April 26, 2018 - For immediate release

Contact:  Scott Shockey, CFO (740) 446-2631

Ohio Valley Banc Corp. Reports 1^st Quarter Earnings

GALLIPOLIS, Ohio - Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended March 31, 2018, of $3,366,000, an increase of $149,000, or 4.6 percent, from the same period the prior year.  Earnings per share for the first quarter of 2018 were $.71, compared to $.69 for the first quarter of 2017, an increase of 2.9 percent.  Return on average assets and return on average equity were 1.20 percent and 12.41 percent, respectively, for the first quarter of 2018, versus 1.23 percent and 12.41 percent, respectively, for the same period the prior year.

 

"Our Community First mission provided opportunities for commercial loan growth and rising debit and credit card usage this quarter.  The growth in those income sources, combined with an extraordinary tax season, resulted in another profitable quarter for the company," commented President and CEO Tom Wiseman. "I look forward to sharing this success with our shareholders at our Annual Meeting on May 16."

 

For the first quarter of 2018, net interest income increased $645,000, or 5.9 percent, from the same period last year.  Contributing to the growth in net interest income was the growth in earning assets.  For the three months ended March 31, 2018, average earning assets increased $84 million from the same period the prior year.  The growth in average earning assets was primarily attributable to seasonal liquidity provided from processing tax refunds and from the loan portfolio.  For the first quarter of 2018, the average balance of funds maintained at the Federal Reserve increased $46 million from the first quarter of 2017.  Approximately half of the increase was related to higher average balances associated with processing tax refunds.  This increase in average balance, when coupled with the 75 basis point increase in short-term interest rates since December 31, 2016, generated an additional $424,000 in interest income.  For the first quarter of 2018, average loans increased $31 million from the same period last year, led by growth within the commercial loan segment.  For the three months ended March 31, 2018, interest and fees on loans increased $459,000 from the same period last year.  For the quarter ended March 31, 2018, the net interest margin was 4.38 percent, compared to 4.52 percent for the same period the prior year.  The decrease in net interest margin was related to the higher balances maintained at the Federal Reserve, which diluted the net interest margin due to the yield on those balances being less than other earning assets, such as loans and securities.

 

For the three months ended March 31, 2018, the provision for loan loss expense totaled $756,000, compared to $145,000 for the same period last year, an increase of $611,000.  For the three months ended March, 31, 2018, the provision for loan loss expense incurred was related to net loan charge-offs of $259,000 and to an increase in general reserves related to certain economic risk and historical loan loss factors.  The ratio of nonperforming loans to total loans at March 31, 2018 was 1.63 percent compared to 1.36 percent at December 31, 2017 and 1.19 percent at March 31, 2017.  The allowance for loan losses was 1.04 percent of total loans at March 31, 2018, compared to .97 percent at December 31, 2017 and .99 percent at March 31, 2017.

 

For the first quarter of 2018, noninterest income totaled $3,076,000, a decrease of $37,000 from the first quarter of 2017.  For the three months ended March 31, 2018, tax refund processing fees totaled $1,228,000, a decrease of $148,000 from the same period the prior year.  The decrease was related to the lower per item fee received by the Company under the contract with the third-party tax refund product provider.  Partially offsetting the decrease in tax refund processing fees was the increase in fee income related to interchange income earned from debit and credit transactions, which increased $81,000 from the same period last year.

 

Noninterest expense totaled $9,808,000 for the first quarter of 2018, an increase of $433,000, or 4.6 percent, from the same period last year.  The Company's largest noninterest expense, salaries and employee benefits, increased $338,000 from the first quarter of 2017.  The increase was primarily related to annual merit increases.  The remaining noninterest expenses increased $95,000, led by an increase in data processing and professional fees, which was partially offset by lower foreclosure costs.

 

For the three months ended March 31, 3018, income tax expense totaled $656,000, a decrease of $585,000 from the same period last year.  The primary contributor to the lower tax expense was the lower federal income tax rate applicable to 2018.  As part of the Tax Cuts and Jobs Act that was enacted on December 22, 2017, the Company's statutory federal income tax rate was reduced from 34 percent to 21 percent.

 

The Company's total assets at March 31, 2018 were $1.096 billion, an increase of $70 million from December 31, 2017.  The increase from December 31, 2017 was primarily related to the influx of deposits from seasonal tax refund processing.

 

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.

 

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