GALLIPOLIS, Ohio, Jan. 27, 2022 /PRNewswire/ -- Ohio Valley
Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net
income for the quarter ended December 31,
2021, of $2,304,000, a
decrease of $2,396,000 from the same
period the prior year. Earnings per share for the fourth quarter of
2021 were $.48 compared to
$.98 for the prior year fourth
quarter. For the year ended December 31,
2021, net income totaled $11,732,000, an increase of $1,473,000, or 14.4%, from the prior year.
Earnings per share were $2.45 for
2021 versus $2.14 for 2020. Return on
average assets and return on average equity were .95% and 8.45%,
respectively, for the year ended December
31, 2021, compared to .94% and 7.83%, respectively, for the
prior year.
"When I think of 2021, the word perseverance comes to mind.
After all, this was the year we were to put COVID 19 behind us and
return to normal," said Tom Wiseman,
Chairman and CEO of the Company. "Instead, we dealt with new
variants (Delta and Omicron) and shuffled our workforce and hours
of operation to be there for our customers though the pandemic left
us short staffed at times. Our folks persevered through it all to
deliver the outstanding financial services our customers have come
to expect. As a result, we close the books on 2021 with the second
highest annual net income earned in the Company's history. The
successful launch of Race Day Mortgage, Ohio Valley Bank's new
online consumer direct mortgage subsidiary, and the continued
pursuit of our 'Community First' mission proves that perseverance
does pay off."
For the fourth quarter of 2021, net interest income increased
$290,000, and for the year ended
December 31, 2021, net interest
income increased $1,031,000 from the
same period last year. Contributing to the increase in net interest
income was the growth in average earning assets, which was
partially offset by a decrease in the net interest margin. For the
year ended December 31, 2021, average
earning assets increased $132 million
from the prior year. The increase was partly due to average loans,
which increased $30 million from last
year due to higher commercial loan balances. In general, commercial
loan demand has been positive in our markets, particularly in the
counties of Pike and Athens in Ohio and Cabell
County in West Virginia. In
addition, the Company participated in the SBA's Paycheck Protection
Program (PPP) to assist various businesses in our market during the
pandemic. The loan fees earned in association with the PPP loans
for the year ended December 31, 2021
totaled $1,183,000, an increase of
$479,000 from the prior year. As of
December 31, 2021, there were
$446,000 in PPP loans still
outstanding with $15,000 in deferred
fees yet to be recognized. Also contributing to earning asset
growth was the $58 million increase
in average balances maintained at the Federal Reserve and a
$44 million increase in average
security balances. In relation to the various stimulus payments
received by customers, the Company experienced a significant
increase in deposit balances. A portion of the increase in deposits
was invested in the securities portfolio and, to the extent those
deposits are not invested in loans or securities, they are invested
at the Federal Reserve to be readily available for future funding
needs. The earnings contribution from the higher balance of earning
assets was partly offset by a decrease in the net interest margin.
For the year ended December 31, 2021,
the net interest margin was 3.61%, compared to 3.97% for the prior
year. The decrease was primarily related to the actions taken by
the Federal Reserve to reduce interest rates by 150 basis points in
March of 2020. In relation to the decrease in market rates, the
Company experienced a greater decrease in yield on earning assets
than the average cost on interest-bearing liabilities. This trend
was partly due to certain deposits already being at or near their
interest rate floor, which limited the Company's ability to reduce
deposit costs to the same magnitude as experienced on earning
assets. Furthermore, the current rate on balances maintained at the
Federal Reserve is .15% and, when combined with the heightened
balances, it had a dilutive effect on the net interest margin.
For the three months ended December 31,
2021, the provision for loan losses was negative
$301,000, an increase of $170,000 from the same period last year. The
negative provision expense for the fourth quarter of 2021 was
primarily related to having net recoveries on charged off loans. In
addition, the net recoveries lowered the historical loss factors
contributing to lower general reserves. For the year ended
December 31, 2021, the provision for
loan losses was negative $419,000, a
decrease of $3,399,000 from the same
period last year. The decrease in provision for loan loss expense
was due to a decrease in net loan charge-offs of $1,834,000 and to a decrease in the provision
expense associated with the establishment of an economic risk
factor for the pandemic during the first quarter of 2020. The
establishment of this risk factor resulted in additional provision
expense of $1,942,000 in the first
quarter of 2020. The allowance for loan losses was .78% of total
loans at December 31, 2021, compared
to .84% at December 31, 2020. The
ratio of nonperforming loans to total loans improved to .56% at
December 31, 2021, compared to .82%
at December 31, 2020.
For the three months ended December 31,
2021, noninterest income totaled $1,407,000, a decrease of $906,000 from the same period last year. For the
year ended December 31, 2021,
noninterest income totaled $9,864,000, a decrease of $1,574,000 from the same period last year. The
primary reason for the decrease in year-to-date noninterest income
was due to the receipt of a $2,000,000 settlement payment from a third-party
tax software product provider for early termination of its contract
during the first quarter of 2020. As part of the settlement
agreement, The Ohio Valley Bank Company (the "Bank") is processing
a certain amount of tax items, which started in 2021 and will end
in 2025. For the year ended December 31,
2021, the Bank recognized $675,000 of additional income under the
agreement. Also generating lower noninterest income for the quarter
and year-to-date periods was the loss on the sale of securities.
During the fourth quarter of 2021, the Company sold $49 million in lower-yielding securities at a
loss of $1,066,000. The proceeds were
reinvested in similar higher-yielding securities, which are
expected to increase future interest income. Contributing to higher
noninterest revenue was interchange income on debit and credit card
transactions as customers increased spending. Interchange income
increased $156,000, or 15.2%, during
the three months ended December 31,
2021, and $613,000, or 15.2%,
during the year ended December 31,
2021, as compared to the same periods in 2020, respectively.
For the year ended December 31, 2021,
the Company experienced lower mortgage banking income following the
heightened refinance boom that occurred during 2020. As a result,
mortgage banking income decreased $400,000 for the year ended December 31, 2021, as compared to the same period
in 2020.
For the three months ended December 31,
2021, noninterest expense totaled $9,327,000, an increase of $2,206,000 from the same period last year. For
the year ended December 31, 2021,
noninterest expense totaled $37,280,000, an increase of $1,147,000, or 3.2%, from the same period last
year. The Company's largest noninterest expense, salaries and
employee benefits, increased $842,000
as compared to the fourth quarter of 2020 and increased
$13,000 as compared to the year ended
December 31, 2020. The quarterly
increase was partly related to staffing the new mortgage
subsidiary, Race Day Mortgage. Also, during the fourth quarter of
2021, the Company increased performance based compensation in
association with the improved financial performance achieved in
2021. Lastly, we experienced higher workers compensation premiums
in relation to receiving refunds in 2020 that were not replicated
in 2021. Further contributing to higher noninterest expense was an
increase in software expense, data processing, marketing, and FDIC
insurance expense. During the three and twelve months ended
December 31, 2021, software expense
increased $168,000 and $404,000, respectively, as compared to the same
periods in 2020. The increase was related to the purchase of
software to enhance the platform used for the loan origination
process, as well as to process PPP loans. Data processing expense
increased $175,000 during the three
months ended December 31, 2021, and
increased $236,000 for the year ended
December 31, 2021, as compared to the
same periods in 2020. The increase was primarily related to the
higher credit and debit card transaction volume in relation to the
heightened consumer spending. For the three months and twelve
months ended December 31, 2021,
marketing expense increased $416,000
and $213,000, respectively, from the
same periods last year. The increase was related to resuming select
marketing campaigns in 2021 that had been limited in 2020 due to
COVID restrictions on lobby access. For the year ended December 31, 2021, FDIC insurance expense
increased $161,000 from the same
period in 2020. The increase was primarily due to assessment
credits received from the FDIC in 2020 that were not received in
2021. Lastly, during the fourth quarter of 2021, the Company
redeemed $3.2 million in long-term
Federal Home Loan Bank advances that were used to fund fixed rate
loans to manage interest rate risk. The specific loans being funded
were paid off, which permitted the Company to redeem the advances.
By redeeming the advances, a prepayment penalty of $186,000 was incurred. The redemption of debt
will reduce interest expense going forward.
The Company's total assets at December
31, 2021 were $1.250 billion,
an increase of $63 million from
December 31, 2020. The increase in
assets was related to a $65 million
increase in securities. The growth in securities was linked to
investing the heightened deposit balances received during 2021. At
December 31, 2021, total deposits had
increased $66 million from year end,
primarily as a result of customers receiving stimulus payments.
Ohio Valley Banc Corp. common stock is traded on the NASDAQ
Global Market under the symbol OVBC. The Company owns The Ohio
Valley Bank Company, with 16 offices in Ohio and West
Virginia; Loan Central, Inc. with six consumer finance
offices in Ohio; and Race Day
Mortgage, Inc., an online consumer direct mortgage company. Learn
more about Ohio Valley Banc Corp. at www.ovbc.com.
Caution Regarding Forward-Looking Information
Certain statements contained in this earnings release that are
not statements of historical fact 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) impacts from the novel coronavirus (COVID-19)
pandemic on our business, operations, customers and capital
position; (ii) the impact of COVID-19 on local, national and global
economic conditions; unexpected changes in interest rates or
disruptions in the mortgage market related to COVID-19 or responses
to the health crisis; (iii) 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; (iv)
competitive pressures; (v) fluctuations in interest rates; (vi) the
level of defaults and prepayment on loans made by the Company;
(vii) unanticipated litigation, claims, or assessments; (viii)
fluctuations in the cost of obtaining funds to make loans; (ix)
regulatory changes; and (x) other factors that may be described in
the Company's Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q as filed with the Securities and Exchange Commission from
time to time. 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.
OHIO VALLEY BANC
CORP - Financial Highlights (Unaudited)
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Three months
ended
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Twelve months
ended
|
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|
December
31,
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|
December
31,
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|
2021
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2020
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2021
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2020
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PER SHARE
DATA
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|
Earnings per
share
|
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|
$
0.48
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|
$
0.98
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|
$
2.45
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|
$
2.14
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Dividends per
share
|
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|
$
0.21
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|
$
0.21
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$
0.84
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|
$
0.84
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Book value per
share
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$
29.74
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$
28.48
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|
$
29.74
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|
$
28.48
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Dividend
payout ratio (a)
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43.50%
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21.39%
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34.25%
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39.20%
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Weighted
average shares outstanding
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4,763,881
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4,787,446
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4,780,609
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4,787,446
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DIVIDEND REINVESTMENT
(in 000's)
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Dividends
reinvested under
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employee stock ownership
plan (b)
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$
-
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$
-
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$
188
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$
154
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Dividends
reinvested under
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|
dividend reinvestment plan
(c)
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|
$
433
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|
$
372
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|
$
1,721
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$
1,514
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PERFORMANCE
RATIOS
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Return on
average equity
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6.48%
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14.04%
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8.45%
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7.83%
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Return on
average assets
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0.73%
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1.62%
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0.95%
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|
0.94%
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Net interest
margin (d)
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3.57%
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|
3.78%
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3.61%
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|
3.97%
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Efficiency
ratio (e)
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|
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78.26%
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56.84%
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72.59%
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69.67%
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Average
earning assets (in 000's)
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|
$
1,167,458
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$
1,075,167
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$
1,148,909
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$
1,016,966
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|
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(a) Total dividends
paid as a percentage of net income.
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(b) Shares may be
purchased from OVBC and on secondary market.
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(c) Shares may be
purchased from OVBC and on secondary market.
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(d) Fully
tax-equivalent net interest income as a percentage of average
earning assets.
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(e) 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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Twelve months
ended
|
(in
$000's)
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
$
10,453
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|
$
10,815
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|
$
42,102
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|
$
43,204
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Interest and dividends on
securities
|
|
655
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|
575
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|
2,446
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|
2,744
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Interest on interest-bearing
deposits with banks
|
53
|
|
25
|
|
164
|
|
225
|
Total interest income
|
|
|
11,161
|
|
11,415
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|
44,712
|
|
46,173
|
Interest
expense:
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|
|
|
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|
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Deposits
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|
|
603
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|
1,104
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|
2,977
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|
5,254
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Borrowings
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|
167
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|
210
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|
722
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|
937
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Total interest expense
|
|
|
770
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|
1,314
|
|
3,699
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|
6,191
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Net interest
income
|
|
|
10,391
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|
10,101
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|
41,013
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|
39,982
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Provision for loan
losses
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(301)
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(471)
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(419)
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|
2,980
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Noninterest
income:
|
|
|
|
|
|
|
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|
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Service charges on deposit
accounts
|
555
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|
436
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|
1,864
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|
1,685
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Trust fees
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|
73
|
|
64
|
|
285
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|
257
|
Income from bank owned life
insurance and
|
|
|
|
|
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|
annuity
assets
|
|
|
203
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|
204
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|
904
|
|
820
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Mortgage banking
income
|
|
|
310
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|
288
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|
854
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|
1,254
|
Electronic refund
check/deposit fees
|
----
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----
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675
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----
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Debit / credit card
interchange income
|
1,184
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|
1,028
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|
4,644
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|
4,031
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Gain (loss) on other real
estate owned
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----
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49
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|
1
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(35)
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Loss on sale of
securities
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(1,066)
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----
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(1,066)
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----
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Tax preparation
fees
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|
2
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|
1
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|
754
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|
644
|
Litigation
settlement
|
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|
----
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----
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----
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2,000
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Other
|
|
|
146
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|
243
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|
949
|
|
782
|
Total noninterest income
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|
|
1,407
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|
2,313
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|
9,864
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|
11,438
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Noninterest
expense:
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Salaries and employee
benefits
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5,624
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4,782
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|
21,649
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|
21,636
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Occupancy
|
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|
381
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|
455
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|
1,796
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1,817
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Furniture and
equipment
|
|
|
284
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|
272
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|
1,136
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|
1,096
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Professional fees
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|
296
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|
(77)
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|
1,578
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|
1,519
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Marketing expense
|
|
|
162
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|
(254)
|
|
826
|
|
613
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FDIC
insurance
|
|
|
84
|
|
72
|
|
326
|
|
165
|
Data
processing
|
|
|
504
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|
329
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|
2,406
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|
2,170
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Software
|
|
|
511
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|
343
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|
1,858
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|
1,454
|
Foreclosed assets
|
|
|
23
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|
11
|
|
55
|
|
128
|
Amortization of
intangibles
|
|
|
10
|
|
14
|
|
48
|
|
62
|
Other
|
|
|
1,448
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|
1,174
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|
5,602
|
|
5,473
|
Total noninterest expense
|
|
|
9,327
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|
7,121
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|
37,280
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|
36,133
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Income before income
taxes
|
|
|
2,772
|
|
5,764
|
|
14,016
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|
12,307
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Income
taxes
|
|
|
468
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|
1,064
|
|
2,284
|
|
2,048
|
NET
INCOME
|
|
|
$
2,304
|
|
$
4,700
|
|
$
11,732
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|
$
10,259
|
OHIO VALLEY BANC
CORP - Consolidated Balance Sheets (Unaudited)
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(in $000's, except
share data)
|
|
|
|
|
|
|
December
31,
|
|
December
31
|
|
|
|
|
|
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and
noninterest-bearing deposits with banks
|
|
|
|
$
14,111
|
|
$
14,989
|
Interest-bearing
deposits with banks
|
|
|
|
|
|
137,923
|
|
123,314
|
Total cash and cash
equivalents
|
|
|
|
|
|
152,034
|
|
138,303
|
Certificates of
deposit in financial institutions
|
|
|
|
|
2,329
|
|
2,500
|
Securities available
for sale
|
|
|
|
|
|
|
177,000
|
|
112,322
|
Securities held to
maturity (estimated fair value: 2021 - $10,450; 2020 -
$10,344)
|
|
10,294
|
|
10,020
|
Restricted
investments in bank stocks
|
|
|
|
|
7,265
|
|
7,506
|
Total
loans
|
|
|
|
|
|
|
831,191
|
|
848,664
|
Less:
Allowance for loan losses
|
|
|
|
|
|
(6,483)
|
|
(7,160)
|
Net loans
|
|
|
|
|
|
|
824,708
|
|
841,504
|
Premises and
equipment, net
|
|
|
|
|
|
|
20,730
|
|
21,312
|
Premises and
equipment held for sale, net
|
|
|
|
|
438
|
|
637
|
Other real estate
owned, net
|
|
|
|
|
|
|
15
|
|
49
|
Accrued interest
receivable
|
|
|
|
|
|
|
2,695
|
|
3,319
|
Goodwill
|
|
|
|
|
|
|
7,319
|
|
7,319
|
Other intangible
assets, net
|
|
|
|
|
|
|
64
|
|
112
|
Bank owned life
insurance and annuity assets
|
|
|
|
|
37,281
|
|
35,999
|
Operating lease
right-of-use asset, net
|
|
|
|
|
1,195
|
|
880
|
Other
assets
|
|
|
|
|
|
|
6,402
|
|
5,150
|
Total assets
|
|
|
|
|
|
|
$
1,249,769
|
|
$
1,186,932
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
|
|
|
|
|
$
353,578
|
|
$
314,777
|
Interest-bearing
deposits
|
|
|
|
|
|
|
706,330
|
|
678,962
|
Total deposits
|
|
|
|
|
|
|
1,059,908
|
|
993,739
|
Other borrowed
funds
|
|
|
|
|
|
|
19,614
|
|
27,863
|
Subordinated
debentures
|
|
|
|
|
|
|
8,500
|
|
8,500
|
Operating lease
liability
|
|
|
|
|
|
|
1,195
|
|
880
|
Accrued
liabilities
|
|
|
|
|
|
|
19,196
|
|
19,626
|
Total liabilities
|
|
|
|
|
|
|
1,108,413
|
|
1,050,608
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
Common stock ($1.00
stated value per share, 10,000,000 shares authorized;
|
|
|
|
|
5,447,185
shares issued)
|
|
|
|
|
|
|
5,447
|
|
5,447
|
Additional paid-in
capital
|
|
|
|
|
|
|
51,165
|
|
51,165
|
Retained
earnings
|
|
|
|
|
|
|
100,702
|
|
92,988
|
Accumulated other
comprehensive income
|
|
|
|
|
708
|
|
2,436
|
Treasury stock, at
cost (2021 - 693,933 shares, 2020 - 659,739 shares)
|
|
(16,666)
|
|
(15,712)
|
Total shareholders' equity
|
|
|
|
|
|
|
141,356
|
|
136,324
|
Total liabilities and shareholders' equity
|
|
|
|
|
$
1,249,769
|
|
$
1,186,932
|
Contact: Scott Shockey, CFO (740)
446-2631
View original
content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-4th-quarter-earnings-301470285.html
SOURCE Ohio Valley Banc Corp.