Shares of Ohio Valley Banc Corp. (OVBC Quick QuoteOVBC - Free Report) have lost 0.9% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 Index’s 0.7% gain over the same time frame. Over the past month, the stock lost 2.6% against the S&P 500’s 2.1% growth.

OVBC’s Earnings Snapshot

Ohio Valley Banc reported third-quarter 2025 net income of $3 million, up 11.4% from $2.7 million a year earlier, translating to earnings per share (EPS) of $0.64 compared with $0.58 in the year-ago quarter. Net interest income rose 16% year over year to $14.6 million for the quarter from $12.6 million, benefiting from higher average earning assets and a wider net interest margin of 4.05%, up from 3.76% a year earlier. Growth in net income was partly offset by an increase in credit loss provisions and lower noninterest income, reflecting realized losses on securities sales.

For the nine months ended Sept. 30, 2025, net income surged 37.3% to $11.6 million, or $2.47 per share, compared with $8.5 million, or $1.79 per share, in the prior-year period.

Ohio Valley Banc’s Revenue Drivers and Segmental Performance

OVBC’s performance was driven by robust loan and securities growth. Average earning assets grew 8.8% year to date, led by increases of $75 million in securities and $65 million in average loans. Growth in commercial real estate, commercial and industrial, and residential real estate lending segments underpinned the expansion, while the consumer loan segment contracted as management continued to pivot toward more profitable segments. On the funding side, average NOW, money market, and savings accounts rose $85 million year to date, supported by the Ohio Homebuyer Plus program and related deposits.

The provision for credit losses increased to $1.1 million in the third quarter of 2025 from $0.9 million a year earlier, reflecting loan growth, charge-offs, and updated economic forecasts. Meanwhile, noninterest income fell 38.8% to $1.7 million from $2.9 million, mainly due to $1.2 million in losses from securities sales. Ohio Valley Banc sold $11 million in low-yield securities (1.32%) and reinvested the proceeds into higher-yielding assets (4.37%), a move expected to bolster future margins.

Noninterest expense rose 2.4% to $11.5 million from $11.2 million year over year, primarily due to higher data processing and marketing costs, partly offset by reduced personnel expenses following a 2024 early retirement program.

OVBC’s Key Business Metrics

Return on average assets improved to 0.78% from 0.75%, while return on average equity was relatively stable at 7.44% compared with 7.39% a year earlier. The efficiency ratio strengthened to 69.70% from 72.01%, underscoring effective cost control amid rising revenues. Book value per share stood at $34.90, up 8% from $32.30 in the prior year.

For the nine-month period, return on average assets and return on average equity improved to 1.03% and 9.95%, respectively, indicating a stronger profitability trend across 2025. Year to date, the efficiency ratio was 65.52%.

Credit quality remained sound, with nonperforming loans at 0.42% of total loans compared with 0.44% a year earlier, and the allowance for credit losses rose to 1.01%, a modest increase from 0.95%. The uptick reflects prudent provisioning amid moderate loan growth and conservative risk modeling.

Ohio Valley Banc maintained its regular quarterly dividend, declaring $0.23 per share in the third quarter or 2025, up from $0.22 a year earlier.

Ohio Valley Banc’s Management Commentary

Management emphasized that the strong earnings performance reflected disciplined execution in core banking operations and prudent balance sheet management. OVBC deliberately realized losses in its securities portfolio during the quarter to reposition into higher-yielding assets, a move aimed at improving future interest income and sustaining net interest margin expansion. Leadership credited the improvement in profitability to employee efforts in strengthening customer relationships and driving steady loan and deposit growth, which together contributed to enhancing shareholder value.

Factors Influencing OVBC’s Headline Numbers

Earnings were primarily supported by the expansion of earning assets and a healthier interest margin, partially offset by security losses and increased provisioning. The redeployment of low-yield investments into higher-yielding securities and loans contributed to margin growth. Expense control, aided by lower salaries and benefits from workforce optimization, helped temper inflationary pressures in other expense categories such as data processing and marketing.

Balance sheet growth remained moderate but steady. Total assets reached $1.57 billion as of Sept. 30, 2025, up from $1.50 billion as of year-end 2024, while total deposits increased to $1.33 billion from $1.28 billion during the same time, led by time deposits. Shareholders’ equity rose to $164.4 million from $150.3 million during the same time, driven by retained earnings and market appreciation of securities following lower interest rates.

Ohio Valley Banc’s Guidance

While Ohio Valley Banc did not provide formal financial guidance, its commentary suggested optimism for continued net interest margin expansion, supported by its repositioned securities portfolio and growing core deposit base. Management’s focus on strengthening commercial lending relationships and enhancing deposit quality indicates a forward-looking approach aimed at sustaining profitability amid evolving market conditions.

OVBC’s Other Developments

No acquisitions, divestitures or major restructuring initiatives were reported during the quarter. The company continues to operate The Ohio Valley Bank Company, with 18 branches across Ohio and West Virginia, and Loan Central, Inc., which runs six consumer finance offices in Ohio.