GALLIPOLIS, Ohio, Oct. 27, 2016 /PRNewswire/ -- Ohio Valley Banc
Corp. (Nasdaq: OVBC) (the "Company") reported consolidated net
income for the quarter ended September 30,
2016, of $358,000, a decrease
from the $1,642,000 earned for the
third quarter of 2015. Earnings per share for the third
quarter of 2016 were $.08 compared to
$.40 for the prior year third
quarter. For the nine months ended September 30, 2016, net income totaled
$4,896,000, a decrease from net
income of $6,676,000 for the nine
months ended September 30,
2015. Earnings per share were $1.15 for the first nine months of 2016 versus
$1.62 for the first nine months of
2015. Return on average assets and return on average equity
were .74 percent and 6.85 percent, respectively, for the nine
months ended September 30, 2016,
compared to 1.06 percent and 10.10 percent, respectively, for the
same period in the prior year.
"The challenges and expense associated with the merger of two
community banks are, for the most part, behind us," stated
Thomas E. Wiseman, president and
CEO. "While net income and earnings per share numbers carry
the burden of the merger expense, we had positive growth in revenue
and assets due to the event. The new combined OVBC has the
tools and positioning in the market to focus our efforts on
successfully pursuing our Community First mission. There is
much opportunity as we bring desired, competitive products, such as
our holiday credit card introductory special, cash-back Rewards
Checking, and Apple Pay, to these expanded and new markets."
For the third quarter of 2016, net interest income increased
$700,000, and for the nine months
ended September 30, 2016, net
interest income increased $927,000
from the same respective periods last year. Positively
impacting net interest income was the growth in earning
assets. For the three months ended September 30, 2016, average earning assets
increased $97 million, and for the
nine months ended September 30, 2016,
average earning assets increased $36
million from the same respective periods the prior
year. The growth in average earning assets was primarily
attributable to the acquisition of Milton Bancorp, Inc.
("Milton") during the third
quarter. At the time of closing, Milton had total assets of $132 million, of which $113 million was in loans and $6 million was in investment securities.
Also contributing to loan growth was the opening of our
Athens loan production office in
late 2015. As of September 30,
2016, the new office had nearly $17
million in loans outstanding. Partially offsetting the
contribution from the growth in earning assets was the decrease in
the net interest margin. For the nine months ended
September 30, 2016, the net interest
margin was 4.34 percent, compared to 4.38 percent for the same
period the prior year.
For the three months ended September 30,
2016, the provision for loan losses totaled $1,708,000, an increase of $1,719,000, and for the nine months ended
September 30, 2016, the provision for
loan losses totaled $2,328,000, an
increase of $1,618,000, from the same
respective periods in 2015. The provision for loan loss
expense incurred for the three months ended September 30, 2016 was related to net charge-offs
of $1,105,000 and to a net increase
in specific reserves on collateral dependent impaired loans of
$231,000. During the third
quarter of 2016, management identified impairment of $814,000 on two collateral dependent impaired
loans and charged off a collateral dependent impaired loan's
specific reserve of $586,000.
For the nine months ended September 30,
2016, the provision for loan loss expense incurred was
related to net charge-offs of $1,439,000 and to a net increase in specific
reserves on collateral dependent impaired loans of $730,000. The ratio of nonperforming loans
to total loans was 1.31 percent at September
30, 2016 compared to 1.24 percent at December 31, 2015 and 1.42 percent at
September 30, 2015. Based on
the evaluation of the adequacy of the allowance for loan losses,
management believes that the allowance for loan losses at
September 30, 2016 was adequate and
reflects probable incurred losses in the portfolio. The
allowance for loan losses was 1.04 percent of total loans at
September 30, 2016, compared to 1.13
percent at December 31, 2015 and 1.18
percent at September 30, 2015.
For the three months ended September 30,
2016, noninterest income totaled $1,693,000, compared to $1,584,000 for the same period last year, an
increase of $109,000.
Contributing to the increase was service charges on deposit
accounts, which was impacted from the merging of Milton deposit accounts. Noninterest
income totaled $6,789,000 for the
nine months ended September 30, 2016,
as compared to $6,990,000 for the
same period last year, a decrease of $201,000. For the first nine months of
2016, tax refund processing fees totaled $2,037,000, a decrease of $325,000 from the same period the prior
year. The decrease was related to the lower per item fee
received by the Company as defined in the contract with the
third-party tax refund product provider. Also contributing to
lower noninterest income for the nine-month period was the
$163,000 decrease in gain on sale of
securities. During the nine months ended September 30, 2016, management elected not to
sell any securities. Partially offsetting the decreases in
noninterest income was the year-to-date increase of $253,000 in service charges on deposit accounts
related to higher overdraft fees and the addition of Milton deposit accounts. For the first
nine months of 2016, all other noninterest income sources increased
$34,000 from the same period a year
ago.
For the three months ended September 30,
2016, noninterest expense totaled $8,828,000, an increase of $1,101,000 from the same period last year.
For the nine months ended September 30,
2016, noninterest expense totaled $24,570,000, an increase of $1,862,000, or 8.2 percent, from the same period
last year. Generally, the acquisition of Milton contributed to an increase in most
noninterest expense categories, reflecting both one-time merger
related expenses and recurring expenses related to having a larger
organization after the merger. The Company's largest
noninterest expense, salaries and employee benefits, increased
$476,000 as compared to the third
quarter of 2015 and increased $748,000 as compared to the first nine months of
2015. The increase was primarily related to adding
Milton employees, annual merit
increases, and higher health insurance expense. Also
contributing to higher noninterest expense were one-time expenses
related to the merger with Milton. During the third quarter,
the Company incurred $416,000 in
merger related expenses, bringing the year-to-date merger related
expenses to $777,000. The
remaining noninterest expenses increased $337,000 for the first nine months of 2016, as
compared to the same period last year, led by software, occupancy,
and furniture and equipment expense.
The Company's total assets at September
30, 2016 were $970 million, an
increase of $174 million from
December 31, 2015. The
acquisition of Milton provided
$132 million in assets. At
September 30, 2016, total
shareholders' equity exceeded $105
million, an increase of $15
million from December 31,
2015. The consideration paid for Milton totaled $18.9
million, of which $11.5
million was the market value of OVBC common shares and
$7.4 million was cash.
Ohio Valley Banc Corp. common stock is traded on the NASDAQ
Global Market under the symbol OVBC. The holding company owns
Ohio Valley Bank, with 19 offices in Ohio and West
Virginia, and Loan Central, with six consumer finance
offices in Ohio. Learn more about Ohio Valley Banc Corp. at
www.ovbc.com.
Caution Regarding Forward-Looking Information
Certain statements contained in this earnings release which are
not statements of historical fact, including statements about the
expected effects of mergers with Milton Bancorp, Inc. and the
Milton Banking Company, constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Words such as "believes," "anticipates," "expects,"
"appears," "intends," "targeted" and similar expressions are
intended to identify forward-looking statements but are not the
exclusive means of identifying those statements.
Forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those predicted by the
forward-looking statements because of various factors and possible
events, including: (i) changes in political, economic or other
factors, such as inflation rates, recessionary or expansive trends,
taxes, the effects of implementation of federal legislation with
respect to taxes and government spending and the continuing
economic uncertainty in various parts of the world; (ii)
competitive pressures; (iii) fluctuations in interest rates;
(iv) the level of defaults and prepayment on loans made by the
Company; (v) unanticipated litigation, claims, or assessments; (vi)
fluctuations in the cost of obtaining funds to make loans; and
(vii) regulatory changes. Forward-looking statements speak
only as of the date on which they are made, and the Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made to reflect unanticipated events. See Item
1.A. "Risk Factors" in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31,
2015, and Part II, Item 1.A. "Risk Factors" in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June
30, 2016, for further discussion of the risks affecting the
business of the Company and the value of an investment in its
shares.
Contact: Scott Shockey, CFO
(740) 446-2631
OHIO VALLEY BANC
CORP - Financial Highlights (Unaudited)
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Three months
ended
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Nine months
ended
|
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|
September
30,
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September
30,
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|
|
2016
|
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2015
|
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2016
|
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2015
|
PER SHARE
DATA
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|
Earnings per
share
|
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|
$
0.08
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|
$
0.40
|
|
$
1.15
|
|
$
1.62
|
Dividends per
share
|
|
|
$
0.19
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|
$
0.21
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|
$
0.61
|
|
$
0.68
|
Book value per
share
|
|
|
$
22.67
|
|
$
21.85
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|
$
22.67
|
|
$
21.85
|
Dividend
payout ratio (a)
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|
|
242.95%
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|
52.68%
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|
53.19%
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|
41.94%
|
Weighted
average shares outstanding
|
4,466,601
|
|
4,117,675
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|
4,246,311
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|
4,117,675
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|
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|
PERFORMANCE
RATIOS
|
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Return on
average equity
|
|
|
1.40%
|
|
7.33%
|
|
6.85%
|
|
10.10%
|
Return on
average assets
|
|
|
0.16%
|
|
0.81%
|
|
0.74%
|
|
1.06%
|
Net interest
margin (b)
|
|
|
4.29%
|
|
4.46%
|
|
4.34%
|
|
4.38%
|
Efficiency
ratio (c)
|
|
|
81.47%
|
|
77.00%
|
|
73.21%
|
|
69.11%
|
Average
earning assets (in 000's)
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|
|
$
848,525
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|
$
751,940
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|
$
824,932
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|
$
789,034
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|
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|
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|
(a) Total dividends
paid as a percentage of net income.
|
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|
(b) Fully
tax-equivalent net interest income as a percentage of average
earning assets.
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|
(c) Noninterest
expense as a percentage of fully tax-equivalent net interest income
plus noninterest income.
|
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OHIO VALLEY BANC
CORP - Consolidated Statements of Income (Unaudited)
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Three months
ended
|
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Nine months
ended
|
(in
$000's)
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
$
9,085
|
|
$
8,323
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|
$
26,147
|
|
$
25,372
|
Interest and dividends on
securities
|
|
739
|
|
693
|
|
2,360
|
|
2,137
|
Total interest income
|
|
|
9,824
|
|
9,016
|
|
28,507
|
|
27,509
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
597
|
|
569
|
|
1,605
|
|
1,659
|
Borrowings
|
|
|
242
|
|
162
|
|
611
|
|
486
|
Total interest expense
|
|
|
839
|
|
731
|
|
2,216
|
|
2,145
|
Net interest
income
|
|
|
8,985
|
|
8,285
|
|
26,291
|
|
25,364
|
Provision for loan
losses
|
|
|
1,708
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|
(11)
|
|
2,328
|
|
710
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
575
|
|
415
|
|
1,414
|
|
1,161
|
Trust fees
|
|
|
58
|
|
52
|
|
174
|
|
167
|
Income from bank owned life
insurance and
|
|
|
|
|
|
|
|
annuity
assets
|
|
|
175
|
|
172
|
|
575
|
|
486
|
Mortgage banking
income
|
|
|
44
|
|
77
|
|
162
|
|
191
|
Electronic refund check /
deposit fees
|
13
|
|
12
|
|
2,037
|
|
2,362
|
Debit / credit card
interchange income
|
653
|
|
604
|
|
1,864
|
|
1,769
|
Gain (loss) on other real
estate owned
|
(8)
|
|
0
|
|
0
|
|
60
|
Gain on sale of
securities
|
|
|
0
|
|
28
|
|
0
|
|
163
|
Other
|
|
|
183
|
|
224
|
|
563
|
|
631
|
Total noninterest income
|
|
|
1,693
|
|
1,584
|
|
6,789
|
|
6,990
|
Noninterest
expense:
|
|
|
|
|
|
|
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|
|
Salaries and employee
benefits
|
|
|
5,032
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|
4,556
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|
14,130
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|
13,382
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Occupancy
|
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|
466
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|
404
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|
1,300
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|
1,194
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Furniture and
equipment
|
|
|
285
|
|
192
|
|
671
|
|
564
|
Professional fees
|
|
|
342
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|
347
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|
1,020
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|
1,056
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Marketing expense
|
|
|
249
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|
232
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|
744
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|
701
|
FDIC
insurance
|
|
|
81
|
|
144
|
|
378
|
|
442
|
Data
processing
|
|
|
380
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|
323
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|
1,069
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|
1,053
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Software
|
|
|
368
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|
304
|
|
962
|
|
813
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Foreclosed assets
|
|
|
61
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|
74
|
|
247
|
|
171
|
Merger related
expenses
|
|
|
416
|
|
0
|
|
777
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|
0
|
Other
|
|
|
1,148
|
|
1,151
|
|
3,272
|
|
3,332
|
Total noninterest expense
|
|
|
8,828
|
|
7,727
|
|
24,570
|
|
22,708
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Income before income
taxes
|
|
|
142
|
|
2,153
|
|
6,182
|
|
8,936
|
Income
taxes
|
|
|
(216)
|
|
511
|
|
1,286
|
|
2,260
|
NET
INCOME
|
|
|
$
358
|
|
$
1,642
|
|
$
4,896
|
|
$
6,676
|
|
|
|
OHIO VALLEY BANC
CORP - Consolidated Balance Sheets (Unaudited)
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|
(in $000's, except
share data)
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and
noninterest-bearing deposits with banks
|
|
|
|
|
$
13,864
|
|
$
9,475
|
Interest-bearing
deposits with banks
|
|
|
|
|
|
48,021
|
|
36,055
|
Total cash and cash
equivalents
|
|
|
|
|
|
|
61,885
|
|
45,530
|
Certificates of
deposit in financial institutions
|
|
|
|
|
1,670
|
|
1,715
|
Securities available
for sale
|
|
|
|
|
|
|
104,860
|
|
91,651
|
Securities held to
maturity (estimated fair value: 2016 - $20,737; 2015 -
$20,790)
|
|
19,651
|
|
19,903
|
Federal Home Loan
Bank, Federal Reserve Bank and United Bankers Bank
stock
|
|
6,939
|
|
6,576
|
Total
loans
|
|
|
|
|
|
|
721,587
|
|
585,752
|
Less:
Allowance for loan losses
|
|
|
|
|
|
|
(7,537)
|
|
(6,648)
|
Net loans
|
|
|
|
|
|
|
714,050
|
|
579,104
|
Premises and
equipment, net
|
|
|
|
|
|
|
12,484
|
|
10,404
|
Other real estate
owned
|
|
|
|
|
|
|
2,616
|
|
2,358
|
Accrued interest
receivable
|
|
|
|
|
|
|
2,247
|
|
1,819
|
Goodwill
|
|
|
|
|
|
|
7,052
|
|
1,267
|
Bank owned life
insurance and annuity assets
|
|
|
|
|
29,199
|
|
28,352
|
Other
assets
|
|
|
|
|
|
|
7,577
|
|
7,606
|
Total assets
|
|
|
|
|
|
|
$
970,230
|
|
$
796,285
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
|
|
|
|
|
$
215,933
|
|
$
176,499
|
Interest-bearing
deposits
|
|
|
|
|
|
|
589,850
|
|
484,247
|
Total deposits
|
|
|
|
|
|
|
805,783
|
|
660,746
|
Other borrowed
funds
|
|
|
|
|
|
|
35,665
|
|
23,946
|
Subordinated
debentures
|
|
|
|
|
|
|
8,500
|
|
8,500
|
Accrued
liabilities
|
|
|
|
|
|
|
14,494
|
|
12,623
|
Total liabilities
|
|
|
|
|
|
|
864,442
|
|
705,815
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
Common stock ($1.00
stated value per share, 10,000,000 shares authorized;
|
|
|
|
|
2016 -
5,325,504 shares issued; 2015 - 4,777,414 shares issued)
|
|
|
5,326
|
|
4,777
|
Additional paid-in
capital
|
|
|
|
|
|
|
46,788
|
|
35,318
|
Retained
earnings
|
|
|
|
|
|
|
68,073
|
|
65,782
|
Accumulated other
comprehensive income
|
|
|
|
|
1,313
|
|
305
|
Treasury stock, at
cost (659,739 shares)
|
|
|
|
|
(15,712)
|
|
(15,712)
|
Total shareholders' equity
|
|
|
|
|
|
|
105,788
|
|
90,470
|
Total liabilities and shareholders' equity
|
|
|
|
|
$
970,230
|
|
$
796,285
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-3rd-quarter-earnings-300353036.html
SOURCE Ohio Valley Banc Corp.