OHIO VALLEY BANC CORP

Critical Audit Matter Description

Management’s estimate of the allowance for credit losses (the “ACL”) includes a reserve on collectively evaluated loans. The reserve on collectively evaluated loans is based on peer group historical credit loss experience which is adjusted for qualitative and forecast factors over the expected remaining lives of the collectively evaluated loans. Significant assumptions in management’s estimate of the reserve on collectively evaluated loans include (i) the peer group utilized to determine historic loss rates; (ii) the loss drivers utilized to project losses during the forecast period; and (iii) qualitative factor adjustments. In evaluating whether qualitative factor adjustments are necessary, management considers internal and external qualitative and credit risk factors.

Significant judgment was required by management in the selection and application of subjective assumptions used to derive the quantitative portion of the ACL. Accordingly, performing audit procedures to evaluate the Company’s estimated ACL involved a high degree of auditor judgment and required significant effort, including the involvement of professionals with specialized skill and knowledge.