CEO Larry Miller attributed the earnings pressure to rising credit loss provisions, which totaled $3.75 million for the quarter. This spike in reserves stems primarily from two collateral-dependent commercial loans—one involving an automobile dealership and the other a hotel construction project. Miller emphasized that the risk is isolated to these specific relationships rather than a systemic weakness in the bank's broader portfolio.
Ohio Valley Banc Corp. Profit Dips as Credit Loss Provisions Rise
Ohio Valley Banc Corp. reported a 30.5% drop in second-quarter net income, falling to $2.9 million as the institution increased provisions for credit losses tied to specific commercial accounts. The decline mirrors a broader six-month trend for the Gallipolis-based lender, which saw earnings per share slide to $1.53.
Despite the bottom-line contraction, the company achieved growth in its core operations. Net interest income rose by $863,000 for the quarter, bolstered by an expansion in average earning assets, particularly within the commercial loan segment. However, this growth came at a cost: higher interest rates on promotional certificates of deposit and money market accounts outpaced the yields on assets, compressing the net interest margin to 3.93%. With total assets reaching $1.66 billion, the bank continues to navigate a shifting funding landscape while maintaining what management describes as a strong balance sheet.
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