What changed in this filing

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Item 1A. Risk Factors

2023-03-23 compared with 2022-03-17 · 264 added, 301 removed, 180 unchanged (76% of the section changed)

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Such statements

involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the COVID-19 pandemic, and which could cause actual results to differ

materially from those expressed in such forward looking statements.

involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the current economic and geopolitical landscape, and which could cause actual

results to differ materially from those expressed in such forward looking statements.

These factors include, but are not limited to:

the effects of the COVID-19 pandemic on our business, operations, customers and capital position;

higher default rates on loans made

to our customers related to COVID-19 and its impact on our customers’ operations and financial condition;

the impact of COVID-19 on local, national and global economic conditions;

unexpected changes in interest rates or disruptions in the mortgage

market related to COVID-19 or responses to the health crisis;

the effects of various governmental responses to the COVID-19 pandemic;

changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes,

the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world;

the effects of rising interest rates on our customers’ operations and financial condition;

changes in political,

economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world;

competitive pressures;

fluctuations in interest rates;

the level of defaults and prepayment on loans made by the Company;

defaults and prepayment on loans made by the Company;

unanticipated litigation, claims, or assessments;

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The following are certain risks that management believes are specific to our business.

This should not be viewed as

an all-inclusive list of risks or as presenting the risk factors listed in any particular order.

This should not be viewed as an all-inclusive

list of risks or as presenting the risk factors listed in any particular order.

Risks Related to Economic, Political and Market Conditions

Economic, political and market risks could adversely affect our earnings and capital through declines in loan demand, quality of

investment securities, our borrowers’ ability to repay loans, the value of the collateral securing our loans, and deposits.

Our success depends, to a certain extent, upon local and national economic and political conditions, as well as

governmental fiscal and monetary policies.

Inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, tariffs, a United States withdrawal from a significant renegotiation of trade agreements, trade wars, and other

factors beyond our control may adversely affect our deposit levels and composition, the quality of our assets including investment securities available for purchase, and the demand for loans, which, in turn, may adversely affect our earnings and

Recent political developments have resulted in substantial changes in economic and political conditions for the United States and the remainder of the world.

Because a significant amount of our loans are secured by real estate, additional

decreases in real estate values likely would adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.

Adverse changes in the economy may also have a negative effect on the ability of our

borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.

In addition, consistent with our community banking philosophy, substantially all of our loans are to individuals and

businesses in Ohio and West Virginia.

Therefore, our local and regional economies have a direct impact on our ability to generate deposits to support loan growth, the demand for loans, the ability of borrowers to repay loans, the value of collateral

securing our loans (particularly loans secured by real estate), and our ability to collect, liquidate and restructure problem loans.

Consequently, any decline in the economy of this market area could have a material adverse effect on our financial

condition and results of operations.

Economic, political and market risks could adversely affect our earnings and capital through declines in loan

demand, quality of investment securities, our borrowers’ ability to repay loans, the value of the collateral securing our loans, and deposits.

Our success depends, to a certain extent, upon local and national economic and political conditions, as well as governmental fiscal

and monetary policies.

control may adversely affect our deposit levels and composition, the quality of our assets including investment securities available for purchase, and the demand for loans, which, in turn, may adversely affect our earnings and capital.

political developments have resulted in substantial changes in economic and political conditions for the United States and the remainder of the world.

example, on February 24, 2022, Russian military forces invaded Ukraine, and sustained conflict and disruption in the region have occurred and remain likely.

Although the length, impact, and outcome of the ongoing war in Ukraine is highly

unpredictable, this conflict has resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply

chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage.

The extent and duration of the military action, sanctions and resulting market disruptions

could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time.

Because a significant amount of our loans are secured by real estate, additional decreases in real

estate values likely would adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.

Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make

timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.

In addition, consistent with our community banking philosophy, substantially all of our loans are to individuals and businesses in Ohio

and West Virginia.

(particularly loans secured by real estate), and our ability to collect, liquidate and restructure problem loans.

Consequently, any decline in the economy of this market area could have a material adverse effect on our financial condition and

results of operations.

We are less able than larger financial institutions to spread risks of unfavorable local economic conditions across a large number of diversified economies.

Our earnings are significantly affected by the fiscal and monetary policies of the United States Government and its agencies, sometimes

The policies of the Federal Reserve Board impact us significantly.

Our earnings are significantly affected by the fiscal and monetary policies of the United States Government and

its agencies, sometimes adversely.

The policies of the Federal Reserve Board impact us significantly, especially given

the current economic and geopolitical landscape .

The Federal Reserve Board regulates the supply of money and credit in the United States.

policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold.

Those policies determine to a significant extent

our cost of funds for lending and investing.

Changes in those policies are beyond our control and are difficult to predict.

Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay

For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services.

This could adversely affect the borrower’s earnings and ability to repay its loan, which could

have a material adverse effect on our financial condition and results of operations.

Changes in interest rates could have a material adverse effect on our financial condition and results of operations.

Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates we earn

on loans, securities and other earning assets and (ii) the interest rates we pay on deposits and other borrowings.

These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of

various governmental and regulatory authorities (in particular, the Federal Reserve Board).

While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such

measures will be effective in avoiding undue interest rate risk.

As market interest rates rise, we will have competitive pressures to increase the rates we pay on deposits, which will result in a decrease of our net interest income and could have

a material adverse effect on our financial condition and results of operations.

In addition to the effect of changes in interest rates on our interest rate spread, changes in interest rates may

negatively affect the ability of our borrowers to repay their loans, particularly as interest rates have been rising and adjustable-rate debt becomes more expensive.

Increased defaults on loans could have a material adverse effect on our financial

condition, results of operations and cash flows.

A transition away from the London Interbank Offered Rate (“LIBOR”) as a reference rate for financial contracts could negatively affect

our income and expenses and the value of various financial contracts.

LIBOR is used extensively in the U.S.

and globally as a reference rate for various commercial and financial contracts,

including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives.

LIBOR is set based on interest rate information reported by certain banks, which may stop reporting such information after 2021.

In 2017, the United

Kingdom’s Financial Conduct Authority (“FCA”) announced that after 2021 it would no longer compel banks to submit rates required to calculate LIBOR.

In November 2020, to facilitate an orderly LIBOR transition, the OCC, the FDIC, and the Federal

Reserve Board jointly announced that entering into new contracts using LIBOR as a reference rate after December 31, 2021, would create a safety and soundness risk.

On March 5, 2021, the FCA announced that all LIBOR settings will either cease to be

provided by any administrator or no longer be representative immediately after December 31, 2021, in the case of 1-week and 2-month LIBOR, and immediately after June 30, 2023, in the case of the remaining LIBOR settings.

In the United States,

efforts to identify a set of alternative U.S.

dollar reference interest rates are ongoing, and the Alternative Reference Rate Committee (“ARRC”), has recommended the use of a Secured Overnight Funding Rate (“SOFR”).

SOFR is different from LIBOR in

that it is a backward looking secured rate rather than a forward looking unsecured rate.

Its policies directly and indirectly influence the rate of interest earned on loans and paid on

borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold.

Those policies determine to a significant extent our cost of funds for lending and investing.

Changes in those policies are beyond our control

and are difficult to predict.

Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans.

For example, a tightening of the money supply by the Federal Reserve Board could

reduce the demand for a borrower’s products and services.

This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.

Changes in interest rates could have a material adverse effect on our financial condition and results of

Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates we earn on loans,

securities and other earning assets and (ii) the interest rates we pay on deposits and other borrowings.

These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various

governmental and regulatory authorities (in particular, the Federal Reserve Board).

While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will

be effective in avoiding undue interest rate risk.

As market interest rates rise, we will have competitive pressures to increase the rates we pay on deposits, which will result in a decrease of our net interest income and could have a material

adverse effect on our financial condition and results of operations.

In addition to the effect of changes in interest rates on our interest rate spread, changes in interest rates may negatively affect

the ability of our borrowers to repay their loans, particularly as interest rates have been rising and adjustable-rate debt becomes more expensive.

Increased defaults on loans could have a material adverse effect on our financial condition, results

of operations and cash flows.

A transition away from the London Interbank Offered Rate (“LIBOR”) as a reference rate for financial contracts

could negatively affect our income and expenses and the value of various financial contracts.

LIBOR was used extensively in the U.S.

and globally as a benchmark for various commercial and financial contracts,

including adjustable rate mortgages, corporate debt, interest rate swaps and other derivative financial instruments.

LIBOR is set based on interest rate information reported by certain banks, which are set to stop reporting such information after

June 30, 2023.

In the U.S., the Alternative Reference Rate Committee (“ARRC”) has recommended the use of a Secured Overnight Funding Rate (“SOFR”) as the set of alternative U.S.

dollar reference interest rates.

SOFR is different from LIBOR in that

it is a backward-looking secured rate rather than a forward-looking unsecured rate.

These differences could lead to a greater disconnect between our costs to raise funds for SOFR as compared to LIBOR.

For cash products and loans, ARRC has also recommended Term SOFR, which is a forward looking SOFRbased on SOFR futures and may in part reduce differences between SOFR and LIBOR.

For cash products and loans, ARRC has also recommended Term SOFR, which is a forward-looking SOFR based on SOFR futures and may in part reduce differences between SOFR and LIBOR.

There are operational issues which may create a delay in the

transition to SOFR or other substitute indices, leading to uncertainty across the industry.

It is currently unknown whether these recommendations and proposals will be broadly accepted, whether they will

continue to evolve, and what effect of their implementation may have on the markets for floating-rate financial instruments.

Any discontinuance, modification, alternative reference rates or other reforms may adversely affect interest rates on our

current or future indebtedness and other financial instruments.

We have a limited number of loans, derivative contracts, borrowings and other financial instruments, and continue to

enter into loans, derivatives contracts, borrowings and other financial instruments, with attributes that are directly or indirectly dependent on LIBOR.

These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and

other financial obligations or extensions of credit.

We have a limited number of loans, derivative contracts, borrowings and other financial instruments, and continue to enter into loans,

derivatives contracts, borrowings and other financial instruments, with attributes that are directly or indirectly dependent on LIBOR.

The transition from LIBOR could create costs and additional risk for us.

Since proposed

alternative rates are calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR.

The transition will change our market risk profiles, requiring changes to risk and pricing models, valuation

tools, product design and hedging strategies.

Since proposed alternative rates are

calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR.

The transition will change our market risk profiles, requiring changes to risk and pricing models, valuation tools, product design and

hedging strategies.

Further, our failure to adequately manage this transition process with our customers could adversely impact our reputation.

Although we are currently unable to assess what the ultimate impact of the

transition from LIBOR will be, any market-wide transition away from LIBOR could have an adverse effect on our business, financial condition and results of operations.

Adverse changes in the financial markets may

adversely impact our results of operations.

The capital and credit markets have been experiencing unprecedented levels of volatility since 2008.

While we generally invest in securities with limited credit risk, certain investment securities we hold possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages .

Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates and

implied credit spreads.

Structured investments have at times been subject to significant market volatility due to the uncertainty of credit

ratings, deterioration in credit losses occurring within certain types of residential mortgages, changes in prepayments of the underlying collateral and the lack of transparency related to the investment structures and the collateral underlying the

Although we are currently unable to assess what the ultimate impact of the transition from LIBOR will

be, any market-wide transition away from LIBOR could have an adverse effect on our business, financial condition and results of operations.

Adverse changes in the

financial markets may adversely impact our results of operations.

The capital and credit markets have been experiencing unprecedented levels of volatility in recent years.

While we generally invest in securities with limited credit

risk, certain investment securities we hold possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages .

Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates and implied credit spreads.

Structured investments have at times been subject to significant market volatility due to the uncertainty of credit ratings,

deterioration in credit losses occurring within certain types of residential mortgages, changes in prepayments of the underlying collateral and the lack of transparency related to the investment structures and the collateral underlying the

structured investment vehicles.

A default by another larger financial institution could adversely affect financial markets generally.

Many financial institutions and their related operations are closely intertwined, and the soundness of such financial

institutions may, to some degree, be interdependent.

Many financial institutions and their related operations are closely intertwined, and the soundness of such financial institutions

may, to some degree, be interdependent.

As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions.

This “systemic risk” may adversely affect our business.

“systemic risk” may adversely affect our business.

Risks Related to Our Business

The economic impact of COVID-19 or any other pandemic could adversely affect our business, financial condition, liquidity, cash flows,

and results of operations.

COVID-19 has negatively impacted global, national and local economies, disrupted global and national supply chains,

lowered equity market valuations, created significant volatility and disruption in financial markets, increased unemployment levels and decreased consumer confidence, generally.

In addition, the pandemic resulted in temporary closures of many

businesses and the institution of social distancing and sheltering in place requirements in many states and communities and may result in the same or similar restrictions in the future.

As a result, the demand for our products and services have

been and may continue to be significantly impacted, which could adversely affect our revenue and results of operations.

Furthermore, the pandemic could continue to result in the recognition of credit losses in our loan portfolios and increases in

our allowance for credit losses, particularly if businesses remain required to operate at diminished capacities or are required to close again, the impact on the global, national and local economies worsen, or more customers draw on their lines of

credit or seek additional loans to help finance their businesses.

Our business operations may also be disrupted if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions,

or other restrictions in connection with COVID-19.

The spread of COVID-19, including new

variants thereof, has also caused us to modify our business practices, including employee work locations, and cancellation of physical participation in meetings, events and conferences.

Further, technology in employees’ homes may not be as

robust as in our offices and could cause the networks, information systems, applications, and other tools available to such employees to be more limited or less reliable.

The continuation of these work-from-home measures also introduces

additional operational risk, including increased cybersecurity risk from phishing, malware, and other cybersecurity attacks, all of which could expose us to risks of data or financial loss and could seriously disrupt our operations and the operations of any impacted customers.

COVID-19, the rise of new strains thereof, or a new pandemic could subject us to any of the following risks that

cannot be predicted, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, liquidity, and results of operations:

demand for our products and services may decline, making it difficult to grow assets and income;

if the economy continues to be unable to be fully re-open, loan delinquencies, problem assets, and foreclosures may increase,

resulting in increased charges and reduced income;

collateral for loans, especially real estate, may decline in value, which could cause credit losses to increase;

our allowance for credit losses may have to be increased if borrowers experience financial difficulties beyond

forbearance periods, which will adversely affect our net income;

the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.

Even after the COVID-19 pandemic subsides, the U.S.

economy will likely require time to recover, the length of which

is unknown and during which the U.S.

may experience a recession or market correction.

Our business could be materially and adversely affected by such recession or market correction.

We continue to closely monitor COVID-19 and related risks as they evolve.

To the extent the effects of COVID-19

adversely impact our business, financial condition, liquidity or results of operations, it may also have the effect of heightening many of the other risks described in this section.

We operate in an extremely competitive market, and our business will suffer if we are unable to compete effectively.

In our market area, we encounter

significant competition from other commercial banks, savings and loan associations, credit unions, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial

institutions.

The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers.

competitors have substantially greater resources and lending limits than we do and may offer services that we do not or cannot provide.

Technology and other changes are allowing parties to complete financial transactions that historically have

involved banks at one or both ends of the transaction.

For example, consumers can now pay bills and transfer funds directly without banks.

The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the

loss of customer deposits and income generated from those deposits.

In addition, technological advancements allow parties to better serve customers, increase efficiency, and reduce costs.

Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend, in part , on our ability to use technology to deliver products and services

that provide convenience to customers and to create additional efficiencies in our operations .

Our small to medium-sized business target market may have fewer financial resources to weather a downturn in the economy.

We target our business development and marketing strategy largely to serve the banking and financial services needs of

small to medium-sized businesses.

The economic impact of COVID-19 or any other pandemic could adversely affect our business, financial condition,

liquidity, cash flows, and results of operations.

COVID-19 negatively impacted global, national and local economies, disrupted global and national supply chains,

lowered equity market valuations, and created significant volatility and disruption in financial markets.

The extent to which COVID-19 or any other pandemic could impact our business, results of operations, and financial condition, as well as our

regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted.

We operate in an extremely competitive market, and our business will suffer if we are unable to compete

In our market area, we encounter significant competition from other commercial banks, savings and loan associations, credit unions,

mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions.

The increasingly competitive environment is a result primarily of changes in regulation,

changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers.

Many of our competitors have substantially greater resources and lending limits than we do and may offer services that

we do not or cannot provide.

Technology and other changes are allowing parties to complete financial transactions that historically have involved banks at one or both ends of the transaction.

For example, consumers can now pay bills and transfer

funds directly without banks.

The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the loss of customer deposits and income generated from those deposits.

In addition, technological advancements allow

parties to better serve customers, increase efficiency, and reduce costs.

Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend, in part, on our ability to use technology to deliver

products and services that provide convenience to customers and to create additional efficiencies in our operations.

Our small to medium-sized business target market may have fewer financial resources to weather a downturn in the

We target our business development and marketing strategy largely to serve the banking and financial services needs of small to

medium-sized businesses.

These small to medium-sized businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger companies.

If general economic conditions negatively impact our Ohio and West

Virginia markets or the other geographic markets in which we operate, our results of operations and financial condition may be negatively affected.

If general economic conditions negatively impact our Ohio and West Virginia

markets or the other geographic markets in which we operate, our results of operations and financial condition may be negatively affected.

Our business strategy includes growth plans.

Our financial condition and results of operations could be negatively affected if we fail to grow or

fail to manage our growth effectively.

Our financial condition and results of operations could be

negatively affected if we fail to grow or fail to manage our growth effectively.

We intend to continue pursuing a profitable growth strategy.

Our prospects must be considered in light of the risks,

expenses and difficulties frequently encountered by companies in significant growth stages of development.

We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that

any such expansion will not adversely affect our results of operations.

Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could

adversely affect our ability to successfully implement our business strategy.

Our prospects must be considered in light of the risks, expenses and

difficulties frequently encountered by companies in significant growth stages of development.

We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such

expansion will not adversely affect our results of operations.

Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could adversely affect

our ability to successfully implement our business strategy.

Also, if we grow more slowly than anticipated, our operating results could be materially adversely affected.

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We may also lose customers as we close one or more branches as part of a plan to expand into other areas or become more productive from other branches.

We may not be able to adapt to technological change.

Failure to integrate or adopt new technology may undermine our ability to meet customer demands, leading to

adverse effects on our financial condition and results of operations.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new

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could have a material adverse effect on our financial condition and results of operations.

Findings of deficiencies in compliance with regulations could

result in restrictions on our activities or even a loss in our financial holding company status.

Findings of deficiencies in compliance with regulations could result in restrictions on our activities or even a loss in our financial holding company

Our exposure to credit risk could adversely affect our earnings and financial condition.

Making loans carries inherent risks, including interest rate changes over the time period in which loans may be

repaid, risks resulting from changes in the economy, risks that we will have inaccurate or incomplete information about borrowers, risks that borrowers will become unable to repay loans;

and, in the case of loans secured by collateral, risks

resulting from uncertainties about the future value of the collateral.

Making loans carries inherent risks, including interest rate changes over the time period in which loans may be repaid, risks

resulting from changes in the economy, risks that we will have inaccurate or incomplete information about borrowers, risks that borrowers will become unable to repay loans;

and, in the case of loans secured by collateral, risks resulting from

uncertainties about the future value of the collateral.

Commercial and commercial real estate loans comprise a significant portion of our loan portfolio.

Commercial loans

generally are viewed as having a higher credit risk than residential real estate or consumer loans because they usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn.

Since our loan portfolio contains a significant number of commercial and commercial real estate loans, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans, and ultimately could have a material

adverse effect on our earnings and financial condition.

We may also have concentrated credit exposure to a particular industry, resulting in a risk of a material adverse effect on our earnings or financial condition if there is an event adversely

affecting that industry.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely

on information provided to us by customers and counterparties, including financial statements and other financial information.

We may also rely on representations of customers and counterparties as to the accuracy and completeness of that

information and, with respect to financial statements, on reports of independent auditors.

For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with United States

generally accepted accounting principles (“GAAP”) and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer.

We may also rely on the audit report covering those financial

Our financial condition, results of operations and cash flows could be negatively impacted to the extent that we rely on financial statements that do not comply with GAAP or on financial statements and other financial information that

are materially misleading.

We may be required to repurchase loans we have sold or indemnify loan purchasers under the terms of the sale agreements, which could adversely affect our

liquidity, results of operations and financial condition.

Commercial loans generally are

viewed as having a higher credit risk than residential real estate or consumer loans because they usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn.

Since our loan

portfolio contains a significant number of commercial and commercial real estate loans, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans, and ultimately could have a material adverse effect

on our earnings and financial condition.

We may also have concentrated credit exposure to a particular industry, resulting in a risk of a material adverse effect on our earnings or financial condition if there is an event adversely affecting that

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information

provided to us by customers and counterparties, including financial statements and other financial information.

We may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with

respect to financial statements, on reports of independent auditors.

For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with United States generally accepted

accounting principles (“GAAP”) and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer.

We may also rely on the audit report covering those financial statements.

Our financial

condition, results of operations and cash flows could be negatively impacted to the extent that we rely on financial statements that do not comply with GAAP or on financial statements and other financial information that are materially misleading.

We may be required to repurchase loans we have sold or indemnify loan purchasers under the terms of the sale

agreements, which could adversely affect our liquidity, results of operations and financial condition.

When the Bank sells a mortgage loan, it agrees to repurchase or substitute a mortgage loan if it is later found to have breached any

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If our actual loan losses exceed our allowance for loan losses, our net income will decrease.

Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these

loans may be insufficient to pay any remaining loan balance.

Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be

insufficient to pay any remaining loan balance.

We may experience significant loan losses, which could have a material adverse effect on our operating results.

In accordance with GAAP, we maintain an allowance for loan losses to

provide for loan defaults and non-performance, which when combined, we refer to as the allowance for loan losses.

Our allowance for loan losses may not be adequate to cover actual credit losses, and future provisions for credit losses could have a

material adverse effect on our operating results.

Our allowance for loan losses is based upon a number of relevant factors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current economic conditions

in the primary lending area, prior experience, possible losses arising from specific problem loans, and our evaluation of the risks in the current portfolio.

The amount of future losses is susceptible to changes in economic, operating and other

conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates.

Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan

Moreover, the Financial Accounting Standards Board (“FASB”) has changed its requirements for establishing the allowance, which will be effective for us in the first quarter of 2023.

We cannot assure you that we will not further increase the

allowance for loan losses or that regulators will not require us to increase this allowance.

In accordance with GAAP, we maintain an allowance for loan losses to provide for loan

defaults and non-performance, which when combined, we refer to as the allowance for loan losses.

Our allowance for loan losses may not be adequate to cover actual credit losses, and future provisions for credit losses could have a material adverse

effect on our operating results.

Our allowance for loan losses is based upon a number of relevant factors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current economic conditions in the primary

lending area, prior experience, possible losses arising from specific problem loans, and our evaluation of the risks in the current portfolio.

The amount of future losses is susceptible to changes in economic, operating and other conditions,

including changes in interest rates that may be beyond our control, and these losses may exceed current estimates.

Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses.

Moreover, the Financial Accounting Standards Board (“FASB”) has changed its requirements for establishing the allowance, which was effective for us in the first quarter of 2023.

We cannot assure you that we will not further increase the allowance

for loan losses or that regulators will not require us to increase this allowance.

Either of these occurrences could have a material adverse effect on our financial condition and results of operations.

We may lose business due to declining use by consumers of banks to complete financial transactions or increased depositing of funds

electronically with banks outside of our market area, which could negatively affect our net financial condition and results of operations.

Technology and other changes allow parties to complete financial transactions without banks.

For example, consumers can pay bills and

transfer funds directly without banks.

Consumers can also shop for higher deposit interest rates at banks across the country, which may offer higher rates because they have few or no physical branches and open deposit accounts electronically.

process could result in the loss of fee income, as well as the loss of client deposits and the income generated from those deposits, in addition to increasing our funding costs.

Failures of, or material breaches in security of, our systems or those of third-party service providers may have a material adverse effect on our

Failures of, or material breaches in security of, our systems or those of third-party service providers may have

a material adverse effect on our business.

We collect, process and store sensitive consumer data by utilizing computer systems and telecommunications networks operated by both us

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may be required to expend significant additional resources to continue to modify and enhance our protective measures or to investigate and remediate any security vulnerabilities.

Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future even if we would like to do so.

We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common

The payment of dividends by us is also subject to certain regulatory restrictions.

As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our

subsidiaries’ earnings, capital requirements, financial condition and other factors.

Although our financial earnings and financial condition have allowed us to declare and pay periodic cash dividends to our shareholders, there can be no assurance

that our dividend policy or the size of dividend distribution will continue in the future, even if we are able to pay dividends.

Our failure to pay dividends on our common shares could have a material adverse effect on the market price of our common

Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future even if we

would like to do so.

We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common stock.

of dividends by us is also subject to certain regulatory restrictions.

As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our subsidiaries’ earnings,

capital requirements, financial condition and other factors.

Although our financial earnings and financial condition have allowed us to declare and pay periodic cash dividends to our shareholders, there can be no assurance that our dividend policy

or the size of dividend distribution will continue in the future, even if we are able to pay dividends.

Our failure to pay dividends on our common shares could have a material adverse effect on the market price of our common shares.

The loss of key members of our senior management team could adversely affect our business.

We believe that our success depends largely on the efforts and abilities of our senior management.

Their experience and

industry contacts significantly benefit us.

Their experience and industry

contacts significantly benefit us.

In addition, our success depends in part upon senior management’s ability to implement our business strategy.

The competition for qualified personnel in the financial services industry is intense, and the

loss of services of any of our senior executive officers or an inability to continue to attract, retain and motivate key personnel could adversely affect our business.

We cannot assure you that we will be able to retain our existing key personnel or

attract additional qualified personnel.

The competition for qualified personnel in the financial services industry is intense, and the loss of

services of any of our senior executive officers or an inability to continue to attract, retain and motivate key personnel could adversely affect our business.

We cannot assure you that we will be able to retain our existing key personnel or attract

additional qualified personnel.

Loss of key employees may disrupt relationships with certain customers.

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Loss of such key personnel, should they enter into an employment relationship with one of our competitors, could result in the loss of some of our customers.

If we foreclose on collateral property and own the underlying real estate, we may be subject to the increased costs associated with the ownership of

real property, resulting in reduced revenue.

If we foreclose on collateral property and own the underlying real estate, we may be subject to the increased

costs associated with the ownership of real property, resulting in reduced revenue.

We may have to foreclose on collateral property to protect our investment and may thereafter own and operate such property, in which

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A limited trading market exists for our common shares, which could lead to price volatility.

Your ability to sell or purchase our common shares depends upon the existence of an active trading market for our common

Your ability to sell or purchase our common shares depends upon the existence of an active trading market for our common shares.

Although our common shares are quoted on The NASDAQ Global Market, the volume of trades on any given day has been limited historically.

As a result, you may be unable to sell or purchase our common shares at the volume, price and time that

As a result, you may be unable to sell or purchase our common shares at the volume, price and time that you

Additionally, a fair valuation of the purchase or sales price of our common shares also depends upon an active trading market, and thus the price you receive for a thinly-traded stock such as our common shares may not reflect its true

The limited trading market for our common shares may cause fluctuations in the market value of our common shares to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market.

Liquidity contingency funding is highly concentrated.

The Bank is a member of the Federal Home Loan Bank of Cincinnati (FHLB).

Access to funding through the FHLB is a significant component

of the Bank’s contingency funding needs.

The ability to access funding from FHLB may be critical if a funding need arises.

However, there can be no assurance that the FHLB will be able to provide funding when needed, nor can there be assurance that

the FHLB will provide funds to the Bank if its financial condition deteriorates.

The inability to access FHLB funding, through a restriction on credit or the failure of the FHLB, could have a materially adverse effect on the Bank’s liquidity

Unrealized losses in the Bank’s investment portfolio could affect liquidity.

As market interest rates increased during 2022, the unrealized losses on the Bank’s investment portfolio also increased.

The increase in

unrealized losses is reflected in Accumulated Other Comprehensive Income on the balance sheet and reduces book capital and therefore its tangible common equity ratio.

Unrealized losses do not affect regulatory capital ratios.

The Bank’s access to

liquidity sources could be affected by unrealized losses if investments must be sold at a loss, tangible capital ratios continue to decline from an increase in unrealized losses or realized credit losses, the FHLB or other sources reduce capacity, or

bank regulators impose restrictions on the Bank such as a limit on interest rates it may pay on deposits or its ability to access brokered deposits.

Risks Related to Legal, Regulatory and Accounting Changes

New laws and increased regulatory oversight may significantly affect our business, financial condition and results of operations.

New laws and increased regulatory oversight may significantly affect our business, financial condition and

results of operations.

The financial services industry is extensively regulated.

We are subject to extensive state and federal regulation,

supervision and legislation that govern almost all aspects of our operations.

Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors, borrowers, the DIF and the banking system as a

whole, and not to benefit our shareholders.

We are subject to extensive state and federal regulation, supervision and

legislation that govern almost all aspects of our operations.

Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors, borrowers, the DIF and the banking system as a whole, and not

to benefit our shareholders.

Regulations affecting banks and financial services businesses are undergoing continuous changes, and management cannot predict the effect of these changes.

The impact of any changes to laws and

regulations or other actions by regulatory agencies may negatively impact us and our ability to increase the value of our business, possibly limiting the services we provide, increasing the potential for competition from non-banks, or requiring us

to change the way we operate.

Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities,

including the imposition of restrictions on the operation of an institution, the classification of assets held by an institution, the adequacy of an institution’s allowance for loan losses and the ability to complete acquisitions.

Additionally,

actions by regulatory agencies against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders.

Even the reduction of regulatory restrictions

could have an adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or market area.

In addition to laws, regulations and actions directed at the operations of banks, proposals to reform the housing finance market could

negatively affect our ability to sell loans.

Increases in FDIC insurance premiums may have a material adverse effect on our earnings.

Increased bank failures for several years commencing in 2008 greatly increased resolution costs of the FDIC and

depleted the DIF.

In order to maintain a strong funding position and restore reserve ratios of the DIF, the FDIC took a number of actions, including increasing assessment rates of insured institutions, requiring riskier institutions to pay a

larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels, changing the assessment base and requiring a prepayment of assessments for over three years.

We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance.

are additional financial institution failures, we may be required to pay even higher FDIC premiums.

Increases in FDIC insurance premiums may materially adversely affect our results of operations and our ability to continue to pay dividends on our

common shares at the current rate or at all.

The FDIC has recently adopted rules revising its assessments in a manner benefitting banks with assets totaling less than $10 billion.

There can be no assurance, though, that assessments will not be

changed in the future.

Changes in accounting standards, policies, estimates or procedures could impact our reported financial condition or results of

Entities that set generally applicable accounting standards, such as the FASB, the Securities and Exchange Commission,

and other regulatory boards, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements.

These changes can be difficult to predict and can materially affect how we record

and report our financial condition and results of operations.

The impact of any changes to laws and regulations or other

actions by regulatory agencies may negatively impact us and our ability to increase the value of our business, possibly limiting the services we provide, increasing the potential for competition from non-banks, or requiring us to change the way we

Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the

imposition of restrictions on the operation of an institution, the classification of assets held by an institution, the adequacy of an institution’s allowance for loan losses and the ability to complete acquisitions.

Additionally, actions by

regulatory agencies against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders.

Even the reduction of regulatory restrictions could have an

adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or market area.

Changes in accounting standards, policies, estimates or procedures could impact our reported financial condition

or results of operations.

Entities that set generally applicable accounting standards, such as the FASB, the Securities and Exchange Commission, and other

regulatory boards, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements.

These changes can be difficult to predict and can materially affect how we record and report

our financial condition and results of operations.

In some cases, we could be required to apply a new or revised standard retroactively, which would result in the restatement of our financial statements for prior periods.

In June 2016, FASB issued a new accounting standard for recognizing current expected credit losses, commonly referred to

CECL will result in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectability.

In October 2019, FASB announced it would

delay the effective date of CECL for smaller companies, such as Ohio Valley, until fiscal years beginning after December 15, 2022.

Upon adoption of CECL, credit loss allowances may increase, which will decrease retained earnings and regulatory

The federal banking regulators have adopted a regulation that will allow banks to phase in the day-one impact of CECL on regulatory capital over three years.

CECL implementation poses operational risk, including the failure to properly

transition internal processes or systems, which could lead to call report errors, financial misstatements, or operational losses.

Management’s accounting policies and methods are fundamental to how we record and report our financial condition and

results of operations.

Our management must exercise judgment in selecting and applying many of these accounting policies and methods in order to ensure that they comply with GAAP and reflect management’s judgment as to the most appropriate manner in

which to record and report our financial condition and results of operations.

In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet

might result in reporting materially different amounts than would have been reported under a different alternative.

Management has identified several accounting policies that are considered significant (one as being “critical”) to the

presentation of our financial condition and results of operations because they require management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially

different amounts would be reported under different conditions or using different assumptions.

Because of the inherent uncertainty of estimates about these matters, no assurance can be given that the application of alternative policies or methods

might not result in our reporting materially different amounts.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our

environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their

environmental, social and governance ("ESG") practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and

safety, diversity, labor conditions and human rights.

Increased ESG-related compliance costs for us as well as among our third-party suppliers, vendors and various other parties within our supply chain could result in increases to our overall

operational costs.

Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price

of our common shares.

In June 2016, FASB issued a new accounting standard for recognizing current expected credit losses, commonly referred to as CECL.

will result in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectability.

In October 2019, FASB announced it would delay the effective

date of CECL for smaller companies, such as Ohio Valley, until fiscal years beginning after December 15, 2022.

The Bank has developed a CECL model and is evaluating model results in relation to the new ASU guidance.

Upon adoption of the new standard

on January 1, 2023, management expects to recognize a one-time cumulative–effect adjustment that will materially increase the allowance for credit losses.

The Company will be electing the three-year phase in option of the day-one impact of this

standard to regulatory capital .

Management’s accounting policies and methods are fundamental to how we record and report our financial condition and results of

record and report our financial condition and results of operations.

In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet might

result in reporting materially different amounts than would have been reported under a different alternative.

Management has identified several accounting policies that are considered significant (one as being “critical”) to the presentation of

our financial condition and results of operations because they require management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts

would be reported under different conditions or using different assumptions.

Because of the inherent uncertainty of estimates about these matters, no assurance can be given that the application of alternative policies or methods might not result in

our reporting materially different amounts.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with

respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental,

social and governance ("ESG") practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity,

labor conditions and human rights.

Increased ESG-related compliance costs for us as well as among our third-party suppliers, vendors and various other parties within our supply chain could result in increases to our overall operational costs.

to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price of our common shares.

General Risk Factors

We may be the subject of litigation and other actions, which could have a material adverse effect on our financial condition, results of

operations and cash flows.

We may be the subject of litigation and other actions, which could have a material adverse effect on our

financial condition, results of operations and cash flows.

From time to time, we may be subject to a variety of litigation arising out of our business.

The risk of litigation

increases in times of increased troubled loan collection activity.

The risk of litigation increases in times

of increased troubled loan collection activity.

Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.

the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition, results of operations and cash flows.

In addition, we may not be able to obtain appropriate

types or levels of insurance in the future or obtain adequate replacement policies with acceptable terms.

Should the ultimate

judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition, results of operations and cash flows.

In addition, we may not be able to obtain appropriate types or

levels of insurance in the future or obtain adequate replacement policies with acceptable terms.

We are at risk of increased losses from fraud.

Criminals are committing fraud at an increasing rate and are using more sophisticated techniques.

In some cases, these

individuals are part of larger criminal rings, which allow them to be more effective.

Such fraudulent activity has taken many forms, ranging from debit card fraud, check fraud, mechanical devices attached to ATM machines, social engineering and

phishing attacks to obtain personal information, or impersonation of clients through the use of falsified or stolen credentials.

Additionally, an individual or business entity may properly identify itself, yet seek to establish a business

relationship for the purpose of perpetrating fraud.

In some cases, these individuals are

part of larger criminal rings, which allow them to be more effective.

Such fraudulent activity has taken many forms, ranging from debit card fraud, check fraud, mechanical devices attached to ATM machines, social engineering and phishing attacks to

obtain personal information, or impersonation of clients through the use of falsified or stolen credentials.

Additionally, an individual or business entity may properly identify itself, yet seek to establish a business relationship for the purpose

of perpetrating fraud.

An emerging type of fraud even involves the creation of synthetic identification in which fraudsters "create" individuals for the purpose of perpetrating fraud.

Further, in addition to fraud

committed directly against us, we may suffer losses as a result of fraudulent activity committed against third parties.

Further, in addition to fraud committed directly against us, we

may suffer losses as a result of fraudulent activity committed against third parties.

Increased deployment of technologies, such as chip card technology, defray and reduce certain aspects of fraud;

criminals are turning to other sources to steal personally identifiable information, such as unaffiliated healthcare providers and government entities, in order to impersonate the consumer and thereby commit fraud.

however, criminals are turning to other sources to

steal personally identifiable information, such as unaffiliated healthcare providers and government entities, in order to impersonate the consumer and thereby commit fraud.

ITEM 1B – UNRESOLVED STAFF COMMENTS

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What changed 10-K

Item 1A. Risk Factors