OHIO Valley BANC Corp.

Banks - Regional • Financial Services • Gallipolis, OH, United States • OVBC (NGM)

740 446 2631 420 Third Avenue, Gallipolis, OH 45631, United States

Quarter: Q1 2026 Reported: January 27, 2026 Sentiment: Positive

Ohio Valley Banc Corp. operates as the bank holding company for The Ohio Valley Bank Company that provides commercial and consumer banking products and services. The company operates in two segments, Banking and Consumer Finance. It accepts various deposit products, including checking, savings, time, and money market accounts, as well as individual retirement accounts, demand deposits, NOW accounts, and certificates of deposit. The company provides various residential real estate loans, including one-to four-family residential mortgages; commercial loans for securing equipment, inventory, stock, commercial real estate, and rental property; and consumer loans secured by automobiles, mobile homes, recreational vehicles, and other personal property, as well as personal loans, unsecured credit card receivables, floor plan and student loans, and construction loans. In addition, it offers safe deposit box, wire transfer, credit card, home equity loans, and Internet banking services; and financial management online services, such as cash management and news updates related to repossession auctions, current rates, and general bank news. Further, the company provides automatic teller machines (ATMs), consumer finance, seasonal tax preparation, commercial property, and various liability insurance services, as well as trust and online-only consumer direct mortgage services. The company owns and operates ATMs, including off-site ATMs. It operates offices in Ohio and West Virginia. The company was founded in 1872 and is based in Gallipolis, Ohio.

Analysis Summary

Ohio Valley Banc Corp. (OVBC) concluded the fiscal year 2025 with outstanding financial results, marked by record earnings and strategic operational enhancements. For the fourth quarter ended December 31, 2025, net income soared 57.3% year-over-year to $3.955 million, translating to earnings per share (EPS) of $0.84, up from $0.53. The full fiscal year 2025 saw net income climb 41.8% to $15.601 million, with EPS reaching $3.31 compared to $2.32 in 2024. Return on average assets and equity also improved significantly to 1.02% and 9.83% respectively for the year.

**Detailed Financial Performance Breakdown:**
Net interest income was a primary driver of profitability, increasing $2.403 million in Q4 and $8.941 million for the full year, driven by a $103 million increase in average earning assets. The net interest margin expanded to 4.18% in Q4 2025 (from 3.70% in Q4 2024) and 4.07% for the full year (from 3.71% in 2024). This improvement was attributed to higher yields on earning assets, particularly from loan and securities growth, and a decrease in the cost of funding sources due to a shift towards lower-cost deposits (NOW, money market, savings accounts) and repricing of higher-cost certificates of deposit.

**Strategic Initiatives and Business Segment Analysis:**
Loan growth was robust, with total loans increasing $134 million (12.6%) to $1.196 billion by year-end 2025. This growth was concentrated in targeted segments: commercial real estate, commercial and industrial, and residential real estate. Conversely, consumer loans were strategically deemphasized due to lower profitability. The company also participated in the Ohio Homebuyer Plus program, which contributed to growth in average securities and lower-cost deposits. A significant strategic move involved selling $36.9 million in lower-yielding securities (average yield 1.35%) at a loss of $3.747 million, reinvesting the proceeds into higher-yielding securities (average yield 4.52%) to enhance future net interest income. Noninterest expense decreased by $2.453 million in Q4 and $1.921 million for the full year, largely due to savings from a voluntary early retirement program implemented in Q4 2024, partially offset by increased data processing and marketing expenses.

**Management Commentary and Forward Guidance:**
CEO Larry Miller expressed strong satisfaction, calling the record earnings a reason to celebrate and a reflection of employee dedication to customer service, shareholder value, and the 'Community First' mission. While no explicit forward-looking numerical guidance was provided, the strategic repositioning of the securities portfolio and the focus on higher-yielding loan segments indicate a proactive approach to sustain and improve future profitability and net interest margin. The company believes the securities sales strategy will increase future interest income.

**Competitive Positioning and Market Trends:**
OVBC demonstrated effective asset/liability management by shifting funding composition to lower-cost deposits and optimizing its securities portfolio for higher yields in the current interest rate environment. Its participation in the Ohio Homebuyer Plus program also highlights a community-focused approach that attracts deposits and supports local housing initiatives.

**Risk Factors and Concerns Raised:**
Despite strong performance, the ratio of nonperforming loans to total loans increased significantly to 1.40% at December 31, 2025, from 0.46% a year prior, primarily due to two commercial loans being placed on nonaccrual status. While these loans are deemed adequately collateralized, this represents a notable increase in credit risk. The provision for credit losses also increased for the full year, partly due to a regression in GDP and unemployment projections. Noninterest income saw a substantial decrease, mainly due to the realized losses from the strategic sale of securities, which, while intended for long-term gain, impacted current period results. General forward-looking risks include changes in economic factors, competitive pressures, interest rate fluctuations, and regulatory changes.

Key Highlights

• Record net income and EPS for Q4 and Full Year 2025, with Q4 net income up 57.3% and FY net income up 41.8%.
• Net Interest Margin (NIM) significantly improved to 4.18% in Q4 2025 and 4.07% for FY 2025.
• Loan portfolio grew 12.6% ($134 million), with strategic focus on commercial real estate, C&I, and residential real estate.
• Executed a securities repositioning strategy, selling $36.9 million in low-yielding securities to reinvest in higher-yielding assets, aiming to boost future interest income.
• Noninterest expense decreased due to savings from a voluntary early retirement program.
• Nonperforming loans to total loans increased to 1.40% from 0.46% year-over-year, primarily due to two commercial loans.
• Shareholders' equity increased by $19.9 million, driven by net income and market appreciation of securities.

Financial Metrics

eps

3.31

YoY: 42.67%

revenue

57.745 million

YoY: 18.31%

guidance

net income

15.601 million

YoY: 41.84%

Stock Performance (90 Days)

Data through Feb 13, 2026

Layoff Events

Earnings Calls

Positive Signals

• Achievement of record earnings in 153rd year of business.
• Significant expansion of net interest margin due to effective asset/liability management.
• Strategic growth in higher-yielding loan segments and deemphasis of less profitable consumer loans.
• Proactive securities repositioning strategy designed to increase future interest income.
• Improved efficiency ratio and reduced noninterest expense from early retirement program.

Risks & Concerns

— Significant increase in nonperforming loans (1.40% from 0.46% YoY), despite being deemed adequately collateralized.
— Decrease in noninterest income primarily due to losses on the strategic sale of securities.
— Increased provision for credit losses partly due to regression in GDP and unemployment projections.
— General economic uncertainties, including inflation rates and potential recessionary trends.
— Competitive pressures and fluctuations in interest rates affecting profitability.