What changed in this filing

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Item 1. Business

2024-03-15 compared with 2023-03-23 · 293 added, 273 removed, 361 unchanged (61% of the section changed)

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Ohio Valley Banc Corp.

(“Ohio Valley” or the “Company”) is an Ohio corporation registered as a financial holding company pursuant to the

Bank Holding Company Act of 1956, as amended (“BHC Act”).

(“Ohio Valley” or the “Company”) is an Ohio corporation registered as a financial holding company pursuant to

the Bank Holding Company Act of 1956, as amended (“BHC Act”).

Ohio Valley was incorporated under the laws of the State of Ohio on January 8, 1992 and began conducting business on October 23, 1992.

The principal executive offices of Ohio Valley are

located at 420 Third Avenue, Gallipolis, Ohio 45631.

The principal executive offices of Ohio Valley

are located at 420 Third Avenue, Gallipolis, Ohio 45631.

Ohio Valley’s common shares are listed on The NASDAQ Global Market under the symbol “OVBC.” Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”).

The Bank has two

wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages (“Race Day”), and Ohio Valley REO, LLC, an Ohio limited liability company (“Ohio Valley REO”), to which the Bank transfers certain real

estate acquired by the Bank through foreclosure for sale by Ohio Valley REO.

Ohio Valley also owns three nonbank subsidiaries, Loan Central, Inc., which engages in lending (“Loan Central”), Ohio Valley Financial Services Agency, LLC, which is used to

facilitate the receipt of commissions on insurance sold by the Bank and Loan Central (“Ohio Valley Financial Services”), and OVBC Captive, Inc., a limited purpose property and casualty insurance company (“OVBC Captive”).

Ohio Valley also owns one

wholly-owned subsidiary trust formed solely to issue a trust preferred security.

Ohio Valley and its subsidiaries are collectively referred to as the “Company.” Ohio Valley’s financial service operations are considered by management to be

aggregated in two reportable segments:

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

Ohio Valley also owns

two nonbank subsidiaries, Loan Central, Inc., which engages in lending (“Loan Central”), and Ohio Valley Financial Services Agency, LLC, which is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central (“Ohio

Valley Financial Services”).

Ohio Valley also owns one wholly-owned subsidiary trust formed solely to issue a trust preferred security.

Ohio Valley and its subsidiaries are collectively referred to herein as the “Company.” Ohio Valley’s

financial service operations are considered by management to be aggregated in two reportable segments:

banking and consumer finance.

Total revenues from the banking segment, which accounted for the majority of the Company’s total revenues, totaled 94.2% and 94.1% of total consolidated revenues for the years

ended December 31, 2022 and 2021, respectively.

Interested readers can access Ohio Valley’s annual reports

on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through

Ohio Valley’s Internet website at www.ovbc.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate the information contained on Ohio

Valley’s website into this Annual Report on Form 10-K).

These reports can be accessed free of charge through a link to The NASDAQ Stock Market, LLC’s website from Ohio Valley’s website as soon as reasonably practicable after Ohio Valley

electronically files such materials with, or furnishes them to, the Securities and Exchange Commission (“SEC”).

Total revenues from the banking segment, which accounted for the majority of the Company’s total revenues,

totaled 95.2% and 94.2% of total consolidated revenues for the years ended December 31, 2023 and 2022, respectively.

Interested readers can access Ohio Valley’s annual

reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

through Ohio Valley’s Internet website at www.ovbc.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate the information contained on Ohio Valley’s website into this Annual

Report on Form 10-K).

These reports can be accessed free of charge through a link to The NASDAQ Stock Market, LLC’s website from Ohio Valley’s website as soon as reasonably practicable after Ohio Valley electronically files such materials with,

or furnishes them to, the Securities and Exchange Commission (“SEC”).

Business of Ohio Valley

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$144,007,000 and $135,028,000 for the same periods, respectively.

Ohio Valley’s financial holding company status allows it to

engage in certain non-banking activities, such as securities underwriting and dealing activities, insurance agency and underwriting activities and merchant banking/equity investment activities.

Ohio Valley presently has an insurance agency,

Ohio Valley Financial Services, which is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central.

Ohio Valley also has a captive insurance company, OVBC Captive, that is engaged in the business of providing

commercial property and various liability insurance to the Company and related entities.

Ohio Valley’s financial holding company status allows it

to engage in certain non-banking activities, such as securities underwriting and dealing activities, insurance agency and underwriting activities and merchant banking/equity investment activities.

Ohio Valley presently has an insurance

agency, Ohio Valley Financial Services, which is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central.

In July 2014, Ohio Valley formed a nonbank subsidiary, OVBC Captive, Inc.

(the “Captive”), which was

engaged in the business of providing commercial property and various liability insurance to the Company and related entities.

However, in December 2023, Ohio Valley discontinued the Captive’s operations as a result of proposed IRS regulations that

will adversely affect the taxation of small captives and will severely limit the Captive’s ability to operate.

Management will consider opportunities to engage in additional nonbanking activities as they arise.

Information about the Company’s business segments is set forth in Note R to the Company’s Financial Statements located in Ohio Valley’s

2022 Annual Report to Shareholders.

Information about the Company’s business segments is set forth in Note R to the Company’s Financial Statements located in Ohio

Valley’s 2023 Annual Report to Shareholders.

Business of Bank Subsidiary

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Interfinancial Network and participates in their Certificate of Deposit Account Registry program, which provides customers with the ability to secure FDIC insurance on balances in excess of the standard limitations.

In addition to originating loans,

the Bank invests in United States government and agency obligations, interest-bearing deposits in other financial institutions, and other investments permitted by applicable law.

In addition to originating

loans, the Bank invests in United States government and agency obligations, interest-bearing deposits in other financial institutions, and other investments permitted by applicable law.

The Bank began offering trust services in 1981.

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services are available to all customers of the Bank.

The Bank also offers Internet banking to its customers, allowing customers to check personal account balances, receive information about

transactions within their accounts, make transfers between accounts, stop payment on a check, and reorder checks all from their own computer.

The Bank also offers Internet banking to its customers, allowing customers to check personal account balances, receive information

about transactions within their accounts, make transfers between accounts, stop payment on a check, and reorder checks all from their own computer.

Customers may also pay bills online and can make payments to virtually any business or individual.

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The Bank offers Tax Refund Advance Loans (“TALs”) to Loan Central tax customers.

A TAL represents a short-term loan offered by the Bank

to tax preparation customers of Loan Central.

A TAL represents a short-term loan offered by the

Bank to tax preparation customers of Loan Central.

Previously, Loan Central offered and originated tax refund anticipation loans that represented a large composition of its annual earnings.

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As a result, Loan Central no longer offers the service to its tax preparation customers, but it is able to do so through the Bank.

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.

Risk of loss could result with the Bank not receiving a tax refund from the IRS, caused by a number of reasons such as errors in the tax return, tax return fraud, or tax debts not previously

disclosed during the underwriting process.

In April 2021, the Bank formed a subsidiary, Race Day, which serves as an online-only consumer direct mortgage banking company.

was created to help fill the demand for home ownership in areas beyond the Bank’s primary markets, while providing a more convenient and efficient process to its clients that live outside the Bank’s primary market area.

However, as announced in

February 2023, the Company is taking steps toward closing Race Day.

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

The Company plans to see current loan applications in

progress to completion.

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

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.

In April 2021, the Bank formed a subsidiary, Race Day Mortgage, Inc.

(“Race Day”), which served as an online-only consumer direct

mortgage banking company.

Race Day was created to help fill the demand for home ownership in areas beyond the Bank’s primary markets, while providing a more convenient and efficient process to its clients that live outside the Bank’s primary market

However, in December 2023, Ohio Valley discontinued Race Day’s operations as a result of low loan demand, poor employee retention, and lack of profitability.

Business of Loan Central

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Business of Financial Services Subsidiaries

Ohio Valley Financial Services is a licensed insurance agency that is used to facilitate the receipt of commissions on insurance sold by

the Bank and Loan Central.

Ohio Valley Financial Services is a licensed insurance agency that is used to facilitate the receipt of commissions on insurance sold

by the Bank and Loan Central.

Ohio Valley Financial Services is licensed by the State of Ohio Department of Insurance.

OVBC Captive is a pure captive insurance company engaged in providing commercial property and various liability insurance to the Company

and affiliates.

OVBC Captive has been approved under the guidelines of the State of Nevada Division of Insurance.

Variable Interest Entities

Ohio Valley owns one special purpose entity, Ohio Valley Statutory Trust III, which has issued $8,500,000 in trust preferred securities.

Ohio Valley has issued a like amount of subordinated debentures to the Trust in exchange

for the proceeds of the issuance of the trust preferred securities.

Ohio Valley owns one special purpose entity, Ohio

Valley Statutory Trust III, which has issued $8,500,000 in trust preferred securities.

Ohio Valley has issued a like amount of subordinated debentures to the Trust in

exchange for the proceeds of the issuance of the trust preferred securities.

Ohio Valley used the proceeds to provide additional capital to the Bank to support growth.

Further detail on Ohio Valley Statutory Trust III is located in Ohio Valley’s

2022 Annual Report to Shareholders under “Note J – Subordinated Debentures and Trust Preferred Securities,” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2022 and 2021.

Further detail on Ohio Valley Statutory Trust III is located in Ohio

Valley’s 2023 Annual Report to Shareholders under “Note J – Subordinated Debentures and Trust Preferred Securities,” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 and 2022.

Financial Information

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The increase in total loans came primarily from

the Company’s residential real estate portfolio.

the Company’s commercial loan portfolio.

The loan portfolio is comprised of commercial (commercial real estate and commercial and industrial), residential real estate and consumer loans, including credit card and home equity loans.

2022, residential real estate loans increased $22,611,000, or 8.2%, while commercial loans increased $16,665,000, or 3.9%, and consumer loans increased $14,582,000, or 10.9%, as compared to 2021.

The residential real estate loan portfolio was largely

impacted by higher warehouse lending and short-term adjustable-rate mortgage loan balances.

Commercial loan growth was impacted by an increase in new loan originations during 2022.

Consumer loan growth was largely impacted by increases in automobile

and home equity lines of credit balances during 2022.

commercial loans increased $40,205,000, or 9.1%, while consumer loans increased $24,178,000, or 16.3%, and residential real estate loans increased $22,468,000, or 7.6%, as compared to 2022.

Commercial loan growth was impacted primarily by an

increase in new commercial real estate loan originations during 2023.

Consumer loan growth was largely impacted by increases in automobile, home equity lines of credit, and other consumer loan balances during 2023.

The residential real estate loan

portfolio was largely impacted by higher short-term adjustable-rate mortgage loan balances.

Consolidated interest and fee revenue from loans accounted for 73.59% and 73.16% of total consolidated revenues in 2023 and 2022, respectively.

The Company’s market area for lending is primarily

located in southeastern Ohio and portions of western West Virginia.

The Company believes that there is no significant concentration of loans to

borrowers engaged in the same or similar industries and does not have any loans to foreign entities.

Company’s market area for lending is primarily located in southeastern Ohio and portions of western West Virginia.

The Company believes that

there is no significant concentration of loans to borrowers engaged in the same or similar industries and does not have any loans to foreign entities.

Residential Real Estate Loans

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Residential real estate loans also consist of the Company’s warehouse lending activity.

Warehouse lending consists of a line of credit provided by the Bank to another mortgage lender that makes loans for the purchase of one- to

four-family residential real estate properties.

Warehouse lending consists of a line of credit provided by the Bank to another mortgage lender that makes loans for the purchase of one-

to four-family residential real estate properties.

The mortgage lender eventually sells the loans and repays the Bank.

The Company’s market area for real estate lending is primarily located in southeastern Ohio and portions of western West Virginia.

The Company’s market area for real estate lending is primarily located in southeastern Ohio and portions of western West

The Bank continues to sell a portion of its new fixed-rate real estate loan originations to the Federal Home Loan Mortgage Corporation to enhance customer service and loan pricing.

Secondary market sales of these real estate loans, which have fixed

rates with fifteen- to thirty-year terms, have assisted in meeting the consumer preference for long-term fixed-rate loans as well as minimized the Bank’s exposure to interest rate risk.

Race Day also originated and sold long-term fixed-rate loans to

various brokers using a convenient, online process during 2022.

However, the Company intends to dissolve this subsidary of the Bank during 2023.

Secondary market sales of these real estate loans,

which have fixed rates with fifteen- to thirty-year terms, have assisted in meeting the consumer preference for long-term fixed-rate loans as well as minimized the Bank’s exposure to interest rate risk.

Commercial Loans

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up to $1,000,000 unsecured, up to $5,000,000 secured, and up to $5,000,000 aggregate.

The Executive Committee of the

Bank’s Board of Directors will review and approve all new commercial loan originations that exceed the Bank’s loan committee thresholds up to the legal lending limit of the Bank.

The Executive Committee of

the Bank’s Board of Directors will review and approve all new commercial loan originations that exceed the Bank’s loan committee thresholds up to the legal lending limit of the Bank.

Consumer Loans

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The Company makes installment credit available to customers in their primary market area of southeastern Ohio and portions of western West Virginia.

Credit approval for consumer

loans requires demonstration of sufficient income to repay principal and interest due, stability of employment, a positive credit record and sufficient collateral for secured loans.

The Company monitors the risk associated with these types of loans

by monitoring factors such as portfolio growth, lending policies and economic conditions.

Credit approval for

consumer loans requires demonstration of sufficient income to repay principal and interest due, stability of employment, a positive credit record and sufficient collateral for secured loans.

The Company monitors the risk associated with these

types of loans by monitoring factors such as portfolio growth, lending policies and economic conditions.

Underwriting standards are continually evaluated and modified based upon these factors.

A qualified compliance officer is responsible for monitoring the

performance of his or her respective consumer portfolio and updating loan personnel.

The Company makes credit life insurance and health and accident insurance available to all qualified borrowers, thus reducing their risk of loss when their income

is terminated or interrupted.

A qualified compliance officer is responsible for

monitoring the performance of his or her respective consumer portfolio and updating loan personnel.

The Company makes credit life insurance and health and accident insurance available to all qualified borrowers, thus reducing their risk of loss

when their income is terminated or interrupted.

The Company reviews its respective consumer loan portfolios monthly to charge off loans which do not meet applicable standards.

Credit card accounts are administered in accordance with the same standards as those

applied to other consumer loans.

Consumer loans generally involve more risk as to collectibility than mortgage loans because of the type and nature of collateral and, in certain instances, the absence of collateral.

As a result, consumer lending

collections are dependent upon the borrower’s continued financial stability and are adversely affected by job loss, divorce or personal bankruptcy and by adverse economic conditions.

Also included in the category of consumer loans are home equity

Credit card accounts are administered in accordance with the same

standards as those applied to other consumer loans.

Consumer loans generally involve more risk as to collectability than mortgage loans because of the type and nature of collateral and, in certain instances, the absence of collateral.

result, consumer lending collections are dependent upon the borrower’s continued financial stability and are adversely affected by job loss, divorce or personal bankruptcy and by adverse economic conditions.

Also included in the category of

consumer loans are home equity loans.

Home equity lines of credit are generally made as second mortgages and charged a variable interest rate.

Home equity lines are written with ten-year terms but are reviewed annually.

The Company’s consumer loans also consist of seasonal TALs

offered by the Bank during the tax season.

The Company’s consumer

loans also consist of seasonal TALs offered by the Bank during the tax season.

Underwriting Standards

The Company’s underwriting guidelines and standards are updated periodically and are presented to the Board of Directors of the holding

company for approval.

The Company’s underwriting guidelines and standards are updated periodically and are presented to the Board of Directors of the

holding company for approval.

The purposes of the standards and guidelines are to grant loans on a sound and collectible basis;

to invest available funds in a safe, profitable manner;

to serve the legitimate credit needs of the Company’s primary market

to serve the legitimate credit needs of the Company’s primary

market areas;

and to ensure that all loan applicants receive fair and equal treatment in the lending process.

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The Company will also utilize certificates of deposit and money market deposits from wholesale markets, when necessary, to support growth in assets.

Short- and long-term advances

from the Federal Home Loan Bank have also been a significant source of funding.

Short- and long-term

advances from the Federal Home Loan Bank have also been a significant source of funding.

Further funding has come from one trust preferred securities offering through Ohio Valley Statutory Trust III, totaling

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10, 2020, the Bank announced that it had entered into a new agreement with a third-party to process future electronic refund checks and deposits presented for payment on behalf of taxpayers through accounts containing taxpayer refunds.

The new agreement

provides that the Bank will process refunds for five tax seasons, beginning with the 2021 tax season and extending through the 2025 tax season.

agreement provides that the Bank will process refunds for five tax seasons, beginning with the 2021 tax season and extending through the 2025 tax season.

Competition among providers of financial products and services continues to increase, with consumers having the opportunity to select

from a growing variety of traditional and nontraditional alternatives.

The principal factors of competition for the Company’s banking business are the rates of interest charged for loans, the rates of interest paid for deposits, the fees charged for

services and the availability and quality of services.

The market area for the Bank is concentrated primarily in the Gallia, Meigs, Jackson, Vinton, Pike and Lawrence Counties of Ohio, as well as the Mason and Cabell Counties of West Virginia.

additional business originates from the surrounding Ohio counties of Scioto, Athens and Ross.

Competition for deposits and loans comes primarily from local banks and savings associations, although some competition is also experienced from local

credit unions and insurance companies.

The principal factors of competition for the Company’s banking business are the rates of interest charged for loans, the rates of interest paid for deposits, the fees charged

for services and the availability and quality of services.

The market area for the Bank is concentrated primarily in the Gallia, Meigs, Jackson, Vinton, Pike and Lawrence Counties of Ohio, as well as the Mason and Cabell Counties of West

Some additional business originates from the surrounding Ohio counties of Scioto, Athens and Ross.

Competition for deposits and loans comes primarily from local banks and savings associations, although some competition is also

experienced from local credit unions and insurance companies.

The Company also competes with non-financial institutions that offer financial products and services.

Some of the Company’s competitors are not subject to the same level of regulation and oversight that is

required of banks and bank holding companies.

Some of the Company’s competitors are not subject to the same level of regulation

and oversight that is required of banks and bank holding companies.

As a result, some of these competitors may have lower cost structures.

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preparation activities and the Bank’s refund advance activities, the Company’s business is not seasonal, nor is it dependent upon a single or small group of customers.

Race Day permitted the Company to compete in select states outside of our core banking markets by using technology to originate and

close mortgage loans.

The loans were sourced from various mortgage rate listing websites and the market was considered highly competitive.

Consumers were sensitive to interest rates and origination fees, which were easily compared on the website.

The volume of loan originations could have been impacted by general economic conditions and influenced by the level and direction of market interest rates.

Historically, larger regional institutions, with substantially greater resources, have been generating a growing market presence.

in recent years, the financial industry continues to consolidate, which affects competition by eliminating some regional and local institutions, while strengthening the acquiring companies.

Many financial institutions have experienced significant

challenges as a result of the economic crisis, which resulted in bank failures and significant intervention from the United States Government.

Yet, in recent years, the financial industry continues to consolidate, which affects competition by eliminating some regional and local institutions, while strengthening the acquiring companies.

Many financial institutions have experienced

significant challenges as a result of the prior economic crisis, which resulted in bank failures and significant intervention from the United States Government.

Overall, the Company believes it is able to compete effectively in both current and newer markets.

There can be no assurance, however,

that our ability to market products and services successfully or to obtain adequate yield on our loans will not be impacted by the nature of the competition that now exists or may later develop.

There can be no assurance,

however, that our ability to market products and services successfully or to obtain adequate yield on our loans will not be impacted by the nature of the competition that now exists or may later develop.

Supervision and Regulation

The following is a summary of certain statutes and regulations affecting Ohio Valley as well as the Bank and Loan Central.

is qualified in its entirety by reference to such statutes and regulations.

The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers, depositors, borrowers, the Deposit Insurance Fund

(“DIF”) and the banking system as a whole, and not for the protection of shareholders.

Applicable laws and regulations restrict permissible activities and investments and require actions to protect loan, deposit, brokerage, fiduciary and other

customers, as well as the DIF.

They also may restrict Ohio Valley’s abilty to repurchase its common shares or to receive dividends from the Bank and impose capital adequacy and liquidity requirements.

The following is a summary of certain statutes and regulations affecting Ohio Valley as well as the Bank, Loan Central, and Ohio

Valley Financial Services.

This summary is qualified in its entirety by reference to such statutes and regulations.

The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers,

depositors, borrowers, the Deposit Insurance Fund (“DIF”) and the banking system as a whole, and not for the protection of shareholders.

Applicable laws and regulations restrict permissible activities and investments and require actions to protect

loan, deposit, brokerage, fiduciary and other customers, as well as the DIF.

They also may restrict Ohio Valley’s ability to repurchase its common shares or to receive dividends from the Bank and impose capital adequacy and liquidity requirements.

Regulation of Financial Holding Company

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Board of Governors of the Federal Reserve System (“Federal Reserve Board”).

The Federal Reserve Board has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties, issue

cease and desist or removal orders, and require that a bank holding company divest subsidiaries (including its banking subsidiaries).

In general, the Federal Reserve Board may initiate enforcement action for violations of laws and regulations and

unsafe or unsound practices.

A bank holding company is required to serve as a source of financial strength to each subsidiary bank and to commit resources to support

those subsidiary banks.

The Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to the shareholders of the bank holding

company if the Federal Reserve Board believes the payment would be an unsafe or unsound practice.

The Federal Reserve Board also requires bank holding companies to provide advance notification of planned dividends under certain circumstances.

The Federal Reserve Board has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties,

issue cease and desist or removal orders, and require that a bank holding company divest subsidiaries (including its banking subsidiaries).

In general, the Federal Reserve Board may initiate enforcement action for violations of laws and regulations

and unsafe or unsound practices.

A bank holding company is required to serve as a source of financial strength to each subsidiary bank and to commit resources to

support those subsidiary banks.

holding company if the Federal Reserve Board believes the payment would be an unsafe or unsound practice.

The Federal Reserve Board also requires bank holding companies to provide advance notification of planned dividends under certain

circumstances.

The BHC Act requires the prior approval of the Federal Reserve Board in any case where a bank holding company proposes to:

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Holding Company Activities

Ohio Valley is a financial holding company, which permits it to engage in activities beyond those permitted for traditional bank holding

Ohio Valley is a financial holding company, which permits it to engage in activities beyond those permitted for traditional bank

holding companies.

A qualifying bank holding company may elect to become a financial holding company and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature and not otherwise

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company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

Financial holding companies may engage in a wide variety of financial activities, including any activity that the Federal Reserve Board

and the Treasury Department consider financial in nature or incidental to financial activities, and any activity that the Federal Reserve Board determines complementary to a financial activity and which does not pose a substantial safety and

Financial holding companies may engage in a wide variety of financial activities, including any activity that the Federal Reserve

Board and the Treasury Department consider financial in nature or incidental to financial activities, and any activity that the Federal Reserve Board determines complementary to a financial activity and which does not pose a substantial safety and

soundness risk.

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authority to engage in a broad array of financial activities, a financial holding company may have several affiliates that are functionally regulated by financial regulators other than the Federal Reserve Board, such as the SEC and state insurance

If a financial holding company or a subsidiary bank fails to meet the requirements for the holding company to remain a financial holding

company, the financial holding company must enter into a written agreement with the Federal Reserve Board within 45 days to comply with all applicable capital and management requirements.

Until the Federal Reserve Board determines that the holding

company and its subsidiary banks meet the requirements, the Federal Reserve Board may impose additional limitations or conditions on the conduct or activities of the financial holding company or any affiliate that the Federal Reserve Board finds to

be appropriate or consistent with federal banking laws.

If a financial holding company or a subsidiary bank fails to meet the requirements for the holding company to remain a financial

holding company, the financial holding company must enter into a written agreement with the Federal Reserve Board within 45 days to comply with all applicable capital and management requirements.

Until the Federal Reserve Board determines that the

holding company and its subsidiary banks meet the requirements, the Federal Reserve Board may impose additional limitations or conditions on the conduct or activities of the financial holding company or any affiliate that the Federal Reserve Board

finds to be appropriate or consistent with federal banking laws.

If the deficiencies are not corrected within 180 days, the financial holding company may be required to divest ownership or control of all banking subsidiaries.

If restrictions are imposed on

the activities of the holding company, such restrictions may not be made publicly available pursuant to confidentiality regulations of the banking regulators.

Loan Central is supervised and regulated by the State of Ohio Department of Financial Institutions, Division of Consumer Finance

Ohio Valley Financial Services is supervised and regulated by the State of Ohio Department of Insurance.

OVBC Captive is supervised and regulated by the State of Nevada Division of Insurance.

The insurance laws and regulations applicable

to insurance agencies, including Ohio Valley Financial Services and OVBC Captive, require education and licensing of individual agents and agencies, require reports and impose business conduct rules.

If restrictions are

imposed on the activities of the holding company, such restrictions may not be made publicly available pursuant to confidentiality regulations of the banking regulators.

Loan Central is supervised and regulated by the Ohio Department of Commerce, Division of Financial Institutions (“ODFI”).

Financial Services is supervised and regulated by the State of Ohio Department of Insurance.

The insurance laws and regulations applicable to insurance agencies, including Ohio Valley Financial Services, require education and licensing of

individual agents and agencies, require reports and impose business conduct rules.

Economic Growth, Regulatory Relief and Consumer Protection Act

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consolidated assets of less than $100 billion, including Ohio Valley, from certain record-keeping, reporting and disclosure requirements.

Certain other regulatory requirements applied only to banks with assets in excess of $50 billion and so did not

apply to the Company even before the enactment of the Regulatory Relief Act.

Certain other regulatory requirements applied only to banks with assets in excess of $50 billion and so did

not apply to the Company even before the enactment of the Regulatory Relief Act.

Regulation of Ohio State Chartered Banks

As an Ohio state-chartered bank that is a member of the Federal Reserve Bank of Cleveland (“FRB”), the Bank is supervised and regulated

primarily by the ODFI and the Federal Reserve Board.

As an Ohio state-chartered bank that is a member of the Federal Reserve Bank of Cleveland (“FRB”), the Bank is supervised and

regulated primarily by the ODFI and the Federal Reserve Board.

The Bank is also subject to the regulations of the Consumer Financial Protection Bureau (“CFPB”), which has broad authority to adopt and enforce consumer protection regulations.

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Equal Credit Opportunity Act:

prohibits discrimination in any credit transaction on the basis of any of various criteria.

prohibits discrimination in any credit transaction on the basis of any of various

Truth in Lending Act:

requires that credit terms are disclosed in a manner that permits a consumer to understand and compare

credit terms more readily and knowledgeably.

requires that credit terms are disclosed in a manner that permits a consumer to understand and

compare credit terms more readily and knowledgeably.

Fair Housing Act:

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Home Mortgage Disclosure Act:

requires financial institutions to collect data that enables regulatory agencies to determine

whether the financial institutions are serving the housing credit needs of the communities in which they are located.

requires financial institutions to collect data that enables regulatory agencies to

determine whether the financial institutions are serving the housing credit needs of the communities in which they are located.

Real Estate Settlement Procedures Act:

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enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of specific banking or consumer finance law.

On July 22, 2020, the CFPB issued a final small dollar loan rule related to payday, vehicle title and certain high

cost installment loans (the “Small Dollar Rule”) that modified a former rule that was issued in November 2013.

On July 22, 2020, the CFPB issued a final small dollar loan rule related to payday, vehicle title and certain

high cost installment loans (the “Small Dollar Rule”) that modified a former rule that was issued in November 2013.

Specifically, the Small Dollar Rule revokes provisions contained in the 2013 rule that:

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compliance date of the Small Dollar Rule was June 13, 2022.

Further, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and

credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

The Small Dollar Rule did not have a material effect on Ohio Valley’s financial condition or results of operations on a consolidated basis in

2022 and 2021.

However, due to continuing appellate litigation regarding the constitutionality of the CPFB’s

funding structure, which stems, in part, from legal challenges to the Small Dollar Rule, the effective date for nationwide compliance with the final Small Dollar Rule remains uncertain at this time .

Further, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations,

and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

The Small Dollar Rule did not have a material effect on Ohio Valley’s financial condition or results of operations on a consolidated

basis in 2023 and 2022.

Federal Reserve System

The Federal Reserve Board requires all depository institutions to maintain reserves at specified

levels against their transaction accounts, primarily checking accounts.

In response to the COVID-19 pandemic, the Federal Reserve Board reduced reserve requirement ratios to 0% effective on March 26, 2020, to support lending to households and

The reserve requirement ratio remained at 0% as of December 31, 2023.

Capital Requirements

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provisions of the Dodd-Frank Act, became effective commencing on January 1, 2015.

Compliance with the new minimum capital requirements was required effective January 1, 2015, while a new capital conservation buffer and deductions from common equity

capital phased in from January 1, 2016, through January 1, 2019, and most deductions from common equity tier 1 capital phased in from January 1, 2015, through January 1, 2019.

Compliance with the new minimum capital requirements was required effective January 1, 2015, while a new capital conservation buffer and deductions from common

equity capital phased in from January 1, 2016, through January 1, 2019, and most deductions from common equity tier 1 capital phased in from January 1, 2015, through January 1, 2019.

The Basel III Capital Rules include (i) a minimum common equity tier 1 capital ratio of 4.5%, (ii) a minimum tier 1 capital ratio of

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limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.

Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock

and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not otherwise permitted), and limited amounts of minority interests in the form of additional tier 1

Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred

stock and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not otherwise permitted), and limited amounts of minority interests in the form of additional tier

1 capital instruments, less certain deductions.

Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and

limited amounts of the allowance for loan and lease losses, subject to specified eligibility criteria, less applicable deductions.

The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing

assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels).

limited amounts of the allowance for credit losses, subject to specified eligibility criteria, less applicable deductions.

The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets,

mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above

certain levels).

Under the guidelines, capital is compared to the relative risk included in the balance sheet.

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The Basel III Capital Rules also place restrictions on the payment of capital distributions, including dividends, and certain

discretionary bonus payments to executive officers if the company does not hold a capital conservation buffer of greater than 2.5% composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained

income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter.

retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter.

In December 2019, the federal banking agencies issued a final rule to address regulatory treatment of credit loss allowances under

The rule revised the federal banking agencies’ regulatory capital rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in

over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model.

Concurrent with the enactment of the CARES Act, federal banking agencies issued an interim final rule that delayed the estimated

impact on regulatory capital resulting from the adoption of CECL.

The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory

capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.

On August 26,

2020, the federal banking agencies issued a final rule that made certain technical changes to the interim final rule, including expanding the pool of eligible institutions.

The changes in the final rule applied only to those banking organizations

that elected the CECL transition relief provided for under the rule.

in over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model.

Concurrent with the enactment of the CARES Act, federal banking agencies issued an interim final rule that delayed the

estimated impact on regulatory capital resulting from the adoption of CECL.

The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on

regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.

August 26, 2020, the federal banking agencies issued a final rule that made certain technical changes to the interim final rule, including expanding the pool of eligible institutions.

The changes in the final rule applied only to those banking

organizations that elected the CECL transition relief provided for under the rule.

The Company adopted the CECL model effective January 1, 2023.

Federal banking regulators have established regulations governing prompt corrective action to resolve capital deficient banks.

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primary federal regulator, and its holding company must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes undercapitalized.

In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a bank

must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any

written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure.

At December 31, 2022, the Bank met the capital ratio requirements to be deemed “well-capitalized”

according to the guidelines described above.

In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a

bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to

any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure.

At December 31, 2023, the Bank met the capital ratio requirements to be deemed

“well-capitalized” according to the guidelines described above.

A bank with a capital level that might qualify for well capitalized or adequately capitalized status may nevertheless

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Limits on Dividends

The ability of a bank holding company to obtain funds for the payment of dividends and for other cash requirements is largely dependent

on the amount of dividends that may be declared by its subsidiary banks and other subsidiaries.

The Federal Reserve Board also expects Ohio Valley to serve as a source of strength to the Bank, which may require it to retain capital for further

investments in the Bank, rather than for dividends for shareholders of Ohio Valley.

The ability of a bank holding company to obtain funds for the payment of dividends and for other cash requirements is largely

dependent on the amount of dividends that may be declared by its subsidiary banks and other subsidiaries.

The Federal Reserve Board also expects Ohio Valley to serve as a source of strength to the Bank, which may require it to retain capital for

further investments in the Bank, rather than for dividends for shareholders of Ohio Valley.

The Bank may not pay dividends to Ohio Valley if, after paying such dividends, it would fail to meet the required capital levels.

Dividends are also subject to

limitations if the Company or the Bank fails to hold the required capital conservation buffer.

The Bank must have the approval of its regulatory authorities if a dividend in any year would cause the total dividends for that year to exceed the sum of

its current year’s net profits and retained net profits for the preceding two years, less required transfers to surplus.

Under Ohio law, the Bank may pay a dividend from surplus only with the approval of its shareholders and the approval of the

Superintendent of Financial Institutions.

Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice or if

necessary to maintain adequate capital for the Bank.

Dividends are also

subject to limitations if the Company or the Bank fails to hold the required capital conservation buffer.

The Bank must have the approval of its regulatory authorities if a dividend in any year would cause the total dividends for that year to

exceed the sum of its current year’s net profits and retained net profits for the preceding two years, less required transfers to surplus.

Under Ohio law, the Bank may pay a dividend from surplus only with the approval of its shareholders and the

approval of the Superintendent of Financial Institutions.

Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking

practice or if necessary to maintain adequate capital for the Bank.

These provisions could have the effect of limiting Ohio Valley’s ability to pay dividends on its outstanding common shares.

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prohibit any insured institution from engaging in any activity the FDIC determines by regulation or order to pose a threat to the DIF, and to take enforcement actions against insured institutions.

The FDIC may terminate insurance of deposits of any

institution if it finds that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or other regulatory agency.

The FDIA requires the FDIC's Board of Directors to set a target or Designated Reserve Ratio (“DRR”) for the DIF

The FDIC may terminate insurance of deposits of

any institution if it finds that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or other regulatory

The FDIA requires the FDIC’s Board of

Directors to set a target or Designated Reserve Ratio (“DRR”) for the DIF annually.

The DRR is the total of the DIF divided by the total estimated insured deposits of the industry.

Under the long-range plan, the FDIC set the DRR at 2.0% and set a schedule of assessment rates that would progressively decrease when the DRR

reached 2.0% and 2.5%.

Under the long-range plan, the FDIC set the DRR at 2.0% and set a

schedule of assessment rates that would progressively decrease when the DRR reached 2.0% and 2.5%.

The FDIC views the 2.0% DRR as a long-term goal and the minimum level needed to withstand future crises of the magnitude of past crises.

Extraordinary growth in insured deposits during the first and second quarters of 2020

caused the DRR to decline below the statutory minimum of 1.35% as of June 30, 2020.

In September 2020, the FDIC Board of Directors adopted a restoration plan to restore the DRR to at least 1.35% by 2028, absent extraordinary circumstances, as

required by the FDIA.

The restoration plan maintained the assessment rate schedules in place at the time and required the FDIC to update its analysis and projections for the DIF balance and DRR at least semiannually.

In the semiannual update for the

restoration plan in June 2022, the FDIC projected that the DRR was at risk of not reaching the statutory minimum of 1.35% by September 30, 2028, the statutory deadline to restore the DRR.

Based on this update, the FDIC Board approved an amended

restoration plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by two basis points, applicable to all insured depository institutions.

In October 2022, the FDIC Board finalized the

increase with an effective date of January 1, 2023, applicable to the first quarterly assessment period of 2023.

The revised assessment rate schedules are intended to increase the likelihood that the DRR reaches the statutory minimum level of 1.35%

by September 30, 2028.

Extraordinary growth in insured deposits during the first and second quarters of 2020 caused the DRR to decline below the statutory minimum of 1.35% as of June 30, 2020.

In September 2020, the FDIC Board of Directors (“FDIC Board”) adopted a

restoration plan to restore the DRR to at least 1.35% by 2028, absent extraordinary circumstances, as required by the FDIA.

The restoration plan maintained the assessment rate schedules in place at the time and required the FDIC to update its

analysis and projections for the DIF balance and DRR at least semiannually.

In the semiannual update for the restoration plan in June 2022, the FDIC projected that the DRR was at risk of not reaching the statutory minimum of 1.35% by September

30, 2028, the statutory deadline to restore the DRR.

Based on this update, the FDIC Board approved an amended restoration plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by two

basis points, applicable to all insured depository institutions.

In October 2022, the FDIC Board finalized the increase with an effective date of January 1, 2023, applicable to the first quarterly assessment period of 2023.

The revised assessment

rate schedules are intended to increase the likelihood that the DRR reaches the statutory minimum level of 1.35% by September 30, 2028.

In the FDIC’s most recent semiannual update for the amended restoration plan in November 2023, the

FDIC noted that increased loss provisions associated with the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023 that reduced the DIF balance, coupled with strong growth in insured deposits, resulted in the reserve

ratio declining 15 basis points from 1.25% as of December 31, 2022, to 1.10% as of June 30, 2023.

Despite the decline in the reserve ratio, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35%

ahead of the deadline of September 30, 2028.

As a result, the FDIC staff recommended no changes to the amended restoration plan and all scheduled assessment rates were maintained.

On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the

protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.

The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the

quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.

The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods,

beginning with the first quarter of 2024.

Because the Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, the Bank will not be subject to this special assessment.

Insurance of deposits may be terminated by the FDIC upon a finding that the insured institution has engaged in unsafe or unsound

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As of its most recent evaluation, the Bank was assigned an overall CRA rating of “Outstanding.”

On October 24, 2023, the federal banking agencies, including the Federal Reserve Board, issued a

final rule designed to strengthen and modernize the regulations implementing the CRA.

The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes

in the banking industry, including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations, and tailor CRA evaluations and data collection to bank size and type.

The applicability date for the

majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Ohio Valley cannot predict the impact the changes to the CRA will have on its operations at this time.

Customer Privacy Protections

The Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers to

nonaffiliated third parties.

The Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers

to nonaffiliated third parties.

These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated party.

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diligence policies, procedures and controls designed to detect and report suspicious activity.

The Company has established policies and procedures to comply with the requirements of the Patriot Act.

The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the Bank Secrecy Act of 1970 (the “BSA”), was enacted

in January 2021.

The AMLA is intended to be a comprehensive reform and modernization to U.S.

bank secrecy and anti-money laundering laws.

Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial

institutions;

requires the development of standards for evaluating technology and internal processes for BSA compliance;

expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA

violations and instituting BSA whistleblower initiatives and protections.

The Company has established policies and procedures to comply with the requirements of the Patriot Act and the AMLA.

Office of Foreign Assets Control Regulation

The United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade sanctions

against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others.

The United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade

sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others.

OFAC publishes lists of specially designated targets and countries.

Ohio Valley is responsible for, among

other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.

Failure to comply with these sanctions

could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even

if approval is not required.

Ohio Valley is responsible

for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.

Failure to comply with

these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such

transactions even if approval is not required.

Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

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One statement indicates that financial

institutions should design multiple layers of security controls to establish several lines of defense and to ensure that their risk management processes also address the risks posed by compromised customer credentials, including security measures to

reliably authenticate customers accessing Internet-based services of the financial institution.

to reliably authenticate customers accessing Internet-based services of the financial institution.

The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to

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it could be subject to various regulatory sanctions, including financial penalties.

In February 2018, the SEC published interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks

and incidents.

In February 2018, the SEC published interpretive guidance to assist public companies in preparing disclosures about cybersecurity

risks and incidents.

These SEC guidelines, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.

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into larger incidents.

This rule also requires bank service providers to notify their bank organization customers of a cybersecurity incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or

or more hours.

Furthermore, once final rules are adopted, the Cyber Incident Reporting for Critical Infrastructure Act, enacted in March 2022, will

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Separate reporting to CISA will also be required within 24 hours, if a ransom payment is made as a result of a ransomware attack.

On July 26, 2023, the SEC adopted final

rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in an

Annual Report on Form 10-K.

Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination.

See Item 1C “Cybersecurity” in Part I of this Annual Report on Form 10-K .

These SEC rules,

and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.

State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.

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customers are located.

In the ordinary course of business, Ohio Valley relies on electronic communications and information systems to conduct its operations

and to store sensitive data.

Ohio Valley employs an in-depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls.

Ohio Valley employs a variety of preventative and detective tools

to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.

Notwithstanding the strength of Ohio Valley’s defensive measures, the threat from cyber-attacks is severe, attacks

are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures.

While to date, Ohio Valley has not detected a significant compromise, significant data loss or any material financial losses related to

cybersecurity attacks, Ohio Valley’s systems and those of its customers and third-party service providers are under constant threat and it is possible that Ohio Valley could experience a significant event in the future.

Risks and exposures related to

cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based

products and services by us and our customers.

Executive and Incentive Compensation

Public companies will be required, once stock exchanges adopt additional listing requirements under the Dodd-Frank Act and rules adopted

by the SEC in October 2022, to adopt and implement “clawback” procedures policies for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous

financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.

This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately

preceding the date the issuer is required to prepare a restatement a three-year look-back window of the restatement and would cover all executives (including former executives) who received incentive awards.

Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in

October 2022, public companies are now required to adopt and implement “clawback” procedures policies for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on

the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.

This clawback policy is intended to apply to compensation paid within the three completed

fiscal years immediately preceding the date the issuer is required to prepare a restatement a three-year look-back window of the restatement and would cover all executives (including former executives) who received incentive awards.

adopted its clawback policy in September 2023, which is attached hereto as Exhibit 97 and is titled “Ohio Valley Banc Corp.

Policy for the Recovery of Erroneously Awarded Compensation.”

As of December 31, 2023, Ohio Valley and its subsidiaries had approximately 284 employees and officers and 270 full-time equivalent

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environmental control facilities in its current fiscal year or for the foreseeable future.

The Bank and Loan Central may be required to make capital expenditures related to properties which they may acquire through foreclosure

proceedings in the future.

The Bank and Loan Central may be required to make capital expenditures related to properties which they may acquire through

foreclosure proceedings in the future.

However, the amount of such capital expenditures, if any, is not currently determinable.

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY;

INTEREST RATES AND INTEREST

The average balance sheet information and the related analysis of net interest earnings for the years

ended December 31, 2022 and 2021 are incorporated herein by reference to the information appearing under the caption “Table I – Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of

Financial Condition and Results of Operations” located in Ohio Valley’s 2022 Annual Report to Shareholders.

INTEREST RATES AND INTEREST DIFFERENTIAL

The average balance sheet information and the related analysis of net interest earnings for the years ended December 31, 2023 and 2022 are incorporated herein by reference to

the information appearing under the caption “Table I – Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio

Valley’s 2023 Annual Report to Shareholders.

Tables setting forth the effect of volume and rate changes on interest income and expense for the years ended December 31, 2023 and 2022 are incorporated herein by

reference to the information appearing under the caption “Table II - Rate Volume Analysis of Changes in Interest Income & Expense,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in

Ohio Valley’s 2022 Annual Report to Shareholders.

in Ohio Valley’s 2023 Annual Report to Shareholders.

INVESTMENT PORTFOLIO

Information r equired

by this item is incorporated herein by reference to the information appearing under the caption “Table III - Securities,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s

2022 Annual Report to Shareholders

Information required by this item is incorporated herein by reference to the information appearing under the caption “Table III - Securities,” within “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2023 Annual Report to Shareholders

Excluding obligations of the United States Government and its agencies, no concentration of securities exists of any issuer that is greater than 10% of shareholders’

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LOAN PORTFOLIO

Maturities and Sensitivities of Loans to Changes in Interest Rates - Information required by this item is incorporated herein by reference to the information appearing

under the caption “Table IV - Maturity and Repricing Data of Loans,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2022 Annual Report to Shareholders.

Maturities and Sensitivities of Loans to Changes in Interest Rates - Information required by this item is incorporated herein by reference to the information appearing under the

caption “Table V - Maturity and Repricing Data of Loans,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2023 Annual Report to Shareholders.

ALLOWANCE FOR CREDIT LOSSES

Discussion of factors that influenced management in determining the amount of additions charged to provision expense is incorporated herein by reference to the

information appearing under the captions “Provision Expense” and “Allowance for Loan Losses” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2022 Annual Report to

Shareholders.

Allocation of the Allowance for Loan Losses - Information required by this item is incorporated herein by reference to

the information appearing under the caption “Table V - Allocation of the Allowance for Loan Losses,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2022 Annual Report to

Discussion of factors that influenced management in determining the amount of additions charged to provision expense is incorporated herein by reference to the information

appearing under the captions “Provision Expense” and “Allowance for Credit Losses” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2023 Annual Report to Shareholders.

Allocation of the Allowance for Loan Losses - Information required by this item is incorporated herein by reference

to the information appearing under the caption “Table VI - Allocation of the Allowance for Loan Losses,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2023 Annual Report to

Shareholders.

Credit ratios – Information required by this item is incorporated herein by reference to the information appearing under the caption

“Table VI – Credit Ratios,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2022 Annual Report to Shareholders.

“Table VII – Credit Ratios,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2023 Annual Report to Shareholders.

Deposit Summary - Information required by this item is incorporated herein by reference to the information appearing under the caption “Table I - Consolidated Average

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

What changed 10-K

Item 1. Business