third quarter of 2026
Filed Oct 27, 2026Third-quarter net income rose to $3,295,000, while nine-month net income declined to $10,519,000 as substantially higher credit-loss provisions outweighed net interest income growth.
Third-quarter net income increased 8.7% and net interest income rose, but year-to-date net income declined 9.7% as credit-loss provisions increased to $8,202,000. Nonperforming loans were 1.09% of total loans at September 30, 2026, compared with .42% a year earlier.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income - three months ended September 30, 2026GAAP | $3,295,000 | – | an increase of $265,000, or 8.7% |
| Earnings per share - three months ended September 30, 2026GAAP | $ 0.70 | – | – |
| Net income - nine months ended September 30, 2026GAAP | $10,519,000 | – | a decrease of $1,127,000, or 9.7% |
| Earnings per share - nine months ended September 30, 2026GAAP | $ 2.23 | – | – |
| Interest and fees on loans - three months ended September 30, 2026GAAP | $ 20,471 (in $000's) | – | – |
| Interest and fees on loans - nine months ended September 30, 2026GAAP | $ 59,873 (in $000's) | – | – |
| Interest and dividends on securities - three months ended September 30, 2026GAAP | $ 2,608 (in $000's) | – | – |
| Interest and dividends on securities - nine months ended September 30, 2026GAAP | $ 7,611 (in $000's) | – | – |
| Interest on interest-bearing deposits with banks - three months ended September 30, 2026GAAP | $ 735 (in $000's) | – | – |
| Interest on interest-bearing deposits with banks - nine months ended September 30, 2026GAAP | $ 2,283 (in $000's) | – | – |
| Total interest income - three months ended September 30, 2026GAAP | $ 23,814 (in $000's) | – | – |
| Total interest income - nine months ended September 30, 2026GAAP | $ 69,767 (in $000's) | – | – |
| Deposits interest expense - three months ended September 30, 2026GAAP | $ 7,467 (in $000's) | – | – |
| Deposits interest expense - nine months ended September 30, 2026GAAP | $ 22,031 (in $000's) | – | – |
| Borrowings interest expense - three months ended September 30, 2026GAAP | $ 479 (in $000's) | – | – |
| Borrowings interest expense - nine months ended September 30, 2026GAAP | $ 1,582 (in $000's) | – | – |
| Total interest expense - three months ended September 30, 2026GAAP | $ 7,946 (in $000's) | – | – |
| Total interest expense - nine months ended September 30, 2026GAAP | $ 23,613 (in $000's) | – | – |
| Net interest income - three months ended September 30, 2026GAAP | $ 15,868 (in $000's) | – | increased $1,271,000 |
| Net interest income - nine months ended September 30, 2026GAAP | $ 46,154 (in $000's) | – | increased $3,882,000 |
| Provision for credit losses - three months ended September 30, 2026GAAP | $ 2,825,000 | – | an increase of $1,713,000 |
| Provision for credit losses - nine months ended September 30, 2026GAAP | $ 8,202,000 | – | an increase of $5,526,000 |
| Total noninterest income - three months ended September 30, 2026GAAP | $ 3,087 (in $000's) | – | increased $1,339,000 |
| Total noninterest income - nine months ended September 30, 2026GAAP | $ 9,561 (in $000's) | – | increased $1,319,000 |
| Debit / credit card interchange income - three months ended September 30, 2026GAAP | $ 1,446 (in $000's) | – | increased $29,000 |
| Debit / credit card interchange income - nine months ended September 30, 2026GAAP | $ 4,030 (in $000's) | – | increased $185,000 |
| Loss on sale of debt securities - three months ended September 30, 2026GAAP | $ 0 (in $000's) | – | $1,219,000 decrease in loss on sale of debt securities |
| Loss on sale of debt securities - nine months ended September 30, 2026GAAP | $ 0 (in $000's) | – | – |
| Unrealized gains on equity securities - nine months ended September 30, 2026GAAP | $ 395 (in $000's) | – | – |
| Total noninterest expense - three months ended September 30, 2026GAAP | $ 12,093,000 | – | an increase of $604,000 |
| Total noninterest expense - nine months ended September 30, 2026GAAP | $ 34,639,000 | – | an increase of $1,283,000, or 3.8% |
| Salaries and employee benefits - three months ended September 30, 2026GAAP | $ 6,659 (in $000's) | – | increased $292,000 |
| Salaries and employee benefits - nine months ended September 30, 2026GAAP | $ 19,559 (in $000's) | – | increased $986,000 |
| Data processing - three months ended September 30, 2026GAAP | $ 873 (in $000's) | – | decreased $61,000 |
| Data processing - nine months ended September 30, 2026GAAP | $ 2,148 (in $000's) | – | decreased $680,000 |
| Software - three months ended September 30, 2026GAAP | $ 724 (in $000's) | – | increased $133,000 |
| Software - nine months ended September 30, 2026GAAP | $ 2,058 (in $000's) | – | increased $339,000 |
| FDIC insurance - three months ended September 30, 2026GAAP | $ 266 (in $000's) | – | increased $87,000 |
| FDIC insurance - nine months ended September 30, 2026GAAP | $ 748 (in $000's) | – | increased $222,000 |
| Income before income taxes - three months ended September 30, 2026GAAP | $ 4,037 (in $000's) | – | – |
| Income before income taxes - nine months ended September 30, 2026GAAP | $ 12,874 (in $000's) | – | – |
| Income taxes - three months ended September 30, 2026GAAP | $ 742 (in $000's) | – | – |
| Income taxes - nine months ended September 30, 2026GAAP | $ 2,355 (in $000's) | – | – |
| Return on average equity - three months ended September 30, 2026other | 7.50 % | – | – |
| Return on average equity - nine months ended September 30, 2026other | 8.14 % | – | – |
| Return on average assets - three months ended September 30, 2026other | 0.79 % | – | – |
| Return on average assets - nine months ended September 30, 2026other | 0.85 % | – | – |
| Net interest margin - Financial Highlights, three months ended September 30, 2026other | 4.30 % | – | – |
| Net interest margin - narrative, third quarter of 2026other | 4.03% | – | a decrease |
| Net interest margin - nine months ended September 30, 2026other | 3.99 % | – | a decrease |
| Efficiency ratio - three months ended September 30, 2026other | 63.35 % | – | – |
| Efficiency ratio - nine months ended September 30, 2026other | 61.73 % | – | – |
| Average earning assets - three months ended September 30, 2026other | $ 1,574,471 (in 000's) | – | increased $131 million |
| Average earning assets - nine months ended September 30, 2026other | $ 1,559,916 (in 000's) | – | increased $143 million |
| Nonperforming loans to total loans - September 30, 2026other | 1.09% | – | – |
| Allowance for credit losses to total loans - September 30, 2026other | 1.05% | – | – |
Capital returns
- Dividends per share - three months ended September 30, 2026: $ 0.25; 2025: $ 0.23.
- Dividends per share - nine months ended September 30, 2026: $ 0.73; 2025: $ 0.68.
- Cash dividends paid: $3.4 million.
- Dividends reinvested under dividend reinvestment plan - three months ended September 30, 2026: $ 326 (in 000's); 2025: $ 327 (in 000's).
- Dividends reinvested under dividend reinvestment plan - nine months ended September 30, 2026: $ 970 (in 000's); 2025: $ 1,039 (in 000's).
- Dividends reinvested under employee stock ownership plan - nine months ended September 30, 2026: $ 206 (in 000's); 2025: $ 195 (in 000's).
What drove it
- Average loans increased $140 million for the nine months ended September 30, 2026, mostly within targeted commercial lending segments.
- The average balance of certificates of deposit increased $125 million and money market accounts increased $28 million for the nine months ended September 30, 2026.
- The Company sold $36.9 million in securities during the second half of 2025 with a yield of 1.35% and reinvested the proceeds into securities yielding 4.52%.
- Third-quarter noninterest income benefited from the $1,219,000 decrease in loss on sale of debt securities during 2025.
- For the nine months ended September 30, 2026, the Company recorded a gain on equity securities of $395,000 related to Visa Class C common stock.
- The nine-month decrease in data processing expense included a $544,000 recovery from a vendor for a billing error.
Concerns
- Quarter-to-date net charge-offs were $6,357,000, including $3,284,000 from conversion of a specific allocation on a collateral dependent automobile dealership loan to charge-off status and $2,818,000 related to recording a foreclosed commercial real estate asset at fair value.
- Year-to-date net charge-offs were $6,783,000, and the provision included a specific allocation of $3,278,000 on a collateral dependent loan to construct a hotel.
- The ratio of nonperforming loans to total loans was 1.09% at September 30, 2026, compared to .42% at September 30, 2025.
- Funding costs increased at a greater pace than the yield on earning assets, according to the Company.
- Shareholders' equity decreased $.5 million from year end 2025, including a $7.5 million decrease in accumulated other comprehensive income.
What to watch
- Credit-loss provision and net charge-offs following the commercial-credit losses described by the Company.
- Loan growth in targeted commercial lending segments and the associated funding mix of certificates of deposit and money market accounts.
- Net interest margin as funding costs remain elevated.
- The reported discrepancy between the 4.03% third-quarter net interest margin in the narrative and the 4.30% figure in Financial Highlights.
- Nonperforming loans, which were 1.09% of total loans at September 30, 2026.
Balance sheet and cash flow
- Total assets at September 30, 2026: $1.655 billion, an increase of $73 million, or 4.6%, from December 31, 2025.
- Total assets: $ 1,655,351 (in $000's) at September 30, 2026; $ 1,582,654 (in $000's) at December 31, 2025.
- Total cash and cash equivalents: $ 70,035 (in $000's) at September 30, 2026; $ 45,897 (in $000's) at December 31, 2025.
- Debt securities available for sale: $ 245,733 (in $000's) at September 30, 2026; $ 253,906 (in $000's) at December 31, 2025.
- Total loans: $ 1,247,856 (in $000's) at September 30, 2026; $ 1,196,018 (in $000's) at December 31, 2025.
- Allowance for credit losses: $ 13,096 (in $000's) at September 30, 2026; $ 11,519 (in $000's) at December 31, 2025.
- Net loans: $ 1,234,760 (in $000's) at September 30, 2026; $ 1,184,499 (in $000's) at December 31, 2025.
- Total deposits: $ 1,413,515 (in $000's) at September 30, 2026; $ 1,329,667 (in $000's) at December 31, 2025.
- Other borrowed funds: $ 31,524 (in $000's) at September 30, 2026; $ 44,848 (in $000's) at December 31, 2025.
- Subordinated debentures: $ 8,500 (in $000's) at September 30, 2026; $ 8,500 (in $000's) at December 31, 2025.
- Total liabilities: $ 1,485,550 (in $000's) at September 30, 2026; $ 1,412,397 (in $000's) at December 31, 2025.
- Total shareholders' equity: $ 169,801 (in $000's) at September 30, 2026; $ 170,257 (in $000's) at December 31, 2025.
- Accumulated other comprehensive income (loss): $ (9,405) (in $000's) at September 30, 2026; $ (1,869) (in $000's) at December 31, 2025.
Analysis
Ohio Valley Banc reported stronger third-quarter earnings, with consolidated net income of $3,295,000, up $265,000, or 8.7%, and earnings per share of $0.70 versus $0.64. For the nine months, however, net income was $10,519,000, down $1,127,000, or 9.7%, and earnings per share declined to $2.23 from $2.47. Return on average assets was 0.85% and return on average equity was 8.14% for the nine-month period, versus 1.03% and 9.95%, respectively, a year earlier.
Core balance-sheet growth drove interest income. Net interest income increased $1,271,000 in the third quarter and $3,882,000 for the nine months as average earning assets increased $131 million and $143 million, respectively. Average loan balances increased $140 million for the nine months, primarily in targeted commercial lending segments. The funding supporting this growth was concentrated in promotional certificates of deposit and money market accounts, whose average balances increased $125 million and $28 million, respectively.
Credit costs remained the principal drag on year-to-date results. The third-quarter provision for credit loss expense was $2,825,000, up $1,713,000, while the nine-month provision was $8,202,000, up $5,526,000. Third-quarter net charge-offs were $6,357,000, including the automobile dealership charge-off and the fair-value adjustment of a foreclosed commercial real estate asset. The ratio of nonperforming loans to total loans was 1.09% at September 30, 2026, compared with .42% at September 30, 2025, although it was lower than 1.40% at December 31, 2025.
Noninterest income increased $1,339,000 in the quarter, largely because the prior-year quarter included a $1,219,000 loss on sale of debt securities. Nine-month noninterest income also included a $395,000 gain on equity securities. Noninterest expense increased $604,000 in the quarter and $1,283,000 for the nine months, reflecting salaries and employee benefits, software expense and FDIC insurance, partly offset by lower data processing costs. The Company reported a 4.03% third-quarter net interest margin in the narrative, while Financial Highlights reports 4.30%; both sources show 4.05% for the prior-year third quarter.
Assets reached $1.655 billion at September 30, 2026, with total loans up $52 million and deposits up $84 million from year end 2025. Shareholders' equity decreased $.5 million, as year-to-date net income of $10.5 million was offset by $3.4 million of cash dividends and a $7.5 million decrease in accumulated other comprehensive income. The release did not provide forward guidance, leaving credit performance, deposit costs, loan growth and the margin trajectory as the principal disclosed operating variables to monitor.
Management, verbatim
Although our year-to-date performance has not met our expectations, the primary driver has been losses tied to a limited number of commercial credits. We remain encouraged by the strength of our core business, including continued loan growth and stable margins. As funding costs remain elevated, we are focused on disciplined execution and are confident in our ability to work through these challenges and create long-term value for our shareholders.
Larry Miller, CEO
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-period outlook was not provided, so no comparison with prior guidance is available.
- Total revenue was not reported as a line item.
- Gross margin was not reported.
- Operating income was not reported.
- Operating cash flow and free cash flow were not reported.
- Share repurchases were not reported.
- GAAP tax rate was not reported.
- The filing does not report business-segment revenue.
- A complete cash-flow statement was not provided.
- The filing contains conflicting third-quarter net interest margin figures: 4.03% in the narrative and 4.30% in Financial Highlights.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.