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Ohio Valley Banc Q1 2026 results show steady core growth

Ohio Valley Banc Corp. reported first-quarter 2026 net income of $4.3 million, slightly below $4.4 million a year earlier, as higher credit costs offset solid core banking growth.

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Form Type
10-Q

Rhea-AI Filing Summary

Ohio Valley Banc Corp. reported first-quarter 2026 net income of $4.3 million, slightly below $4.4 million a year earlier, as higher credit costs offset solid core banking growth. Earnings per share were $0.91 versus $0.94.

Total assets increased to $1.68 billion from $1.58 billion at year-end 2025, driven by loan growth to $1.21 billion and deposits rising to $1.42 billion. Net interest income improved to $14.9 million, but the provision for credit losses rose to $1.6 million. Unrealized losses on the securities portfolio reduced other comprehensive income, bringing total comprehensive income to $2.1 million. The company paid a quarterly cash dividend of $0.23 per share and ended the period with $171.3 million in shareholders’ equity.

Net income $4.3 million Three months ended March 31, 2026 vs $4.4 million in 2025
Earnings per share $0.91 Q1 2026 EPS vs $0.94 in Q1 2025
Total assets $1.68 billion Balance at March 31, 2026 vs $1.58 billion at Dec. 31, 2025
Total loans $1.21 billion Loans outstanding at March 31, 2026
Total deposits $1.42 billion Deposits at March 31, 2026
Net interest income $14.9 million Three months ended March 31, 2026 vs $13.1 million in 2025
Provision for credit losses $1.6 million Provision expense for Q1 2026 vs $0.4 million in 2025
Allowance for credit losses on loans $12.9 million ACL balance at March 31, 2026 vs $11.5 million at Dec. 31, 2025
allowance for credit losses financial
"Less: Allowance for credit losses ( 12,943 )"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
securities available for sale financial
"Securities available for sale 251,439"
Securities available for sale are investments—like bonds or shares—that a company owns but does not plan to hold until they mature or trade every day; they are kept with the intention that they may be sold when needed or when a good opportunity arises. For investors, these holdings matter because their market value changes can affect a company’s reported net worth and provide a source of cash or unexpected gains or losses, similar to having a reserve of items you can sell when prices are favorable.
nonaccrual loans financial
"Nonaccrual Loans With an ACL Total Nonaccrual Loans"
Nonaccrual loans are loans a lender has stopped counting toward interest income because the borrower is overdue or unlikely to pay; the lender only records cash payments received and may set aside extra funds to cover potential losses. For investors, a rising number or amount of nonaccrual loans signals weaker credit quality, lower future interest revenue and larger potential write-downs — similar to pausing expected subscription income when many customers stop paying.
Level 3 financial
"Significant Unobservable Inputs (Level 3)"
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
off-balance sheet commitments financial
"ACL related to off-balance sheet credit exposures was $791"
other comprehensive income financial
"Total other comprehensive (loss) income, net of tax"
Other comprehensive income is a section of a company’s financial statements that records gains and losses not shown in the regular profit-and-loss line, such as paper gains or losses on certain investments, pension plan adjustments, and changes from converting foreign operations. These items don’t represent cash earned or spent today but change a company’s reported net worth, like value swings in things stored in a closet rather than money in your wallet, and help investors spot hidden strengths or risks to long-term financial health.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How did Ohio Valley Banc Corp. (OVBC) perform in Q1 2026?
Ohio Valley Banc Corp. earned $4.3 million in Q1 2026, slightly below $4.4 million a year earlier. Net interest income grew to $14.9 million, but higher credit loss provisions and securities valuation swings limited overall profit growth.

What were OVBC’s earnings per share for Q1 2026?
OVBC reported diluted earnings per share of $0.91 for Q1 2026, compared with $0.94 in Q1 2025. The modest decline reflects higher provision for credit losses despite stronger net interest income from loan growth and a larger balance sheet.

How did OVBC’s loans and deposits change by March 31, 2026?
At March 31, 2026, OVBC’s total loans reached $1.21 billion, up from $1.20 billion at year-end 2025. Total deposits increased to $1.42 billion from $1.33 billion, providing funding for asset growth and supporting higher cash and securities balances.

What happened to OVBC’s allowance for credit losses in Q1 2026?
The allowance for credit losses on loans increased to $12.9 million at March 31, 2026 from $11.5 million at year-end 2025. OVBC recorded $1.7 million of provision expense as it built reserves, partly reflecting individually evaluated commercial real estate loans.

How did unrealized securities losses affect OVBC’s Q1 2026 results?
Unrealized losses on available for sale securities produced $2.2 million of negative other comprehensive income, net of tax, in Q1 2026. As a result, total comprehensive income was $2.1 million, below net income, and accumulated other comprehensive loss deepened.

What dividend did Ohio Valley Banc Corp. pay in Q1 2026?
Ohio Valley Banc Corp. paid a cash dividend of $0.23 per share during Q1 2026, compared with $0.22 per share in Q1 2025. Total dividends were $1.1 million, reducing retained earnings while still allowing equity to grow modestly over the quarter.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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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 March 31, 2026

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  May 14, 2026 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
43
Item 4.
Controls and Procedures
43
     
PART II.
OTHER INFORMATION
  
     
Item 1.
Legal Proceedings
43
Item 1A.
Risk Factors
43
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
44
Item 3.
Defaults Upon Senior Securities
44
Item 4.
Mine Safety Disclosures
44
Item 5.
Other Information
44
Item 6.
Exhibits
45
     
Signatures
  
46

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)

 
March 31,
2026
(Unaudited)
    
December 31,
2025
  
             
ASSETS
            
Cash and noninterest-bearing deposits with banks
  
$
16,255
    
$
14,845
  
Interest-bearing deposits with banks
    
109,072
      
31,052
  
Total cash and cash equivalents
    
125,327
      
45,897
  
                 
Securities available for sale
    
251,439
      
253,906
  
Securities held to maturity, net of allowance for credit losses of $1 in 2026 and 2025
    
5,435
      
5,452
  
Restricted investments in bank stocks
    
5,258
      
5,258
  
                 
Total loans
    
1,214,814
      
1,196,018
  
Less: Allowance for credit losses
    
(12,943
)
    
(11,519
)
Net loans
    
1,201,871
      
1,184,499
  
                 
Premises and equipment, net
    
20,501
      
20,509
  
Premises and equipment held for sale, net
    
395
      
400
  
Accrued interest receivable
    
5,535
      
5,476
  
Goodwill
    
7,319
      
7,319
  
Bank owned life insurance and annuity assets
    
42,606
      
43,305
  
Operating lease right-of-use asset, net
    
876
      
923
  
Deferred tax assets
    
6,252
      
5,621
  
Other assets
    
4,688
      
4,089
  
Total assets
  
$
1,677,502
    
$
1,582,654
  
                 
LIABILITIES
                
Noninterest-bearing deposits
  
$
332,760
    
$
314,131
  
Interest-bearing deposits
    
1,090,914
      
1,015,536
  
Total deposits
    
1,423,674
      
1,329,667
  
                 
Other borrowed funds
    
43,529
      
44,848
  
Subordinated debentures
    
8,500
      
8,500
  
Operating lease liability
    
876
      
923
  
Allowance for credit losses on off-balance sheet commitments
    
791
      
871
  
Other liabilities
    
28,852
      
27,588
  
Total liabilities
    
1,506,222
      
1,412,397
  
                 
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
    
136,220
      
133,007
  
Accumulated other comprehensive income (loss)
    
(4,059
)
    
(1,869
)
Treasury stock, at cost (779,994 shares)
    
(18,693
)
    
(18,693
)
Total shareholders’ equity
    
171,280
      
170,257
  
Total liabilities and shareholders’ equity
  
$
1,677,502
    
$
1,582,654
  

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
March 31,
  
   
2026
    
2025
  
             
Interest and dividend income:
            
Loans, including fees
  
$
19,404
    
$
16,695
  
Securities
                
Taxable
    
2,375
      
2,155
  
Tax exempt
    
26
      
28
  
  Dividends
    
88
      
96
  
  Interest-bearing deposits with banks
    
582
      
826
  
     
22,475
      
19,800
  
                 
Interest expense:
                
Deposits
    
7,031
      
6,133
  
Other borrowed funds
    
436
      
393
  
Subordinated debentures
    
120
      
134
  
     
7,587
      
6,660
  
Net interest income
    
14,888
      
13,140
  
Provision for (recovery of) credit losses
    
1,622
      
416
  
Net interest income after provision for credit losses
    
13,266
      
12,724
  
                 
Noninterest income:
                
Service charges on deposit accounts
    
745
      
720
  
Trust fees
    
92
      
103
  
Income from bank owned life insurance and annuity assets
    
378
      
240
  
Mortgage banking income
    
37
      
37
  
Electronic refund check / deposit fees
    
-
      
540
  
Debit / credit card interchange income
    
1,235
      
1,149
  
Tax preparation fees
    
608
      
596
  
Other
    
193
      
261
  
     
3,288
      
3,646
  
Noninterest expense:
                
Salaries and employee benefits
    
6,347
      
6,012
  
Occupancy
    
524
      
521
  
Furniture and equipment
    
318
      
350
  
Professional fees
    
473
      
500
  
Marketing expense
    
280
      
279
  
FDIC insurance
    
241
      
183
  
Data processing
    
911
      
925
  
Software
    
673
      
541
  
Other
    
1,534
      
1,507
  
     
11,301
      
10,818
  
                 
Income before income taxes
    
5,253
      
5,552
  
Provision for income taxes
    
956
      
1,146
  
                 
NET INCOME
  
$
4,297
    
$
4,406
  
                 
Earnings per share
  
$
0.91
    
$
0.94
  

See accompanying notes to consolidated financial statements

4
 
OHIO VALLEY BANC CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(dollars in thousands)

 
Three months ended
March 31,
  
   
2026
    
2025
  
             
Net Income
  
$
4,297
    
$
4,406
  
                 
Other comprehensive income (loss):
                
Change in unrealized (loss) gain on available for sale securities
    
(2,810
)
    
2,589
  
Related tax benefit (expense)
    
620
      
(571
)
Total other comprehensive  (loss) income, net of tax
    
(2,190
)
    
2,018
  
                 
Total comprehensive income
  
$
2,107
    
$
6,424
  
 
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 January 1, 2026
  
$
5,491
    
$
52,321
    
$
133,007
    
$
(1,869
)
  
$
(18,693
)
  
$
170,257
  
Net income
    
—
      
—
      
4,297
      
—
      
—
      
4,297
  
Other comprehensive income (loss), net
    
—
      
—
      
—
      
(2,190
)
    
—
      
(2,190
)
Cash dividends, $0.23 per share
    
—
      
—
      
(1,084
)
    
—
      
—
      
(1,084
)
Balance at March 31, 2026
  
$
5,491
    
$
52,321
    
$
136,220
    
$
(4,059
)
  
$
(18,693
)
  
$
171,280
  
                                                 
Balance at January 1, 2025
  
$
5,491
    
$
52,321
    
$
121,693
    
$
(10,484
)
  
$
(18,693
)
  
$
150,328
  
Net income
    
—
      
—
      
4,406
      
—
      
—
      
4,406
  
Other comprehensive income (loss), net
    
—
      
—
      
—
      
2,018
      
—
      
2,018
  
Cash dividends, $0.22 per share
    
—
      
—
      
(1,037
)
    
—
      
—
      
(1,037
)
Balance at March 31, 2025
  
$
5,491
    
$
52,321
    
$
125,062
    
$
(8,466
)
  
$
(18,693
)
  
$
155,715
  

See accompanying notes to consolidated financial statements
 
6
 
OHIO VALLEY BANC CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(dollars in thousands)

 
Three months ended
March 31,
  
   
2026
    
2025
  
             
Net cash provided by operating activities
  
$
7,190
    
$
496
  
                 
Investing activities:
                
Proceeds from maturities and paydowns of securities available for sale
    
44,666
      
39,480
  
Purchases of securities available for sale
    
(44,677
)
    
(27,482
)
Proceeds from calls and maturities of securities held to maturity
    
15
      
515
  
   Net change in loans
    
(19,038
)
    
18,139
  
Purchases of premises and equipment
    
(387
)
    
(358
)
Withdrawals from bank owned life insurance and annuity asset
    
57
      
57
  
Net cash (used in) provided by investing activities
    
(19,364
)
    
30,351
  
                 
Financing activities:
                
Change in deposits
    
94,007
      
8,991
  
Cash dividends
    
(1,084
)
    
(1,037
)
Repayment of Federal Home Loan Bank borrowings
    
(1,354
)
    
(1,383
)
Change in other short-term borrowings
    
35
      
83
  
Net cash provided by financing activities
    
91,604
      
6,654
  
                 
Change in cash and cash equivalents
    
79,430
      
37,501
  
Cash and cash equivalents at beginning of period
    
45,897
      
83,107
  
Cash and cash equivalents at end of period
  
$
125,327
    
$
120,608
  
                 
Supplemental disclosure:
                
Cash paid for interest
  
$
5,400
    
$
6,562
  
Proceeds from bank owned life insurance and annuity assets not settled
    
1,020
      
—
  

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 March 31, 2026, and its results of operations and cash flows for the periods presented.  The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2026.  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, 2025, filed with the SEC on March 13, 2026 (the “2025 Annual Report”), contains consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements.

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 November 2024, the FASB issued Accounting Standards Update (“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 2024-03 should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.

In November 2025, the FASB issued ASU No. 2025‑08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans. This update amends the guidance in Accounting Standards Codification (“ASC”) Topic 326 to improve the accounting for acquired loans. The amendments expand the population of acquired financial assets subject to the “gross-up” approach to include certain loans acquired without evidence of significant credit deterioration that meet the definition of “purchased seasoned loans.” Under this approach, an allowance for expected credit losses is recognized at the acquisition date as an adjustment to the amortized cost basis of the asset, rather than through credit loss expense. The amendments are intended to improve comparability and better reflect the economics of acquired loans by eliminating the recognition of a Day 1 credit loss expense for such assets. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods, and should be applied prospectively to loans acquired after the adoption date. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-08 on its consolidated financial statements.



8
 
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In December 2025, the FASB issued ASU No. 2025‑11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This update amends the guidance in ASC Topic 270 to improve the clarity and usability of interim reporting requirements. The amendments are intended to enhance the navigability of interim disclosure requirements and clarify the applicability of Topic 270. The ASU provides a comprehensive list of disclosures required in interim periods under US GAAP and introduces a disclosure principle requiring entities to disclose events and changes that occur after the end of the most recent annual reporting period that have a material impact on the entity. The amendments also clarify the form and content of interim financial statements. The guidance is not intended to change the fundamental nature of interim reporting or significantly expand or reduce existing disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities, and for interim reporting periods within annual reporting periods beginning after December 15, 2028, for all other entities. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025‑11 on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025‑12, Codification Improvements. This update is part of the FASB’s ongoing project to make incremental improvements to US GAAP and includes amendments to correct errors, clarify guidance, and improve consistency across various topics within the ASC. The amendments in ASU 2025‑12 affect multiple areas of US GAAP, including, but not limited to, earnings per share, lease accounting, transfers and servicing, and equity method investments. The changes are generally intended to enhance the clarity and operability of existing guidance and are not expected to have a significant impact on accounting practice for most entities. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025‑12 on its consolidated financial statements.

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.

Management made the accounting policy election to exclude accrued interest receivable from the estimate of credit losses. Accrued interest receivable on AFS debt securities totaled $917 at March 31, 2026 and $1,330 at December 31, 2025.

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 March 31, 2026 and December 31, 2025, there was no ACL related to AFS debt securities.
9
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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. Management classifies the HTM portfolio into two major security types: Obligations of states and political subdivisions and Agency mortgage-backed residential securities. Agency mortgage-backed residential securities consist of only two securities with balances that are not significant. 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 March 31, 2026, the ACL related to HTM debt securities was $1, unchanged from December 31, 2025. Furthermore, there was no corresponding provision expense during the three months ended March 31, 2026 and 2025.

Management made the accounting policy election to exclude accrued interest receivable from the estimate of credit losses. Accrued interest receivable on HTM debt securities totaled $37 at March 31, 2026 and $13 at December 31, 2025.

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 non-accrual 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.


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 March 31, 2026 and December 31, 2025, 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.
10

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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, referred to above as “Loss Driver”, 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.

The Company has elected to exclude accrued interest receivable from the measurement of its ACL. Accrued interest receivable on loans totaled $4,401 at March 31, 2026 and $4,111 at December 31, 2025. 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.

At March 31, 2026, there was $12,943 in the ACL related to loans, compared to $11,519 at December 31, 2025. This resulted in corresponding provision expense of $1,702 during the three months ended March 31, 2026, compared to $476 during the three months ended March 31, 2025.

The Company’s loan portfolio segments have been identified as follows: Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.
11
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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. At March 31, 2026, there was $791 in the ACL related to off-balance sheet credit exposures, compared to $871 at December 31, 2025. This resulted in corresponding provision expense recoveries of $80 and $60 during the three months ended March 31, 2026 and 2025, respectively.

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 for both the three months ended March 31, 2026 and 2025. 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 entity has the ability to access as of the measurement date.
12
NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Level 2: Significant other observable inputs other than Level 1 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 is generally based on the fair value of collateral, less costs to sell. When carried at fair value, individually evaluated collateral dependent loans generally receive specific allocations of the ACL. For collateral dependent loans, 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. 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.

Other Real Estate Owned:  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 the 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 both collateral-dependent impaired loans and other real estate 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 that typically approximate 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).



13
 
NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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 March 31, 2026 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
  
$
86,233
    
$
—
    
$
—
  
U.S. Government sponsored entity securities
    
—
      
5,098
      
—
  
Agency mortgage-backed securities, residential
    
—
      
160,108
      
—
  
Interest rate swap derivatives
    
—
      
767
      
—
  
                         
Liabilities:
                        
Interest rate swap derivatives
    
—
      
(767
)
    
—
  

 
Fair Value Measurements at December 31, 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
  
$
86,779
    
$
—
    
$
—
  
U.S. Government sponsored entity securities
    
—
      
5,124
      
—
  
Agency mortgage-backed securities, residential
    
—
      
162,003
      
—
  
Interest rate swap derivatives
    
—
      
754
      
—
  
                         
Liabilities:
                        
Interest rate swap derivatives
    
—
      
(754
)
    
—
  

There were no transfers into or out of Level 3 during the periods ended March 31, 2026 or 2025.


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, 2025. Assets or liabilities measured at fair value on a nonrecurring basis at March 31, 2026 are summarized below:

Fair Value Measurements at March 31, 2026 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:
            
   Commercial real estate:
                  
     Owner-occupied
  
$
—
    
$
—
    
$
3,900
  
     Nonowner-occupied
    
—
      
—
      
4,938
  

At March 31, 2026, the recorded investment of individually evaluated collateral dependent loans measured for impairment using the fair value of collateral totaled $10,869, with a corresponding valuation allowance of $2,031, resulting in an increase of $2,031 in provision expense during the three months ended March 31, 2026, with no corresponding charge-offs recognized. This is compared to no impact to provision expense during the three months ended March 31, 2025.
14
NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

There were no financial instruments measured at fair value on a non-recurring basis at December 31, 2025. 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 March 31, 2026:

   
Fair
Value
    
Valuation
Technique(s)
  
Unobservable
Input(s)
  
Range
    
Weighted Average
  
Individually evaluated collateral dependent loans:
          
1
        
1
        
Commercial real estate loans:
                              
  Owner-occupied
  
$
3,900
    
Sales approach
  
Adjustment to comparables
  
0% to 0.21%
      
0.09
%
  Nonowner-occupied
    
4,938
    
Income approach
  
Capitalization rate
    
8
%
    
8
%



The carrying amounts and estimated fair values of financial instruments at March 31, 2026 and December 31, 2025 are as follows:

 
Carrying
    
Fair Value Measurements at March 31, 2026 Using
  
   
Value
    
Level 1
    
Level 2
    
Level 3
    
Total
  
Financial Assets:
                              
Cash and cash equivalents
  
$
125,327
    
$
125,327
    
$
—
    
$
—
    
$
125,327
  
Securities available for sale
    
251,439
      
86,233
      
165,206
      
—
      
251,439
  
Securities held to maturity
    
5,435
      
—
      
2,960
      
2,058
      
5,018
  
Loans, net
    
1,201,871
      
—
      
—
      
1,190,836
      
1,190,836
  
Interest rate swap derivatives
    
767
      
—
      
767
      
—
      
767
  
Accrued interest receivable
    
5,535
      
—
      
1,116
      
4,419
      
5,535
  
                                         
Financial liabilities:
                                        
Deposits
    
1,423,674
      
878,615
      
545,468
      
—
      
1,424,083
  
Other borrowed funds
    
43,529
      
—
      
43,000
      
—
      
43,000
  
Subordinated debentures
    
8,500
      
—
      
8,500
      
—
      
8,500
  
Interest rate swap derivatives
    
767
      
—
      
767
      
—
      
767
  
Accrued interest payable
    
8,749
      
—
      
8,749
      
—
      
8,749
  

 
Carrying
    
Fair Value Measurements at December 31, 2025 Using:
  
   
Value
    
Level 1
    
Level 2
    
Level 3
    
Total
  
Financial Assets:
                              
Cash and cash equivalents
  
$
45,897
    
$
45,897
    
$
—
    
$
—
    
$
45,897
  
Securities available for sale
    
253,906
      
86,779
      
167,127
      
—
      
253,906
  
Securities held to maturity
    
5,452
      
—
      
2,963
      
2,111
      
5,074
  
Loans, net
    
1,184,499
      
—
      
—
      
1,171,189
      
1,171,189
  
Interest rate swap derivatives
    
754
      
—
      
754
      
—
      
754
  
Accrued interest receivable
    
5,476
      
—
      
1,357
      
4,119
      
5,476
  
                                         
Financial liabilities:
                                        
Deposits
    
1,329,667
      
839,931
      
490,970
      
—
      
1,330,901
  
Other borrowed funds
    
44,848
      
—
      
44,386
      
—
      
44,386
  
Subordinated debentures
    
8,500
      
—
      
8,500
      
—
      
8,500
  
Interest rate swap derivatives
    
754
      
—
      
754
      
—
      
754
  
Accrued interest payable
    
6,584
      
-
      
6,584
      
—
      
6,584
  

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 March 31, 2026 and December 31, 2025 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
  
March 31, 2026
                        
U.S. Government securities
  
$
86,295
    
$
209
    
$
(271
)
  
$
86,233
  
U.S. Government sponsored entity securities
    
5,336
      
—
      
(238
)
    
5,098
  
Agency mortgage-backed securities, residential
    
165,015
      
117
      
(5,024
)
    
160,108
  
Total securities
  
$
256,646
    
$
326
    
$
(5,533
)
  
$
251,439
  
                                 
December 31, 2025
                                
U.S. Government securities
  
$
86,442
    
$
575
    
$
(238
)
  
$
86,779
  
U.S. Government sponsored entity securities
    
5,336
      
—
      
(212
)
    
5,124
  
Agency mortgage-backed securities, residential
    
164,525
      
768
      
(3,290
)
    
162,003
  
Total securities
  
$
256,303
    
$
1,343
    
$
(3,740
)
  
$
253,906
  

Securities Held to Maturity
  
Amortized
Cost
    
Gross Unrecognized
Gains
    
Gross Unrecognized
Losses
    
Estimated
Fair Value
    
Allowance for Credit Losses
  
March 31, 2026
                              
Obligations of states and political subdivisions
  
$
5,436
    
$
—
    
$
(418
)
  
$
5,018
    
$
(1
)
Total securities
  
$
5,436
    
$
—
    
$
(418
)
  
$
5,018
    
$
(1
)
                                         
December 31, 2025
                                        
Obligations of states and political subdivisions
  
$
5,453
    
$
-
    
$
(379
)
  
$
5,074
    
$
(1
)
Total securities
  
$
5,453
    
$
-
    
$
(379
)
  
$
5,074
    
$
(1
)

The amortized cost and estimated fair value of debt securities at March 31, 2026, 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
  
$
56,954
    
$
56,702
    
$
632
    
$
622
  
Due in over one to five years
    
34,677
      
34,629
      
2,650
      
2,515
  
Due in over five to ten years
    
—
      
—
      
325
      
266
  
Due after ten years
    
—
      
—
      
1,829
      
1,615
  
Agency mortgage-backed securities, residential
    
165,015
      
160,108
      
-
      
-
  
Total debt securities
  
$
256,646
    
$
251,439
    
$
5,436
    
$
5,018
  

There were no sales of securities during the three months ended March 31, 2026 and 2025.

Debt securities with a carrying value of approximately $176,175 at March 31, 2026 and $195,245 at December 31, 2025, respectively, 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 losses has not been recorded at March 31, 2026 and December 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position:

March 31, 2026
  
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
  
$
41,975
    
$
(92
)
  
$
11,823
    
$
(179
)
  
$
53,798
    
$
(271
)
U.S. Government sponsored entity
   securities
    
—
      
—
      
5,098
      
(238
)
    
5,098
      
(238
)
Agency mortgage-backed
                                                
   securities, residential
    
80,646
      
(1,579
)
    
43,381
      
(3,445
)
    
124,027
      
(5,024
)
Total available for sale
  
$
122,621
    
$
(1,671
)
  
$
60,302
    
$
(3,862
)
  
$
182,923
    
$
(5,533
)

December 31, 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
  
$
—
    
$
—
    
$
16,755
    
$
(238
)
  
$
16,755
    
$
(238
)
U.S. Government sponsored entity
   securities
    
—
      
—
      
5,124
      
(212
)
    
5,124
      
(212
)
Agency mortgage-backed securities, residential
    
35,475
      
(154
)
    
46,121
      
(3,136
)
    
81,596
      
(3,290
)
Total available for sale
  
$
35,475
    
$
(154
)
  
$
68,000
    
$
(3,586
)
  
$
103,475
    
$
(3,740
)

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 March 31, 2026, the Company had 64 AFS debt securities in an unrealized position without an ACL, of which 7 were from U.S. Government securities, 2 were from U.S. Government sponsored entity securities, and 55 were from Agency mortgage-backed residential securities. Comparatively at December 31, 2025, the Company had 53 AFS debt securities in an unrealized position without an ACL, of which 3 were from U.S. Government securities, 2 were from U.S. Government sponsored entity securities, and 48 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 March 31, 2026 and December 31, 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 March 31, 2026 and December 31, 2025.
17
NOTE 3 – SECURITIES (Continued)

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

Held to Maturity Debt Securities
  
Three months ended
March 31, 2026
    
Three months ended
March 31, 2025
  
Allowance for credit losses: 
            
    Beginning balance
  
$
1
    
$
1
  
    Provision for (recovery of) credit loss expense
    
—
      
—
  
Allowance for credit losses ending balance
  
$
1
    
$
1
  

The Company’s HTM securities 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 March 31, 2026, there were no past due principal and interest payments related to HTM securities. During the first quarter of 2026 and 2025, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three months ended March 31, 2026 and 2025.

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are comprised of the following:

 
March 31,
2026
    
December 31,
2025
  
             
Residential real estate
  
$
423,761
    
$
417,920
  
Commercial real estate:
                
Owner-occupied
    
110,974
      
114,724
  
Nonowner-occupied
    
283,290
      
269,285
  
Construction
    
89,979
      
86,028
  
Commercial and industrial
    
170,857
      
167,099
  
Consumer:
                
Automobile
    
34,401
      
37,277
  
Home equity
    
51,883
      
50,605
  
Other
    
49,669
      
53,080
  
     
1,214,814
      
1,196,018
  
Less:  Allowance for credit losses
    
(12,943
)
    
(11,519
)
                 
Loans, net
  
$
1,201,871
    
$
1,184,499
  

At March 31, 2026 and December 31, 2025, net deferred loan origination fees were $474 and $357, respectively. At March 31, 2026 and December 31, 2025, net unamortized loan purchase discounts were $869 and $833, respectively.
18
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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 March 31, 2026 and December 31, 2025:

March 31, 2026
  
Loans Past Due
90 Days And
Still Accruing
    
Nonaccrual
Loans With No
ACL
    
Nonaccrual
Loans With an
ACL
    
Total
Nonaccrual
Loans
  
                         
Residential real estate
  
$
228
    
$
—
    
$
1,879
    
$
1,879
  
Commercial real estate:
                                
Owner-occupied
    
—
      
679
      
4,410
      
5,089
  
Nonowner-occupied
    
106
      
3,860
      
6,203
      
10,063
  
Construction
    
—
      
—
      
—
      
—
  
Commercial and industrial
    
812
      
1,173
      
6
      
1,179
  
Consumer:
                                
Automobile
    
27
      
—
      
205
      
205
  
Home equity
    
—
      
24
      
187
      
211
  
Other
    
14
      
—
      
65
      
65
  
Total
  
$
1,187
    
$
5,736
    
$
12,955
    
$
18,691
  

December 31, 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
  
$
—
    
$
324
    
$
1,758
    
$
2,082
  
Commercial real estate:
                                
Owner-occupied
    
—
      
679
      
—
      
679
  
Nonowner-occupied
    
—
      
4,956
      
214
      
5,170
  
Construction
    
—
      
6,000
      
—
      
6,000
  
Commercial and industrial
    
1,171
      
942
      
8
      
950
  
Consumer:
                                
Automobile
    
75
      
—
      
172
      
172
  
Home equity
    
—
      
24
      
294
      
318
  
Other
    
12
      
—
      
103
      
103
  
Total
  
$
1,258
    
$
12,925
    
$
2,549
    
$
15,474
  

The Company recognized $8 and $18 of interest income in nonaccrual loans during the three months ended March 31, 2026 and 2025, 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 March 31, 2026 and December 31, 2025:

March 31, 2026
  
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
  
$
3,984
    
$
600
    
$
740
    
$
5,324
    
$
418,437
    
$
423,761
  
Commercial real estate:
                                                
Owner-occupied
    
202
      
155
      
5,089
      
5,446
      
105,528
      
110,974
  
Nonowner-occupied
    
869
      
—
      
6,106
      
6,975
      
276,315
      
283,290
  
Construction
    
87
      
612
      
—
      
699
      
89,280
      
89,979
  
Commercial and industrial
    
929
      
5,564
      
1,985
      
8,478
      
162,379
      
170,857
  
Consumer:
                                                
Automobile
    
635
      
279
      
124
      
1,038
      
33,363
      
34,401
  
Home equity
    
521
      
50
      
148
      
719
      
51,164
      
51,883
  
Other
    
420
      
102
      
54
      
576
      
49,093
      
49,669
  
Total
  
$
7,647
    
$
7,362
    
$
14,246
    
$
29,255
    
$
1,185,559
    
$
1,214,814
  

December 31, 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
  
$
4,656
    
$
1,523
    
$
570
    
$
6,749
    
$
411,171
    
$
417,920
  
Commercial real estate:
                                                
Owner-occupied
    
672
      
4,711
      
679
      
6,062
      
108,662
      
114,724
  
Nonowner-occupied
    
—
      
—
      
—
      
—
      
269,285
      
269,285
  
Construction
    
—
      
—
      
6,000
      
6,000
      
80,028
      
86,028
  
Commercial and industrial
    
248
      
35
      
2,113
      
2,396
      
164,703
      
167,099
  
Consumer:
                                                
Automobile
    
918
      
327
      
122
      
1,367
      
35,910
      
37,277
  
Home equity
    
194
      
64
      
149
      
407
      
50,198
      
50,605
  
Other
    
581
      
225
      
52
      
858
      
52,222
      
53,080
  
Total
  
$
7,269
    
$
6,885
    
$
9,685
    
$
23,839
    
$
1,172,179
    
$
1,196,018
  

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 March 31, 2026 and December 31, 2025, 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
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Owner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
250
    
$
31,838
    
$
13,202
    
$
17,653
    
$
6,433
    
$
20,853
    
$
3,822
    
$
94,051
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
11,680
      
—
      
11,680
  
        Substandard
    
—
      
—
      
—
      
—
      
—
      
5,143
      
100
      
5,243
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
250
    
$
31,838
    
$
13,202
    
$
17,653
    
$
6,433
    
$
37,676
    
$
3,922
    
$
110,974
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
6
    
$
—
    
$
49
    
$
—
    
$
55
  



21
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Nonowner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
9,287
    
$
57,020
    
$
36,017
    
$
26,912
    
$
38,080
    
$
99,157
    
$
6,851
    
$
273,324
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
        Substandard
    
—
      
—
      
—
      
3,860
      
6,106
      
—
      
—
      
9,966
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
9,287
    
$
57,020
    
$
36,017
    
$
30,772
    
$
44,186
    
$
99,157
    
$
6,851
    
$
283,290
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Construction
                                                
     Risk Rating
                                                
        Pass
  
$
4,731
    
$
38,736
    
$
12,937
    
$
9,300
    
$
14,182
    
$
3,407
    
$
5,384
    
$
88,677
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
14
      
—
      
14
  
        Substandard
    
—
      
—
      
—
      
612
      
—
      
—
      
676
      
1,288
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
4,731
    
$
38,736
    
$
12,937
    
$
9,912
    
$
14,182
    
$
3,421
    
$
6,060
    
$
89,979
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial and Industrial
                                                
     Risk Rating
                                                
        Pass
  
$
4,199
    
$
27,300
    
$
8,271
    
$
5,595
    
$
19,362
    
$
60,082
    
$
31,963
    
$
156,772
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
2,181
      
2,181
  
        Substandard
    
—
      
—
      
380
      
98
      
32
      
6,252
      
5,142
      
11,904
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
4,199
    
$
27,300
    
$
8,651
    
$
5,693
    
$
19,394
    
$
66,334
    
$
39,286
    
$
170,857
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
2
    
$
—
    
$
1
    
$
—
    
$
3
  


22
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Owner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
33,907
    
$
13,312
    
$
18,663
    
$
6,468
    
$
5,279
    
$
15,235
    
$
1,574
    
$
94,438
  
     Special Mention
    
—
      
—
      
—
      
—
      
12,260
      
—
      
—
      
12,260
  
        Substandard
    
—
      
—
      
—
      
—
      
4,191
      
2,036
      
1,799
      
8,026
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
33,907
    
$
13,312
    
$
18,663
    
$
6,468
    
$
21,730
    
$
17,271
    
$
3,373
    
$
114,724
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Nonowner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
54,962
    
$
35,753
    
$
25,438
    
$
37,616
    
$
29,092
    
$
68,754
    
$
6,932
    
$
258,547
  
     Special Mention
    
—
      
—
      
1,603
      
—
      
—
      
—
      
—
      
1,603
  
        Substandard
    
—
      
—
      
4,956
      
963
      
—
      
3,216
      
—
      
9,135
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
54,962
    
$
35,753
    
$
31,997
    
$
38,579
    
$
29,092
    
$
71,970
    
$
6,932
    
$
269,285
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate:
                                                
   Construction
                                                
     Risk Rating
                                                
        Pass
  
$
34,799
    
$
12,252
    
$
9,561
    
$
14,222
    
$
1,203
    
$
2,384
    
$
4,300
    
$
78,721
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
19
      
—
      
19
  
        Substandard
    
—
      
—
      
612
      
6,000
      
—
      
—
      
676
      
7,288
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
34,799
    
$
12,252
    
$
10,173
    
$
20,222
    
$
1,203
    
$
2,403
    
$
4,976
    
$
86,028
  
                                                                 
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, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial and Industrial
                                                
     Risk Rating
                                                
        Pass
  
$
28,717
    
$
8,759
    
$
5,519
    
$
20,266
    
$
22,949
    
$
38,192
    
$
27,598
    
$
152,000
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
2,550
      
2,550
  
        Substandard
    
—
      
380
      
469
      
33
      
141
      
6,293
      
5,233
      
12,549
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
28,717
    
$
9,139
    
$
5,988
    
$
20,299
    
$
23,090
    
$
44,485
    
$
35,381
    
$
167,099
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
45
    
$
—
    
$
12
    
$
58
    
$
—
    
$
45
    
$
160
  

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses.  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 March 31, 2026 and December 31, 2025:

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Residential Real Estate
                                                
     Payment Performance
                                                
        Performing
  
$
19,543
    
$
73,749
    
$
62,733
    
$
49,526
    
$
33,349
    
$
156,391
    
$
26,363
    
$
421,654
  
        Nonperforming
    
—
      
—
      
317
      
177
      
617
      
996
      
—
      
2,107
  
    Total
  
$
19,543
    
$
73,749
    
$
63,050
    
$
49,703
    
$
33,966
    
$
157,387
    
$
26,363
    
$
423,761
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
48
    
$
—
    
$
—
    
$
24
    
$
—
    
$
72
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Automobile
                                                
     Payment Performance
                                                
        Performing
  
$
2,760
    
$
9,249
    
$
6,803
    
$
8,228
    
$
5,574
    
$
1,555
    
$
—
    
$
34,169
  
        Nonperforming
    
—
      
44
      
35
      
60
      
82
      
11
      
—
      
232
  
    Total
  
$
2,760
    
$
9,293
    
$
6,838
    
$
8,288
    
$
5,656
    
$
1,566
    
$
—
    
$
34,401
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
23
    
$
69
    
$
43
    
$
37
    
$
2
    
$
—
    
$
174
  



24
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 
                                      
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Home Equity
                                                
     Payment Performance
                                                
        Performing
  
$
—
    
$
—
    
$
—
    
$
—
    
$
66
    
$
—
    
$
51,606
    
$
51,672
  
        Nonperforming
    
—
      
—
      
—
      
—
      
—
      
—
      
211
      
211
  
    Total
  
$
—
    
$
—
    
$
—
    
$
—
    
$
66
    
$
—
    
$
51,817
    
$
51,883
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
                                                 
                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Other
                                                
     Payment Performance
                                                
        Performing
  
$
3,774
    
$
14,330
    
$
5,324
    
$
5,219
    
$
3,973
    
$
4,040
    
$
12,930
    
$
49,590
  
        Nonperforming
    
—
      
10
      
33
      
19
      
8
      
9
      
—
      
79
  
    Total
  
$
3,774
    
$
14,340
    
$
5,357
    
$
5,238
    
$
3,981
    
$
4,049
    
$
12,930
    
$
49,669
  
                                                                 
Current Period gross charge-offs
  
$
224
    
$
14
    
$
34
    
$
22
    
$
9
    
$
7
    
$
45
    
$
355
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Residential Real Estate
                                                
     Payment Performance
                                                
        Performing
  
$
70,687
    
$
63,505
    
$
51,608
    
$
34,817
    
$
41,803
    
$
119,416
    
$
34,002
    
$
415,838
  
        Nonperforming
    
—
      
415
      
201
      
430
      
26
      
1,010
      
—
      
2,082
  
    Total
  
$
70,687
    
$
63,920
    
$
51,809
    
$
35,247
    
$
41,829
    
$
120,426
    
$
34,002
    
$
417,920
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
100
    
$
—
    
$
15
    
$
23
    
$
15
    
$
—
    
$
153
  



25
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Automobile
                                                
     Payment Performance
                                                
        Performing
  
$
10,413
    
$
7,814
    
$
9,907
    
$
6,831
    
$
1,672
    
$
393
    
$
—
    
$
37,030
  
        Nonperforming
    
32
      
63
      
46
      
106
      
—
      
—
      
—
      
247
  
    Total
  
$
10,445
    
$
7,877
    
$
9,953
    
$
6,937
    
$
1,672
    
$
393
    
$
—
    
$
37,277
  
                                                                 
Current Period gross charge-offs
  
$
34
    
$
251
    
$
338
    
$
118
    
$
12
    
$
16
    
$
—
    
$
769
  

 
                                      
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Home Equity
                                                
     Payment Performance
                                                
        Performing
  
$
—
    
$
4
    
$
19
    
$
—
    
$
100
    
$
140
    
$
50,024
    
$
50,287
  
        Nonperforming
    
—
      
—
      
—
      
—
      
—
      
—
      
318
      
318
  
    Total
  
$
—
    
$
4
    
$
19
    
$
—
    
$
100
    
$
140
    
$
50,342
    
$
50,605
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
31
    
$
31
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer:
                                                
   Other
                                                
     Payment Performance
                                                
        Performing
  
$
11,889
    
$
12,012
    
$
6,005
    
$
4,696
    
$
3,425
    
$
1,535
    
$
13,403
    
$
52,965
  
        Nonperforming
    
3
      
40
      
23
      
23
      
7
      
19
      
—
      
115
  
    Total
  
$
11,892
    
$
12,052
    
$
6,028
    
$
4,719
    
$
3,432
    
$
1,554
    
$
13,403
    
$
53,080
  
                                                                 
Current Period gross charge-offs
  
$
346
    
$
148
    
$
162
    
$
76
    
$
73
    
$
29
    
$
376
    
$
1,210
  

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 3.68% of total loans were unsecured at March 31, 2026, down from 3.73% at December 31, 2025.

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.



26
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

During the three months ended March 31, 2026 and 2025, the Company experienced no new modifications to borrowers experiencing financial difficulty.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2026 and 2025:

March 31, 2026
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
and Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Beginning balance
  
$
2,793
    
$
5,331
    
$
1,738
    
$
1,657
    
$
11,519
  
Provision for credit losses
    
(421
)
    
1,999
      
(101
)
    
225
      
1,702
  
Loans charged-off
    
(72
)
    
(55
)
    
(3
)
    
(529
)
    
(659
)
Recoveries
    
16
      
—
      
16
      
349
      
381
  
Total ending allowance balance
  
$
2,316
    
$
7,275
    
$
1,650
    
$
1,702
    
$
12,943
  

March 31, 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
    
(4
)
    
136
      
273
      
71
      
476
  
Loans charged-off
    
(5
)
    
—
      
(160
)
    
(526
)
    
(691
)
Recoveries
    
18
      
-
      
56
      
192
      
266
  
Total ending allowance balance
  
$
2,693
    
$
3,789
    
$
1,705
    
$
1,952
    
$
10,139
  

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of March 31, 2026 and December 31, 2025:

 
Collateral Type
  
March 31, 2026
  
Real Estate
    
Business Assets
    
Total
  
Residential real estate
  
$
—
    
$
—
    
$
—
  
Commercial real estate:
                        
Owner-occupied
    
4,887
      
140
      
5,027
  
Non-owner occupied
    
9,610
      
356
      
9,966
  
       Construction
    
1,288
      
—
      
1,288
  
Commercial and Industrial
    
614
      
1,145
      
1,759
  
Consumer:
                        
Automobile
    
—
      
9
      
9
  
Home equity
    
74
      
—
      
74
  
       Other
    
—
      
20
      
20
  
Total collateral dependent loans
  
$
16,473
    
$
1,670
    
$
18,143
  

27
 
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

 
Collateral Type
  
December 31, 2025
  
Real Estate
    
Business Assets
    
Total
  
Residential real estate
  
$
1,301
    
$
544
    
$
1,845
  
Commercial real estate:
                        
Owner-occupied
    
4,885
      
140
      
5,025
  
     Non-Owner-occupied
    
5,062
      
—
      
5,062
  
     Construction
    
7,288
      
—
      
7,288
  
Commercial & Industrial
    
543
      
1,257
      
1,800
  
Consumer:
                        
Automobile
    
—
      
14
      
14
  
Home equity
    
75
      
—
      
75
  
       Other
    
39
      
21
      
60
  
Total collateral dependent loans
  
$
19,193
    
$
1,976
    
$
21,169
  


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 classified as impaired 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 March 31, 2026 and December 31, 2025. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $534 and $788 as of March 31, 2026 and December 31, 2025, 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 March 31, 2026, the contract amounts of these instruments totaled approximately $232,139, compared to $226,570 at December 31, 2025.  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 March 31, 2026, the estimated ACL related to off-balance sheet commitments was $791, compared to $871 at December 31, 2025. This includes an $80 recovery of provision expense during the three months ended March 31, 2026 compared to  a $60 recovery in provision expense during the three months ended March 31, 2025. 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 March 31, 2026 and December 31, 2025 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

 
FHLB
Borrowings
    
Promissory
Notes
    
Totals
  
                   
March 31, 2026
  
$
40,893
    
$
2,636
    
$
43,529
  
December 31, 2025
  
$
42,247
    
$
2,601
    
$
44,848
  

Pursuant to collateral agreements with the FHLB, advances are secured by $415,462 in qualifying mortgage loans, $33,766 in commercial loans and $3,118 in FHLB stock at March 31, 2026.  Fixed-rate FHLB advances of $40,893 mature through 2042 and have interest rates ranging from 1.53% to 4.91% and a year-to-date weighted average cost of 3.99% at March 31, 2026 and 4.03% at December 31, 2025.  There were no variable-rate FHLB borrowings at March 31, 2026.

At March 31, 2026, 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 March 31, 2026.

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 $261,624 at March 31, 2026.  Of this maximum borrowing capacity, the Company had $172,606 available to use as additional borrowings, of which $172,606 could be used for short term, cash management advances, as mentioned above.

At March 31, 2026, 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 March 31, 2026, 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 March 11, 2027, and have fixed rates ranging from 4.25% to 4.60% and a year-to-date weighted average cost of 4.39% at March 31, 2026, as compared to 4.49% at December 31, 2025.  At March 31, 2026 and December 31, 2025, there were six promissory notes payable by Ohio Valley to related parties totaling $2,636.  There were no promissory notes payable to other banks at March 31, 2026 and December 31, 2025, respectively.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $48,125 at March 31, 2026 and $52,000 at December 31, 2025.

Scheduled principal payments as of March 31, 2026:

 
FHLB
Borrowings
    
Promissory
Notes
    
Totals
  
                   
2026
  
$
10,503
    
$
1,778
    
$
12,281
  
2027
    
22,870
      
858
      
23,728
  
2028
    
1,349
      
—
      
1,349
  
2029
    
1,319
      
—
      
1,319
  
2030
    
1,599
      
—
      
1,599
  
Thereafter
    
3,253
      
—
      
3,253
  
   
$
40,893
    
$
2,636
    
$
43,529
  

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 is 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 1 month to 15.3 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
March 31,
2026
    
As of
December 31,
2025
  
Operating leases:
            
Operating lease right-of-use assets
  
$
876
    
$
923
  
Operating lease liabilities
    
876
      
923
  

The components of lease cost were as follows:

Three months ended
March 31,
  
 
2026
  
2025
  
Operating lease cost
  
$
54
    
$
49
  
Short-term lease expense
    
—
      
-
  

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2026 are as follows:

 
Operating
Leases
  
2026 (remaining)
  
$
104
  
2027
    
127
  
2028
    
129
  
2029
    
129
  
2030
    
121
  
Thereafter
    
543
  
Total lease payments
    
1,153
  
Less: Imputed Interest
    
(277
)
Total operating leases
  
$
876
  

Other information was as follows:

 
As of
March 31,
2026
    
As of
December 31,
2025
  
Weighted-average remaining lease term for operating leases
  
10.4 years
    
10.7 years
  
Weighted-average discount rate for operating leases
    
2.83
%
    
2.85
%


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.

30
 

NOTE 9 – DEPOSITS

Deposits are comprised of the following:

 
March 31,
2026
    
December 31,
2025
  
             
Noninterest-bearing deposits
  
$
332,760
    
$
314,131
  
                 
Interest-bearing deposits:
                
NOW accounts
    
230,434
      
218,432
  
   Savings and money market
    
315,421
      
307,368
  
Time deposits of $250 or less
    
438,183
      
394,183
  
Time deposits of more than $250
    
106,876
      
95,553
  
      Total interest-bearing deposits
    
1,090,914
      
1,015,536
  
                 
Total deposits
  
$
1,423,674
    
$
1,329,667
  

Brokered deposits, included in time deposits, were $68,957 and $61,464 at March 31, 2026 and December 31, 2025, 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. The tax refund clearing agreement, and associated revenue recognized, ended in 2025.

• 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.




31
 
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 Exchange 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 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 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 applicable law.

BUSINESS OVERVIEW: The following discussion on consolidated financial statements includes 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.

FINANCIAL RESULTS OVERVIEW: Net income totaled $4,297 during the first quarter of 2026, a decrease of $109 from the same period in 2025. Earnings per share for the first quarter of 2026 finished at $.91 per share, compared to $.94 per share during the first quarter of 2025. Lower net earnings had a corresponding impact on the Company’s annualized net income to average asset ratio, or return on assets, which decreased 12 basis points to 1.08% during the first quarter of 2026, compared to the same period in 2025. In addition, the Company’s net income to average equity ratio, or return on equity, decreased 165 basis points to 10.17% during the first quarter of 2026, compared to the same period in 2025.

Lower earnings during the first quarter of 2026 compared to the first quarter of 2025 were primarily impacted by a $1,206 increase in provision expense caused by the collateral impairments of two commercial loan relationships. Lower earnings were also impacted by both noninterest income and noninterest expense. Noninterest income during the first quarter of 2026 decreased $358 compared to the same period in 2025, impacted primarily by lower electronic refund check and deposit fees. Noninterest expense during the first quarter of 2026 increased $483 compared to the same period in 2025, impacted primarily by higher salaries and employee benefit costs. These negative factors were partially offset by growth in net interest income, which increased $1,748 during the first quarter of 2026 over the same period in 2025, in large part due to an 8.6% increase in average earning assets and a 16 basis point improvement to the quarterly net interest margin. Earning asset growth came largely from loans, the Company’s highest earning asset, while the yields on earning assets increased at a faster pace than the average costs on interest-bearing liabilities.

32
 

During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, over the same period in 2025. This increase was primarily related to a $120,686 increase in average earning assets, led mostly by a 14.0% increase in average loans. The growth in average loans was related to the commercial and residential real estate lending segments. The emphasis on higher-yielding loan growth during the first quarter of 2026 contributed to lower average securities and interest-bearing deposits with banks, which decreased 5.5% and 14.3%, respectively, compared to the same period in 2025. The decrease in average securities was also impacted by a reduced need for securities to be pledged as collateral to secure public fund deposits. Earnings were further enhanced by a higher net interest margin, which finished at 4.01% at March 31, 2026 compared to 3.85% at March 31, 2025. Margin growth was related to an increase in the yield on earning assets, which outpaced the increase in average costs associated with the Company’s funding sources. The improvement to earning asset yields was directly related to the growth in higher-yielding loans and a 59 basis point improvement in the average yield on securities. The growth in average securities yield was largely impacted by several bond transactions that occurred in 2025 that replaced lower-yielding taxable securities with similar taxable securities at higher rates of return.  The cost of funding sources increased primarily within the Company’s Negotiable Order of Withdrawal (“NOW”) and savings accounts, while the average cost on certificates of deposit (“CDs”) decreased.

During the three months ended March 31, 2026, the Company’s provision for credit loss expense increased $1,206 when compared to the same period in 2025. The increase resulted primarily from a $2,031 specific allocation on two collateral dependent loans. This increase in reserves was partially offset by a decrease in certain qualitative risk factors and lower net charge offs.

During the three months ended March 31, 2026, noninterest income decreased $358, or 9.8%, from the same period in 2025. The decrease was primarily from electronic refund check and deposit fees, which decreased $540 from 2025. This was due to the expiration of a tax processing agreement with a third party. Also contributing to the decrease was other noninterest income, which was down $68 from 2025, impacted by less commercial loan servicing fees. The decreases were partially offset by a $138 increase in income from bank owned life insurance due to the receipt of life insurance proceeds and to the $86 increase in debit and credit card interchange income.

During the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, over the same period in 2025. Noninterest expense was impacted mostly by salaries and employee benefits, which increased $335 due to annual merit increases and higher health insurance premiums. Also increasing was software expense, which was up $132 over 2025, resulting from the investment in software to enhance internal processes. Noninterest expense was further impacted by a $58 increase in FDIC insurance expense related to a higher assessment base and an increase in the assessment rate in relation to higher nonperforming loans.

The $190 decrease in the Company’s provision for income taxes during the three months ended March 31, 2026, compared to the same period in 2025, was largely due to the decrease in operating income affected by the factors mentioned above, as well as a decrease in the effective tax rate.   

At March 31, 2026, total assets were $1,677,502, an increase of $94,848 from year-end 2025. The increase in assets was primarily the result of a $78,020 increase in interest-bearing deposits with banks, and an $18,796 increase in loans. The increase in interest-bearing deposits with banks was primarily associated with balances maintained at the Federal Reserve Bank (“Federal Reserve”) that were impacted by the first quarter growth in both interest- and noninterest-bearing deposit liabilities.

At March 31, 2026, total liabilities were $1,506,222, up $93,825 from year-end 2025. Contributing most to this increase were higher interest-bearing deposit balances, up $75,378 from year-end 2025, consisting of higher balances from time deposits (+11.3%) and savings, NOW and money market balances (+3.8%), while noninterest-bearing demand deposits increased 5.9% from year-end 2025.

At March 31, 2026, total shareholders' equity was $171,280, up $1,023 from December 31, 2025. This increase consisted of year-to-date net income being partially offset by an after-tax increase in net unrealized losses on AFS securities and year-to-date cash dividends paid. Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

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Comparison of Financial Condition
at March 31, 2026 and December 31, 2025

The following discussion focuses in more detail on the consolidated financial condition of the Company at March 31, 2026 compared to December 31, 2025.  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 March 31, 2026, cash and cash equivalents were $125,327, an increase of $79,430, or 173.1%, from December 31, 2025. The increase came primarily from interest-bearing deposits with banks, which were up $78,020, or 251.3%, from year-end 2025. The Company’s interest-bearing FRB clearing account contributed most to the increase in interest-bearing deposits with banks, representing 87% of cash and cash equivalents at March 31, 2026. The Company utilizes its interest-bearing FRB clearing account to manage excess funds, as well as to assist in funding earning asset growth. The increase in excess funds during the first three months of 2026 resulted primarily from growth in total deposits, which were up 7.1% from year-end 2025. 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 (“FOMC”). During the first quarter of 2026, the FOMC took no action to reduce the targeted federal funds rate, which remains at a target range of 3.50% to 3.75%. 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.

Securities

The balance of total securities decreased $2,484, or 1.0% from year-end 2025. The decrease came mostly from U.S. Government agency (“Agency”) mortgage-backed and U.S. Government securities, which were collectively down $2,441, or 1.0%, from year-end 2025. During the first three months of 2026, total purchases, net of maturities, for both Agency mortgage-backed and U.S. Government securities totaled $9,677. This was completely offset by $9,681 in principal repayments coming mostly from Agency mortgage-backed securities. 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 March 31, 2026, the Company’s investment securities portfolio was comprised mostly of Agency mortgage-backed securities at 62.3% of total investments, while U.S. Government securities represented 33.6%.

Included in the factors mentioned above were changes in net unrealized losses associated with AFS securities. During the first three months of 2026, an increase in long-term market rates led to a $2,810 decrease in the fair value associated with the Company’s AFS securities at March 31, 2026. The fair value of an investment security moves inversely to interest rates, so as rates increased, the fair value decreased, causing the unrealized loss in the portfolio to increase. 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 by 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.

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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.

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 $1,214,814 at March 31, 2026, representing an increase of $18,796, or 1.6%, as compared to $1,196,018 at December 31, 2025.  The increase in loans came primarily from both the commercial and residential real estate portfolios, as well as the commercial and industrial portfolio, while partially being offset by a decrease in the consumer loan portfolio from year-end 2025.

The Company’s commercial loan portfolio increased $17,964, or 2.8%, from year-end 2025. The most significant driver of this increase was higher loan balances within the commercial real estate portfolio, which increased $14,206, or 3.0%, from year-end 2025.  At March 31, 2026, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 39.9%. The increase from year-end 2025 came primarily from new originations within the nonowner-occupied and construction loan segments.

COMMERCIAL REAL ESTATE BY INDUSTRY
As of March 31, 2026
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 
  
$
252,361
      
52.11
%
Accommodation and Food Services 
    
77,852
      
16.08
%
Retail Trade 
    
42,216
      
8.72
%
Health Care and Social Assistance 
    
23,726
      
4.90
%
Manufacturing 
    
19,217
      
3.97
%
Construction 
    
17,692
      
3.65
%
All Other 
    
51,179
      
10.57
%
Total 
  
$
484,243
      
100.00
%

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Commercial loans were also positively impacted by an increase in the commercial and industrial portfolio, which was up $3,758, or 2.2%, from year-end 2025. The growth was impacted by an increase in larger loan originations during the quarter. 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.

At March 31, 2026, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 34.9%. During 2026, mortgage rates remained elevated relative to variable rate options, which provided the Company with less opportunities to originate and sell long-term fixed-rate residential mortgages to the Federal Home Loan Mortgage Corporation. Due to the elevated mortgage rates, mortgage customers were selecting more in-house variable rate mortgage products than long-term fixed rate products, which enhanced the growth in the portfolio. As a result, residential real estate loans increased $5,841, or 1.4%, from year-end 2025.

The increases in the Company’s commercial and residential real estate loan portfolios at March 31, 2026 were partially offset by a decrease in the Company’s consumer loan portfolio, which was down $5,009, or 3.6%, from year-end 2025. This change was impacted by a $3,411, or 6.4%, decrease in other consumer loans from year-end 2025, impacted by principal repayments and payoffs. Decreases in consumer loans also came from a $2,876, or 7.7%, 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 in 2024. Decreases in consumer loans were partially offset by a $1,278, or 2.5%, 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. Upon adoption of ASC 326 on January 1, 2023, and as of March 31, 2026, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis were due to non-credit related factors. Therefore, no ACL was recorded, and no provision expense was recognized during the three months ended March 31, 2026.

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 the issuer’s bond rating, historical loss, financial condition, and timely principal and interest payments. At March 31, 2026, the ACL for HTM debt securities was $1 based on a .02% cumulative default rate taken from the S&P and Moody’s bond rating index. This compares to an ACL of $1 at December 31, 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 considering 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.

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As of March 31, 2026, the ACL for loans totaled $12,943, or 1.07%, of total loans. As of December 31, 2025, the ACL for loans totaled $11,519, or 0.96%, of total loans. The $1,424, or 12.4%, increase in the ACL was impacted by a $2,031 increase in specific reserves on loans individually evaluated for impairment from year-end 2025. During the first quarter of 2026, the Company individually evaluated the commercial real estate loans of two borrowers for expected credit loss. After measuring the fair value of the loans’ collateral to the loans’ recorded investment, the Company identified $2,031 in expected losses based on the impairment associated with the borrowers’ collateral. This resulted in a corresponding charge to provision expense to establish the specific allocation within the ACL at March 31, 2026. The increase in the ACL was also impacted by additional reserves associated with loan growth of $18,796 during the first quarter of 2026 compared to an $18,529 decrease in loan balances during the first quarter of 2025. These increases in specific and general reserves were partially offset by the improvements in certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with improved general economic conditions. The Company also experienced a decrease in modeled loss rates due to the improvements in GDP and unemployment projections.

The Company experienced higher delinquency levels as compared to year-end 2025. Nonperforming loans to total loans increased to 1.64% at March 31, 2026, compared to 1.40% at December 31, 2025, while nonperforming assets to total assets increased to 1.19% at March 31, 2026, compared to 1.06% at December 31, 2025. The increase in nonperforming loans was primarily related to one commercial loan being placed on nonaccrual status during the first quarter of 2026.  The loan is secured by commercial real estate and was identified as having collateral impairment, which required a specific allocation of the ACL at March 31, 2026.

Management believes that the ACL at March 31, 2026 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 March 31, 2026 increased $94,007, or 7.1%, from year-end 2025. The increase in deposits came primarily from interest-bearing deposit balances, which were up by $75,378, or 7.4%, from year-end 2025, while noninterest-bearing deposits increased $18,629, or 5.9%, from year-end 2025.
The increase in noninterest-bearing demand deposits was primarily from the Company’s business and incentive-based checking account balances.
The increase in interest-bearing deposits came primarily from time deposit balances, which increased $55,323, or 11.3%, from year-end 2025, $47,575 of which was a result of an increase in retail time deposits. The Company targeted growth in retail CDs by promoting a special CD rate during the first quarter of 2026 to assist in funding loan growth. The Company also utilized more wholesale CDs to help fund earning asset demand, which increased $7,748 from year-end 2025.
Further increases in interest-bearing deposits came from NOW account balances, which increased $12,002, or 5.5%, from year-end 2025. The increase was largely from a $12,671 increase in the Company’s municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.
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 Savings and money market balances also increased $8,053, or 2.6%, from year-end 2025. The increase came primarily from money market accounts, which increased $4,913 from year-end 2025, 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 $3,140 impacted mostly by the Company’s statement savings account product.
The Company expects to continue to experience increased competition for deposits in its market areas, which could challenge its net growth. The Company will continue to emphasize growth and retention within its core deposit relationships during 2026, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improving net interest income.
Other Borrowed Funds
Other borrowed funds were $43,529 at March 31, 2026, a decrease of $1,319, or 2.9%, from year-end 2025. 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 March 31, 2026 increased $1,023, or 0.6%, to finish at $171,280, as compared to $170,257 at December 31, 2025. This was primarily from year-to-date net income partially offset by cash dividends paid and a decrease in accumulated other comprehensive income. The decrease in accumulated other comprehensive income was related to the $2,190, net of tax, market depreciation of AFS securities due to an increase in market interest rates.
Comparison of Results of Operations
For the Three Months Ended
March 31, 2026 and 2025

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three months ended March 31, 2026, compared to the same period in 2025. 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 months ended March 31, 2026, net interest income increased $1,748, or 13.3%, compared to the same period in 2025. The quarterly improvement during 2026 came from average earning asset growth and the net interest margin. The average growth was impacted by a composition shift into higher-yielding loans which contributed to margin improvement, combined with a decrease in the average cost on CDs that helped minimize the higher average costs paid on deposits and borrowings.

Total interest and fee income recognized on the Company’s earning assets increased $2,709, or 16.2%, during the first quarter of 2026, compared to the same period in 2025. The earnings growth was impacted by interest on loans, which increased $2,737, or 17.3%, compared to the same period in 2025. This improvement was impacted by increases in both average loan balances and loan yields. Overall, average loans increased $146,436 during the first quarter of 2026, primarily from 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 12 basis points to 6.65% during the first quarter of 2026, compared to the same period in 2025. The loan yield increase was mostly impacted by the commercial and residential real estate loan portfolios.

Total interest on securities increased $218, or 10.0%, during the first quarter of 2026, compared to the same period in 2025. The earnings growth was primarily related to an increase in the average yield on taxable securities. This was impacted by the Company’s decision to sell $36,950 in taxable securities yielding 1.35% during the second half of 2025 and replace them with similar taxable securities yielding 4.52% with longer durations. As a result, the average yield on taxable securities increased 60 basis points to 3.79% during the first quarter of 2026, compared to the same period in 2025. The yield improvement from taxable securities completely offset the negative impact of lower average securities balances, which decreased $14,634, or 5.4%, during the first quarter of 2026. Average securities have decreased due to the Company’s emphasis on growing higher-yielding loans during the first quarter of 2026, as well as a lower need for securities to be pledged as collateral to secure public fund NOW accounts from a year ago, particularly with the Bank’s public fund NOW account deposits with the Ohio Treasurer (the “Treasurer”) as part of the Ohio Homebuyer Plus program. Securities pledged as collateral to secure the Treasurer deposit balances totaled $58,955 at March 31, 2026, compared to $96,707 at March 31, 2025.

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Total interest income from interest-bearing deposits with banks decreased $244, or 29.5%, during the first quarter of 2026, compared to the same period in 2025. This was largely from average balance decreases with the Company’s interest-bearing FRB clearing account, which decreased $11,360 during the three months ended March 31, 2026, compared to the same period in 2025. FRB clearing balances were used to assist in funding loan growth, which contributed to the average balance decrease of FRB funds during 2026. Further impacting lower interest income from the FRB clearing account were short-term rate decreases during 2025. Between September and December 2025, the FRB took action to reduce the rate associated with the FRB clearing account by 75 basis points due to inflationary pressures, which lowered the target federal funds rate to a range of 3.50% to 3.75% going into 2026. These decreases in interest rates had a negative impact on the FRB clearing account’s interest earnings during the first quarter of 2026.

Total interest expense incurred on the Company’s interest-bearing liabilities increased $927, or 13.9%, during the first quarter of 2026, compared to the same period in 2025. The increase was impacted by a $100,539, or 10.2%, increase in average interest-bearing liabilities, coming mostly from higher time, savings, and money market deposit balances. The increase in time deposit balances was impacted by the Company’s strategy to raise additional retail deposits during the first quarter of 2026 by offering special CD rate offerings during that time. The increase in savings and money market account balances were mostly impacted by deposit growth within the Company’s tiered money market product (Money Fund) that offered competitive rates. These increases were partially offset by a decrease in average NOW account balances, which came largely from lower public fund balances from a year ago.

The growth in interest expense from higher average interest-bearing liabilities was further impacted by a higher average cost on average interest-bearing liabilities during 2026. The average rates on the Company’s savings, NOW, and money market balances increased 7 basis points to 1.47% during the first quarter of 2026, as product rates on tiered money market accounts adjusted upward, while public fund NOW account balances shifted to a new higher-costing cash sweep product offered by the Bank. While product rates on various savings, NOW, and money market products increased, the Company experienced a decrease in the weighted average cost of its time deposit balances. Prior to 2025, market competition for deposits had resulted in higher rates on short-term CD offerings. Since then, product rates on retail CDs have decreased during 2025 and into 2026. The Company’s strategy to fund loan growth by raising additional retail deposits through special CD rate offerings was in effect during the second half of 2025. This has allowed a large portion of these short-term retail CDs to renew at lower rates during the first quarter of 2026. As a result of the rate repricings on retail CDs, the average cost associated with time deposits decreased by 30 basis points to 4.04% during the first three months of 2026, compared to the same period in 2025. This helped to reduce the expense impacts of higher average deposit balances, and the average rate increases in specific savings, NOW and money market products.

The Company’s net interest margin is defined as fully tax-equivalent net interest income as a percentage of average earning assets. During the first quarter of 2026, the Company’s net interest margin increased 16 basis points to 4.01%, compared to 3.85% during the first quarter of 2025. Positive contributions to margin growth came from the Company’s average earning assets, which increased 8.6% during the first quarter of 2026, mostly from higher-yielding loans. Margin improvement was also positively impacted by a 12 basis point increase in the average yield on loans, while the average cost of time deposits, which was the primary funding source of earning assets during the first quarter of 2026, decreased 30 basis points to help limit the rise in interest expense. 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.

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 March 31, 2026, the Company’s provision for credit losses expense totaled $1,622, an increase of $1,206 over the three months ended March 31, 2025.

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The provision for credit loss expense for the first quarter of 2026 was primarily related to the establishment of a specific allocation of $2,031 on two loan relationships that were deemed to be collateral dependent. In addition, provision for credit loss expense was required to cover net charge-offs of $278 and higher general reserves for the $18,796 increase in loans since December 31, 2025. These increases in reserves were partially offset by the improvements in certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with improved general economic conditions.

Credit loss expense during the quarter was also impacted by unfunded commitments on off-balance sheet liabilities, which decreased $20 during the first quarter of 2026, compared to the same period in 2025. The impact came mostly from lower loss rates on commercial lines during the first quarter of 2026.

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 decreased $358, or 9.8%, during the three months ended March 31, 2026, compared to the same period in 2025. The decrease was primarily related to the $540 decrease in electronic refund check and deposit fees due to the expiration of a tax processing agreement with a third party. This decrease was partially offset by a $138 increase in income from bank owned life insurance due to the receipt of life insurance proceeds and to the $86 increase in debit and credit card interchange income. The remaining noninterest income categories decreased $42, which came mostly from a $44 decline in commercial servicing fees.

Noninterest Expense

Noninterest expense increased $483, or 4.5%, during the three months ended March 31, 2026, compared to the same period in 2025. The Company’s largest noninterest expense, salaries and employee benefits, increased $335, or 5.6%, during the three months ended March 31, 2026, compared to the same period in 2025. The expense increase was primarily related to annual merit increases and to health insurance premiums.

Higher noninterest expense also came from software expense, which increased $132 during the first quarter of 2026, compared to the same period in 2025. Higher costs in this category were the result of the investment in software to enhance internal processes.

Also contributing to higher noninterest expense for the first quarter of 2026 was a $58 increase in FDIC insurance expense, as compared to the same period last year. The increase was related to a higher assessment base due to growth in assets and to an increase in the assessment rate in relation to the higher nonperforming loans.

The remaining noninterest expense categories decreased $42 during the first quarter of 2026, compared to the same period in 2025. The decrease was mostly a result of lower furniture and equipment expense (down $32), as well as a decrease in professional fees (down $27).

Efficiency

The Company’s efficiency ratio is a non-GAAP measurement and is defined as noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income. The effects of provision expense are excluded from the efficiency ratio. Management believes the efficiency ratio provides investors with important information regarding operational efficiency and operating performance. 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 months ended March 31, 2026 to the same period in 2025, the Company has benefited from an increase in average earning assets, primarily from higher-yielding loans, combined with an increase in the net interest margin to increase net interest income $1,748, or 13.3%. The growth in net interest income was partially offset by a decrease in noninterest income of $358, or 9.8%, primarily due to lower electronic refund check and deposit fees due to the expiration of a tax processing agreement with a third party. In total, the net increase in these two revenue sources was $1,390 from the first quarter of 2025. For the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, from the same period in 2025. The increase was largely related to the $335 increase in salaries and employee benefits. Based on the net increase in revenue sources outpacing the increase in noninterest expense, the Company’s efficiency ratio decreased (improved) to 61.72% during the three months ended March 31, 2026, compared to 63.95% during the three months ended March 31, 2025.

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Provision for income taxes
The Company’s income tax provision decreased $190 during the three months ended March 31, 2026, compared to the same period in 2025.  The decrease in tax expense was primarily associated with the 4.5% decrease in operating income and a decrease in the effective tax rate from 20.6% at March 31, 2025 to 18.2% at March 31, 2026. The effective rate decreased primarily from higher tax-exempt earnings during the first quarter of 2026.

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.

The Community Bank Leverage Ratio (CBLR) framework provides simplified capital requirements for qualifying community banking organizations (QCBOs), including banks and holding companies. To be eligible for the CBLR framework, a QCBO must meet the following criteria:

• Have less than $10 billion in total consolidated assets,
• Hold limited amounts of certain trading assets and liabilities,
• Maintain limited off-balance sheet exposure, and
• Achieve a leverage ratio greater than 9.0%.

The federal banking agencies adopted a final rule that will modify the CBLR framework effective July 1, 2026. Key provisions include a decrease in the CBLR requirement from 9.0% to 8.0%, extension of the grace period to meet one or more CBLR qualifying requirements from two consecutive quarters to four consecutive quarters, as long as the leverage ratio stays above 7.0%, and cap the extended grace period to eight quarters within a five-year period. A QCBO failing to satisfy these requirements must comply with the existing Basel III capital requirements. The Bank opted into the CBLR, and, therefore, is not required to comply with the Basel III capital requirements. As of March 31, 2026, the Bank’s CBLR was 10.06%.

Cash dividends paid by the Company were $1,084 during the first three months of 2026.  The year-to-date dividends paid totaled $0.23 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 $377,398, represented 22.5% of total assets at March 31, 2026 compared to $300,436 and 19.0% of total assets at December 31, 2025. The increase in liquid funds came primarily from the $79,430 increase in cash and cash equivalents, which was related to the growth in total deposits. From year-end 2025, total deposits increased $94,007, or 7.1%, of which a portion was utilized to fund loan growth of $18,976.

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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 March 31, 2026, the Bank could borrow an additional $172,606 from the FHLB and the borrowing line with the FRB had availability of $39,097. 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 March 31, 2026, the amount of brokered CDs outstanding was 4.15% of total assets, as compared to 3.92% at December 31, 2025. At March 31, 2026, the Bank had utilized 34.03% of our FHLB capacity, a decrease from 37.62% at December 31, 2025. The collective internal limit on all wholesale funding sources is 40% of total assets. At March 31, 2026, the Bank’s total wholesale funding sources represented 11.36% of total assets, a decrease from 11.89% at December 31, 2025. Based on the collective internal wholesale funding limit, the Bank had the capacity to borrow an additional $476 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.

As part of performing liquidity stress tests, the Bank monitors and evaluates the exposure to uninsured deposits. Of the Company’s $1,423,674 in total deposit balances at March 31, 2026, only 36.5%, or $520,282, 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 March 31, 2026. 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.

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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.

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 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 March 31, 2026. 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 March 31, 2026.

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 March 31, 2026, 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 2025 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 1A of our 2025 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 March 31, 2026.

Ohio Valley did not purchase any of its shares during the three months ended March 31, 2026.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
Not applicable.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION
During the three months ended March 31, 2026, 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.

44
 
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:
  May 15, 2026
By:
 /s/Larry E. Miller, II
     
Larry E. Miller, II
     
Chief Executive Officer
       
Date:
  May 15, 2026
By:
 /s/Scott W. Shockey
     
Scott W. Shockey
     
Senior Vice President and Chief Financial Officer





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Source: View Original Filing on SEC EDGAR

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