OHIO VALLEY BANC CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS OHIO VALLEY BANC CORP. CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share and per share data) March 31, 2025 (Unaudited) December 31, 2024 ASSETS Cash and noninterest-bearing deposits with banks $ 18,571 $ 15,704 Interest-bearing deposits with banks 102,037 67,403 Total cash and cash equivalents 120,608 83,107 Securities available for sale 259,260 268,120 Securities held to maturity, net of allowance for credit losses of $ 1 in 2025 and 2024 6,531 7,049 Restricted investments in bank stocks 5,007 5,007 Total loans 1,043,296 1,061,825 Less: Allowance for credit losses ( 10,139 ) ( 10,088 ) Net loans 1,033,157 1,051,737 Premises and equipment, net 21,155 21,229 Premises and equipment held for sale, net 502 507 Accrued interest receivable 4,792 4,805 Goodwill 7,319 7,319 Bank owned life insurance and annuity assets 42,231 42,048 Operating lease right-of-use asset, net 980 1,024 Deferred tax assets 6,647 7,218 Other assets 4,916 4,242 Total assets $ 1,513,105 $ 1,503,412 LIABILITIES Noninterest-bearing deposits $ 320,864 $ 322,383 Interest-bearing deposits 963,305 952,795 Total deposits 1,284,169 1,275,178 Other borrowed funds 38,440 39,740 Subordinated debentures 8,500 8,500 Operating lease liability 980 1,024 Allowance for credit losses on off-balance sheet commitments 522 582 Other liabilities 24,779 28,060 Total liabilities 1,357,390 1,353,084 CONTINGENT LIABILITIES — — SHAREHOLDERS’ EQUITY Common stock ($ 1.00 stated value per share, 10,000,000 shares authorized; 5,490,995 shares issued) 5,491 5,491 Additional paid-in capital 52,321 52,321 Retained earnings 125,062 121,693 Accumulated other comprehensive income (loss) ( 8,466 ) ( 10,484 ) Treasury stock, at cost ( 779,994 shares) ( 18,693 ) ( 18,693 ) Total shareholders’ equity 155,715 150,328 Total liabilities and shareholders’ equity $ 1,513,105 $ 1,503,412 See accompanying notes to consolidated financial statements 3 OHIO VALLEY BANC CORP. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands, except per share data) Three months ended March 31, 2025 2024 Interest and dividend income: Loans, including fees $ 16,695 $ 15,250 Securities Taxable 2,155 885 Tax exempt 28 34 Dividends 96 98 Interest-bearing deposits with banks 826 1,417 19,800 17,684 Interest expense: Deposits 6,133 5,899 Other borrowed funds 393 438 Subordinated debentures 134 157 6,660 6,494 Net interest income 13,140 11,190 Provision for (recovery of) credit losses 416 751 Net interest income after provision for (recovery of) credit losses 12,724 10,439 Noninterest income: Service charges on deposit accounts 720 725 Trust fees 103 104 Income from bank owned life insurance and annuity assets 240 225 Mortgage banking income 37 39 Electronic refund check / deposit fees 540 540 Debit / credit card interchange income 1,149 1,145 Tax preparation fees 596 607 Other 261 311 3,646 3,696 Noninterest expense: Salaries and employee benefits 6,012 6,167 Occupancy 521 469 Furniture and equipment 350 334 Professional fees 500 486 Marketing expense 279 225 FDIC insurance 183 148 Data processing 925 807 Software 541 621 Other 1,507 1,484 10,818 10,741 Income before income taxes 5,552 3,394 Provision for income taxes 1,146 601 NET INCOME $ 4,406 $ 2,793 Earnings per share $ 0.94 $ 0.58 See accompanying notes to consolidated financial statements 4 OHIO VALLEY BANC CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (dollars in thousands) Three months ended March 31, 2025 2024 Net Income $ 4,406 $ 2,793 Other comprehensive income (loss): Change in unrealized gain (loss) on available for sale securities 2,589 ( 600 ) Related tax (expense) benefit ( 571 ) 132 Total other comprehensive income (loss), net of tax 2,018 ( 468 ) Total comprehensive income (loss) $ 6,424 $ 2,325 See accompanying notes to consolidated financial statements 5 OHIO VALLEY BANC CORP. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) (dollars in thousands, except share and per share data) Quarter-to-date Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders' Equity Balance at January 1, 2025 $ 5,491 $ 52,321 $ 121,693 $ ( 10,484 ) $ ( 18,693 ) $ 150,328 Net income — — 4,406 — — 4,406 Other comprehensive income (loss), net — — — 2,018 — 2,018 Cash dividends, $ 0.22 per share — — ( 1,037 ) — — ( 1,037 ) Balance at March 31, 2025 $ 5,491 $ 52,321 $ 125,062 $ ( 8,466 ) $ ( 18,693 ) $ 155,715 Balance at January 1, 2024 $ 5,470 $ 51,842 $ 114,871 $ ( 11,428 ) $ ( 16,748 ) $ 144,007 Net income — — 2,793 — — 2,793 Other comprehensive income (loss), net — — — ( 468 ) — ( 468 ) Cash dividends, $ 0.22 per share — — ( 1,050 ) — — ( 1,050 ) Common stock issued to ESOP, 20,542 shares 21 479 — — — 500 Balance at March 31 , 2024 $ 5,491 $ 52,321 $ 116,614 $ ( 11,896 ) $ ( 16,748 ) $ 145,782 See accompanying notes to consolidated financial statements 6 OHIO VALLEY BANC CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands) Three months ended March 31, 2025 2024 Net cash provided by operating activities $ 496 $ 928 Investing activities: Proceeds from maturities and paydowns of securities available for sale 39,480 9,161 Purchases of securities available for sale ( 27,482 ) ( 9,554 ) Proceeds from calls and maturities of securities held to maturity 515 14 Redemptions of restricted investments in bank stocks — 54 Net change in loans 18,139 ( 18,315 ) Purchases of premises and equipment ( 358 ) ( 694 ) Withdrawals from bank owned life insurance and annuity asset 57 74 Net cash provided by (used in) investing activities 30,351 ( 19,260 ) Financing activities: Change in deposits 8,991 21,648 Cash dividends ( 1,037 ) ( 1,050 ) Repayment of Federal Home Loan Bank borrowings ( 1,383 ) ( 1,386 ) Change in other short-term borrowings 83 54 Net cash provided by financing activities 6,654 19,266 Change in cash and cash equivalents 37,501 934 Cash and cash equivalents at beginning of period 83,107 128,126 Cash and cash equivalents at end of period $ 120,608 $ 129,060 Supplemental disclosure: Cash paid for interest $ 6,562 $ 7,055 See accompanying notes to consolidated financial statements 7 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, and Ohio Valley Financial Services Agency, LLC, an insurance agency. The Bank has one active, wholly-owned subsidiary, Ohio Valley REO, LLC (“Ohio Valley REO”), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley and its 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, 2025, and its results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2025. The accompanying consolidated financial statements do not purport to contain all the necessary financial disclosures required by U.S. generally accepted accounting principles (“US GAAP”) that might otherwise be necessary in the circumstances. The Annual Report of the Company for the year ended December 31, 2024, contains consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements. The consolidated financial statements for 2024 have been reclassified to conform to the presentation for 2025. 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. INDUSTRY SEGMENT INFORMATION: We conduct our operations through a single business segment, banking, which derives interest and noninterest income through our banking products and services and investment securities. All of our income relates to our operations in the United States. Pursuant to Financial Accounting Standards Codification 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision makers in determining how to allocate resources and assessing performance. Our chief operating decision maker, which is our Chief Executive Officer, evaluates interest and noninterest income streams and credit losses from our various products and services, while expense activities, including interest expense and noninterest expense, are managed, and financial performance is evaluated, on a Company-wide basis. As a result, detailed profitability information for each interest and noninterest income stream is not used by our chief operating decision maker to allocate resources or in assessing performance. Rather, our chief operating decision maker uses consolidated net income to assess performance by comparing it to and monitoring against budgeted and prior year results. This information is used to manage resources to drive business and net income growth, including investment in key strategic priorities, as well as determining our ability to return capital to shareholders. Segment assets represent total assets on our Consolidated Balance Sheets and segment net income represents net income on our Consolidated Statements of Income. NEW ACCOUNTING PRONOUNCEMENTS PENDING ADOPTION: In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures. In November 2024 , the FASB issued ASU No. 2024 - 03, Disaggregation of Income Statement Expenses . ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement to be presented in a tabular format in the footnotes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The amendments in ASU 2024-03 should be applied on a prospective basis, although retrospective application is permitted. The Company is evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures. 8 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) DEBT SECURITIES: The Company 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 $ 1,178 at March 31, 2025 and $ 1,294 at December 31, 2024, and is excluded from the estimate of credit losses. Management classifies the AFS portfolio into the following major security types: U.S. Government securities, U.S. Government sponsored entity securities, and Agency mortgage-backed residential securities. At March 31, 2025 and at December 31, 2024, there was no ACL related to AFS debt securities. 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 one major security type: Obligations of states and political subdivisions. 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, 2025, the ACL related to HTM debt securities was $ 1 , unchanged from December 31, 2024. Furthermore, there was no corresponding provision expense during the three months ended March 31, 2025 and 2024. Accrued interest receivable on HTM debt securities totaled $ 45 at March 31, 2025 and $ 24 at December 31, 2024, and is excluded from the estimate of credit losses. LOANS: 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 nonaccrual 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. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. 9 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Bank also originates long-term, fixed-rate mortgage loans, with 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 March 31, 2025 and December 31, 2024, there were no loans held for sale by the Bank. ACL – LOANS: 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. 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 Loss Driver 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 Construction Cumulative Undiscounted Expected Loss National Unemployment, National GDP Commercial and industrial Cumulative Undiscounted Expected Loss National Unemployment, National GDP Consumer: Automobile Cumulative Undiscounted Expected Loss National Unemployment Home equity Cumulative Undiscounted Expected Loss National Unemployment Other 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 modification 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. 10 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on nonaccrual 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 ACL: 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. Accrued interest receivable on loans totaled $ 1,178 at March 31, 2025 and $ 3,429 at December 31, 2024, and is excluded from the estimate of credit losses. At March 31 , 2025, there was $ 10,139 in the ACL related to loans, compared to $ 10,088 at December 31, 2024. This resulted in corresponding provision expense of $ 476 during the three months ended March 31, 2025, compared to $ 857 in provision expense during the three months ended March 31, 2024. The Company’s loan portfolio segments have been identified as follows: Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer. 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 property. Nonowner-occupied loans that are dependent upon rental income are primarily impacted by the level of interest rates associated with the debt and to local economic conditions, which dictate occupancy rates and the amount of rent charged. The increase in debt service due to higher interest rates may not be able to be passed on to tenants. As part of the origination process, loan interest rates and occupancy rates are stressed to determine the impact on the borrower’s ability to maintain adequate debt service under different economic conditions. Furthermore, the Company monitors the concentration in any one industry and has established limits relative to capital. In addition, credit quality trends are monitored by industry to determine if a change in the risk exposure to a certain industry may warrant a change in our underwriting standards. 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. 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. Consumer: 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 ACL as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios. 11 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ACL – OFF-BALANCE SHEET CREDIT EXPOSURES: 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 Company. 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. At March 31, 2025, there was $ 522 in the ACL related to off-balance sheet credit exposures, compared to $ 582 at December 31, 2024. This resulted in corresponding provision expense recoveries of $ 60 and $ 106 during the three months ended March 31, 2025 and 2024, respectively. EARNINGS PER SHARE: Earnings per share is based on net income divided by the weighted average number of common shares outstanding during the quarter. The weighted average common shares outstanding were 4,711,001 and $ 4,785,773 for the three months ended March 31, 2025 and 2024, respectively. Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented. 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. There are three levels of inputs that may be used to measure fair values: 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. Level 2: 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. Level 3: 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: Securities: 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). 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. Individually Evaluated Collateral Dependent Loans: 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. 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. 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. 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. Such adjustments would be classified as a Level 2 classification. 12 NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued) Appraisals for both collateral-dependent impaired 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. Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics. On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that typically approximate 10 %. 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). Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements at March 31, 2025 Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Government securities $ 134,170 $ — $ — U.S. Government sponsored entity securities — 5,970 — Agency mortgage-backed securities, residential — 119,120 — Interest rate swap derivatives — 943 — Liabilities: Interest rate swap derivatives — ( 943 ) — Fair Value Measurements at December 31, 2024 Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Government securities $ 168,030 $ — $ — U.S. Government sponsored entity securities — 5,888 — Agency mortgage-backed securities, residential — 94,202 — Interest rate swap derivatives — 657 — Liabilities: Interest rate swap derivatives — ( 657 ) — There were no transfers between Level 1 and Level 2 during the periods ended March 31, 2025 or 2024. Assets and Liabilities Measured on a Nonrecurring Basis There were no assets or liabilities measured at fair value on a nonrecurring basis at March 31, 2025 and December 31, 2024. 13 NOTE 2 – FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued) The carrying amounts and estimated fair values of financial instruments at March 31, 2025 and December 31, 2024 are as follows: Carrying Fair Value Measurements at March 31, 2025 Using Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 120,608 $ 120,608 $ — $ — $ 120,608 Securities available for sale 259,260 134,170 125,090 — 259,260 Securities held to maturity 6,531 — 3,676 2,245 5,921 Loans, net 1,033,157 — — 1,018,623 1,018,623 Interest rate swap derivatives 943 — 943 — 943 Accrued interest receivable 4,792 — 1,405 3,387 4,792 Financial liabilities: Deposits 1,284,169 884,145 400,702 — 1,284,847 Other borrowed funds 38,440 — 37,723 — 37,723 Subordinated debentures 8,500 — 8,500 — 8,500 Interest rate swap derivatives 943 — 943 — 943 Accrued interest payable 5,332 1 5,331 — 5,332 Carrying Fair Value Measurements at December 31, 2024 Using: Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 83,107 $ 83,107 $ — $ — $ 83,107 Securities available for sale 268,120 168,030 100,090 — 268,120 Securities held to maturity 7,049 — 3,651 2,769 6,420 Loans, net 1,051,737 — — 1,037,349 1,037,349 Interest rate swap derivatives 657 — 657 — 657 Accrued interest receivable 4,805 — 1,540 3,265 4,805 Financial liabilities: Deposits 1,275,178 881,290 394,470 — 1,275,760 Other borrowed funds 39,740 — 38,815 — 38,815 Subordinated debentures 8,500 — 8,500 — 8,500 Interest rate swap derivatives 657 — 657 — 657 Accrued interest payable 5,234 1 5,233 — 5,234 Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. 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. 14 NOTE 3 – SECURITIES The following table summarizes the amortized cost and fair value of securities AFS and securities HTM at March 31, 2025 and December 31, 2024 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses: Securities Available for Sale Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31 , 2025 U.S. Government securities $ 134,763 $ 275 $ ( 868 ) $ 134,170 U.S. Government sponsored entity securities 6,386 — ( 416 ) 5,970 Agency mortgage-backed securities, residential 128,972 142 ( 9,994 ) 119,120 Total securities $ 270,121 $ 417 $ ( 11,278 ) $ 259,260 December 31 , 2024 U.S. Government securities $ 169,203 $ 210 $ ( 1,383 ) $ 168,030 U.S. Government sponsored entity securities 6,406 — ( 518 ) 5,888 Agency mortgage-backed securities, residential 105,961 — ( 11,759 ) 94,202 Total securities $ 281,570 $ 210 $ ( 13,660 ) $ 268,120 Securities Held to Maturity Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Estimated Fair Value Allowance for Credit Losses March 31 , 2025 Obligations of states and political subdivisions $ 6,532 $ — $ ( 611 ) $ 5,921 $ ( 1 ) Total securities $ 6,532 $ — $ ( 611 ) $ 5,921 $ ( 1 ) December 31 , 2024 Obligations of states and political subdivisions $ 7,050 $ 1 $ ( 631 ) $ 6,420 $ ( 1 ) Total securities $ 7,050 $ 1 $ ( 631 ) $ 6,420 $ ( 1 ) The amortized cost and estimated fair value of debt securities at March 31, 2025, 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. Available for Sale Held to Maturity Debt Securities: Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 83,595 $ 83,359 $ 834 $ 821 Due in over one to five years 57,554 56,781 2,734 2,583 Due in over five to ten years — — 984 818 Due after ten years — — 1,980 1,699 Agency mortgage-backed securities, residential 128,972 119,120 - - Total debt securities $ 270,121 $ 259,260 $ 6,532 $ 5,921 There were no sales of securities during the three months ended March 31, 2025 and 2024. Debt securities with a carrying value of approximately $ 225,979 at March 31, 2025 and $ 223,484 at December 31, 2024, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law. 15 NOTE 3 – SECURITIES (Continued) The following table summarizes debt securities AFS in an unrealized loss position for which an ACL losses has not been recorded at March 31, 2025 and December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position: March 31 , 2025 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Securities Available for Sale U.S. Government securities $ 29,900 $ ( 50 ) $ 24,574 $ ( 818 ) $ 54,474 $ ( 868 ) U.S. Government sponsored entity securities — — 5,970 ( 416 ) 5,970 ( 416 ) Agency mortgage-backed securities, residential 4,653 ( 74 ) 87,128 ( 9,920 ) 91,781 ( 9,994 ) Total available for sale $ 34,553 $ ( 124 ) $ 117,672 $ ( 11,154 ) $ 152,225 $ ( 11,278 ) December 31 , 2024 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Securities Available for Sale U.S. Government securities $ 31,418 $ ( 329 ) $ 26,802 $ ( 1,054 ) $ 58,220 $ ( 1,383 ) U.S. Government sponsored entity securities — — 5,889 ( 518 ) 5,889 ( 518 ) Agency mortgage-backed securities, residential 4,694 ( 130 ) 89,467 ( 11,629 ) 94,161 ( 11,759 ) Total available for sale $ 36,112 $ ( 459 ) $ 122,158 $ ( 13,201 ) $ 158,270 $ ( 13,660 ) Management evaluates AFS 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, 2025, the Company had 93 AFS debt securities in an unrealized position without an ACL, of which 13 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 77 were from Agency mortgage-backed residential securities. Comparatively at December 31, 2024, the Company had 96 AFS debt securities in an unrealized position without an ACL, of which 16 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 77 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, 2025 and December 31, 2024, 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 ACL on AFS debt securities at March 31, 2025 and December 31, 2024. The following table presents the activity in the ACL for HTM debt securities: Held to Maturity Debt Securities Three months ended March 31, 2025 Three months ended March 31, 2024 Allowance for credit losses: Beginning balance $ 1 $ 2 Provision for (recovery of) credit loss expense — — Allowance for credit losses ending balance $ 1 $ 2 The Company’s HTM securities consist of obligations of states and political subdivisions. The ACL on HTM 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, 2025, there were no past due principal and interest payments related to HTM securities. During the first quarter of 2025 and 2024, the cumulative loss rate remained at 0.02 %, resulting in no change to provision expense during the three months ended March 31, 2025 and 2024. 16 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans are comprised of the following: March 31, 2025 December 31, 2024 Residential real estate $ 348,826 $ 373,534 Commercial real estate: Owner-occupied 89,936 86,471 Nonowner-occupied 211,610 206,847 Construction 79,433 79,669 Commercial and industrial 164,630 158,440 Consumer: Automobile 45,595 50,246 Home equity 43,369 42,473 Other 59,897 64,145 1,043,296 1,061,825 Less: Allowance for credit losses ( 10,139 ) ( 10,088 ) Loans, net $ 1,033,157 $ 1,051,737 At March 31, 2025 and December 31, 2024 , net deferred loan origination costs were $ 234 and $ 363 , respectively. At March 31, 2025 and December 31, 2024 , net unamortized loan purchase premiums were $ 355 and $ 398 , 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, 2025 and December 31, 2024: March 31 , 2025 Loans Past Due 90 Days And Still Accruing Nonaccrual Loans With No ACL Nonaccrual Loans With an ACL Total Nonaccrual Loans Residential real estate $ 37 $ — $ 1,967 $ 1,967 Commercial real estate: Owner-occupied — 671 136 807 Nonowner-occupied — — 143 143 Construction — — — — Commercial and industrial — 962 308 1,270 Consumer: Automobile 16 — 335 335 Home equity — 25 255 280 Other 16 — 139 139 Total $ 69 $ 1,658 $ 3,283 $ 4,941 December 31, 2024 Loans Past Due 90 Days And Still Accruing Nonaccrual Loans With No ACL Nonaccrual Loans With an ACL Total Nonaccrual Loans Residential real estate $ 49 $ — $ 1,931 $ 1,931 Commercial real estate: Owner-occupied — 680 136 816 Nonowner-occupied — — 158 158 Construction — — — — Commercial and industrial — 962 90 1,052 Consumer: Automobile 39 — 379 379 Home equity — 26 338 364 Other 28 — 117 117 Total $ 116 $ 1,668 $ 3,149 $ 4,817 The Company recognized $ 18 and $ 4 of interest income in nonaccrual loans during the three months ended March 31, 2025 and 2024, respectively. 17 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) The following table presents the aging of the recorded investment of past due loans by class of loans as of March 31, 2025 and December 31, 2024: March 31 , 2025 30-59 Days Past Due 60-89 Days Past Due 90 Days Or More Past Due Total Past Due Loans Not Past Due Total Residential real estate $ 4,548 $ 717 $ 642 $ 5,907 $ 342,919 $ 348,826 Commercial real estate: Owner-occupied 1,060 — 807 1,867 88,069 89,936 Nonowner-occupied 2,376 — - 2,376 209,234 211,610 Construction - — — - 79,433 79,433 Commercial and industrial 48 14 1,256 1,318 163,312 164,630 Consumer: Automobile 708 351 153 1,212 44,383 45,595 Home equity 369 235 125 729 42,640 43,369 Other 285 108 83 476 59,421 59,897 Total $ 9,394 $ 1,425 $ 3,066 $ 13,885 $ 1,029,411 $ 1,043,296 December 31 , 2024 30-59 Days Past Due 60-89 Days Past Due 90 Days Or More Past Due Total Past Due Loans Not Past Due Total Residential real estate $ 3,294 $ 1,097 $ 984 $ 5,375 $ 368,159 $ 373,534 Commercial real estate: Owner-occupied 773 — 816 1,589 84,882 86,471 Nonowner-occupied 2,294 — — 2,294 204,553 206,847 Construction — — — — 79,669 79,669 Commercial and industrial 533 58 745 1,336 157,104 158,440 Consumer: Automobile 791 414 349 1,554 48,692 50,246 Home equity 402 141 243 786 41,687 42,473 Other 716 260 98 1,074 63,071 64,145 Total $ 8,803 $ 1,970 $ 3,235 $ 14,008 $ 1,047,817 $ 1,061,825 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: 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. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed. The Company uses the following definitions for its criticized loan risk ratings: Special Mention. Loans classified as “special mention” are graded 8 and 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. 18 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) The Company uses the following definitions for its classified loan risk ratings: Substandard. Loans classified as “substandard” are graded 9 and 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. Collateral liquidation is considered likely to satisfy debt. Doubtful. Loans classified as “doubtful” are graded 10 and 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. Loss. Loans classified as “loss” are graded 11 and 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, 2025 and December 31, 2024, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows: Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Commercial real estate: Owner-occupied Risk Rating Pass $ 3,440 $ 13,846 $ 19,090 $ 7,376 $ 5,561 $ 19,748 $ 529 $ 69,590 Special Mention — — — — 12,725 1,388 299 14,412 Substandard — 76 — — 4,287 971 600 5,934 Doubtful — — — — — — — — Total $ 3,440 $ 13,922 $ 19,090 $ 7,376 $ 22,573 $ 22,107 $ 1,428 $ 89,936 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — 19 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Commercial real estate: Nonowner-occupied Risk Rating Pass $ 5,162 $ 36,403 $ 12,095 $ 30,532 $ 30,918 $ 84,077 $ 6,285 $ 205,472 Special Mention — — 1,634 — — — — 1,634 Substandard — 219 — 987 — 3,298 — 4,504 Doubtful — — — — — — — — Total $ 5,162 $ 36,622 $ 13,729 $ 31,519 $ 30,918 $ 87,375 $ 6,285 $ 211,610 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Commercial real estate: Construction Risk Rating Pass $ 1,980 $ 13,907 $ 30,124 $ 28,325 $ 1,103 $ 2,859 $ 470 $ 78,768 Special Mention — — — — — 34 — 34 Substandard — — 631 — — — — 631 Doubtful — — — — — — — — Total $ 1,980 $ 13,907 $ 30,755 $ 28,325 $ 1,103 $ 2,893 $ 470 $ 79,433 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Commercial and Industrial Risk Rating Pass $ 4,144 $ 16,896 $ 7,231 $ 23,701 $ 31,839 $ 44,992 $ 22,231 $ 151,034 Special Mention — 88 — — — 172 6,191 6,451 Substandard — 1,989 210 49 377 499 4,021 7,145 Doubtful — — — — — — — — Total $ 4,144 $ 18,973 $ 7,441 $ 23,750 $ 32,216 $ 45,663 $ 32,443 $ 164,630 Current Period gross charge-offs $ — $ 45 $ — $ 12 $ 58 $ — $ 45 $ 160 20 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Commercial real estate: Owner-occupied Risk Rating Pass $ 13,762 $ 17,199 $ 7,441 $ 10,094 $ 4,787 $ 16,336 $ 583 $ 70,202 Special Mention — — — 12,896 — 1,415 299 14,610 Substandard 79 — — — 136 844 600 1,659 Doubtful — — — — — — — — Total $ 13,841 $ 17,199 $ 7,441 $ 22,990 $ 4,923 $ 18,595 $ 1,482 $ 86,471 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Commercial real estate: Nonowner-occupied Risk Rating Pass $ 35,216 $ 11,377 $ 30,773 $ 31,465 $ 19,351 $ 66,312 $ 6,172 $ 200,666 Special Mention — 1,636 — — — — — 1,636 Substandard 220 — 996 — 3,329 — — 4,545 Doubtful — — — — — — — — Total $ 35,436 $ 13,013 $ 31,769 $ 31,465 $ 22,680 $ 66,312 $ 6,172 $ 206,847 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Commercial real estate: Construction Risk Rating Pass $ 13,865 $ 33,162 $ 27,678 $ 1,111 $ 266 $ 2,647 $ 93 $ 78,822 Special Mention — — — — — 38 — 38 Substandard — 638 — — — 171 — 809 Doubtful — — — — — — — — Total $ 13,865 $ 33,800 $ 27,678 $ 1,111 $ 266 $ 2,856 $ 93 $ 79,669 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — 21 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Commercial and Industrial Risk Rating Pass $ 17,260 $ 7,875 $ 24,843 $ 25,894 $ 20,648 $ 25,593 $ 21,785 $ 143,898 Special Mention 446 — — — — 178 6,476 7,100 Substandard 2,039 226 60 480 205 — 4,432 7,442 Doubtful — — — — — — — — Total $ 19,745 $ 8,101 $ 24,903 $ 26,374 $ 20,853 $ 25,771 $ 32,693 $ 158,440 Current Period gross charge-offs $ 219 $ — $ — $ 1 $ — $ — $ 1 $ 221 The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. 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, 2025 and December 31, 2024: Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Residential Real Estate Payment Performance Performing $ 12,625 $ 59,210 $ 56,270 $ 39,266 $ 45,096 $ 132,608 $ 1,747 $ 346,822 Nonperforming — — 229 366 83 1,326 — 2,004 Total $ 12,625 $ 59,210 $ 56,499 $ 39,632 $ 45,179 $ 133,934 $ 1,747 $ 348,826 Current Period gross charge-offs $ — $ — $ — $ 1 $ — $ 4 $ — $ 5 Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Consumer: Automobile Payment Performance Performing $ 2,069 $ 12,162 $ 15,935 $ 10,803 $ 3,097 $ 1,178 $ — $ 45,244 Nonperforming — 56 162 120 — 13 — 351 Total $ 2,069 $ 12,218 $ 16,097 $ 10,923 $ 3,097 $ 1,191 $ — $ 45,595 Current Period gross charge-offs $ — $ 81 $ 78 $ 17 $ 7 $ 10 $ — $ 193 22 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Consumer: Home Equity Payment Performance Performing $ — $ — $ — $ — $ — $ — $ 43,089 $ 43,089 Nonperforming — — — — — — 280 280 Total $ — $ — $ — $ — $ — $ — $ 43,369 $ 43,369 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ 31 $ 31 Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized March 31, 2025 2025 2024 2023 2022 2021 Prior Cost Basis Total Consumer: Other Payment Performance Performing $ 4,356 $ 17,535 $ 8,823 $ 7,634 $ 5,679 $ 2,720 $ 12,995 $ 59,742 Nonperforming — 32 49 19 24 31 — 155 Total $ 4,356 $ 17,567 $ 8,872 $ 7,653 $ 5,703 $ 2,751 $ 12,995 $ 59,897 Current Period gross charge-offs $ 82 $ 10 $ 33 $ 17 $ 25 $ 26 $ 109 $ 302 Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Residential Real Estate Payment Performance Performing $ 57,385 $ 57,546 $ 40,026 $ 46,067 $ 38,969 $ 98,084 $ 33,477 $ 371,554 Nonperforming — 234 435 83 54 1,174 — 1,980 Total $ 57,385 $ 57,780 $ 40,461 $ 46,150 $ 39,023 $ 99,258 $ 33,477 $ 373,534 Current Period gross charge-offs $ — $ — $ 15 $ — $ — $ 27 $ — $ 42 23 NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Consumer: Automobile Payment Performance Performing $ 13,643 $ 18,133 $ 12,693 $ 3,686 $ 1,268 $ 405 $ — $ 49,828 Nonperforming 145 162 77 12 5 17 — 418 Total $ 13,788 $ 18,295 $ 12,770 $ 3,698 $ 1,273 $ 422 $ — $ 50,246 Current Period gross charge-offs $ 91 $ 364 $ 232 $ 34 $ 22 $ 7 $ — $ 750 Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Consumer: Home Equity Payment Performance Performing $ 317 $ — $ 61 $ 152 $ — $ — $ 41,579 $ 42,109 Nonperforming — — — — — — 364 364 Total $ 317 $ — $ 61 $ 152 $ — $ — $ 41,943 $ 42,473 Current Period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Revolving Loans Term Loans Amortized Cost Basis by Origination Year Amortized December 31, 2024 2024 2023 2022 2021 2020 Prior Cost Basis Total Consumer: Other Payment Performance Performing $ 13,110 $ 18,442 $ 8,768 $ 6,580 $ 2,367 $ 973 $ 13,760 $ 64,000 Nonperforming 3 50 14 46 25 7 — 145 Total $ 13,113 $ 18,492 $ 8,782 $ 6,626 $ 2,392 $ 980 $ 13,760 $ 64,145 Current Period gross charge-offs $ 443 $ 192 $ 156 $ 107 $ 52 $ 29 $ 495 $ 1,474 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 4.24 % of total loans were unsecured at March 31, 2025, up from 4.16 % at December 31, 2024. 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. 24 N OTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) During the three months ended March 31, 2025 and 2024, 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, 2025 and 2024: March 31 , 2025 Residential Real Estate Commercial Real Estate Commercial and Industrial Consumer Total Allowance for credit losses: Beginning balance $ 2,684 $ 3,653 $ 1,536 $ 2,215 $ 10,088 Provision for credit losses ( 4 ) 136 273 71 476 Loans charged-off ( 5 ) — ( 160 ) ( 526 ) ( 691 ) Recoveries 18 — 56 192 266 Total ending allowance balance $ 2,693 $ 3,789 $ 1,705 $ 1,952 $ 10,139 March 31 , 2024 Residential Real Estate Commercial Real Estate Commercial and Industrial Consumer Total Allowance for credit losses: Beginning balance $ 2,213 $ 3,047 $ 1,275 $ 2,232 $ 8,767 Provision for credit losses 130 188 184 355 857 Loans charged-off ( 37 ) — ( 109 ) ( 448 ) ( 594 ) Recoveries 22 11 4 162 199 Total ending allowance balance $ 2,328 $ 3,246 $ 1,354 $ 2,301 $ 9,229 The following table presents the amortized cost basis of collateral dependent loans by class of loans as of March 31, 2025 and December 31, 2024: Collateral Type March 31, 2025 Real Estate Business Assets Total Residential real estate $ 563 $ — $ 563 Commercial real estate: Owner-occupied 5,082 140 5,222 Non-owner occupied 109 — 109 Construction 631 — 631 Commercial and Industrial 187 2,984 3,171 Consumer: Automobile — 31 31 Home equity 49 26 75 Other — 76 76 Total collateral dependent loans $ 6,621 $ 3,257 $ 9,878 Collateral Type December 31, 2024 Real Estate Business Assets Total Residential real estate $ 569 $ — $ 569 Commercial real estate: Owner-occupied 804 140 944 Non-Owner-occupied 110 — 110 Construction 637 — 637 Commercial & Industrial 285 3,044 3,329 Consumer: Automobile — 38 38 Home equity 50 26 76 Other — 81 81 Total collateral dependent loans $ 2,455 $ 3,329 $ 5,784 25 N OTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued) 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 OREO, 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 OREO for residential real estate properties at March 31, 2025 and December 31, 2024. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $ 352 and $ 342 as of March 31, 2025 and December 31, 2024, 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. 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 March 31, 2025, the contract amounts of these instruments totaled approximately $ 225,927 , compared to $ 203,019 at December 31, 2024. 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, 2025, the estimated ACL related to off-balance sheet commitments was $ 522 , which included a $ 60 and $ 106 recovery of provision during the three months ended March 31, 2025 and 2024, respectively. 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 March 31, 2025 and December 31, 2024 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes. FHLB Borrowings Promissory Notes Totals March 31 , 2025 $ 35,856 $ 2,584 $ 38,440 December 31 , 2024 $ 37,239 $ 2,501 $ 39,740 Pursuant to collateral agreements with the FHLB, advances are secured by $ 341,287 in qualifying mortgage loans, $ 40,465 in commercial loans and $ 2,866 in FHLB stock at March 31, 2025. Fixed-rate FHLB advances of $ 35,856 mature through 2042 and have interest rates ranging from 1.53 % to 4.91 % and a year-to-date weighted average cost of 4.05 % at March 31, 2025 and 4.02 % at December 31, 2024. There were no variable-rate FHLB borrowings at March 31, 2025. At March 31, 2025, 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. 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 March 31, 2025. 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 $ 189,134 at March 31, 2025. Of this maximum borrowing capacity, the Company had $ 89,603 available to use as additional borrowings, of which $ 89,603 could be used for short term, cash management advances, as mentioned above. At March 31, 2025, the Company had a federal funds line of credit with two correspondent banks totaling $ 25,000 . The lines of credit are not committed and are provided at the discretion of the correspondent bank. No collateral has been pledged to the lines of credit. Any advance is due to be repaid the next business day. At March 31, 2025, there was $ 25,000 available on these lines of credit. 26 NOTE 6 - OTHER BORROWED FUNDS (Continued) Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of March 11, 2026 , and have fixed rates ranging from 4.35 % to 5.00 % and a year-to-date weighted average cost of 4.91 % at March 31, 2025, as compared to 4.71 % at December 31, 2024. At March 31, 2025 and December 31, 2024, there were six promissory notes payable by Ohio Valley to related parties totaling $ 2,584 . There were no promissory notes payable to other banks at March 31, 2025 and December 31, 2024, respectively. Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $ 63,675 at March 31, 2025 and $ 58,500 at December 31, 2024. Scheduled principal payments as of March 31, 2025: FHLB Borrowings Promissory Notes Totals 2025 $ 4,052 $ 1,761 $ 5,813 2026 12,908 823 13,731 2027 11,397 — 11,397 2028 1,349 — 1,349 2029 1,733 — 1,733 Thereafter 4,417 — 4,417 $ 35,856 $ 2,584 $ 38,440 NOTE 7 – 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. 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. The Company has no finance lease arrangements. Operating leases have remaining lease terms ranging from 13 months to 16.4 years, some of which include options to extend the leases for up to 15 years . Operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index. Balance sheet information related to leases is as follows: As of March 31, 2025 As of December 31, 2024 Operating leases: Operating lease right-of-use assets $ 980 $ 1,024 Operating lease liabilities 980 1,024 The components of lease cost were as follows: Three months ended March 31, 2025 2024 Operating lease cost $ 49 $ 49 Short-term lease expense — 7 27 NOTE 7 – LEASES (Continued) Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2025 are as follows: Operating Leases 2025 (remaining) $ 146 2026 140 2027 109 2028 111 2029 111 Thereafter 653 Total lease payments 1,270 Less: Imputed Interest ( 290 ) Total operating leases $ 980 Other information was as follows: As of March 31, 2025 As of December 31, 2024 Weighted-average remaining lease term for operating leases 11.8 years 12.0 years Weighted-average discount rate for operating leases 2.82 % 2.84 % NOTE 8 – RISKS AND UNCERTAINTIES The risks pertinent to the Bank regarding liquidity and rising deposit costs have increased due to an elevated interest rate environment and increased deposit competition within our markets. Our liquidity position is supported by the management of liquid assets such as cash and interest-bearing deposits with banks, and liabilities such as core deposits. The Bank can also access other sources of funds such as brokered deposits and FHLB advances. With the present economic conditions putting a strain on liquidity and higher borrowing costs, the Company believes it has sufficient liquid assets and funding sources should there be a liquidity need. NOTE 9 – DEPOSITS Deposits are comprised of the following: March 31, 2025 December 31, 2024 Noninterest-bearing deposits $ 320,864 $ 322,383 Interest-bearing deposits: NOW accounts 270,367 272,941 Savings and money market 292,914 285,966 Time deposits of $250 or less 314,443 311,972 Time deposits of more than $250 85,581 81,916 Total interest-bearing deposits 963,305 952,795 Total deposits $ 1,284,169 $ 1,275,178 Brokered deposits, included in time deposits, were $ 48,519 and $ 48,395 at March 31, 2025 and December 31, 2024, respectively. 28 NOTE 10 – REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue is segregated based on the nature of products and services offered as part of contractual arrangements. Revenue from contracts with customers within the scope of ASC 606 is broadly segregated within the following noninterest income categories: • Service charges on deposit accounts – These include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer, or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services. • Trust fees - This includes periodic fees due from trust customers for managing the customers' financial assets. Fees are generally charged on a quarterly or annual basis and are recognized ratably throughout the period, as the services are provided on an ongoing basis. • Electronic refund check/deposit fees – A tax refund clearing agreement between the Bank and a tax refund processor requires the Bank to process electronic refund checks and electronic refund deposits presented for payment on behalf of taxpayers through accounts containing taxpayer refunds. The Bank, in turn, receives a fee paid by the third -party tax refund processor for each transaction that is processed. The amount of fees received are tiered based on the tax refund product selected. Since the Bank acts as a sub servicer in the tax process relationship, a portion of the fee collected is passed on to the tax refund processor. • Debit/credit card interchange income – This includes interchange income from cardholder transactions conducted with merchants, throughout various interchange networks with which the Company participates. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, as transaction processing services are provided to the deposit customer. Gross fees from interchange are recorded in operating income separately from gross network costs, which are recorded in operating expense. • Tax preparation fees – This includes fees received by tax preparation customers of Loan Central as part of the Bank’s TAL business. After Loan Central prepares a customer’s tax return, the customer is offered the opportunity to have immediate access to a portion of the anticipated tax refund by entering into a TAL with the Bank. As part of the process, the tax customer completes a loan application and authorizes the expected tax refund to be deposited with the Bank once it is issued by the IRS. Once the Bank receives the tax refund, the refund is used to repay the TAL and Loan Central’s tax preparation fees, then the remainder of the refund is remitted to Loan Central’s tax customer. • Float income from tax product processor – This is associated with the tax refund clearing agreement between the Bank and a third -party tax refund processor. The revenue earned is based on the estimated compensating balances associated with processing the contractual minimum number of check items multiplied by the interest rate paid by the Federal Reserve on reserves for the respective period. The float income is paid by the tax refund product processor at the end of each year of the tax agreement, which is to expire in 2025 . 29