What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-14 · 620 added, 628 removed, 348 unchanged (78% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

September 30,

(dollars in thousands, except share

and per share data)

Cash and noninterest-bearing deposits with banks

3 unchanged sentences

Securities available for sale

Securities held to maturity (estimated fair value:

Securities held to maturity, net of allowance for credit losses of $ 3 in 2023 and $ 0 in 2022;

(estimated fair

2023 - $ 8,398 ;

1 unchanged sentence

Restricted investments in bank stocks

Allowance for loan losses

Allowance for credit losses

Premises and equipment, net

Premises and equipment held for sale, net

Other real estate owned, net

Accrued interest receivable

9 unchanged sentences

Operating lease liability

Allowance for credit losses on off-balance sheet commitments

Other liabilities

4 unchanged sentences

2023 - 5,470,453 shares issued;

2021 - 5,447,185

2022 - 5,465,707 shares issued)

10 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

Net interest income after provision for loan losses

Provision for (recovery of) credit losses

Net interest income after provision for (recovery of) credit losses

Noninterest income:

4 unchanged sentences

Debit / credit card interchange income

Gain on other real estate owned

Tax preparation fees

16 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

Other comprehensive income (loss):

1 unchanged sentence

Related tax (expense) benefit

Total other comprehensive income (loss), net of tax

Total other comprehensive (loss), net of tax

Total comprehensive income (loss)

8 unchanged sentences

Shareholders'

Balance at July 1, 2022

Other comprehensive loss, net

Cash dividends, $ 0.21

Balance at September 30 , 2022

Balance at July 1, 2021

Other comprehensive loss, net

Cash dividends, $ 0.21

Shares acquired for treasury, 16,569 shares

Balance at September 30 , 2021

Comprehensive

Income (Loss)

Shareholders'

Balance at January 1, 2023

Cumulative change in adopting ASU 2016-13

Balance at January 1, 2023 (as adjusted for change in adopting ASU 2016-13)

Other comprehensive loss, net

Cash dividends, $ 0.78

Cash dividends, $ 0.21 per share

Common Stock issued to ESOP, 4,746 shares

Balance at September 30 , 2022

Balance at March 31, 2023

Balance at January 1, 2022

Other comprehensive loss, net

Cash dividends, $ 0.63

Shares acquired for treasury, 16,569 shares

Balance at September 30 , 2021

Cash dividends, $ 0.21 per share

Common Stock issued to ESOP, 18,522 shares

Balance at March 31 , 2022

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:

Investing activities:

Proceeds from maturities and calls of securities available for sale

Proceeds from maturities and paydowns of securities available for sale

Purchases of securities available for sale

Proceeds from maturities and calls of securities held to maturity

Proceeds from calls and 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

Redemptions of federal home loan bank stock

Redemptions of restricted investments in bank stocks

Net change in loans

Proceeds from sale of other real estate owned

Purchases of premises and equipment

Disposals of premises and equipment

Proceeds from building grant

Purchases of bank owned life insurance and annuity assets

Net cash (used in) investing activities

2 unchanged sentences

Cash dividends

Purchase of treasury stock

Proceeds from Federal Home Loan Bank borrowings

Repayment of Federal Home Loan Bank borrowings

6 unchanged sentences

Cash paid for interest

Cash paid for income taxes

Proceeds from bank owned life insurance and annuity assets not settled

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

See accompanying notes to consolidated financial statements

3 unchanged sentences

BASIS OF PRESENTATION:

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., a consumer finance company, Ohio Valley Financial Services Agency, LLC, an insurance agency, and OVBC

Captive, Inc., a limited purpose property and casualty insurance company.

The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc.,

an Ohio corporation that provides online consumer mortgages, and 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

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, 2022, and its results of operations and cash flows for the periods presented.

The results of operations for the three and nine months ended September

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., a consumer finance company, Ohio Valley

Financial Services Agency, LLC, an insurance agency, and OVBC Captive, Inc., a limited purpose property and casualty insurance company.

The Bank has two

wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages, and 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.

In February 2023, Ohio Valley announced that it was taking steps toward closing Race Day.

The decision to start this process was made due to low loan demand, issues retaining personnel, and

lack of profitability.

Ohio Valley plans to see current loan applications in progress to completion.

An exact date of closing is anticipated to be set once existing loan applications have been processed.

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 March 31, 2023, and its results of operations and cash flows for the periods presented.

The results of operations for the three months ended March 31,

2023, are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2023.

5 unchanged sentences

The consolidated financial statements for 2022 have been reclassified to conform to the presentation for 2023.

These reclassifications had no effect on net income or

shareholders’ equity.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:

These reclassifications had no effect on net

income or shareholders’ equity.

USE OF ESTIMATES

IN THE PREPARATION OF FINANCIAL STATEMENTS:

The accounting and reporting policies followed by the Company conform to US GAAP established by the Financial Accounting Standards Board (“FASB”).

The preparation of financial statements in conformity with US GAAP requires management to make estimates

and assumptions that affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

The preparation of financial statements in

conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

INDUSTRY SEGMENT INFORMATION:

Internal financial information is primarily reported

and aggregated in two lines of business:

Internal financial information is primarily reported and aggregated in two lines of business:

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.

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

ADOPTION OF NEW

ACCOUNTING PRONOUNCEMENTS:

Effective January 1, 2023, the Company adopted ASU No.

2022-02 Financial Instruments - Credit Losses (Topic

TDR’s and Vintage Disclosures .

This new accounting guidance eliminated the previous accounting guidance for troubled debt restructurings (“TDRs”) and resulted in additional disclosure requirements related to gross charge offs by year of

origination and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties.

Effective January 1, 2023, the Company adopted ASU No.

2016-13 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, (“ASU 2016-13”) (“ASC 326”) as amended.

new accounting guidance replaces the “incurred loss” model with an “expected loss” model, which is referred to as the current expected credit loss

(“CECL”) model.

The measurement of expected credit losses under the CECL model is applicable to financial assets measured at amortized cost, including loan receivables and HTM debt securities.

It also applies to off-balance sheet credit exposures not

accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments).

In addition, ASC 326 made changes to the accounting for available for sale debt securities.

One such change is to require

credit losses to be presented as an allowance rather than as a write-down on available for sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit

Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable US GAAP.

The Company recorded a net decrease to retained

earnings of $ 2,209 as of January 1, 2023 for the cumulative effect of adopting ASC 326.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table

illustrates the transition adjustment of adopting ASC 326:

January 1, 2023

ACL - HTM debt securities

Obligations of states and political subdivisions

Residential real estate

Commercial real estate

Commercial and industrial

Total ACL - Loans

Deferred tax assets

ACL - Off-balance sheet commitments

DEBT SECURITIES:

classifies securities into held to maturity (“HTM”) and available for sale (“AFS”) categories.

HTM securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost.

Securities classified

as AFS include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale.

AFS securities are reported at fair value, with unrealized gains or losses included in other

comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without

anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated.

Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

ALLOWANCE FOR CREDIT LOSSES (“ACL”) - AFS SECURITIES:

For AFS debt securities in an unrealized position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the

security before recovery of its amortized cost basis.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income.

For debt securities AFS that do not meet

the aforementioned criteria, the Company evaluates whether the decline in fair values has resulted from credit losses or other factors.

In making this assessment, management considers the extent to which fair value is less than amortized cost, any

changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected

from the security are compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by

the amount that the fair value is less than the amortized cost basis.

Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.

Changes in the ACL are recorded as credit loss expense (or reversal).

Losses are charged against the allowance when management believes the

uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on AFS debt securities totaled $ 448 at March 31, 2023 and is excluded from the estimate of credit losses.

Management classifies the AFS portfolio into the following major security types:

Government securities, U.S.

Government sponsored entity

securities, and Agency mortgage-backed residential securities.

These security types have an explicit government guarantee, and therefore, no ACL is recorded for these securities.

As a result, there was no ACL related to AFS debt securities at March 31, 2023.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

ACL - HTM SECURITIES:

Management measures expected credit losses on HTM debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current

conditions and reasonable and supportable forecasts.

The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of HTM securities to present the net amount expected to be collected.

HTM securities are

charged off against the ACL when deemed uncollectible.

Adjustments to the ACL are reported in the Company’s consolidated statements of income in the provision for credit losses.

Accrued interest receivable on HTM securities is excluded from the

estimate of credit losses.

Management classifies the HTM portfolio into two major security types:

Obligations of states and political subdivisions and Agency mortgage-backed residential securities.

Agency mortgage-backed residential securities

consist of only two securities with balances that are not significant.

With regard to obligations of states and political subdivisions, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial

condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities.

At March 31, 2023, there was $ 3 in the ACL related to HTM debt securities, with no corresponding provision expense during the first quarter of 2023.

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 ACL.

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.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan

payments are past due 90 days or over unless the loan is well-secured or in process of collection.

2 unchanged sentences

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.

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.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Bank also originates long-term, fixed-rate mortgage loans, with the 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 September 30, 2022, there were $ 493 in loans held for sale by the Bank, as compared

to $ 1,682 in loans held for sale at December 31, 2021.

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.

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 ("TDRs") and are 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

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.

TDRs are measured at the present value of estimated future cash flows using the loan’s

effective rate at inception.

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

For TDRs 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 three years for the consumer and real estate portfolio segment and five 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

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.

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

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.

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, 2023, there were $ 124 in loans held

for sale by the Bank, as compared to no loans held for sale at December 31, 2022.

The ACL for loans is a

contra asset valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans.

Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible.

Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers historical loss experience,

current conditions and forecasts of future economic conditions.

Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components:

evaluation of expected credit losses for certain groups of loans that share

similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value that 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 six 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.

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 September 30, 2022, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior

The ACL is measured on a collective (pool) basis when similar risk characteristics exist.

The Company has identified the

following portfolio segments and measures the ACL using the following methods:

Portfolio Segment

Measurement Method

Residential real estate

Cumulative Undiscounted Expected Loss

National Unemployment, National GDP

Commercial real estate:

Owner-occupied

Cumulative Undiscounted Expected Loss

National Unemployment, National GDP

Nonowner-occupied

Cumulative Undiscounted Expected Loss

National Unemployment, National GDP

Cumulative Undiscounted Expected Loss

National Unemployment, National GDP

Commercial and industrial

Cumulative Undiscounted Expected Loss

National Unemployment, National GDP

Cumulative Undiscounted Expected Loss

National Unemployment

Cumulative Undiscounted Expected Loss

National Unemployment

Cumulative Undiscounted Expected Loss, Remaining Life Method

National Unemployment

Historical credit loss experience is the basis for the estimation of expected credit losses.

We apply historical loss rates to pools of loans

with similar risk characteristics.

In defining historical loss rates and the prepayment rates and curtailment rates used to determine the expected life of loans, the use of regional and national peer data was used.

After consideration of the historic

loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date.

Our reasonable and supportable

forecast adjustment is based on the national unemployment rate and the national gross domestic product forecast for the first year.

For periods beyond our reasonable and supportable forecast, we revert to historical loss rates utilizing a straight-line

method over a two-year reversion period.

The qualitative adjustments for current conditions are based upon changes in lending policies and

practices, experience and ability of lending staff, quality of the Company’s loan review system, value of underlying collateral, the volume and severity of past due loans, the value of underlying collateral for collateral dependent loans, the existence

of and changes in concentrations and other external factors.

Each factor is assigned a value to reflect improving, stable, or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.

The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:

management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower, or the extension of renewal options are included in the original or modified contract at the reporting date

and are not unconditionally cancellable by the Company.

The Company has elected to exclude accrued interest receivable from the measurement of its ACL.

When a loan is placed on non-accrual status,

any outstanding accrued interest is reversed against interest income.

Loans that do not share risk characteristics are evaluated on an individual basis.

Loans evaluated individually are not also included in the

collective evaluation.

We evaluate all loans that meet the following criteria:

1) when it is determined that foreclosure is probable;

2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the

operation or sale of the collateral;

3) when it is determined by management that a loan does not share similar risk characteristics with other loans.

Specific reserves are established based on the following three acceptable methods for measuring the

1) the present value of expected future cash flows discounted at the loan’s original effective interest rate;

2) the loan’s observable market price;

or 3) the fair value of the collateral when the loan is collateral dependent.

Our individual loan

evaluations consist primarily of the fair value of collateral method because most of our loans are collateral dependent.

Collateral values are discounted to consider disposition costs when appropriate.

A specific reserve is established or a charge-off

is taken if the fair value of the loan is less than the loan balance.

At March 31, 2023, there was $ 7,607

in the ACL related to loans, with corresponding provision expense of $ 465 during the first quarter of 2023.

The Company’s loan portfolio segments have been identified as follows:

Commercial and Industrial, Commercial Real Estate, Residential Real

Estate, and Consumer.

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Commercial and industrial:

Portfolio segment consists 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:

Portfolio segment 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

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 that may be absorbed by the Company.

At March 31, 2023, there was $ 655 in the ACL related to

off-balance sheet credit exposures, with corresponding provision expenses of $ 24 during the first quarter of 2023.

Residential real estate:

Portfolio segment

consists 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.

Portfolio segment consists 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 six 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.

ACL – OFF-BALANCE SHEET CREDIT

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by

The ACL on off-balance sheet credit exposures is adjusted through credit loss expense.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be

funded over its estimated life.

EARNINGS PER SHARE:

Earnings per share are computed based on net income divided by the

weighted average number of common shares outstanding during the quarter.

The weighted average common shares outstanding were 4,771,774 and 4,783,886 for the three months ended September 30, 2022

and 2021, respectively.

The weighted average common shares outstanding were 4,768,246 and 4,786,246 for the nine months ended September 30, 2022 and 2021, respectively.

Earnings per share

are computed based on net income divided by the weighted average number of common shares outstanding during the quarter.

The weighted average common shares outstanding were 4,773,461 and 4,761,072 for the three months ended March 31, 2023 and 2022, respectively.

Ohio Valley had

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

ACCOUNTING GUIDANCE TO BE ADOPTED IN FUTURE PERIODS:

June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses”.

ASU 2016-13 requires entities to replace the current “incurred loss” model with an “expected loss” model, which is referred to as the current expected credit loss

(“CECL”) model.

These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts.

This ASU also requires enhanced disclosures to help

investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio.

These disclosures include

qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.

The Bank’s CECL steering committee has developed a CECL model and is evaluating the source data, various credit loss

methodologies and model results in relation to the ASU guidance.

Management expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is

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.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326).

This standard:

(i) eliminates the accounting guidance for

TDRs, requiring entities to determine whether a modification results in a new loan or a continuation of an existing loan;

(ii) expands disclosures related to modifications;

and (iii) requires disclosure of current period gross write-offs of financing

receivables within the vintage disclosures table.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and are applied prospectively, except with respect to

the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method.

Early adoption of the amendments in this update is permitted if ASU 2016-13 has been previously adopted.

An entity may elect to

early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures.

The Company is assessing the impact that the adoption of ASU 2022-02 will have on its consolidated financial

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous

market for the asset or liability in an orderly transaction between market participants on the measurement date.

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most

advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

There are three levels of inputs that may be used to measure fair values:

Quoted prices (unadjusted) for identical assets or

liabilities in active markets that the entity has the ability to access as of the measurement date.

Significant other observable inputs other than Level 1

prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Significant unobservable inputs that reflect a company’s

own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and

liabilities on a recurring or nonrecurring basis:

The fair values for securities are determined by

quoted market prices, if available (Level 1).

Quoted prices (unadjusted)

for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Significant other observable

inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Significant unobservable

inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets

and liabilities on a recurring or nonrecurring basis:

The fair values for

securities are determined by quoted market prices, if available (Level 1).

For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

For securities where quoted prices or market prices of similar

securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

For securities where quoted prices or

market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

During times when trading is more liquid, broker quotes are used (if available) to validate the model.

Rating agency and industry

research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans:

At the time a loan is considered impaired, it is

valued at the lower of cost or fair value.

Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses.

Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Individually Evaluated Collateral Dependent

The fair value of individually evaluated collateral dependent loans is generally based on the fair value of collateral, less costs to sell.

When carried at fair value, individually evaluated collateral dependent loans generally receive

specific allocations of the ACL.

For collateral dependent loans, fair value is commonly based on recent real estate appraisals.

These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences

between the comparable sales and income data available.

Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

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.

These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the

income approach.

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

Such adjustments are usually significant and typically result in a

Level 3 classification of the inputs for determining fair value.

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.

Such adjustments would be classified as a Level 2 classification.

I ndividually

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

Other Real Estate Owned:

Assets acquired through or instead of

loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.

These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell.

Fair value is commonly based

on recent real estate appraisals.

acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.

These assets are subsequently accounted for at lower of cost or fair value less estimated costs to

Fair value is commonly based on recent real estate appraisals.

These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the independent

appraisers to adjust for differences between the comparable sales and income data available.

Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

In some instances, fair

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

Adjustments are routinely made in the

appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining

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.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial

Appraisals for both collateral-dependent loans and other real estate owned are performed by certified general appraisers (for commercial

properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.

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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, which

typically amount to approximately 10 % of the fair value of such collateral.

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 %.

Interest Rate Swap Agreements:

The fair value of interest rate

swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).

The variable cash receipts (or payments) are based

on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).

The variable cash

receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

Fair Value Measurements at September 30,

Fair Value Measurements at March 31,

Quoted Prices in Active

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Interest rate swap derivatives

Liabilities :

Interest rate swap derivatives

There were no transfers between Level 1 and Level 2 during 2023 or 2022.

Assets and Liabilities Measured on a Nonrecurring Basis

There were no assets or

liabilities measured at fair value on a nonrecurring basis at September 30, 2022.

Assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2021 are summarized below:

Fair Value Measurements at December 31, 2021

December 31, 2021

Quoted Prices in Active

Markets for Identical Assets

Significant Other

Observable Inputs

Unobservable Inputs

Impaired loans:

Commercial and industrial

At December 31, 2021, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $ 1,993 , with a corresponding valuation allowance of $ 10 ,

resulting in an increase of $ 10 in provision expense during the year ended December 31, 2021, 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, 2022 and December 31, 2021.

There were no corresponding write-downs during

the three and nine months ended September 30, 2022 and 2021.

liabilities measured at fair value on a nonrecurring basis at March 31, 2023 and December 31, 2022.

There was no other real

estate owned that was measured at fair value less costs to sell at March 31, 2023 and December 31, 2022.

Furthermore, there were no corresponding write downs during

the three months ended March 31, 2023 and 2022.

There was no quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a

non-recurring basis at March 31, 2023 and December 31, 2022.

NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

There was no quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis

at September 30, 2022.

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, 2021:

December 31, 2021

Weighted Average

Impaired loans:

Commercial and industrial

Sales approach

Adjustment to comparables

and equipment comparables

The carrying amounts and estimated fair values of financial instruments at September 30, 2022 and December 31, 2021 are as follows:

Fair Value Measurements at September 30,

The carrying amounts and estimated fair values of financial instruments at March 31, 2023 and December 31, 2022 are as follows:

Fair Value Measurements at March 31,

Financial Assets:

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Accrued interest payable

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

estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument.

Because no market exists for a significant portion of the Company’s financial

instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors.

These estimates are subjective in nature and

involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.

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

These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument.

Because no market exists for a significant portion of the

Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors.

These estimates are subjective

in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.

Changes in assumptions could significantly affect the estimates.

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, 2022 and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains

The following table summarizes the amortized cost and fair value of securities available for sale

and securities held to maturity at March 31, 2023

and December 31, 2022 and the

corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains and losses, and allowance for credit losses:

Securities Available for Sale

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Gross Unrealized

September 30 , 2022

March 31 , 2023

Government securities

10 unchanged sentences

Gross Unrecognized

September 30 , 2022

Allowance for Credit Losses

March 31 , 2023

Obligations of states and political subdivisions

5 unchanged sentences

Total securities

The amortized cost and estimated fair value of debt securities at September 30, 2022, 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.

The amortized cost and estimated fair value of debt securities at March 31, 2023, 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.

8 unchanged sentences

Total debt securities

There were no sales of securities during the

three months ended March 31, 2023 and 2022.

Debt securities with a carrying value of approximately $ 134,382 at March 31, 2023 and $ 126,318 at December 31, 2022, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.

NOTE 3 – SECURITIES (Continued)

The following table summarizes securities with unrealized losses at September 30, 2022 and December 31, 2021, aggregated by

major security type and length of time in a continuous unrealized loss position:

September 30 , 2022

The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not

been recorded at March 31, 2023 and December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position:

March 31 , 2023

Less Than 12 Months

12 Months or More

Unrealized Loss

Securities Available for Sale

Government securities

Government sponsored entity securities

Agency mortgage-backed securities,

Government sponsored entity

Agency mortgage-backed

securities, residential

Total available for sale

2 unchanged sentences

12 Months or More

Unrealized Loss

Securities Available for Sale

Government securities

U.S Government sponsored entity securities

Agency mortgage-backed securities,

Government sponsored entity

Agency mortgage-backed securities, residential

Total available for sale

September 30, 2022

Less Than 12 Months

12 Months or More

Unrecognized Loss

Securities Held to Maturity

Obligations of states and political subdivisions

Total held to maturity

December 31, 2021

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 sales of investment

securities during the three and nine months ended September 30, 2022 or 2021.

Unrealized losses on the Company’s debt securities

have not been recognized into income because the issuers’ securities were of high credit quality as of September 30, 2022, 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, 2022 and December 31, 2021

represents an other-than-temporary impairment.

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

Management evaluates available for sale debt securities in unrealized positions to determine whether impairment is due to credit-related factors.

Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period

of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2023, the Company had 99 available

for sale debt securities in an unrealized position without an allowance for credit losses, of which 15 were from U.S.

Government securities, 3 were from U.S.

Government sponsored entity securities, and 81 were from Agency mortgage-backed residential securities.

Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

The fair value is expected to recover as the

securities approach their maturity date or repricing date or if market yields for such investments decline.

Accordingly, as of March 31, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related

factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at March 31, 2023.

The following table presents the activity in the allowance for credit losses for held to maturity debt securities:

Held to Maturity Debt Securities

Three months ended

March 31, 2023

Allowance for credit losses:

Beginning balance

Impact of adopting ASC 326

Credit loss expense

Allowance for credit losses ending balance

The Company’s held to maturity securities primarily consist of obligations

of states and political subdivisions.

The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type.

Risk factors such as issuer bond ratings, historical loss rates, financial

condition of issuer, and timely principal and interest payments of issuer were evaluated to determine if a credit reserve was required within the portfolio.

At March 31, 2023, there were no past due principal and interest payments related to held to

maturity securities.

The Company identified a cumulative loss rate of .03 % using historical loss data provided by S&P and Moody’s bond

rating service.

This resulted in a $ 3 credit loss reserve for

held to maturity debt securities upon adoption of ASC 326 on January 1, 2023, with no provision expense during the three months ended March 31,

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are comprised of the following:

September 30,

Residential real estate

3 unchanged sentences

Commercial and industrial

Allowance for loan losses

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law in response to coronavirus ("COVID-19").

The CARES Act

provided assistance to small businesses through the establishment of the Paycheck Protection Program ("PPP").

The PPP provided small businesses with funds to use for payroll and certain other expenses.

At September 30, 2022, there were no commercial and industrial loans originated under the PPP, as compared to $ 446 at December 31, 2021.

These loans are guaranteed by the Small Business Administration.

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2022 and 2021:

September 30 , 2022

and Industrial

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged off

Total ending allowance balance

September 30 , 2021

and Industrial

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged-off

Total ending allowance balance

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, 2022 and 2021:

September 30, 2022

and Industrial

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged-off

Total ending allowance balance

September 30 , 2021

and Industrial

Allowance for loan losses:

Beginning balance

Provision for loan losses

Loans charged-off

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, 2022 and December 31, 2021:

September 30 , 2022

and Industrial

Allowance for loan losses:

Ending allowance balance attributable to loans:

Individually evaluated for impairment

Collectively evaluated for impairment

Total ending allowance balance

Loans individually evaluated for impairment

Loans collectively evaluated for impairment

Total ending loans balance

December 31, 2021

and Industrial

Allowance for loan losses:

Ending allowance balance attributable to loans:

Individually evaluated for impairment

Collectively evaluated for impairment

Total ending allowance balance

Loans individually evaluated for impairment

Loans collectively evaluated for impairment

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, 2022 and December 31, 2021:

September 30 , 2022

Principal Balance

Allowance for Loan

Losses Allocated

With an allowance recorded:

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

December 31, 2021

Principal Balance

Allowance for Loan

Losses Allocated

With an allowance recorded:

Commercial and industrial

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

Commercial and industrial

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, 2022 and 2021:

Three months ended September 30, 2022

Nine months ended September 30, 2022

Impaired Loans

Interest Income

Interest Recognized

Impaired Loans

Interest Income

Interest Recognized

With an allowance recorded:

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

Three months ended September 30, 2021

Nine months ended September 30, 2021

Impaired Loans

Interest Income

Interest Recognized

Impaired Loans

Interest Income

Interest Recognized

With an allowance recorded:

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

Commercial and industrial

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for

impairment and individually classified as impaired loans.

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).

Other real estate owned for residential real estate properties totaled $ 15 as of

September 30, 2022 and December 31, 2021.

In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $ 459 and $ 316 as of September 30, 2022 and December 31, 2021,

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, 2022 and December 31, 2021:

September 30 , 2022

Allowance for credit losses

At March 31, 2023 and December 31, 2022, net deferred loan

origination costs were $ 812 and $ 663 , respectively.

At March 31, 2023 and December 31, 2022, net unamortized

loan purchase premiums were $ 985 and $ 1,142 , respectively.

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, 2023 and December 31, 2022:

March 31 ,2023

Loans Past Due

Still Accruing

Loans With No

Loans With an

Residential real estate

11 unchanged sentences

Commercial and industrial

The Company recognized $ 20 of

interest income in nonaccrual loans during the three months ended March 31, 2023.

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, 2022 and December 31, 2021:

September 30 , 2022

The following table presents the aging of the recorded investment of past due loans by class of

loans as of March 31, 2023 and December 31, 2022:

March 31 , 2023

Residential real estate

9 unchanged sentences

Commercial and industrial

Troubled Debt Restructurings:

A TDR occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.

TDRs are considered to be impaired.

The modification of the terms of such loans included one or a combination of the following:

a reduction of the stated interest rate of the loan;

an extension of the maturity date at a stated rate of interest lower

than the current market rate for new debt with similar risk;

a reduction in the contractual principal and interest payments of the loan;

or short-term interest-only payment terms.

The Company has allocated reserves for a portion of its TDRs to reflect the fair values of the underlying collateral or the present value of the

concessionary terms granted to the customer.

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, 2022 and December 31, 2021:

September 30 , 2022

Performing to Modified Terms

Commercial real estate:

Owner-occupied

Reduction of principal and interest payments

Credit extension at lower stated rate than market rate

Nonowner-occupied

Credit extension at lower stated rate than market rate

December 31, 2021

Performing to Modified Terms

Commercial real estate:

Owner-occupied

Reduction of principal and interest payments

Maturity extension at lower stated rate than market rate

Credit extension at lower stated rate than market rate

Nonowner-occupied

Credit extension at lower stated rate than market rate

Commercial and industrial

Interest only payments

At September 30, 2022 and December 31, 2021, the Company had no

specific allocations in reserves to customers whose loan terms have been modified in TDRs.

At September 30, 2022, the Company had no

commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $ 3,199 at December 31,

There were no TDR loan modifications that

occurred during the three and nine months ended September 30, 2022 and 2021, and, therefore, no impact to provision expense or the allowance for loan losses.

During the three and nine months ended September 30, 2022 and 2021, the Company had no TDRs 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.

The CARES Act 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 if they are less than 30 days past due on their contractual payments at the time of modification.

Through September 30, 2022, the Company had modified 521 loans related to COVID-19 with an outstanding loan balance of $ 97,236

that were not reported as TDRs.

As of September 30, 2022, the Company had 11 of those modified loans still operating under their COVID-19

related deferral terms with an outstanding loan balance of $ 120 that were not reported as TDRs in the tables presented above.

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

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as:

financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such

current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

These risk categories are represented by a loan grading scale from 1 through 11.

The Company analyzes

loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets.

The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that

are graded 9 through 11.

analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets.

The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be

loans that are graded 9 through 11.

The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $ 1,000 .

1 unchanged sentence

Special Mention.

Loans classified as "special mention" indicate

considerable risk due to deterioration of repayment (in the earliest stages) that results from potential weak primary repayment source or payment delinquency.

These loans will be under constant supervision and are not classified and do not expose the

institution to sufficient risks to warrant classification.

These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.

loans are considered bankable assets with no apparent loss of principal or interest envisioned.

Loans classified as

“special mention” indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.

These loans will be under constant supervision, are not classified and do

not expose the institution to sufficient risks to warrant classification.

These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the

deficiencies.

These loans are considered bankable assets with no apparent loss of principal or interest envisioned.

The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.

Credits that are

defined as TDRs should be graded no higher than special mention until they have been reported as performing over one year after restructuring.

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

The Company uses the following definitions for its classified loan risk ratings:

Loans classified as "substandard" represent very

high risk, serious delinquency, nonaccrual, or unacceptable credit.

Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect

collection of the loans.

Loans classified as

“substandard” represent very high risk, serious delinquency, nonaccrual, or unacceptable credit.

Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well-defined weaknesses, and the collateral pledged

may inadequately protect collection of the loans.

Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness.

Loans are still considered collectible, although loss of principal is more likely than with

special mention loans.

Loans are still considered collectible, although loss of principal is

more likely than with special mention loans.

Collateral liquidation is considered likely to satisfy debt.

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.

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 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 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.

A doubtful classification for an entire credit should be avoided when collection of a specific portion appears

highly probable with the adequately secured portion graded substandard.

Loans classified as "loss" are considered uncollectible and

are of such little value that their continuance as bankable assets is not warranted.

This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this

asset yielding such a minimum value even though partial recovery may be affected in the future.

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 that may strengthen the credit can be more accurately

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

A doubtful classification for an entire credit should be avoided when collection of

a specific portion appears highly probable with the adequately secured portion graded substandard.

Loans classified as “loss” are

considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.

This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or

desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.

Amounts classified as loss should be promptly charged off.

As of March 31,

2023 and December 31, 2022, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Commercial real estate - Owner-occupied

Special Mention

Current Period gross charge-offs

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

Criticized and classified loans will mostly consist of commercial and industrial and commercial real estate loans.

The Company considers its loans that do

not meet the criteria for a criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch).

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

reevaluation date.

of September 30, 2022 and

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

September 30 , 2022

Commercial real estate:

Owner-occupied

Nonowner-occupied

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Commercial real estate - Nonowner-occupied

Special Mention

Current Period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Commercial real estate - Construction

Special Mention

Current Period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Commercial and Industrial

Special Mention

Current Period gross charge-offs

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

December 31, 2022

3 unchanged sentences

Commercial and industrial

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau), but the scores are not updated.

Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower's credit score to be a significant influence in the determination of a loan's credit risk grading.

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, 2022 and December 31, 2021:

September 30 , 2022

The Company considers the performance of the loan portfolio and its impact on the allowance for credit

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 March 31, 2023 and December 31,2022:

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Residential Real Estate:

Payment Performance

Nonperforming

Current Period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Consumer - Automobile:

Payment Performance

Nonperforming

Current Period gross charge-offs

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

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Consumer - Home Equity:

Payment Performance

Nonperforming

Current Period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

March 31, 2023

Consumer - Other:

Payment Performance

Nonperforming

Current Period gross charge-offs

December 31, 2022

Nonperforming

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 4.76 % of total loans were unsecured at September 30, 2022, up from 4.45 % at December 31, 2021.

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 4.61 % of total loans were unsecured at March 31, 2023, up from 4.52 % at December 31, 2022.

N OTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

Modifications to Borrowers Experiencing Financial Difficulty:

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty.

These modifications may include one or a

combination of the following:

a reduction of the stated interest rate of the loan;

an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk;

a reduction in the contractual

principal and interest payments of the loan;

or short-term interest-only payment terms.

All modifications to borrowers experiencing financial difficulty are considered to be impaired.

During the three months ended March 31, 2023, the Company experienced no new modifications to borrowers experiencing financial difficulty.

The following table presents the activity in the allowance for credit losses by portfolio segment for

the three months ended March 31, 2023

March 31 , 2023

and Industrial

Allowance for credit losses:

Beginning balance

Impact of adopting ASC 326

Provision for credit losses

Loans charged-off

Total ending allowance balance

March 31 , 2022

and Industrial

Allowance for credit losses:

Beginning balance

Provision for credit losses

Loans charged-off

Total ending allowance balance

The following table presents the balance in the

allowance for credit losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2022:

December 31 , 2022

and Industrial

Allowance for loan losses:

Ending allowance balance attributable to loans:

Individually evaluated for impairment

Collectively evaluated for impairment

Total ending allowance balance

Loans individually evaluated for impairment

Loans collectively evaluated for impairment

Total ending loans balance

N OTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

The following table presents the amortized cost basis of collateral dependent loans by class of

loans as of March 31, 2023:

Collateral Type

March 31, 2023

Business Assets

Commercial real estate:

Owner-occupied

Total collateral dependent loans

The following tables present information related to loans individually evaluated for impairment

by class of loans as of December 31, 2022:

December 31 , 2022

Allowance for

With an allowance recorded:

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

The following tables present information related to loans individually evaluated for impairment by class of loans for the three months ended March 31, 2022:

Three months ended

March 31, 2022

Impaired Loans

Interest Income

Interest Recognized

With an allowance recorded:

Commercial and industrial

With no related allowance recorded:

Commercial real estate:

Owner-occupied

Nonowner-occupied

Commercial and industrial

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively

evaluated for impairment and individually classified as impaired loans.

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).

The Company had no other real estate owned for residential real estate properties at March 31, 2023 and December 31, 2022.

In addition, nonaccrual residential mortgage loans

that are in the process of foreclosure had a recorded investment of $455 and $370 as of March 31, 2023 and December 31, 2022, respectively.

NOTE 5 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its

These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to

extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.

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

At September 30, 2022, the contract amounts of

these instruments totaled approximately $ 101,706 , compared to $ 89,602 at December 31, 2021.

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

Since many of these instruments are expected to expire without

being drawn upon, the total contract amounts do not necessarily represent future cash requirements.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for

commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.

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

At March 31, 2023,

the contract amounts of these instruments totaled approximately $ 103,786 , compared to $ 103,413 at December 31, 2022.

The Bank estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk via a contractual obligation to extend credit.

At March 31, 2023, the

estimated ACL related to off-balance sheet commitments was $ 655 , which included $ 24 in provision expense during the first quarter of 2023.

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

balance sheet.

Since many of these instruments are expected to expire without being drawn upon, the total contract amounts do not necessarily represent future cash requirements.

NOTE 6 - OTHER BORROWED FUNDS

Other borrowed funds at September 30,

2022 and December 31, 2021 are

comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

FHLB Borrowings

Promissory Notes

September 30 ,

Other borrowed funds at March 31, 2023 and December 31, 2022 are comprised of advances from the Federal Home Loan Bank (“FHLB”)

of Cincinnati and promissory notes.

March 31 , 2023

December 31 , 2022

Pursuant to collateral agreements with the FHLB, advances are secured by $ 265,986 in qualifying mortgage loans, $ 30,420 in commercial loans and $ 3,813 in FHLB stock at September 30, 2022.

Pursuant to collateral agreements with the FHLB, advances are secured by $ 284,657 in qualifying mortgage loans, $ 31,519 in commercial loans and $ 1,953 in FHLB stock at March 31, 2023.

Fixed-rate FHLB advances of $ 14,936

mature through 2042 and have interest rates ranging from 1.53 % to 2.97 % and a year-to-date weighted average cost of 2.35 % at September 30,

2022 and 2.39 % at December 31, 2021.

mature through 2042 and have interest rates ranging from 1.53 % to 2.97 % and a year-to-date weighted average cost of 2.38 % at March 31, 2023 and 2.39 % at December 31, 2022.

There were no

variable-rate FHLB borrowings at September 30, 2022.

At September 30, 2022, the Company had a cash management line of credit enabling it to borrow up to $ 100,000 from the FHLB, subject to the stock ownership and collateral limitations described below.

variable-rate FHLB borrowings at March 31, 2023.

At March 31, 2023, the Company had a cash management line of credit enabling it to borrow up to $ 100,000 from the FHLB, subject to the stock ownership and collateral limitations described in the next paragraph.

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, 2022.

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 $ 183,760 at September 30,

Of this maximum borrowing capacity, the Company had $ 96,813 available to use as additional borrowings, of which $ 96,813 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 April 13, 2023 , and have fixed rates ranging from 1.25 % to 1.30 % and a year-to-date weighted average cost of 1.25 %

at September 30,2022, as compared to 1.23 % at December 31, 2021.

At September 30, 2022, there were six promissory notes payable by Ohio Valley to related parties totaling $ 2,138 .

There were no promissory notes payable to other banks at September 30, 2022 or December 31, 2021.

Letters of credit issued on the Bank's behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 71,000 at September 30, 2022 and $ 68,380 at December 31, 2021.

Scheduled principal payments as of September 30, 2022:

There was $ 100,000 available on this line of credit at March 31, 2023.

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 $ 188,384 at March 31,

Of this maximum borrowing capacity, the Company had $ 101,748 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 November 18, 2023 , and have fixed rates ranging from 1.25 %

to 4.75 % and a year-to-date weighted average cost of 2.30 % at March 31, 2023, as compared to 1.35 % at December 31, 2022.

At March 31, 2023 there were six promissory notes payable by Ohio Valley

to related parties totaling $ 2,394 .

There were no

promissory notes payable to other banks at March 31, 2023 and December 31, 2022, respectively.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 71,700 at March 31, 2023 and $ 75,140 at December 31, 2022.

Scheduled principal payments as of March 31, 2023:

NOTE 7 – SEGMENT INFORMATION

The reportable segments are determined by the products and services offered, primarily distinguished between banking and consumer finance.

They are also

distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and

customers are similar.

They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business, which are then aggregated if operating performance,

products/services, and customers are similar.

Loans, investments, and deposits provide the majority of the net revenues from the banking operation, while loans provide the majority of the net revenues for the consumer finance segment.

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 % of total consolidated revenues for the quarters end September 30, 2022

and 2021, 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.

segments are domestic.

Total revenues from the banking segment, which accounted for the majority of the Company’s total revenues, totaled 92.5 % and 90.5 % of total consolidated revenues

for the quarters end March 31, 2023 and 2022,

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.

Income taxes are allocated based on income before tax expense.

All goodwill is in the banking segment.

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

Three Months Ended September 30, 2022

Net interest income

Provision for loan losses

Noninterest income

Noninterest expense

Provision for income taxes

Three Months Ended September 30, 2021

Net interest income

Provision for loan losses

Noninterest income

Noninterest expense

Provision for income taxes

Nine Months Ended September 30, 2022

Three months ended March 31,

Net interest income

Provision for loan losses

Provision for (recovery of) credit losses

Noninterest income

1 unchanged sentence

Provision for income taxes

Nine Months Ended September 30, 2021

Three months ended March 31,

Net interest income

Provision for loan losses

Provision for (recovery of) credit losses

Noninterest income

2 unchanged sentences

NOTE 8 – LEASES

Substantially all of the Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent leases for branch buildings and

office space to conduct business.

Substantially all of the Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent leases for branch

buildings and office space to conduct business.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

The lease expense for these leases are recorded on a straight-line basis over the lease term.

Leases with initial

terms in excess of 12 months are recorded as either operating or financing leases on the consolidated balance sheet.

with initial terms in excess of 12 months are recorded as either operating or financing leases on the consolidated balance sheet.

The Company has no finance lease arrangements.

Operating leases have remaining lease terms ranging from 7 months to 19 years, some of which include

Operating leases have remaining lease terms ranging from 1 month to 18 years, some of which include

options to extend the leases for up to 15 years.

3 unchanged sentences

Balance sheet information related to leases is as follows:

September 30, 2022

December 31, 2021

Operating leases:

1 unchanged sentence

Operating lease liabilities

The components of lease cost are as follows:

The components of lease cost were as follows:

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, 2022 are as follows:

Operating Leases

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2023 are as follows:

Total lease payments

1 unchanged sentence

Total operating leases

Other information is as follows:

September 30, 2022

December 31, 2021

Other information was as follows:

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

NOTE 9 – RISKS AND UNCERTAINTIES

Over the past few months, certain banks were placed into receivership by the FDIC and one bank began to voluntarily dissolve.

While the U.S.

government intervened to cover depositors, even those with balances exceeding FDIC insurance coverage, there can be no guarantee that the same coverage will be applied if there are future bank failures.

Management believes that the conditions

impacting these banks do not present a significant risk to the Company, and the Company has not been directly impacted by the bank failures.

Present economic conditions have caused disruption to the banking system and any additional implications are

The Company believes that it has sufficient liquid assets and borrowing sources should there be a liquidity need.

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