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Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

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Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

PR Newswire

GALLIPOLIS, Ohio, July 26, 2018 /PRNewswire/ -- Ohio Valley Banc Corp. (NASDAQ:OVBC) (the "Company") reported consolidated net income for the quarter ended June 30, 2018, of $2,976,000, an increase of 70.9 percent from the $1,741,000 earned for the second quarter of 2017.   Earnings per share for the second quarter of 2018 were $.63 compared to $.37 for the prior year second quarter.  For the six months ended June 30, 2018, net income totaled $6,342,000, a 27.9 percent increase from net income of $4,958,000 for the six months ended June 30, 2017.  Earnings per share were $1.34 for the first six months of 2018 versus $1.06 for the first six months of 2017.  Return on average assets and return on average equity were 1.16 percent and 11.53 percent, respectively, for the first half of 2018, compared to .97 percent and 9.40 percent, respectively, for the same period in the prior year.

"It is tremendous, I think, that Ohio Valley Banc Corp.'s companies were able to achieve over a half million dollar increase in net income in a quarter when they also gave so much of their time to their communities," stated Thomas E. Wiseman, President and CEO.  "Also during the quarter, our offices held seven customer appreciation events, spent 730 hours in community service, provided six new $3,000 college scholarships to deserving youth, and even organized our first ever 5K Ruck Walk to benefit area veterans' medical centers."  Wiseman further commented, "Our success isn't because we are alone in our mission to put Community First. Many have joined us to make a real and positive impact in our communities."

For the second quarter of 2018, net interest income increased $569,000, and for the six months ended June 30, 2018, net interest income increased $1,214,000 from the same respective periods last year.  Positively impacting net interest income was the growth in earning assets.  For the six months ended June 30, 2018, average earning assets increased $74 million from the same period the prior year.  The growth in average earning assets was primarily attributable to an increase in balances being maintained at the Federal Reserve and from the loan portfolio.  The $42 million increase in average balances being maintained at the Federal Reserve was related to the growth in average deposits exceeding the growth in average loans, partially due to an increase in seasonal deposit balances associated with clearing tax refunds.  This increase in average balance, when coupled with the 125 basis point increase in short-term interest rates since December 31, 2016, generated an additional $676,000 in interest income.  For the six months ended June 30, 2018, average loans increased $30 million from the same period last year, led by growth within the commercial loan segment from our Athens market.  For the six months ended June 30, 2018, interest and fees on loans increased $1,095,000 from the same period last year.  For the six months ended June 30, 2018, the net interest margin was 4.37 percent, compared to 4.49 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 June 30, 2018, the provision for loan losses decreased $198,000, and for the six months ended June 30, 2018, the provision for loan losses increased $413,000, from the same respective periods in 2017.  For the three months ended June 30, 2018, the negative provision for loan loss expense of $23,000 was primarily related to an improvement in certain economic risk factors contributing to lower general reserves.  For the six months ended June 30, 2018, the provision for loan losses incurred of $733,000 was primarily related to net loan charge-offs of $592,000.  The ratio of nonperforming loans to total loans was 1.45 percent at June 30, 2018 compared to 1.36 percent at December 31, 2017 and 1.09 percent at June 30, 2017.  The allowance for loan losses was .98 percent of total loans at June 30, 2018, compared to .97 percent at December 31, 2017 and .92 percent at June 30, 2017.

For the three months ended June 30, 2018, noninterest income totaled $2,538,000, an increase of $426,000 from the same period last year.  Noninterest income totaled $5,614,000 for the six months ended June 30, 2018, an increase of $389,000, or 7.4 percent, from the same period last year.  The increase in noninterest income was related to an increase in gain on sale of other real estate owned and interchange income.  For the first half of 2017, gain on sale of other real estate owned increased $228,000 and interchange income earned from debit and credit transactions increased $150,000, respectively, from the same period last year.  Partially offsetting the increases above was a decrease in tax refund processing fees.  For the first six months of 2018, tax refund processing fees totaled $1,533,000, a decrease of $134,000 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.

For the three months ended June 30, 2018, noninterest expense totaled $9,674,000, a decrease of $202,000 from the same period last year.  For the six months ended June 30, 2018, noninterest expense totaled $19,482,000, an increase of $231,000 from the same period last year.  The Company's largest noninterest expense, salaries and employee benefits, increased $396,000 as compared to the second quarter of 2017 and increased $734,000 as compared to the first half of 2017.  The increase was primarily related to annual merit increases and higher health insurance expense.  Also adding to higher noninterest expense was data processing and professional fees, which increased $333,000 and $119,000, respectively, from the six months ended June 30, 2017.  Offsetting the increases above was the decrease in fraud expense.  During the second quarter of 2017, the Company incurred $830,000 in fraud expense in relation to fraudulent wire transfers.  The fraud expense was recouped via existing insurance policies in the fourth quarter of 2017; however, as of June 30, 2017, noninterest expense reflected the increase in expense.  Also helping to limit noninterest expense growth was the decrease in foreclosure expense, which for the six months ended June 30, 2018 decreased $157,000 from the same period last year.

For the six months ended June 30, 3018, income tax expense totaled $1,207,000, a decrease of $425,000 from the same period last year.  The primary contributor to the lower tax expense was the lower federal income tax rate applicable in 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.

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 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 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, 2017, 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)


















Three months ended


Six months ended




June 30,


June 30,




2018


2017


2018


2017

PER SHARE DATA










  Earnings per share



$             0.63


$             0.37


$               1.34


$             1.06

  Dividends per share



$             0.21


$             0.21


$               0.42


$             0.42

  Book value per share



$           23.95


$           23.27


$            23.95


$           23.27

  Dividend payout ratio (a)



33.31%


56.46%


31.20%


39.59%

  Weighted average shares outstanding

4,724,124


4,681,763


4,717,901


4,677,066











DIVIDEND REINVESTMENT (in 000's)








  Dividends reinvested under










     employee stock ownership plan (b)


$                    -


$                    -


$                173


$              188

  Dividends reinvested under










     dividend reinvestment plan (c)



$              380


$              381


$                753


$              796











PERFORMANCE RATIOS










  Return on average equity



10.68%


6.49%


11.53%


9.40%

  Return on average assets



1.13%


0.70%


1.16%


0.97%

  Net interest margin (d)



4.35%


4.45%


4.37%


4.49%

  Efficiency ratio (e)



72.77%


79.75%


69.62%


72.51%

  Average earning assets (in 000's)



$      990,775


$      925,338


$     1,032,690


$       958,258











(a) Total dividends paid as a percentage of net income.



(b) Shares purchased from OVBC.



(c) Shares may be purchased from OVBC and on secondary market.



(d) Fully tax-equivalent net interest income as a percentage of average earning assets.



(e) Noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income.





























OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)









Three months ended


Six months ended

(in $000's)



June 30,


June 30,




2018


2017


2018


2017

Interest income:










     Interest and fees on loans



$         10,767


$         10,131


$          22,016


$         20,921

     Interest and dividends on securities


800


741


1,575


1,429

     Interest on interest-bearing deposits with banks

371


117


1,056


377

          Total interest income



11,938


10,989


24,647


22,727

Interest expense:










     Deposits



961


628


1,853


1,228

     Borrowings



337


290


644


563

          Total interest expense



1,298


918


2,497


1,791

Net interest income



10,640


10,071


22,150


20,936

Provision for loan losses 



(23)


175


733


320

Noninterest income:










     Service charges on deposit accounts

515


530


1,017


1,034

     Trust fees



68


55


128


113

     Income from bank owned life insurance and








       annuity assets



173


182


349


404

     Mortgage banking income



68


50


132


105

     Electronic refund check / deposit fees

305


291


1,533


1,667

     Debit / credit card interchange income

932


863


1,793


1,643

     Gain (loss) on other real estate owned

170


(21)


157


(71)

     Other



307


162


505


330

          Total noninterest income



2,538


2,112


5,614


5,225

Noninterest expense:










     Salaries and employee benefits



5,541


5,145


11,243


10,509

     Occupancy 



426


448


867


882

     Furniture and equipment 



258


258


512


518

     Professional fees



515


451


1,023


904

     Marketing expense



262


257


524


512

     FDIC insurance 



115


109


258


267

     Data processing 



707


553


1,421


1,088

     Software



366


378


762


737

     Foreclosed assets



55


75


110


267

     Amortization of intangibles



36


41


72


82

     Other 



1,393


2,161


2,690


3,485

          Total noninterest expense



9,674


9,876


19,482


19,251

Income before income taxes



3,527


2,132


7,549


6,590

Income taxes



551


391


1,207


1,632

NET INCOME



$           2,976


$           1,741


$            6,342


$           4,958



OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)













(in $000's, except share data)







June 30,


December 31,








2018


2017

ASSETS










Cash and noninterest-bearing deposits with banks




$          11,652


$         12,664

Interest-bearing deposits with banks






51,539


61,909

     Total cash and cash equivalents






63,191


74,573

Certificates of deposit in financial institutions





1,820


1,820

Securities available for sale 







100,165


101,125

Securities held to maturity (estimated fair value:  2018 - $17,752; 2017 - $18,079)


17,313


17,581

Restricted investments in bank stocks






7,506


7,506

Total loans 







781,980


769,319

  Less:  Allowance for loan losses 







(7,639)


(7,499)

     Net loans







774,341


761,820

Premises and equipment, net







13,694


13,281

Other real estate owned







1,328


1,574

Accrued interest receivable







2,548


2,503

Goodwill







7,371


7,371

Other intangible assets, net







442


514

Bank owned life insurance and annuity assets





29,024


28,675

Other assets







6,621


7,947

          Total assets







$     1,025,364


$   1,026,290











LIABILITIES










Noninterest-bearing deposits







$        243,090


$       253,655

Interest-bearing deposits







603,245


603,069

     Total deposits







846,335


856,724

Other borrowed funds 







41,443


35,949

Subordinated debentures







8,500


8,500

Accrued liabilities







15,858


15,756

          Total liabilities







912,136


916,929











SHAREHOLDERS' EQUITY










Common stock ($1.00 stated value per share, 10,000,000 shares authorized;





  2018 - 5,387,119 shares issued; 2017 - 5,362,005 shares issued)




5,387


5,362

Additional paid-in capital







48,933


47,895

Retained earnings







77,230


72,694

Accumulated other comprehensive loss





(2,610)


(878)

Treasury stock, at cost (659,739 shares)





(15,712)


(15,712)

          Total shareholders' equity







113,228


109,361

               Total liabilities and shareholders' equity





$     1,025,364


$   1,026,290











 

Cision View original content:http://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-2nd-quarter-earnings-300687532.html

SOURCE Ohio Valley Banc Corp.

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