EXHIBIT 99.1
April 15, 2009 - For immediate release
Contact: Scott Shockey, CFO (740) 446-2631
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, 2009, of
$2,051,000, representing an increase of 4.4 percent over the same period the
prior year. Earnings per share for the first quarter of 2009 were $.51, up 6.3
percent from the $.48 earned the first quarter of 2008. Return on average assets
and return on average equity both increased to 1.02 percent and 13.13 percent,
respectively, for the first quarter of 2009, versus 1.00 percent and 13.10
percent, respectively, for the same period the prior year. The increase in
earnings was primarily the result of increased revenues from both net interest
income and noninterest income.
For the first quarter of 2009, net interest income increased $605,000, or
7.9 percent, from the same period last year. The increase was attributable to a
higher net interest margin. Throughout 2008, the net interest margin increased
due to the balance sheet being positioned to benefit from the declining interest
rate environment, which produced a greater decrease in the cost of funds than
the yield on earning assets. As a result, the net interest margin for the three
months ended March 31, 2009 was 4.42 percent, compared to 4.21 percent for the
same period the prior year.
Supplementing the increase in revenue from net interest income was the
increase in noninterest income. For the first quarter of 2009, noninterest
income totaled $2,063,000, an increase of $479,000, or 30.2 percent, from the
first quarter of 2008. Contributing to the increase was processing fee income
earned from facilitating the clearing of tax refunds for a tax software
provider. With continued growth in transaction volume, the associated fee income
increased
$239,000 from the 2008 first quarter. In addition, gain on sale of loans for the
first quarter of 2009 increased $213,000 over the prior year first quarter. With
historical low mortgage rates, the Company has experienced a significant
increase in secondary market loan originations.
Noninterest expense totaled $6,598,000 for the first quarter of 2009, an
increase of $846,000, or 14.7 percent, from the same period last year.
Contributing to the increase was higher FDIC insurance premiums due to an
increase in assessment rates on the banking industry. For the first quarter of
2009, FDIC insurance premiums increased $268,000 from the same time period last
year. With yet higher assessment rates starting in the second quarter and a
proposed one-time special assessment at June 30, 2009, the cost of insuring
deposits will continue to increase and will be significantly above 2008's
expense. The Company's largest noninterest expense, salaries and employee
benefits contributed $271,000 to the increase. The total of all remaining
noninterest expense categories increased $307,000 from the prior year first
quarter, led by communication and equipment expense.
For the three months ended March 31, 2009, management provided $848,000 to
the allowance for loan losses, an increase of $147,000 from the same period the
prior year. Although the ratio of nonperforming loans to total loans at March
31, 2009 of .95 percent was down from the 1.40 percent at March 31, 2008, the
ratio was up from the .84 percent at December 31, 2008. For the three months
ended March 31, 2009, net charge-offs were up $404,000 from the same three-month
period in 2008, primarily due to the partial charge-off of a large real estate
loan. Based on the evaluation of the adequacy of the allowance for loan losses,
management believes that the allowance for loan losses at March 31, 2009 was
adequate and reflects probable incurred losses in the portfolio. The allowance
for loan losses was 1.22 percent
of total loans at March 31, 2009, compared to 1.24 percent at December 31, 2008
and 1.09 percent at March 31, 2008.
"I am extremely proud of all of the employees of Ohio Valley Banc Corp.,"
stated Jeffrey E. Smith, President and CEO. "These employees continue to work
every day in this challenging economic environment to do their part to minimize
the effects of higher FDIC insurance premiums, manage asset quality, and, at the
same time, provide the customer service our thousands of customers deserve.
Their efforts for the first calendar quarter of 2009 compared to the same period
in 2008 have generated increases in both earnings and earnings per share and
improved returns on assets and equity, while maintaining a ratio of
nonperforming loans to total loans of less than 1.00 percent. This performance
represents a successful start to the fiscal year."
Ohio Valley Banc Corp. common stock is traded on the NASDAQ Global Market
under the symbol OVBC. The holding company owns three subsidiaries: Ohio Valley
Bank, with 16 offices in Ohio and West Virginia; Loan Central, with six consumer
finance offices in Ohio, and Ohio Valley Financial Services, an insurance agency
based in Jackson, 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," "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, and taxes; (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, 2008, 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,
2009 2008
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PER SHARE DATA
Earnings per share $0.51 $0.48
Dividends per share $0.20 $0.19
Book value per share $16.21 $15.30
Dividend payout ratio (a) 38.83% 39.38%
Weighted average shares outstanding 3,983,009 4,060,585
PERFORMANCE RATIOS
Return on average equity 13.13% 13.10%
Return on average assets 1.02% 1.00%
Net interest margin (b) 4.42% 4.21%
Efficiency ratio (c) 63.17% 61.38%
Average earning assets (in 000's) $769,169 $743,909
(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,
2009 2008
------------ ------------
Interest income:
Interest and fees on loans $ 11,659 $ 12,642
Interest and dividends on securities 952 1,092
Total interest income 12,611 13,734
Interest expense:
Deposits 3,449 4,886
Borrowings 882 1,173
Total interest expense 4,331 6,059
Net interest income 8,280 7,675
Provision for loan losses 848 701
Noninterest income:
Service charges on deposit accounts 625 710
Trust fees 55 61
Income from bank owned insurance 200 175
Gain on sale of loans 258 45
Loss on sale of other real estate owned ---- (41)
Other 925 634
Total noninterest income 2,063 1,584
Noninterest expense:
Salaries and employee benefits 3,700 3,429
Occupancy 403 386
Furniture and equipment 285 235
Data processing 227 265
FDIC insurance 285 17
Other 1,698 1,420
Total noninterest expense 6,598 5,752
Income before income taxes 2,897 2,806
Income taxes 846 841
NET INCOME $ 2,051 $ 1,965
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in $000's, except share and per share data)
March 31, December 31,
2009 2008
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ASSETS
Cash and noninterest-bearing deposits with banks $ 8,321 $ 16,650
Federal funds sold ---- 1,031
Total cash and cash equivalents 8,321 17,681
Interest-bearing deposits in other financial institutions 42,817 611
Securities available-for-sale 80,344 75,340
Securities held-to-maturity
(estimated fair value: 2009 - $16,315; 2008 - $17,241) 16,025 16,986
Federal Home Loan Bank stock 6,281 6,281
Total loans 633,566 630,391
Less: Allowance for loan losses (7,704) (7,799)
Net loans 625,862 622,592
Premises and equipment, net 10,548 10,232
Accrued income receivable 3,005 3,172
Goodwill 1,267 1,267
Bank owned life insurance 18,311 18,153
Other assets 9,183 8,793
Total assets $ 821,964 $ 781,108
LIABILITIES
Noninterest-bearing deposits $ 96,934 $ 85,506
Interest-bearing deposits 557,247 506,855
Total deposits 654,181 592,361
Securities sold under agreements to repurchase 27,292 24,070
Other borrowed funds 51,148 76,774
Subordinated debentures 13,500 13,500
Accrued liabilities 11,261 11,347
Total liabilities 757,382 718,052
SHAREHOLDERS' EQUITY
Common stock ($1.00 par value per share, 10,000,000 shares
authorized; 2009 and 2008 - 4,642,748 shares issued) 4,643 4,643
Additional paid-in capital 32,683 32,683
Retained earnings 42,007 40,752
Accumulated other comprehensive income 961 690
Treasury stock, at cost (2009 and 2008 - 659,739 shares) (15,712) (15,712)
Total shareholders' equity 64,582 63,056
Total liabilities and shareholders' equity $ 821,964 $ 781,108