Ohio Valley Banc (OVBC) 8-K Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

EXHIBIT 99.1

July 27, 2015 - For immediate release

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

Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

GALLIPOLIS, Ohio - Ohio Valley Banc Corp. [Nasdaq: OVBC] (the “Company”) reported consolidated net income for the quarter ended June 30, 2015, of $1,410,000, an increase of 4.9 percent from the $1,344,000 earned for the second quarter of 2014.   Earnings per share for the second quarter of 2015 were $.34 compared to $.33 for the prior year second quarter.  For the six months ended June 30, 2015, net income totaled $5,034,000, a 2.6 percent increase from net income of $4,908,000 for the six months ended June 30, 2014.  Earnings per share were $1.22 for the first six months of 2015 versus $1.20 for the first six months of 2014.  Return on average assets and return on average equity were 1.19 percent and 11.53 percent, respectively, for the first half of 2015, compared to 1.20 percent and 12.03 percent, respectively, for the same period in the prior year.

“We are pleased to report higher earnings for the quarter and first half of 2015,” stated Thomas E. Wiseman, President and CEO.  “The increase in earnings was related to the significant reduction in provision for loan loss expense, which offset much of the decrease in revenue from tax refund processing and the increase in noninterest expense.  Overall, the effort of the employees of Ohio Valley Banc Corp. continues to produce solid results, which compare favorably in the banking industry.”

For the second quarter of 2015, net interest income decreased $38,000, and for the six months ended June 30, 2015, net interest income increased $110,000 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, 2015, average earning assets increased over $31 million, or 4.1 percent, from the same period the prior year.  The growth in earning assets was attributable to an increase in average loan balances and to an increase in balances being maintained in interest-bearing deposits with banks.  The growth in loan balances occurred within all loan segments, but was primarily attributable to commercial lending.  The growth in interest-bearing deposits with banks was related to higher balances being maintained at the Federal Reserve in relation to seasonal tax refund processing.   Although the Company experienced growth in average earning assets, the net interest margin declined.  Contributing to the lower net interest margin was a decrease in asset yields which more than offset the reduction in the cost of our funding sources.  With the prolonged low interest rate environment, there is limited opportunity to further reduce our funding costs, while the average rate on loans continues to trend lower.  Additionally, the higher balances maintained at the Federal Reserve have a dilutive effect on the net interest margin due to the balances only earning .25 percent.  For the six months ended June 30, 2015, the net interest margin was 4.35 percent compared to 4.49 percent for the same period the prior year.

For the three months ended June 30, 2015, the provision for loan losses decreased $587,000, and for the six months ended June 30, 2015, the provision for loan losses decreased $1,159,000 from the same respective periods in 2014.  The provision for loan loss expense incurred in the first half of 2015 of $721,000 was primarily related to the identified impairment for a specific loan.  The provision expense incurred in the first half of 2014 was associated with the increase in classified loans, which are loans demonstrating financial weakness.  Due to the higher balance of classified assets, the calculation of the allowance for loan losses required additional reserves.  For the six months ended June 30, 2015, net charge-offs totaled $1,611,000, an increase of $1,504,000 from the same period in 2014.  The increase was largely due to the charge-off of an existing specific allocation on a collateral dependent impaired loan.  The ratio of nonperforming loans to total loans was 1.45 percent at June 30, 2015 compared to 1.62 percent at December 31, 2014.  Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at June 30, 2015 was adequate and reflects probable incurred losses in the portfolio.  The allowance for loan losses was 1.26 percent of total loans at June 30, 2015, compared to 1.40 percent at December 31, 2014.

For the three months ended June 30, 2015, noninterest income totaled $1,917,000, compared to $1,912,000 for 2014’s second quarter.  Noninterest income totaled $5,406,000 for the six months ended June 30, 2015, as compared to $6,030,000 for the same period last year, a decrease of $624,000, or 10.3 percent.  Tax refund processing fees decreased $159,000 for the three months ended June 30, 2015, and decreased $712,000 for the six months ended June 30, 2015, when compared to the same respective periods in 2014.  Although the volume of tax refunds processed increased from the prior year, the per item fees received by the Company were lower under the new contract with the third-party tax refund product provider, which was reported in October of last year.  For the first half of 2015, all other noninterest income sources increased $88,000 from the same period a year ago, led by interchange fees earned on debit and credit card transactions and gain on sale of securities.

For the three months ended June 30, 2015, noninterest expense totaled $7,554,000, an increase of $557,000, or 8.0 percent, from the same period last year.  For the six months ended June 30, 2015, noninterest expense totaled $14,981,000, an increase of $689,000, or 4.8 percent, from the same period last year.  The Company’s largest noninterest expense, salaries and employee benefits, increased $191,000 as compared to the second quarter of 2014 and increased $214,000 as compared to the first half of 2014.  The increase was primarily related to annual merit increases and higher retirement benefit costs.  Also contributing to higher noninterest expense was the continued growth in debit and credit card transaction volume.  For the six months ended June 30, 2015, the data processing and customer rewards related to the higher transaction volume increased expense $146,000 from the same period last year.  Further contributing to noninterest expense growth were increases in the areas of audit, software maintenance, and FDIC insurance.

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 14 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 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, 2014, 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						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
PER SHARE DATA
Earnings per share	$	0.34		$	0.33		$	1.22		$	1.20
Dividends per share	$	0.26		$	0.21		$	0.47		$	0.42
Book value per share	$	21.59		$	20.58		$	21.59		$	20.58
Dividend payout ratio (a)		75.91	%		64.06	%		38.44	%		35.08	%
Weighted average shares outstanding		4,117,675			4,098,753			4,117,675			4,098,753
PERFORMANCE RATIOS
Return on average equity		6.33	%		6.45	%		11.53	%		12.03	%
Return on average assets		0.68	%		0.68	%		1.19	%		1.20	%
Net interest margin (b)		4.24	%		4.46	%		4.35	%		4.49	%
Efficiency ratio (c)		73.80	%		68.24	%		65.63	%		61.33	%
Average earning assets (in 000's)	$	786,972		$	749,509		$	807,887		$	776,339
(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						Six months ended
(in $000's)	June 30,						June 30,
		2015			2014			2015			2014
Interest income:
Interest and fees on loans	$	8,150		$	8,223		$	17,049		$	17,037
Interest and dividends on securities		716			702			1,444			1,396
Total interest income		8,866			8,925			18,493			18,433
Interest expense:
Deposits		555			578			1,090			1,151
Borrowings		162			160			324			313
Total interest expense		717			738			1,414			1,464
Net interest income		8,149			8,187			17,079			16,969
Provision for loan losses		799			1,386			721			1,880
Noninterest income:
Service charges on deposit accounts		393			395			746			786
Trust fees		57			59			115			114
Income from bank owned life insurance and
annuity assets		138			171			314			330
Mortgage banking income		55			57			114			115
Electronic refund check / deposit fees		255			414			2,350			3,062
Debit / credit card interchange income		627			548			1,165			1,052
Gain (loss) on other real estate owned		45			4			60			(8	)
Gain on sale of securities		135			0			135			0
Gain on sale of ProAlliance Corporation		0			0			0			135
Other		212			264			407			444
Total noninterest income		1,917			1,912			5,406			6,030
Noninterest expense:
Salaries and employee benefits		4,426			4,235			8,826			8,612
Occupancy		388			391			790			789
Furniture and equipment		194			152			372			332
FDIC insurance		132			113			298			240
Data processing		362			293			730			614
Foreclosed assets		62			41			97			102
Other		1,990			1,772			3,868			3,603
Total noninterest expense		7,554			6,997			14,981			14,292
Income before income taxes		1,713			1,716			6,783			6,827
Income taxes		303			372			1,749			1,919
NET INCOME	$	1,410		$	1,344		$	5,034		$	4,908

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in $000's, except share data)	June 30,			December 31,
	2015			2014
ASSETS
Cash and noninterest-bearing deposits with banks	$	10,587		$	9,315
Interest-bearing deposits with banks		41,493			21,662
Total cash and cash equivalents		52,080			30,977
Certificates of deposit in financial institutions		980			980
Securities available for sale		84,963			85,236
Securities held to maturity
(estimated fair value:  2015 - $22,538; 2014 - $23,570)		21,914			22,820
Federal Home Loan Bank and Federal Reserve Bank stock		6,576			6,576
Total loans		592,899			594,768
Less:  Allowance for loan losses		(7,444	)		(8,334	)
Net loans		585,455			586,434
Premises and equipment, net		9,991			9,195
Other real estate owned		1,590			1,525
Accrued interest receivable		1,799			1,806
Goodwill		1,267			1,267
Bank owned life insurance and annuity assets		25,926			25,612
Other assets		7,832			6,240
Total assets	$	800,373		$	778,668
LIABILITIES
Noninterest-bearing deposits	$	172,419		$	161,794
Interest-bearing deposits		493,869			485,036
Total deposits		666,288			646,830
Other borrowed funds		24,322			24,972
Subordinated debentures		8,500			8,500
Accrued liabilities		12,378			12,150
Total liabilities		711,488			692,452
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value per share, 10,000,000 shares
authorized; 4,777,414 shares issued)		4,777			4,777
Additional paid-in capital		35,318			35,318
Retained earnings		63,971			60,873
Accumulated other comprehensive income		531			960
Treasury stock, at cost (659,739 shares)		(15,712	)		(15,712	)
Total shareholders' equity		88,885			86,216
Total liabilities and shareholders' equity	$	800,373		$	778,668