What changed in this filing

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Item 1. Business

2025-03-14 compared with 2024-03-15 · 67 added, 95 removed, 559 unchanged (22% of the section changed)

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

financial service operations are considered by management to be aggregated in one reportable segment:

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”).

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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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.

adversely affect the taxation of small captives.

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 2023 Annual Report to Shareholders.

Business of Bank Subsidiary

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the making and

servicing of personal, commercial, floor plan and student loans;

servicing of personal and commercial loans;

and the making of construction and real estate loans.

The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and

As part of its lending function, the Bank offers credit card services.

The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.

its lending function, the Bank offers credit card services.

The Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”).

The Bank is also a member of the Promontory

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.

The Bank is also a member of the Promontory 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.

The Bank began offering trust services in 1981.

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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.

However, new Ohio laws that became effective in April

2019 placed numerous restrictions on short-term and small loans extended by certain non-bank lenders in Ohio.

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.

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.

After Loan Central prepares a customer’s tax return, the customer is offered the opportunity to have immediate access to a portion of the anticipated tax refund by entering into a TAL with the

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.

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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.

Race Day was created to help fill the demand for home ownership in areas beyond the Bank’s primary markets.

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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credit risk history.

Loan Central’s line of business also includes seasonal tax preparation services as part of the TAL lending activity previously discussed.

Loan Central’s line of business also includes seasonal tax preparation services as part of the TAL lending activity discussed above.

Loan Central presently has six offices, all located within southeastern Ohio.

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The Company’s loan portfolio increased $89,925,000 to finish at $1,061,825,000 in 2024.

The increase in total loans came primarily from

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.

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.

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.

The increase in total loans came primarily

from both the Company’s residential real estate and commercial loan portfolios.

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.

During 2024, residential real estate loans increased $54,030,000, or 16.9%, while commercial loans increased $51,235,000, or 10.7%, partially offset by a $15,340,000, or 8.9%, decrease in consumer loans, as compared to

Residential real estate loan growth was largely impacted by higher short-term adjustable-rate mortgage loan balances.

Commercial loan growth was impacted primarily by an increase in new commercial real estate loan originations during 2024.

The decline in consumer loans was largely impacted by decreases in automobile and other consumer loan balances during 2024.

Consolidated interest and fee revenue from loans accounted for 73.02% and 73.59% of total consolidated revenues in 2024 and

2023, respectively.

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

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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The Bank, in turn, would receive a fee paid by the provider for each transaction that was processed by the Bank.

In 2015, the agreement between the Bank and the original provider, which had a term ending at December

In 2015, the agreement between the Bank and the original provider, which had a term ending December 31,

2019, was assumed by MetaBank.

MetaBank ceased utilizing the services of the Bank at the end of 2018.

Due to the absence of tax processing activity, the Bank experienced a significant decline in ERC/ERD fee income in 2019 and 2020.

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.

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.

MetaBank ceased utilizing the services of the Bank at the end of 2018, resulting in a significant decline in ERC/ERD fee income in 2019 and 2020 for the Bank.

On March 10, 2020, the Bank announced that it had entered

into a new agreement with a third-party to process future ERCs and ERDs.

The new agreement provides that the Bank will process refunds for five tax seasons, which began with the 2021 tax season and will extend through the 2025 tax season.

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

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permissible for a bank holding company, if:

(i) the holding company is “well managed” and “well capitalized” and (ii) each of its subsidiary banks (a) is well capitalized under the Federal Deposit Insurance Corporation Act of 1991 (“FDIA”) prompt

corrective action provisions, (b) is well managed, and (c) has at least a “satisfactory” rating under the Community Reinvestment Act of 1977, as amended (“CRA”).

No regulatory approval is required for a financial holding company to acquire a

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.

(i) the holding company is "well managed" and "well capitalized" and (ii) each of its subsidiary banks (a) is well capitalized under the Federal Deposit Insurance Corporation Improvement Act of 1991

prompt corrective action provisions, (b) is well managed, and (c) has at least a "satisfactory" rating under the Community Reinvestment Act of 1977, as amended (“CRA”).

No regulatory approval is required for a financial holding company to acquire

a 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

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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.

Financial Services is supervised and regulated by the 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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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.

The Bank’s deposits are insured up to applicable limits by the FDIC, and the Bank is subject to the applicable provisions of the FDIA

and certain regulations of the FDIC.

The Bank’s deposits are insured up to applicable limits by the FDIC, and the Bank is subject to the applicable provisions of the

Federal Deposit Insurance Act (“FDIA”) and certain regulations of the FDIC.

Various requirements and restrictions under the laws of the United States, the State of Ohio and the State of West Virginia affect the

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Equal Credit Opportunity Act:

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

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

Truth in Lending Act:

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and (iv) establish related definitions, reporting, and recordkeeping requirements.

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

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 .

compliance date of the Small Dollar Rule is March 30, 2025.

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

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Dividend restrictions are also listed within the provisions of Ohio Valley’s trust preferred security arrangements.

provisions of these agreements, the interest payable on the trust preferred securities is deferral for up to five years and any such deferral would not be considered a default.

provisions of these agreements, the interest payable on the trust preferred securities is deferred for up to five years and any such deferral would not be considered a default.

During any period of deferral, Ohio Valley would be precluded from

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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.

In the FDIC’s most recent semiannual update for the amended restoration plan in October 2024, the FDIC

noted the reserve ratio increased 6 basis points from 1.15% as of December 31, 2023, to 1.21% as of June 30, 2024.

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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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.

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

Policy for the Recovery of Erroneously Awarded Compensation.”

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Other Information

Management anticipates no material effect upon the capital expenditures, earnings and competitive position of the Company by reason of

any laws regulating or protecting the environment.

Ohio Valley believes that the nature of the operations of its subsidiaries has little, if any, environmental impact.

Ohio Valley, therefore, anticipates no material capital expenditures for

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

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

Neither Ohio Valley nor its subsidiaries have any material patents, trademarks, licenses, franchises or concessions.

amounts have been spent on research activities, and no employees are engaged full-time in research activities.

Financial Information About Foreign and Domestic Operations and Export Sales

Ohio Valley’s subsidiaries do not have any offices located in a foreign country, and they have no foreign assets, liabilities, or

related income and expense.

Statistical Disclosure

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY;

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.

INTEREST RATES AND INTEREST

The average balance sheet information and the related analysis of net interest earnings for the years ended December 31, 2024 and 2023 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 2024 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, 2024 and 2023 are incorporated herein by

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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 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.

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 2024 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 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

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 2024 Annual Report to

Shareholders.

Allocation of the Allowance for Credit 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 Credit Losses,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2024

Annual Report to Shareholders.

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

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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