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27.07.2017 23:14:00

Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

GALLIPOLIS, Ohio, July 27, 2017 /PRNewswire/ -- Ohio Valley Banc Corp. (Nasdaq: OVBC) (the "Company") reported consolidated net income for the quarter ended June 30, 2017, of $1,741,000, an increase of 2.1 percent from the $1,706,000 earned for the second quarter of 2016. Earnings per share for the second quarter of 2017 were $.37 compared to $.41 for the prior year second quarter. For the six months ended June 30, 2017, net income totaled $4,958,000, a 9.3 percent increase from net income of $4,538,000 for the six months ended June 30, 2016. Earnings per share were $1.06 for the first six months of 2017 versus $1.10 for the first six months of 2016. Return on average assets and return on average equity were .97 percent and 9.40 percent, respectively, for the first half of 2017, compared to 1.05 percent and 9.88 percent, respectively, for the same period in the prior year.

"Two quarters into the new fiscal year and eleven months into the Milton Banking Company merger things are coming together nicely," stated Thomas E. Wiseman, President and CEO.  "Customer response has been positive, loan demand steady and our Community First mission stronger than ever. We are pleased with the second quarter and year-to-date financial results and recognize the outstanding effort put forth by the entire OVBC family."

For the second quarter of 2017, net interest income increased $1,865,000, and for the six months ended June 30, 2017, net interest income increased $3,630,000 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, 2017, average earning assets increased $145 million from the same period the prior year. The growth in average earning assets was attributable to average loans, which increased $152 million. In addition to positive loan growth from existing markets, the growth in loans was supplemented from recent expansion initiatives. During the third quarter of 2016, the Company acquired Milton Bancorp, Inc. ("Milton"), which contributed $106 million to the growth in loans. Furthermore, the Company opened a loan production office in Athens, Ohio in late 2015. Average loans for the Athens location increased $14 million for the first half of 2017, as compared to the same period last year. Adding to the contribution from the growth in earning assets was the increase in the strong net interest margin, or profit margin on earning assets. For the six months ended June 30, 2017, the net interest margin was 4.49 percent, compared to 4.36 percent for the same period the prior year. The improvement in net interest margin was related to higher loan balances relative to total earning assets.

For the three months ended June 30, 2017, the provision for loan losses increased $34,000, and for the six months ended June 30, 2017, the provision for loan losses decreased $300,000, from the same respective periods in 2016. For the six months ended June 30, 2017, net charge-offs totaled $1,067,000, an increase of $733,000 from the same period in 2016. However, the net charge-offs incurred during the first half of 2017 were predominately related to the charge-off of specific allocations on collateral dependent impaired loans, which had already been provided for in the allowance for loan losses. As a result, charge-offs for loans without specific reserves were down from the prior year, which contributed to a decrease in provision for loan losses. The ratio of nonperforming loans to total loans was 1.09 percent at June 30, 2017 compared to 1.26 percent at December 31, 2016 and 1.14 percent at June 30, 2016. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at June 30, 2017 was adequate and reflects probable incurred losses in the portfolio. The allowance for loan losses was .92 percent of total loans at June 30, 2017, compared to 1.05 percent at December 31, 2016 and 1.15 percent at June 30, 2016.

For the three months ended June 30, 2017, noninterest income totaled $2,112,000, compared to $1,861,000 for the same period last year. Noninterest income totaled $5,225,000 for the six months ended June 30, 2017, as compared to $5,096,000 for the same period last year, an increase of $129,000. The increase in noninterest income was related to the higher deposit base associated with the Milton acquisition. For the first half of 2017, interchange income earned from debit and credit transactions increased $432,000 and service charges on deposit accounts increased $195,000, respectively, from the same period last year. Partially offsetting the increases above was tax refund processing fees. For the first six months of 2017, tax refund processing fees totaled $1,667,000, a decrease of $357,000 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, 2017, noninterest expense totaled $9,876,000, an increase of $2,103,000 from the same period last year. For the six months ended June 30, 2017, noninterest expense totaled $19,251,000, an increase of $3,509,000, or 22.3 percent, from the same period last year. Generally, the acquisition of Milton contributed to an increase in most noninterest expense categories, related to having a larger organization after the merger. The Company's largest noninterest expense, salaries and employee benefits, increased $617,000 as compared to the second quarter of 2016 and increased $1,411,000 as compared to the first half of 2016. The increase was primarily related to adding Milton employees, annual merit increases, and higher health insurance expense. Also adding to higher noninterest expense was fraud expense. During the second quarter of 2017, management discovered four fraudulent wire transfers associated with a single account relationship totaling $933,000. As of June 30, 2017, management was able to recover $103,000, resulting in a net expense of $830,000. A determination of whether or not existing insurance policies will cover all or part of any such residual loss is still pending. The remaining noninterest expenses increased $1,268,000, led by an increase in data processing, professional fees and expenses associated with facilities.

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, 2016, for further discussion of the risks affecting the business of the Company and the value of an investment in its shares. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition of Milton as additional information relative to closing date fair values become available.

 

OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)


















Three months ended


Six months ended




June 30,


June 30,




2017


2016


2017


2016

PER SHARE DATA










  Earnings per share



$          0.37


$          0.41


$               1.06


$             1.10

  Dividends per share



$          0.21


$          0.21


$               0.42


$             0.42

  Book value per share



$        23.27


$        22.89


$             23.27


$           22.89

  Dividend payout ratio (a)



56.46%


51.00%


39.59%


38.22%

  Weighted average shares outstanding

4,681,763


4,142,247


4,677,066


4,134,956











DIVIDEND REINVESTMENT (in 000's)








  Dividends reinvested under










     employee stock ownership plan (b)


$                -


$                -


$                188


$              181

  Dividends reinvested under










     dividend reinvestment plan (c)



$           381


$           413


$                796


$              822











PERFORMANCE RATIOS










  Return on average equity



6.49%


7.33%


9.40%


9.88%

  Return on average assets



0.70%


0.81%


0.97%


1.05%

  Net interest margin (d)



4.45%


4.22%


4.49%


4.36%

  Efficiency ratio (e)



79.75%


75.95%


72.51%


69.27%

  Average earning assets (in 000's)



$   925,338


$   798,651


$        958,258


$       813,006











(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,




2017


2016


2017


2016

Interest income:










     Interest and fees on loans



$     10,131


$        8,135


$          20,921


$         17,062

     Interest and dividends on securities


858


778


1,806


1,621

          Total interest income



10,989


8,913


22,727


18,683

Interest expense:










     Deposits



628


510


1,228


1,008

     Borrowings



290


197


563


369

          Total interest expense



918


707


1,791


1,377

Net interest income



10,071


8,206


20,936


17,306

Provision for loan losses 



175


141


320


620

Noninterest income:










     Service charges on deposit accounts

530


434


1,034


839

     Trust fees



55


56


113


116

     Income from bank owned life insurance and








       annuity assets



182


191


404


400

     Mortgage banking income



50


61


105


118

     Electronic refund check / deposit fees

291


270


1,667


2,024

     Debit / credit card interchange income

863


625


1,643


1,211

     Gain (loss) on other real estate owned

(21)


13


(71)


8

     Other



162


211


330


380

          Total noninterest income



2,112


1,861


5,225


5,096

Noninterest expense:










     Salaries and employee benefits



5,145


4,528


10,509


9,098

     Occupancy 



448


405


882


834

     Furniture and equipment 



258


201


518


386

     Professional fees



451


341


904


678

     Marketing expense



257


248


512


495

     FDIC insurance 



109


148


267


297

     Data processing 



553


336


1,088


689

     Software



378


302


737


594

     Foreclosed assets



75


121


267


186

     Amortization of intangibles



41


0


82


0

     Merger related expenses



0


134


27


361

     Other 



2,161


1,009


3,458


2,124

          Total noninterest expense



9,876


7,773


19,251


15,742

Income before income taxes



2,132


2,153


6,590


6,040

Income taxes



391


447


1,632


1,502

NET INCOME



$        1,741


$        1,706


$            4,958


$           4,538

 

 

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)













(in $000's, except share data)







June 30,


December 31,








2017


2016

ASSETS










Cash and noninterest-bearing deposits with banks





$          11,013


$         12,512

Interest-bearing deposits with banks






24,473


27,654

     Total cash and cash equivalents







35,486


40,166

Certificates of deposit in financial institutions





1,820


1,670

Securities available for sale 







102,697


96,490

Securities held to maturity (estimated fair value:  2017 - $19,330; 2016 - $19,171)


18,605


18,665

Restricted investments in bank stocks






7,506


7,506

Total loans 







756,905


734,901

  Less:  Allowance for loan losses 







(6,952)


(7,699)

     Net loans







749,953


727,202

Premises and equipment, net







13,233


12,783

Other real estate owned







2,436


2,129

Accrued interest receivable







2,264


2,315

Goodwill







7,371


7,801

Other intangible assets, net







588


670

Bank owned life insurance and annuity assets





29,529


29,349

Other assets







8,668


7,894

          Total assets







$        980,156


$       954,640











LIABILITIES










Noninterest-bearing deposits







$        227,064


$       209,576

Interest-bearing deposits







581,128


580,876

     Total deposits







808,192


790,452

Other borrowed funds 







40,655


37,085

Subordinated debentures







8,500


8,500

Accrued liabilities







13,822


14,075

          Total liabilities







871,169


850,112











SHAREHOLDERS' EQUITY










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





  2017 - 5,342,846 shares issued; 2016 - 5,325,504 shares issued)



5,343


5,326

Additional paid-in capital







47,268


46,788

Retained earnings







72,112


69,117

Accumulated other comprehensive loss





(24)


(991)

Treasury stock, at cost (659,739 shares)





(15,712)


(15,712)

          Total shareholders' equity







108,987


104,528

               Total liabilities and shareholders' equity





$        980,156


$       954,640

 

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

View original content:http://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-2nd-quarter-earnings-300495775.html

SOURCE Ohio Valley Banc Corp.

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