Ohio Valley Banc Corp. Reports 4th Quarter and Record Fiscal Year Earnings

For the fourth quarter of 2025, the net interest margin was 4.18%, an increase from 3.70% for the fourth quarter of 2024. For the year ended December 31, 2025, the net interest margin was 4.07%, an increase from 3.71% for the same period last year. The increase in the net interest margin was related to the yield on earning assets increasing, while the cost of funding sources decreased. The yield on earning assets improved in relation to the growth in higher yielding loans and securities, along with the recognition of a market discount on purchased loans totaling $817,000 during the second quarter and another $832,000 during the fourth quarter. The cost of funding sources decreased as the composition of funding sources shifted to lower cost deposit sources, such as, NOW, money market, and savings accounts. Furthermore, the average cost of certificates of deposit decreased as higher costing certificates repriced to lower current market rates.

For the three months ended December 31, 2025, the provision for credit loss expense totaled $378,000, a decrease of $239,000 from the same period last year. The quarterly provision for credit loss expense was primarily associated with the $65 million quarterly increase in loan balances and the quarter-to-date net charge-offs of $225,000, which were partially offset by the decrease in certain qualitative risk factors. For the year ended December 31, 2025, the provision for credit losses was $3,054,000, an increase of $585,000 from the same period last year. The year-to-date provision for credit loss expense was primarily associated with net charge-offs of $1,334,000, loan growth of $134 million and an increase in modeled loss rates due to the regression in GDP and unemployment projections, which items were partially offset by the decrease in certain qualitative risk factors. The ratio of nonperforming loans to total loans was 1.40% at December 31, 2025, compared to .46% at December 31, 2024. The increase in nonperforming loans was primarily related to two commercial loans being placed on nonaccrual status. The loans are secured by commercial real estate and deemed adequately collateralized. The allowance for credit losses was .96% of total loans at December 31, 2025, compared to .95% at December 31, 2024.

For the three and twelve months ended December 31, 2025, noninterest income decreased $3,192,000 and $4,201,000, respectively, from the same periods last year. The decreases were largely due to the loss on the sale of securities. During the fourth quarter of 2025, the Company sold $25.9 million in securities at a loss of $2,528,000. The securities sold were yielding 1.36% and were reinvested in similar securities with a longer duration that are yielding 4.59%. During the third quarter of 2025 a similar strategy was implemented. The Company sold $11.0 million in securities at a loss of $1,219,000 that were yielding 1.32%.  The proceeds were reinvested into securities yielding 4.37%. Collectively, during 2025, the Company sold $36.9 million in securities at a loss of $3,747,000. The yield on securities sold went from 1.35% to 4.52% on the securities purchased. The Company believes that this strategy will increase future interest income by increasing its net interest margin. Also contributing to lower noninterest income was a decrease in other noninterest income, which for the three months ended December 31, 2025 decreased $733,000, and, for the year ended 2025, decreased $690,000 from the same periods the prior year, respectively. The decreases were largely related to lower earnings from a tax processing agreement and the disposition of certain assets. Partially offsetting these decreases was interchange income earned on debit and credit cards, which increased $45,000 and $196,000 during the three and twelve months ended December 31, 2025, compared to the same periods from 2024, respectively.

For the three months ended December 31, 2025, noninterest expense totaled $10,853,000, a decrease of $2,453,000 from the same period last year. For the year ended December 31, 2025, noninterest expense totaled $44,209,000, a decrease of $1,921,000 from the same period last year. The Company's largest noninterest expense, salaries and employee benefits, decreased $2,497,000 as compared to the fourth quarter of 2024, and decreased $2,873,000 as compared to the year ended December 31, 2024. The decreases were primarily related to the cost incurred from the implementation of a voluntary early retirement program in the fourth quarter of 2024, which resulted in an expense of $3,338,000. The savings from the early retirement program were partially offset by annual merit increases and data processing and marketing expense. For the three months and year ended December 31, 2025, data processing increased $44,000 and $457,000, respectively, from the same periods last year. Higher costs in this category were related to debit and credit card processing due to higher transaction volume and conversion costs for the Company's new rewards platform. For the three months and year ended December 31, 2025, marketing expense increased $221,000 and $385,000, respectively, from the same periods last year. The increases were primarily related to advertising, a higher contribution to our own foundation fund and costs associated with supporting the communities we serve.

The Company's total assets at December 31, 2025 were $1.583 billion, an increase of $79 million from December 31, 2024. Since December 31, 2024, loan balances increased $134 million, or 12.6%. The growth in loans occurred mostly in the targeted areas of commercial real estate, commercial and industrial, and residential real estate. The growth in these segments was partially offset by a decrease in consumer loans, as this segment has been deemphasized by the Company due to profitability relative to other loan portfolio segments. The increase in loans was primarily funded by a $54 million increase in total deposits, led by time deposits, and a $36 million decrease in balances maintained at the Federal Reserve. At December 31, 2025, shareholders' equity increased $19.9 million from year end 2024. This was primarily from year-to-date net income of $15.6 million and an increase in accumulated other comprehensive income of $8.6 million, partially offset by cash dividends paid of $4.3 million. The increase in accumulated other comprehensive income was related to the $5.6 million, net of tax, market appreciation of securities due to a decrease in market interest rates and the recognition of a $3.0 million, net of tax, realized loss on the sale of securities that was previously unrealized.

Ohio Valley Banc Corp. common stock is traded on the NASDAQ Global Market under the symbol OVBC. The holding company owns The Ohio Valley Bank Company with 18 offices in Ohio and West Virginia, and Loan Central, Inc. 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 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) 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, tariffs 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; (vii) regulatory changes; and (viii) 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.

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

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SOURCE Ohio Valley Banc Corp.