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Item 1A. Risk Factors

2024-03-15 compared with 2023-03-23 · 208 added, 206 removed, 238 unchanged (63% of the section changed)

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Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this report and other publicly available documents incorporated herein by reference

constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and as defined in the Private Securities Litigation Reform Act of 1995.

Such statements are often,

but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar expressions.

Certain statements contained in this report and other publicly available documents incorporated herein by

reference constitute “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and as defined in the Private Securities Litigation Reform Act of 1995.

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 current economic and geopolitical landscape, and which could cause actual

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

are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar expressions.

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 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;

defaults and prepayment on loans made by the Company;

the effects of fluctuating 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;

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

unanticipated litigation, claims, or assessments;

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information, unanticipated future events or otherwise.

All subsequent written and oral forward-looking statements attributable to Ohio Valley or any person acting on our behalf are qualified in their entirety by the following cautionary statements.

All subsequent written and oral forward-looking statements attributable to Ohio Valley or any person acting on our behalf are qualified in their entirety by the following cautionary

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.

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

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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.

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.

political developments, such as the military conflicts in Ukraine and the Middle East, have resulted in substantial changes in economic and political conditions for the United States and the remainder of the world.

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.

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.

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 adversely.

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

the current economic and geopolitical landscape .

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.

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.

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.

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

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

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,

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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.

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.

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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

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

June 30, 2023.

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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.

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.

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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.

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.

During 2023, the Company’s limited number of loans, derivative contracts, borrowings and other financial instruments transitioned

from LIBOR to using a SOFR rate.

The change to SOFR did not have any 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.

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,

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“systemic risk” may adversely affect our business.

Recent bank failures have created significant market volatility, regulatory uncertainty, and decreased confidence in the U.S.

banking system.

The recent failures of several high-profile banking institutions in 2023 have caused significant market volatility,

regulatory uncertainty, and decreased confidence in the U.S.

banking system.

These bank failures occurred during a period of rapidly rising interest rates, which among other things, has resulted in unrealized losses in longer duration securities

and more competition for bank deposits, and may increase the risk of a potential economic recession in the United States.

Given the current environment, we may experience more deposit volatility as customers react to adverse events or market

speculation involving financial institutions.

In response to the bank failures, the United States government may adopt a variety of measures and new regulations

designed to strengthen capital levels, liquidity standards, and risk management practices and otherwise restore confidence in financial institutions.

Any reforms, if adopted, could have a significant impact on banks and bank holding companies,

including us.

We may also be subject to any special assessment that the FDIC adopts to recover the loss to the DIF, and such assessment, if significant, could have an adverse effect on our business, financial condition, and results of operations.

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 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

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.

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.

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.

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

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

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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.

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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.

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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opportunities, the competitive responses from other financial institutions in our market areas, our ability to raise sufficient capital and our ability to manage our growth.

While we believe we have the management resources and internal systems in

place to successfully manage our future growth, there can be no assurance growth opportunities will be available or growth will be successfully managed.

While we believe we have the management resources and internal systems

in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or growth will be successfully managed.

We may acquire other financial institutions or parts of institutions in the future and may open new branches.

also may consider and enter into new lines of business or offer new products or services.

We also may consider and enter into new lines of business or offer new products or services.

Expansions of our business involve a number of expenses and risks, including:

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the possible failure of the introduction of new products and services into our existing business;

the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on

our results of operations;

the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects

on our results of operations;

the risk of loss of key employees and customers.

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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.

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.

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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We are subject to periodic reviews from state and federal regulators, which may impact our operations and our financial condition.

part of the regulatory review, the loan portfolio and the allowance for loan losses are evaluated.

As a result, the incurred loss identified on loans or the assigned loan rating could change and may require us to increase our provision for loan

losses or loan charge-offs.

As part of the regulatory review, the loan portfolio and the allowance for loan losses are evaluated.

As a result, the incurred loss identified on loans, or the assigned loan rating could change and may require us to increase our provision for

loan losses or loan charge-offs.

In addition, any downgrade in loan ratings could impact our level of impaired loans or classified assets.

Any increase in our provision for loan losses or loan charge-offs as required by these regulatory authorities

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

Any increase in our provision for loan losses or loan charge-offs as required by these regulatory

authorities 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.

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

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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

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

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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.

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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representations and warranties as well as borrower fraud, we cannot give assurance that no breach or fraud will ever occur.

Required repurchases, substitutions or indemnifications could have an adverse effect on our liquidity, results of operations

and financial condition.

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

Required repurchases, substitutions or indemnifications could have an adverse effect on our liquidity, results of

operations and financial condition.

If our actual loan losses exceed our allowance for credit 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

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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 losses.

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

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

Our allowance for credit 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 credit 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 credit 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.

We cannot assure you that we will not further

increase the allowance for credit 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.

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

and third-party service providers.

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

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

us and third-party service providers.

Our dependence upon automated systems to record and process the Bank’s transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those systems, or attacks by third

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have experienced denial of service attacks in which individuals or organizations flood the bank’s website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.

also be adversely affected if one of our employees or a third-party service provider causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates

our operations or systems.

could also be adversely affected if one of our employees or a third-party service provider causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently

manipulates our operations or systems.

We are further exposed to the risk that third-party service providers may be unable to fulfill their contractual obligations or will be affected by the same risks as the Bank has.

These disruptions may interfere with

service to the Bank’s customers, cause additional regulatory scrutiny and result in a financial loss or liability.

We are also at risk of the impact of natural disasters, terrorism and international hostilities on our systems or for the effects of

outages or other failures involving power or communications systems operated by others.

These disruptions may

interfere with service to the Bank’s customers, cause additional regulatory scrutiny and result in a financial loss or liability.

We are also at risk of the impact of natural disasters, terrorism, and international hostilities on our systems or

for the effects of outages or other failures involving power or communications systems operated by others.

Employees could engage in fraudulent, improper, or unauthorized activities on behalf of clients or improper use of confidential

We may not be able to prevent employee errors or misconduct, and the precautions we take to detect this type of activity might not be effective in all cases.

Employee errors or misconduct could subject us to civil claims for negligence

or regulatory enforcement actions, including fines and restrictions on our business.

In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as

customers to initiate wire and automated clearinghouse transactions out of customer accounts.

Employee errors or misconduct could subject us to civil claims for

negligence or regulatory enforcement actions, including fines and restrictions on our business.

In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose

as customers to initiate wire and automated clearinghouse transactions out of customer accounts.

Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will

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Certain cyber security risks arise due to this access, including cyber espionage, blackmail, ransom, and theft.

As cyber and other data security threats continue to evolve, we

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.

As cyber and other data security threats continue to evolve,

we 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 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.

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

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

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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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maintenance costs, may adversely affect the income from the real estate.

Therefore, the cost of operating a real property may exceed the rental income earned from such property, and we may have to advance funds in order to protect our investment,

or we may be required to dispose of the real property at a loss.

We may also acquire properties with hazardious substances that must be removed or remediated, the costs of which could be substantial, and we may not be able to recover such costs

from the responsible parties.

Therefore, the cost of operating a real property may exceed the rental income earned from such property, and we may have to advance funds in order to protect our

investment, or we may be required to dispose of the real property at a loss.

We may also acquire properties with hazardous substances that must be removed or remediated, the costs of which could be substantial, and we may not be able to recover

such costs from the responsible parties.

The foregoing expenditures and costs could adversely affect our ability to generate revenues, resulting in reduced levels of profitability.

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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

Liquidity risk could impair our ability to fund operations and have an adverse impact on our earnings and financial condition.

Our primary funding and liquidity source to support our business strategies is a stable customer deposit base.

Deposit levels may

be affected by a number of factors, including interest rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, banking industry conditions that can impact customers perceptions of the

safety and soundness of the banking industry generally or of specific financial institutions, and general economic conditions.

If our deposit levels fall, we could lose a relatively low-cost source of funding and our interest expense would likely

increase as we obtain alternative funding to replace lost deposits.

If local customer deposits are not sufficient to fund our normal operations and growth, we will look to outside sources, such as lines of credit with both the Federal Home Loan

Bank of Cincinnati (“FHLB”) and FRB, brokered CDs, a federal funds line with a correspondent bank, and available funds from select deposit placement services.

Although the Bank has historically been able to replace maturing deposits and advances,

no assurance can be given that the Bank would be able to replace such funds in the future if our financial condition were to change.

If we are required to rely more heavily on more expensive funding sources to support asset growth, our revenues

may not increase proportionately to cover our costs, which would have a negative impact to profitability and the net interest margin.

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.

As a result of market interest rates increasing during 2022 and 2023, 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.

The majority of the Bank’s securities portfolio is classified as AFS and therefore could be sold for

liquidity, investment management or similar reasons even if there is not an intention of such a sale.

Unrealized losses on the AFS debt securities portfolio amounted to $14,661 and $18,751 at December 31, 2023 and 2022, respectively.

not currently intend to sell these securities, if it was required to sell such securities to meet liquidity needs, we may incur losses, which could impair our capital, financial condition, and results of operations and, in the event that our

other funding sources are insufficient, could require us to raise additional capital.

While we have taken actions to maximize our funding sources, there is no guarantee that such actions will be successful or sufficient in the event of sudden

liquidity needs.

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.

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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

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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.

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.

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 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.

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 .

The Company adopted

the new accounting standard effective January 1, 2023, and recorded a net charge to retained earnings of $2,209,000 for the cumulative effect.

Upon adoption, the Company increased the allowance for credit losses by $2,162,000.

In addition, a

reserve for unfunded commitments and held to maturity securities was established totaling $631,000 and $3,000, respectively.

The Company elected to utilize the three-year phase in option of the day-one impact of this standard to regulatory capital .

If the methodologies and assumptions used in our CECL model prove to be incorrect, inadequate or we fail to properly transition internal processes

or systems, the allowance for credit losses may be insufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on Ohio Valley’s financial condition and results of

Additionally, the time horizon over which we are required to estimate future credit losses has expanded under CECL, which could result in increased volatility in future allowances for credit losses.

If weak or deteriorating economic

conditions are forecasted, our expectations for credit losses may be altered under CECL, with the potential to negatively affect our financial condition.

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

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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.

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.

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.

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.

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.

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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, wire 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;

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

Not applicable.

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.

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 1A. Risk Factors