0001140361-26-009342
SEC filingOhio Valley Banc Corp. reported strong financial performance for fiscal year 2025, with net income increasing 41.8% to $15.6 million compared to $11.0 million in 2024. Earnings per share rose 42.7% to $3.31. The company's net interest income grew 18.3% to $57.7 million, driven by a 7.7% increase in average earning assets and a 36 basis point improvement in net interest margin to 4.07%. Total loans increased 12.6% to $1.196 billion, led by commercial real estate loans which grew 26.0% to $470.0 million. Noninterest income decreased 31.9% to $9.0 million primarily due to a $3.7 million loss on sale of securities, while noninterest expense decreased 4.2% to $44.2 million. The company's efficiency ratio improved from 73.79% to 65.74%.
Ohio Valley Banc Corp. delivered strong financial results for fiscal year 2025, with net income increasing 41.8% to $15.6 million from $11.0 million in 2024. Earnings per share rose 42.7% to $3.31. The company's net interest income grew 18.3% to $57.7 million, driven by a 7.7% increase in average earning assets and a 36 basis point improvement in net interest margin to 4.07%. Total loans increased 12.6% to $1.196 billion, with commercial real estate loans showing the strongest growth at 26.0% to $470.0 million. Noninterest income decreased 31.9% to $9.0 million primarily due to a $3.7 million loss on sale of securities, while noninterest expense decreased 4.2% to $44.2 million. The company's efficiency ratio improved significantly from 73.79% to 65.74%.
The company's revenue growth was primarily driven by net interest income, which increased $8.9 million or 18.3% to $57.7 million. This growth resulted from a $102.7 million increase in average earning assets, with higher relative balances maintained in loans rather than lower-yielding interest-bearing deposits with banks or securities. Loan growth was led by commercial real estate loans (up 26.0%), residential real estate loans (up 11.9%), and commercial and industrial loans (up 5.5%). The company sold $36.9 million in securities yielding 1.35% and replaced them with securities yielding 4.52%, which contributed to a $3.7 million loss on sale but is expected to increase future interest income. Noninterest income decreased $4.2 million to $9.0 million, with interchange income on debit and credit cards increasing $196,000 due to higher transaction volume.
The company's net interest margin improved 36 basis points to 4.07% in 2025, driven by a 25 basis point increase in earning asset yield and a 20 basis point decrease in funding costs. The yield on earning assets increased due to growth in higher-yielding loans and securities, along with recognition of $1.6 million in market discounts on purchased loans. Funding costs decreased as higher-costing certificates of deposit repriced to lower market rates and the composition shifted to lower-cost deposit sources such as NOW, money market, and savings accounts. The provision for credit losses increased 23.7% to $3.1 million, primarily due to loan growth and increased modeled loss rates from regression in GDP and unemployment projections. The effective tax rate increased to 19.8% from 17.8% due to higher relative taxable income.
Cash and cash equivalents decreased $37.2 million to $45.9 million at December 31, 2025, primarily due to lower interest-bearing deposits with correspondent banks. Net cash provided by operating activities was $18.1 million, while net cash used in investing activities was $110.6 million, primarily for purchases of securities available for sale ($143.3 million) and net change in loans ($133.7 million). Net cash provided by financing activities was $55.3 million, driven by a $54.5 million change in deposits. Total deposits increased 4.3% to $1.33 billion, with time deposits growing 24.3% and savings and money market deposits increasing 7.5%. Total shareholders' equity increased 13.3% to $170.3 million, driven by net income of $15.6 million less dividends paid of $4.3 million, plus an $8.6 million after-tax increase in net unrealized gains on available-for-sale securities.
The company's primary focus remains on generating loan growth, particularly in commercial lending which provides the highest returns. Management will continue to monitor the pace of loan volume while maintaining sound underwriting practices with a focus on asset quality. The company expects to continue experiencing increased competition for deposits in its market areas, which could challenge net growth. Management will emphasize growth and retention within core deposit relationships to reduce reliance on higher-cost funding and improve net interest income. The company maintains multiple sources of funding to enhance liquidity, including borrowing lines with the Federal Home Loan Bank and Federal Reserve Bank, with available capacity of $156.3 million and $41.9 million respectively at year-end 2025. Asset quality will remain a key focus as management stresses quality in loan underwriting alongside loan growth.