What changed in this filing

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Item 1. Financial Statements

2020-11-09 compared with 2020-08-10 · 141 added, 140 removed, 664 unchanged (30% of the section changed)

3 unchanged sentences

(dollars in thousands, except share and per share data)

September 30,

Cash and noninterest-bearing deposits with banks

39 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Interest and dividend income:

13 unchanged sentences

Debit / credit card interchange income

Gain (loss) on other real estate owned

Loss on other real estate owned

Tax preparation fees

17 unchanged sentences

Three months ended

Six months ended

Other comprehensive income:

Change in unrealized gain on available for sale securities

Related tax expense

Total other comprehensive income, net of tax

September 30,

Nine months ended

September 30,

Other comprehensive income (loss):

Change in unrealized gain (loss) on available for sale securities

Related tax (expense) benefit

Total other comprehensive income (loss), net of tax

Total comprehensive income

8 unchanged sentences

Shareholders'

Balance at April 1, 2020

Other comprehensive income, net

Balance at July 1, 2020

Other comprehensive loss, net

Cash dividends, $ 0.21 per share

Balance at June 30, 2020

Balance at April 1, 2019

Other comprehensive income, net

Balance at September 30, 2020

Balance at July 1, 2019

Other comprehensive loss, net

Common stock issued through dividend reinvestment, 10,120 shares

Cash dividends, $ 0.21 per share

Balance at June 30, 2019

Balance at September 30, 2019

Comprehensive

4 unchanged sentences

Cash dividends, $ 0.63 per share

Balance at June 30, 2020

Balance at September 30, 2020

Balance at January 1, 2019

3 unchanged sentences

Cash dividends, $ 0.63 per share

Balance at June 30, 2019

Balance at September 30, 2019

See accompanying notes to consolidated financial statements

3 unchanged sentences

(dollars in thousands)

Six months ended

Nine months ended

September 30,

Net cash provided by operating activities:

17 unchanged sentences

Change in other short-term borrowings

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Change in cash and cash equivalents

13 unchanged sentences

The accompanying consolidated financial statements include the accounts of Ohio Valley Banc Corp.

(“Ohio Valley”) and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc.

(“Loan Central”), a consumer finance company, Ohio Valley Financial Services Agency, LLC, an insurance agency, and OVBC Captive, Inc.

(the “Captive”), a limited purpose property and casualty insurance company.

The Bank has one wholly-owned subsidiary, Ohio Valley REO, LLC (“Ohio Valley REO”), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO.

(“Ohio Valley”) and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company (“Loan Central”), Ohio Valley Financial Services Agency, LLC, an insurance agency, and OVBC Captive, Inc., a limited purpose property and casualty insurance company (the “Captive”).

The Bank has one wholly-owned subsidiary, Ohio Valley REO, LLC, an Ohio limited liability company (“Ohio Valley REO”), to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO.

Ohio Valley and its subsidiaries are collectively referred to as the “Company.” All material intercompany accounts and transactions have been eliminated in consolidation.

These interim financial statements are prepared by the Company without audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at June 30, 2020, and its results of operations and cash flows for the periods presented.

The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2020.

These interim financial statements are prepared by the Company without audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at September 30, 2020, and its results of operations and cash flows for the periods presented.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2020.

The accompanying consolidated financial statements do not purport to contain all the necessary financial disclosures required by U.S.

5 unchanged sentences

In March 2020, the World Health Organization declared the outbreak of the coronavirus (“COVID-19”) as a global pandemic.

COVID-19 has negatively impacted the global economy, disrupted global supply chains, created significant volatility and disruption in financial markets, and increased unemployment levels.

The resulting temporary closure of many businesses and the implementation of social distancing and sheltering-in-place policies has, and may continue to impact, many of the Company’s customers.

COVID-19 has continued to negatively impact the global economy, disrupt global supply chains, create significant volatility, disrupt financial markets, and increase unemployment levels.

The resulting temporary closure of many businesses and the implementation of social distancing and sheltering-in-place policies has impacted, and may continue to impact, many of the Company’s customers.

The potential financial impact of COVID-19 is unknown at this time and depends largely on the actions taken by governmental authorities and other third parties.

2 unchanged sentences

Effects may include:

The provision for loan losses could increase.

Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and related economic effects will continue to affect the accounting for loan losses.

Increased provision for loan losses.

Continued uncertainty regarding the severity and duration of COVID-19 and related economic effects will continue to affect the accounting for loan losses.

It also is possible that asset quality could worsen, and that loan charge-offs could increase.

The Company is actively participating in the Paycheck Protection Program (“PPP”) by providing loans to small businesses negatively impacted by the COVID-19 pandemic.

The Company is actively participating in the Paycheck Protection Program (“PPP”) by providing loans to small businesses negatively impacted by COVID-19.

PPP loans are fully guaranteed by the U.S.

government, and if that should change, the Company could be required to increase its allowance for loan losses through an additional provision for loan losses charged to earnings.

Valuation and fair value measurement challenges may occur.

Material adverse impacts may include all or a combination of valuation impairments on the Company’s securities, impaired loans, goodwill, other real estate owned, and interest rate swap agreements.

Valuation and fair value measurement challenges.

Material adverse impacts of COVID-19 may result in valuation impairments on the Company’s securities, impaired loans, goodwill, other real estate owned, and interest rate swap agreements.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

7 unchanged sentences

Earnings per share are computed based on net income divided by the weighted average number of common shares outstanding during the period.

The weighted average common shares outstanding were 4,787,446 and 4,763,858 for the three months ended June 30 , 2020 and 2019 , respectively.

The weighted average common shares outstanding were 4,787,446 and 4,756,209 for the six months ended June 30, 2020 and 2019, respectively.

The weighted average common shares outstanding were 4,787,446 and 4,773,258 for the three months ended September 30 , 2020 and 2019 , respectively.

The weighted average common shares outstanding were 4,787,446 and 4,761,954 for the nine months ended September 30, 2020 and 2019, respectively.

Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

38 unchanged sentences

Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.

In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement.

Such adjustments would be classified as a Level 2 classification.

Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

17 unchanged sentences

Assets and liabilities measured at fair value on a recurring basis are summarized below:

Fair Value Measurements at June 30, 2020 Using

Fair Value Measurements at September 30, 2020 Using

Quoted Prices in Active

6 unchanged sentences

Interest rate swap derivatives

Liabilities :

Interest rate swap derivatives

13 unchanged sentences

Assets and Liabilities Measured on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2020.

Assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2019 are summarized below:

Assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2020 and December 31, 2019 are summarized below:

Fair Value Measurements at September 30, 2020 Using

Quoted Prices in Active

Markets for Identical Assets

Significant Other

Observable Inputs

Unobservable Inputs

Impaired loans:

Commercial real estate:

Nonowner-occupied

Fair Value Measurements at December 31, 2019 Using

6 unchanged sentences

Commercial real estate:

Owner-occupied

Nonowner-occupied

Commercial and Industrial

At June 30, 2020, the Company had no recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans and, therefore, recorded no impact to provision expense during the three and six months ended June 30, 2020.

This is compared to a decrease of $ 3 to provision expense during the three months ended June 30, 2019, and an increase of $ 1 to provision expense during the six months ended June 30, 2019, with $ 65 in additional charge-offs recognized during both periods.

At September 30, 2020, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $ 242 , with a corresponding valuation allowance of $ 43 , resulting in an increase of $ 43 in provision expense during the three and nine months ended September 30, 2020, with no corresponding charge-offs recognized.

This is compared to no provision expense during the three and nine months ended September 30, 2019.

At December 31, 2019, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $ 7,010 , with a corresponding valuation allowance of $ 807 , resulting in an increase of $ 807 in provision expense during the year ended December 31, 2019, with no corresponding charge-offs recognized.

There was no other real estate owned that was measured at fair value less costs to sell at June 30, 2020 and December 31, 2019.

There were no corresponding write downs during the three and six months ended June 30, 2020 and 2019.

There was no other real estate owned that was measured at fair value less costs to sell at September 30, 2020 and December 31, 2019.

There were no corresponding write downs during the three and nine months ended September 30, 2020 and 2019.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2019:

10 unchanged sentences

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

The carrying amounts and estimated fair values of financial instruments at June 30, 2020 and December 31, 2019 are as follows:

Fair Value Measurements at June 30, 2020 Using

The carrying amounts and estimated fair values of financial instruments at September 30, 2020 and December 31, 2019 are as follows:

Fair Value Measurements at September 30, 2020 Using

Financial Assets:

29 unchanged sentences

NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at June 30, 2020 and December 31, 2019, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains and losses:

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at September 30, 2020 and December 31, 2019, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains and losses:

Securities Available for Sale

1 unchanged sentence

Gross Unrealized

June 30 , 2020

September 30 , 2020

Government sponsored entity securities

8 unchanged sentences

Gross Unrecognized

June 30 , 2020

September 30 , 2020

Obligations of states and political subdivisions

5 unchanged sentences

Total securities

The amortized cost and estimated fair value of debt securities at June 30, 2020, by contractual maturity, are shown below.

The amortized cost and estimated fair value of debt securities at September 30, 2020, by contractual maturity, are shown below.

Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities.

9 unchanged sentences

NOTE 3 – SECURITIES (Continued)

The following table summarizes securities with unrealized losses at June 30, 2020 and December 31, 2019, aggregated by major security type and length of time in a continuous unrealized loss position:

June 30, 2020

The following table summarizes securities with unrealized losses at September 30, 2020 and December 31, 2019, aggregated by major security type and length of time in a continuous unrealized loss position:

September 30, 2020

Less Than 12 Months

4 unchanged sentences

Securities Available for Sale

Agency mortgage-backed

securities, residential

Agency mortgage-backed securities,

Total available for sale

Less Than 12 Months

12 Months or More

Unrecognized Loss

Securities Held to Maturity

Obligations of states and political subdivisions

Total held to maturity

There were no securities held to maturity with unrealized losses at September 30, 2020.

December 31, 2019

6 unchanged sentences

Government sponsored entity securities

Agency mortgage-backedsecurities, residential

Agency mortgage-backed securities,

Total available for sale

7 unchanged sentences

Total held to maturity

There were no sales of investment securities during the three and six months ended June 30, 2020 or 2019.

Unrealized losses on the Company’s debt securities have not been recognized into income because the issuers’ securities are of high credit quality as of June 30, 2020, and management does not intend to sell, and it is likely that management will not be required to sell, the securities prior to their anticipated recovery.

Management does no t believe any individual unrealized loss at June 30, 2020 and December 31, 2019 represents an other-than-temporary impairment.

There were no sales of investment securities during the three and nine months ended September 30, 2020 or 2019.

Unrealized losses on the Company’s debt securities have not been recognized into income because the issuers’ securities are of high credit quality as of September 30, 2020, and management does not intend to sell, and it is likely that management will not be required to sell, the securities prior to their anticipated recovery.

Management does no t believe any individual unrealized loss at September 30, 2020 and December 31, 2019 represents an other-than-temporary impairment.

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are comprised of the following:

September 30,

Residential real estate

4 unchanged sentences

Allowance for loan losses

Commercial and industrial loans include $ 34,145 of loans originated under the PPP at June 30, 2020.

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2020 and 2019:

June 30 , 2020

Commercial and industrial loans include $ 35,114 of loans originated under the PPP at September 30, 2020.

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2020 and 2019:

September 30 , 2020

and Industrial

4 unchanged sentences

Total ending allowance balance

June 30 , 2019

September 30 , 2019

and Industrial

5 unchanged sentences

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2020 and 2019:

June 30 , 2020

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2020 and 2019:

September 30, 2020

and Industrial

4 unchanged sentences

Total ending allowance balance

June 30 , 2019

September 30 , 2019

and Industrial

4 unchanged sentences

Total ending allowance balance

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of September 30, 2020 and December 31, 2019:

September 30 , 2020

and Industrial

18 unchanged sentences

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present information related to loans individually evaluated for impairment by class of loans as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following tables present information related to loans individually evaluated for impairment by class of loans as of September 30, 2020 and December 31, 2019:

September 30 , 2020

Principal Balance

2 unchanged sentences

With an allowance recorded:

Commercial real estate:

Nonowner-occupied

With no related allowance recorded:

19 unchanged sentences

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present information related to loans individually evaluated for impairment by class of loans for the three and six months ended June 30, 2020 and 2019:

Three months ended June 30, 2020

Six months ended June 30, 2020

The following tables present information related to loans individually evaluated for impairment by class of loans for the three and nine months ended September 30, 2020 and 2019:

Three months ended September 30, 2020

Nine months ended September 30, 2020

Impaired Loans

5 unchanged sentences

With an allowance recorded:

Commercial real estate:

Nonowner-occupied

With no related allowance recorded:

4 unchanged sentences

Commercial and industrial

Three months ended June 30, 2019

Six months ended June 30, 2019

Three months ended September 30, 2019

Nine months ended September 30, 2019

Impaired Loans

5 unchanged sentences

With an allowance recorded:

Residential real estate

Commercial real estate:

Nonowner-occupied

With no related allowance recorded:

7 unchanged sentences

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu).

As of June 30, 2020, there were no other real estate owned for residential real estate properties, as compared to $ 68 at December 31, 2019.

In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $ 759 and $ 1,780 as of June 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, there was $ 97 in other real estate owned for residential real estate properties, as compared to $ 68 at December 31, 2019.

In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $ 684 and $ 1,780 as of September 30, 2020 and December 31, 2019, respectively.

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of September 30, 2020 and December 31, 2019:

September 30 , 2020

Loans Past Due

14 unchanged sentences

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following table presents the aging of the recorded investment of past due loans by class of loans as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following table presents the aging of the recorded investment of past due loans by class of loans as of September 30, 2020 and December 31, 2019:

September 30 , 2020

Residential real estate

19 unchanged sentences

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following table presents the types of TDR loan modifications by class of loans as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following table presents the types of TDR loan modifications by class of loans as of September 30, 2020 and December 31, 2019:

September 30 , 2020

Performing to Modified Terms

28 unchanged sentences

Reduction of principal and interest payments

At June 30 , 2020 , the balance in TDR loans decreased $ 1,766 , or 20.7 % , from year-end 2019 .

The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at  

June 30 , 2020 , as compared to $ 227 in reserves at December 31, 2019 .

At June 30 , 2020 , the Company had $ 2,423 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $ 941 at December 31, 2019 .

At September 30 , 2020 , the balance in TDR loans decreased $ 3,188 , or 37.3 % , from year-end 2019 .

The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at September 30 , 2020 , as compared to $ 227 in reserves at December 31, 2019 .

At September 30 , 2020 , the Company had $ 2,964 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $ 941 at December 31, 2019 .

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

There were no TDR loan modifications that occurred during the three and six months ended June 30, 2020.

The following table presents the pre- and post-modification balances of TDR loan modifications by class of loans that occurred during the three and six months ended June 30, 2019:

Performing to Modified Terms

Performing toModified Terms

Three months ended June 30 , 2019

Pre-Modification Recorded

Post-Modification Recorded

Pre-Modification Recorded

Post-Modification Recorded

Residential real estate:

Interest only payments

Commercial and Industrial:

Interest only payments

There were no TDR loan modifications that occurred during the three and nine months ended September 30, 2020.

Furthermore, there were no TDR loan modifications that occurred during the three months ended September 30, 2019.

The following table presents the pre- and post-modification balances of TDR loan modifications by class of loans that occurred during the nine months ended September 30, 2019:

Performing to Modified Terms

Six months ended June 30 , 2019

Nine months ended September 30 , 2019

Pre-Modification Recorded

6 unchanged sentences

Interest only payments

The TDRs described above had no impact on the allowance for loan losses and resulted in no charge-offs during the three and six months ended June 30, 2019.

The Company had no TDRs that occurred during the three and six months ended June 30, 2020 or June 30, 2019 that experienced any payment defaults within twelve months following their loan modification.

The TDRs described above had no impact on the allowance for loan losses and resulted in no charge-offs during the nine months ended September 30, 2019.

During the third quarter of 2019, the Company had one TDR loan totaling $ 133 that experienced a payment default within twelve months following its loan modification.

This commercial and industrial loan was first modified as a TDR in April 2019 and was converted to nonaccrual status in August 2019.

The Company had no additional TDRs that, during the three and nine months ended September 30, 2020 and 2019, experienced any payment defaults within twelve months following their loan modification.

A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.

TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 and provided guidance around the modification of loans as a result of the COVID-19 pandemic, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 and provided guidance on the modification of loans as a result of COVID-19, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs.

This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.

Borrowers are considered current under the CARES Act and related regulatory guidance if they are less than 30 days past due on their contractual payments at the time a modification program is implemented.

As of June 30 , 2020 , the Company had modified 692 loans related to the COVID-19 pandemic with an aggregate loan balance of $ 139,304 that were not reported as TDRs in the tables presented above.

As of September 30, 2020, the Company had modified 745 loans related to COVID-19 with an aggregate loan balance of $ 151,595 .

As of September 30 , 2020 , the Company had 231 modified loans remaining that were related to COVID-19 with an aggregate loan balance of $ 38,926 that were not reported as TDRs in the tables presented above.

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

34 unchanged sentences

All commercial loans are categorized into a risk category either at the time of origination or reevaluation date.

As of June 30, 2020 and December 31, 2019, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

June 30 , 2020

As of September 30, 2020 and December 31, 2019, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

September 30 , 2020

Commercial real estate:

10 unchanged sentences

For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of June 30, 2020 and December 31, 2019:

June 30 , 2020

The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of September 30, 2020 and December 31, 2019:

September 30 , 2020

Nonperforming

1 unchanged sentence

Nonperforming

The Company, through its subsidiaries, originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia.

Approximately 4.34 % of total loans were unsecured at June 30, 2020, down from 5.00 % at December 31, 2019.

The Company originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia.

Approximately 4.33 % of total loans were unsecured at September 30, 2020, down from 5.00 % at December 31, 2019.

NOTE 5 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

3 unchanged sentences

The contract amounts of these instruments are not included in the consolidated financial statements.

At June 30, 2020, the contract amounts of these instruments totaled approximately $ 84,507 , compared to $ 75,178 at December 31, 2019.

At September 30, 2020, the contract amounts of these instruments totaled approximately $ 86,146 , compared to $ 75,178 at December 31, 2019.

The Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.

1 unchanged sentence

NOTE 6 - OTHER BORROWED FUNDS

Other borrowed funds at June 30, 2020 and December 31, 2019 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

Other borrowed funds at September 30, 2020 and December 31, 2019 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

FHLB Borrowings

Promissory Notes

June 30, 2020

September 30, 2020

December 31, 2019

Pursuant to collateral agreements with the FHLB, advances were secured by $ 306,417 in qualifying mortgage loans, $ 79,976 in commercial loans and $ 5,365 in FHLB stock at June 30, 2020.

Pursuant to collateral agreements with the FHLB, advances were secured by $ 305,131 in qualifying mortgage loans, $ 79,447 in commercial loans and $ 5,365 in FHLB stock at September 30, 2020.

Fixed-rate FHLB advances of $ 25,763 mature through 2042 and have interest rates ranging from 1.53 % to 3.31 % and a year-to-date weighted average cost of 2.40 %.

There were no variable-rate FHLB borrowings at June 30, 2020.

At June 30, 2020, the Company had a cash management line of credit enabling it to borrow up to $ 80,000 from the FHLB.

There were no variable-rate FHLB borrowings at September 30, 2020.

At September 30, 2020, the Company had a cash management line of credit enabling it to borrow up to $ 100,000 from the FHLB.

All cash management advances have an original maturity of 90 days.

The line of credit must be renewed on an annual basis.

There was $ 80,000 available on this line of credit at June 30, 2020.

Based on the Company's current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $ 198,131 at June 30, 2020.

There was $ 100,000 available on this line of credit at September 30, 2020.

Based on the Company's current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $ 203,193 at September 30, 2020.

Of this maximum borrowing capacity, the Company had $ 109,189 available to use as additional borrowings, of which $ 100,000 could be used for short-term, cash management advances, as mentioned above.

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of May 18, 2021 , and have fixed rates ranging from 2.00 % to 4.09 % and a year-to-date weighted average cost of 2.40 % at June 30, 2020, as compared to 2.73 % at December 31, 2019.

There were seven promissory notes payable by Ohio Valley to related parties totaling $ 3,558 at June 30, 2020, and December 31, 2019.

Promissory notes payable to other banks totaled $ 106 at June 30, 2020, as compared to $ 405 at December 31, 2019.

Letters of credit issued on the Bank's behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 62,397 at June 30, 2020 and $ 56,500 at December 31, 2019.

Scheduled principal payments as of June 30, 2020:

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of May 18, 2021 , and have fixed rates ranging from 2.00 % to 2.85 % and a year-to-date weighted average cost of 2.31 % at September 30, 2020, as compared to 2.73 % at December 31, 2019.

There were seven promissory notes payable by Ohio Valley to related parties totaling $ 3,558 at September 30, 2020, and December 31, 2019.

There were no promissory notes payable to other banks at September 30, 2020, as compared to $ 405 at December 31, 2019.

Letters of credit issued on the Bank's behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 68,240 at September 30, 2020 and $ 56,500 at December 31, 2019.

Scheduled principal payments as of September 30, 2020:

NOTE 7 – SEGMENT INFORMATION

3 unchanged sentences

All Company segments are domestic.

Total revenues from the banking segment, which accounted for the majority of the Company's total revenues, totaled 93.2 % and 93.1 % of total consolidated revenues for the quarters end June 30, 2020 and 2019, respectively.

Total revenues from the banking segment, which accounted for the majority of the Company's total revenues, totaled 94.0 % and 93.9 % of total consolidated revenues for the quarters end September 30, 2020 and 2019, respectively.

The accounting policies used for the Company's reportable segments are the same as those described in Note 1 - Summary of Significant Accounting Policies.

1 unchanged sentence

Information for the Company’s reportable segments is as follows:

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Net interest income

2 unchanged sentences

Noninterest expense

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Net interest income

2 unchanged sentences

Noninterest expense

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Net interest income

2 unchanged sentences

Noninterest expense

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Net interest income

13 unchanged sentences

Balance sheet information related to leases was as follows:

June 30, 2020

September 30, 2020

December 31, 2019

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating lease cost

Short-term lease expense

Future undiscounted lease payments for operating leases with initial terms of one year or more as of June 30, 2020 are as follows:

Future undiscounted lease payments for operating leases with initial terms of one year or more as of September 30, 2020 are as follows:

Operating Leases

4 unchanged sentences

Other information was as follows:

June 30, 2020

September 30, 2020

December 31, 2019

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements