1. OVBC's Q4 net income decreased by $708,000 from last year. 2. Earnings per share dropped from $0.68 to $0.53 year-over-year. 3. Total assets rose to $1.503 billion, increasing by $151 million. 4. The company incurred $3.3 million in early retirement program expenses. 5. Loan growth exceeded expectations, particularly in commercial and residential segments.
Decreased net income and lower earnings per share typically drive bearish sentiment. Similar trends in past earnings led to price decline for OVBC.
The financial results directly impact investor perception of OVBC's stability and profitability. A recent decline in earnings is a significant indicator for potential future performance.
Immediate market reaction to earnings report expected to affect OVBC's price quickly. Generally, earnings impacts are felt in the near term.
GALLIPOLIS, Ohio, Jan. 28, 2025 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended December 31, 2024, of $2,515,000, a decrease of $708,000 from the same period the prior year. Earnings per share for the fourth quarter of 2024 were $0.53 compared to $0.68 for the prior year fourth quarter. For the year ended December 31, 2024, net income totaled $10,999,000, a decrease of $1,632,000, or 12.9%, from the same period the prior year. Earnings per share were $2.32 for 2024 versus $2.65 for 2023. Return on average assets and return on average equity were 0.77% and 7.50%, respectively, for the year ended December 31, 2024, compared to 0.99% and 9.24%, respectively, for the same period in the prior year.
Ohio Valley Banc Corp. President and CEO, Larry Miller, stated, "While it is never enjoyable to report lower net income, given all that was accomplished in 2024, I am quite pleased with how the company is positioned for future success. Net income was down primarily due to two one-time expenses that management knowingly accepted to put the company in a more favorable position as we look to the future. The largest of the two expenses was the $3.3 million associated with the voluntary early retirement program. The other one-time expense was the $496,000 in account bonuses paid to new Sweet Home Ohio depositors. Both of these expenses are part of a broader strategy to improve shareholder value and further our Community First Mission."
For the three months ended December 31, 2024, net interest income increased $1,755,000, and for the year ended December 31, 2024, net interest income increased $2,777,000 from the same respective periods last year. Contributing to the increase in quarterly net interest income was the $187 million increase in average earning assets. For the year ended December 31, 2024, the increase in net interest income was attributable to the $149 million increase in average earning assets, which was partially offset by the 23 basis point decrease in the net interest margin. In general, the growth in earning assets was primarily driven by loan growth followed by an increase in average securities and higher average balances being maintained at the Federal Reserve. For 2024, average loans increased $86 million from the prior year.
For the three months ended December 31, 2024, the provision for credit losses was $617,000, a decrease of $72,000 from the same period last year. The provision for credit loss expense for the fourth quarter of 2024 was primarily related to additional reserves for certain qualitative risk factors, quarter-to-date net charge-offs of $433,000, and a $13 million quarterly increase in loan balances. These increases were partially offset by the release of a $427,000 specific reserve on a collateral dependent individually evaluated loan due to obtaining additional collateral to cover the deficiency. In addition, the improvement in the unemployment and gross domestic product forecast contributed to lower expected loss rates.
The Company's total assets at December 31, 2024 were $1.503 billion, an increase of $151 million from December 31, 2023. As previously discussed, the Company began participating in the Ohio Treasurer's Ohio Homebuyer Plus program. For each Sweet Home Ohio account that was opened, the Company received a deposit from the Treasurer at a subsidized interest rate.
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," 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.
| Three months ended | Twelve months ended |
|---|---|
| December 31, 2024 | December 31, 2024 |
| Earnings per share: $0.53 | Earnings per share: $2.32 |
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 17 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.
Contact: Scott Shockey, CFO (740) 446-2631