Ohio Valley Banc Corp. Reports Earnings Growth

GALLIPOLIS, Ohio, April 17 /PRNewswire-FirstCall/ -- Ohio Valley Banc
Corp. (Nasdaq: OVBC) (the "Company") reported consolidated net income for the
quarter ended March 31, 2008, of $1,965,000, representing an increase of 10.7
percent over the same period the prior year. Earnings per share for the first
quarter of 2008 were $.48, up 14.3 percent from the $.42 earned the first
quarter of 2007. Return on average assets and return on average equity both
increased to 1.00 percent and 13.02 percent, respectively, for the first
quarter of 2008, versus .94 percent and 11.91 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,
while exercising good expense control.
For the first quarter of 2008, net interest income increased $604,000, or
8.5 percent, from the same period last year. The increase was attributable to
a higher net interest margin in conjunction with the Company's growth in
earning assets. The net interest margin for the three months ended March 31,
2008 was 4.21 percent, compared to 4.02 percent for the same period the prior
year. The net interest margin improvement was related 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. The Company's average earning assets for the first quarter of
2008 were up $21,571,000, or 3.0 percent, from the first quarter of 2007.
Supplementing the increase in revenue from net interest income was the
increase in noninterest income. For the first quarter of 2008, noninterest
income totaled $1,584,000, an increase of $191,000, or 13.7 percent, from the
first quarter of 2007. 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 $80,000, or over 140 percent, from the 2007 quarter. In
addition, service charges on deposit accounts increased primarily due to a
higher volume of overdrafts occurring in 2008, which increased fees $62,000
from the prior year.
Noninterest expense totaled $5,752,000 for the first quarter of 2008, an
increase of $231,000, or 4.2 percent, from the same period last year.
Salaries and employee benefits, the Company's largest noninterest expense, was
up $196,000, led by incentive compensation and health insurance benefits. The
total of all remaining noninterest expense categories increased only $35,000
from the prior year first quarter. The emphasis management placed on expense
control and revenue generation contributed to an improved efficiency ratio of
61.38 percent for the three months ended March 31, 2008, as compared to 64.49
percent for the three months ended March 31, 2007.
For the three months ended March 31, 2008, management provided $701,000 to
the allowance for loan losses, an increase of $315,000 from the same period
the prior year. Although the ratio of nonperforming loans to total loans at
March 31, 2008 of 1.40 percent was down from the 1.60 percent at March 31,
2007, the ratio was up from the .57 percent at December 31, 2007.
Nonperforming loans totaled $8.9 million at March 31, 2008. The increase from
year end was primarily related to one borrower, which accounted for 56 percent
of total nonperforming loans. Management believes that the loan relationship
is adequately collateralized by real estate. For the three months ended March
31, 2008, net charge-offs were down $858,000 from the same three-month period
in 2007, primarily due to the significant decrease in commercial loan charge-
offs. Based on the evaluation of the adequacy of the allowance for loan
losses, management believes that the allowance for loan losses at March 31,
2008 was adequate and reflects probable incurred losses in the portfolio. The
allowance for loan losses was 1.09 percent of total loans at March 31, 2008,
compared to 1.06 percent at December 31, 2007 and 1.34 percent at March 31,
2007.
"I am extremely proud of all the employees of Ohio Valley Banc Corp. in
the first quarter of 2008," stated Jeffrey E. Smith, President and CEO.
"During a challenged banking environment, their efforts produced many positive
results, including an improved net interest margin and an enhanced efficiency
ratio driven by revenue enhancement and expense control. These efforts
culminated in producing double-digit earnings growth for the Company."
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 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,
2007, for further discussion of the risks affecting the business of the
Company and the value of an investment in its shares.
Contact: Scott Shockey, CFO (740) 446-2631

OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)

Three months ended
March 31,
2008 2007
PER SHARE DATA
Earnings per share $0.48 $0.42
Dividends per share $0.19 $0.17
Book value per share $15.39 $14.61
Dividend payout ratio (a) 39.38% 40.23%
Weighted average shares outstanding 4,060,585 4,192,809

PERFORMANCE RATIOS
Return on average equity 13.02% 11.91%
Return on average assets 1.00% 0.94%
Net interest margin (b) 4.21% 4.02%
Efficiency ratio (c) 61.38% 64.49%
Average earning assets (in 000's) $743,909 $722,338

(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,
2008 2007
Interest income:
Interest and fees on loans $12,642 $12,440
Interest and dividends on securities 1,092 1,062
Total interest income 13,734 13,502
Interest expense:
Deposits 4,886 5,267
Borrowings 1,173 1,164
Total interest expense 6,059 6,431
Net interest income 7,675 7,071
Provision for loan losses 701 386
Noninterest income:
Service charges on deposit accounts 710 660
Trust fees 61 56
Income from bank owned insurance 175 180
Gain on sale of loans 45 39
Loss on sale of other real estate owned -41 -1
Other 634 459
Total noninterest income 1,584 1,393
Noninterest expense:
Salaries and employee benefits 3,429 3,233
Occupancy 386 364
Furniture and equipment 235 270
Data processing 265 194
Other 1,437 1,460
Total noninterest expense 5,752 5,521
Income before income taxes 2,806 2,557
Income taxes 841 782
NET INCOME $1,965 $1,775

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)

(in $000's, except share and per share data) March 31, December 31,
2008 2007
ASSETS
Cash and noninterest-bearing
deposits with banks $17,946 $15,584
Federal funds sold 15,732 1,310
Total cash and cash equivalents 33,678 16,894
Interest-bearing deposits in other
financial institutions 507 633
Securities available-for-sale 71,333 78,063
Securities held-to-maturity
(estimated fair value: 2008 -
$17,464; 2007 - $15,764) 18,589 15,981
Federal Home Loan Bank stock 6,114 6,036
Total loans 633,232 637,103
Less: Allowance for loan losses (6,898) (6,737)
Net loans 626,334 630,366
Premises and equipment, net 9,760 9,871
Accrued income receivable 3,450 3,254
Goodwill 1,267 1,267
Bank owned life insurance 16,475 16,339
Other assets 4,874 4,714
Total assets $792,381 $783,418

LIABILITIES
Noninterest-bearing deposits $86,348 $78,589
Interest-bearing deposits 524,940 510,437
Total deposits 611,288 589,026
Securities sold under agreements to
repurchase 30,043 40,390
Other borrowed funds 61,881 67,002
Subordinated debentures 13,500 13,500
Accrued liabilities 13,334 11,989
Total liabilities 730,046 721,907

SHAREHOLDERS' EQUITY
Common stock ($1.00 par value per
share, 10,000,000 shares
authorized; 2008 - 4,641,748
shares issued;
2007 - 4,641,747 shares issued) 4,642 4,642
Additional paid-in capital 32,664 32,664
Retained earnings 38,243 37,763
Accumulated other comprehensive
income (loss) 815 (115)
Treasury stock, at cost (2008 -
590,731 shares; 2007 - 567,403
shares) (14,029) (13,443)
Total shareholders' equity 62,335 61,511
Total liabilities and shareholders'
equity $792,381 $783,418

SOURCE Ohio Valley Banc Corp.

Scott Shockey, CFO of Ohio Valley Banc Corp., +1-740-446-2631