Ohio Valley Banc Corp. [NASDAQ:OVBC] announced today its financial results for the third quarter ended September 30, 2024, showing a net income increase of 20.8% to $2,719,000 compared to the same period last year. Earnings per share for the quarter were $0.58, up from $0.47 year-over-year. Despite the quarterly rise, the nine-month net income fell to $8,484,000, a decrease from the previous year's $9,408,000. Earnings per share for the first nine months were $1.79, down from $1.97 in the same period in 2023.
The company's President and CEO, Larry Miller, attributed the positive quarterly results to strong loan growth and the successful launch of the Sweet Home Ohio deposit account, despite facing challenges from an unfavorable interest rate environment and rising costs. Net interest income for the quarter rose by $1,205,000, while the nine-month period saw an increase of $1,022,000 from the previous year. The growth in earning assets, primarily from loans and higher average balances at the Federal Reserve, contributed to the rise in net interest income.
The provision for credit loss expense increased slightly for the quarter to $920,000 and rose to $1,852,000 for the nine-month period, reflecting loan growth and specific reserves on impaired loans. The allowance for credit losses was 0.95% of total loans at the end of September, up from 0.85% the previous year.
Noninterest income for the quarter and nine-month periods increased by $286,000 and $203,000, respectively, mainly due to service charges on deposit accounts, trust fees, and income from bank-owned life insurance. However, mortgage application referral income decreased due to the closure of Race Day Mortgage at the end of 2023.
Noninterest expense for the quarter increased by $841,000, and $1,758,000 for the nine-month period, largely due to higher salaries and employee benefits, including costs associated with a voluntary early retirement program. The company anticipates recording additional severance expense in the fourth quarter.
Total assets as of September 30, 2024, reached $1.494 billion, a $142 million increase from December 31, 2023. This growth was primarily driven by the Sweet Home Ohio deposit accounts and a $77 million increase in loans.
The company also extended its stock buyback program until August 31, 2025, allowing for the repurchase of up to $5 million in shares of the company's outstanding common stock. To date, approximately $2.967 million worth of shares have been repurchased under this program.
Despite a decrease in earnings, Ohio Valley Banc Corp. noted an increase in net interest income for the quarter by $349,000. These recent developments reflect Ohio Valley Banc Corp.'s ongoing commitment to enhancing shareholder value and effectively managing its capital.
InvestingPro Insights
Ohio Valley Banc Corp.'s recent financial results can be further contextualized with real-time data from InvestingPro. The company's market capitalization stands at $109.25 million, reflecting its current market valuation. With a P/E ratio of 9.83, OVBC appears to be trading at a relatively low multiple compared to earnings, which could be of interest to value-oriented investors.
An InvestingPro Tip highlights that OVBC has maintained dividend payments for 31 consecutive years, demonstrating a strong commitment to shareholder returns despite the challenges mentioned in the quarterly report. This is particularly noteworthy given the company's current dividend yield of 3.79%, which may be attractive to income-seeking investors in the current economic climate.
Another InvestingPro Tip indicates that OVBC has been profitable over the last twelve months, aligning with the positive quarterly results reported. The company's operating income margin of 25.44% for the last twelve months suggests efficient operations, which supports the CEO's comments on strong loan growth and successful new product launches.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into OVBC's financial health and market position.
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