April 25, 2013 - For immediate release
Contact: Scott Shockey, CFO (740) 446-2631
Exhibit 99.1
Ohio Valley Banc Corp. Reports Higher 1st Quarter Earnings
GALLIPOLIS, Ohio - Ohio Valley Banc Corp. [Nasdaq: OVBC] (the “Company”) reported consolidated net income for the quarter ended March 31, 2013, of $3,223,000, representing an increase of $601,000, or 22.9 percent, from the same period the prior year. Earnings per share for the first quarter of 2013 were $.79, up 21.5 percent from the $.65 earned the first quarter of 2012. Return on average assets and return on average equity were 1.56 percent and 17.13 percent, respectively, for the first quarter of 2013, versus 1.20 percent and 14.60 percent, respectively, for the same period the prior year.
“We are certainly pleased with our first quarter results and proud of our employees’ dedication to the Company’s ‘Community First’ mission,” stated Thomas E. Wiseman, President and CEO. “The communities we serve have been hit hard economically the last few years, so it is incumbent upon us all to find ways to support each other. The men and women of Ohio Valley Banc Corp. are equal to the task. We believe that a ‘Community First’ philosophy ultimately will produce the best results not only for our community but also for our Company and for our shareholders.”
For the first quarter of 2013, net interest income decreased $491,000, or 5.5 percent, from the same period last year. Contributing to the lower net interest income was the decline in average earning assets, which decreased $37 million, primarily in loans. However, the Company’s net interest margin remains strong, and for the three months ended March 31, 2013, the net interest margin was 4.40 percent compared to 4.41 percent for the same period the prior year.
For the three months ended March 31, 2013, management provided $31,000 to the allowance for loan losses, a decrease of $1,285,000 from the same period the prior year. The lower provision expense was related to the significant reduction in net charge-offs. For the three months ended March 31, 2013, net charge-offs were down $1,548,000 from the same three-month period in 2012. The ratio of nonperforming loans to total loans at March 31, 2013 was .81 percent compared to .83 percent at March 31, 2012, and .71 percent at December 31, 2012. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at March 31, 2013 was adequate and reflects probable incurred losses in the portfolio. The allowance for loan losses was 1.21 percent of total loans at March 31, 2013, compared to 1.24 percent at December 31, 2012 and 1.20 percent at March 31, 2012.
For the first quarter of 2013, noninterest income totaled $3,940,000, an increase of $461,000, or 13.3 percent, from the first quarter of 2012. In conjunction with various benefit plans for directors and key employees, the Company maintains an investment in bank owned life insurance. During the first quarter, the Company received life insurance proceeds of $452,000, which was the primary contributor to the increase in noninterest income. For the three months ended March 31, 2013, tax processing fees totaled $2,105,000, an increase of $67,000 from the same period the prior year due to an increase in the number of tax refund items processed. Management was pleased with the significant contribution from this revenue source, which accounted for over 53 percent of our first quarter noninterest income. Further contributing to revenue growth was the increase in interchange fees earned on debit and credit card transactions. By continuing to offer incentives to customers to utilize the bank’s debit and credit card for purchases, interchange income increased $57,000, or 14.4 percent, from the 2012 first quarter.
Noninterest expense totaled $7,948,000 for the first quarter of 2013, an increase of $616,000, or 8.4 percent, from the same period last year. The Company’s largest noninterest expense, salaries and employee benefits, increased $171,000 from the first quarter of 2012. The increase was primarily related to annual merit increases and retirement benefit costs. For the first quarter of 2013, foreclosure costs increased $185,000 over the prior year first quarter. The increase was related to the liquidation of real estate in process of foreclosure. During the first quarter of 2013, the Company exercised the option to redeem $5 million in trust preferred securities prior to maturity. The redemption of the securities was at a premium, which resulted in an expense of $212,000. However, the redemption is anticipated to have a favorable impact on future earnings due to the elimination of the annual interest expense on the securities totaling $530,000. Additionally, management was pleased with decreases in many expense categories for the first quarter, such as FDIC insurance, occupancy expense, and furniture and equipment expense.
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 15 offices in Ohio and West Virginia, and Loan Central, with seven consumer finance offices in Ohio. Learn more about Ohio Valley Banc Corp. at www.ovbc.com.
Forward-Looking Information
Certain statements contained in this earnings release which 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 the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012 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, 2012, for further discussion of the risks affecting the business of the Company and the value of an investment in its shares.
| OHIO VALLEY BANC CORP - Financial Highlights (Unaudited) | | | | | | |
| | | | | | | |
| | | Three months ended | |
| | | March 31, | |
| | | 2013 | | | 2012 | |
| PER SHARE DATA | | | | | | |
| Earnings per share | | $ | 0.79 | | | $ | 0.65 | |
| Dividends per share | | $ | 0.10 | | | $ | 0.21 | |
| Book value per share | | $ | 19.34 | | | $ | 18.31 | |
| Dividend payout ratio (a) | | | 12.60 | % | | | 32.25 | % |
| Weighted average shares outstanding | | | 4,062,204 | | | | 4,027,950 | |
| | | | | | | | | |
| PERFORMANCE RATIOS | | | | | | | | |
| Return on average equity | | | 17.13 | % | | | 14.60 | % |
| Return on average assets | | | 1.56 | % | | | 1.20 | % |
| Net interest margin (b) | | | 4.40 | % | | | 4.41 | % |
| Efficiency ratio (c) | | | 63.70 | % | | | 58.66 | % |
| Average earning assets (in 000's) | | $ | 786,219 | | | $ | 823,271 | |
| | | | | | | | | |
| (a) Total dividends paid as a percentage of net income. | | | | | | | | |
| (b) Fully tax-equivalent net interest income as a percentage of average earning assets. | | | | | | | | |
| (c) 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 | |
| (in $000's) | | March 31, | |
| | | | 2013 | | | | 2012 | |
| Interest income: | | | | | | | | |
| Interest and fees on loans | | $ | 8,917 | | | $ | 9,964 | |
| Interest and dividends on securities | | | 563 | | | | 701 | |
| Total interest income | | | 9,480 | | | | 10,665 | |
| Interest expense: | | | | | | | | |
| Deposits | | | 839 | | | | 1,374 | |
| Borrowings | | | 220 | | | | 379 | |
| Total interest expense | | | 1,059 | | | | 1,753 | |
| Net interest income | | | 8,421 | | | | 8,912 | |
| Provision for loan losses | | | 31 | | | | 1,316 | |
| Noninterest income: | | | | | | | | |
| Service charges on deposit accounts | | | 424 | | | | 450 | |
| Trust fees | | | 51 | | | | 49 | |
| Income from bank owned life insurance and annuity assets | | | 631 | | | | 194 | |
| Mortgage banking income | | | 137 | | | | 97 | |
| Electronic refund check / deposit fees | | | 2,105 | | | | 2,038 | |
| Debit / credit card interchange income | | | 452 | | | | 395 | |
| Gain (loss) on other real estate owned | | | (65 | ) | | | 8 | |
| Other | | | 205 | | | | 248 | |
| Total noninterest income | | | 3,940 | | | | 3,479 | |
| Noninterest expense: | | | | | | | | |
| Salaries and employee benefits | | | 4,439 | | | | 4,268 | |
| Occupancy | | | 394 | | | | 402 | |
| Furniture and equipment | | | 226 | | | | 237 | |
| FDIC insurance | | | 144 | | | | 291 | |
| Data processing | | | 281 | | | | 279 | |
| Foreclosed assets | | | 295 | | | | 110 | |
| Other | | | 2,169 | | | | 1,745 | |
| Total noninterest expense | | | 7,948 | | | | 7,332 | |
| Income before income taxes | | | 4,382 | | | | 3,743 | |
| Income taxes | | | 1,159 | | | | 1,121 | |
| NET INCOME | | $ | 3,223 | | | $ | 2,622 | |
| OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited) | | | | | | |
| | | | | | | |
| (in $000's, except share data) | | March 31, | | | December 31, | |
| | | 2013 | | | 2012 | |
| ASSETS | | | | | | |
| Cash and noninterest-bearing deposits with banks | | $ | 9,842 | | | $ | 10,617 | |
| Interest-bearing deposits with banks | | | 105,530 | | | | 35,034 | |
| Total cash and cash equivalents | | | 115,372 | | | | 45,651 | |
| Securities available for sale | | | 99,515 | | | | 94,965 | |
| Securities held to maturity | | | | | | | | |
| (estimated fair value: 2013 - $24,623; 2012 - $24,624) | | | 23,496 | | | | 23,511 | |
| Federal Home Loan Bank stock | | | 6,281 | | | | 6,281 | |
| Total loans | | | 551,274 | | | | 558,288 | |
| Less: Allowance for loan losses | | | (6,672 | ) | | | (6,905 | ) |
| Net loans | | | 544,602 | | | | 551,383 | |
| Premises and equipment, net | | | 8,567 | | | | 8,680 | |
| Other real estate owned | | | 3,371 | | | | 3,667 | |
| Accrued interest receivable | | | 2,033 | | | | 2,057 | |
| Goodwill | | | 1,267 | | | | 1,267 | |
| Bank owned life insurance and annuity assets | | | 24,587 | | | | 25,056 | |
| Other assets | | | 5,817 | | | | 6,705 | |
| Total assets | | $ | 834,908 | | | $ | 769,223 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Noninterest-bearing deposits | | $ | 212,707 | | | $ | 139,526 | |
| Interest-bearing deposits | | | 509,665 | | | | 515,538 | |
| Total deposits | | | 722,372 | | | | 655,064 | |
| Other borrowed funds | | | 14,452 | | | | 14,285 | |
| Subordinated debentures | | | 8,500 | | | | 13,500 | |
| Accrued liabilities | | | 11,030 | | | | 10,554 | |
| Total liabilities | | | 756,354 | | | | 693,403 | |
| | | | | | | | | |
| SHAREHOLDERS' EQUITY | | | | | | | | |
| Common stock ($1.00 stated value per share, 10,000,000 shares | | | | | | | | |
| authorized; 4,721,943 shares issued) | | | 4,722 | | | | 4,722 | |
| Additional paid-in capital | | | 34,109 | | | | 34,109 | |
| Retained earnings | | | 53,911 | | | | 51,094 | |
| Accumulated other comprehensive income | | | 1,524 | | | | 1,607 | |
| Treasury stock, at cost (659,739 shares) | | | (15,712 | ) | | | (15,712 | ) |
| Total shareholders' equity | | | 78,554 | | | | 75,820 | |
| Total liabilities and shareholders' equity | | $ | 834,908 | | | $ | 769,223 | |
