OHIO VALLEY BANC CORP

The Company’s net interest income in 2025 was $57,745, representing an increase of $8,941, or 18.3%, from 2024. Net interest income during 2025 was positively impacted by a $102,674 increase in average earning assets, with higher relative balances being maintained in loans, as opposed to interest-bearing deposits with banks or securities, which generally yield less than loans. This led to a $75,080 increase in average loans and a $52,599 increase in average securities, while average interest-bearing deposits with banks decreased $25,005 from year-end 2024. The benefits of higher earning assets were further enhanced by a year-to-date increase in the Company’s fully tax-equivalent net interest income as a percentage of average earning assets (“net interest margin”), which increased 36 basis points to 4.07% at December 31, 2025. The increase in the net interest margin was related to the yield on earning assets increasing, while the cost of interest-bearing liabilities decreased.

Net interest income increased $8,941, or 18.3%, during 2025, compared to 2024. Growth in net interest earnings was mostly impacted by growth in average earning assets, which increased 7.7% during 2025. This was further enhanced by a higher net interest margin, increasing 36 basis points during 2025. The growth in average earning assets came primarily from loans and securities. Loan increases were led by the commercial real estate, commercial and industrial, and residential real estate loan segments. Average securities grew in large part to increased pledging requirements on public fund deposits as part of the Ohio Homebuyer Plus program. The decrease in interest-bearing deposits with banks consisted mostly of average balances maintained at the Company’s interest-bearing Federal Reserve Bank (“FRB”) clearing account. Increases in the net interest margin were largely related to the yield on earning assets increasing while the cost of funding sources decreased. The increase in the yield on earning assets was related to the growth in higher yielding loans and securities, along with the recognition of market discounts on purchased loans totaling $1,648. The cost of funding sources decreased as the composition of funding sources shifted to lower cost deposit sources such as negotiable order of withdrawal (“NOW”), money market, and savings accounts. Furthermore, the cost of certificates of deposit (“CDs”) decreased as higher costing CDs repriced to lower current market rates.

Provision for credit losses during 2025 increased $585, or 23.7%, from 2024. The increase was primarily due to growth in both loans and off-balance sheet commitments related to unused commercial lines, as well as an increase in modeled loss rates due to the regression in gross domestic product (“GDP”) and unemployment projections.

The Company’s noninterest income decreased $4,201, or 31.9%, from 2024. The year-to-date decrease in noninterest income was largely due to the loss on sales of securities totaling $3,747. During the third and fourth quarters of 2025, the Company sold $36,950 in securities that were yielding 1.35% and replaced them with longer duration securities yielding 4.52%, which is expected to increase future interest income. Decreases to noninterest income also came from other noninterest income, which lowered by $690 during 2025 and were largely related to lower earnings from a tax processing agreement and the disposition of certain assets. Partially offsetting these decreases was interchange income earned on debit and credit card transactions, which increased $196 during 2025, benefiting from an increase in the number of transactions.

The Company’s noninterest expenses during 2025 decreased $1,921, or 4.2%, from 2024. This decrease was mostly impacted by salary and employee benefit expense, which lowered by $2,873, or 10.3%, during 2025, as compared to 2024. The decrease was largely the result of a voluntary early retirement program offered to employees meeting certain criteria during the fourth quarter of 2024, which resulted in a one-time expense of $3,338 in 2024. The savings from the early retirement program were partially offset by annual merit increases and data processing and marketing expense. During 2025, data processing expense increased $457 due to higher debit and credit card processing costs associated with higher transaction volume and conversion costs for the Company’s new rewards platform. Increases in marketing expense of $385 were primarily related to advertising, a higher contribution to our own foundation fund and costs associated with supporting the communities we serve.

The Company’s provision for income taxes increased $1,474 during 2025, largely due to the changes in taxable income affected by the factors mentioned above.