Ohio Valley Banc Corp Continues Earnings Growth GALLIPOLIS, Ohio,
July 15 /PRNewswire-FirstCall/ -- Ohio Valley Banc Corp
(NASDAQ:OVBC) reported consolidated net income for the quarter
ended June 30, 2004, of $3,252,000, or $.94 per share, compared to
net income of $1,573,000, or $.45 a share, a year ago. For the six
months ended June 30, 2004, consolidated net income was $4,817,000,
or $1.39 per share, compared to $3,032,000, or $.87 per share, a
year ago. Earnings in the second quarter of 2004 include the impact
of the previously disclosed sale of OVBC's ownership in ProCentury
Corp. (NASDAQ:PROS), a Columbus-based property and casualty
insurer. The transaction resulted in an after-tax gain of
$1,625,000 or $.47 per share. Operating earnings, earnings not
including the gain on the sale of the ProCentury investment, for
the quarter ended June 30, 2004, were $1,627,000 representing an
increase of 3.4 percent over the prior year. Operating earnings per
share for the second quarter of 2004 were $.47, up 4.4 percent from
the $.45 earned the second quarter of 2003. For the six months
ended June 30, 2004, operating earnings were $3,192,000, up 5.3
percent compared to $3,032,000 a year ago. Operating earnings per
share were $.92 for the first six months of 2004 versus $.87 last
year, an increase of 5.7 percent. On an operating basis, return on
average assets and return on average equity were .90 percent and
11.76 percent for the first six months of 2004, versus .89 percent
and 11.95 percent for the prior year. The increase in operating
earnings reflects the benefit of OVBC's continuing improvement in
asset quality. For the six months ended June 30, 2004, provision
for loan losses decreased $1,491,000 from the same time period the
prior year. The decrease in provision for loan losses was
attributable to both a decline in nonperforming loans and net
charge-offs in both the commercial and consumer lending portfolios.
The Company's ratio of nonperforming loans to total loans stood at
.42 percent at June 30, 2004, as compared to 1.08 percent at June
30, 2003. The ratio of nonperforming assets to total assets
decreased to .61 percent at June 30, 2004 from 1.36% at June 30,
2003. The Company's net charge-offs for the first six months of
2004 were down $764,000 from the same time period the prior year.
With improving credit quality, management feels that the allowance
for loan losses is adequate to absorb probable losses in the
portfolio. The allowance for loan losses was 1.21 percent of total
loans at June 30, 2004, as compared to 1.32 percent at June 30,
2003. For the six months ended June 30, 2004, net interest income
decreased $228,000 or 1.6 percent from last year. For the second
quarter of 2004, net interest income decreased $235,000 or 3.4
percent from the prior year second quarter. The net interest margin
for the six months ending June 30, 2004 was 4.12 percent compared
to 4.36 percent for the same time period the prior year reflecting
the extended low interest rate environment and the Company's desire
to shift from higher-yielding fixed rate assets to variable rate
assets. The Company's average earning assets for the first six
months of 2004 increased $22,941,000 or 3.5 percent from the same
time period last year. Noninterest income totaled $5,111,000 for
the six months ended June 30, 2004, as compared to $2,974,000 for
the same time period last year. For the three months ended June 30,
2004, noninterest income totaled $3,805,000 compared to $1,528,000
for 2003's second quarter. Included in the increase in noninterest
income was the pre-tax gain of $2,463,000 on the aforementioned
sale of ProCentury. Gain on sale of loans for the first six months
of 2004 was down $342,000 from the same time period last year
caused by a decline in the sales of secondary market real estate
loans due to lower mortgage refinance volume and a shift to
variable rate mortgage originations. Offsetting a portion of this
decline was an increase in service charges on deposit accounts of
$98,000 or 6.5 percent. On a year-to-date basis, noninterest
expense totaled $10,534,000 in 2004, an increase of $571,000 or 5.7
percent compared to $9,963,000 the previous year. On a
quarter-to-date basis, noninterest expense increased $307,000 or
6.1 percent from the second quarter in 2003. Salaries and employee
benefits grew $438,000 or 7.7 percent for the first six months of
2004, as compared to the same time period in 2003. The increase was
related to annual merit increases and rising benefit costs. With
the renovation of the Milton office and upgrade in personal
computers within various departments, furniture and equipment
expense was up $124,000 on a year-to-date basis. The remaining
noninterest expense categories were up $9,000 collectively from
2003. Total assets increased $9,852,000 from year-end 2003 to reach
$717,179,000 at June 30, 2004. Driving asset growth for 2004 was
loan growth of $17,118,000 which equals an annual growth rate of
6.0 percent as compared to the 2.5 percent growth rate for all of
2003. Loan growth came equally from all segments of the portfolio.
Total deposits grew $32,149,000 from year-end 2003 to fund loan
growth and to reduce borrowed funds, which are down $23,191,000.
The growth in deposits was primarily in certificates of deposit
originated from local and national markets. "We are pleased with
the work of our employees in delivering another quarter of earnings
growth," stated Jeffrey E. Smith, President and CEO. "The decline
in nonperforming loans and the associated decrease in provision for
loan losses represent a significant achievement. Our focus on asset
quality led to additional earnings and a stronger balance sheet for
the Company. In addition, the gain on the sale of our ProCentury
investment has generated an after-tax benefit of $1.6 million which
will be invested in the renovation and/or relocation of facilities
in existing markets as well as expansion in new markets. Thanks to
the hard work and dedication of the employees of OVBC for making
these financial results possible." Ohio Valley Banc Corp common
stock is traded on the NASDAQ Stock Market under the symbol OVBC.
The holding company owns three subsidiaries: Ohio Valley Bank, with
17 offices in Ohio and West Virginia; Loan Central, with five
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/ . Non-GAAP
Financial Measures In addition to results presented in accordance
with generally accepted accounting principles in the United States
of America (GAAP), this press release contains certain non-GAAP
financial measures. OVBC believes that providing certain non-GAAP
financial measures provides investors with information useful in
understanding OVBC's financial performance. OVBC provides measures
based on "operating earnings," which exclude significant
non-recurring gains, losses or expenses that are not reflective of
continuing operations. A reconciliation of these non-GAAP measures
to the most comparable GAAP equivalent is included in the attached
financial tables. 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 Ohio Valley 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. OHIO VALLEY BANC CORP - Non-GAAP
Disclosure Reconciliation Operating earnings are net income
adjusted to exclude the results of certain significant transactions
not representative of continuing operations. The following
reconciles GAAP net income and earnings per share to operating
earnings and operating earnings per share for the quarter and six
months ended June 30, 2004 and 2003. Three months ended Six months
ended (in $000's, except per share data) June 30, June 30, 2004
2003 2004 2003 Net income $3,252 $1,573 $4,817 $3,032 Gain on sale
of investment (2,463) (2,463) Tax effect 838 838 After-tax
non-operating items (1,625) (1,625) Operating earnings $1,627
$1,573 $3,192 $3,032 Earnings per share $0.94 $0.45 $1.39 $0.87
Gain on sale of investment (0.71) (0.71) Tax effect 0.24 0.24
After-tax non-operating items (0.47) (0.47) Operating earnings per
share $0.47 $0.45 $0.92 $0.87 OHIO VALLEY BANC CORP - Financial
Highlights (Unaudited) Three months ended Six months ended June 30,
June 30, 2004 2003 2004 2003 PER SHARE DATA Operating earnings per
share $0.47 $0.45 $0.92 $0.87 Earnings per share $0.94 $0.45 $1.39
$0.87 Dividend per share $0.19 $0.18 $0.37 $0.35 Book value per
share $16.16 $15.07 $16.16 $15.07 Dividend payout ratio 20.26%
39.76% 26.75% 40.04% Weighted average shares outstanding 3,468,842
3,477,455 3,484,600 3,473,290 PERFORMANCE RATIOS Operating return
on average equity 11.98% 12.22% 11.76% 11.95% Return on average
equity 23.49% 12.22% 17.57% 11.95% Operating return on average
assets 0.90% 0.91% 0.90% 0.89% Return on average assets 1.80% 0.91%
1.35% 0.89% Net interest margin 4.01% 4.36% 4.12% 4.36% Operating
efficiency ratio 65.51% 58.60% 63.97% 58.43% Efficiency ratio
50.33% 58.60% 55.65% 58.43% Average earning assets (in 000's)
$684,149 $650,898 $674,377 $651,436 OHIO VALLEY BANC CORP -
Consolidated Statements of Income (Unaudited) Three months ended
Six months ended (in $000's) June 30, June 30, 2004 2003 2004 2003
Interest income: Interest and fees on loans $9,798 $10,551 $19,757
$21,239 Interest and dividends on securities 924 942 1,857 1,866
Total interest income 10,722 11,493 21,614 23,105 Interest expense:
Deposits 2,813 3,174 5,554 6,490 Borrowings 1,162 1,337 2,390 2,717
Total interest expense 3,975 4,511 7,944 9,207 Net interest income
6,747 6,982 13,670 13,898 Provision for loan losses 373 1,246 1,141
2,632 Noninterest income: Service charges on deposit accounts 839
803 1,598 1,500 Trust fees 54 58 106 111 Income from bank owned
insurance 148 172 311 344 Gain on sale of loans 3 155 10 352 Gain
on sale of ProCentury Corp. 2,463 2,463 Other 298 340 623 667 Total
noninterest income 3,805 1,528 5,111 2,974 Noninterest expense:
Salaries and employee benefits 3,080 2,885 6,120 5,682 Occupancy
322 317 651 649 Furniture and equipment 318 240 601 477 Data
processing 182 139 360 299 Other 1,444 1,458 2,802 2,856 Total
noninterest expense 5,346 5,039 10,534 9,963 Income before income
taxes 4,833 2,225 7,106 4,277 Income taxes 1,581 652 2,289 1,245
NET INCOME $3,252 $1,573 $4,817 $3,032 OHIO VALLEY BANC CORP -
Consolidated Balance Sheets (Unaudited) (dollars in thousands,
except share and per share data) June 30, December 31, 2004 2003
ASSETS Cash and noninterest-bearing deposits with banks $15,517
$17,753 Federal funds sold 1,125 Total cash and cash equivalents
16,642 17,753 Interest-bearing deposits in other banks 1,255 859
Securities available-for-sale 70,142 76,352 Securities
held-to-maturity (estimated fair value: 2004 - $13,455 , 2003 -
$13,547) 13,054 12,835 Total loans 590,822 573,704 Less: Allowance
for loan losses (7,137) (7,593) Net loans 583,685 566,111 Premises
and equipment, net 9,098 9,142 Accrued income receivable 2,732
2,700 Goodwill 1,267 1,267 Bank owned life insurance 13,476 13,222
Other assets 5,828 7,086 Total assets $717,179 $707,327 LIABILITIES
Noninterest-bearing deposits $63,901 $62,235 Interest-bearing
deposits 475,757 445,274 Total deposits 539,658 507,509 Securities
sold under agreements to repurchase 20,779 24,018 Other borrowed
funds 78,371 101,562 Subordinated debentures 13,500 13,500 Accrued
liabilities 8,833 6,330 Total liabilities 661,141 652,919
SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 10,000,000
shares authorized; 2004 - 3,674,314 shares issued, 2003 - 3,658,212
shares issued) 3,674 3,658 Additional paid-in capital 31,451 30,962
Retained earnings 26,872 23,343 Accumulated other comprehensive
income (374) 624 Treasury stock at cost (2004 - 205,985 shares,
(5,585) (4,179) 2003 - 159,611 shares) Total shareholders' equity
56,038 54,408 Total liabilities and shareholders' equity $717,179
$707,327 Contact: Scott Shockey, CFO (740) 446-2631 DATASOURCE:
Ohio Valley Banc Corp Contact: Scott Shockey, CFO of Ohio Valley
Banc Corp, +1-740-446-2631 Web site: http://www.ovbc.com/
Copyright