GALLIPOLIS, Ohio, April 15 /PRNewswire-FirstCall/ -- Ohio Valley Banc Corp. (the "Company") reported consolidated net income for the quarter ended March 31, 2009, of $2,051,000, representing an increase of 4.4 percent over the same period the prior year. Earnings per share for the first quarter of 2009 were $.51, up 6.3 percent from the $.48 earned the first quarter of 2008. Return on average assets and return on average equity both increased to 1.02 percent and 13.13 percent, respectively, for the first quarter of 2009, versus 1.00 percent and 13.10 percent, respectively, for the same period the prior year. The increase in earnings was primarily the result of increased revenues from both net interest income and noninterest income.
For the first quarter of 2009, net interest income increased $605,000, or 7.9 percent, from the same period last year. The increase was attributable to a higher net interest margin. Throughout 2008, the net interest margin increased due to the balance sheet being positioned to benefit from the declining interest rate environment, which produced a greater decrease in the cost of funds than the yield on earning assets. As a result, the net interest margin for the three months ended March 31, 2009 was 4.42 percent, compared to 4.21 percent for the same period the prior year.
Supplementing the increase in revenue from net interest income was the increase in noninterest income. For the first quarter of 2009, noninterest income totaled $2,063,000, an increase of $479,000, or 30.2 percent, from the first quarter of 2008. Contributing to the increase was processing fee income earned from facilitating the clearing of tax refunds for a tax software provider. With continued growth in transaction volume, the associated fee income increased $239,000 from the 2008 first quarter. In addition, gain on sale of loans for the first quarter of 2009 increased $213,000 over the prior year first quarter. With historical low mortgage rates, the Company has experienced a significant increase in secondary market loan originations.
Noninterest expense totaled $6,598,000 for the first quarter of 2009, an increase of $846,000, or 14.7 percent, from the same period last year. Contributing to the increase was higher FDIC insurance premiums due to an increase in assessment rates on the banking industry. For the first quarter of 2009, FDIC insurance premiums increased $268,000 from the same time period last year. With yet higher assessment rates starting in the second quarter and a proposed one-time special assessment at June 30, 2009, the cost of insuring deposits will continue to increase and will be significantly above 2008's expense. The Company's largest noninterest expense, salaries and employee benefits contributed $271,000 to the increase. The total of all remaining noninterest expense categories increased $307,000 from the prior year first quarter, led by communication and equipment expense.
For the three months ended March 31, 2009, management provided $848,000 to the allowance for loan losses, an increase of $147,000 from the same period the prior year. Although the ratio of nonperforming loans to total loans at March 31, 2009 of .95 percent was down from the 1.40 percent at March 31, 2008, the ratio was up from the .84 percent at December 31, 2008. For the three months ended March 31, 2009, net charge-offs were up $404,000 from the same three-month period in 2008, primarily due to the partial charge-off of a large real estate loan. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at March 31, 2009 was adequate and reflects probable incurred losses in the portfolio. The allowance for loan losses was 1.22 percent of total loans at March 31, 2009, compared to 1.24 percent at December 31, 2008 and 1.09 percent at March 31, 2008.
"I am extremely proud of all of the employees of Ohio Valley Banc Corp.," stated Jeffrey E. Smith, President and CEO. "These employees continue to work every day in this challenging economic environment to do their part to minimize the effects of higher FDIC insurance premiums, manage asset quality, and, at the same time, provide the customer service our thousands of customers deserve. Their efforts for the first calendar quarter of 2009 compared to the same period in 2008 have generated increases in both earnings and earnings per share and improved returns on assets and equity, while maintaining a ratio of nonperforming loans to total loans of less than 1.00 percent. This performance represents a successful start to the fiscal year."
Ohio Valley Banc Corp. common stock is traded on the NASDAQ Global Market under the symbol OVBC. The holding company owns three subsidiaries: Ohio Valley Bank, with 16 offices in Ohio and West Virginia; Loan Central, with six consumer finance offices in Ohio, and Ohio Valley Financial Services, an insurance agency based in Jackson, Ohio. Learn more about Ohio Valley Banc Corp. at http://www.ovbc.com/.
Forward-Looking Information
Certain statements contained in this earnings release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements. Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including: (i) changes in political, economic or other factors such as inflation rates, recessionary or expansive trends, and taxes; (ii) competitive pressures; (iii) fluctuations in interest rates; (iv) the level of defaults and prepayment on loans made by the Company; (v) unanticipated litigation, claims, or assessments; (vi) fluctuations in the cost of obtaining funds to make loans; and (vii) regulatory changes. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. See Item 1.A. "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, for further discussion of the risks affecting the business of the Company and the value of an investment in its shares.
OHIO VALLEY BANC CORP - Financial Highlights (Unaudited) Three months ended March 31, 2009 2008 ---- ---- PER SHARE DATA Earnings per share $0.51 $0.48 Dividends per share $0.20 $0.19 Book value per share $16.21 $15.30 Dividend payout ratio (a) 38.83% 39.38% Weighted average shares outstanding 3,983,009 4,060,585 PERFORMANCE RATIOS Return on average equity 13.13% 13.10% Return on average assets 1.02% 1.00% Net interest margin (b) 4.42% 4.21% Efficiency ratio (c) 63.17% 61.38% Average earning assets (in 000's) $769,169 $743,909 (a) Total dividends paid as a percentage of net income. (b) Fully tax-equivalent net interest income as a percentage of average earning assets. (c) Noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income. OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited) Three months ended (in $000's) March 31, 2009 2008 ---- ---- Interest income: Interest and fees on loans $11,659 $12,642 Interest and dividends on securities 952 1,092 Total interest income 12,611 13,734 Interest expense: Deposits 3,449 4,886 Borrowings 882 1,173 Total interest expense 4,331 6,059 Net interest income 8,280 7,675 Provision for loan losses 848 701 Noninterest income: Service charges on deposit accounts 625 710 Trust fees 55 61 Income from bank owned insurance 200 175 Gain on sale of loans 258 45 Loss on sale of other real estate owned ---- (41) Other 925 634 Total noninterest income 2,063 1,584 Noninterest expense: Salaries and employee benefits 3,700 3,429 Occupancy 403 386 Furniture and equipment 285 235 Data processing 227 265 FDIC insurance 285 17 Other 1,698 1,420 Total noninterest expense 6,598 5,752 Income before income taxes 2,897 2,806 Income taxes 846 841 NET INCOME $2,051 $1,965 OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited) (in $000's, except share and per share data) March 31, December 31, 2009 2008 ---- ---- ASSETS Cash and noninterest-bearing deposits with banks $8,321 $16,650 Federal funds sold ---- 1,031 Total cash and cash equivalents 8,321 17,681 Interest-bearing deposits in other financial institutions 42,817 611 Securities available-for-sale 80,344 75,340 Securities held-to-maturity (estimated fair value: 2009 - $16,315; 2008 - $17,241) 16,025 16,986 Federal Home Loan Bank stock 6,281 6,281 Total loans 633,566 630,391 Less: Allowance for loan losses (7,704) (7,799) Net loans 625,862 622,592 Premises and equipment, net 10,548 10,232 Accrued income receivable 3,005 3,172 Goodwill 1,267 1,267 Bank owned life insurance 18,311 18,153 Other assets 9,183 8,793 Total assets $821,964 $781,108 LIABILITIES Noninterest-bearing deposits $96,934 $85,506 Interest-bearing deposits 557,247 506,855 Total deposits 654,181 592,361 Securities sold under agreements to repurchase 27,292 24,070 Other borrowed funds 51,148 76,774 Subordinated debentures 13,500 13,500 Accrued liabilities 11,261 11,347 Total liabilities 757,382 718,052 SHAREHOLDERS' EQUITY Common stock ($1.00 par value per share, 10,000,000 shares authorized; 2009 and 2008 - 4,642,748 shares issued) 4,643 4,643 Additional paid-in capital 32,683 32,683 Retained earnings 42,007 40,752 Accumulated other comprehensive income 961 690 Treasury stock, at cost (2009 and 2008 - 659,739 shares) (15,712) (15,712) Total shareholders' equity 64,582 63,056 Total liabilities and shareholders' equity $821,964 $781,108 Contact: Scott Shockey, CFO (740) 446-2631
Ohio Valley Banc Corp.
CONTACT: Scott Shockey, CFO, +1-740-446-2631
Web Site: http://www.ovbc.com/
