What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 201 added, 233 removed, 572 unchanged (43% 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

27 unchanged sentences

5,447,185 shares issued)

2019 - 5,447,185 shares issued)

Additional paid-in capital

9 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

Interest and dividend income:

6 unchanged sentences

Net interest income

Provision for (recovery of) loan losses

Provision for loan losses

Net interest income after provision for loan losses

3 unchanged sentences

Mortgage banking income

Electronic refund check / deposit fees

Debit / credit card interchange income

Loss on other real estate owned

Gain (loss) on other real estate owned

Tax preparation fees

17 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

Other comprehensive income (loss):

12 unchanged sentences

Shareholders'

Balance at July 1, 2020

Other comprehensive loss, net

Cash dividends, $ 0.21 per share

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 September 30, 2019

Comprehensive

Income (Loss)

Shareholders'

Balance at January 1, 2021

Other comprehensive income, net

Other comprehensive loss, net

Cash dividends, $ 0.21 per share

Balance at September 30, 2020

Balance at March 31, 2021

Balance at January 1, 2020

Other comprehensive income, net

Common stock issued to ESOP, 8,333 shares

Common stock issued through dividend reinvestment, 29,219 shares

Cash dividends, $ 0.21 per share

Balance at September 30, 2019

Balance at March 31, 2020

See accompanying notes to consolidated financial statements

3 unchanged sentences

(dollars in thousands)

Nine months ended

September 30,

Three months ended

Net cash provided by operating activities:

3 unchanged sentences

Proceeds from maturities of securities held to maturity

Purchase of securities held to maturity

Proceeds from maturities of certificates of deposit in financial institutions

Purchase of certificates of deposit in financial institutions

Net change in loans

1 unchanged sentence

Purchases of premises and equipment

Purchases of bank owned life insurance and annuity assets

Net cash (used in) investing activities

1 unchanged sentence

Change in deposits

Proceeds from common stock through dividend reinvestment

Cash dividends

1 unchanged sentence

Change in other long-term borrowings

Change in other short-term borrowings

Net cash provided by financing activities

4 unchanged sentences

Cash paid for interest

Cash paid for income taxes

Transfers from loans to other real estate owned

Initial recognition of operating lease right-of-use asset

Operating lease liability arising from obtaining right-of-use asset

8 unchanged sentences

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 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.

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 March 31, 2021, and its results of operations and cash flows for the periods presented.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2021.

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

7 unchanged sentences

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.

In addition, COVID-19 may adversely impact several industries within our geographic footprint and impair the ability of our customers to fulfill their contractual obligations to the Company.

The continued financial impact of COVID-19 depends largely on the actions taken by governmental authorities and other third parties.

In addition, COVID-19 may continue to adversely impact several industries within our geographic footprint for some time and impair the ability of our customers to fulfill their contractual obligations to the Company.

This could result in a material adverse effect on our business operations, asset valuations, liquidity, financial condition, and results of operations.

Effects may include:

These effects may include:

Increased provision for loan losses.

6 unchanged sentences

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)

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:

4 unchanged sentences

banking and consumer finance.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses.

Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments.

The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection.

Past due status is based on the contractual terms of the loan.

In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.

Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual.

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 Bank also originates long-term, fixed-rate mortgage loans, with full intention of being sold to the secondary market.

These loans are considered held for sale during the period of time after the principal has been advanced to the borrower by the Bank, but before the Bank has been reimbursed by the Federal Home Loan Mortgage Corporation, typically within a few business days.

Loans sold to the secondary market are carried at the lower of aggregate cost or fair value.

As of March 31, 2021, there were $ 275 in loans held for sale by the Bank, as compared to $ 70 in loans held for sale at December 31, 2020.

ALLOWANCE FOR LOAN LOSSES:

The allowance for loan losses is a valuation allowance for probable incurred credit losses.

Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Subsequent recoveries, if any, are credited to the allowance.

Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.

Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.

The specific component relates to loans that are individually classified as impaired.

A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.

Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.

Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.

If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.

Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.

Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.

If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.

For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years for the consumer and real estate portfolio segment and 5 years for the commercial portfolio segment.

The total loan portfolio’s actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following:

levels of and trends in delinquencies and impaired loans;

levels of and trends in charge-offs and recoveries;

trends in volume and terms of loans;

effects of any changes in risk selection and underwriting standards;

other changes in lending policies, procedures, and practices;

experience, ability, and depth of lending management and other relevant staff;

national and local economic trends and conditions;

industry conditions;

and effects of changes in credit concentrations.

The following portfolio segments have been identified:

Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.

Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.

The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.

Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.

An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.

Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.

A nonowner- occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.

Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.

Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.

Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.

Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.

Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.

The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.

These loans typically have maturities of 6 years or less with repayment dependent on individual wages and income.

The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.

The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At March 31, 2021, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

EARNINGS PER SHARE:

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 4,773,258 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.

The weighted average common shares outstanding were 4,787,446 for both the three months ended March 31, 2021 and 2020, respectively.

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

ADOPTION OF NEW ACCOUNTING STANDARD UPDATES (“ASU”):

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.

This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements.

Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted.

For non-public entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial position or results of operations.

ACCOUNTING GUIDANCE TO BE ADOPTED IN FUTURE PERIODS:

8 unchanged sentences

Management expects the adoption will result in a material increase to the allowance for loan losses balance.

At this time, the impact is being evaluated.

On October 16, 2019, the FASB confirmed it would delay the effective date of this ASU for smaller reporting companies, such as the Company, until fiscal years beginning after December 15, 2022.

For SEC filers who are smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS

21 unchanged sentences

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

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Other Real Estate Owned:

9 unchanged sentences

Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.

On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that typically approximate 10 %.

On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs, which typically amount to approximately 10 % of the fair value of such collateral.

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Interest Rate Swap Agreements:

3 unchanged sentences

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

Fair Value Measurements at September 30, 2020 Using

Fair Value Measurements at March 31, 2021 Using

Quoted Prices in Active

3 unchanged sentences

Unobservable Inputs

Government securities

Government sponsored entity securities

2 unchanged sentences

Interest rate swap derivatives

Fair Value Measurements at December 31, 2019 Using

Fair Value Measurements at

December 31, 2020 Using

Quoted Prices in Active

6 unchanged sentences

Interest rate swap derivatives

Liabilities :

Interest rate swap derivatives

There were no transfers between Level 1 and Level 2 during 2021 or 2020.

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Assets and Liabilities Measured on a Nonrecurring Basis

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

There were no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2020.

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

Fair Value Measurements at

March 31, 2021, Using

Quoted Prices in Active

Markets for Identical Assets

Significant Other

Observable Inputs

Significant Other Observable Inputs

Unobservable Inputs

1 unchanged sentence

Commercial real estate:

Nonowner-occupied

Owner-occupied

Commercial and Industrial

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 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:

December 31, 2019

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

At March 31, 2021, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $ 2,431 , with a corresponding valuation allowance of $ 90 , resulting in an increase of $ 90 in provision expense during the three months ended March 31, 2021, with no corresponding charge-offs recognized.

This is compared to an increase of $ 854 in provision expense during the three months ended March 31, 2020.

At December 31, 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 year ended December 31, 2020.

There was no other real estate owned that was measured at fair value less costs to sell at March 31, 2021 and December 31, 2020.

There were no corresponding write downs during the three months ended March 31, 2021 and 2020.

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 March 31, 2021

March 31, 2021

Weighted Average

7 unchanged sentences

Adjustment to comparables

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

The carrying amounts and estimated fair values of financial instruments at March 31, 2021 and December 31, 2020 are as follows:

Fair Value Measurements at March 31, 2021 Using

Financial Assets:

23 unchanged sentences

Accrued interest payable

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.

4 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 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:

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at March 31, 2021 and December 31, 2020 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

September 30 , 2020

March 31 , 2021

Government securities

Government sponsored entity securities

8 unchanged sentences

Gross Unrecognized

September 30 , 2020

March 31 , 2021

Obligations of states and political subdivisions

5 unchanged sentences

Total securities

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

The amortized cost and estimated fair value of debt securities at March 31, 2021, 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.

Securities not due at a single maturity are shown separately.

NOTE 3 – SECURITIES (Continued)

Available for Sale

1 unchanged sentence

Debt Securities:

Amortized Cost

Estimated Fair Value

Amortized Cost

Estimated Fair Value

Due in one year or less

1 unchanged sentence

Due in over five to ten years

Due after ten years

Agency mortgage-backed securities, residential

Total debt securities

NOTE 3 – SECURITIES (Continued)

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

The following table summarizes securities with unrealized losses at March 31, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position:

March 31, 2021

Less Than 12 Months

4 unchanged sentences

Securities Available for Sale

Agency mortgage-backed securities,

Government securities

Government sponsored entity

Agency mortgage-backed

securities, residential

Total available for sale

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

December 31, 2020

5 unchanged sentences

Securities Available for Sale

Government sponsored entity securities

Agency mortgage-backed securities,

Agency mortgage-backedsecurities, residential

Total available for sale

NOTE 3 – SECURITIES (Continued)

March 31 , 2021

Less Than 12 Months

6 unchanged sentences

Total held to maturity

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.

There were no sales of investment securities during the three months ended March 31, 2021 or 2020.

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 March 31, 2021, 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 March 31, 2021 and December 31, 2020 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 $ 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

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged off

Total ending allowance balance

September 30 , 2019

and Industrial

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged-off

Total ending allowance balance

Commercial and industrial loans include $ 25,829 of loans originated under the PPP at March 31 , 2021 compared to $27,933 at December 31, 2020.

These loans are guaranteed by the SBA.

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 nine months ended September 30, 2020 and 2019:

September 30, 2020

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2021 and 2020:

March 31 , 2021

and Industrial

4 unchanged sentences

Total ending allowance balance

September 30 , 2019

March 31 , 2020

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 September 30, 2020 and December 31, 2019:

September 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 March 31, 2021 and December 31, 2020:

March 31 , 2021

and Industrial

7 unchanged sentences

Total ending loans balance

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

December 31 , 2020

8 unchanged sentences

Total ending loans balance

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 September 30, 2020 and December 31, 2019:

September 30 , 2020

Principal Balance

Allowance for Loan

Losses Allocated

The following tables present information related to loans individually evaluated for impairment by class of loans as of March 31, 2021 and December 31, 2020:

March 31 , 2021

Allowance for

With an allowance recorded:

Commercial real estate:

Nonowner-occupied

Owner-occupied

Commercial and industrial

With no related allowance recorded:

5 unchanged sentences

December 31 , 2020

Principal Balance

Allowance for Loan

Losses Allocated

Allowance for

With an allowance recorded:

Commercial real estate:

Owner-occupied

Commercial and industrial

With no related allowance recorded:

5 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 nine months ended September 30, 2020 and 2019:

Three months ended September 30, 2020

Nine months ended September 30, 2020

Impaired Loans

Interest Income

Interest Recognized

The following tables present information related to loans individually evaluated for impairment by class of loans for the three months ended March 31, 2021 and 2020:

Three months ended

March 31, 2021

Impaired Loans

3 unchanged sentences

Commercial real estate:

Nonowner-occupied

Owner-occupied

Commercial and industrial

With no related allowance recorded:

4 unchanged sentences

Commercial and industrial

Three months ended September 30, 2019

Nine months ended September 30, 2019

Impaired Loans

Interest Income

Interest Recognized

Three months ended

March 31, 2020

Impaired Loans

2 unchanged sentences

With an allowance recorded:

Commercial real estate:

Owner-occupied

Commercial and industrial

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 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.

As of March 31, 2021, there were no other real estate owned for residential real estate properties, as compared to $ 43 at December 31, 2020.

In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $ 693 and $ 1,097 as of March 31, 2021 and December 31, 2020, 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 September 30, 2020 and December 31, 2019:

September 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 March 31, 2021 and December 31, 2020:

March 31 , 2021

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 September 30, 2020 and December 31, 2019:

September 30 , 2020

The following table presents the aging of the recorded investment of past due loans by class of loans as of March 31, 2021 and December 31, 2020:

March 31 , 2021

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 September 30, 2020 and December 31, 2019:

September 30 , 2020

Performing to Modified Terms

Residential real estate:

Interest only payments

The following table presents the types of TDR loan modifications by class of loans as of March 31, 2021 and December 31, 2020:

March 31 , 2021

Performing to

Commercial real estate:

Owner-occupied

Interest only payments

Reduction of principal and interest payments

6 unchanged sentences

December 31 , 2020

Performing to Modified Terms

Performing to

Residential real estate:

2 unchanged sentences

Owner-occupied

Interest only payments

Reduction of principal and interest payments

5 unchanged sentences

Interest only payments

Reduction of principal and interest payments

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 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

Nine months ended September 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

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.

The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at March 31, 2021 and December 31, 2020.

At March 31, 2021, the Company had $ 2,465 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $ 1,100 at December 31, 2020.

There were no TDR loan modifications that occurred during the three months ended March 31, 2021 and 2020 that impacted provision expense or the allowance for loan losses.

The Company had no TDRs that occurred during the three months ended March 31, 2021 and 2020 that 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.

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

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 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)

Borrowers are considered current if they are less than 30 days past due on their contractual payments at the time of modification.

As of March 31, 2021, the Company had modified 783 loans related to COVID-19 with an outstanding loan balance of $ 147,985 that were not reported as TDRs.

As of March 31, 2021, the Company had 56 modified loans that were still in active deferral related to COVID-19 with an outstanding loan balance of $ 2,395 that were not reported as TDRs in the tables presented above.

Credit Quality Indicators:

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Loans classified as "doubtful" display a high probability of loss, although the amount of actual loss at the time of classification is undetermined.

This classification should be temporary until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification.

This classification should be temporary until such time that actual loss can be identified, or improvements are made to reduce the seriousness of the classification.

These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable.

This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value.

Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined.

Loss is deferred until certain important and reasonable specific pending factors that may strengthen the credit can be more accurately determined.

These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans.

7 unchanged sentences

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

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

As of March 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

March 31 , 2021

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 September 30, 2020 and December 31, 2019:

September 30 , 2020

The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of March 31, 2021 and December 31, 2020:

March 31 , 2021

Nonperforming

2 unchanged sentences

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.

Approximately 4.04 % of total loans were unsecured at March 31, 2021, down from 4.22 % at December 31, 2020.

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

At March 31, 2021, the contract amounts of these instruments totaled approximately $ 86,859 , compared to $ 88,456 at December 31, 2020.

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 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

September 30, 2020

Other borrowed funds at March 31, 2021 and December 31, 2020 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

March 31, 2021

December 31, 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 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.

Pursuant to collateral agreements with the FHLB, advances were secured by $ 282,889 in qualifying mortgage loans, $ 55,701 in commercial loans and $ 5,365 in FHLB stock at March 31, 2021.

Fixed-rate FHLB advances of $ 23,493 mature through 2042 and have interest rates ranging from 1.53 % to 3.31 % and a year-to-date weighted average cost of 2.43 % at March 31, 2021 and 2.40 % at December 31, 2020.

There were no variable-rate FHLB borrowings at March 31, 2021.

At March 31, 2021, 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 $ 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 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:

There was $ 92,178 available on this line of credit at March 31, 2021.

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 $ 188,666 at March 31, 2021.

Of this maximum borrowing capacity, the Company had $ 92,178 available to use as additional borrowings.

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of December 9, 2021 , and have fixed rates ranging from 1.00 % to 2.85 % and a year-to-date weighted average cost of 1.41 % at March 31, 2021, as compared to 2.20 % at December 31, 2020.

At March 31, 2021 and December 31, 2020, there were six promissory notes payable by Ohio Valley to related parties totaling $ 3,198 .

There were no promissory notes payable to other banks at March 31, 2021 and December 31, 2020, respectively.

Letters of credit issued on the Bank's behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 72,995 at March 31, 2021 and $ 76,740 at December 31, 2020.

Scheduled principal payments as of March 31, 2021:

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 94.0 % and 93.9 % of total consolidated revenues for the quarters end September 30, 2020 and 2019, respectively.

Total revenues from the banking segment, which accounted for the majority of the Company's total revenues, totaled 90.8 % of total consolidated revenues for both quarters ended, March 31, 2021 and 2020.

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 September 30, 2020

Net interest income

Provision expense

Noninterest income

Noninterest expense

Three Months Ended September 30, 2019

Net interest income

Provision expense

Noninterest income

Noninterest expense

Nine Months Ended September 30, 2020

Three months ended March 31, 2021

Net interest income

2 unchanged sentences

Noninterest expense

Nine Months Ended September 30, 2019

Three months ended March 31, 2020

Net interest income

11 unchanged sentences

The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Upon adoption of the new lease guidance on January 1, 2019, an initial ROU asset of $ 1,280 was recognized as a non-cash asset addition to the consolidated balance sheet.

Balance sheet information related to leases was as follows:

September 30, 2020

December 31, 2019

Operating leases:

3 unchanged sentences

Three 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 September 30, 2020 are as follows:

Operating Leases

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2021 are as follows:

2021 (remaining)

3 unchanged sentences

Other information was as follows:

September 30, 2020

December 31, 2019

Weighted-average remaining lease term for operating leases

1 unchanged sentence

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