statements

6

OHIO VALLEY BANC CORP.

CONDENSED CONSOLIDATED STATEMENTS OF

CASH FLOWS (UNAUDITED)

(dollars in thousands)

		Six months ended June 30,
		2025				2024
Net cash provided by operating activities		$	4,974			$	5,108
Investing activities:
Proceeds from maturities and paydowns of securities available for sale			76,041				18,531
Purchases of securities available for sale			(67,306	)			(19,357	)
Proceeds from calls and maturities of securities held to maturity			548				47
Purchases of restricted investments in bank stocks			—				(79	)
Redemptions of restricted investments in bank stocks			—				100
Net change in loans			(39,285	)			(68,631	)
Purchases of premises and equipment			(467	)			(1,017	)
Withdrawals from bank owned life insurance and annuity asset			115				131
Net cash (used in) investing activities			(30,354	)			(70,275	)
Financing activities:
Change in deposits			1,584				51,292
Cash dividends			(2,121	)			(2,105	)
Purchases of treasury stock			—				(1,931	)
Repayment of Federal Home Loan Bank borrowings			(2,625	)			(2,604	)
Change in other short-term borrowings			62				68
Net cash provided by (used in) financing activities			(3,100	)			44,720
Change in cash and cash equivalents			(28,480	)			(20,447	)
Cash and cash equivalents at beginning of period			83,107				128,126
Cash and cash equivalents at end of period		$	54,627			$	107,679
Supplemental disclosure:
Cash paid for interest		$	12,712			$	12,202
Cash paid for income taxes			1,424				1,850

See accompanying notes to consolidated financial statements

7

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION:  The accompanying consolidated financial statements include the accounts of Ohio Valley Banc Corp. (“Ohio Valley”) and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company, and Ohio Valley Financial Services Agency, LLC, an insurance agency. The Bank has one wholly-owned subsidiary, Ohio Valley REO, LLC (“Ohio Valley REO”), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley and its subsidiaries are collectively referred to as the “Company.”  All material intercompany accounts and transactions have been eliminated in consolidation.

These interim financial statements are prepared by the Company without audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at June 30, 2025, and its results of operations and cash flows for the periods presented.  The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2025.  The accompanying consolidated financial statements do not purport to contain all the necessary financial disclosures required by U.S. generally accepted accounting principles (“US GAAP”) that might otherwise be necessary in the circumstances.  The Annual Report of the Company for the year ended December 31, 2024, filed with the SEC on March 14, 2025 (the “2024 Annual Report”), contains consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements.

The consolidated financial statements for 2024 have been reclassified to conform to the presentation for 2025.  These reclassifications had no effect on net income or shareholders’ equity.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:  The accounting and reporting policies followed by the Company conform to US GAAP established by the Financial Accounting Standards Board (“FASB”). The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

INDUSTRY SEGMENT INFORMATION:  We conduct our operations through a single business segment, banking, which derives interest and noninterest income through our banking products and services and investment securities. All of our income relates to our operations in the United States. 

Pursuant to Financial Accounting Standards Codification 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision makers in determining how to allocate resources and assessing performance.

Our chief operating decision maker, which is our Chief Executive Officer, evaluates interest and noninterest income streams and credit losses from our various products and services, while expense activities, including interest expense and noninterest expense, are managed, and financial performance is evaluated, on a Company-wide basis. As a result, detailed profitability information for each interest and noninterest income stream is not used by our chief operating decision maker to allocate resources or in assessing performance. Rather, our chief operating decision maker uses consolidated net income to assess performance by comparing it to and monitoring against budgeted and prior year results. This information is used to manage resources to drive business and net income growth, including investment in key strategic priorities, as well as determining our ability to return capital to shareholders. Segment assets represent total assets on our Consolidated Balance Sheets and segment net income represents net income on our Consolidated Statements of Income.

NEW ACCOUNTING PRONOUNCEMENTS PENDING ADOPTION: In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement to be presented in a tabular format in the footnotes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The amendments in ASU 20204-03 should be applied on a prospective basis, although retrospective application is permitted. The Company is evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures.

8

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

DEBT SECURITIES:  The Company classifies securities into held to maturity (“HTM”) and available for sale (“AFS”) categories. HTM securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as AFS include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. AFS securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

ALLOWANCE FOR CREDIT LOSSES (“ACL”) - AFS SECURITIES: For AFS debt securities in an unrealized position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities AFS that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair values has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.

Changes in the ACL are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on AFS debt securities totaled $1,212 at June 30, 2025 and $1,294 at December 31, 2024, and is excluded from the estimate of credit losses.

Management classifies the AFS portfolio into the following major security types: U.S. Government securities, U.S. Government sponsored entity securities, and Agency mortgage-backed residential securities. At June 30, 2025 and at December 31, 2024, there was no ACL related to AFS debt securities.

ACL - HTM SECURITIES: Management measures expected credit losses on HTM debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of HTM securities to present the net amount expected to be collected. HTM securities are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in the Company’s consolidated statements of income in the provision for credit losses. Accrued interest receivable on HTM securities is excluded from the estimate of credit losses. Management classifies the HTM portfolio into one major security type: Obligations of states and political subdivisions. With regard to obligations of states and political subdivisions, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. At June 30, 2025, the ACL related to HTM debt securities was $1, unchanged from December 31, 2024. Furthermore, there was no corresponding provision expense during the three and six months ended June 30, 2025 and 2024.

Accrued interest receivable on HTM debt securities totaled $25 at June 30, 2025 and $24 at December 31, 2024, and is excluded from the estimate of credit losses.

LOANS: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an ACL. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments.  The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to nonaccrual status when full loan repayment is in doubt, typically when the loan payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  

9

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.  Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Bank also originates long-term, fixed-rate mortgage loans, with the full intention of being sold to the secondary market.  These loans are considered held for sale during the period of time after the principal has been advanced to the borrower by the Bank, but before the Bank has been reimbursed by the Federal Home Loan Mortgage Corporation, typically within a few business days.  Loans sold to the secondary market are carried at the lower of aggregate cost or fair value. As of June 30, 2025 and December 31, 2024, there were no loans held for sale by the Bank.

ACL – LOANS: The ACL for loans is a contra asset valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the ACL using the following methods:

Portfolio Segment		Measurement Method		Loss Driver
Residential real estate		Cumulative Undiscounted Expected Loss		National Unemployment, National GDP
Commercial real estate:
Owner-occupied		Cumulative Undiscounted Expected Loss		National Unemployment, National GDP
Nonowner-occupied		Cumulative Undiscounted Expected Loss		National Unemployment, National GDP
Construction		Cumulative Undiscounted Expected Loss		National Unemployment, National GDP
Commercial and industrial		Cumulative Undiscounted Expected Loss		National Unemployment, National GDP
Consumer:
Automobile		Cumulative Undiscounted Expected Loss		National Unemployment
Home equity		Cumulative Undiscounted Expected Loss		National Unemployment
Other		Cumulative Undiscounted Expected Loss, Remaining Life Method		National Unemployment

Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. In defining historical loss rates and the prepayment rates and curtailment rates used to determine the expected life of loans, the use of regional and national peer data was used. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on the national unemployment rate and the national gross domestic product forecast for the first year. For periods beyond our reasonable and supportable forecast, we revert to historical loss rates utilizing a straight-line method over a two-year reversion period. The qualitative adjustments for current conditions are based upon changes in lending policies and practices, experience and ability of lending staff, quality of the Company’s loan review system, value of underlying collateral, the volume and severity of past due loans, the value of underlying collateral for collateral dependent loans, the existence of and changes in concentrations and other external factors. Each factor is assigned a value to reflect improving, stable, or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a modification will be executed with an individual borrower, or the extension of renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

10

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on nonaccrual status, any outstanding accrued interest is reversed against interest income.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. We evaluate all loans that meet the following criteria: 1) when it is determined that foreclosure is probable; 2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the operation or sale of the collateral; 3) when it is determined by management that a loan does not share similar risk characteristics with other loans. Specific reserves are established based on the following three acceptable methods for measuring the ACL: 1) the present value of expected future cash flows discounted at the loan’s original effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral when the loan is collateral dependent. Our individual loan evaluations consist primarily of the fair value of collateral method because most of our loans are collateral dependent. Collateral values are discounted to consider disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than the loan balance

Accrued interest receivable on loans totaled $3,684 at June 30, 2025 and $3,429 at December 31, 2024, and is excluded from the estimate of credit losses.

The Company’s loan portfolio segments have been identified as follows: Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial: Portfolio segment consists of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write down the value significantly to sell.

Commercial real estate: Portfolio segment consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property. Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service. A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by the level of interest rates associated with the debt and to local economic conditions, which dictate occupancy rates and the amount of rent charged.  The increase in debt service due to higher interest rates may not be able to be passed on to tenants. As part of the origination process, loan interest rates and occupancy rates are stressed to determine the impact on the borrower’s ability to maintain adequate debt service under different economic conditions. Furthermore, the Company monitors the concentration in any one industry and has established limits relative to capital. In addition, credit quality trends are monitored by industry to determine if a change in the risk exposure to a certain industry may warrant a change in our underwriting standards. Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion. Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value that may be absorbed by the Company.

Residential real estate: Portfolio segment consists of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer:  Portfolio segment consists of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of six years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its ACL as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

11

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

ACL – OFF-BALANCE SHEET CREDIT EXPOSURES: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

EARNINGS PER SHARE:  Earnings per share is based on net income divided by the weighted average number of common shares outstanding during the quarter.  The weighted average common shares outstanding were 4,711,001 and 4,740,073 for the three months ended June 30, 2025 and 2024, respectively. The weighted average common shares outstanding were 4,711,001 and 4,762,923 for the six months ended June 30, 2025 and 2024, respectively. Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the reporting entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and liabilities on a recurring or nonrecurring basis:

Securities:  The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Individually Evaluated Collateral Dependent Loans:  The fair value of individually evaluated collateral dependent loans with specific allocations of the ACL is generally based on the fair value of collateral, less costs to sell, based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement. Such adjustments would be classified as a Level 2 classification. Individually evaluated collateral dependent loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

12

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Other Real Estate Owned ("OREO"):  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement.  Such adjustments would be classified as a Level 2 classification.

Appraisals for collateral securing both  individually evaluated collateral dependent loans and OREO owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.

On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs, which typically amount to approximately 10%.

Interest Rate Swap Agreements:  The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).  The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

		Fair Value Measurements at June 30, 2025 Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government securities		$	104,804			$	—			$	—
U.S. Government sponsored entity securities			—				6,041				—
Agency mortgage-backed securities, residential			—				154,497				—
Interest rate swap derivatives			—				822				—
Liabilities:
Interest rate swap derivatives			—				(822	)			—

		Fair Value Measurements at December 31, 2024 Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government securities		$	168,030			$	—			$	—
U.S. Government sponsored entity securities			—				5,888				—
Agency mortgage-backed securities, residential			—				94,202				—
Interest rate swap derivatives			—				657				—
Liabilities:
Interest rate swap derivatives			—				(657	)			—

There were no transfers into or out of Level 3 during the periods ended June 30, 2025 or 2024.

13

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Assets and Liabilities Measured on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2024. Assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2025 are summarized below:

	Fair Value Measurements at June 30, 2025 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Individually evaluated collateral dependent loans:
Residential real estate		$	—			$	—			$	382

At June 30, 2025, the recorded investment of individually evaluated collateral dependent loans measured for impairment using the fair value of collateral totaled $424, with a corresponding valuation allowance of $42, resulting in an increase of $42 in provision expense during the three and six months ended June 30, 2025, with no corresponding charge-offs recognized. This is compared to no impact to provision expense during the three and six months ended June 30, 2024.

There was no OREO measured at fair value less costs to sell at June 30, 2025 and December 31, 2024.

There were no financial instruments measured at fair value on a non-recurring basis at December 31, 2024. The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2025:

June 30, 2025		Fair Value				Valuation Technique(s)			Unobservable Input(s)		Range				Weighted Average
Individually evaluated collateral dependent loans:							1					1
Residential real estate loans		$	382								1.6% to 10.7%					4.6	%

14

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

The carrying amounts and estimated fair values of financial instruments at June 30, 2025 and December 31, 2024 are as follows:

		Carrying				Fair Value Measurements at June 30, 2025 Using
		Value				Level 1				Level 2				Level 3				Total
Financial Assets:
Cash and cash equivalents		$	54,627			$	54,627			$	—			$	—			$	54,627
Securities available for sale			265,342				104,804				160,538				—				265,342
Securities held to maturity			6,493				—				3,724				2,221				5,945
Loans, net			1,090,411				—				—				1,075,632				1,075,632
Interest rate swap derivatives			822				—				822				—				822
Accrued interest receivable			4,941				—				1,238				3,703				4,941
Financial liabilities:
Deposits			1,276,762				891,556				386,936				—				1,278,492
Other borrowed funds			37,177				—				36,488				—				36,488
Subordinated debentures			8,500				—				8,500				—				8,500
Interest rate swap derivatives			822				—				822				—				822
Accrued interest payable			5,686				—				5,686				—				5,686

		Carrying				Fair Value Measurements at December 31, 2024 Using
		Value				Level 1				Level 2				Level 3				Total
Financial Assets:
Cash and cash equivalents		$	83,107			$	83,107			$	—			$	—			$	83,107
Securities available for sale			268,120				168,030				100,090				—				268,120
Securities held to maturity			7,049				—				3,651				2,769				6,420
Loans, net			1,051,737				—				—				1,037,349				1,037,349
Interest rate swap derivatives			657				—				657				—				657
Accrued interest receivable			4,805				—				1,540				3,265				4,805
Financial liabilities:
Deposits			1,275,178				881,290				394,470				—				1,275,760
Other borrowed funds			39,740				—				38,815				—				38,815
Subordinated debentures			8,500				—				8,500				—				8,500
Interest rate swap derivatives			657				—				657				—				657
Accrued interest payable			5,234				1				5,233				—				5,234

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

15

NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities AFS and securities HTM at June 30, 2025 and December 31, 2024, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

Securities Available for Sale		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
June 30, 2025
U.S. Government securities		$	104,946			$	490			$	(632	)		$	104,804
U.S. Government sponsored entity securities			6,386				—				(345	)			6,041
Agency mortgage-backed securities, residential			162,409				522				(8,434	)			154,497
Total securities		$	273,741			$	1,012			$	(9,411	)		$	265,342
December 31, 2024
U.S. Government securities		$	169,203			$	210			$	(1,383	)		$	168,030
U.S. Government sponsored entity securities			6,406				—				(518	)			5,888
Agency mortgage-backed securities, residential			105,961				—				(11,759	)			94,202
Total securities		$	281,570			$	210			$	(13,660	)		$	268,120

Securities Held to Maturity		Amortized Cost				Gross Unrecognized Gains				Gross Unrecognized Losses				Estimated Fair Value				Allowance for Credit Losses
June 30, 2025
Obligations of states and political subdivisions		$	6,494			$	-			$	(549	)		$	5,945			$	(1	)
Total securities		$	6,494			$	-			$	(549	)		$	5,945			$	(1	)
December 31, 2024
Obligations of states and political subdivisions		$	7,050			$	1			$	(631	)		$	6,420			$	(1	)
Total securities		$	7,050			$	1			$	(631	)		$	6,420			$	(1	)

The amortized cost and estimated fair value of debt securities at June 30, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities.  Securities not due at a single maturity are shown separately.

		Available for Sale								Held to Maturity
Debt Securities:		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
Due in one year or less		$	56,118			$	55,934			$	828			$	819
Due in over one to five years			55,214				54,911				2,703				2,584
Due in over five to ten years			—				—				983				838
Due after ten years			—				—				1,980				1,704
Agency mortgage-backed securities, residential			162,409				154,497				—				—
Total debt securities		$	273,741			$	265,342			$	6,494			$	5,945

There were no sales of securities during the three and six months ended June 30, 2025 and 2024, respectively.

Debt securities with a carrying value of approximately $214,115 at June 30, 2025 and $223,484 at December 31, 2024, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.

16

NOTE 3 – SECURITIES (Continued)

The following table summarizes debt securities AFS in an unrealized loss position for which an ACL has not been recorded at June 30, 2025 and December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position:

June 30, 2025		Less Than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
Securities Available for Sale
U.S. Government securities		$	15,119			$	(10	)		$	24,805			$	(622	)		$	39,924			$	(632	)
U.S. Government sponsored entity securities			—				—				6,041				(345	)			6,041				(345	)
Agency mortgage-backed securities,
residential			14,413				(81	)			84,507				(8,353	)			98,920				(8,434	)
Total available for sale		$	29,532			$	(91	)		$	115,353			$	(9,320	)		$	144,885			$	(9,411	)

December 31, 2024		Less Than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
Securities Available for Sale
U.S. Government securities		$	31,418			$	(329	)		$	26,802			$	(1,054	)		$	58,220			$	(1,383	)
U.S Government sponsored entity securities			—				—				5,889				(518	)			5,889				(518	)
Agency mortgage-backed securities,
residential			4,694				(130	)			89,467				(11,629	)			94,161				(11,759	)
Total available for sale		$	36,112			$	(459	)		$	122,158			$	(13,201	)		$	158,270			$	(13,660	)

Management evaluates AFS debt securities in unrealized positions to determine whether impairment is due to credit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2025, the Company had 89 AFS debt securities in an unrealized position without an ACL, of which 9 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 77 were from Agency mortgage-backed residential securities. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of June 30, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions and, therefore, the Company carried no ACL on AFS debt securities at June 30, 2025.

17

NOTE 3 – SECURITIES (Continued)

The following table presents the activity in the ACL for HTM debt securities:

Held to Maturity Debt Securities		Six months ended June 30, 2025				Six months ended June 30, 2024
Allowance for credit losses:
Beginning balance		$	1			$	2
Provision for (recovery of) credit loss expense			—				—
Allowance for credit losses ending balance		$	1			$	2

The Company’s HTM securities primarily consist of obligations of states and political subdivisions. The ACL on HTM securities is estimated at each measurement date on a collective basis by major security type.  Risk factors such as issuer bond ratings, historical loss rates, financial condition of issuer, and timely principal and interest payments of issuer were evaluated to determine if a credit reserve was required within the portfolio. At June 30, 2025, there were no past due principal and interest payments related to HTM securities. During the second quarter of 2025 and 2024, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three and six months ended June 30, 2025 and 2024, respectively.

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are comprised of the following:

		June 30, 2025				December 31, 2024
Residential real estate		$	360,726			$	373,534
Commercial real estate:
Owner-occupied			100,487				86,471
Nonowner-occupied			247,907				206,847
Construction			70,942				79,669
Commercial and industrial			176,208				158,440
Consumer:
Automobile			42,345				50,246
Home equity			45,527				42,473
Other			57,125				64,145
			1,101,267				1,061,825
Less:  Allowance for credit losses			(10,856	)			(10,088	)
Loans, net		$	1,090,411			$	1,051,737

At June 30, 2025 and December 31, 2024, net deferred loan origination costs were $52 and $363, respectively. At June 30, 2025 net unaccreted loan purchase discounts were $1,575. At December 31, 2024 net unamortized loan purchase premiums were $398.

18

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of June 30, 2025 and December 31, 2024:

June 30, 2025		Loans Past Due 90 Days And Still Accruing				Nonaccrual Loans With No ACL				Nonaccrual Loans With an ACL				Total Nonaccrual Loans
Residential real estate		$	48			$	—			$	2,195			$	2,195
Commercial real estate:
Owner-occupied			131				679				—				679
Nonowner-occupied			—				—				136				136
Construction			—				—				—				—
Commercial and industrial			—				952				12				964
Consumer:
Automobile			37				—				254				254
Home equity			—				25				307				332
Other			27				—				127				127
Total		$	243			$	1,656			$	3,031			$	4,687

December 31, 2024		Loans Past Due 90 Days And Still Accruing				Nonaccrual Loans With No ACL				Nonaccrual Loans With an ACL				Total Nonaccrual Loans
Residential real estate		$	49			$	—			$	1,931			$	1,931
Commercial real estate:
Owner-occupied			—				680				136				816
Nonowner-occupied			—				—				158				158
Construction			—				—				—				—
Commercial and industrial			—				962				90				1,052
Consumer:
Automobile			39				—				379				379
Home equity			—				26				338				364
Other			28				—				117				117
Total		$	116			$	1,668			$	3,149			$	4,817

The Company recognized $28 and $46 of interest income in nonaccrual loans during the three and six months ended June 30, 2025, respectively. This is compared to $15 and $19 of interest income in nonaccrual loans during the three and six months ended June 30, 2024, respectively.

19

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The following table presents the aging of the recorded investment of past due loans by class of loans as of June 30, 2025 and December 31, 2024:

June 30, 2025		30-59 Days Past Due				60-89 Days Past Due				90 Days Or More Past Due				Total Past Due				Loans Not Past Due				Total
Residential real estate		$	2,401			$	1,586			$	960			$	4,947			$	355,779			$	360,726
Commercial real estate:
Owner-occupied			860				211				810				1,881				98,606				100,487
Nonowner-occupied			665				102				—				767				247,140				247,907
Construction			-				—				—				-				70,942				70,942
Commercial and industrial			530				22				952				1,504				174,704				176,208
Consumer:
Automobile			648				263				208				1,119				41,226				42,345
Home equity			493				170				182				845				44,682				45,527
Other			411				158				77				646				56,479				57,125
Total		$	6,008			$	2,512			$	3,189			$	11,709			$	1,089,558			$	1,101,267

December 31, 2024		30-59 Days Past Due				60-89 Days Past Due				90 Days Or More Past Due				Total Past Due				Loans Not Past Due				Total
Residential real estate		$	3,294			$	1,097			$	984			$	5,375			$	368,159			$	373,534
Commercial real estate:
Owner-occupied			773				—				816				1,589				84,882				86,471
Nonowner-occupied			2,294				—				—				2,294				204,553				206,847
Construction			—				—				—				—				79,669				79,669
Commercial and industrial			533				58				745				1,336				157,104				158,440
Consumer:
Automobile			791				414				349				1,554				48,692				50,246
Home equity			402				141				243				786				41,687				42,473
Other			716				260				98				1,074				63,071				64,145
Total		$	8,803			$	1,970			$	3,235			$	14,008			$	1,047,817			$	1,061,825

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and “classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000.

The Company uses the following definitions for its criticized loan risk ratings:

Special Mention.  Loans classified as “special mention” are graded 8 and indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. 

20

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The Company uses the following definitions for its classified loan risk ratings:

Substandard.  Loans classified as “substandard” are graded 9 and represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well-defined weaknesses, and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful.  Loans classified as “doubtful” are graded 10 and display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This classification should be temporary until such time that actual loss can be identified, or improvements are made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors that may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss.  Loans classified as “loss” are graded 11 and are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.  This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.  Amounts classified as loss should be promptly charged off.

As of June 30, 2025 and December 31, 2024, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Commercial real estate:
Owner-occupied
Risk Rating
Pass		$	16,023			$	13,547			$	18,973			$	7,213			$	5,472			$	18,053			$	1,226			$	80,507
Special Mention			—				—				—				—				12,565				—				—				12,565
Substandard			—				73				—				—				4,239				2,204				899				7,415
Doubtful			—				—				—				—				—				—				—				—
Total		$	16,023			$	13,620			$	18,973			$	7,213			$	22,276			$	20,257			$	2,125			$	100,487
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

21

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Commercial real estate:
Nonowner-occupied
Risk Rating
Pass		$	26,382			$	37,302			$	22,360			$	38,263			$	29,949			$	80,387			$	7,175			$	241,818
Special Mention			—				—				1,622				—				—				—				—				1,622
Substandard			—				217				—				980				—				3,270				—				4,467
Doubtful			—				—				—				—				—				—				—				—
Total		$	26,382			$	37,519			$	23,982			$	39,243			$	29,949			$	83,657			$	7,175			$	247,907
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Commercial real estate:
Construction
Risk Rating
Pass		$	14,368			$	11,990			$	19,706			$	20,139			$	1,094			$	2,634			$	357			$	70,288
Special Mention			—				—				—				—				—				29				—				29
Substandard			—				—				625				—				—				—				—				625
Doubtful			—				—				—				—				—				—				—				—
Total		$	14,368			$	11,990			$	20,331			$	20,139			$	1,094			$	2,663			$	357			$	70,942
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Commercial and Industrial
Risk Rating
Pass		$	19,136			$	14,793			$	6,808			$	22,594			$	24,414			$	44,865			$	26,566			$	159,176
Special Mention			—				—				—				—				—				—				5,187				5,187
Substandard			—				1,359				147				39				222				6,407				3,671				11,845
Doubtful			—				—				—				—				—				—				—				—
Total		$	19,136			$	16,152			$	6,955			$	22,633			$	24,636			$	51,272			$	35,424			$	176,208
Current Period gross charge-offs		$	—			$	45			$	—			$	12			$	58			$	—			$	45			$	160

22

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Commercial real estate:
Owner-occupied
Risk Rating
Pass		$	13,762			$	17,199			$	7,441			$	10,094			$	4,787			$	16,336			$	583			$	70,202
Special Mention			—				—				—				12,896				—				1,415				299				14,610
Substandard			79				—				—				—				136				844				600				1,659
Doubtful			—				—				—				—				—				—				—				—
Total		$	13,841			$	17,199			$	7,441			$	22,990			$	4,923			$	18,595			$	1,482			$	86,471
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Commercial real estate:
Nonowner-occupied
Risk Rating
Pass		$	35,216			$	11,377			$	30,773			$	31,465			$	19,351			$	66,312			$	6,172			$	200,666
Special Mention			—				1,636				—				—				—				—				—				1,636
Substandard			220				—				996				—				3,329				—				—				4,545
Doubtful			—				—				—				—				—				—				—				—
Total		$	35,436			$	13,013			$	31,769			$	31,465			$	22,680			$	66,312			$	6,172			$	206,847
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Commercial real estate:
Construction
Risk Rating
Pass		$	13,865			$	33,162			$	27,678			$	1,111			$	266			$	2,647			$	93			$	78,822
Special Mention			—				—				—				—				—				38				—				38
Substandard			—				638				—				—				—				171				—				809
Doubtful			—				—				—				—				—				—				—				—
Total		$	13,865			$	33,800			$	27,678			$	1,111			$	266			$	2,856			$	93			$	79,669
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

23

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Commercial and Industrial
Risk Rating
Pass		$	17,260			$	7,875			$	24,843			$	25,894			$	20,648			$	25,593			$	21,785			$	143,898
Special Mention			446				—				—				—				—				178				6,476				7,100
Substandard			2,039				226				60				480				205				—				4,432				7,442
Doubtful			—				—				—				—				—				—				—				—
Total		$	19,745			$	8,101			$	24,903			$	26,374			$	20,853			$	25,771			$	32,693			$	158,440
Current Period gross charge-offs		$	219			$	—			$	—			$	1			$	—			$	—			$	1			$	221

The Company considers the performance of the loan portfolio and its impact on the ACL. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of June 30, 2025 and  December 31, 2024:

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Residential Real Estate
Payment Performance
Performing		$	28,764			$	62,650			$	55,561			$	38,001			$	43,680			$	128,059			$	1,768			$	358,483
Nonperforming			—				424				222				357				83				1,157				—				2,243
Total		$	28,764			$	63,074			$	55,783			$	38,358			$	43,763			$	129,216			$	1,768			$	360,726
Current Period gross charge-offs		$	—			$	—			$	—			$	1			$	—			$	15			$	—			$	16

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Consumer:
Automobile
Payment Performance
Performing		$	5,326			$	10,383			$	13,617			$	9,300			$	2,609			$	818			$	—			$	42,053
Nonperforming			1				71				103				116				—				1				—				292
Total		$	5,327			$	10,454			$	13,720			$	9,416			$	2,609			$	819			$	—			$	42,345
Current Period gross charge-offs		$	—			$	137			$	202			$	76			$	8			$	16			$	—			$	439

24

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

																									Revolving
																									Loans
	Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025	2025				2024					2023				2022			2021				Prior				Cost Basis					Total
Consumer:
Home Equity
Payment Performance
Performing		$	101			$	—			$	—			$	—			$	—			$	81			$	45,013			$	45,195
Nonperforming			—				—				—				—				—				—				332				332
Total		$	101			$	—			$	—			$	—			$	—			$	81			$	45,345			$	45,527
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	31			$	31

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
June 30, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				Total
Consumer:
Other
Payment Performance
Performing		$	7,636			$	15,398			$	7,848			$	6,326			$	4,796			$	2,228			$	12,739			$	56,971
Nonperforming			—				47				40				16				19				28				4				154
Total		$	7,636			$	15,445			$	7,888			$	6,342			$	4,815			$	2,256			$	12,743			$	57,125
Current Period gross charge-offs		$	209			$	35			$	69			$	38			$	43			$	27			$	246			$	667

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Residential Real Estate
Payment Performance
Performing		$	57,385			$	57,546			$	40,026			$	46,067			$	38,969			$	98,084			$	33,477			$	371,554
Nonperforming			—				234				435				83				54				1,174				—				1,980
Total		$	57,385			$	57,780			$	40,461			$	46,150			$	39,023			$	99,258			$	33,477			$	373,534
Current Period gross charge-offs		$	—			$	—			$	15			$	—			$	—			$	27			$	—			$	42

25

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Consumer:
Automobile
Payment Performance
Performing		$	13,643			$	18,133			$	12,693			$	3,686			$	1,268			$	405			$	—			$	49,828
Nonperforming			145				162				77				12				5				17				—				418
Total		$	13,788			$	18,295			$	12,770			$	3,698			$	1,273			$	422			$	—			$	50,246
Current Period gross charge-offs		$	91			$	364			$	232			$	34			$	22			$	7			$	—			$	750

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Consumer:
Home Equity
Payment Performance
Performing		$	317			$	—			$	61			$	152			$	—			$	—			$	41,579			$	42,109
Nonperforming			—				—				—				—				—				—				364				364
Total		$	317			$	—			$	61			$	152			$	—			$	—			$	41,943			$	42,473
Current Period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

																										Revolving
																										Loans
		Term Loans Amortized Cost Basis by Origination Year																								Amortized
December 31, 2024		2024				2023				2022				2021				2020				Prior				Cost Basis				Total
Consumer:
Other
Payment Performance
Performing		$	13,110			$	18,442			$	8,768			$	6,580			$	2,367			$	973			$	13,760			$	64,000
Nonperforming			3				50				14				46				25				7				—				145
Total		$	13,113			$	18,492			$	8,782			$	6,626			$	2,392			$	980			$	13,760			$	64,145
Current Period gross charge-offs		$	443			$	192			$	156			$	107			$	52			$	29			$	495			$	1,474

The Company originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia.  Approximately 3.69% of total loans were unsecured at June 30, 2025, down from 4.16% at December 31, 2024.

26

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Modifications to Borrowers Experiencing Financial Difficulty:

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty.  These modifications may include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms. All modifications to borrowers experiencing financial difficulty are considered to be impaired.

During the three and six months ended June 30, 2025 and 2024,  the Company experienced no new modifications to borrowers experiencing financial difficulty.

The following table presents the activity in the ACL by portfolio segment for the three months ended June 30, 2025 and 2024:

June 30, 2025		Residential Real Estate				Commercial Real Estate				Commercial and Industrial				Consumer				Total
Allowance for credit losses:
Beginning balance		$	2,693			$	3,789			$	1,705			$	1,952			$	10,139
Provision for credit losses			171				421				70				371				1,033
Loans charged-off			(11	)			—				—				(611	)			(622	)
Recoveries			20				18				60				208				306
Total ending allowance balance		$	2,873			$	4,228			$	1,835			$	1,920			$	10,856

June 30, 2024		Residential Real Estate				Commercial Real Estate				Commercial and Industrial				Consumer				Total
Allowance for credit losses:
Beginning balance		$	2,328			$	3,246			$	1,354			$	2,301			$	9,229
Provision for credit losses			(7	)			232				(428	)			341				138
Loans charged-off			-				—				—				(555	)			(555	)
Recoveries			29				13				467				110				619
Total ending allowance balance		$	2,350			$	3,491			$	1,393			$	2,197			$	9,431

The following table presents the activity in the ACL by portfolio segment for the six months ended June 30, 2025 and 2024:

June 30, 2025		Residential Real Estate				Commercial Real Estate				Commercial and Industrial				Consumer				Total
Allowance for credit losses:
Beginning balance		$	2,684			$	3,653			$	1,536			$	2,215			$	10,088
Provision for credit losses			167				557				343				442				1,509
Loans charged-off			(16	)			—				(160	)			(1,137	)			(1,313	)
Recoveries			38				18				116				400				572
Total ending allowance balance		$	2,873			$	4,228			$	1,835			$	1,920			$	10,856

June 30, 2024		Residential Real Estate				Commercial Real Estate				Commercial and Industrial				Consumer				Total
Allowance for credit losses:
Beginning balance		$	2,213			$	3,047			$	1,275			$	2,232			$	8,767
Provision for credit losses			123				420				(244	)			696				995
Loans charged-off			(37	)			—				(109	)			(1,003	)			(1,149	)
Recoveries			51				24				471				272				818
Total ending allowance balance		$	2,350			$	3,491			$	1,393			$	2,197			$	9,431

27

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of June 30, 2025 and December 31, 2024:

		Collateral Type
June 30, 2025		Real Estate				Business Assets				Total
Residential real estate		$	1,369			$	556			$	1,925
Commercial real estate:
Owner-occupied			5,043				140				5,183
Non-owner-occupied			108				—				108
Construction			625				—				625
Commercial and Industrial			197				1,779				1,976
Consumer:
Automobile			—				27				27
Home equity			50				25				75
Other			43				29				72
Total collateral dependent loans		$	7,435			$	2,556			$	9,991

		Collateral Type
December 31, 2024		Real Estate				Business Assets				Total
Residential real estate		$	569			$	—			$	569
Commercial real estate:
Owner-occupied			804				140				944
Non-owner-occupied			110				—				110
Construction			637				—				637
Commercial & Industrial			285				3,044				3,329
Consumer:
Automobile			—				38				38
Home equity			50				26				76
Other			—				81				81
Total collateral dependent loans		$	2,455			$	3,329			$	5,784

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually evaluated collateral dependent loans.

The Company transfers loans to OREO, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). The Company had no OREO for residential real estate properties at June 30,2025 and December 31, 2024. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $702 and $342 as of June 30, 2025 and December 31, 2024, respectively.

NOTE 5 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees.  The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.  The contract amounts of these instruments are not included in the consolidated financial statements.  At June 30, 2025, the contract amounts of these instruments totaled approximately $249,085, compared to $203,019 at December 31, 2024.  The Bank estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk via a contractual obligation to extend credit. At June 30, 2025, the estimated ACL related to off-balance sheet commitments was $637, which included $115 and $55 in provision during the three and six months ended June 30, 2025. This is compared to $43 in provision and a $63 recovery of provision during the three and six months ended June 30, 2024, respectively. The Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.  Since many of these instruments are expected to expire without being drawn upon, the total contract amounts do not necessarily represent future cash requirements.

28

NOTE 6 – OTHER BORROWED FUNDS

Other borrowed funds at June 30, 2025 and December 31, 2024 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

		FHLB Borrowings				Promissory Notes				Totals
June 30, 2025		$	34,615			$	2,562			$	37,177
December 31, 2024		$	37,239			$	2,501			$	39,740

Pursuant to collateral agreements with the FHLB, advances are secured by $351,101 in qualifying mortgage loans, $40,538 in commercial loans and $2,866 in FHLB stock at June 30, 2025.  Fixed-rate FHLB advances of $34,615 mature through 2042 and have interest rates ranging from 1.53% to 4.91% and a year-to-date weighted average cost of 4.05% at June 30, 2025 and 4.02% at December 31, 2024.  There were no variable-rate FHLB borrowings at June 30, 2025.

At June 30, 2025, the Company had a cash management line of credit enabling it to borrow up to $100,000 from the FHLB, subject to the stock ownership and collateral limitations described below.  All cash management advances have an original maturity of 90 days.  The line of credit must be renewed on an annual basis.  There was $100,000 available on this line of credit at June 30, 2025.

Based on the Company’s current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $198,180 at June 30, 2025.  Of this maximum borrowing capacity, the Company had $111,440 available to use as additional borrowings, of which $111,440 could be used for short term, cash management advances, as mentioned above.

At June 30, 2025, the Company had a federal funds line of credit with two correspondent banks totaling $25,000. The lines of credit are not committed and are provided at the discretion of the correspondent bank. No collateral has been pledged to the lines of credit. Any advance is due to be repaid the next business day. At June 30, 2025, there was $25,000 available on these lines of credit.

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of June 15, 2026, and have fixed rates ranging from 4.25% to 4.65% and a year-to-date weighted average cost of 4.69% at June 30, 2025, as compared to 4.71% at December 31, 2024.  At June 30, 2025, there were six promissory notes payable by Ohio Valley to totaling $2,562. There were no promissory notes payable to other banks at June 30, 2025 or December 31, 2024, respectively.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $52,125 at June 30, 2025 and $58,500 at December 31, 2024.

Scheduled principal payments as of June 30, 2025:

		FHLB Borrowings				Promissory Notes				Totals
2025		$	2,811			$	1,240			$	4,051
2026			12,908				1,322				14,230
2027			11,397				—				11,397
2028			1,349				—				1,349
2029			1,733				—				1,733
Thereafter			4,417				—				4,417
		$	34,615			$	2,562			$	37,177

29

NOTE 7 – LEASES

Substantially all of the Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent leases for branch buildings and office space to conduct business.  Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The lease expense for these leases are recorded on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as either operating or financing leases on the consolidated balance sheet. The Company has no finance lease arrangements. Operating leases have remaining lease terms ranging from 10 months to 16.2 years, some of which include options to extend the leases for up to 15 years. Operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Balance sheet information related to leases is as follows:

		As of June 30, 2025				As of December 31, 2024
Operating leases:
Operating lease right-of-use assets		$	935			$	1,024
Operating lease liabilities			935				1,024

The components of lease cost are as follows:

	Three Months Ended June 30,								Six Months Ended June 30,
	2025				2024				2025				2024
Operating lease cost		$	49			$	49			$	98			$	98
Short-term lease expense			—				2				—				9

Future undiscounted lease payments for operating leases with initial terms of one year or more as of June 30, 2025 are as follows:

		Operating Leases
2025 (remaining)		$	97
2026			140
2027			109
2028			111
2029			111
Thereafter			653
Total lease payments			1,221
Less: Imputed Interest			(286	)
Total operating leases		$	935

Other information is as follows:

		As of June 30, 2025				As of December 31, 2024
Weighted-average remaining lease term for operating leases		11.5 years				12.0 years
Weighted-average discount rate for operating leases			2.81	%			2.84	%

30

NOTE 8 – RISKS AND UNCERTAINTIES

The risks pertinent to the Bank regarding liquidity and rising deposit costs have increased due to an elevated interest rate environment and increased deposit competition within our markets. Our liquidity position is supported by the management of liquid assets such as cash and interest-bearing deposits with banks, and liabilities such as core deposits. The Bank can also access other sources of funds such as brokered deposits and FHLB advances. With the present economic conditions putting a strain on liquidity and higher borrowing costs, the Company believes it has sufficient liquid assets and funding sources should there be a liquidity need.

NOTE 9 – DEPOSITS

Deposits are comprised of the following:

		June 30, 2025				December 31, 2024
Noninterest-bearing deposits		$	331,373			$	322,383
Interest-bearing deposits:
NOW accounts			257,530				272,941
Savings and money market			302,653				285,966
Time deposits of $250 or less			304,967				311,972
Time deposits of more than $250			80,239				81,916
Total interest-bearing deposits			945,389				952,795
Total deposits		$	1,276,762			$	1,275,178

Brokered deposits, included in time deposits, were $34,260 and $48,395 at June 30, 2025 and December 31, 2024, respectively.

NOTE 10 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue is segregated based on the nature of products and services offered as part of contractual arrangements. Revenue from contracts with customers within the scope of ASC 606 is broadly segregated within the following noninterest income categories:

• Service charges on deposit accounts – These include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer, or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services.

• Trust fees - This includes periodic fees due from trust customers for managing the customers' financial assets. Fees are generally charged on a quarterly or annual basis and are recognized ratably throughout the period, as the services are provided on an ongoing basis.

• Electronic refund check/deposit fees – A tax refund clearing agreement between the Bank and a tax refund processor requires the Bank to process electronic refund checks and electronic refund deposits presented for payment on behalf of taxpayers through accounts containing taxpayer refunds. The Bank, in turn, receives a fee paid by the third-party tax refund processor for each transaction that is processed.  The amount of fees received are tiered based on the tax refund product selected. Since the Bank acts as a sub servicer in the tax process relationship, a portion of the fee collected is passed on to the tax refund processor.

• Debit/credit card interchange income – This includes interchange income from cardholder transactions conducted with merchants, throughout various interchange networks with which the Company participates.  Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, as transaction processing services are provided to the deposit customer.  Gross fees from interchange are recorded in operating income separately from gross network costs, which are recorded in operating expense.

• Tax preparation fees – This includes fees received by tax preparation customers of Loan Central as part of the Bank’s TAL business. After Loan Central prepares a customer’s tax return, the customer is offered the opportunity to have immediate access to a portion of the anticipated tax refund by entering into a TAL with the Bank. As part of the process, the tax customer completes a loan application and authorizes the expected tax refund to be deposited with the Bank once it is issued by the IRS. Once the Bank receives the tax refund, the refund is used to repay the TAL and Loan Central’s tax preparation fees, then the remainder of the refund is remitted to Loan Central’s tax customer.

• Float income from tax product processor –  This is associated with the tax refund clearing agreement between the Bank and a third-party tax refund processor. The revenue earned is based on the estimated compensating balances associated with processing the contractual minimum number of check items multiplied by the interest rate paid by the Federal Reserve on reserves for the respective period. The float income is paid by the tax refund product processor at the end of each year of the tax agreement, which is to expire in 2025.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(dollars in thousands, except share and per share data)

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q (the “report”) and other publicly available documents incorporated herein by reference constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended (the “Exchange Act”), and as defined in the Private Securities Litigation Reform Act of 1995.  Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and other similar expressions. Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking-statements.  However, it is difficult to predict the effect of known factors, and by Ohio Valley Banc Corp. (“Ohio Valley”) cannot anticipate all factors that could affect future results. Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements include, but are not limited to: the effects of fluctuating interest rates on our customers’ operations and financial condition; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries (collectively, the “Company”); unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes.  Additional detailed information concerning such factors is available in the Company’s filings with the Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A. Risk Factors” of Part I of the 2024 Annual Report for the fiscal year ended December 31, 2024 and elsewhere in this document (including, without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”). All forward looking statements are qualified in their entirety by these and other cautionary statements that the Company makes from time to time in its other SEC filings and public communications. Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.  The Company undertakes no obligation and disclaims any duty to update or revise any forward looking statements, whether as a result of new information, unanticipated future events or otherwise, except as required by law.

BUSINESS OVERVIEW: The following discussion on consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company (“Loan Central”), and Ohio Valley Financial Services Agency, LLC, an insurance agency. The Bank has one active, wholly-owned subsidiary, Ohio Valley REO, LLC, an Ohio limited liability company.

The Company is primarily engaged in commercial and retail banking, offering a blend of commercial and consumer banking services within southeastern Ohio as well as western West Virginia.  The banking services offered by the Bank include the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal and commercial loans; the making of construction and real estate loans; and credit card services.  The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.  Furthermore, the Bank offers Tax Refund Advance Loans (“TALs”) to Loan Central tax customers. A TAL represents a short-term loan offered by the Bank to tax preparation customers of Loan Central.

IMPACT OF PARTICIPATING IN THE OHIO HOMEBUYER PLUS PROGRAM: During the third quarter of 2024, the Company began participating in a program offered by the Ohio Treasurer (the “Treasurer”) called Ohio Homebuyer Plus. The program is designed to encourage Ohio residents to save for the purchase of a home. As a participant in the program, the Company developed the “Sweet Home Ohio” deposit account to offer participants an above-market interest rate of 5.83%, along with a deposit bonus to assist customers in achieving their home savings goals. For each Sweet Home Ohio account that was opened, the Company received a deposit from the Treasurer at a subsidized interest rate of 0.86%. Accounts connected with Ohio Homebuyer Plus must be used within five years and the corresponding balance of Treasurer deposits will fluctuate based upon active customer accounts. At June 30, 2025, the balance of Sweet Home Ohio accounts totaled $8,419 compared to $6,775 at December 31, 2024. At June 30, 2025, the amount of Treasurer deposits totaled $77,265 compared to $97,366 at December 31, 2024. Since the Treasurer deposits are classified as public funds, which are required to be collateralized, the Company invested the funds in securities to be pledged as collateral to the Treasurer. At June 30, 2025, the balance of securities used to collateralize the Treasurer deposits totaled $81,123 compared to $102,871 at December 31, 2024.

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FINANCIAL RESULTS OVERVIEW: Net income totaled $4,210 during the second quarter of 2025, an increase of $1,238 from the same period of 2024. Earnings per share for the second quarter of 2025 finished at $.89 per share, compared to $.63 per share during the second quarter of 2024. Net income totaled $8,616 during the first six months of 2025, an increase of $2,851 from the same period of 2024. Earnings per share during the first six months of 2025 finished at $1.83 per share, compared to $1.21 per share during the first six months of 2024. Earnings were positively impacted by the growth in average earning assets, which increased 8.3% and 9.5% during both the quarterly and year-to-date periods, respectively. The increases came primarily from loans and securities, which contributed to a 21.5% and 19.5% increase in net interest income during both the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. Also contributing to higher net earnings were increases in noninterest income, up 5.4% and 1.5%, during both the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. The positive effects from higher net interest and noninterest income were partially offset by higher provision and noninterest expense. During the second quarter of 2025, provision expense increased $967 in large part due to strong asset growth and higher net charge-offs, which contributed to a 67.8% increase in provision expense on a year-to-date basis. In addition, noninterest expense increased 1.7% and 1.2% during both the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. Higher net earnings also had a corresponding impact on the Company’s annualized net income to average asset ratio, or return on assets, which increased 32 basis points to 1.16% during the first six months of 2025, compared to the same period in 2024. In addition, the Company’s net income to average equity ratio, or return on equity, increased 329 basis points to 11.30% during the first six months of 2025, compared to the same period in 2024.

During the three months ended June 30, 2025, net interest income increased $2,572, or 21.5%, over the same period in 2024. During the six months ended June 30, 2025, net interest income increased $4,522, or 19.5%, over the same period in 2024. Net interest income growth during both the quarterly and year-to-date periods came mostly from an increase in average earning assets, led by securities and loans. During the three months ended June 30, 2025, average securities increased $103,063 while average loans increased $51,150. During the six months ended June 30, 2025, average securities increased $99,312 while average loans increased $59,742. The growth in average securities came in large part due to the increased pledging requirements on public fund deposits as part of the Ohio Homebuyer Plus program. The growth in average loans was related to the commercial and residential real estate lending segments. Earnings were further enhanced by a higher net interest margin, increasing 43 basis points during the three months ended June 30, 2025, and 33 basis points during the six months ended June 30, 2025, compared to the same periods in 2024, respectively. Margin growth was related to an increase in the yield on earning assets, while the cost of funding sources decreased. The improvement to earning asset yields was directly related to the growth in higher-yielding securities and loans, and the accretion of an $817 market discount on purchased loans that was recognized in the second quarter of 2025. The cost of funding sources decreased as the composition of funding sources shifted to lower cost deposit sources, such as Negotiable Order of Withdrawal (“NOW”), savings, money market, and checking accounts.

During the three and six months ended June 30, 2025, the Company’s provision for credit loss expense increased $967 and $632, when compared to the same periods in 2024. The increases during both periods came primarily from growth in loan balances, higher net charge-offs, and an increase in modeled loss rates in relation to the regression in GDP and unemployment projections.

During the three and six months ended June 30, 2025, noninterest income increased $147, or 5.4%, and $97, or 1.5%, from the same periods in 2024. The increases came mostly from interchange income earned on debit and credit cards, which increased $56 and $60 during the three and six months ended June 30, 2025, when compared to the same periods in 2024. Other noninterest income also increased $71 during the second quarter of 2025 and $21 during the first half of 2025, when compared to the same periods in 2024. Increases to other noninterest income came mostly from lower losses related to both other real estate owned (“OREO”) and the pending sale of premises, while card merchant fees and mortgage application referral fees also increased during both the quarterly and year-to-date periods. These increases were partially offset by a decline in swap asset revenue.

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During the three and six months ended June 30, 2025, noninterest expense increased $186, or 1.7%, and $263, or 1.2%, over the same periods in 2024. Noninterest expenses were led by increases in data processing and marketing costs, which collectively increased $239, or 23.7%, and $411, or 20.1%, during the three and six months ended June 30, 2025, over the same periods in 2024. Data processing expenses were impacted by costs associated with the Company’s debit and credit card platforms. Marketing cost increases were impacted by higher donation and advertising budgets for 2025. The Company’s largest noninterest expense, salaries and employee benefits, increased $8 during the three months ended June 30, 2025, but decreased $147 during the six months ended June 30, 2025, when compared to the same periods in 2024. Cost savings in salaries and employee benefits during the first half of 2025 were the direct result of a voluntary early retirement program implemented in 2024. The changes in the remaining noninterest expense areas were minimal.

The $328 and $873 increase in the Company’s provision for income taxes during the three and six months ended June 30, 2025, compared to the same periods in 2024, was largely due to the increase in operating income affected by the factors mentioned above, as well as an increase in the effective tax rate.   

At June 30, 2025, total assets were $1,510,358, an increase of $6,946 from year-end 2024. The increase in assets was primarily the result of a $39,442 increase in loans, which was driven by strong second quarter loan growth of $57,971 that more than offset the $18,529 decrease in loans that occurred during the first quarter. The first quarter loan decrease was related to a $31,473 decrease in a warehouse line of credit extended to another mortgage lender. The second quarter growth in loans occurred primarily in the targeted areas of commercial real estate, commercial and industrial, and residential real estate loans. This included a $12,777 repurchase of two commercial and industrial loans in June 2025 that had been previously participated out  The increase in loans was primarily funded by a $29,581 decrease in interest-bearing balances maintained at the FRB. Total securities also decreased by $3,334 in relation to a lower need for securities to be pledged to the Treasurer due to a $20,101 deposit balance decrease from year-end 2024.

At June 30, 2025, total liabilities were $1,349,598, down $3,486 from year-end 2024. Contributing most to this decrease were lower interest-bearing deposit balances, down $7,406 from year-end 2024, consisting of lower balances from NOW accounts (-5.6%), and time deposits (-2.2%), partially offset by an increase in savings and money market accounts (+5.8%). At June 30, 2025, the Company experienced higher noninterest-bearing demand deposits, increasing $8,990 from year-end 2024.

At June 30, 2025, total shareholders' equity was $160,760, up $10,432 from December 31, 2024. This increase came primarily from year-to-date net income and an after-tax increase in net unrealized gains on AFS securities, partially offset by year-to-date cash dividends paid. Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

Comparison of Financial Condition
at June 30, 2025 and December 31, 2024

The following discussion focuses in more detail on the consolidated financial condition of the Company at June 30, 2025 compared to December 31, 2024.  This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Cash and Cash Equivalents

At June 30, 2025, cash and cash equivalents were $54,627, a decrease of $28,480, or 34.3%, from December 31, 2024. The decrease came primarily from interest-bearing deposits with banks, which were down $29,581, or 43.9%, from year-end 2024. The Company’s interest-bearing FRB clearing account contributed most to the decrease in interest-bearing deposits with banks, representing 68% of cash and cash equivalents at June 30, 2025. The Company utilizes its interest-bearing FRB clearing account to manage excess funds, as well as to assist in funding earning asset growth. The decrease in excess funds during the first six months of 2025 came primarily from an increase in loans, which were up $39,442 from year-end 2024. The interest rate paid on both the required and excess reserve balances of the FRB is based on the targeted federal funds rate established by the Federal Open Market Committee, which remained at a range of 4.25% to 4.50% at June 30, 2025 and December 31, 2024. The interest-bearing deposit balances in the FRB are 100% secured by the U.S. Government.

As liquidity levels continuously vary based on consumer activities, amounts of cash and cash equivalents can vary widely at any given point in time. The Company’s focus during periods of heightened liquidity will be to invest excess funds into longer-term, higher-yielding assets, primarily loans, when opportunities arise.

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Securities

The balance of total securities decreased $3,334, or 1.2% from year-end 2024. As previously mentioned, the decrease in securities was impacted by the lower need for securities to pledge to the Treasurer for deposits related to the Homebuyers Plus program. The Company’s U.S. Government securities portfolio decreased $63,226 from $168,030 at year-end 2024 to $104,804 at June 30, 2025, impacted by $65,180 in scheduled maturities. The Company utilized a portion of its proceeds from maturities of U.S. Government securities to fund additional purchases in U.S. Government agency (“Agency”) mortgage-backed securities, which were up $60,295, or 64.0%, from year-end 2024. During the first half of 2025, purchases of Agency mortgage-backed securities totaled $67,306, while being partially offset by $10,841 in principal repayments. The monthly repayment of principal has been the primary advantage of Agency mortgage-backed securities as compared to other types of investment securities, which deliver proceeds upon maturity or call date. At June 30, 2025, the Company’s investment securities portfolio was comprised mostly of Agency mortgage-backed securities at 56.8% of total investments, while U.S. Government securities represented 38.6%.

Included in the factors mentioned above were changes in net unrealized losses associated with AFS securities. During the first half of 2025, a decrease in long-term market rates led to a $5,051 increase in the fair value associated with the Company’s AFS securities at June 30, 2025.  The fair value of an investment security moves inversely to interest rates, so as rates decreased, the fair value increased, causing the unrealized loss in the portfolio to decrease. These changes in rates are typical and do not impact earnings of the Company as long as the securities are held to full maturity.

Loans

The loan portfolio represents the Company’s largest asset category and is its most significant source of interest income. Loan segments have been identified as Commercial Real Estate, Commercial and Industrial, Residential Real Estate, and Consumer.

Commercial real estate consists of owner-occupied, nonowner-occupied and construction loans. Owner-occupied loans consist of nonfarm, nonresidential properties. A commercial owner-occupied loan is a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing operations conducted by the party, or an affiliate of the party, who owns the property. Owner-occupied loans of the Company include loans secured by hospitals, churches, and hardware and convenience stores. Nonowner-occupied loans are property loans for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property, such as apartment buildings, condominiums, hotels, and motels. These loans are primarily impacted by the level of interest rates associated with the debt and to local economic conditions, which dictate occupancy rates and the amount of rent charged. The increase in debt service due to higher interest rates may not be able to be passed on to tenants. As part of the origination process, loan interest rates and occupancy rates are stressed to determine the impact on the borrower’s ability to maintain adequate debt service under different economic conditions. Furthermore, the Company monitors the concentration in any one industry and has established limits relative to capital. In addition, credit quality trends are monitored by industry to determine if a change in the risk exposure to a certain industry may warrant a change in our underwriting standards. Table I has been provided to illustrate the industry composition of the commercial real estate portfolio. Commercial construction loans are extended to individuals as well as corporations for the construction of an individual property or multiple properties and are secured by raw land and the subsequent improvements. Commercial real estate also includes loan participations with other banks outside the Company’s primary market area. Although the Company is not actively seeking to participate in loans originated outside its primary market area, it has taken advantage of the relationships it has with certain lenders in those areas where the Company believes it can profitably participate with an acceptable level of risk.

Commercial and industrial loans consist of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include service, retail, and wholesale merchants. Collateral securing these loans includes equipment, inventory, and stock.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower. The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

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COMMERCIAL REAL ESTATE BY INDUSTRY

As of June 30, 2025

Table I

The following table provides the composition of commercial real estate loans by industry classification (as defined by the North American Industry Classification System).

(dollars in thousands)
		Amount				% of Total
Real Estate Rental and Leasing		$	212,834				50.75	%
Accommodation and Food Services			71,780				17.12	%
Retail Trade			31,220				7.44	%
Health Care and Social Assistance			24,565				5.86	%
Manufacturing			18,957				4.52	%
Construction			16,169				3.86	%
All Other			43,811				10.45	%
Total		$	419,336				100.00	%

Consumer loans are primarily secured by automobiles, mobile homes, recreational vehicles, and other personal property. Personal loans and unsecured credit card receivables are also included as consumer loans.

The Company’s loan balances increased to $1,101,267 at June 30, 2025, representing an increase of $39,442, or 3.7%, as compared to $1,061,825 at December 31, 2024.  The increase in loans came primarily from the commercial real estate and commercial and industrial portfolios, partially offset by decreases in the residential real estate and consumer loan portfolios from year-end 2024.

The Company’s commercial loan portfolio increased $64,117, or 12.1%, from year-end 2024. The most significant driver of this increase was higher loan balances within the commercial real estate portfolio, which increased $46,349, or 12.4%, from year-end 2024.  At June 30, 2025, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 38.1%. The increase from year-end 2025 came primarily from new originations within the owner- and nonowner-occupied loan segments.

Commercial loans were also positively impacted by an increase in the commercial and industrial portfolio, which was up $17,768, or 11.2%, from year-end 2024. The growth was impacted by an increase in larger loan originations during the year. This included a $12,777 repurchase of two commercial and industrial loans in June 2025 that had been previously participated out. While management believes lending opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and other related conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, and the effects of competitive pressure and normal underwriting considerations. Management will continue to place emphasis on its commercial lending, which generally yields a higher return on investment as compared to other types of loans.

The increase in the Company’s commercial loan portfolio at June 30, 2025 was partially offset by decreases in the residential real estate and consumer loan portfolios. The Company’s residential real estate loan portfolio decreased $12,808, or 3.4%, from year-end 2024. At June 30, 2025, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 32.7%. As previously mentioned, the decrease was largely due to a $31,473 paydown in a warehouse line of credit extended to another mortgage lender. The warehouse lending line is used by the mortgage lender to make loans for the purchase of one- to four-family residential real estate properties. The mortgage lender eventually sells the loan and repays the Bank. The paydown was a result of lower mortgage volume due to higher mortgage rates and the increase in the lead bank’s internal capacity in relation to a capital infusion. At June 30, 2025, the balance of this line of credit was $0, but may increase in future periods if mortgage volume increases and the funding needs of the lead bank changes. The remaining residential real estate loan balances increased $18,665, or 5.0%, from year-end 2024. Through the first half of 2025, as mortgage rates continued to increase, the Company experienced fewer opportunities to sell long-term fixed rate loans to the secondary market. As a result of the elevated mortgage rates, mortgage customers selected more variable rate mortgage products instead of long-term fixed rate mortgage products. This had a direct impact on lowering loan volume within the long-term fixed rate loan portfolio (down $2,563) and contributed to a shift into more short-term variable rate mortgages (up $13,970) as of June 30, 2025.

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Further decreases in loans came from the Company’s consumer loan portfolio, which was down $11,867, or 7.6%, from year-end 2024. This change was impacted by a $7,901, or 15.7%, decrease in automobile loans. This was directly impacted by management’s strategy to place more emphasis on higher yielding loan portfolios (i.e. commercial, and to a smaller extent, residential real estate). Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return. As a result, the Company exited the indirect lending business for automobiles and recreational vehicles during the fourth quarter of 2024. Decreases in consumer loans also came from a $7,020, or 10.9%, decrease in other consumer loans from year-end 2024, impacted by principal repayments and payoffs. Decreases in consumer loans were partially offset by a $3,054, or 7.2%, increase in home equity lines of credit.

Allowance for Credit Losses

The Company maintains an ACL that represents management’s best estimate of the appropriate level of losses and risks inherent in our applicable financial assets under the current expected credit loss (“CECL”) model. The amount of the ACL should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all. The determination of the ACL involves a high degree of judgement and subjectivity. Please refer to Note 1 of the notes to the financial statements for discussion regarding our ACL methodologies for securities and loans.

For AFS debt securities, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized costs basis is due to credit-related factors or noncredit-related factors. As of June 30, 2025, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis from year-end 2024 were due to non-credit related factors. Furthermore, the Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. Therefore, no ACL was recorded, and no provision expense was recognized during the three and six months ended June 30, 2025.

For HTM debt securities, the Company evaluates the securities collectively by major security type at each measurement date to determine expected credit losses based on issuer’s bond rating, historical loss, financial condition, and timely principal and interest payments. At June 30, 2025, a $1 ACL was recognized based on a .02% cumulative default rate taken from the S&P and Moody’s bond rating index. The $1 ACL for HTM debt securities was unchanged from December 31, 2024, resulting in no provision expense during the three and six months ended June 30, 2025.

For loans, the Company’s ACL is management’s estimate of expected lifetime credit losses, measured over the contractual life of a loan, that considers historical loss experience, current conditions, and forecasts of future economic conditions. The ACL on loans is established through a provision for credit losses recognized in earnings. The ACL on loans is reduced by charge-offs on loans and is increased by recoveries of amounts previously charged off. Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors within two main components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments. The ACL for loans with similar risk characteristics are collectively evaluated for expected credit losses based on certain quantitative information that include historical loss rates, prepayment rates, and curtailment rates. Expected credit losses on loans with similar characteristics are also determined by certain qualitative factors that include national unemployment rates, national gross domestic product forecasts, changes in lending policy, quality of loan review, and delinquency status. The ACL for loans that do not share similar risk characteristics are individually evaluated for expected credit losses primarily based on foreclosure status and whether a loan is collateral dependent. Expected credit losses on individually evaluated loans are then determined using the present value of expected future cash flows based upon the loan’s original effective interest rate, at the loan’s observable market price, or if the loan was collateral dependent, at the fair value of the collateral.

As of June 30, 2025, the ACL for loans totaled $10,856, or 0.99%, of total loans. As of December 31, 2024, the ACL for loans totaled $10,088, or 0.95%, of total loans. The $768, or 7.6%, increase in the ACL came primarily from loans collectively evaluated. The increase in ACL reserves was mostly due to a higher historical loss rate within the commercial real estate and commercial and industrial portfolios, partially offset by a lower historical loss rate within the consumer loan portfolio.

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Increases in the ACL were also impacted by a $42 increase in specific reserves on loans individually evaluated for impairment from year-end 2024. During the second quarter of 2025, the Company individually evaluated one residential real estate loan for expected credit loss. After measuring the fair value of the loan’s collateral to the loan’s recorded investment, the Company identified $42 in expected losses based on the impairment associated with the borrower’s collateral. This resulted in a corresponding charge to provision expense to establish the specific allocation within the ACL at June 30, 2025.

The Company experienced minimal change in its delinquency levels from year-end 2024. Nonperforming loans to total loans decreased slightly to 0.45% at June 30, 2025, compared to 0.46% at December 31, 2024, while nonperforming assets to total assets remained unchanged at 0.33%. The decrease in nonperforming loans to total loans resulted from a $130 decrease in nonaccrual loans, coming mostly from the commercial real estate and consumer loan portfolios.

Management believes that the ACL at June 30, 2025 was appropriate to absorb expected losses in the loan portfolio.  Changes in the circumstances of particular borrowers, as well as adverse developments in the economy, are factors that could change, and management will make adjustments to the ACL as needed. Asset quality will continue to remain a key focus of the Company as management continues to stress not just loan growth, but quality in loan underwriting.

Deposits

Deposits are used as part of the Company’s liquidity management strategy to meet obligations for depositor withdrawals, fund the borrowing needs of loan customers, and fund ongoing operations. Deposits continue to be the most significant source of funds used by the Company to support earning assets. Total deposits at June 30, 2025 increased $1,584, or 0.1%, from year-end 2024. This minimal change in deposits came primarily from noninterest-bearing deposit balances, which were up by $8,990, or 2.8%, from year-end 2024, while interest-bearing deposits decreased $7,406, or 0.8%, from year-end 2024.

The increase in noninterest-bearing demand deposits was primarily from the Company’s business and incentive-based checking account balances.

The decrease in interest-bearing deposits came primarily from NOW account balances, which decreased $15,411, or 5.6%, from year-end 2024. The decrease was largely from a $20,101 decrease in the Company’s municipal NOW account with the Treasurer in relation to the Homebuyer Plus program. Excluding this decrease in the Treasurer account balances, the Company would have experienced a $4,036 increase in its other municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.

Further decreases in interest-bearing deposits came from time deposit balances, which decreased $8,682, or 2.2%, from year-end 2024. The decrease came from wholesale time deposits, which decreased $13,901, or 22.8%, from year-end 2024. This was the result of $14,270 in brokered CD maturities during the second quarter of 2025. Retail time deposits increased $5,219 from year-end 2024, partially offsetting the impact of lower wholesale deposits. The surge in product rate increases on retail CDs continue to slow during 2025, which has limited the growth in time deposits from year-end 2024 compared to savings and money market deposits.

Partially offsetting the decreases in NOW and time deposit balances were higher savings and money market account balances, which increased $16,687, or 5.8%, from year-end 2024. The increase came primarily from money market accounts, which increased $9,101 from year-end 2024, impacted mostly by increases in the Company’s tiered money market product (Money Fund) that was introduced in 2023 and offers a higher rate on tiered deposit balances. Savings account balances increased $7,586 impacted mostly by the Company’s statement savings account product.

While facing increased competition for deposits in its market areas, the Company will continue to emphasize growth and retention in its core deposit relationships during the remainder of 2025, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improve net interest income.

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Other Borrowed Funds

Other borrowed funds were $37,177 at June 30, 2025, a decrease of $2,563, or 6.4%, from year-end 2024. The decrease was related to the scheduled principal amortization for applicable FHLB advances. While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale funding sources to help manage interest rate sensitivity and liquidity.

Shareholders’ Equity

Total shareholders' equity at June 30, 2025 increased $10,432, or 6.9%, to finish at $160,760, as compared to $150,328 at December 31, 2024. This was primarily from year-to-date net income and an increase in the fair value of AFS securities, partially offset by cash dividends paid. The after-tax increase in fair value on AFS securities totaled $3,937 from year-end 2024, as long-term market rates decreased during the first half of 2025, causing an increase in the fair value of AFS securities.

Comparison of Results of Operations

For the Three and Six Months Ended

June 30, 2025 and 2024

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three and six months ended June 30, 2025, compared to the same period in 2024. This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Net Interest Income

The most significant portion of the Company's revenue, net interest income, results from properly managing the spread between interest income on earning assets and interest expense incurred on interest-bearing liabilities. During the three and six months ended June 30, 2025, net interest income increased $2,572, or 21.5%, and $4,522, or 19.5%, compared to the same periods in 2024, respectively. The quarterly and year-to-date improvement during 2025 came from average earning asset growth and the net interest margin. The average growth was impacted by a composition shift into higher-yielding loans and securities, combined with a consumer shift to more lower-cost deposit sources that helped reduce the higher average costs paid on deposits and borrowings.

Total interest and fee income recognized on the Company’s earning assets increased $2,387, or 12.8%, during the second quarter of 2025, and $4,503, or 12.4%, during the six months ended June 30, 2025, compared to the same periods in 2024, respectively. The earnings growth was impacted by interest on loans, which increased $1,725, or 11.1%, and $3,072, or 10.2%, during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. This improvement was impacted by increases in both average loan balances and loan yields. Overall, average loans increased $51,150 during the second quarter of 2025 and $59,742 during the first half of 2025. Balance increases were mostly realized within the commercial and residential real estate loan portfolios due to higher commercial loan volume and a consumer preference for short-term, variable rate residential real estate loans. Loan revenue improvement also came from average loan yields increasing 37 basis points to 6.82% during the second quarter of 2025 and increasing 28 basis points during the first half of 2025, compared to the same periods in 2024. A portion of the loan yield improvement came from the recognition of a market discount on two purchased commercial and industrial loans totaling $817 in the second quarter of 2025. Loan yield increases were mostly impacted by the commercial and residential real estate loan portfolios.

Total interest on securities increased $1,342, or 136.8%, during the second quarter of 2025, and $2,606, or 137.2%, during the first half of 2025, compared to the same periods in 2024. The earnings growth was primarily from the purchase of $100,497 in U.S. Government securities during the third quarter of 2024 as part of the Company’s participation in the state’s Homebuyer Plus program. The securities were purchased at a weighted average yield of 4.7% with maturity terms ranging from 6 to 18 months. The security purchases were used to collateralize $100,000 in public fund deposits received by the Treasurer as part of the program. This contributed to increases in average security balances, which were up $103,063 and $99,312 during the three and six months ended June 30, 2025, compared to the same periods in 2024. While average securities have grown in large part due to the security purchases from the Homebuyer Plus program, the Company has placed more emphasis on growing its higher-yielding loan portfolio during 2024 and 2025, utilizing proceeds from various maturities and repayments of securities to help fund loan growth. Earnings from securities were positively impacted by increases in the average yield on securities, impacted by the $100,497 purchase of U.S Government securities at a weighted average yield of 4.7% that was higher than the 2.04% average yield on the total securities portfolio at June 30, 2024.  Average security yields were also positively impacted by the elevated market rate environment during 2024 that continued into 2025. As a result, average security yields increased 115 basis points to 3.25% during the second quarter of 2025 and increased 117 basis points to 3.21% during the first half of 2025, compared to the same periods in 2024.

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Total interest income from interest-bearing deposits with banks decreased $807, or 55.8%, during the second quarter of 2025, and decreased $1,398, or 48.8%, during the first half of 2025, compared to the same periods in 2024. This was largely from average balance decreases with the Company’s interest-bearing FRB clearing account, which decreased $45,937 and $36,766 during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. FRB clearing balances were used to assist in funding loan growth, which contributed to the average balance decrease of FRB funds during 2025. Further impacting lower interest income from the FRB clearing account were short-term rate decreases during 2024. Between September and December 2024, the FRB took action to reduce the rate associated with the FRB clearing account by 100 basis points due to improvements in inflationary pressures. This action lowered the target federal funds rate to a range of 4.25% to 4.50%, which had a negative impact on the FRB clearing account’s interest earnings.

Total interest expense incurred on the Company’s interest-bearing liabilities decreased $185, or 2.8%, during the second quarter of 2025, and decreased $19, or 0.1%, during the first half of 2025, compared to the same periods in 2024. Decreases in interest expense were impacted by a lower cost of funds as the composition of average funding sources shifted from higher cost deposit sources such as time deposits to lower cost deposit sources such as NOW, savings, and money market deposits. The decrease in lower cost of funds completely offset the increases in average interest-bearing liabilities, primarily from deposits.

Growth in the Company’s average interest-bearing liabilities came mostly from NOW, savings and money market deposit balances, which increased $103,195 and $110,624 during both the second quarter and first half of 2025, compared to the same periods in 2024. A large portion of this growth came from lower-costing NOW and savings account balances related to the Company’s participation in the Homebuyers Plus program. With the additions of the municipal NOW Treasurer account and new Home Sweet Home savings accounts during the second half of 2024, this contributed to an average balance increase of $87,013 and $90,804 in interest-bearing deposits during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. Average interest-bearing deposit growth also came from the Company’s lower-costing tiered money market product (Money Fund), which increased $31,235 and $31,530 during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively.

The Company also experienced a $4,557 and $6,083 increase in its average time deposits during both the second quarter and first half of 2025, compared to the same periods in 2024. While the movement of higher time deposit balances had a corresponding impact to higher interest expense, the average cost associated with time deposits decreased 44 basis points to 4.23% during the first half of 2025. During 2023, rate offerings on retail CDs continued to adjust up as a result of market competition. The Company had offered various “short-term” CD rate specials with maturity terms of less than one year to attract and retain its core deposit funding during this time. Since then, product rates on retail CDs have decreased, which has allowed a large portion of those short-term retail CDs to renew at lower rates, or in some cases, be reinvested into lower-costing NOW, savings or money market accounts (average cost of 1.40%). Furthermore, the Company’s average wholesale funding balances decreased $19,627 during the first half of 2025, which included the use of brokered CDs (average cost of 4.68%) and FHLB advances (average cost of 4.05%). With the Company utilizing the growth in its lower-cost retail deposit sources to fund earning asset growth, the reliance on higher-cost wholesale deposits to fund asset growth decreased, which contributed to lower interest expense during 2025. As a result of the rate repricings on retail CDs and the deposit shift into lower-cost funding sources, the Company’s total weighted average costs on interest-bearing liabilities decreased by 17 basis points from 2.15% at June 30, 2025 to 1.98% at June 30, 2024.

The Company’s net interest margin is defined as fully tax-equivalent net interest income as a percentage of average earning assets. During 2025, the Company’s second quarter net interest margin increased to 4.17%, compared to 2024’s second quarter net interest margin of 3.74%. The Company’s year-to-date net interest margin increased to 4.01%, compared to 2024’s year-to-date net interest margin of 3.68%. Positive contributions to margin growth came from the Company’s average earning assets, which increased 8.3% and 9.5% during the second quarter and first half of 2025, respectively, mostly from higher-yielding loans and securities. Margin improvement was also positively impacted by lower average costs associated with the Bank’s interest-bearing liabilities due to a deposit composition shift into more lower-cost NOW, savings, and money market account deposits. Furthermore, the Company has benefited from its retail CDs repricing at lower product rates, while also relying less on wholesale funding sources. The Company’s primary focus is to invest its funds into higher yielding assets, particularly loans, as opportunities arise. However, if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

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Provision for Credit Losses

Provision for credit losses is recorded to achieve an ACL that is adequate to absorb estimated losses inherent in the Company’s loan portfolio, unfunded loans, and HTM debt securities. Management performs, on a quarterly basis, a detailed analysis of the ACL that encompasses asset portfolio composition, asset quality, loss experience and other relevant economic factors. For the three months ended June 30, 2025, the Company’s provision for credit losses expense totaled $1,148, an increase of $967 when compared to $181 in provision expense during the three months ended June 30, 2024. For the six months ended June 30, 2025, the Company’s provision for credit losses expense totaled $1,564, an increase of $632 when compared to $932 in provision expense during the six months ended June 30, 2024.

The increase in credit loss expense came primarily from loans, which increased $895 during the second quarter of 2025, and increased $514 during the first half of 2025, compared to the same periods in 2024. Provision expense on loans during 2025 was impacted primarily by increases in net charge-offs, which were up $385 during the second quarter of 2025 and $410 during the first half of 2025, compared to the same periods in 2024. The increases in net charge-offs during 2025 were the result of large recoveries collected on one commercial and industrial borrower during the second quarter of 2024.

Provision expense on loans during 2025 was also impacted by a higher historical loan loss and qualitative risk factor that increased reserves. The historical loan loss factor was primarily impacted by a regression in GDP and unemployment projections from year-end 2024. The qualitative risk factor was impacted by the improvement in residential real estate loan collateral risks that lowered reserves during 2024, that were not as impactful in 2025.

Further increases to provision expense also came from increases in loan balances generally allocated for due to strong loan growth during 2025 that generated higher general reserves and a corresponding increase to provision expense.

Credit loss expense during 2025 was also impacted by unfunded commitments on off-balance sheet liabilities, which increased $72 during the three months ended June 30, 2025, and increased $118 during the first half of 2025, compared to the same periods in 2024. The impact came mostly from an increase in the originations of several new commercial and industrial lines during the second quarter of 2025.

Future provisions to the ACL will continue to be based on management’s quarterly in-depth evaluation that is discussed in further detail under the caption “Critical Accounting Estimates” within this Management’s Discussion and Analysis.

Noninterest Income

Noninterest income increased $147, or 5.4%, during the three months ended June 30, 2025, and increased $97, or 1.5%, during the six months ended June 30, 2025, compared to the same periods in 2024. The increases came mostly from interchange income earned on debit and credit cards, which increased $56 and $60 during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. This was due to an increase in the transaction volume associated with debit and credit cards. The Company’s other noninterest income also increased $71 and $21 during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. Other noninterest income was primarily impacted by losses of $54 incurred on OREO properties and the sale of bank premises during the second quarter of 2024 that did not repeat in 2025. Other noninterest income was also impacted by increases in card merchant fees and mortgage application referral fees partially offset by decreases in swap asset revenue. The remaining noninterest income categories increased $20, or 1.6%, during the second quarter of 2025, and increased $16, or 0.5%, during the first half of 2025, compared to the same periods in 2024.

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Noninterest Expense

Noninterest expense increased $186, or 1.7%, during the three months ended June 30, 2025, and increased $263, or 1.2%, during the three months ended June 30, 2025, compared to the same periods in 2024. Contributing most to the increase in noninterest expense were data processing expenses, which increased $181 and $299 during the three and six months ended June 30, 2025, compared to the same periods in 2024, respectively. Higher costs in this category were primarily related to debit and credit card processing due to higher transaction volume and conversion costs for the Company’s new reward platform.

Higher noninterest expense also came from marketing expense, which increased $58 during the second quarter of 2025, and $112 during the first half of 2025. Higher costs in this category were the direct result of additional expense added to both the donations and advertising budgets for 2025.

The Company’s largest noninterest expense, salaries and employee benefits, increased $8, or 0.1%, during the three months ended June 30, 2025, but decreased $147, or 1.2%, during the six months ended June 30, 2025, compared to the same periods in 2024. The year-to-date decrease was primarily related to the Company’s full-time equivalent employee base being down ten employees from 245 at June 30, 2024 to 235 at June 30, 2025. Furthermore, insurance premium costs saw a decrease in 2025, also coinciding with a smaller full-time equivalent employee base. The primary reason for the decrease in employee base was due to the voluntary early retirement program that was implemented in 2024. The early retirement program was expected to reduce salary and employee benefit expense. Partially offsetting the year-to-date expense savings from the early retirement program were annual merit increases, which contributed to the increase in salaries and employee benefits during the second quarter of 2025.

The remaining noninterest expense categories decreased $61 during the second quarter of 2025, and decreased $1 during the first half of 2025, compared to the same periods in 2024.

Efficiency

The Company’s efficiency ratio is defined as noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income. The effects from provision expense are excluded from the efficiency ratio. Management continues to place emphasis on managing its balance sheet mix and interest rate sensitivity as well as developing more innovative ways to generate noninterest revenue. Comparing the three and six months ended June 30, 2025 to the same periods in 2024, the Company has benefited from an increase in average earning assets, primarily from higher-yielding loans and securities, a decrease in average costs on interest-bearing deposits, and a deposit composition shift from higher-costing time deposits to lower-costing savings, NOW, money market and checking account deposits. Positive earnings growth has not only benefited from an increase in noninterest income during 2025, but also from the cost savings in salaries and employee benefits that resulted from management’s implementation of a voluntary retirement program in 2024. This has helped to limit overhead expense to just a 1.7% increase during the second quarter of 2025, and a 1.2% increase during the first half of 2025, over the same periods in 2024. With strong growth in net interest income combined with minimal overhead expense pickup from 2024, the Company’s quarterly efficiency number decreased (improved) to 63.09% during the three months ended June 30, 2025, compared to 73.37% during the three months ended June 30, 2024. The Company’s year-to-date efficiency number also decreased (improved) to 63.51% during the six months ended June 30, 2025, compared to 72.41% during the six months ended June 30, 2024.

Provision for income taxes

The Company’s income tax provision increased $328 during the three months ended June 30, 2025, and increased $873 during the six months ended June 30, 2025, compared to the same periods in 2024.  The increase in tax expense was related to increases in operating income and the effective tax rate.  During the second quarter of 2025, operating income increased 43.3% and the associated effective tax rate increased from 17.9% in 2024 to 18.8% in 2025.  During the first half of 2025, operating income increased 53.1% and the associated effective tax rate increased from 17.8% in 2024 to 19.8% in 2025. The effective rate increases during both the quarterly and year-to-date periods of 2025 were primarily from lower tax-exempt earnings.

Capital Resources

Federal regulators have classified and defined capital into the following components: (i) Tier 1 capital, which includes tangible shareholders’ equity for common stock, qualifying preferred stock and certain qualifying hybrid instruments, and (ii) Tier 2 capital, which includes a portion of the allowance for credit losses, certain qualifying long-term debt, preferred stock and hybrid instruments which do not qualify as Tier 1 capital.

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In September 2019, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies issued a final rule providing simplified capital requirements for certain community banking organizations (banks and holding companies). Under the rule, a qualifying community banking organization (“QCBO”) is eligible to opt into the Community Bank Leverage Ratio (“CBLR”) framework in lieu of the Basel III capital requirements if it has less than $10 billion in total consolidated assets, limited amounts of certain trading assets and liabilities, limited amounts of off-balance sheet exposure and a leverage ratio greater than 9.0%. The new rule took effect January 1, 2020, and QCBOs were allowed to opt into the new CBLR framework in their Call Report beginning the first quarter of 2020.

A QCBO opting into the CBLR framework must maintain a CBLR of 9.0%, subject to a two-quarter grace period to come back into compliance, provided that the QCBO maintains a leverage ratio of more than 8.0% during the grace period. A QCBO failing to satisfy these requirements must comply with the existing Basel III capital requirements as implemented by the banking regulators in July 2013.

The Bank opted into the CBLR, and, therefore, is not required to comply with the Basel III capital requirements. The numerator of the CBLR is Tier 1 capital, as calculated under present rules. The denominator of the CBLR is the QCBO’s average assets, calculated in accordance with the QCBO’s Call Report instructions and less assets deducted from Tier 1 capital. The current rules and Call Report instructions were impacted by the Company’s adoption of ASC 326 and its election to apply the 3-year CECL transition provision on January 1, 2023. By making this election, the Bank, in accordance with Section 301 of the regulatory capital rules, will increase it retained earnings (Tier 1 Capital) and average assets by 75% of its CECL transition amount during the first year of the transition period, 50% of its CECL transition amount during the second year, and 25% of its CECL transitional amount during the third year of the transition period. The Bank’s transition amount during year three of the transitional period totaled $2,276, which resulted in the add-back of $569 to both Tier 1 capital and average assets as part of the CBLR calculation for June 30, 2025. As of June 30, 2025, the Bank’s CBLR was 10.27%.

Cash dividends paid by the Company were $2,121 during the first half of 2025. The year-to-date dividends paid totaled $0.45 per share.

Liquidity

Liquidity relates to the Company's ability to meet the cash demands and credit needs of its customers in the short and long-term and is provided by the ability to readily convert assets to cash and raise funds in the marketplace. The Company manages funding and liquidity based on point-in-time metrics as well as forward-looking projections, which incorporate different sources and uses of funds under base and stress scenarios. Liquidity risk is monitored and managed by the Bank’s Asset Liability Committee using a series of policy limits and key risk indicators, which are established to ensure risks are managed within the Company’s risk tolerance. The Company maintains a contingency funding plan that provides for liquidity stress testing, which assesses the liquidity needs under varying market conditions, time horizons and other events. The stress testing provides for ongoing monitoring of unused borrowing capacity and available sources of contingent liquidity to prepare for unexpected liquidity needs and to cover unanticipated events that could affect liquidity.

Total cash and cash equivalents, HTM securities maturing within one year, and AFS securities, which totaled $320,797, represented 21.2% of total assets at June 30, 2025 compared to $352,563 and 23.5% of total assets at December 31, 2024.This decrease in liquid funds went primarily towards the funding of loans, which increased $39,442 from year-end 2024, mostly from the commercial loan portfolio. Loan funding sources also came from an increase in net proceeds from maturities and paydowns of securities. Increases in deposits were largely impacted by growth in noninterest-bearing demand deposits and savings and money market deposits, which increased 4.2% from year-end 2024, partially offset by lower interest-bearing demand deposits and time deposits, which decreased 3.6%, from year-end 2024.

In addition to the on-balance sheet liquidity discussed above, the Bank has established multiple sources of funding to further enhance the Bank’s ability to meet liquidity demands. The Bank has pledged collateral to the FHLB and the FRB to establish committed borrowing lines. At June 30, 2025, the Bank could borrow an additional $111,440 from the FHLB and the borrowing line with the FRB had availability of $46,988. For each of these sources, the Bank has established an internal limit of 85% of our borrowing capacity. In addition to the committed borrowing lines, the Bank has access to several wholesale funding sources, such as, brokered CDs, a $25 million federal funds purchase limit with two correspondent banks, and the ability to bid on available funds from select deposit placement services. The Bank has established limits for each respective funding source and a collective limit on all wholesale funding sources. The Bank’s internal limit on brokered CDs is 10% of total assets. At June 30, 2025, the amount of brokered CDs outstanding was 2.29% of total assets, as compared to 3.25% at December 31, 2024. At June 30, 2025, the Bank had utilized 43.77% of its FHLB capacity, a decrease from 52.21% at December 31, 2024. The collective internal limit on all wholesale funding sources is 40% of total assets. At June 30, 2025, the Bank’s total wholesale funding sources represented 10.02% of total assets. Based on the collective internal wholesale funding limit, the Bank had the capacity to borrow an additional $449 million in wholesale funds and the available funding from the respective wholesale funding sources exceeded this amount, which provides the flexibility to utilize one source more than another due to pricing or availability.

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As part of performing liquidity stress tests, the Bank monitors and evaluates the exposure to uninsured deposits. Of the Company’s $1,276,762 in total deposit balances at June 30, 2025, only 38.9%, or $496,161, were deemed uninsured as per the $250 FDIC threshold. A portion of these deposits are on behalf of public entity customers, which require the Bank to pledge securities or FHLB letters of credit to cover the amount of the deposit balance that is deemed uninsured. To the extent these deposits left the Bank, the level of unpledged securities and the borrowing capacity at the FHLB would increase or could be utilized to fund the deposit outflow. The sum of current on-balance sheet liquidity and available wholesale funding sources exceeded the balance of uninsured deposits at June 30, 2025. Included in on-balance sheet liquidity are AFS securities in an unrealized loss position. Although management does not intend to sell the securities before the recovery of its cost basis, they are a contingent resource from a liquidity perspective.

As our liquidity position dictates, the preceding funding sources may be utilized to supplement our liquidity position. If the utilization of wholesale funding increases to fund asset growth or for liquidity management purposes, the net interest margin may be negatively impacted due to the higher relative cost of these sources as compared to core deposits. For further cash flow information, see the condensed consolidated statement of cash flows. Management does not rely on any single source of liquidity and monitors the level of liquidity based on many factors affecting the Company’s financial condition.

Off-Balance Sheet Arrangements

As discussed in Note 5 – Financial Instruments with Off-Balance Sheet Risk, the Company engages in certain off-balance sheet credit-related activities, including commitments to extend credit and standby letters of credit, which could require the Company to make cash payments in the event that specified future events occur. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. While these commitments are necessary to meet the financing needs of the Company’s customers, many of these commitments are expected to expire without being drawn upon. Therefore, the total amount of commitments does not necessarily represent future cash requirements.

Critical Accounting Estimates

The preparation of financial statements and related disclosures requires management to use judgment and make estimates.  The Company evaluates such estimates on an ongoing basis.  By their nature, these judgments are subject to uncertainty.  We base our estimates on historical experience, current trends and other factors that we believe to be relevant and reasonable under the circumstances at the time the estimate was made.

We believe our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made.  However, because future events and their effects cannot be determined with certainty, actual results could differ materially from those implied by our assumptions and estimates.

The Company believes the determination of the ACL involves a higher degree of judgment and complexity than its other significant accounting policies. The ACL is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses over the life of an asset or off-balance sheet credit exposure. Management’s determination of the adequacy of the ACL is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. However, this evaluation has subjective components requiring material estimates, including expected default probabilities, the expected loss given default, the amounts and timing of expected future cash flows on individually evaluated collateral dependent loans, and estimated losses based on historical loss experience and forecasted economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods. Refer to “Allowance for Credit Losses” and “Provision for Credit Losses” sections within this Management’s Discussion and Analysis for additional discussion.

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Concentration of Credit Risk

The Company maintains a diversified credit portfolio, with residential real estate loans currently comprising the most significant portion. Credit risk is primarily subject to loans made to businesses and individuals in southeastern Ohio and western West Virginia. Management believes this risk to be general in nature, as there are no material concentrations of loans to any industry or consumer group. To the extent possible, the Company diversifies its loan portfolio to limit credit risk by avoiding industry concentrations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

With the participation of the President and Chief Executive Officer (the principal executive officer) and the Senior Vice President and Chief Financial Officer (the principal financial officer and principal accounting officer) of Ohio Valley, Ohio Valley’s management has evaluated the effectiveness of Ohio Valley’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025. Based on that evaluation, Ohio Valley’s Chief Executive Officer and Senior Vice President and Chief Financial Officer have concluded that Ohio Valley’s disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control over Financial Reporting

There was no change in Ohio Valley’s internal control over financial reporting (as defined in Rule 13a‑15(f) under the Exchange Act) that occurred during Ohio Valley’s fiscal quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, Ohio Valley’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is involved in various claims and legal actions, as both plaintiff and defendant, arising in the ordinary course of business. The Company does not believe that any such proceedings, individually and in the aggregate, will have a material adverse effect on its business, financial position, results of operations or cash flows.

ITEM 1A.  RISK FACTORS

An investment in our common shares involves risks. Before making an investment decision, you should carefully consider all of the information in this Quarterly Report, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Condensed Consolidated Financial Statements and related notes. In addition, you should carefully consider the risks and uncertainties described in the section entitled “Risk Factors” in our 2024 Annual Report. If any of the identified risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that case, the trading price of our common shares may decline. In addition, other risks of which we are currently unaware, or which we do not currently view as material, could have a material adverse effect on our business, financial condition, operating results and prospects. As of the date of this Quarterly Report, there have been no material changes to the risk factors previously disclosed under the section entitled "Risk Factors" in Part I, Item IA of our 2024 Annual Report.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Ohio Valley did not sell any unregistered equity securities during the three months ended June 30, 2025.

Ohio Valley did not purchase any of its shares during the three months ended June 30, 2025.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

During the three months ended June 30, 2025, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6.  EXHIBITS

(a) Exhibits:

Exhibit Number		Exhibit Description
3.1		Amended Articles of Incorporation of Ohio Valley (reflects amendments through April 7, 1999) [for SEC reporting compliance only - - not filed with the Ohio Secretary of State]:  Incorporated herein by reference to Exhibit 3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2007.
3.2		Code of Regulations of Ohio Valley: Incorporated herein by reference to Exhibit 3(b) to Ohio Valley’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.
4.1		Agreement to furnish instruments and agreements defining rights of holders of long-term debt: Filed herewith.
31.1		Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer):  Filed herewith.
31.2		Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer):  Filed herewith.
32		Section 1350 Certifications (Principal Executive Officer and Principal Accounting Officer): Filed herewith.
101.INS #		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH #		XBRL Taxonomy Extension Schema: Filed herewith. #
101.CAL #		XBRL Taxonomy Extension Calculation Linkbase: Filed herewith. #
101.DEF #		XBRL Taxonomy Extension Definition Linkbase: Filed herewith. #
101.LAB #		XBRL Taxonomy Extension Label Linkbase: Filed herewith. #
101.PRE #		XBRL Taxonomy Extension Presentation Linkbase: Filed herewith. #
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) Filed herewith #

# Attached as Exhibit 101 are the following documents formatted in XBRL (eXtensive Business Reporting Language): (i) Unaudited Consolidated Balance Sheets; (ii) Unaudited Consolidated Statements of Income; (iii) Unaudited Consolidated Statements of Comprehensive Income; (iv) Unaudited Consolidated Statements of Changes in Shareholders’ Equity; (v) Unaudited Condensed Consolidated Statements of Cash Flows; and (vi) Notes to the Unaudited Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			OHIO VALLEY BANC CORP.
Date:	August 14, 2025	By:	/s/Larry E. Miller, II
			Larry E. Miller, II
			President and Chief Executive Officer
Date:	August 14, 2025	By:	/s/Scott W. Shockey
			Scott W. Shockey
			Senior Vice President and Chief Financial Officer

48

FAQ

What were OVBC's net income and EPS for Q2 2025?

OVBC reported net income of $4.21 million and earnings per share of $0.89 for the quarter ended June 30, 2025.

How did Ohio Valley Banc's net interest income perform in Q2 2025?

Net interest income was $14.54 million for the three months ended June 30, 2025, up from $11.96 million in Q2 2024.

What was the provision for credit losses and the allowance at June 30, 2025 for OVBC?

The provision for credit losses was $1.148 million for Q2 2025 and the allowance for credit losses totaled $10.856 million at June 30, 2025.

How large were OVBC's loans and deposits at June 30, 2025?

Total loans were $1,101,267,000 and total deposits were $1,276,762,000 at June 30, 2025.

What happened to Ohio Valley Banc's liquidity during the period?

Cash and cash equivalents declined to $54.627 million at June 30, 2025 from $83.107 million at December 31, 2024; deposits remained essentially flat.