10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 00-20914

OHIO VALLEY BANC CORP.

(Exact Name of Registrant as Specified in its Charter)

Ohio	31-1359191
(State of incorporation)	(I.R.S. Employer Identification No.)

420 Third Avenue, Gallipolis, Ohio	45631
(Address of principal executive offices)	(ZIP Code)

(740) 446-2631

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common shares, without par value	OVBC	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

    Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐   No ☑

    Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 Yes □   No ☑

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑   No ☐

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑   No ☐

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer  □	Accelerated filer  □
Non-accelerated filer  ☑	Smaller reporting company  ☑
Emerging growth company  □

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

    Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☑

    Based on the closing sales price of $24.45 per share on June 30, 2021, the aggregate market value of the issuer’s shares held by non-affiliates on such date was $101,766,157.  For this purpose, shares held by non-affiliates are all outstanding shares except those held by the directors and executive officers of the issuer and those held by The Ohio Valley Bank Company as trustee with respect to which The Ohio Valley Bank Company has sole or shared voting or dispositive power.

    The number of common shares of the registrant outstanding as of February 28, 2022, was 4,771,774

Documents Incorporated By Reference:

(1) Portions of the 2021 Annual Report to Shareholders of Ohio Valley Banc Corp. (Exhibit 13) are incorporated by reference into Part I, Item 1 and Part II, Items 5, 6, 7, 7A, 8 and 9A.

(2) Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held on May 18, 2022, are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14.

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PART I

ITEM 1 - BUSINESS

Organizational History and Subsidiaries

Ohio Valley Banc Corp. (“Ohio Valley” or the “Company”) is an Ohio corporation registered as a financial holding company pursuant to the Bank Holding Company Act of 1956, as amended (“BHC Act”).  Ohio Valley was incorporated under the laws of the State of Ohio on January 8, 1992 and began conducting business on October 23, 1992.  The principal executive offices of Ohio Valley are located at 420 Third Avenue, Gallipolis, Ohio 45631.  Ohio Valley’s common shares are listed on The NASDAQ Global Market under the symbol “OVBC.”  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”).  The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages (“Race Day”), and Ohio Valley REO, LLC, an Ohio limited liability company (“Ohio Valley REO”), to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley also owns three nonbank subsidiaries, Loan Central, Inc., which engages in lending (“Loan Central”), Ohio Valley Financial Services Agency, LLC, which is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central (“Ohio Valley Financial Services”), and OVBC Captive, Inc., a limited purpose property and casualty insurance company (“OVBC Captive”).  Ohio Valley also owns one wholly-owned subsidiary trust formed solely to issue a trust preferred security.   Ohio Valley and its subsidiaries are collectively referred to as the “Company.” Ohio Valley’s financial service operations are considered by management to be aggregated in two reportable segments:  banking and consumer finance.  Total revenues from the banking segment, which  accounted for the majority of the Company’s total revenues, totaled 94.1%, 94.3% and 94.2% of total consolidated revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

Interested readers can access Ohio Valley’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through Ohio Valley’s Internet website at www.ovbc.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate the information contained on Ohio Valley’s website into this Annual Report on Form 10-K).  These reports can be accessed free of charge through a link to The NASDAQ Stock Market, LLC’s website from Ohio Valley’s website as soon as reasonably practicable after Ohio Valley electronically files such materials with, or furnishes them to, the Securities and Exchange Commission (“SEC”).

Business of Ohio Valley

As a financial holding company registered under the BHC Act, Ohio Valley’s primary business is community banking.  As of December 31, 2021, Ohio Valley’s consolidated assets approximated to $1,249,769,000, and total shareholders’ equity approximated to $141,356,000.

Ohio Valley is also permitted to engage in certain non-banking activities, such as securities underwriting and dealing activities, insurance agency and underwriting activities and merchant banking/equity investment activities.  Ohio Valley presently has an insurance agency, Ohio Valley Financial Services, which is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central. Ohio Valley also has a captive insurance company, OVBC Captive, that is engaged in the business of providing commercial property and various liability insurance to the Company and related entities.  Management will consider opportunities to engage in additional nonbanking activities as they arise.

Information about the Company’s business segments is set forth in Note R to the Company’s Financial Statements located in Ohio Valley’s 2021 Annual Report to Shareholders.

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Business of Bank Subsidiary

A substantial portion of Ohio Valley’s revenue is derived from cash dividends paid by the Bank.   The Bank presently has sixteen offices located in Ohio and West Virginia, all but one offer automatic teller machines (“ATMs”).  Twelve of these offices also offer drive-up services.  The Bank accounted for substantially all of Ohio Valley’s consolidated assets at December 31, 2021.

The Bank is primarily engaged in commercial and retail banking.  The Bank is a full-service financial institution offering a blend of commercial and consumer banking services within southeastern Ohio as well as western West Virginia.  The banking services offered by the Bank include the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, floor plan and student loans; and the making of construction and real estate loans.  The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.  As part of its lending function, the Bank offers credit card services.  The Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”).  In addition to originating loans, the Bank invests in United States government and agency obligations, interest-bearing deposits in other financial institutions, and other investments permitted by applicable law.

The Bank began offering trust services in 1981.   The trust department acts as trustee under wills, trusts and profit sharing plans, as executor and administrator of estates, and as guardian for estates of minors and incompetents.  In addition, the trust department performs a variety of investment and security services where the Bank acts as an agent on behalf of the client.  Trust services are available to all customers of the Bank.

The Bank also offers Internet banking to its customers, allowing customers to check personal account balances, receive information about transactions within their accounts, make transfers between accounts, stop payment on a check, and reorder checks all from their own computer.  Customers may also pay bills online and can make payments to virtually any business or individual.  Furthermore, the Bank offers other financial management online services, such as cash management and news updates related to repossession auctions, current rates and general bank news.

In January 2020, the Bank began offering Tax Refund Advance Loans (“TALs”) to Loan Central tax customers.  A TAL represents a short-term loan offered by OVB to tax preparation customers of Loan Central.  Previously, Loan Central offered and originated tax refund anticipation loans that represented a large composition of its annual earnings.  However, new Ohio laws that became effective in April 2019 placed numerous restrictions on short-term and small loans extended by certain non-bank lenders in Ohio.  As a result, Loan Central no longer offers the service to its tax preparation customers, but it is able to do so through the Bank.  After Loan Central prepares a customer’s tax return, the customer is offered the opportunity to have immediate access to a portion of the anticipated tax refund by entering into a TAL with the Bank.  As part of the process, the tax customer completes a loan application and authorizes the expected tax refund to be deposited with the Bank once it is issued by the IRS.  Once the Bank receives the tax refund, the refund is used to repay the TAL and Loan Central’s tax preparation fees, then the remainder of the refund is remitted to Loan Central’s tax customer.

In April 2021, the Bank formed a subsidiary, Race Day, which serves as an online-only consumer direct mortgage banking company. Race Day was created to help fill the demand for home ownership in areas beyond the Bank’s primary markets, while providing a more convenient and efficient process to its clients that live outside the Bank’s primary market area. Race Day provides both new mortgage originations and refinancing of current mortgages.

Business of Loan Central

Loan Central is engaged in consumer finance, offering smaller balance personal and mortgage loans generally to individuals with higher credit risk history.  Loan Central’s line of business also includes seasonal tax preparation services as part of the TAL lending activity previously discussed.  Loan Central presently has six offices, all located within southeastern Ohio.

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Business of Financial Services Subsidiaries

Ohio Valley Financial Services is a licensed insurance agency that is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central.  Ohio Valley Financial Services is licensed by the State of Ohio Department of Insurance.

OVBC Captive is a pure captive insurance company engaged in providing commercial property and various liability insurance to the Company and affiliates.  OVBC Captive has been approved under the guidelines of the State of Nevada Division of Insurance.

Variable Interest Entities

Ohio Valley owns one special purpose entity, Ohio Valley Statutory Trust III, which has issued $8,500,000 in trust preferred securities.  Ohio Valley has issued a like amount of subordinated debentures to the Trust in exchange for the proceeds of the issuance of the trust preferred securities.  Ohio Valley used the proceeds to provide additional capital to the Bank to support growth.  Further detail on Ohio Valley Statutory Trust III is located in Ohio Valley’s 2021 Annual Report to Shareholders under “Note J – Subordinated Debentures and Trust Preferred Securities,” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2021.

Financial Information

 Financial information regarding the Company as of December 31, 2021 and 2020 and results of operations for the last three fiscal years are contained in the Company’s consolidated financial statements for the fiscal year ended December 31, 2021.

Lending Activities

The Company’s loan portfolio decreased $17,473,000 to finish at $831,191,000 in 2021.  The decrease in total loans was primarily due to payments and payoffs occurring within the Company’s residential real estate portfolio.  The loan portfolio is comprised of commercial (commercial real estate and commercial and industrial), residential real estate and consumer loans, including credit card and home equity loans.  During 2021, residential real estate loans decreased $31,053,000, or 10.2%, while commercial loans increased $12,181,000, or 3.0%, and consumer loans increased $1,399,000, or 1.1%, as compared to 2020. The residential real estate loan portfolio was largely impacted by lower short-term adjustable-rate mortgages and warehouse lending loan balances. Commercial loan growth was impacted by an increase in new loan originations, partially offset by the payoffs of Paycheck Protection Program loans during 2021. Consolidated interest and fee revenue from loans accounted for 77.14%, 74.99%, and 76.94% of total consolidated revenues in 2021, 2020 and 2019, respectively.  The Company’s market area for lending is primarily located in southeastern Ohio and portions of western West Virginia.  The Company believes that there is no significant concentration of loans to borrowers engaged in the same or similar industries and does not have any loans to foreign entities.

Residential Real Estate Loans

The Company’s residential real estate loans consist primarily of one- to four-family residential mortgages and carry many of the same customer and industry risks as the commercial loan portfolio.  Real estate loans to consumers are secured primarily by a first lien mortgage or deed of trust  with evidence of title in favor of the Bank.  The Company also requires proof of hazard insurance, required at the time of closing, with the Bank or Loan Central named as the mortgagee and as loss payee.  The Company generally requires the amount of a residential real estate loan be no more than 80% of the purchase price or the appraisal value (whichever is the lesser) of the real estate securing the loan, unless private mortgage insurance is obtained by the borrower for the percentage exceeding 80%.  These loans generally range from one-year adjustable to thirty-year fixed-rate mortgages. Residential real estate loans also consist of the Company’s warehouse lending activity. Warehouse lending consists of a line of credit provided by the Bank to another mortgage lender that makes loans for the purchase of one- to four-family residential real estate properties. The mortgage lender eventually sells the loans and repays the Bank. The Company’s market area for real estate lending is primarily located in southeastern Ohio and portions of western West Virginia.  The Bank continues to sell a portion of its new fixed-rate real estate loan originations to the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to enhance customer service and loan pricing.  Secondary market sales of these real estate loans, which have fixed rates with fifteen- to thirty-year terms, have assisted in meeting the consumer preference for long-term fixed-rate loans as well as minimized the Bank’s exposure to interest rate risk. Race Day also originates and sells long-term fixed-rate loans to various brokers using a convenient, online process.

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Commercial Loans

The Company’s commercial loan portfolio consists of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include service, retail and wholesale merchants.  Collateral securing these loans includes equipment, inventory, stock, commercial real estate and rental property.  Commercial loans are considered to have a higher level of risk compared to other types of loans (i.e., single-family residential mortgages, installment loans and credit card loans), although care is taken to minimize these risks.  Numerous risk factors impact this portfolio, such as the economy, new technology, labor rates, cash flow, financial structure and asset quality.  The payment experience on commercial loans is dependent on adequate cash flows from the business to service both interest and principal due.  Thus, commercial loans may be more sensitive to adverse conditions in the economy generally or adverse conditions in a specific industry.  The Company diversifies risk within this portfolio by closely monitoring industry concentrations and portfolios to ensure that it does not exceed established lending guidelines.  Underwriting standards require a comprehensive credit analysis and independent evaluation of virtually all larger balance commercial loans prior to approval. The Bank’s loan committee will review and approve all new commercial loan originations that exceed the loan officer group’s highest lending limit according to the following thresholds:  up to $750,000 unsecured, up to $3,000,000 secured, and up to $3,000,000 aggregate.  The  Executive Committee of the Bank’s Board of Directors will review and approve all new commercial loan originations up to the legal lending limit of the Bank.

Consumer Loans

Consumer loans are secured by automobiles, mobile homes, recreational vehicles and other personal property.  Personal loans and unsecured credit card receivables are also included as consumer loans.  The Company makes installment credit available to customers in their primary market area of southeastern Ohio and portions of western West Virginia.  Credit approval for consumer loans requires demonstration of sufficient income to repay principal and interest due, stability of employment, a positive credit record and sufficient collateral for secured loans.  The Company monitors the risk associated with these types of loans by monitoring factors such as portfolio growth, lending policies and economic conditions.  Underwriting standards are continually evaluated and modified based upon these factors.  A qualified compliance officer is responsible for monitoring the performance of his or her respective consumer portfolio and updating loan personnel.  The Company makes credit life insurance and health and accident insurance available to all qualified borrowers, thus reducing their risk of loss when their income is terminated or interrupted.  The Company reviews its respective consumer loan portfolios monthly to charge off loans which do not meet applicable standards.  Credit card accounts are administered in accordance with the same standards as those applied to other consumer loans.  Consumer loans generally involve more risk as to collectibility than mortgage loans because of the type and nature of collateral and, in certain instances, the absence of collateral.  As a result, consumer lending collections are dependent upon the borrower’s continued financial stability and are adversely affected by job loss, divorce or personal bankruptcy and by adverse economic conditions.  Also included in the category of consumer loans are home equity loans.  Home equity lines of credit are generally made as second mortgages and charged a variable interest rate.  Home equity lines are written with ten-year terms but are reviewed annually.  The Company’s consumer loans also consist of seasonal TALs offered by the Bank during the tax season.  As previously discussed, TALs are short-term, cash advances against a customer's anticipated income tax refund.

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Underwriting Standards

The Company’s underwriting guidelines and standards are updated periodically and are presented to the Board of Directors of the holding company for approval.  The purposes of the standards and guidelines are to grant loans on a sound and collectible basis; to invest available funds in a safe, profitable manner; to serve the legitimate credit needs of the Company’s primary market areas; and to ensure that all loan applicants receive fair and equal treatment in the lending process.  It is the intent of the underwriting guidelines and standards to:  minimize losses by carefully investigating the credit history of each applicant, verify the source of repayment and the ability of the applicant to repay, collateralize those loans in which collateral is deemed to be required, exercise care in the documentation of the application, review, approval, and origination process, and administer a comprehensive loan collection program.  The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application.  A loan officer may grant, with justification, a loan with variances from the underwriting guidelines and standards.  However, a loan officer may not exceed his or her respective lending authority without obtaining the prior, proper approval from a superior.

Investment Activities

The Company’s investment policy stresses the management of the investment securities portfolio, which includes both securities held to maturity and securities available for sale, to maximize the return over the long-term in a manner that is consistent with good banking practices and relative safety of principal.  The Company’s investment portfolio is comprised of United States Government, sponsored entity and mortgage-backed securities, as well as obligations of state and political subdivisions.  Revenues from interest and dividends on securities accounted for 4.43%, 4.68% and 5.51% of total consolidated revenues in 2021, 2020 and 2019, respectively.  The Company currently does not engage in trading account activity.

Funding Activities

Sources of funds for loan and investment activities include “core deposits.”  Core deposits include demand deposits, savings, money market, NOW accounts, and certificates of deposit less than $100,000.  The Company will also utilize certificates of deposit and money market deposits from wholesale markets, when necessary, to support growth in assets.  Short- and long-term advances from the Federal Home Loan Bank have also been a significant source of funding.  Further funding has come from one trust preferred securities offering through Ohio Valley Statutory Trust III, totaling $8,500,000.  Ohio Valley used the proceeds to provide additional capital to the Bank to support growth. 

Electronic Refund Check / Electronic Refund Deposit Activities

The Company began its participation in a tax refund service in 2006 by serving as a facilitator for the clearing of tax refunds for a single tax refund product provider.  An agreement between the Bank and the original provider required the Bank to process electronic refund checks ("ERCs") and electronic refund deposits ("ERDs") presented for payment on behalf of taxpayers containing taxpayer refunds.  The Bank, in turn, would receive a fee paid by the provider for each transaction that was processed by the Bank.  In 2015, the agreement between the Bank and the original provider, which had a term ending at December 31, 2019, was assumed by MetaBank.  MetaBank ceased utilizing the services of the Bank at the end of 2018. Due to the absence of tax processing activity, the Bank experienced a significant decline in ERC/ERD fee income in 2019 and 2020. On March 10, 2020, the Bank announced that it had entered into a new agreement with a third-party to process future electronic refund checks and deposits presented for payment on behalf of taxpayers through accounts containing taxpayer refunds.  The new agreement provides that the Bank will process refunds for five tax seasons, beginning with the 2021 tax season and extending through the 2025 tax season.

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Competition

Competition among providers of financial products and services continues to increase, with consumers having the opportunity to select from a growing variety of traditional and nontraditional alternatives.  The principal factors of competition for the Company’s banking business are the rates of interest charged for loans, the rates of interest paid for deposits, the fees charged for services and the availability and quality of services.  The market area for the Bank is concentrated primarily in the Gallia, Meigs, Jackson, Vinton and Pike Counties of Ohio, as well as the Mason and Cabell Counties of West Virginia.  Some additional business originates from the surrounding Ohio counties of Lawrence, Scioto, Athens and Ross.  Competition for deposits and loans comes primarily from local banks and savings associations, although some competition is also experienced from local credit unions and insurance companies.  The Company also competes with non-financial institutions that offer financial products and services.  Some of the Company’s competitors are not subject to the same level of regulation and oversight that is required of banks and bank holding companies.  As a result, some of these competitors may have lower cost structures.

Loan Central’s market presence further strengthens the Company’s ability to compete in the Gallia, Jackson, Lawrence and Pike Counties by serving a consumer base that may not meet the Bank’s credit standards.  Loan Central also operates in Scioto and Ross counties of Ohio, which are outside the Bank’s primary market area.  With the exception of TALs related to Loan Central’s tax preparation activities and the Bank’s refund advance activities, the Company’s business is not seasonal, nor is it dependent upon a single or small group of customers.

Race Day permits the Company to compete in select states outside of our core banking markets by using technology to originate and close mortgage loans.  The loans are sourced from various mortgage rate listing websites and the market is considered highly competitive.  Consumers are sensitive to interest rates and origination fees, which are easily compared on the website.  The volume of loan originations can be impacted by general economic conditions and can be influenced by the level and direction of market interest rates.

Historically, larger regional institutions, with substantially greater resources, have been generating a growing market presence.  Yet, in recent years, the financial industry continues to consolidate, which affects competition by eliminating some regional and local institutions, while strengthening the acquiring companies.  Many financial institutions have experienced significant challenges as a result of the economic crisis, which resulted in bank failures and significant intervention from the United States Government.

Overall, the Company believes it is able to compete effectively in both current and newer markets.  There can be no assurance, however, that our ability to market products and services successfully or to obtain adequate yield on our loans will not be impacted by the nature of the competition that now exists or may later develop.

Supervision and Regulation

The following is a summary of certain statutes and regulations affecting Ohio Valley as well as the Bank and Loan Central.  This summary is qualified in its entirety by reference to such statutes and regulations. The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers, depositors, borrowers, the Deposit Insurance Fund (“DIF”) and the banking system as a whole, and not for the protection of shareholders.  Applicable laws and regulations restrict permissible activities and investments and require actions to protect loan, deposit, brokerage, fiduciary and other customers, as well as the DIF.  They also may restrict Ohio Valley’s abilty to repurchase its common shares or to receive dividends from the Bank and impose capital adequacy and liquidity requirements.

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Regulation of Financial Holding Company

Ohio Valley is subject to the requirements of the BHC Act and to the reporting requirements of, and examination and regulation by, the Board of Governors of the Federal Reserve System (“Federal Reserve Board”).  The Federal Reserve Board has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties, issue cease and desist or removal orders, and require that a bank holding company divest subsidiaries (including its banking subsidiaries). In general, the Federal Reserve Board may initiate enforcement action for violations of laws and regulations and unsafe or unsound practices.

A bank holding company is required to serve as a source of financial strength to each subsidiary bank and to commit resources to support those subsidiary banks.  The Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to the shareholders of the bank holding company if the Federal Reserve Board believes the payment would be an unsafe or unsound practice. The Federal Reserve Board also requires bank holding companies to provide advance notification of planned dividends under certain circumstances.

The BHC Act requires the prior approval of the Federal Reserve Board in any case where a bank holding company proposes to:

• acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank that is not already majority-owned by it;

• acquire all or substantially all of the assets of another bank or bank holding company; or

• merge or consolidate with any other bank holding company.

Holding Company Activities

Ohio Valley is a financial holding company, which permits it to engage in activities beyond those permitted for traditional bank holding companies.  A qualifying bank holding company may elect to become a financial holding company and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature and not otherwise permissible for a bank holding company, if: (i) the holding company is "well managed" and "well capitalized" and (ii) each of its subsidiary banks (a) is well capitalized under the Federal Deposit Insurance Corporation Act of 1991 (“FDIA”) prompt corrective action provisions, (b) is well managed, and (c) has at least a "satisfactory" rating under the Community Reinvestment Act of 1977, as amended (“CRA”).  No regulatory approval is required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

Financial holding companies may engage in a wide variety of financial activities, including any activity that the Federal Reserve Board and the Treasury Department consider financial in nature or incidental to financial activities, and any activity that the Federal Reserve Board determines complementary to a financial activity and which does not pose a substantial safety and soundness risk.  These activities include securities underwriting, dealing, and market making activities, sponsoring mutual funds and investment companies, insurance and underwriting activities and merchant banking activities.  Because it has authority to engage in a broad array of financial activities, a financial holding company may have several affiliates that are functionally regulated by financial regulators other than the Federal Reserve Board, such as the SEC and state insurance regulators.

If a financial holding company or a subsidiary bank fails to meet the requirements for the holding company to remain a financial holding company, the financial holding company must enter into a written agreement with the Federal Reserve Board within 45 days to comply with all applicable capital and management requirements.  Until the Federal Reserve Board determines that the holding company and its subsidiary banks meet the requirements, the Federal Reserve Board may impose additional limitations or conditions on the conduct or activities of the financial holding company or any affiliate that the Federal Reserve Board finds to be appropriate or consistent with federal banking laws.  If the deficiencies are not corrected within 180 days, the financial holding company may be required to divest ownership or control of all banking subsidiaries.  If restrictions are imposed on the activities of the holding company, such restrictions may not be made publicly available pursuant to confidentiality regulations of the banking regulators.

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Loan Central is supervised and regulated by the State of Ohio Department of Financial Institutions, Division of Consumer Finance (“ODFI”).  Ohio Valley Financial Services is supervised and regulated by the State of Ohio Department of Insurance. OVBC Captive is supervised and regulated by the State of Nevada Division of Insurance. The insurance laws and regulations applicable to insurance agencies, including Ohio Valley Financial Services and OVBC Captive, require education and licensing of individual agents and agencies, require reports and impose business conduct rules.

The Coronavirus Aid, Relief, and Economic Security Act of 2020

In response to the novel COVID-19 pandemic (“COVID-19”), the Coronavirus Aid, Relief, and Economic Security Act of 2020, as amended (the “CARES Act”), was signed into law on March 27, 2020, to provide national emergency economic relief measures. Many of the CARES Act’s programs are dependent upon the direct involvement of U.S. financial institutions, such as Ohio Valley and the Bank, and have been implemented through rules and guidance adopted by federal departments and agencies, including the U.S. Department of Treasury, the Federal Reserve Board and other federal banking agencies, including those with direct supervisory jurisdiction over Ohio Valley and the Bank. Furthermore, as COVID-19 evolves, federal regulatory authorities continue to issue additional guidance with respect to the implementation, lifecycle, and eligibility requirements for the various CARES Act programs as well as industry-specific recovery procedures for COVID-19. In addition, it is possible that Congress will enact supplementary COVID-19 response legislation, including amendments to the CARES Act or new bills comparable in scope to the CARES Act. For example, on December 27, 2020, the Consolidated Appropriations Act (the “CAA”) was signed into law, which, among other things, allowed certain banks to temporarily postpone implementation of the current expected credit loss (“CECL”) model (accounting standard), which is described below. Ohio Valley is continuing to assess the impact of the CARES Act and other statues, regulations and supervisory guidance related to COVID-19.

The CARES Act amended the loan program of the Small Business Administration (the “SBA”), in which the Bank participates, to create a guaranteed, unsecured loan program, the Paycheck Protection Program (the “PPP”), to fund operational costs of eligible businesses, organizations and self-employed persons during COVID-19. In June 2020, the Paycheck Protection Program Flexibility Act was enacted, which, among other things, gave borrowers additional time and flexibility to use PPP loan proceeds. After previously being extended by Congress, the application deadline for PPP loans expired on May 31, 2021. As a participating lender in the PPP, the Bank continues to monitor legislative, regulatory, and supervisory developments related thereto. On September 29, 2020, the federal bank regulatory agencies issued a final rule that neutralizes the regulatory capital and liquidity coverage ratio effects of participating in certain COVID-19 liquidity facilities due to the fact there is no credit or market risk in association with exposures pledged to such facilities. As a result, the final rule supports the flow of credit to households and businesses affected by COVID-19.

Economic Growth, Regulatory Relief and Consumer Protection Act

On May 25, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (“Regulatory Relief Act”) was enacted, which repealed or modified  certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (“Dodd-Frank Act”), and eased regulations on all but the largest banks (those with consolidated assets in excess of $250 billion).  Bank holding companies with consolidated assets of less than $100 billion, including Ohio Valley, are no longer subject to enhanced prudential standards. The Regulatory Relief Act also relieves bank holding companies and banks with consolidated assets of less than $100 billion, including Ohio Valley, from certain record-keeping, reporting and disclosure requirements. Certain other regulatory requirements applied only to banks with assets in excess of $50 billion and so did not apply to the Company even before the enactment of the Regulatory Relief Act.

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Regulation of Ohio State Chartered Banks

As an Ohio state-chartered bank that is a member of the Federal Reserve Bank of Cleveland (“FRB”), the Bank is supervised and regulated primarily by the ODFI and the Federal Reserve Board.  The Bank is also subject to the regulations of the Consumer Financial Protection Bureau (“CFPB”), which has broad authority to adopt and enforce consumer protection regulations.

The Bank’s deposits are insured up to applicable limits by the FDIC, and the Bank is subject to the applicable provisions of the FDIA and certain regulations of the FDIC.

Various requirements and restrictions under the laws of the United States, the State of Ohio and the State of West Virginia affect the operations of the Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on payment of dividends, limitations on branching and increasingly extensive consumer protection laws and regulations.

Consumer Protection Laws and Regulations

Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations.  The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement powers over consumer financial products and services. The CFPB has adopted numerous rules with respect to consumer protection laws and has commenced related enforcement actions. The following are just a few of the consumer protection laws applicable to the Bank:

• Community Reinvestment Act of 1977: imposes a continuing and affirmative obligation to fulfill the credit needs of its entire community, including low- and moderate-income neighborhoods.

• Equal Credit Opportunity Act: prohibits discrimination in any credit transaction on the basis of any of various criteria.

• Truth in Lending Act: requires that credit terms are disclosed in a manner that permits a consumer to understand and compare credit terms more readily and knowledgeably.

• Fair Housing Act: makes it unlawful for a lender to discriminate in its housing-related lending activities against any person on the basis of any of certain criteria.

• Home Mortgage Disclosure Act: requires financial institutions to collect data that enables regulatory agencies to determine whether the financial institutions are serving the housing credit needs of the communities in which they are located.

• Real Estate Settlement Procedures Act: requires that lenders provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits abusive practices that increase borrowers’ costs.

• Privacy provisions of the Gramm-Leach-Bliley Act: requires financial institutions to establish policies and procedures to restrict the sharing of non-public customer data with non-affiliated parties and to protect customer information from unauthorized access.

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The banking regulators also use their authority under the Federal Trade Commission Act to take supervisory or enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of specific banking or consumer finance law.

On July 22, 2020, the CFPB issued a final small dollar loan rule related to payday, vehicle title and certain high cost installment loans (the “Small Dollar Rule”) that modified a former rule that was issued in November 2013. Specifically, the Small Dollar Rule revokes provisions contained in the 2013 rule that: (i) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms; (ii) prescribe mandatory underwriting requirements for making the ability-to-repay determination; (iii) exempt certain loans from mandatory underwriting requirements; and (iv) establish related definitions, reporting, and recordkeeping requirements. The compliance date of the Small Dollar Rule is June 13, 2022.

Further, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes. The Small Dollar Rule did not have a material effect on Ohio Valley’s financial condition or results of operations on a consolidated basis in 2021.

Capital Requirements

Financial institutions and their holding companies are required to maintain capital as a way of absorbing losses that can, as well as losses that cannot, be predicted.  The Federal Reserve Board has adopted risk-based capital guidelines for financial holding companies as well as state banks that are members of a Federal Reserve Bank.  The Office of the Comptroller of the Currency (“OCC”) and the FDIC have adopted risk-based capital guidelines for national banks and state non-member banks, respectively.  The guidelines provide a systematic analytical framework which makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy and incentivizes holding liquid, low-risk assets.  Capital levels as measured by these standards are also used to categorize financial institutions for purposes of certain prompt corrective action regulatory provisions.

Capital rules applicable to smaller banking organizations (the “Basel III Capital Rules”), which also implement certain of the provisions of the Dodd-Frank Act, became effective commencing on January 1, 2015.  Compliance with the new minimum capital requirements was required effective January 1, 2015, while a new capital conservation buffer and deductions from common equity capital phased in from January 1, 2016, through January 1, 2019, and most deductions from common equity tier 1 capital phased in from January 1, 2015, through January 1, 2019.

The rules include (i) a minimum common equity tier 1 capital ratio of 4.5%, (ii) a minimum tier 1 capital ratio of 6.0%, (iii) a minimum total risk-based capital ratio of 8.0%, and (iv) a minimum tier 1 leverage ratio of 4.0%.

Common equity for the common equity tier 1 capital ratio includes common stock (plus related surplus) and retained earnings, plus limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.

Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not otherwise permitted), and limited amounts of minority interests in the form of additional tier 1 capital instruments, less certain deductions.

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Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and limited amounts of the allowance for loan and lease losses, subject to specified eligibility criteria, less applicable deductions.

The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels).

Under the guidelines, capital is compared to the relative risk included in the balance sheet.  To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The Basel III Capital Rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the company does not hold a capital conservation buffer of greater than 2.5% composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter.

In December 2018, the federal banking agencies issued a final rule to address regulatory treatment of credit loss allowances under CECL.  The rule revised the federal banking agencies’ regulatory capital rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model. Concurrent with the enactment of the CARES Act, federal banking agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL. The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay. On August 26, 2020, the federal banking agencies issued a final rule that made certain technical changes to the interim final rule, including expanding the pool of eligible institutions. The changes in the final rule applied only to those banking organizations that elected the CECL transition relief provided for under the rule.

Federal banking regulators have established regulations governing prompt corrective action to resolve capital deficient banks. Under these regulations, institutions that become undercapitalized become subject to mandatory regulatory scrutiny and limitations, which increase as capital continues to decrease.  Each such institution is also required to file a capital plan with its primary federal regulator, and its holding company must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes undercapitalized.

In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure.  At December 31, 2021, the Bank met the capital ratio requirements to be deemed “well-capitalized” according to the guidelines described above.

A bank with a capital level that might qualify for well capitalized or adequately capitalized status may nevertheless be treated as though the bank is in the next lower capital category if the bank’s primary federal banking supervisory authority determines that an unsafe or unsound condition or practice warrants that treatment.  A bank’s operations can be significantly affected by its capital classification under the prompt corrective action rules.  For example, a bank that is not well capitalized generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market without advance regulatory approval.  These deposit-funding limitations can have an adverse effect on the bank’s liquidity.  At each successively lower capital category, an insured depository institution is subject to additional restrictions.  Undercapitalized banks are required to take specified actions to increase their capital or otherwise decrease the risks to the DIF. Bank regulatory agencies generally are required to appoint a receiver or conservator within 90 days after a bank becomes critically undercapitalized with a leverage ratio of less than 2.0%.  The FDIA provides that a federal bank regulatory authority may require a bank holding company to divest itself of an undercapitalized bank subsidiary if the agency determines that divestiture will improve the bank’s financial condition and prospects.

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Regulations of the Federal Reserve Board generally require a financial holding company to maintain total risk-based capital of 10.0% and tier 1 risk-based capital of 6.0%.  If, however, a bank holding company satisfies the requirements of the Federal Reserve Board’s Small Bank Holding Company and Small Savings and Loan Holding Company Policy Statement (the “SBHCP”), the holding company is not required to meet the consolidated capital requirements.  As amended effective in September 2018, the SBHCP requires that the holding company have assets of less than $3 billion, that it meet certain qualitative requirements, and that all of the holding company’s bank subsidiaries meet all bank capital requirements.  As of December 31, 2021, Ohio Valley was deemed to meet the SBHCP requirements and so was not required to meet consolidated capital requirements at the holding company level.

Limits on Dividends

The ability of a bank holding company to obtain funds for the payment of dividends and for other cash requirements is largely dependent on the amount of dividends that may be declared by its subsidiary banks and other subsidiaries.  The Federal Reserve Board also expects Ohio Valley to serve as a source of strength to the Bank, which may require it to retain capital for further investments in the Bank, rather than for dividends for shareholders of Ohio Valley.  The Bank may not pay dividends to Ohio Valley if, after paying such dividends, it would fail to meet the required capital levels. Dividends are also subject to limitations if the Company or the Bank fails to hold the required capital conservation buffer.  The Bank must have the approval of its regulatory authorities if a dividend in any year would cause the total dividends for that year to exceed the sum of its current year’s net profits and retained net profits for the preceding two years, less required transfers to surplus.  Under Ohio law, the Bank may pay a dividend from surplus only with the approval of its shareholders and the approval of the Superintendent of Financial Institutions.  Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice or if necessary to maintain adequate capital for the Bank.  These provisions could have the effect of limiting Ohio Valley’s ability to pay dividends on its outstanding common shares.

In addition, Federal Reserve Board policy requires Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

Dividend restrictions are also listed within the provisions of Ohio Valley’s trust preferred security arrangements.  Under the provisions of these agreements, the interest payable on the trust preferred securities is deferral for up to five years and any such deferral would not be considered a default.  During any period of deferral, Ohio Valley would be precluded from declaring or paying dividends to its shareholders or repurchasing any of its common stock.

Deposit Insurance Assessments

The FDIC is an independent federal agency which insures deposits, up to prescribed statutory limits, of federally-insured banks and savings associations and safeguards the safety and soundness of the financial institution industry.  The deposits of the Bank are insured up to statutorily prescribed limits by the FDIC, generally up to a maximum of $250,000 per separately insured depositor.

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As insurer, the FDIC is authorized to conduct examinations of and to require reporting by insured institutions, including the Bank, to prohibit any insured institution from engaging in any activity the FDIC determines by regulation or order to pose a threat to the DIF, and to take enforcement actions against insured institutions.  The FDIC may terminate insurance of deposits of any institution if it finds that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or other regulatory agency.

The FDIC assesses a quarterly deposit insurance premium on each insured institution based on risk characteristics of the institution and may also impose special assessments in emergency situations.  The premiums fund the DIF.  Pursuant to the Dodd-Frank Act, the FDIC has established 2.0% as the designated reserve ratio (“DRR”), which is the amount in the DIF as a percentage of all DIF insured deposits.  In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Act.  The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.  Although the FDIC’s rules reduced assessment rates on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reached 1.35%.  The DRR reached 1.35% on September 30, 2018.  The rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk. The rules also provide assessment credits to banks with assets of less than $10 billion for the portion of their assessments that contributed to the increase of the DRR to 1.35%.  On June 30, 2019, the DRR reached 1.40%, and the FDIC applied small bank assessment credits to quarterly assessment invoices, beginning with the second quarter assessment payable in September 2019. On June 30, 2020, the DRR fell below the statutory minimum DRR to 1.30%. As a result, the FDIC adopted a restoration plan requiring the restoration of the DRR to 1.35% by September 30, 2028, within eight years of plan establishment. This restoration plan maintains the scheduled assessment rates for all insured institutions. The DRR was 1.27% on September 30, 2021.

Insurance of deposits may be terminated by the FDIC upon a finding that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the bank's regulatory agency.  Notice would be given to all depositors before the deposit insurance was terminated.

Community Reinvestment Act

The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.  Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit or other financial assistance to low and moderate-income individuals and communities.  Depository institutions are periodically examined for compliance with the CRA. As of its most recent evaluation, the Bank was assigned an overall CRA rating of “Satisfactory.”

Customer Privacy Protections

The Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers to nonaffiliated third parties.  These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated party.

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Patriot Act

The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorist Act of 2001, as amended (the “Patriot Act”), and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity.  The Company has established policies and procedures to comply with the requirements of the Patriot Act.

Office of Foreign Assets Control Regulation

The United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries. Ohio Valley is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence. Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required. Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

Cybersecurity

In March 2015, federal regulators issued two related statements regarding cybersecurity. One statement indicates that financial institutions should design multiple layers of security controls to establish several lines of defense and to ensure that their risk management processes also address the risks posed by compromised customer credentials, including security measures to reliably authenticate customers accessing Internet-based services of the financial institution. The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the financial institution’s operations after a cyber-attack involving destructive malware. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cyber-attack. If Ohio Valley fails to observe the regulatory guidance, it could be subject to various regulatory sanctions, including financial penalties.

In February 2018, the SEC published interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents. These SEC guidelines, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.

In November 2021, federal banking agencies issued a final rule requiring banking organizations that experience a computer-security incident to notify certain entities. A computer-security incident occurs when actual or potential harm to the confidentiality, integrity, or availability of information or an information system occurs, or there is a violation or imminent threat of a violation to banking security policies and procedures. The affected bank must notify its respective federal regulator of the computer-security incident as soon as possible and no later than 36 hours after the bank determines a computer-security incident has occurred. These notifications are intended to promote early awareness of threats to banking organizations and will help banks react to those threats before they manifest into bigger incidents. This rule also requires bank service providers to notify its customers of a computer-security incident.

State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements. Ohio Valley expects this trend of state-level activity in those areas to continue and is continually monitoring developments in the states in which our customers are located.

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In the ordinary course of business, Ohio Valley relies on electronic communications and information systems to conduct its operations and to store sensitive data. Ohio Valley employs an in-depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls. Ohio Valley employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. Notwithstanding the strength of Ohio Valley’s defensive measures, the threat from cyber-attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. While to date, Ohio Valley has not detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, Ohio Valley’s systems and those of its customers and third-party service providers are under constant threat and it is possible that Ohio Valley could experience a significant event in the future. Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers.

Employees

As of December 31, 2021, Ohio Valley and its subsidiaries had approximately 264 employees and officers and 255 full-time equivalent employees and officers.  Management considers its relationship with its employees and officers to be good.

Other Information

Management anticipates no material effect upon the capital expenditures, earnings and competitive position of the Company by reason of any laws regulating or protecting the environment.  Ohio Valley believes that the nature of the operations of its subsidiaries has little, if any, environmental impact.  Ohio Valley, therefore, anticipates no material capital expenditures for environmental control facilities in its current fiscal year or for the foreseeable future.

The Bank and Loan Central may be required to make capital expenditures related to properties which they may acquire through foreclosure proceedings in the future.  However, the amount of such capital expenditures, if any, is not currently determinable.

Neither Ohio Valley nor its subsidiaries have any material patents, trademarks, licenses, franchises or concessions.  No material amounts have been spent on research activities, and no employees are engaged full-time in research activities.

Financial Information About Foreign and Domestic Operations and Export Sales

Ohio Valley’s subsidiaries do not have any offices located in a foreign country, and they have no foreign assets, liabilities, or related income and expense.

Statistical Disclosure

The following section contains certain financial disclosures relating to Ohio Valley as required under the SEC’s Subpart 1400 of Regulation S-K, “Disclosure by Bank and Savings and Loan Registrants,” or a specific reference as to the location of the required disclosures in Ohio Valley’s 2021 Annual Report to Shareholders, which are incorporated herein by reference.

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DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL

A. & B.  The average balance sheet information and the related analysis of net interest earnings for the years ended December 31, 2021, 2020 and 2019 are incorporated herein by reference to the information  appearing under the caption “Table I – Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

C. Tables setting forth the effect of volume and rate changes on interest income and expense for the years ended December 31, 2021 and 2020 are incorporated herein by reference to the information appearing under the caption “Table II - Rate Volume Analysis of Changes in Interest Income & Expense,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

INVESTMENT PORTFOLIO

A. Information required by this item is incorporated herein by reference to the information appearing under the caption “Table III - Securities,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders

B. Excluding obligations of the United States Government and its agencies, no concentration of securities exists of any issuer that is greater than 10% of shareholders’ equity of Ohio Valley.

LOAN PORTFOLIO

A. Maturities and Sensitivities of Loans to Changes in Interest Rates - Information required by this item is incorporated herein by reference to the information appearing under the caption “Table IV - Maturity and Repricing Data of Loans,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

ALLOWANCE FOR CREDIT LOSSES

               A. & B. Discussion of factors that influenced management in determining the amount of additions charged to provision expense is incorporated herein by reference to the information appearing under the captions “Provision Expense” and “Allowance for Loan Losses” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

Allocation of the Allowance for Loan Losses - Information required by this item is incorporated herein by reference to the information appearing under the caption  “Table V - Allocation of the Allowance for Loan Losses,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

Credit ratios - Information required by this item is incorporated herein by reference to the information appearing under the caption  “Table VI – Credit Ratios,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

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V. DEPOSITS

A. Deposit Summary - Information required by this item is incorporated herein by reference to the information appearing under the caption “Table I - Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

               C.&D. Foreign Deposits - There were no foreign deposits outstanding at December 31, 2021, 2020, or 2019.

E. Uninsured Deposits – Uninsured deposits were estimated at $271,727 and $238,914 at December 31, 2021 and December 31, 2020, respectively.

F. Schedule of Maturities - The following table provides the uninsured portion of time deposits at December 31, 2021, with a maturity of:

December 31, 2021			Over		Over
(dollars in thousands)	3 months		3 through		6 through		Over
	or less		6 months		12 months		12 months
Total uninsured time deposits	$	15,993	$	11,178	$	11,316	$	3,795

ITEM 1A – RISK FACTORS

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this report and other publicly available documents incorporated herein by reference constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and as defined in the Private Securities Litigation Reform Act of 1995.  Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar expressions. Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the  COVID-19 pandemic, and which could cause actual results to differ materially from those expressed in such forward looking statements.  These factors include, but are not limited to:  the effects of the COVID-19 pandemic on our business, operations, customers and capital position; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; the impact of COVID-19 on local, national and global economic conditions; unexpected changes in interest rates or disruptions in the mortgage market related to COVID-19 or responses to the health crisis; the effects of various governmental responses to the COVID-19 pandemic; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; fluctuations in interest rates; the level of defaults and prepayment on loans made by the Company; unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes.

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 those factors identified below.  There is also the risk that Ohio Valley’s management or Board of Directors incorrectly analyzes these risks and forces, or that the strategies Ohio Valley develops to address them are unsuccessful.

Forward-looking statements speak only as of the date on which they are made.  Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.  The Company undertakes no obligation and disclaims any intention to republish revised or updated forward looking statements, whether as a result of new information, unanticipated future events or otherwise.  All subsequent written and oral forward-looking statements attributable to Ohio Valley or any person acting on our behalf are qualified in their entirety by the following cautionary statements.

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The following are certain risks that management believes are specific to our business.  This should not be viewed as an all-inclusive list of risks or as presenting the risk factors listed in any particular order.

Risks Related to Economic, Political and Market Conditions

Economic, political and market risks could adversely affect our earnings and capital through declines in loan demand, quality of investment securities, our borrowers’ ability to repay loans, the value of the collateral securing our loans, and deposits.

Our success depends, to a certain extent, upon local and national economic and political conditions, as well as governmental fiscal and monetary policies.  Inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, tariffs, a United States withdrawal from a significant renegotiation of trade agreements, trade wars, and other factors beyond our control may adversely affect our deposit levels and composition, the quality of our assets including investment securities available for purchase, and the demand for loans, which, in turn, may adversely affect our earnings and capital. Recent political developments have resulted in substantial changes in economic and political conditions for the United States and the remainder of the world. Because a significant amount of our loans are secured by real estate, additional decreases in real estate values likely would adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.  Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.

In addition, consistent with our community banking philosophy, substantially all of our loans are to individuals and businesses in Ohio and West Virginia.  Therefore, our local and regional economies have a direct impact on our ability to generate deposits to support loan growth, the demand for loans, the ability of borrowers to repay loans, the value of collateral securing our loans (particularly loans secured by real estate), and our ability to collect, liquidate and restructure problem loans.  Consequently, any decline in the economy of this market area could have a material adverse effect on our financial condition and results of operations.  We are less able than larger financial institutions to spread risks of unfavorable local economic conditions across a large number of diversified economies.

Our earnings are significantly affected by the fiscal and monetary policies of the United States Government and its agencies, sometimes adversely.

  The policies of the Federal Reserve Board impact us significantly.  The Federal Reserve Board regulates the supply of money and credit in the United States.  Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold.  Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict.  Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans.  For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services.  This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.

Changes in interest rates could have a material adverse effect on our financial condition and results of operations.

Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates we earn on loans, securities and other earning assets and (ii) the interest rates we pay on deposits and other borrowings.  These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities (in particular, the Federal Reserve Board).  While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will be effective in avoiding undue interest rate risk.  As market interest rates rise, we will have competitive pressures to increase the rates we pay on deposits, which will result in a decrease of our net interest income and could have a material adverse effect on our financial condition and results of operations.

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In addition to the effect of changes in interest rates on our interest rate spread, changes in interest rates may negatively affect the ability of our borrowers to repay their loans, particularly as interest rates have been rising and adjustable-rate debt becomes more expensive. Increased defaults on loans could have a material adverse effect on our financial condition, results of operations and cash flows.

A transition away from the London Interbank Offered Rate (“LIBOR”) as a reference rate for financial contracts could negatively affect our income and expenses and the value of various financial contracts.

LIBOR is used extensively in the U.S. and globally as a reference rate for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives.  LIBOR is set based on interest rate information reported by certain banks, which may stop reporting such information after 2021. In 2017, the United Kingdom’s Financial Conduct Authority (“FCA”) announced that after 2021 it would no longer compel banks to submit rates required to calculate LIBOR. In November 2020, to facilitate an orderly LIBOR transition, the OCC, the FDIC, and the Federal Reserve Board jointly announced that entering into new contracts using LIBOR as a reference rate after December 31, 2021, would create a safety and soundness risk. On March 5, 2021, the FCA announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after December 31, 2021, in the case of 1-week and 2-month LIBOR, and immediately after June 30, 2023, in the case of the remaining LIBOR settings. In the United States, efforts to identify a set of alternative U.S. dollar reference interest rates are ongoing, and the Alternative Reference Rate Committee (“ARRC”), has recommended the use of a Secured Overnight Funding Rate (“SOFR”). SOFR is different from LIBOR in that it is a backward looking secured rate rather than a forward looking unsecured rate.

These differences could lead to a greater disconnect between our costs to raise funds for SOFR as compared to LIBOR. For cash products and loans, ARRC has also recommended Term SOFR, which is a forward looking SOFRbased on SOFR futures and may in part reduce differences between SOFR and LIBOR. There are operational issues which may create a delay in the transition to SOFR or other substitute indices, leading to uncertainty across the industry.

It is currently unknown whether these recommendations and proposals will be broadly accepted, whether they will continue to evolve, and what effect of their implementation may have on the markets for floating-rate financial instruments. Any discontinuance, modification, alternative reference rates or other reforms may adversely affect interest rates on our current or future indebtedness and other financial instruments.

We have a limited number of loans, derivative contracts, borrowings and other financial instruments, and continue to enter into loans, derivatives contracts, borrowings and other financial instruments, with attributes that are directly or indirectly dependent on LIBOR.  The transition from LIBOR could create costs and additional risk for us.  Since proposed alternative rates are calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR.  The transition will change our market risk profiles, requiring changes to risk and pricing models, valuation tools, product design and hedging strategies.  Further, our failure to adequately manage this transition process with our customers could adversely impact our reputation. Although we are currently unable to assess what the ultimate impact of the transition from LIBOR will be, any market-wide transition away from LIBOR could have an adverse effect on our business, financial condition and results of operations.

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Adverse changes in the financial markets may adversely impact our results of operations.

The capital and credit markets have been experiencing unprecedented levels of volatility since 2008. While we generally invest in securities with limited credit risk, certain investment securities we hold possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages.  Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates and implied credit spreads.

Structured investments have at times been subject to significant market volatility due to the uncertainty of credit ratings, deterioration in credit losses occurring within certain types of residential mortgages, changes in prepayments of the underlying collateral and the lack of transparency related to the investment structures and the collateral underlying the structured investment vehicles.

A default by another larger financial institution could adversely affect financial markets generally.

Many financial institutions and their related operations are closely intertwined, and the soundness of such financial institutions may, to some degree, be interdependent. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions.  This “systemic risk” may adversely affect our business.

Risks Related to Our Business

The economic impact of COVID-19 or any other pandemic could adversely affect our business, financial condition, liquidity, cash flows, and results of operations.

COVID-19 has negatively impacted global, national and local economies, disrupted global and national supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, increased unemployment levels and decreased consumer confidence, generally. In addition, the pandemic resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities and may result in the same or similar restrictions in the future. As a result, the demand for our products and services have been and may continue to be significantly impacted, which could adversely affect our revenue and results of operations. Furthermore, the pandemic could continue to result in the recognition of credit losses in our loan portfolios and increases in our allowance for credit losses, particularly if businesses remain required to operate at diminished capacities or are required to close again, the impact on the global, national and local economies worsen, or more customers draw on their lines of credit or seek additional loans to help finance their businesses. Our business operations may also be disrupted if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, or other restrictions in connection with COVID-19.

The spread of COVID-19, including new variants thereof,  has also caused us to modify our business practices, including employee work locations, and cancellation of physical participation in meetings, events and conferences. Further, technology in employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to such employees to be more limited or less reliable. The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk from phishing, malware, and other cybersecurity attacks, all of which could expose us to risks of data or financial loss and could seriously disrupt our operations and the operations of any impacted customers.

COVID-19, the rise of new strains thereof, or a new pandemic could subject us to any of the following risks that cannot be predicted, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, liquidity, and results of operations:

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• demand for our products and services may decline, making it difficult to grow assets and income;

• if the economy continues to be unable to be fully re-open, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;

• collateral for loans, especially real estate, may decline in value, which could cause credit losses to increase;

• our allowance for credit losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income; and

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.

Even after the COVID-19 pandemic subsides, the U.S. economy will likely require time to recover, the length of which is unknown and during which the U.S. may experience a recession or market correction. Our business could be materially and adversely affected by such recession or market correction.

We continue to closely monitor COVID-19 and related risks as they evolve. To the extent the effects of COVID-19 adversely impact our business, financial condition, liquidity or results of operations, it may also have the effect of heightening many of the other risks described in this section.

We operate in an extremely competitive market, and our business will suffer if we are unable to compete effectively.

In our market area, we encounter significant competition from other commercial banks, savings and loan associations, credit unions, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions. The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers.  Many of our competitors have substantially greater resources and lending limits than we do and may offer services that we do not or cannot provide.  Technology and other changes are allowing parties to complete financial transactions that historically have involved banks at one or both ends of the transaction.  For example, consumers can now pay bills and transfer funds directly without banks.  The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the loss of customer deposits and income generated from those deposits. In addition, technological advancements allow parties to better serve customers, increase efficiency, and reduce costs. Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend, in part, on our ability to use technology to deliver products and services that provide convenience to customers and to create additional efficiencies in our operations.

Our small to medium-sized business target market may have fewer financial resources to weather a downturn in the economy.

We target our business development and marketing strategy largely to serve the banking and financial services needs of small to medium-sized businesses.  These small to medium-sized businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger companies.  If general economic conditions negatively impact our Ohio and West Virginia markets or the other geographic markets in which we operate, our results of operations and financial condition may be negatively affected.

Our business strategy includes growth plans.  Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

We intend to continue pursuing a profitable growth strategy.  Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in significant growth stages of development.  We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations.  Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could adversely affect our ability to successfully implement our business strategy.  Also, if we grow more slowly than anticipated, our operating results could be materially adversely affected.

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Our ability to grow successfully will depend on a variety of factors, including the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas, our ability to raise sufficient capital and our ability to manage our growth.  While we believe we have the management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or growth will be successfully managed.

We may acquire other financial institutions or parts of institutions in the future and may open new branches.  We also may consider and enter into new lines of business or offer new products or services.  Expansions of our business involve a number of expenses and risks, including:

• the time and costs associated with identifying and evaluating potential acquisitions or new products or services;

• the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to the target institutions;

• the time and costs of evaluating new markets, hiring local management and opening new offices, and the delay between commencing these activities and the generation of profits from the expansion;

• our ability to finance an acquisition or other expansion and the possible dilution to our existing shareholders;

• the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses;

• entry into unfamiliar markets;

• the possible failure of the introduction of new products and services into our existing business;

• the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and

• the risk of loss of key employees and customers.

We may incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect.  Neither can we assure that integration efforts for any future acquisitions will be successful. We may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.  We may also lose customers as we close one or more branches as part of a plan to expand into other areas or become more productive from other branches.

We may not be able to adapt to technological change.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers while reducing costs. Our future success depends, in part, upon our ability to address customer needs by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Digital or cryptocurrencies, blockchain, and other “fintech” technologies are being developed to change the way banks operate and are eliminating the need for banks as financial deposit-keepers and intermediaries. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological changes affecting the financial services industry could negatively affect our growth, revenue and profit.

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Periodic regulatory reviews may affect our operations and financial condition.

We are subject to periodic reviews from state and federal regulators, which may impact our operations and our financial condition.  As part of the regulatory review, the loan portfolio and the allowance for loan losses are evaluated.  As a result, the incurred loss identified on loans or the assigned loan rating could change and may require us to increase our provision for loan losses or loan charge-offs.  In addition, any downgrade in loan ratings could impact our level of impaired loans or classified assets.  Any increase in our provision for loan losses or loan charge-offs as required by these regulatory authorities could have a material adverse effect on our financial condition and results of operations. Findings of deficiencies in compliance with regulations could result in restrictions on our activities or even a loss in our financial holding company status.

Our exposure to credit risk could adversely affect our earnings and financial condition.

Making loans carries inherent risks, including interest rate changes over the time period in which loans may be repaid, risks resulting from changes in the economy, risks that we will have inaccurate or incomplete information about borrowers, risks that borrowers will become unable to repay loans; and, in the case of loans secured by collateral, risks resulting from uncertainties about the future value of the collateral.

Commercial and commercial real estate loans comprise a significant portion of our loan portfolio.  Commercial loans generally are viewed as having a higher credit risk than residential real estate or consumer loans because they usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn.  Since our loan portfolio contains a significant number of commercial and commercial real estate loans, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans, and ultimately could have a material adverse effect on our earnings and financial condition.  We may also have concentrated credit exposure to a particular industry, resulting in a risk of a material adverse effect on our earnings or financial condition if there is an event adversely affecting that industry.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information provided to us by customers and counterparties, including financial statements and other financial information.  We may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors.  For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with United States generally accepted accounting principles (“GAAP”) and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer.  We may also rely on the audit report covering those financial statements.  Our financial condition, results of operations and cash flows could be negatively impacted to the extent that we rely on financial statements that do not comply with GAAP or on financial statements and other financial information that are materially misleading.

We may be required to repurchase loans we have sold or indemnify loan purchasers under the terms of the sale agreements, which could adversely affect our liquidity, results of operations and financial condition.

When the Bank sells a mortgage loan, it agrees to repurchase or substitute a mortgage loan if it is later found to have breached any representation or warranty the Bank made about the loan or if the borrower is later found to have committed fraud in connection with the origination of the loan.  While we have underwriting policies and procedures designed to avoid breaches of representations and warranties as well as borrower fraud, we cannot give assurance that no breach or fraud will ever occur.  Required repurchases, substitutions or indemnifications could have an adverse effect on our liquidity, results of operations and financial condition.

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If our actual loan losses exceed our allowance for loan losses, our net income will decrease.

Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance.  We may experience significant loan losses, which could have a material adverse effect on our operating results.  In accordance with GAAP, we maintain an allowance for loan losses to provide for loan defaults and non-performance, which when combined, we refer to as the allowance for loan losses.  Our allowance for loan losses may not be adequate to cover actual credit losses, and future provisions for credit losses could have a material adverse effect on our operating results.  Our allowance for loan losses is based upon a number of relevant factors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current economic conditions in the primary lending area, prior experience, possible losses arising from specific problem loans, and our evaluation of the risks in the current portfolio. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates.  Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses.  Moreover, the Financial Accounting Standards Board (“FASB”) has changed its requirements for establishing the allowance, which will be effective for us in the first quarter of 2023.  We cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance.  Either of these occurrences could have a material adverse effect on our financial condition and results of operations.

We may lose business due to declining use by consumers of banks to complete financial transactions or increased depositing of funds electronically with banks outside of our market area, which could negatively affect our net financial condition and results of operations.

Technology and other changes allow parties to complete financial transactions without banks.  For example, consumers can pay bills and transfer funds directly without banks.  Consumers can also shop for higher deposit interest rates at banks across the country, which may offer higher rates because they have few or no physical branches and open deposit accounts electronically.  This process could result in the loss of fee income, as well as the loss of client deposits and the income generated from those deposits, in addition to increasing our funding costs.

Failures of, or material breaches in security of, our systems or those of third-party service providers may have a material adverse effect on our business.

We collect, process and store sensitive consumer data by utilizing computer systems and telecommunications networks operated by both us and third-party service providers.  Our dependence upon automated systems to record and process the Bank’s transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those systems, or attacks by third parties will result in losses and may be difficult to detect.  Our inability to use these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations.  In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.  We could also be adversely affected if one of our employees or a third-party service provider causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.  We are further exposed to the risk that third-party service providers may be unable to fulfill their contractual obligations or will be affected by the same risks as the Bank has.  These disruptions may interfere with service to the Bank’s customers, cause additional regulatory scrutiny and result in a financial loss or liability.  We are also at risk of the impact of natural disasters, terrorism and international hostilities on our systems or for the effects of outages or other failures involving power or communications systems operated by others.

Employees could engage in fraudulent, improper or unauthorized activities on behalf of clients or improper use of confidential information.  We may not be able to prevent employee errors or misconduct, and the precautions we take to detect this type of activity might not be effective in all cases.  Employee errors or misconduct could subject us to civil claims for negligence or regulatory enforcement actions, including fines and restrictions on our business.

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In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers.  Such activity can result in financial liability and harm to our reputation.

Management cannot be certain that the security controls we have adopted will prevent unauthorized access to our computer systems or those of our third-party service providers, whom we require to maintain similar controls. A security breach of the computer systems and loss of confidential information, such as customer account numbers or personal information, could result in a loss of customers’ confidence and, thus, loss of business.  In addition, unauthorized access to or use of sensitive data could subject us to litigation and liability and costs to prevent further such occurrences.

Further, we may be affected by data breaches at retailers and other third parties who participate in data interchanges with us and our customers that involve the theft of customer credit and debit card data, which may include the theft of our debit card PIN numbers and commercial card information used to make purchases at such retailers and other third parties.  Such data breaches could result in us incurring significant expenses to reissue debit cards and cover losses, which could result in a material adverse effect on our results of operations.

Our assets at risk for cyber-attacks include financial assets and non-public information belonging to customers.  We use several third-party vendors who have access to our assets via electronic media.  Certain cyber security risks arise due to this access, including cyber espionage, blackmail, ransom, and theft.  As cyber and other data security threats continue to evolve, we may be required to expend significant additional resources to continue to modify and enhance our protective measures or to investigate and remediate any security vulnerabilities.

Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future even if we would like to do so.

We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common stock.  The payment of dividends by us is also subject to certain regulatory restrictions.  As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our subsidiaries’ earnings, capital requirements, financial condition and other factors.  Although our financial earnings and financial condition have allowed us to declare and pay periodic cash dividends to our shareholders, there can be no assurance that our dividend policy or the size of dividend distribution will continue in the future, even if we are able to pay dividends.  Our failure to pay dividends on our common shares could have a material adverse effect on the market price of our common shares.

The loss of key members of our senior management team could adversely affect our business.

We believe that our success depends largely on the efforts and abilities of our senior management.  Their experience and industry contacts significantly benefit us.  In addition, our success depends in part upon senior management’s ability to implement our business strategy.  The competition for qualified personnel in the financial services industry is intense, and the loss of services of any of our senior executive officers or an inability to continue to attract, retain and motivate key personnel could adversely affect our business.  We cannot assure you that we will be able to retain our existing key personnel or attract additional qualified personnel.

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Loss of key employees may disrupt relationships with certain customers.

Our business is primarily relationship-driven in that many of our key employees have extensive customer relationships.  Loss of a key employee with such customer relationships may lead to the loss of business if the customers were to follow that employee to a competitor.  While we believe we have strong relationships with our key producers, we cannot guarantee that all of our key personnel will remain with our organization.  Loss of such key personnel, should they enter into an employment relationship with one of our competitors, could result in the loss of some of our customers.

If we foreclose on collateral property and own the underlying real estate, we may be subject to the increased costs associated with the ownership of real property, resulting in reduced revenue.

We may have to foreclose on collateral property to protect our investment and may thereafter own and operate such property, in which case we will be exposed to the risks inherent in the ownership of real estate.  The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including, but not limited to:  (i) general or local economic conditions; (ii) neighborhood values; (iii) interest rates; (iv) real estate tax rates; (v) operating expenses of the mortgaged properties; (vi) supply of and demand for rental units or properties; (vii) ability to obtain and maintain adequate occupancy of the properties; (viii) zoning laws; (ix) governmental rules, regulations and fiscal policies; and (x) acts of God.  Certain expenditures associated with the ownership of real estate, principally real estate taxes and maintenance costs, may adversely affect the income from the real estate.  Therefore, the cost of operating a real property may exceed the rental income earned from such property, and we may have to advance funds in order to protect our investment, or we may be required to dispose of the real property at a loss.  We may also acquire properties with hazardious substances that must be removed or remediated, the costs of which could be substantial, and we may not be able to recover such costs from the responsible parties.  The foregoing expenditures and costs could adversely affect our ability to generate revenues, resulting in reduced levels of profitability.

A limited trading market exists for our common shares, which could lead to price volatility.

Your ability to sell or purchase our common shares depends upon the existence of an active trading market for our common shares.  Although our common shares are quoted on The NASDAQ Global Market, the volume of trades on any given day has been limited historically.  As a result, you may be unable to sell or purchase our common shares at the volume, price and time that you desire.  Additionally, a fair valuation of the purchase or sales price of our common shares also depends upon an active trading market, and thus the price you receive for a thinly-traded stock such as our common shares, may not reflect its true value.  The limited trading market for our common shares may cause fluctuations in the market value of our common shares to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market.

Risks Related to Legal, Regulatory and Accounting Changes

New laws and increased regulatory oversight may significantly affect our business, financial condition and results of operations.

The financial services industry is extensively regulated.  We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations.  Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors, borrowers, the DIF and the banking system as a whole, and not to benefit our shareholders.  Regulations affecting banks and financial services businesses are undergoing continuous changes, and management cannot predict the effect of these changes.  The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us and our ability to increase the value of our business, possibly limiting the services we provide, increasing the potential for competition from non-banks, or requiring us to change the way we operate.

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Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets held by an institution, the adequacy of an institution’s allowance for loan losses and the ability to complete acquisitions.  Additionally, actions by regulatory agencies against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders. Even the reduction of regulatory restrictions could have an adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or market area.

In addition to laws, regulations and actions directed at the operations of banks, proposals to reform the housing finance market could negatively affect our ability to sell loans.

Increases in FDIC insurance premiums may have a material adverse effect on our earnings.

Increased bank failures for several years commencing in 2008 greatly increased resolution costs of the FDIC and depleted the DIF.  In order to maintain a strong funding position and restore reserve ratios of the DIF, the FDIC took a number of actions, including increasing assessment rates of insured institutions, requiring riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels, changing the assessment base and requiring a prepayment of assessments for over three years.

We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance.  If there are additional financial institution failures, we may be required to pay even higher FDIC premiums. Increases in FDIC insurance premiums may materially adversely affect our results of operations and our ability to continue to pay dividends on our common shares at the current rate or at all.  The FDIC has recently adopted rules revising its assessments in a manner benefitting banks with assets totaling less than $10 billion.  There can be no assurance, though, that assessments will not be changed in the future.

Changes in accounting standards, policies, estimates or procedures could impact our reported financial condition or results of operations.

Entities that set generally applicable accounting standards, such as the FASB, the Securities and Exchange Commission, and other regulatory boards, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements. These changes can be difficult to predict and can materially affect how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, which would result in the restatement of our financial statements for prior periods.

In June 2016, FASB issued a new accounting standard for recognizing current expected credit losses, commonly referred to as CECL.  CECL will result in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectability.  In October 2019, FASB announced it would delay the effective date of CECL for smaller companies, such as Ohio Valley, until fiscal years beginning after December 15, 2022.   Upon adoption of CECL, credit loss allowances may increase, which will decrease retained earnings and regulatory capital.  The federal banking regulators have adopted a regulation that will allow banks to phase in the day-one impact of CECL on regulatory capital over three years.  CECL implementation poses operational risk, including the failure to properly transition internal processes or systems, which could lead to call report errors, financial misstatements, or operational losses.

Management’s accounting policies and methods are fundamental to how we record and report our financial condition and results of operations.  Our management must exercise judgment in selecting and applying many of these accounting policies and methods in order to ensure that they comply with GAAP and reflect management’s judgment as to the most appropriate manner in which to record and report our financial condition and results of operations.  In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet might result in reporting materially different amounts than would have been reported under a different alternative.

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Management has identified several accounting policies that are considered significant (one as being “critical”) to the presentation of our financial condition and results of operations because they require management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions.  Because of the inherent uncertainty of estimates about these matters, no assurance can be given that the application of alternative policies or methods might not result in our reporting materially different amounts.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance ("ESG") practices and disclosure. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights. Increased ESG-related compliance costs for us as well as among our third-party suppliers, vendors and various other parties within our supply chain could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price of our common shares.

General Risk Factors

We may be the subject of litigation and other actions, which could have a material adverse effect on our financial condition, results of operations and cash flows.

From time to time, we may be subject to a variety of litigation arising out of our business. The risk of litigation increases in times of increased troubled loan collection activity. Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, we may not be able to obtain appropriate types or levels of insurance in the future or obtain adequate replacement policies with acceptable terms.

We are at risk of increased losses from fraud.

Criminals are committing fraud at an increasing rate and are using more sophisticated techniques.  In some cases, these individuals are part of larger criminal rings, which allow them to be more effective.  Such fraudulent activity has taken many forms, ranging from debit card fraud, check fraud, mechanical devices attached to ATM machines, social engineering and phishing attacks to obtain personal information, or impersonation of clients through the use of falsified or stolen credentials.  Additionally, an individual or business entity may properly identify itself, yet seek to establish a business relationship for the purpose of perpetrating fraud.  An emerging type of fraud even involves the creation of synthetic identification in which fraudsters "create" individuals for the purpose of perpetrating fraud.  Further, in addition to fraud committed directly against us, we may suffer losses as a result of fraudulent activity committed against third parties.  Increased deployment of technologies, such as chip card technology, defray and reduce certain aspects of fraud; however, criminals are turning to other sources to steal personally identifiable information, such as unaffiliated healthcare providers and government entities, in order to impersonate the consumer and thereby commit fraud.

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ITEM 1B – UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2 - PROPERTIES

The principal executive offices of Ohio Valley and the Bank are located at 420 Third Avenue, Gallipolis, Ohio.  The Bank owns twelve financial service centers located in Gallipolis and Rio Grande (Gallia Co.), Jackson, Oak Hill, and Wellston (Jackson Co.), and Waverly (Pike Co.) in Ohio; and Point Pleasant and Mason (Mason Co.), and Milton and Barboursville (Cabell Co.) in West Virginia. The Bank leases four additional financial service centers located in Gallipolis (Gallia Co.) and Athens (Athens Co.) in Ohio; and Point Pleasant (Mason Co.) in West Virginia. The Bank also owns and operates thirty-six ATMs, including twenty off-site ATMs.  Furthermore, the Bank owns four facilities in Gallipolis (Gallia Co.), Ohio, which are used for additional office space.   The Bank also owns a facility in Gallipolis (Gallia Co.) in Ohio; and a facility in Point Pleasant (Mason Co.) in West Virginia, which are all leased to third parties.

Loan Central conducts its consumer finance operations through six offices located in Gallipolis (Gallia Co.), Jackson (Jackson Co.), Waverly (Pike Co.), South Point (Lawrence Co.), Wheelersburg (Scioto Co.) and Chillicothe (Ross Co.), all in Ohio.  All of these facilities are leased by Loan Central, except for the Gallipolis (Gallia Co.), Jackson (Jackson Co.) and Wheelersburg (Scioto Co.) facilities.  Loan Central leases a portion of its Gallipolis (Gallia Co.) and Wheelersburg (Scioto Co.) facilities to third parties.

Management considers all of these properties to be satisfactory for the Company’s current operations.  The Bank and Loan Centrals’ leased facilities are all subject to commercially standard leasing arrangements.

Information concerning the value of the Company’s owned and leased real property and a summary of future lease payments is contained in “Note D – Premises and Equipment” and “Note E – Leases” of the notes to the Company’s consoldiated financial statements for the fiscal year ended December 31, 2021, located in Ohio Valley’s 2021 Annual Report to Shareholders.

ITEM 3 – LEGAL PROCEEDINGS

From time to time, the Company may be involved in various claims and legal actions in the ordinary course of business. The Company is not currently involved in any material legal proceedings outside the ordinary course of the Company’s business.

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Ohio Valley’s common shares are traded on The NASDAQ Stock Market under the symbol “OVBC,” and were held of record by approximately 2,179 shareholders as of February 28, 2022.

The payment of future cash dividends is at the discretion of our Board of Directors and subject to a number of factors, including results of operations, general business conditions, growth, financial condition, regulatory limitation and other factors deemed relevant by the Board. Further, our ability to pay future cash dividends is subject to certain regulatory requirements and restrictions discussed in the Regulation section in Item 1 above. For further information, see “Note P - Regulatory Matters” of the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2021 located in Ohio Valley’s 2021 Annual Report to Shareholders.

31

ISSUER PURCHASES OF SECURITIES

Ohio Valley did not sell any unregistered equity securities during the three months ended December 31, 2021.

The following table provides information regarding Ohio Valley’s repurchases of its common shares during the three months ended December 31, 2021:

Period	Total number of common shares purchased		Average price paid per common share		Total number of shares purchased as part of publicly announced plans or programs(1)		Maximum approximate dollar value of shares that may yet be purchased under publicly announced plans or programs(1)
October 1 - 31, 2021		6,000	$	27.85		6,000	$	4,375
November 1 - 30, 2021		5,000	$	28.41		5,000	$	4,232
December 1 - 31, 2021		6,625	$	28.20		6,625	$	4,046
TOTAL		17,625	$	28.14		17,625	$	4,046

(1) In July 2021, Ohio Valley’s Board announced its approval of a plan to repurchase up to $5,000,000 of Ohio Valley’s common shares.  The repurchase program has an expiration date of August 31, 2022, unless it is sooner termined or amended by the Board.

ITEM 6 - [Reserved].

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required under this Item 7 by Item 303 of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2021 Annual Report to Shareholders.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Ohio Valley’s consolidated financial statements and related notes are listed below and incorporated herein by reference to Ohio Valley’s 2021 Annual Report to Shareholders.  The supplementary data located under the captions “Consolidated Quarterly Financial Information (unaudited)” and the “Report of Independent Registered Public Accounting Firm” located in Ohio Valley’s 2021 Annual Report to Shareholders is also incorporated herein by reference.

Consolidated Statements of Condition as of December 31, 2021 and 2020

Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019

Notes to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

32

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A – CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

With the participation of the Chief Executive Officer (the principal executive officer) and the Senior Vice President and Chief Financial Officer (the principal financial officer) of Ohio Valley, Ohio Valley's management has evaluated the effectiveness of Ohio Valley's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that Ohio Valley’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of December 31, 2021, in ensuring that the information required to be disclosed by Ohio Valley in the reports that Ohio Valley files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and were operating in an effective manner to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

“Management’s Report on Internal Control Over Financial Reporting” located in Ohio Valley’s 2021 Annual Report to Shareholders is incorporated into this Item 9A by reference.

Report of Registered Public Accounting Firm

The “Report of Independent Registered Public Accounting Firm” located in Ohio Valley’s 2021 Annual Report to Shareholders is incorporated into this Item 9A by reference.

Changes In Internal Control Over Financial Reporting

There was no change in Ohio Valley's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during Ohio Valley's fiscal quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, Ohio Valley's internal control over financial reporting.

ITEM 9B – OTHER INFORMATION

None.

ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

33

PART III

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required under this Item 10 by Items 401, 405, and 407(c)(3), (d)(4) and (d)(5) of SEC Regulation S-K is incorporated herein by reference to the information presented in Ohio Valley’s definitive proxy statement relating to the annual meeting of shareholders of Ohio Valley to be held on May 18, 2022 (the “2022 Proxy Statement”), under the captions “Proxy Item 1:  Election of Directors,” and “Compensation of Executive Officers and Directors” of the 2022 Proxy Statement.

The Board of Directors of Ohio Valley has adopted a Code of Ethics covering the directors, officers and employees of Ohio Valley and its affiliates, including, without limitation, the principal executive officer, the principal financial officer and the principal accounting officer of Ohio Valley.  The Code of Ethics is posted on Ohio Valley’s website at www.ovbc.com.  Amendments to the Code of Ethics and waivers of the provisions of the Code of Ethics will also be posted on Ohio Valley’s website.  Interested persons may obtain copies of the Code of Ethics without charge by writing to Ohio Valley Banc Corp., Attention: Tom R. Shepherd, Secretary, 420 Third Avenue, Gallipolis, Ohio 45631.

ITEM 11 - EXECUTIVE COMPENSATION

The information required under this Item 11 by Items 402 and 407(e)(4) and (e)(5) of SEC Regulation S-K is incorporated herein by reference to the information presented under the captions “Compensation of Executive Officers and Directors” and “Proxy item 1: Election of Directors – Committees of the Board – Compensation and Management Succession Committee” of the 2022 Proxy Statement.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required under this Item 12 by Item 403 of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Ownership of Certain Beneficial Owners and Management” of the 2022 Proxy Statement.

Ohio Valley does not maintain any equity compensation plans requiring disclosure pursuant to Item 201(d) of SEC Regulation S-K.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required under this Item 13 by Item 404 and Item 407(a) of SEC Regulation S-K is incorporated herein by reference to the information presented under the captions “Certain Relationships and Related Transactions” and “Proxy Item 1:  Election of Directors” of the 2022 Proxy Statement.

ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required under this Item 14 by Item 9(e) of Schedule 14A is incorporated herein by reference to the information presented under the captions “Pre-Approval of Services Performed by Independent Registered Public Accounting Firm” and “Services Rendered by Independent Registered Public Accounting Firm” of the 2022 Proxy Statement.

34

PART IV

ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A. (1) Financial Statements

The following consolidated financial statements of Ohio Valley appear in the 2021 Annual Report to Shareholders, Exhibit 13, and are specifically incorporated herein by reference under Item 8 of this Form 10-K:

               Consolidated Statements of Condition as of December 31, 2021 and 2020

Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019

Notes to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Auditor Name: Crowe LLP

Auditor Location: Cleveland, Ohio

PCAOB Number: 173

 (2) Financial Statement Schedules

Financial statement schedules are omitted as they are not required or are not applicable, or the required information is included in the financial statements.

 (3) Exhibits

Reference is made to the Exhibit Index beginning on page 36 of this Form 10-K.

ITEM 16 – FORM 10-K SUMMARY

None.

35

EXHIBIT INDEX

The following exhibits are included in this Form 10-K or are incorporated by reference as noted in the following table:

Exhibit Number	Exhibit Description
3.1	Amended Articles of Incorporation of Ohio Valley (reflects amendments through April 7, 1999) [for SEC reporting compliance only - - not filed with the Ohio Secretary of State]:  Incorporated herein by reference to Exhibit 3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2007 (File No. 000-20914).
3.2	Code of Regulations of Ohio Valley: Incorporated herein by reference to Exhibit 3(b) to Ohio Valley’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 000-20914).
4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt: Filed herewith.
4.2	Description of Registered Securities: Incorporated herein by reference to Exhibit 4.2 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2019 (File No. 000-20914).
10.1*	The Ohio Valley Bank Company Executive Group Life Split Dollar Plan Agreement, dated December 31, 2011, between Thomas E. Wiseman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.1 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2015 (File No. 000-20914).
10.2*	Schedule A to Exhibit 10.1 identifying other identical Executive Group Life Split Dollar Agreements between The Ohio Valley Bank Company and certain executive officers of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.2 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.3(a)*	The Ohio Valley Bank Company Third Amended and Restated Director Retirement Agreement, dated December 18, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.3(b)*	Schedule A to Exhibit 10.3(a) identifying other identical Third Amended and Restated Director Retirement Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.: Filed herewith.
10.4(a)*	The Ohio Valley Bank Company Salary Continuation Agreement, dated January 26, 2016, by and between Larry E. Miller and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.4 to Ohio Valley’s Current Report on Form 8-K filed on January 26, 2016 (File No. 000-20914).

36

Exhibit Number	Exhibit Description
10.4(b)*	Schedule A to Exhibit 10.4(a) identifying other identical Salary Continuation Agreements between The Ohio Valley Bank Company and certain executive officers of Ohio Valley Banc Corp.: Incorporated herein by reference to Exhibit 10.4(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.5(a)*	The Ohio Valley Bank Company Second Amended and Restated Director Deferred Fee Agreement, dated December 18, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.6(a) to Ohio Valley’s Quarterly Report on Form 10-Q for period ended September 30, 2015 (File No. 000-20914).
10.5(b)*	Schedule A to Exhibit 10.5(a) identifying other identical Second Amended and Restated Director Deferred Fee Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.: Filed herewith.
10.6(a)*	The Ohio Valley Bank Company Executive Deferred Compensation Agreement, dated December 18, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.7(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.6(b)*	First Amendment to The Ohio Valley Bank Company Executive Deferred Compensation Agreement, dated January 26, 2016:  Incorporated herein by reference to Exhibit 10.2 to Ohio Valley’s Current Report on Form 8-K filed on January 26, 2016 (File No. 000-20914).
10.6(c)*	The Ohio Valley Bank Company Executive Deferred Compensation Agreement, dated January 26, 2016, between Larry E. Miller and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.1 to Ohio Valley’s Current Report on Form 8-K filed on January 26, 2016 (File No. 000-20914).
10.6(d)*	Schedule A to Exhibit 10.6(a) identifying other identical Executive Deferred Compensation Agreements between The Ohio Valley Bank Company and executive officers of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.6(e)*	Schedule A to Exhibit 10.6(b) identifying the named executive officers of Ohio Valley Banc Corp. who executed with  The Ohio Valley Bank Company the First Amendment to The Ohio Valley Bank Company Executive Deferred Compensation Agreement:  Incorporated herein by reference to Exhibit 10.3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2020 (File No. 000-20914).
10.7*	Summary of Compensation for Directors and Named Executive Officers of Ohio Valley Banc Corp.:  Filed herewith.
10.8*	Summary of Bonus Program of Ohio Valley Banc Corp.:  Filed herewith.

37

Exhibit Number	Exhibit Description
10.9*	The Ohio Valley Bank Company Supplemental Executive Retirement Plan agreement, dated March 6, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company: Incorporated herein by reference to Exhibit 10.1 to Ohio Valley’s Current Report on Form 8-K filed on March 9, 2012 (File No. 000-20914).
10.10*	The Ohio Valley Bank Company Fourth Amended and Restated Director Retirement Agreement, dated May 13, 2015, between Brent A. Saunders and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.11 to Ohio Valley’s Quarterly Report on Form 10-Q for period ended September 30, 2015 (File No. 000-20914).
10.11*	Schedule A to Exhibit 10.10 identifying other identical Fourth Amended and Restated Director Retirement Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.12 to Ohio Valley’s Quarterly Report on Form 10-Q for period ended September 30, 2015 (File No. 000-20914).
10.12*	The Ohio Valley Bank Company Third Amended and Restated Director Deferred Fee Agreement, dated May 13, 2015, between Brent A. Saunders and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.13 to Ohio Valley’s Quarterly Report on Form 10-Q for period ended September 30, 2015 (File No. 000-20914).
10.13*	Schedule A to Exhibit 10.12 identifying other identical Third Amended and Restated Director Deferred Fee Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.14 to Ohio Valley’s Quarterly Report on Form 10-Q for period ended September 30, 2015 (File No. 000-20914).
10.14*	The Ohio Valley Bank Company Director Retirement Agreement, dated December 14, 2016, between Brent R. Eastman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.15 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2016 (File No. 000-20914).
10.15*	The Ohio Valley Bank Company Director Deferred Fee Agreement, dated December 14, 2016, between Brent R. Eastman and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.16 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2016 (File No. 000-20914).
10.16*	2016 Determination of Director’s Fees Agreement for purposes of the Director Deferred Fee Agreements for Directors Thomas, Wiseman, Barnitz and Saunders:  Filed herewith.
10.17*	2016 Determination of Director’s Fees Agreement for purposes of the Director Retirement Agreement for Directors Thomas and Wiseman:  Filed herewith.

38

Exhibit Number	Exhibit Description
10.18*	2016 Determination of Director’s Fees Agreement for purposes of the Director Retirement Agreement for Directors Barnitz and Saunders:  Incorporated herein by reference to Exhibit 10.21 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2016 (File No. 000-20914).
10.19(a)*	The Ohio Valley Bank Company Director Retirement Agreement, dated December 19, 2017, between Kimberly A. Canady and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.22 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2017 (File No. 000-20914).
10.19(b)*	Schedule A to Exhibit 10.19(a) identifying other Director Retirement Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.22(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2019 (File No. 000-20914).
10.20(a)*	The Ohio Valley Bank Company Director Deferred Fee Agreement, dated December 19, 2017, between Kimberly A. Canady and The Ohio Valley Bank Company: Incorporated herein by reference to Exhibit 10.24 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2017 (File No. 000-20914).
10.20(b)*	Schedule A to Exhibit 10.20(a) identifying other Director Deferred Fee Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.24(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2017 (File No. 000-20914).
13	Ohio Valley’s Annual Report to Shareholders for the fiscal year ended December 31, 2021:  Filed  herewith.  (Not  deemed filed except for portions thereof specifically incorporated by reference into this Annual Report on Form 10-K.)
21	Subsidiaries of Ohio Valley:  Filed herewith.
23	Consent of Crowe LLP.:  Filed herewith.
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer):  Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer):  Filed herewith.
32	Section 1350 Certifications (Principal Executive Officer and Principal Accounting Officer): Filed herewith.

39

Exhibit Number	Exhibit Description
101.INS #	XBRL Instance Document:  Submitted electronically herewith. #
101.SCH #	XBRL Taxonomy Extension Schema:  Submitted electronically herewith. #
101.CAL #	XBRL Taxonomy Extension Calculation Linkbase:  Submitted electronically herewith. #
101.DEF #	XBRL Taxonomy Extension Definition Linkbase:  Submitted electronically herewith. #
101.LAB #	XBRL Taxonomy Extension Label Linkbase: Submitted electronically herewith. #
101.PRE #	XBRL Taxonomy Extension Presentation Linkbase:  Submitted electronically herewith. #
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Compensatory plan or arrangement.

# Attached as Exhibit 101 to Ohio Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are the following documents formatted in XBRL (eXtensive Business Reporting Language): (i) Consolidated Statements of Condition at December 31, 2021 and December 31, 2020; (ii) Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019; (iv) Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2021, 2020 and 2019; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019; and (vi) Notes to the Consolidated Financial Statements.

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Ohio Valley has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			OHIO VALLEY BANC CORP.
Date:	March 16, 2022	By:	/s/Thomas E. Wiseman
			Thomas E. Wiseman
			Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 16, 2022 by the following persons on behalf of Ohio Valley and in the capacities indicated.

Name	Capacity
/s/Thomas E. Wiseman	Chief Executive Officer
Thomas E. Wiseman	(principal executive officer) and Director
/s/Scott W. Shockey	Senior Vice President and Chief
Scott W. Shockey	Financial Officer (principal financial officer and principal accounting officer)
/s/Larry E. Miller	Director
Larry E. Miller
/s/Anna P. Barnitz	Director
Anna P. Barnitz
/s/David W. Thomas	Director
David W. Thomas
/s/Brent A. Saunders	Director
Brent A. Saunders
/s/Brent R. Eastman	Director
Brent R. Eastman
/s/Kimberly A. Canady	Director
Kimberly A. Canady
/s/Edward J. Robbins	Director
Edward J. Robbins
/s/K. Ryan Smith	Director
K. Ryan Smith
/s/Edward B. Roberts	Director
Edward B. Roberts

41

EX-4.1

EXHIBIT 4.1

OHIO VALLEY BANC CORP.

420 Third Avenue

Gallipolis, OH  45631

(740) 446-2631

March 16, 2022

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.  20549

RE: Ohio Valley Banc Corp. – Form 10-K for the fiscal year ended December 31, 2021

Gentlemen:

Ohio Valley Banc Corp., an Ohio corporation (“Ohio Valley”), is today filing an Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Form 10-K”), as executed on March 16, 2022.

Pursuant to the instructions relating to the Exhibits in Item 601(b)(4)(iii) of Regulation S-K, Ohio Valley hereby agrees to furnish the Commission, upon request, copies of instruments and agreements defining the rights of holders of its long-term debt and of the long-term debt of its consolidated subsidiaries, which are not being filed as exhibits to the Form 10-K.  No such instrument or agreement represents long-term debt exceeding  10% of the total assets of Ohio Valley Banc Corp. and its subsidiaries on a consolidated basis.

Very truly yours,

/s/Thomas E. Wiseman

Thomas E. Wiseman

Chief Executive Officer

Ohio Valley Banc Corp.

EX-10.3(B)

EXHIBIT 10.3(b)

SCHEDULE A TO EXHIBIT 10.3(a)

The following individuals entered into director retirement agreements with The Ohio Valley Bank Company which are identical to the Third Amended and Restated Director Retirement Agreement, dated December 18, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company filed herewith.

Name	Date of Agreement
David W. Thomas	December 18, 2012

EX-10.5(B)

EXHIBIT 10.5(b)

SCHEDULE A TO EXHIBIT 10.5(a)

The following individuals entered into director deferred fee agreements with The Ohio Valley Bank Company which are identical to the Second Amended and Restated Director Deferred Fee Agreement, dated December 18, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company filed herewith.

Name	Date of Agreement
David W. Thomas	December 18, 2012

EX-10.7

EXHIBIT 10.7

SUMMARY OF COMPENSATION FOR

DIRECTORS AND NAMED EXECUTIVE OFFICERS

OF OHIO VALLEY BANC CORP.

Directors

All of the directors of Ohio Valley Banc Corp. (“Ohio Valley”) also serve as directors of its subsidiary, The Ohio Valley Bank Company (the “Bank”).  The directors of Ohio Valley are paid by the Bank for their services rendered as directors of the Bank, not Ohio Valley.  Each director of the Bank who is not an employee of Ohio Valley or any of its subsidiaries (a “Non-Employee Director”) receives $750 per month for his or her services.  Each director of the Bank who is an employee of Ohio Valley or any of its subsidiaries (an “Employee Director”) receives $350 per month for his or her services.  In addition, each director of the Bank receives an annual retainer of $17,000 paid in January or February for non-employee directors and monthly for employee directors of each year for services to be rendered during the year, pro-rated for time served for new or retiring members.

Each Non-Employee Director who is a member of the Executive Committee of the Bank receives $2,000 per month for his or her services.  In addition, each Non-Employee Director who is a member of the Executive Committee receives an annual retainer of $16,695 paid in January or February of each year for services to be rendered during the year as members of that committee, pro-rated for time served for new or retiring members.  Employee Directors receive no additional compensation for serving on the Executive Committee.

Brent A. Saunders, LPA received retainer fees of $22,000 for legal services to the Company and its subsidiaries during 2021, as approved by the Board of Directors in December 2020.  In December 2021, the Board of Directors of Ohio Valley approved the payment to Mr. Saunders of $22,000 in retainer fees for legal services to the Company and its subsidiaries during 2022.

The Bank maintains a life insurance policy for each director with a death benefit of two times annual director fees at time of death, reduced by 35% at age 65 and 50% at age 70, as part of the Bank’s group term life insurance program.  The life insurance policies terminate upon retirement.  Messrs. Miller and Wiseman, as employees of the Bank, are excluded from this benefit under the terms of the Bank’s group term life insurance program.  Each director is entitled to retirement and deferred compensation agreements, and the Bank has executed agreements with all such persons, except that Mr. Miller has elected not to participate in the director deferred compensation plan and new directors Edward B. Roberts and K. Ryan Smith have not executed agreements so far.  These documents are filed as exhibits to various documents filed by Ohio Valley with the Securities and Exchange Commission, as set forth in the Exhibit Index to Ohio Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Named Executive Officers

The following sets forth the current salaries of the executive officers of Ohio Valley named in the Summary Compensation Table in Ohio Valley’s proxy statement (the “Named Executive Officers”):

Name	Current Salary
Thomas E. Wiseman	391,373
Larry E. Miller II	299,934
Scott W. Shockey	210,310

Certain Named Executive Officers are entitled to participate in several benefit arrangements, including the Ohio Valley Banc Corp. Bonus Program, the Ohio Valley Bank Company Executive Group Life Split Dollar Plan, the Executive Deferred Compensation Plan, and a supplemental  executive retirement plan (currently only for Messrs. Wiseman, Miller and Shockey).  These benefit plans are set forth in exhibits to various documents filed by Ohio Valley, as set forth in the Exhibit Index to Ohio Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and described in Ohio Valley’s proxy statement for its 2022 annual meeting of shareholders.  In addition, Named Executive Officers are entitled to participate in various benefit plans available to all employees, including a Profit Sharing Retirement Plan, a 401(k) plan, an employee stock ownership plan, group term life insurance, health insurance, disability insurance and a flexible compensation/cafeteria plan, as described in Ohio Valley's proxy statement for its 2022 annual meeting of shareholders.

EX-10.8

EXHIBIT 10.8

SUMMARY OF BONUS PROGRAM

OF OHIO VALLEY BANC CORP.

The following is a description of the Bonus Program (the "Bonus Program") of Ohio Valley Banc Corp. (the “Company”) provided pursuant to Item 601(b)(10)(iii) of Regulation S-K promulgated by the Securities and Exchange Commission, which requires a written description of a compensatory plan when no formal document contains the compensation information.

The executive officers of the Company receive no compensation from the Company.  Instead they are paid by subsidiaries for services rendered in their capacities as executive officers of subsidiaries of the Company.

The objectives of the bonus component of the Company's compensation program are to: (a) motivate executive officers and other employees and reward such persons for the accomplishment of both annual and long range goals of the Company and its subsidiaries, (b) reinforce a strong performance orientation with differentiation and variability in individual awards based on contribution to long-range business results and (c) provide a fully competitive compensation package that will attract, reward, and retain individuals of the highest quality.  Typically, all employees of the Company's subsidiaries holding positions with a pay grade of 9 or above, are eligible to participate in the bonus program, including all of the named executive officers. Bonuses payable to participants in the bonus program are based on (a) the performance of the Company and its subsidiaries as measured against specific performance targets; and (b) each employee's individual performance.  At the beginning of each fiscal year, the Compensation Committee sets specific performance targets for the Company and its subsidiaries based on a combination of some or all of a number of performance criteria.  The targets are based on one or more of the following performance criteria: net income, net income per share, return on assets, return on equity, asset quality (as measured by the ratio of adversely classified assets to tier 1 capital plus the ALLL), tier 1 leverage ratio and efficiency ratio.  It is the objective of the Compensation Committee to establish goals that are “reaching” but “reachable.”  The Compensation Committee may not consider the goals to be of equal weight, but, in the aggregate, it considers them to be fundamental metrics which are important to the long-term performance of the Company and which, at the same time, do not expose the Company to, nor incent the employees to undertake, excessive risks which would threaten the Company’s long-term value.  At the end of the fiscal year, the aggregate amount available for the payment of a bonus, if any, is determined by the Company’s Board of Directors upon recommendation of its Compensation Committee based on an evaluation of the accomplishment of the performance targets.  A bonus may be paid without targets having been established or achieved.  No officer or employee has any right to the payment of a bonus until the Board of Directors has exercised its discretion to award one and the amount to be paid to each person has been determined and announced.

Once the aggregate amount of the bonus pool is determined, individual bonus awards, for eligible employees in grades 11 and below, are typically determined through a formula that applies each employee's performance evaluation score to a “bonus grid,” reflecting the individual employee's job grade and individual job performance using the performance criteria referenced above.  For employees in grades 12 and above, individual bonus awards are determined by the level of achievement by the Company and its subsidiaries of some or all of a number of previously mentioned performance metrics. Upon the recommendation of the Compensation Committee and if approved by the Board, individual bonus awards for grades 12 and above are typically awarded as a percent of base compensation.  Employees are evaluated by their supervisors, except for Messrs. Wiseman and Miller, who are evaluated by the Compensation Committee.  The Company’s Board of Directors approves the bonuses payable to the executive officers under the Bonus Program based upon the recommendation of the Compensation Committee.  For 2021 bonus amounts, goals were based on net income, the efficiency and asset quality.

Bonuses are normally paid in February in cash in a single lump sum, subject to payroll taxes and tax withholdings.

EX-10.16

EXHIBIT 10.16

The following form of agreement was executed by The Ohio Valley Bank Company and each of the following directors on the dates indicated beside their names:

Name	Date of Agreement
David W. Thomas	December 20, 2016
Thomas E. Wiseman	December 13, 2016
Anna P. Barnitz	December 13, 2016
Brent A. Saunders	December 13, 2016

2016 DETERMINATION OF DIRECTOR’S FEES

FOR PURPOSES OF THE DIRECTOR DEFERRED FEE AGREEMENT

FOR _____________

THIS AGREEMENT is made this ______ day of December, 2016, by and between THE OHIO VALLEY BANK COMPANY located in Gallipolis, Ohio (the “Company”), and _________  (the “Director”).

The Company and the Director entered into a DEFERRED FEE AGREEMENT most recently amended on ___________ (the “Agreement”).

The Director agrees that the definition of “Fees” in Section 1.10 be amended to read as follows effective for deferrals on or after January 1, 2017:

1.10 “Fees” means the total annual board retainer and monthly fees paid to all directors, earned by the Director during a Plan Year.  For purposes of clarity, Fees does not include any lead director fees, committee meeting or chair fees or other special director fees.

The parties, by executing this Agreement hereby agree to the terms stated herein. 

DIRECTOR:	THE OHIO VALLEY BANK COMPANY
	By:
	Title:

EX-10.17

EXHIBIT 10.17

The following form of agreement was executed by The Ohio Valley Bank Company and each of the following directors on the dates indicated beside their names:

Name	Date of Agreement
David W. Thomas	December 20, 2016
Thomas E. Wiseman	December 13, 2016

2016 DETERMINATION OF DIRECTOR’S FEES

FOR PURPOSES OF THE DIRECTOR RETIREMENT AGREEMENT

FOR _____________

THIS AGREEMENT is made this ______ day of December, 2016, by and between THE OHIO VALLEY BANK COMPANY located in Gallipolis, Ohio (the “Company”), and ______________ (the “Director”).

The Company and the Director entered into a DIRECTOR RETIREMENT AGREEMENT most recently amended and restated on ____________________, 20__ (the “Agreement”).

The Director agrees that Director’s “total annual or monthly fees” for purposes of sections 2.1.1 Normal Retirement Benefit, 2.2.1 Disability Benefit, and 3.1.1 Death During Active Service will include the annual board retainer and monthly fees paid to all directors, earned by the Director during a Plan Year and will not include committee fees of any type, lead director fees or other special director fees.

The parties, by executing this Agreement hereby agree to the terms stated herein.

DIRECTOR:	THE OHIO VALLEY BANK COMPANY
	By:
	Title:

EX-13

OVBC

Annual Report

 2021

Start your engines...

Message from Management Dear Neighbors and Friends, Surely 2021, like 2020, will go down in history as the time of the global pandemic. Though this unceasing disease did its best to force our community apart, we noticed something pretty amazing, but not surprising, our community came TOGETHER like never before. When we opened a new drive-thru office in the north endof Point Pleasant, you showed us your love by flocking toit. When we shared our joy over breathing new life into OVB on the Square, you congratulated us and set to workon how to expand on this revitalization of the downtown.When we collected toys for local children in need, moreof you than ever before stood up and said, “How can we help?” This doesn’t happen in the big city. It happens here at home where your company is constantly working to improve service. One of our most promising new endeavorsof the year was the opening of Race Day Mortgage, an online-only consumer direct mortgage company. We hope to leave the competition in the dust through speed of service and a seamless online model, backed by OVB’s quality customer service approach. The giving we do to sustain the community and the steps we take to improve service are connected. In all that wedo, you are the driving force behind this company’s will  to put our Community First. You are keeping us on track for success.	For several years now, we have invited shareholders, employees, customers, and neighbors to join us in our Community First mission. And you have accepted the challenge, rising to the occasion with a shared generosity and enthusiasm to make this a better place to live and work. With your support, your company reached the milestone of the 2nd highest record earnings in company history. Thank you. Within these pages, please find information regarding your company’s management and operation for the past year. Between the lines, you may even spot a little of our determination to remain an independent community bank. You can learn more by attending our Annual Shareholders Meeting to be be held Wednesday, May 18, at the brand new Holzer Leadership & Innovation Institute. Get involved. Let’s keep Community First. Sincerely, Thomas E. Wiseman Chairman of the Board & CEO Ohio Valley Banc Corp.
	Larry E. Miller, II
	President & Chief Operating Officer Ohio Valley Banc Corp.

1

Being a community leader

is about being the one who helps others cross the

                                                                                                                                              finish line

Ohio Valley Bank and Loan Central have always been known for providing outstanding service to the community. These financial professionals try every day to do what is expected and then go one step beyond.

In September of 2021, Ohio Valley Bank opened its own subsidiary, a nationwide online-only consumer direct mortgage company.

Yes, our community got a little bigger.

Race Day Mortgage serves customers in not only Ohio, but also Tennessee, North Carolina, South Carolina, Florida,Colorado, Utah, Pennsylvania, Washington, and Nevada.Plans are in place to add more states over the next few years.

You won’t find a Race Day Mortgage office on a map or with Siri. The loan officers and processing personnel who help these clients work remotely from Columbus, Ohio, to Houston, Texas. These mortgage professionals, though serving a much larger community than the bank, serve their  customers



with respect, a sense of urgency, and a determination to do whatever it takes. Lessons they have embraced from Ohio Valley Bank.
As of press time, Race Day Mortgage has a perfect 5-Star Rating on Bankrate.com. But don’t take our word for it, see what this Las Vegas customer had to say. 

“We recently refinanced our home with Race Day Mortgage. I have gone through the home buying process and refi process numerous times. My experience with Race Day Mortgage was nothing short of amazing! I was shopping around and checking different rates on Bankrate and could not be happier to have gone with Race Day. Not only was the customer service fantastic, the process was super stress free, quick, and easy! I could not recommend them enough! In fact, I recommended them to some long time friends who also went through the process and had nothing but positive things to say. Thanks again for everything!”

2

2021 notable small numbers

Every year, we tend to report the big numbers. This year, we share the small numbers that make an enormous impact...

106
New pages built as part of the redesign of www.ovbc.com, which debuted in July. The new site features a robust fraud and scam information section, more free financial education resources, integrated blog, and is highlighted with local photography.

42
The 42nd card in OVB’s Community First Debit Card Program was introduced, meaning that the program now raises much needed funds for 42 local schools and charities on an ongoing basis.

10
States served by Race Day Mortgage with 8 more states to be added in early 2022 and plans to further expand.

7
Free services offered with every OVB checking account: Digital Banking, Online Bill Pay, Debit Card, Benjamin Tracker money management, eDelivery statements and notices, OVB Line Telephone Banking, and OVB ATM service.

6
Loan Central offices stayed open extended, holiday, and special weekend hours to help members of their community get their taxes done in record time.

1
Mission to put your “Community First.”

3

2019 Little Miss Apple Festival Kennedy Knittel proudly shows the 2021 finalists the exhibit created in her honor at OVB Jackson.

Being a community bank

is about being there for our

community

Our Community First mission is a new way of thinking about shareholder return. When we give back to the community we serve, the businesses and people in that community are better able to do their work and in turn give back themselves.

This year, we were thrilled to see our friends and neighbors join us and put their Community First in creative ways.

Right Page Left to Right: Jackson County OVB 4-H Scholar Elizabeth Fannin slipped into the 4-H building early because she couldn’t wait to see her lifesize photo at the Fair. Every OVB 4-H Scholar receives a total of $3,000 in scholarship money over four years. As of 2021, the OVB 4-H Scholarship Program has awarded 241 scholarships.

Young gymnasts Ella Grant and Bekah Circle unveiled the Southern Ohio Gymnastics Association (SOGA) debit card design as part of OVB’s Community First Debit Card Program. For every upgrade to the SOGA design, the boosters receive $5. Over 40 other local schools and charities are getting the funds they need though this groundbreaking program created by OVB.

Ohio Valley Bank’s Point Pleasant North office opened with a ribbon-cutting ceremony right in the drive-thru lane! The convenient new location has been very popular with customers, handling over 13,000 teller and ATM transactions in their first four and a half months of operation.

OVB’s Jenni Swain and Bill Richards put in a little elbow grease during an Impact Day at the Gallipolis Freight and Railroad Museum. Employees are allowed up to three paid days off to volunteer in their community through the Impact Day program. In addition to cleaning train cars, the bank’s volunteers also put up wall paneling inside.

Right Middle:Employees representing every Ohio Valley Bank and Loan Central location lined up to pass a commemorative flag presented to former Chairman JeffSmith on his retirement at the OVB on the Square flag raising ceremony. Many members of the community,including the VFW Honor Guard, came out to take part in the special occasion.

Page Bottom:OVB’s Leigh Anne Roten and Maranda Prevatt delivered a donation to the Fisher House made possible by employees serving on the bank’s Veterans Action Committee. Fisher House serves as a place to stay for the families of veterans who are patients at the Williams Veterans Medical Center in Huntington. OVB Barboursville and other locations also held drives to collect non-perishable food, toiletry items, and slippers for the house over the year. Pictured with Fisher House Director Jason Wyant.

4

5

Director & Officer	OVBC OFFICERS
Listing
	Thomas E. Wiseman, Chairman & Chief Executive Officer
	Larry E. Miller II, President & Chief Operating Officer
OVBC DIRECTORS	Tommy R. Shepherd, Senior Vice President & Secretary
	Scott W. Shockey, Senior Vice President & CFO
Thomas E. Wiseman	Bryan F. Stepp, Senior Vice President - Lending/Credit
Chairman & Chief Executive Officer,	Bryna S. Butler, Vice President
Ohio Valley Banc Corp. and Ohio Valley Bank	Frank W. Davison, Vice President
	Allen W. Elliott, Vice President
Larry E. Miller II	Cherie A. Elliott, Vice President
President & Chief Operating Officer,	Brandon O. Huff, Vice President
Ohio Valley Banc Corp. and Ohio Valley Bank	Ryan J. Jones, Vice President
	Marilyn G. Kearns, Vice President
David W. Thomas, Lead Director	Mario P. Liberatore, Vice President
Former Chief Examiner, Ohio Division of	Shawn R. Siders, Vice President
Financial Institutions	Paula W. Clay, Assistant Secretary
bank supervision and regulation	Cindy H. Johnston, Assistant Secretary
Anna P. Barnitz	OHIO VALLEY BANK DIRECTORS
Treasurer & CFO, Bob’s Market & Greenhouses, Inc.
wholesale horticultural products and retail landscaping	Thomas E. Wiseman, Chairman	Edward J. Robbins
stores	David W. Thomas, Lead Director	Edward B. Roberts
	Anna P. Barnitz	Brent A. Saunders
Kimberly A. Canady	Kimberly A. Canady	K. Ryan Smith
Owner, Canady Farms, LLC	Brent R. Eastman
agricultural products and agronomy services	Larry E. Miller II
Brent R. Eastman	LOAN CENTRAL DIRECTORS
President & Co-owner, Ohio Valley Supermarkets
Partner, Eastman Enterprises	Larry E. Miller II
grocery	Cherie A. Elliott
	Ryan J. Jones
Edward J. Robbins
President & CEO, Ohio Valley Veneer, Inc.	RACE DAY MORTGAGE DIRECTORS
wood harvesting, processing and manufacturing of dry
lumber & flooring in Ohio, Kentucky, and Tennessee	Bryan F. Stepp	Scott W. Shockey
	Bryna S. Butler	Thomas E. Wiseman
Edward B. Roberts	Tim J. Scholten
Co-owner, OakBridge Financial Partners LLC
Financial Advisor, LPL Financial	WEST VIRGINIA ADVISORY BOARD
financial services
	Mario P. Liberatore, Chairman
Brent A. Saunders	E. Allen Bell
Chairman of the Board, Holzer Health System	Richard L. Handley
Attorney, Halliday, Sheets & Saunders	Stephen L. Johnson
healthcare and legal	John A. Myers
K. Ryan Smith	DIRECTORS EMERITUS
President, University of Rio Grande,
Rio Grande Community College	W. Lowell Call	Barney A. Molnar
Former Speaker of the Ohio House of Representatives	Steven B. Chapman	Jeffrey E. Smith
higher education	Robert E. Daniel	Wendell B. Thomas
	Harold A. Howe	Lannes C. Williamson
	John G. Jones

6

OHIO VALLEY BANK OFFICERS
EXECUTIVE OFFICERS		ASSISTANT VICE PRESIDENTS
Thomas E. Wiseman	Chairman & Chief Executive Officer	Terri M. Camden	Asst. Human Resources Director
Larry E. Miller II	President & Chief Operating Officer	Barbara A. Patrick	BSA Officer/Loss Prevention
Tommy R. Shepherd	Executive Vice President & Secretary	Stephenie L. Peck	Regional Branch Administrator
Scott W. Shockey	Executive Vice President,	Raymond G. Polcyn	Manager of Buying Department
	Chief Financial Officer	Richard P. Speirs	Facilities Manager /Security Officer
Bryan F. Stepp	Executive Vice President,	Kimberly R. Williams	Systems Officer
	Lending/Credit	Melissa P. Wooten	Shareholder Relations Manager &
Mario P. Liberatore	President, OVB West Virginia		Trust Officer
		Joe J. Wyant	Region Manager Jackson County
SENIOR VICE PRESIDENTS
		ASSISTANT CASHIERS
Bryna S. Butler	Corporate Communications
Frank W. Davison	Operations	Glen P. Arrowood II	Manager of Indirect Lending
Allen W. Elliott	Branch Administration	William F. Richards	Advertising Manager
Brandon O. Huff	Process Efficiency Officer	Pamela K. Smith	Eastern Cabell Region Manager
Ryan J. Jones	Chief Risk Officer	Anthony W. Staley	Product Development
Marilyn G. Kearns	Human Resources		Business Sales & Support
Shawn R. Siders	Chief Credit Officer
		LOAN CENTRAL OFFICERS
VICE PRESIDENTS
		Larry E. Miller II, Chairman of the Board
John A. Anderson	Director of Loan Operations	Cherie A. Elliott, President
Shelly N. Boothe	Commerical Business	Timothy R. Brumfield, Vice President & Secretary,
	Development Officer	Manager, Gallipolis Office
Kyla R. Carpenter	Director of Marketing	John J. Holtzapfel, Compliance Officer,
Paula W. Clay	Assistant Secretary	Manager, Wheelersburg Office
Jody M. DeWees	Trust	Melody D. Hammond, Manager, Chillicothe Office
Lori A. Edwards	Residential Loan Operations Manager	Joseph I. Jones, Manager, South Point Office
Brian E. Hall	Corporate Banking	Steven B. Leach, Manager, Jackson Office
Cindy H. Johnston	Assistant Secretary	T. Joe Wilson, Manager, Waverly Office
Angela S. Kinnaird	Director of Customer Support
Tamela D. LeMaster	Branch Administration/CRM	RACE DAY MORTGAGE OFFICERS
Adam D. Massie	Northern Region Manager
Jay D. Miller	Business Development Officer	Bryan F. Stepp	President
Diana L. Parks	Internal Audit Liaison	Scott W. Shockey	Secretary - Treasurer
Christopher S. Petro	Comptroller
Benjamin F. Pewitt	Business Development
Gregory A. Phillips	Consumer Lending
Christopher L. Preston	Business Development West Virginia
Daniel T. Roush	Senior Compliance Officer
Rick A. Swain	Western Division Branch Manager
Patrick H. Tackett	Corporate Banking

7

The Swain family has been OVBC shareholders for multiple generations. Little ones Natalie, Sable (between Mom Jenni and Dad BJ), Lyla, and Finlee enjoy the security their shares provide.

Being a responsible shareholder

is about planning for your company’s

                                                   future

Ohio Valley Banc Corp. shareholders are folks who believe in the power of community and pride in one’s hometown.We believe this is the reason for much of your company’s success.

As shares pass from generation to generation, it is vitally important to protect these ideals. Rather than selling shares on the open market, ensure shares are in the hands of shareholders who hold these values and want to see OVB remain an independent community bank. It is easy for registered shareholders to transfer ownership of any number of shares at any time without brokerage fees. This is accomplished through the “gifting” of shares.Shares can be gifted to a child, grandchild, or anyone.Contact the OVBC Shareholder Relations Department at 800-468-6682 or email investorrelations@ovbc.com to get started. OVBC shareholders received over $4 million in dividends in 2021, and our shareholders returned that loyalty by reinvesting over $1.1 million of those dividends through the Dividend Reinvestment Program and Employee Stock Ownership Plan. On top of that, over $757,000 was invested through supplemental payments by current shareholders. Growing numbers are realizing the benefit of OVBC ownership. Make sure your family is included in those numbers, and know that the staff of OVBC’s companies look forward to serving you and your loved ones for many generations to come.

$4,017,965 in dividends paid to OVBC shareholders in 2021 $1,152,143 of those dividends reinvested in the company through the Dividend Reinvestment Program and Employee Profit Sharing Plan.

8

OHIO VALLEY BANC CORP.

ANNUAL REPORT 2021

FINANCIALS

SELECTED FINANCIAL DATA

	Years Ended December 31
	2021			2020			2019			2018			2017
(dollars in thousands, except share and per share data)
SUMMARY OF OPERATIONS:
Total interest income	$	44,712		$	46,173		$	50,317		$	49,197		$	45,708
Total interest expense		3,699			6,191			7,265			5,471			3,975
Net interest income		41,013			39,982			43,052			43,726			41,733
Provision for loan losses		(419	)		2,980			1,000			1,039			2,564
Total other income		9,864			11,438			9,166			8,938			9,435
Total other expenses		37,280			36,133			39,498			37,426			36,609
Income before income taxes		14,016			12,307			11,720			14,199			11,995
Income taxes		2,284			2,048			1,813			2,255			4,486
Net income		11,732			10,259			9,907			11,944			7,509
PER SHARE DATA:
Earnings per share	$	2.45		$	2.14		$	2.08		$	2.53		$	1.60
Cash dividends declared per share	$	0.84		$	0.84		$	0.84		$	0.84		$	0.84
Book value per share	$	29.74		$	28.48		$	26.77		$	24.87		$	23.26
Weighted average number of common shares outstanding		4,780,609			4,787,446			4,767,279			4,725,971			4,685,067
AVERAGE BALANCE SUMMARY:
Total loans	$	841,681		$	811,434		$	775,860		$	773,995		$	753,204
All other interest-earning assets(1)		307,228			205,532			189,187			223,390			193,199
Deposits		1,042,364			906,315			850,400			886,639			845,227
Other borrowed funds(2)		34,564			40,416			45,850			48,967			47,663
Shareholders’ equity		138,831			131,038			122,314			112,393			108,110
Total assets		1,233,801			1,096,191			1,035,230			1,063,256			1,014,115
PERIOD END BALANCES:
Total loans	$	831,191		$	848,664		$	772,774		$	777,052		$	769,319
All other interest-earning assets(1)		334,811			255,662			166,761			184,925			189,941
Deposits		1,059,908			993,739			821,471			846,704			856,724
Shareholders’ equity		141,356			136,324			128,179			117,874			109,361
Total assets		1,249,769			1,186,932			1,013,272			1,030,493			1,026,290
KEY RATIOS:
Return on average assets		.95	%		.94	%		.96	%		1.12	%		0.74	%
Return on average equity		8.45	%		7.83	%		8.10	%		10.63	%		6.95	%
Dividend payout ratio		34.25	%		39.20	%		40.37	%		33.20	%		52.36	%
Average equity to average assets		11.25	%		11.95	%		11.82	%		10.57	%		10.66	%

(1) All other interest-earning assets include securities, interest-bearing deposits with banks and restricted investments in bank stocks.

(2) Other borrowed funds include subordinated debentures.

9

consolidated statements of condition

	As of December 31
	2021			2020
(dollars in thousands, except share and per share data)
Assets
Cash and noninterest-bearing deposits with banks	$	14,111		$	14,989
Interest-bearing deposits with banks		137,923			123,314
Total cash and cash equivalents		152,034			138,303
Certificates of deposit in financial institutions		2,329			2,500
Securities available for sale		177,000			112,322
Securities held to maturity (estimated fair value: 2021 - $10,450; 2020 - $10,344)		10,294			10,020
Restricted investments in bank stocks		7,265			7,506
Total loans		831,191			848,664
Less: Allowance for loan losses		(6,483	)		(7,160	)
Net loans		824,708			841,504
Premises and equipment, net		20,730			21,312
Premises and equipment held for sale, net		438			637
Other real estate owned, net		15			49
Accrued interest receivable		2,695			3,319
Goodwill		7,319			7,319
Other intangible assets, net		64			112
Bank owned life insurance and annuity assets		37,281			35,999
Operating lease right-of-use asset, net		1,195			880
Other assets		6,402			5,150
Total assets	$	1,249,769		$	1,186,932
Liabilities
Noninterest-bearing deposits	$	353,578		$	314,777
Interest-bearing deposits		706,330			678,962
Total deposits		1,059,908			993,739
Other borrowed funds		19,614			27,863
Subordinated debentures		8,500			8,500
Operating lease liability		1,195			880
Other liabilities		19,196			19,626
Total liabilities		1,108,413			1,050,608
Commitments and Contingent Liabilities (See Note L)
Shareholders’ Equity
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 5,447,185 shares issued)		5,447			5,447
Additional paid-in capital		51,165			51,165
Retained earnings		100,702			92,988
Accumulated other comprehensive income		708			2,436
Treasury stock, at cost (2021 – 693,933 shares, 2020 – 659,739 shares)		(16,666	)		(15,712	)
Total shareholders’ equity		141,356			136,324
Total liabilities and shareholders’ equity	$	1,249,769		$	1,186,932

See accompanying notes to consolidated financial statements

10

consolidated statements of income

For the years ended December 31	2021			2020
(dollars in thousands, except per share data)
Interest and dividend income:
Loans, including fees	$	42,102		$	43,204
Securities:
Taxable		1,948			2,164
Tax exempt		236			286
Dividends		231			245
Interest-bearing deposits with banks		163			226
Other interest		32			48
		44,712			46,173
Interest expense:
Deposits		2,977			5,254
Other borrowed funds		564			729
Subordinated debentures		158			208
		3,699			6,191
Net interest income		41,013			39,982
Provision for loan losses		(419	)		2,980
Net interest income after provision for loan losses		41,432			37,002
Noninterest income:
Service charges on deposit accounts		1,864			1,685
Trust fees		285			257
Income from bank owned life insurance and annuity assets		904			820
Mortgage banking income		854			1,254
Electronic refund check / deposit fees		675			—
Debit / credit card interchange income		4,644			4,031
Gain (loss) on other real estate owned		1			(35	)
Loss on sale of securities		(1,066	)		—
Tax preparation fees		754			644
Litigation settlement		—			2,000
Other		949			782
		9,864			11,438
Noninterest expense:
Salaries and employee benefits		21,649			21,636
Occupancy		1,796			1,817
Furniture and equipment		1,136			1,096
Professional fees		1,578			1,519
Marketing expense		826			613
FDIC insurance		326			165
Data processing		2,406			2,170
Software		1,858			1,454
Foreclosed assets		55			128
Amortization of intangibles		48			62
Other		5,602			5,473
		37,280			36,133
Income before income taxes		14,016			12,307
Provision for income taxes		2,284			2,048
NET INCOME	$	11,732		$	10,259
Earnings per share	$	2.45		$	2.14

See accompanying notes to consolidated financial statements

11

consolidated statements of

comprehensive income

For the years ended December 31	2021			2020
(dollars in thousands)
NET INCOME	$	11,732		$	10,259
Other comprehensive income (loss):
Change in unrealized gain (loss) on available for sale securities		(3,253	)		2,415
Reclassification adjustment for realized losses		1,066			—
		(2,187	)		2,415
Related tax effect		459			(507	)
Total other comprehensive income (loss), net of tax		(1,728	)		1,908
Total comprehensive income	$	10,004		$	12,167

See accompanying notes to consolidated financial statements

12

consolidated statements of changes in

shareholders’ equity

For the years ended December 31, 2021, 2020
(dollars in thousands, except share and per share data)
	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balances at January 1, 2020	$	5,447	$	51,165	$	86,751		$	528		$	(15,712	)	$	128,179
Net income		—		—		10,259			—			—			10,259
Other comprehensive income (loss), net		—		—		—			1,908			—			1,908
Cash dividends, $0.84 per share		—		—		(4,022	)		—			—			(4,022	)
Balances at December 31, 2020		5,447		51,165		92,988			2,436			(15,712	)		136,324
Net income		—		—		11,732			—			—			11,732
Other comprehensive income (loss), net		—		—		—			(1,728	)		—			(1,728	)
Cash dividends, $0.84 per share		—		—		(4,018	)		—			—			(4,018	)
Shares acquired for treasury,34,194 shares		—		—		—			—			(954	)		(954	)
Balances at December 31, 2021	$	5,447	$	51,165	$	100,702		$	708		$	(16,666	)	$	141,356

See accompanying notes to consolidated financial statements

13

consolidated statements of cash flows

For the years ended December 31	2021			2020
(dollars in thousands)
Cash flows from operating activities:
Net income	$	11,732		$	10,259
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment		1,461			1,341
Net amortization (accretion) of purchase accounting adjustments		37			(42	)
Net amortization of securities		815			459
Net realized loss on sale of securities		1,066			—
Proceeds from sale of loans in secondary market		18,972			40,158
Loans disbursed for sale in secondary market		(18,118	)		(38,904	)
Amortization of mortgage servicing rights		103			126
Impairment (recovery) of mortgage servicing rights		(11	)		11
Gain on sale of loans		(946	)		(1,391	)
Amortization of intangible assets		48			62
Deferred tax (benefit) expense		(130	)		12
Provision for loan losses		(419	)		2,980
Earnings on bank owned life insurance and annuity assets		(904	)		(820	)
Loss on sale of other real estate owned		(1	)		35
Change in accrued interest receivable		624			(755	)
Change in accrued liabilities		(113	)		(632	)
Change in other assets		(1,079	)		(408	)
Net cash provided by operating activities		13,137			12,491
Cash flows from investing activities:
Proceeds from sales of securities available for sale		47,666			—
Proceeds from maturities and paydowns of securities available for sale		41,301			36,154
Purchases of securities available for sale		(157,686	)		(41,162	)
Proceeds from calls and maturities of securities held to maturity		3,700			2,694
Purchases of securities held to maturity		(4,001	)		(721	)
Proceeds from maturities of certificates of deposit in financial institutions		935			980
Purchases of certificates of deposit in financial institutions		(763	)		(1,120	)
Redemptions of restricted investments in bank stocks		240			—
Net change in loans		17,181			(78,038	)
Proceeds from sale of other real estate owned		49			548
Purchases of premises and equipment		(1,085	)		(3,450	)
Disposals of premises and equipment		486			13
Proceeds from bank owned life insurance		173			—
Purchases of bank owned life insurance and annuity assets		(550	)		(4,583	)
Net cash (used in) investing activities		(52,354	)		(88,685	)
Cash flows from financing activities:
Change in deposits		66,169			172,290
Cash dividends		(4,018	)		(4,022	)
Purchases of treasury stock		(954	)		—
Proceeds from Federal Home Loan Bank borrowings		600			—
Repayment of Federal Home Loan Bank borrowings		(7,789	)		(5,093	)
Change in other long-term borrowings		—			(405	)
Change in other short-term borrowings		(1,060	)		(629	)
Net cash provided by financing activities		52,948			162,141
Cash and cash equivalents:
Change in cash and cash equivalents		13,731			85,947
Cash and cash equivalents at beginning of year		138,303			52,356
Cash and cash equivalents at end of year	$	152,034		$	138,303
Supplemental disclosure:
Cash paid for interest	$	4,360		$	6,681
Cash paid for income taxes		2,800			2,050
Transfers from loans to other real estate owned		15			92
Operating lease liability arising from obtaining right-of-use asset		570			—

See accompanying notes to consolidated financial statements

14

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies

Description of Business: Ohio Valley Banc Corp. (“Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”), an Ohio state-chartered bank that is a member of the Federal Reserve Bank (“FRB”) and is regulated primarily by the Ohio Division of Financial Institutions and the Federal Reserve Board.  Ohio Valley also has a subsidiary that engages in consumer lending generally to individuals with higher credit risk history, Loan Central, Inc.; a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC; and a limited purpose property and casualty insurance company, OVBC Captive, Inc. The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages, and Ohio Valley REO, LLC ("Ohio Valley REO"), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley and its subsidiaries are collectively referred to as the “Company.”

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans. Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., Ohio Valley Financial Services Agency, LLC, and OVBC Captive, Inc. All material intercompany accounts and transactions have been eliminated.

Industry Segment Information: Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the U.S., management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, noninterest-bearing deposits with banks, federal funds sold and interest-bearing deposits with banks with maturity terms of less than 90 days. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Certificates of deposit in financial institutions: Certificates of deposit in financial institutions are carried at cost and have maturity terms of 90 days or greater.  The longest maturity date is September 22, 2023.

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

15

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

Other-Than-Temporary Impairments of Securities: In determining an other-than-temporary impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Restricted Investments in Bank Stocks: As a member of the Federal Home Loan Bank (“FHLB”) system and the FRB system, the Bank is required to own a certain amount of stock based on its level of borrowings and other factors and may invest in additional amounts. FHLB stock and FRB stock are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Company has additional investments in other restricted bank stocks that are not material to the financial statements.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments. The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Bank also originates long-term, fixed-rate mortgage loans, with full intention of being sold to the secondary market.  These loans are considered held for sale during the period of time after the principal has been advanced to the borrower by the Bank, but before the Bank has been reimbursed by the Federal Home Loan Mortgage Corporation or mortgage broker, typically within a few business days.  Loans sold to the secondary market are carried at the lower of aggregate cost or fair value.  Total loans on the balance sheet included $1,682 in loans held for sale by the Bank as of December 31, 2021, as compared to $70 loans held for sale at December 31, 2020.

16

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years for the consumer and real estate portfolio segment and 5 years for the commercial portfolio segment. The total loan portfolio’s actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows  from operations  can  be adversely  affected  by current  market conditions  for their   product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

17

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 6 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2021, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentrations of Credit Risk: The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2021			2020
Residential real estate loans		33.02	%		36.00	%
Commercial real estate loans		33.90	%		29.86	%
Consumer loans		16.05	%		15.56	%
Commercial and industrial loans		17.03	%		18.58	%
		100.00	%		100.00	%

The Bank, in the normal course of its operations, conducts business with correspondent financial institutions. Balances in correspondent accounts, investments in federal funds, certificates of deposit and other short-term securities are closely monitored to ensure that prudent levels of credit and liquidity risks are maintained.  At December 31, 2021, the Bank’s primary correspondent balance was $135,995 on deposit at the FRB, Cleveland, Ohio.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line method over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

The Company enters into leases in the normal course of business primarily for branch buildings and office space to conduct business.  The Company’s leases have remaining terms ranging from 16 months to 20 years, some of which include options to extend the leases for up to 15 years.

18

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected to not recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date.  Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term.  Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.  At December 31, 2021, the Company did not have any finance leases.

The Company’s operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Foreclosed assets: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed.

Goodwill: Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. Goodwill is the only intangible asset with an indefinite life on our balance sheet. The Company has selected December 31 as the date to perform its annual qualitative impairment test. For the year ended December 31, 2021, the Company used a qualitative assessment based on profitability and positive equity to determine that it was more likely than not that the fair value of goodwill was more than the carrying amount, resulting in no impairment.  For the year ended December 31, 2020, management could not conclude using a qualitative assessment that its fair value of goodwill exceeded the carrying amount due to the Company’s stock price having traded below book value for an extended period throughout 2020. Therefore, the Company performed a quantitative impairment test to conclude that there was no goodwill impairment for the year ended December 31, 2020. See Note F for more specific disclosures related to goodwill impairment testing.

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Mortgage Servicing Rights: A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2021 and 2020, the Company’s MSR assets were $480 and $458, respectively.

Earnings Per Share: Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,780,609 for 2021 and 4,787,446 for 2020. Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

19

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized at the time of enactment of such change in tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Bank Owned Life Insurance and Annuity Assets: The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Dividend Reinvestment Plan: The Company maintains a Dividend Reinvestment Plan. The plan enables shareholders to elect to have their cash dividends on all or a portion of shares held automatically reinvested in additional shares of the Company’s common stock. The stock is issued out of the Company’s authorized shares and credited to participant accounts at fair market value. Dividends are reinvested on a quarterly basis.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note L for more specific disclosure related to loan commitments.

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note P for more specific disclosure related to dividend restrictions.

Restrictions on Cash: Cash on hand or on deposit with a third-party correspondent bank and the FRB totaled $136,379 and $121,432 at year-end 2021 and 2020, respectively, and were subject to clearing requirements but not subject to any regulatory reserve requirements.  The balances on deposit with a third-party correspondent do not earn interest.

Derivatives: At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

20

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies (continued)

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2021 and 2020, the only derivative instruments used by the Company were interest rate swaps, which are classified as stand-alone derivatives.  See Note H for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note O.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications: The consolidated financial statements for 2020 have been reclassified to conform with the presentation for 2021.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

Current Events: In March 2020, the World Health Organization declared the outbreak of the coronavirus (“COVID-19”) as a global pandemic. COVID-19 has continued to negatively impact the global economy, disrupt global supply chains, create significant volatility, disrupt financial markets, and increase unemployment levels.

The continued financial impact of COVID-19 depends largely on the actions taken by governmental authorities and other third parties. In addition, COVID-19 may continue to adversely impact several industries within our geographic footprint for some time and impair the ability of our customers to fulfill their contractual obligations to the Company. This could result in a material adverse effect on our business operations, asset valuations, liquidity, financial condition, and results of operations. These effects may include an increase in the Company’s allowance for loan losses and valuation impairments on the Company’s securities, impaired loans, goodwill, other real estate owned, and interest rate swap agreements.

Accounting Guidance to be Adopted in Future Periods: In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”. ASU 2016-13 requires entities to replace the current “incurred loss” model with an “expected loss” model, which is referred to as the current expected credit loss (“CECL”) model.  These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. The Bank’s CECL steering committee has developed a CECL model and is evaluating the source data, various credit loss methodologies and model results in relation to the new ASU guidance.  Management expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective.  Management expects the adoption will result in a material increase to the allowance for loan losses balance. For SEC filers who are smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

21

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note B - Securities

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2021 and 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2021
U.S. Government securities	$	20,182	$	—	$	(39	)	$	20,143
U.S. Government sponsored entity securities		25,980		109		(173	)		25,916
Agency mortgage-backed securities, residential		129,942		1,476		(477	)		130,941
Total securities	$	176,104	$	1,585	$	(689	)	$	177,000
December 31, 2020
U.S. Government sponsored entity securities	$	17,814	$	339	$	—		$	18,153
Agency mortgage-backed securities, residential		91,425		2,748		(4	)		94,169
Total securities	$	109,239	$	3,087	$	(4	)	$	112,322

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2021
Obligations of states and political subdivisions	$	10,292	$	200	$	(44	)	$	10,448
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,294	$	200	$	(44	)	$	10,450
December 31, 2020
Obligations of states and political subdivisions	$	10,018	$	324	$	—		$	10,342
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,020	$	324	$	—		$	10,344

At year-end 2021, there were holdings of $18,500 in securities issued by the Federal Farm Credit Bank that exceeded 10% of shareholders’ equity. At year-end 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

During 2021, proceeds from the sales of debt securities totaled $47,666 with gross losses of $1,066 recognized. There were no sales of debt securities during 2020.

Securities with a carrying value of approximately $123,742 at December 31, 2021 and $83,344 at December 31, 2020 were pledged to secure public deposits and repurchase agreements and for other purposes as required or permitted by law.

Unrealized losses on the Company’s debt securities have not been recognized into income because the issuers’ securities are of high credit quality as of December 31, 2021, and management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.  Management does not believe any individual unrealized loss at December 31, 2021 and 2020 represents an OTTI.

22

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note B - Securities (continued)

The amortized cost and estimated fair value of debt securities at December 31, 2021, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities. Securities not due at a single maturity are shown separately.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	4,001	$	4,018	$	230	$	234
Due in one to five years		22,095		22,104		4,243		4,366
Due in five to ten years		20,066		19,937		3,408		3,419
Due after ten years		—		—		2,411		2,429
Agency mortgage-backed securities, residential		129,942		130,941		2		2
Total debt securities	$	176,104	$	177,000	$	10,294	$	10,450

The following table summarizes securities with unrealized losses at December 31, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position:

December 31, 2021	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government securities	$	20,143	$	(39	)	$	—	$	—	$	20,143	$	(39	)
U.S. Government sponsored entity securities		18,307		(173	)		—		—		18,307		(173	)
Agency mortgage-backed securities, residential		64,560		(477	)		—		—		64,560		(477	)
Total available for sale	$	103,010	$	(689	)	$	—	$	—	$	103,010	$	(689	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)
Total held to maturity	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)

December 31, 2020	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities, residential	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)
Total available for sale	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)

23

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses

Loans are comprised of the following at December 31:

	2021			2020
Residential real estate	$	274,425		$	305,478
Commercial real estate:
Owner-occupied		71,979			51,863
Nonowner-occupied		176,100			164,523
Construction		33,718			37,063
Commercial and industrial		141,525			157,692
Consumer:
Automobile		48,206			55,241
Home equity		22,375			19,993
Other		62,863			56,811
		831,191			848,664
Less: Allowance for loan losses		(6,483	)		(7,160	)
Loans, net	$	824,708		$	841,504

Commercial and industrial loans include $446 of loans originated under the PPP at December 31, 2021, as compared to $27,933 at December 31, 2020. These loans are guaranteed by the SBA.

The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021, and 2020:

December 31, 2021	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160
Provision for loan losses		(615	)		(61	)		(258	)		515			(419	)
Loans charged off		(84	)		(115	)		(120	)		(1,162	)		(1,481	)
Recoveries		199			293			173			558			1,223
Total ending allowance balance	$	980		$	2,548		$	1,571		$	1,384		$	6,483

December 31, 2020	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,250		$	1,928		$	1,447		$	1,647		$	6,272
Provision for loan losses		413			946			443			1,178			2,980
Loans charged off		(340	)		(559	)		(185	)		(1,949	)		(3,033	)
Recoveries		157			116			71			597			941
Total ending allowance balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160

24

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2021 and 2020:

December 31, 2021	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	10	$	—	$	10
Collectively evaluated for impairment		980		2,548		1,561		1,384		6,473
Total ending allowance balance	$	980	$	2,548	$	1,571	$	1,384	$	6,483
Loans:
Loans individually evaluated for impairment	$	—	$	5,411	$	4,531	$	81	$	10,023
Loans collectively evaluated for impairment		274,425		276,386		136,994		133,363		821,168
Total ending loans balance	$	274,425	$	281,797	$	141,525	$	133,444	$	831,191

December 31, 2020	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,480		2,431		1,776		1,473		7,160
Total ending allowance balance	$	1,480	$	2,431	$	1,776	$	1,473	$	7,160
Loans:
Loans individually evaluated for impairment	$	411	$	5,845	$	4,686	$	84	$	11,026
Loans collectively evaluated for impairment		305,067		247,604		153,006		131,961		837,638
Total ending loans balance	$	305,478	$	253,449	$	157,692	$	132,045	$	848,664

25

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents information related to loans individually evaluated for impairment by class of loans as of the years ended December 31, 2021, and 2020:

December 31, 2021	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:
Commercial and industrial	$	1,993	$	1,993	$	10	$	1,987	$	94	$	94
With no related allowance recorded:
Commercial real estate:
Owner-occupied		5,052		5,027		—		5,151		309		309
Nonowner-occupied		384		384		—		387		29		29
Commercial and industrial		2,538		2,538		—		2,981		139		139
Consumer:
Home equity		31		31		—		32		2		2
Other		50		50		—		49		2		2
Total	$	10,048	$	10,023	$	10	$	10,587	$	575	$	575

December 31, 2020	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:	$	—	$	—	$	—	$	—	$	—	$	—
With no related allowance recorded:
Residential real estate		418		411		—		423		21		21
Commercial real estate:
Owner-occupied		5,256		5,256		—		3,417		260		260
Nonowner-occupied		632		589		—		626		29		29
Commercial and industrial		4,686		4,686		—		3,772		196		196
Consumer:
Home equity		34		34		—		28		2		2
Other		50		50		—		10		2		2
Total	$	11,076	$	11,026	$	—	$	8,276	$	510	$	510

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). As of December 31, 2021 and December 31, 2020, other real estate owned for residential real estate properties totaled $15 and $49, respectively. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $316 and $1,097 as of December 31, 2021 and December 31, 2020, respectively.

26

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of December 31, 2021 and 2020:

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2021
Residential real estate	$	10	$	2,683
Commercial real estate:
Owner-occupied		—		1,055
Nonowner-occupied		—		—
Construction		—		146
Commercial and industrial		65		150
Consumer:
Automobile		55		147
Home equity		—		148
Other		160		17
Total	$	290	$	4,346

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2020
Residential real estate	$	127	$	5,256
Commercial real estate:
Owner-occupied		—		205
Nonowner-occupied		—		362
Construction		—		156
Commercial and industrial		15		149
Consumer:
Automobile		146		129
Home equity		—		210
Other		136		36
Total	$	424	$	6,503

The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2021 and 2020:

December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,208	$	1,218	$	921	$	4,347	$	270,078	$	274,425
Commercial real estate:
Owner-occupied		895		—		153		1,048		70,931		71,979
Nonowner-occupied		100		—		—		100		176,000		176,100
Construction		36		53		33		122		33,596		33,718
Commercial and industrial		517		60		215		792		140,733		141,525
Consumer:
Automobile		656		148		194		998		47,208		48,206
Home equity		35		165		47		247		22,128		22,375
Other		401		133		177		711		62,152		62,863
Total	$	4,848	$	1,777	$	1,740	$	8,365	$	822,826	$	831,191

27

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,845	$	496	$	1,663	$	5,004	$	300,474	$	305,478
Commercial real estate:
Owner-occupied		470		1,003		193		1,666		50,197		51,863
Nonowner-occupied		94		—		362		456		164,067		164,523
Construction		—		82		—		82		36,981		37,063
Commercial and industrial		1,112		11		164		1,287		156,405		157,692
Consumer:
Automobile		831		131		258		1,220		54,021		55,241
Home equity		204		81		113		398		19,595		19,993
Other		446		76		172		694		56,117		56,811
Total	$	6,002	$	1,880	$	2,925	$	10,807	$	837,857	$	848,664

Troubled Debt Restructurings:

A troubled debt restructuring (“TDR”) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  All TDRs are considered to be impaired.   The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms.

The Company has allocated reserves for a portion of its TDRs to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer.

The following table presents the types of TDR loan modifications by class of loans as of December 31, 2021 and December 31, 2020:

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2021
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	1,455	$	—	$	1,455
Maturity extension at lower stated rate than market rate		268		—		268
Credit extension at lower stated rate than market rate		375		—		375
Nonowner-occupied
Credit extension at lower stated rate than market rate		385		—		385
Commercial and industrial
Interest only payments		2,301		—		2,301
Total TDRs	$	4,784	$	—	$	4,784

28

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2020
Residential real estate:
Interest only payments	$	202	$	—	$	202
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments		1,486		—		1,486
Maturity extension at lower stated rate than market rate		351		—		351
Credit extension at lower stated rate than market rate		384		—		384
Nonowner-occupied
Credit extension at lower stated rate than market rate		390		—		390
Commercial and industrial
Interest only payments		4,400		—		4,400
Total TDRs	$	7,213	$	—	$	7,213

The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at December 31, 2021 and 2020. At December 31, 2021, the Company had $3,199 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $1,100 at December 31, 2020.

There were no TDR loan modifications that occurred during the years ended December 31, 2021 and 2020 that impacted provision expense or the allowance for loan losses. 

During the years ended December 31, 2021, and 2020, the Company had no TDRs that experienced any payment defaults within twelve months following their loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.  TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 and provided guidance on the modification of loans as a result of COVID-19, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers are considered current if they are less than 30 days past due on their contractual payments at the time of modification.As of December 31, 2021, the Company had modified 655 loans related to COVID-19 with an outstanding loan balance of $124,657 that were not reported as TDRs. As of December 31, 2021, the Company had 30 of those modified loans still operating under their COVID-19 related deferral terms with an outstanding loan balance of $374 that were not reported as TDRs in the tables presented above.

The terms of certain other loans were modified during the years ended December 31, 2021 and 2020 that did not meet the definition of a TDR.  These loans have a total recorded investment of $23,171 as of December 31, 2021 and $16,624 as of December 31, 2020.  The modification of these loans primarily involved the modification of the terms of a loan to borrowers who were not experiencing financial difficulties.

29

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000.

The Company uses the following definitions for its criticized loan risk ratings:

Special Mention. Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.  Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring.

The Company uses the following definitions for its classified loan risk ratings:

Substandard. Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful. Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, and receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss. Loans classified as loss are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.  This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.  Amounts classified as loss should be promptly charged off.

Criticized and classified loans will mostly consist of commercial and industrial and commercial real estate loans. The Company considers its loans that do not meet the criteria for a criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date.

30

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note C - Loans and Allowance for Loan Losses (continued)

As of December 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

December 31, 2021	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	66,999	$	618	$	4,362	$	71,979
Nonowner-occupied		175,901		—		199		176,100
Construction		33,685		—		33		33,718
Commercial and industrial		134,983		1,862		4,680		141,525
Total	$	411,568	$	2,480	$	9,274	$	423,322

December 31, 2020	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	46,604	$	669	$	4,590	$	51,863
Nonowner-occupied		160,324		3,629		570		164,523
Construction		37,063		—		—		37,063
Commercial and industrial		150,786		2,064		4,842		157,692
Total	$	394,777	$	6,362	$	10,002	$	411,141

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau) but not thereafter. The Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower’s credit score to be a significant influence in the determination of a loan’s credit risk grading.

For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of December 31, 2021 and December 31, 2020:

	Consumer
December 31, 2021	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	48,004	$	22,227	$	62,686	$	271,732	$	404,649
Nonperforming		202		148		177		2,693		3,220
Total	$	48,206	$	22,375	$	62,863	$	274,425	$	407,869

	Consumer
December 31, 2020	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	54,966	$	19,783	$	56,639	$	300,095	$	431,483
Nonperforming		275		210		172		5,383		6,040
Total	$	55,241	$	19,993	$	56,811	$	305,478	$	437,523

The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the southeastern area of Ohio as well as the western counties of West Virginia.  Approximately 4.45% of total loans were unsecured at December 31, 2021, up from 4.22% at December 31, 2020.

31

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note D - Premises and Equipment

Following is a summary of premises and equipment at December 31:

	2021		2020
Land	$	2,570	$	2,719
Buildings		22,360		22,081
Leasehold improvements		1,402		1,302
Furniture and equipment		9,528		8,892
		35,860		34,994
Less accumulated depreciation		15,130		13,682
Total premises and equipment	$	20,730	$	21,312

Following is a summary of premises and equipment held for sale at December 31:

	2021		2020
Land	$	105	$	153
Buildings		387		564
		492		717
Less accumulated depreciation		54		80
Total premises and equipment held for sale	$	438	$	637

Note E – Leases

Balance sheet information related to leases at December 31 was as follows:

	2021		2020
Operating leases:
Operating lease right-of-use assets	$	1,195	$	880
Operating lease liabilities		1,195		880

The components of lease cost were as follows for the year ending:

	2021		2020
Operating lease cost	$	161	$	170
Short-term lease expense		36		31

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2021 are as follows:

	Operating Leases
2022	$	168
2023		127
2024		106
2025		106
2026		107
Thereafter		866
Total lease payments		1,480
Less: Imputed Interest		(285	)
Total operating leases	$	1,195

Other information at December 31 was as follows:

	2021		2020
Weighted-average remaining lease term for operating leases	13.7 years		9.6 years
Weighted-average discount rate for operating leases		2.29%		2.79%

32

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note F – Goodwill and Intangible Assets

Goodwill:  The change in goodwill during the year is as follows:

	Gross Carrying Amount
	2021		2020
Goodwill	$	7,319	$	7,319

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2021, the Company’s reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that fair value of the reporting unit exceeded its carrying value, including goodwill.  The qualitative assessment indicated that it is more likely than not that fair value of goodwill is more than the carrying value, resulting in no impairment for the year ended December 31, 2021.  Therefore, the Company did not proceed to step one of the annual goodwill impairment testing requirement.

During 2020, the general economic conditions the Company operates in had trended from generally stable to somewhat challenged in relation to the pandemic. At December 31, 2020, the Company’s reporting unit remained profitable and had positive equity. However, earnings for 2020 were negatively impacted by adding general reserves to the allowance in relation to the pandemic and to a lower net interest margin in relation to the first quarter rate cuts. As a result, the Company’s stock price experienced a decrease in value during 2020, and was trading below book value at December 31, 2020. Given the economic outlook, the challenge of growing earnings going forward in this environment, and the Company’s stock price trading below book value, management could not conclude that evidence provided by a qualitative assessment would support that it would be more likely than not the fair value of goodwill is more than the carrying amount. Therefore, the Company proceeded to complete the quantitative impairment test.

The quantitative impairment test includes comparing the carrying value of the reporting unit, including the existing goodwill and intangible assets, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value of the reporting unit, up to the amount of goodwill attributed to the reporting unit. After performing the quantitative testing, it was determined that the reporting unit’s fair value exceeded the reporting unit’s carrying value, resulting in no impairment for the year ended December 31, 2020.

Acquired intangible assets:  Acquired intangible assets were as follows at year-end:

	2021				2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Core deposit intangibles	$	738	$	674	$	738	$	626

Aggregate amortization expense was $48 for 2021 and $62 for 2020.

Estimated amortization expense for each of the next five years:

2022	$	35
2023		21
2024		8
2025		—
2026		—
Total	$	64

33

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note G - Deposits

Following is a summary of interest-bearing deposits at December 31:

	2021		2020
NOW accounts	$	205,362	$	185,364
Savings and Money Market		311,686		286,937
Time:
In denominations of $250,000 or less		147,000		165,834
In denominations of more than $250,000		42,282		40,827
Total time deposits		189,282		206,661
Total interest-bearing deposits	$	706,330	$	678,962

Following is a summary of total time deposits by remaining maturity at December 31, 2021:

2022	$	138,738
2023		41,386
2024		5,529
2025		1,329
2026		1,932
Thereafter		368
Total	$	189,282

Brokered deposits, included in time deposits, were $11,438 and $18,834 at December 31, 2021 and 2020, respectively.

Note H - Interest Rate Swaps

The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities.  The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position.  As part of this strategy, the Company provides its customer with a fixed-rate loan while creating a variable-rate asset for the Company by the customer entering into an interest rate swap with the Company on terms that match the loan.  The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution.  These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative.  At December 31, 2021, the Company had offsetting interest rate swaps associated with commercial loans with a notional value of $13,843 and a fair value asset of $583 and a fair value liability for the same amount.  This is compared to offsetting interest rate swaps with a notional value of $10,967 and a fair value asset and liability of $913 at December 31, 2020.  The notional amount of the interest rate swaps does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreement.  To further offset the risk exposure related to market value fluctuations of its interest rate swaps, the Company maintains collateral deposits on hand with a third-party correspondent, which totaled $600 at December 31, 2021 and $1,250 at December 31, 2020.

Note I - Other Borrowed Funds

Other borrowed funds at December 31, 2021 and 2020 are comprised of advances from the FHLB of Cincinnati and promissory notes.

	FHLB Borrowings		Promissory Notes		Totals
2021	$	17,476	$	2,138	$	19,614
2020		24,665		3,198		27,863

34

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note I - Other Borrowed Funds (continued)

Pursuant to collateral agreements with the FHLB, advances are secured by $265,850 in qualifying mortgage loans, $37,091 in commercial loans and $5,125 in FHLB stock at December 31, 2021. Fixed-rate FHLB advances of $17,476 mature through 2042 and have interest rates ranging from 1.53% to 2.97% and a year-to-date weighted average cost of 2.39% and 2.40% at December 31, 2021 and 2020, respectively. There were no variable-rate FHLB borrowings at December 31, 2021.

At December 31, 2021, the Company had a cash management line of credit enabling it to borrow up to $100,000 from the FHLB, subject to the stock ownership and collateral limitations described in the next paragraph. All cash management advances have an original maturity of 90 days. The line of credit must be renewed on an annual basis.

Based on the Company’s current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $176,096 at December 31, 2021. Of this maximum borrowing capacity of $176,096, the Company had $90,241 available to use as additional borrowings.

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of March 13, 2023, and have fixed rates ranging from 1.00% to 1.30% and a year-to-date weighted average cost of 1.23% at December 31, 2021, as compared to 2.20% at December 31, 2020. At December 31, 2021, there were six promissory notes payable by Ohio Valley to related parties totaling $2,138. See Note M for further discussion of related party transactions.  There were no promissory notes payable to other banks at December 31, 2021 and 2020, respectively.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $68,380 at December 31, 2021 and $76,740 at December 31, 2020.

Scheduled principal payments over the next five years:

	FHLB Borrowings		Promissory Notes		Totals
2022	$	2,109	$	1,031	$	3,140
2023		1,784		1,107		2,891
2024		1,693		—		1,693
2025		1,560		—		1,560
2026		1,434		—		1,434
Thereafter		8,896		—		8,896
	$	17,476	$	2,138	$	19,614

Note J - Subordinated Debentures and Trust Preferred Securities

On March 22, 2007, a trust formed by Ohio Valley issued $8,500 of adjustable-rate trust preferred securities as part of a pooled offering of such securities.  The rate on these trust preferred securities was fixed at 6.58% for five years, and then converted to a floating-rate term on March 15, 2012, based on a rate equal to the 3-month LIBOR plus 1.68%.  The interest rate on these trust preferred securities was 1.88% at December 31, 2021 and 1.90% at December 31, 2020.  There were no debt issuance costs incurred with these trust preferred securities.  The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering.  The subordinated debentures must be redeemed no later than June 15, 2037.

Under the provisions of the related indenture agreements, the interest payable on the trust preferred securities is deferrable for up to five years and any such deferral is not considered a default. During any period of deferral, the Company would be precluded from declaring or paying dividends to shareholders or repurchasing any of the Company’s common stock.  Under generally accepted accounting principles, the trusts are not consolidated with the Company.  Accordingly, the Company does not report the securities issued by the trust as liabilities, and instead reports as liabilities the subordinated debentures issued by the Company and held by the trust.  Since the Company’s equity interest in the trusts cannot be received until the subordinated debentures are repaid, these amounts have been netted.  The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

35

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note K - Income Taxes

The provision for income taxes consists of the following components:

	2021			2020
Current tax expense	$	2,414		$	2,036
Deferred tax (benefit) expense		(130	)		12
Total income taxes	$	2,284		$	2,048

The source of deferred tax assets and deferred tax liabilities at December 31:

	2021			2020
Items giving rise to deferred tax assets:
Allowance for loan losses	$	1,410		$	1,557
Deferred compensation		2,007			1,822
Deferred loan fees/costs		148			136
Other real estate owned		—			1
Accrued bonus		286			212
Purchase accounting adjustments		2			18
Net operating loss		82			99
Lease liability		324			235
Nonaccrual interest income		174			—
Other		275			339
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(104	)		(100	)
FHLB stock dividends		(676	)		(676	)
Unrealized gain on securities available for sale		(188	)		(647	)
Prepaid expenses		(205	)		(202	)
Depreciation and amortization		(783	)		(894	)
Right-of-use asset		(324	)		(235	)
Net deferred tax asset	$	2,428		$	1,665

The Company determined that it was not required to establish a valuation allowance for deferred tax assets since management believes that the deferred tax assets are likely to be realized through the future reversals of existing taxable temporary differences, deductions against forecasted income and tax planning strategies.

At December 31, 2021, the Company’s deferred tax asset related to Section 382 net operating loss carryforwards was $391, which will expire in 2026.

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 21% to income before taxes is as follows:

	2021			2020
Statutory tax (21%)	$	2,943		$	2,584
Effect of nontaxable interest		(378	)		(348	)
Effect of nontaxable insurance premiums		(220	)		(210	)
Income from bank owned insurance, net		(168	)		(161	)
Effect of postretirement benefits		26			124
Effect of nontaxable life insurance death proceeds		(10	)		—
Effect of state income tax		150			125
Tax credits		(72	)		(102	)
Other items		13			36
Total income taxes(1)	$	2,284		$	2,048

(1) Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

At December 31, 2021 and December 31, 2020, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.  The Company did not recognize any interest and/or penalties related to income tax matters for the periods presented.

36

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note K - Income Taxes (continued)

The Company is subject to U.S. federal income tax as well as West Virginia state income tax.  The Company is no longer subject to federal or state examination for years prior to 2018.  The tax years 2018-2020 remain open to federal and state examinations.

Note L - Commitments and Contingent Liabilities

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.  The Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.

Following is a summary of such commitments at December 31:

	2021		2020
Fixed rate	$	1,014	$	1,127
Variable rate		84,929		83,956
Standby letters of credit		3,659		3,373

At December 31, 2021, the fixed-rate commitments have interest rates ranging from 2.50% to 6.25% and maturities ranging from 15 years to 30 years.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Bank evaluates each customer’s credit worthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

There are various contingent liabilities that are not reflected in the financial statements, including claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on financial condition or results of operations.

Note M - Related Party Transactions

Certain directors, executive officers and companies with which they are affiliated were loan customers during 2021. A summary of activity on these borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2021	$	2,729
New loans		16,401
Repayments		(472	)
Other changes		(810	)
Total loans at December 31, 2021	$	17,848

Other changes include adjustments for loans applicable to one reporting period that are excludable from the other reporting period, such as changes in persons classified as directors, executive officers and companies’ affiliates.

Deposits from principal officers, directors, and their affiliates at year-end 2021 and 2020 were $110,405 and $94,056.  In addition, the Company had promissory notes outstanding with directors and their affiliates totaling $2,138 at year-end 2021 and $3,198 at year-end 2020.  The interest rates ranged from 1.00% to 2.85%, with terms ranging from 12 to 24 months.

37

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note N - Employee Benefits

The Bank has a profit-sharing plan for the benefit of its employees and their beneficiaries. Contributions to the plan are determined by the Board of Directors of Ohio Valley. Contributions charged to expense were $265 and $242 for 2021 and 2020.

Ohio Valley maintains an Employee Stock Ownership Plan (“ESOP”) covering substantially all employees of the Company. Ohio Valley issues shares to the ESOP, purchased by the ESOP with subsidiary cash contributions, which are allocated to ESOP participants based on relative compensation. The total number of shares held by the ESOP, all of which have been allocated to participant accounts, were 292,680 and 298,294 at December 31, 2021 and 2020.  In addition, the subsidiaries made contributions to the ESOP as follows:

	Years ended December 31
	2021		2020
Number of shares issued		—		—
Fair value of stock contributed	$	—	$	—
Cash contributed		580		614
Total expense	$	580	$	614

Life insurance contracts with a cash surrender value of $35,052 and annuity assets of $2,229 at December 31, 2021 have been purchased by the Company, the owner of the policies. The purpose of these contracts was to replace a current group life insurance program for executive officers, implement a deferred compensation plan for directors and executive officers, implement a director retirement plan and implement supplemental retirement plans for certain officers.  Under the deferred compensation plan, Ohio Valley pays each participant the amount of fees deferred plus interest over the participant’s desired term, upon termination of service.  Under the director retirement plan, participants are eligible to receive ongoing compensation payments upon retirement subject to length of service.  The supplemental retirement plans provide payments to select executive officers upon retirement based upon a compensation formula determined by Ohio Valley’s Board of Directors.  The present value of payments expected to be provided are accrued during the service period of the covered individuals and amounted to $8,973 and $8,377 at December 31, 2021 and 2020. Expenses related to the plans for each of the last three years amounted to $830 and $743. In association with the split-dollar life insurance plan, the present value of the postretirement benefit totaled $3,843 at December 31, 2021 and $3,721 at December 31, 2020.

Note O - Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

38

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note O - Fair Value of Financial Instruments (continued)

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and liabilities on a recurring or nonrecurring basis:

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans: At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement. Such adjustments would be classified as a Level 2 classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement.  Such adjustments would be classified as a Level 2 classification.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.

On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that typically approximate 10%.

Interest Rate Swap Agreements: The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).  The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

39

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note O - Fair Value of Financial Instruments (continued)

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government securities		—	$	20,143			—
U.S. Government sponsored entity securities		—		25,916			—
Agency mortgage-backed securities, residential		—		130,941			—
Interest rate swap derivatives		—		599			—
Liabilities:
Interest rate swap derivatives		—		(599	)		—

	Fair Value Measurements at December 31, 2020, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government sponsored entity securities		—	$	18,153			—
Agency mortgage-backed securities, residential		—		94,169			—
Interest rate swap derivatives		—		928			—
Liabilities:
Interest rate swap derivatives		—		(928	)		—

Assets and Liabilities Measured on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2020. Assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2021 are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial and Industrial	$	—	$	—	$	1,983

At December 31, 2021, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $1,993, with a corresponding valuation allowance of $10, resulting in an increase of $10 in provision expense during the year ended December 31, 2021, with no corresponding charge-offs. At December 31, 2020, the Company had no recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans and, therefore, recorded no impact to provision expense during the year ended December 31, 2020.

There was no other real estate owned that was measured at fair value less costs to sell at December 31, 2021 and 2020. Furthermore, there were no corresponding write-downs during the years ended December 31, 2021 and 2020.

40

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note O - Fair Value of Financial Instruments (continued)

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2021:

December 31, 2021	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range	(Weighted Average)
Impaired loans:
Commercial and Industrial	$	1,983	Sales approach	Adjustment to comparables and equipment comparables	0% to 25%		18.5	%

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 and December 31, 2020 are as follows:

			Fair Value Measurements at December 31, 2021 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	152,034	$	152,034	$	—	$	—	$	152,034
Certificates of deposit in financial institutions		2,329		—		2,329		—		2,329
Securities available for sale		177,000		—		177,000		—		177,000
Securities held to maturity		10,294		—		6,063		4,387		10,450
Loans, net		824,708		—		—		821,899		821,899
Interest rate swap derivatives		599		—		599		—		599
Accrued interest receivable		2,695		—		363		2,332		2,695
Financial Liabilities:
Deposits		1,059,908		870,626		189,796		—		1,060,422
Other borrowed funds		19,614		—		20,279		—		20,279
Subordinated debentures		8,500		—		5,657		—		5,657
Interest rate swap derivatives		599		—		599		—		599
Accrued interest payable		439		1		438		—		439

			Fair Value Measurements at December 31, 2020 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	138,303	$	138,303	$	—	$	—	$	138,303
Certificates of deposit in financial institutions		2,500		—		2,500		—		2,500
Securities available for sale		112,322		—		112,322		—		112,322
Securities held to maturity		10,020		—		4,989		5,355		10,344
Loans, net		841,504		—		—		837,387		837,387
Interest rate swap derivatives		928		—		928		—		928
Accrued interest receivable		3,319		—		283		3,036		3,319
Financial Liabilities:
Deposits		993,739		787,078		208,552		—		995,630
Other borrowed funds		27,863		—		29,807		—		29,807
Subordinated debentures		8,500		—		5,556		—		5,556
Interest rate swap derivatives		928		—		928		—		928
Accrued interest payable		1,100		1		1,099		—		1,100

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

41

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note P - Regulatory Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet capital requirements can initiate regulatory action. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 2021, the Bank met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations applicable to insured depository institutions provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2021 and 2020, the Bank met the capital requirements to be deemed well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since year-end 2021 and 2020 that management believes have changed the institution's well capitalized category.

In 2019, the federal banking agencies jointly issued a final rule that provides for an optional, simplified measure of capital adequacy, the community bank leverage ratio ("CBLR") framework, for qualifying community banking organizations (banks and holding companies), consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule became effective on January 1, 2020 and was elected by the Bank as of March 31, 2020. In April 2020, the federal banking agencies issued an interim final rule that made temporary changes to the CBLR framework, pursuant to Section 4012 of the CARES Act, and a second interim final rule that provided a graduated increase in the CBLR requirement after the expiration of the temporary changes implemented pursuant to Section 4012 of the CARES Act.

The CBLR removes the requirement for qualifying banking organizations to calculate and report risk-based capital and only requires a Tier 1 to average assets ("leverage") ratio. Qualifying banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than required minimums are considered to have satisfied the generally applicable risk based and leverage capital requirements in the agencies' capital rules and, if applicable, are considered to have met the well capitalized ratio requirements for purposes of Section 38 of the Federal Deposit Insurance Act. Under the interim final rules, the CBLR minimum requirement is 8% as of December 31, 2020, 8.5% for calendar year 2021, and 9% for calendar year 2022 and beyond. The interim rule allows for a two-quarter grace period to correct a ratio that falls below the required amount, provided that the Bank maintains a leverage ratio of 7% as of December 31, 2020, 7.5% for calendar year 2021, and 8% for calendar year 2022 and beyond.

Under the final rule, an eligible banking organization can opt out of the CBLR framework and revert back to the risk-weighting framework without restriction. As of December 31, 2021 and 2020, the Bank qualified as a community banking organization as defined by the federal banking agencies and elected to measure capital adequacy under the CBLR framework.

The following tables summarize the actual and required capital amounts of the Bank as of year-end.

	Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations
Bank	Amount		Ratio			Amount		Ratio
Tier 1 capital (to average assets)
December 31, 2021	$	126,201		10.3	%	$	104,387		8.5	%
December 31, 2020		120,989		10.7			90,407		8.0

42

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note P - Regulatory Matters (continued)

Dividends paid by the subsidiaries are the primary source of funds available to Ohio Valley for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the subsidiaries to Ohio Valley is subject to restrictions by regulatory authorities and state law. These restrictions generally limit dividends to the current and prior two years retained earnings of the Bank and Loan Central, Inc., and 90% of the prior year’s net income of OVBC Captive, Inc. At January 1, 2022 approximately $12,747 of the subsidiaries’ retained earnings were available for dividends under these guidelines. The ability of Ohio Valley to borrow funds from the Bank is limited as to amount and terms by banking regulations. The Board of Governors of the Federal Reserve System also has a policy requiring Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

Note Q - Parent Company Only Condensed Financial Information

Below is condensed financial information of Ohio Valley. In this information, Ohio Valley’s investment in its subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries since acquisition. This information should be read in conjunction with the consolidated financial statements of the Company.

CONDENSED STATEMENTS OF CONDITION

	Years ended December 31:
Assets	2021		2020
Cash and cash equivalents	$	5,366	$	4,112
Investment in subsidiaries		147,214		143,424
Notes receivable – subsidiaries		2,123		1,603
Other assets		38		32
Total assets	$	154,741	$	149,171
Liabilities
Notes payable	$	2,138	$	3,198
Subordinated debentures		8,500		8,500
Other liabilities		2,747		1,149
Total liabilities		13,385		12,847
Shareholders’ Equity
Total shareholders’ equity		141,356		136,324
Total liabilities and shareholders’ equity	$	154,741	$	149,171

CONDENSED STATEMENTS OF INCOME

	Years ended December 31:
Income:	2021		2020
Interest on notes	$	20	$	41
Dividends from subsidiaries		6,650		4,125
Expenses:
Interest on notes		31		82
Interest on subordinated debentures		158		208
Operating expenses		379		344
Income before income taxes and equity in undistributed earnings of subsidiaries		6,102		3,532
Income tax benefit		112		121
Equity in undistributed earnings of subsidiaries		5,518		6,606
Net Income	$	11,732	$	10,259
Comprehensive Income	$	10,004	$	12,167

43

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note Q - Parent Company Only Condensed Financial Information (continued)

CONDENSED STATEMENTS OF CASH FLOWS

	Years ended December 31:
Cash flows from operating activities:	2021			2020
Net Income	$	11,732		$	10,259
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(5,518	)		(6,606	)
Change in other assets		(6	)		16
Change in other liabilities		1,598			832
Net cash provided by operating activities		7,806			4,501
Cash flows from investing activities:
Change in notes receivable		(520	)		360
Net cash provided by investing activities		(520	)		360
Cash flows from financing activities:
Change in notes payable		(1,060	)		(1,035	)
Purchases of treasury stock		(954	)		—
Cash dividends paid		(4,018	)		(4,022	)
Net cash used in financing activities		(6,032	)		(5,057	)
Cash and cash equivalents:
Change in cash and cash equivalents		1,254			(196	)
Cash and cash equivalents at beginning of year		4,112			4,308
Cash and cash equivalents at end of year	$	5,366		$	4,112

44

notes to the consolidated financial statements

Amounts are in thousands, except share and per share data.

Note R - Segment Information

The reportable segments are determined by the products and services offered, primarily distinguished between banking and consumer finance.  They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business which are then aggregated if operating performance, products/services, and customers are similar.  Loans, investments, and deposits provide the majority of the net revenues from the banking operation, while loans provide the majority of the net revenues for the consumer finance segment.  All Company segments are domestic.

Total revenues from the banking segment, which accounted for the majority of the Company’s total revenues, totaled 94.1% and 94.3% of total consolidated revenues for the years ended December 31, 2021 and 2020, respectively.

The accounting policies used for the Company’s reportable segments are the same as those described in Note A - Summary of Significant Accounting Policies.  Income taxes are allocated based on income before tax expense.  All goodwill is in the Banking segment.

Segment information is as follows:

	Year Ended December 31, 2021
	Banking			Consumer Finance		Total Company
Net interest income	$	38,883		$	2,130	$	41,013
Provision expense		(500	)		81		(419	)
Noninterest income		8,831			1,033		9,864
Noninterest expense		34,847			2,433		37,280
Tax expense		2,149			135		2,284
Net income		11,218			514		11,732
Assets		1,235,231			14,538		1,249,769

	Year Ended December 31, 2020
	Banking		Consumer Finance		Total Company
Net interest income	$	37,825	$	2,157	$	39,982
Provision expense		2,945		35		2,980
Noninterest income		10,344		1,094		11,438
Noninterest expense		33,693		2,440		36,133
Tax expense		1,886		162		2,048
Net income		9,645		614		10,259
Assets		1,173,820		13,112		1,186,932

45

report of independent registered

public accounting firm

To the Shareholders and Board of Directors

Ohio Valley Banc Corp.

Gallipolis, Ohio

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of condition of Ohio Valley Banc Corp. (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses – Economic Conditions Qualitative Factor

As more fully described in Note A and Note C to the consolidated financial statements, the Company’s allowance for loan losses represents management’s best estimate of probable incurred losses in the loan portfolio. The allowance consists of a specific component which relates to individually impaired loans and a general component. For the general component, management performs a quantitative and qualitative analysis to determine the general reserve portion of the allowance for loan losses. The quantitative component consists of historical loss experience determined by portfolio segment and is based on the actual loss history experienced by the Company. The total loan portfolio’s actual loss experience is supplemented with qualitative factors based on the risks present for each portfolio segment.  These qualitative  factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions (economic conditions); industry conditions; and effects of changes in credit concentrations.  The most significant qualitative factor considered as of December 31, 2021 was the economic conditions. Management exercised significant judgment when assessing the economic conditions qualitative factor in estimating the allowance for loan losses.

46

report of independent registered

public accounting firm

We identified auditing the economic conditions qualitative factor component of the allowance for loan losses as a critical audit matter because auditing management’s assessment of the economic conditions qualitative factor required significant auditor judgment.

The primary audit procedures we performed to address this critical audit matter included the following:

• Evaluated the relevance and reliability of data used in the development of the economic conditions qualitative factor

• Evaluated management’s judgments and assumptions used to determine the economic conditions qualitative factor for reasonableness

• Performed data validation of inputs and tested mathematical accuracy of management’s calculation of the economic conditions qualitative factor

	/s/Crowe LLP
	Crowe LLP
We have served as the Company’s auditor since 1992.
Cleveland, Ohio
March 16, 2022

47

MANAGEMENT'S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Board of Directors and Shareholders

Ohio Valley Banc Corp.

The management of Ohio Valley Banc Corp. (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

The system of internal control over financial reporting as it relates to the consolidated financial statements is evaluated for effectiveness by management. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed Ohio Valley Banc Corp.’s system of internal control over financial reporting as of December 31, 2021, in relation to criteria for effective internal control over financial reporting as described in the 2013 “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management concluded that, as of December 31, 2021, its system of internal control over financial reporting is effective and meets the criteria of the “Internal Control Integrated Framework.”

Crowe LLP, independent registered public accounting firm, has not issued an integrated audit report on Ohio Valley Banc Corp.’s internal control over financial reporting.

Ohio Valley Banc Corp.
/s/Thomas E. Wiseman	/s/Scott W. Shockey
Thomas E. Wiseman	Scott W. Shockey
Chief Executive Officer	Senior Vice President, CFO
March 16, 2022

48

PERFORMANCE GRAPH

OHIO VALLEY BANC CORP.

Year ended December 31, 2021

The following graph sets forth a comparison of five-year cumulative total returns among the Company's common shares (indicated “Ohio Valley Banc Corp.” on the Performance Graph), the S & P 500 Index (indicated “S & P 500” on the Performance Graph), and Dow Jones U.S. MicroCap Banks Index (indicated “Dow Jones U.S. MicroCap Banks Index” on the Performance Graph) for fiscal years indicated.  Information reflected on the graph assumes an investment of $100 on December 31, 2016, in the common shares of each of the Company, the S & P 500 Index, and the Dow Jones U.S. MicroCap Banks Index.  Cumulative total return assumes reinvestment of dividends. The Dow Jones U.S. MicroCap Banks Index represents the stock performance of 163 banks located throughout the United States, including the Company, within the respective market capitalization range as selected by Dow Jones.  The Dow Jones U.S. MicroCap Banks Index was selected as a replacement peer index for the SNL $1 Billion-$5 Billion Bank Asset-Size Index due to the latter no longer being published.

49

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

Certain statements contained in this report and other publicly available documents incorporated herein by reference constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended (the “Exchange Act”), and as defined in the Private Securities Litigation Reform Act of 1995.  Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and other similar expressions. Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the Coronavirus (“COVID-19”) pandemic, and which could cause actual results to differ materially from those expressed in such forward looking statements.  These factors include, but are not limited to:  the effects of COVID-19 on our business, operations, customers and capital position; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; the impact of COVID-19 on local, national and global economic conditions; unexpected changes in interest rates or disruptions in the mortgage market; the effects of various governmental responses to COVID-19; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; fluctuations in interest rates; the level of defaults and prepayment on loans made by the Company; unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes.  Additional detailed information concerning such factors is available in the Company’s filings with the Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.  The Company undertakes no obligation and disclaims any intention to republish revised or updated forward looking statements, whether as a result of new information, unanticipated future events or otherwise.

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this discussion is to provide an analysis of the financial condition and results of operations of Ohio Valley Banc Corp. (“Ohio Valley” or the “Company”) that is not otherwise apparent from the audited consolidated financial statements included in this report.  The accompanying consolidated financial information has been prepared by management in conformity with U.S. generally accepted accounting principles (“US GAAP”) and is consistent with that reported in the consolidated financial statements.  Reference should be made to those statements and the selected financial data presented elsewhere in this report for an understanding of the following tables and related discussion. All dollars are reported in thousands, except share and per share data.

BUSINESS OVERVIEW:

The Company is primarily engaged in commercial and retail banking through its wholly-owned subsidiary, The Ohio Valley Bank Company (the “Bank”), offering a blend of commercial and consumer banking services within southeastern Ohio, as well as western West Virginia.  The banking services offered by the Bank include the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, floor plan and student loans; the making of construction and real estate loans; and credit card services.  The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.  Ohio Valley also has a subsidiary that engages in consumer lending generally to individuals with higher credit risk history, Loan Central, Inc. (“Loan Central”); a subsidiary insurance agency that facilitates the receipt of insurance commissions, Ohio Valley Financial Services Agency, LLC; and a limited purpose property and casualty insurance company, OVBC Captive, Inc. (the “Captive”).  The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc. ("Race Day"), an online consumer direct mortgage company, and Ohio Valley REO, LLC, an entity to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale.

50

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 In January 2020, the Bank began offering Tax Refund Advance Loans (“TALs”) to Loan Central tax customers. A TAL represents a short-term loan offered by the Bank to tax preparation customers of Loan Central.  Previously, Loan Central offered and originated tax refund anticipation loans that represented a large composition of its annual earnings.  However, new Ohio laws that became effective in April 2019 placed numerous restrictions on short-term and small loans extended by certain non-bank lenders in Ohio.  As a result, Loan Central is no longer able to directly offer the service to its tax preparation customers, but it is able to do so through the Bank.  After Loan Central prepares a customer’s tax return, the customer is offered the opportunity to have immediate access to a portion of the anticipated tax refund by entering into a TAL with the Bank.  As part of the process, the tax customer completes a loan application and authorizes the expected tax refund to be deposited with the Bank once it is issued by the IRS.  Once the Bank receives the tax refund, the refund is used to repay the TAL and Loan Central’s tax preparation fees, then the remainder of the refund is remitted to Loan Central’s tax customer.

IMPACT of COVID-19:

COVID-19 has caused significant disruption in the United States and international economies and financial markets. The primary markets served by the Company in southeastern Ohio and western West Virginia were significantly impacted by COVID-19, which has changed the way we live and work. The continued effects of COVID-19 on the economy, supply chains, financial markets, unemployment levels, businesses and our customers is unknown and unpredictable.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law. The CARES Act provided assistance to small businesses through the establishment of the Paycheck Protection Program ("PPP"). The PPP provided small businesses with funds to use for payroll and certain other expenses. The funds were provided in the form of loans that would be fully forgiven if certain criteria were met. In 2021, Congress amended the PPP by extending the authority of the Small Business Administration (“SBA”) to guarantee loans and the ability of PPP lenders to disburse PPP loans until May 31, 2021. The Company supported its clients who experienced financial hardship due to COVID-19 through participation in the PPP, assistance with expedited deposits of CARES Act stimulus payments, and loan modifications, as needed.

RESULTS OF OPERATIONS:

SUMMARY

2021 v. 2020

Ohio Valley generated net income of $11,732 for 2021, an increase of $1,473, or 14.4%, from 2020.  Earnings per share were $2.45 for 2021, an increase of 14.5% from 2020.  The increase in net income and earnings per share for 2021 was impacted by higher net interest income and lower provision expense, which collectively contributed to a $4,430 increase in earnings from 2020.  For 2021, the Company finished with negative provision expense of $419, compared to $2,980 in provision expense for 2020. The decrease in provision expense was largely due to a decrease in net loan charge offs during 2021 and the establishment of an economic risk factor for the pandemic during the first quarter of 2020 that was less impactful in 2021. Net interest income increased 2.6% in 2021 largely due to growth in average earning assets, partially offset by a decrease in the fully tax-equivalent net interest income as a percentage of average earning assets (“net interest margin”). Average earnings assets increased 13.0% coming from growth in loans, investment securities and  interest-bearing deposits with banks. The positive impact from earning asset growth was partially offset by net interest margin compression in relation to aggressive rate cuts by the Federal Reserve in response to the pandemic during 2020.  The positive contributions from higher net interest income and lower provision expense were partially offset by lower noninterest income and higher noninterest expense, which collectively contributed to a $2,721 decrease in earnings from 2020. Contributing to lower noninterest income were realized losses of $1,066 from the sale of lower-yielding securities during 2021 and the receipt of $2,000 during 2020 from a litigation settlement with a third-party. Partially offsetting these negative factors within noninterest income was growth in debit/credit card interchange income and electronic refund check/electronic refund deposit (“ERC/ERD”) fees during 2021. The increase in noninterest expenses during 2021 came mostly from higher software, data processing, marketing and FDIC costs.

51

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s net interest income in 2021 was $41,013, representing an increase of $1,031, or 2.6%, from 2020.  Impacting net interest income growth was average earning assets, which were up $131,943 during 2021, as compared to 2020.  The growth came largely from increases in interest-bearing deposits with banks and investment securities, which were up $57,860 and $43,836, over 2020, respectively. Interest-bearing deposits were impacted by higher balances maintained at the Federal Reserve Bank (“FRB”) driven by heightened deposit balances related to stimulus payments received by customers. A portion of the deposit increase was invested in the securities portfolio during 2021. Average loans also grew $30,247 during 2021, largely impacted by higher commercial loan balances. In general, commercial loan demand has been positive in the Company’s market areas, particularly in the counties of Pike and Athens in Ohio and Cabell County in West Virginia. Furthermore, the Company participated in the PPP to assist various businesses in our market areas during the pandemic. The loan fees earned in association with the PPP loans during 2021 contributed to a $587 increase in total loan fees, which also had a positive impact to net interest income. Partially offsetting the positive impacts from average earning asset growth and loan fee increases was the decrease in net interest margin in relation to the decrease in market rates. In March 2020, the Federal Reserve took action to reduce interest rates by 150 basis points in response to COVID-19. This action led to a sustained low-rate interest environment, which contributed to lower earning asset yields during the remainder of 2020 and all of 2021. Interest-bearing costs were reduced during those periods, but not to the same magnitude as earning assets due to a lagging effect associated with time deposits and certain other interest-bearing deposits being at or near their interest rate floors. Furthermore, the change in asset mix during 2020 and 2021 into more PPP loans and elevated deposits at the Federal Reserve had a dilutive effect on the net interest margin, with PPP loans carrying a 1.0% interest rate and the rate on balances maintained at the Federal Reserve below 25 basis points. As a result, the Company’s net interest margin finished at 3.61% during the year ended December 31, 2021, a decrease of 36 basis points from a 3.97% net interest margin during the same period in 2020.

The Company recorded negative provision expense of $419 during 2021, representing a decrease of $3,399 compared to 2020. The decrease in provision expense was largely impacted by the economic effects of the COVID-19 pandemic, which resulted in a higher general allocation of the allowance for loan losses during the first quarter of 2020. Based on declining economic conditions and increasing unemployment levels, management increased general reserves by $2,315 to reflect higher anticipated losses due to COVID-19.  Further impacting lower provision expense in 2021 was a $1,332 decrease in net charge-offs on loans that had not been specifically allocated for, primarily from the consumer and residential real estate loan portfolios.

52

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s noninterest income decreased $1,574, or 13.8%, from 2020. The year-to-date decrease in noninterest income was largely impacted by proceeds of $2,000 received in a litigation settlement with a third-party.  The proceeds were paid to the Bank as part of a settlement agreement signed during the first quarter of 2020. The settlement agreement was related to the previously disclosed litigation the Bank filed against a third-party tax software product provider for early termination of its tax processing contract.  As part of the settlement agreement, the Bank is processing a certain amount of tax items, which started in 2021 and will end in 2025. As a result, the Bank recognized $675 in ERC/ERD income during 2021, which partially offset the impact of the non-recurring litigation settlement proceeds in 2020.  Further contributing to the decrease in noninterest income for 2021 were losses of $1,066 realized on the sale of $48,732 in lower-yielding investment securities during the fourth quarter of 2021. The proceeds from the sale were reinvested into similar higher-yielding securities, which are expected to increase future income. As was anticipated, mortgage banking income decreased $400 during 2021, primarily due to the 2020 heightened refinancing volume that subsided in 2021.  Partially offsetting decreases in noninterest income was an increase of $613 in interchange income on debit and credit card transactions as customers increased spending during 2021.

The Company’s noninterest expenses during 2021 increased $1,147, or 3.2%, from 2020. This increase was impacted by various items including higher software, data processing, marketing and FDIC costs. Software expense increased $404 in relation to the purchase of software to enhance the platform used for the loan origination process, as well as to process PPP loans. Data processing expense increased $236 due to higher debit and credit card transaction volume impacted by heightened consumer spending. Marketing expense increased $213 due to resuming select marketing campaigns in 2021 that had been limited in 2020 due to COVID-19 restrictions on lobby access. FDIC insurance costs were up $161 primarily due to assessment credits received from the FDIC in 2020 that were not received in 2021.

The Company’s provision for income taxes increased $236 during 2021, largely due to the changes in taxable income affected by the factors mentioned above.

NET INTEREST INCOME

The most significant portion of the Company's revenue, net interest income, results from properly managing the spread between interest income on earning assets and interest expense incurred on interest-bearing liabilities.  The Company earns interest and dividend income from loans, investment securities and short-term investments while incurring interest expense on interest-bearing deposits and short- and long-term borrowings.  Net interest income is affected by changes in both the average volume and mix of assets and liabilities and the level of interest rates for financial instruments.  Changes in net interest income are measured by net interest margin and net interest spread.  Net interest margin is expressed as the percentage of net interest income to average interest-earning assets. Net interest spread is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities.  Both of these are reported on a fully tax-equivalent (“FTE”) basis.  Net interest margin exceeds the net interest rate spread because noninterest-bearing sources of funds, principally noninterest-bearing demand deposits and stockholders' equity, also support interest-earning assets. The following is a discussion of changes in interest-earning assets, interest-bearing liabilities and the associated impact on interest income and interest expense for the two years ended December 31, 2021 and 2020.  Tables I and II have been prepared to summarize the significant changes outlined in this analysis.

53

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net interest income in 2021 totaled $41,491 on an FTE basis, up $1,069, or 2.6%, from 2020. This positive change reflects a 13.0% increase in average earning assets partially offset by the net effect of a 65 basis point decrease in earning asset yield less a 41 basis point decrease in average interest-bearing liability cost. The increase in average earning assets came mostly from interest-bearing balances with banks and securities, which increased 74.0% and 34.4% during 2021, respectively, as compared to the same period in 2020. Average loans also increased 3.7% over the same time period.  The average earning asset yield during 2021 was impacted by the FRB’s action to lower rates by 150 basis points in March 2020. Market rate decreases during 2020 had a corresponding impact to lower average deposit costs during 2021, primarily within time, savings and money market deposits. The net interest margin decrease of 36 basis points reflected a 41 basis point positive impact from lower funding costs that was completely offset by a 65 basis point negative impact from the mix and yield on earning assets and a 12 basis point negative impact from the use of noninterest-bearing funding (i.e., demand deposits and shareholders’ equity).

Net interest income increased in 2021 primarily due to the increase in average volume of earning assets plus the decrease in average cost of interest-bearing liabilities, partially offset by the decrease in average yield on earning assets. The volume increase in average earning assets was responsible for increasing FTE interest income by $2,445 during 2021 compared to 2020, while the decrease in average interest-bearing liability costs contributed to a $2,416 reduction in interest expense during the same period. These positive impacts were partially offset by lower average earning asset yields, which decreased FTE interest income by $3,868 during 2021 compared to 2020. The increase in average earning assets for 2021 was largely impacted by interest-bearing balances with other banks. The average volume on interest-bearing balances with other banks contributed to $136 in interest income growth during 2021, primarily from excess deposits within the Federal Reserve clearing account. Balances within interest-bearing deposits with banks are driven primarily by the Company’s interest-bearing Federal Reserve clearing account.  The Company utilizes its interest-bearing Federal Reserve clearing account to manage excess funds, as well as to assist in funding earning asset growth. The impact of COVID-19 continued to generate higher levels of excess funds within the clearing account during 2021, which included customer deposits of stimulus monies from various government relief programs. The volume increase in the Bank’s Federal Reserve clearing account during 2021 led to a $57,860, or 74.0%, increase in average interest-bearing balances with other banks during 2021 compared to 2020, and also led to a higher composition of average interest-bearing balances with other banks, finishing at 11.8% of average earning assets in 2021, as compared to 7.7% in 2020.  The action of the FRB to reduce rates by 150 basis points in March 2020 had an immediate effect on reducing the interest income generated by the Company’s Federal Reserve clearing account. The clearing account interest rate was adjusted down to 0.25% in March 2020, and has been fluctuating at or below 0.25% since that time. As a result, the average yield factor on interest-bearing balances with other banks continued to have a negative impact on earnings, decreasing interest income by $215 in 2021, as compared to a $1,285 decrease in interest income during 2020.

Average securities of $171,157 at year-end 2021 represented a 34.4% increase from the $127,321 in average securities at year-end 2020. The significant surge in deposits during 2021 was a result of various government stimulus programs that produced heightened levels of excess liquidity.  The Company utilized a portion of these excess funds to purchase investment securities. Average taxable securities in 2021 increased 37.6% over the prior year, particularly from purchases of U.S. Government, Agency and Agency mortgage-backed securities. As a result, the composition of average taxable securities grew to 14.1% of average earning assets at year-end 2021, as compared to 11.6% at year-end 2020. Average tax exempt securities were down 6.3% from the prior year, largely related to maturities of state and municipal investments. As a result, the composition of average state and municipal investments trended down to 0.8% of average earning assets at year-end 2021, as compared to 0.9% at year-end 2020.  Management continues to focus on generating loan growth as loans provide the greatest return to the Company. Management also maintains securities at a dollar level adequate enough to provide ample liquidity and cover pledging requirements.

54

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net interest income was negatively impacted by loans, particularly with the decrease in average yield. The decrease in short-term rates in March 2020 had a direct impact on the repricing of a portion of the Company’s loan portfolio that contributed to lower earnings in 2021.  This decreased the average loan yield by 32 basis points to 5.05% at year-end 2021, as compared to 5.37% at year-end 2020, which caused FTE interest income to decrease by $2,639 during 2021.  Partially offsetting the effects from loan yields was a $30,247, or 3.7%, increase in average loans, which contributed to $1,587 in additional FTE interest income during 2021 compared to 2020. This growth came predominantly from the commercial real estate and commercial and industrial loan segments. This was due to positive loan demand occurring within the Company’s primary market areas, particularly Athens and Pike counties in Ohio and Cabell County in West Virginia. While the Company experienced origination increases of government-guaranteed PPP loans in 2020, and to a smaller extent in early 2021, the payoffs of those loans were experienced during the second half of 2021, causing an average balance decrease in PPP loans in 2021 compared to 2020. While average loans increased in 2021, interest-bearing deposits with other banks and investment securities experienced more accelerated growth in 2021. As a result, the Company’s average loan composition decreased to 73.3% of average earning assets at year-end 2021, as compared to 79.8% for 2020.

Net interest income was positively impacted by a decline in the average cost of interest-bearing liabilities, particularly with the Company’s time deposits, during 2021. The short-term rate decrease from 2020 had a direct impact in lowering CD rate offerings. However, there was a lagging effect to the impact that this market rate decrease had on reducing time deposit expense. As CD rates have repriced downward, the Company benefited from lower interest expense only to the extent that new CDs at lower rates were issued. As CDs continued to rollover into lower rates during the second half of 2020 and all of 2021, a greater reduction to interest expense on time deposits was recognized.  As a result, the average cost of time deposits decreased 74 basis points from 1.75% in 2020 to 1.01% in 2021, which contributed to a $1,483 decrease in interest expense for the year. This is compared to a $427 decrease in interest expense during 2020. Lower CD rates have also generated less consumer demand for CD products.  As a result, the average time deposit segment decreased $11,337, or 5.4%, during 2021, which led to a decrease in the composition of average time deposits from 30.8% of interest-bearing liabilities at year-end 2020 to 26.9% at year-end 2021.

Lower interest rates also had a significant impact on core deposit segments that include negotiable order of withdrawal (“NOW”), savings and money market accounts. Interest expense was significantly impacted by a decrease in the average costs of this core group of interest-bearing liabilities, particularly savings and money market accounts. This is largely due to the short-term rate cuts made by the FRB in March 2020 that influenced the repricing of various deposit products into 2021. These repricing efforts in a lower rate environment have contributed to lower average costs in 2021. This includes the rate reduction associated with the Company’s prime investment deposit account, which contributed to a $542 decrease in money market interest expense during 2021.  As a result, the average cost of savings and money market accounts decreased from 0.36% in 2020 to 0.09% in 2021, which led to a $794 decrease in interest expense during 2021.  Conversely, customer deposits continued to increase during 2021 within these core deposit segments impacted by stimulus relief monies and a consumer preference to preserve these customer deposit proceeds during the pandemic.  As a result, average balances during 2021 increased 19.5% within NOW accounts and 15.7% within savings and money market accounts, altogether representing 68.5% of average interest-bearing liabilities in 2021, as compared to 63.4% in 2020.

55

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition, the Company’s average other borrowings and subordinated debentures collectively decreased $5,852, or 14.5%, during 2021.  The decrease was related to the principal repayments applied to various FHLB advances. Borrowings and subordinated debentures continue to represent the smallest composition of average interest-bearing liabilities, finishing at 4.6% and 5.9% at the end of 2021 and 2020, respectively.

Total interest and fee income on average earning assets decreased $1,423, or 3.1%, during 2021, and $4,133, or 8.1%, during 2020.  The decreases in earnings were largely the result of a decline in market rates during the second half of 2019 and in March 2020 partially offset by loan fee increases during 2021. The Company’s interest and fees from its consumer loan portfolio decreased $376, or 3.6%, during 2021. The decrease was primarily the result of lower consumer loan yields and a decrease in average automobile loans. As a result, consumer loan interest decreased $358 and consumer loan fees decreased $18 during 2021. During 2020, consumer loan interest and fees decreased $1,726, or 14.3%. The decrease was also impacted by lower consumer yields, as well as a decrease in average automobile and home equity loan balances, which contributed to an $804 decrease in consumer loan interest during 2020. Consumer loan fees also decreased $922 during 2020. The decrease was primarily due to a change in the Company’s business model with Loan Central that was necessary to comply with new regulations, which resulted in Loan Central not assessing any loan fees for tax refund loan advances during 2020. Rather, Loan Central began assessing a fee for preparing a tax return in combination with a reduced loan fee. The fee income for preparing the tax return was recorded as noninterest income.

The Company’s interest and fees from its commercial loan portfolio increased $1,387, or 7.0%, during 2021. The increase was impacted by higher average commercial loan balances that completely offset the negative impact of lower commercial loan yields. Commercial loan demand was successful in generating an average balance increase of 14.0% within the Company’s commercial real estate and commercial and industrial portfolios. Balance increases were driven by a $48,035 increase in average commercial loans from the Company’s Pike and Athens counties in Ohio and Cabell County in West Virginia.  Further impacting commercial revenue during 2021 was a $728 increase in loan fees. The Company has participated in the PPP since 2020 as part of the government’s relief program for businesses impacted by COVID-19. These originations began in the second quarter of 2020, with another round added during the first quarter of 2021. The majority of PPP loan originations from both rounds had paid off by year-end 2021.  This resulted in the income recognition of $1,184 in PPP loan fees from the SBA during 2021, an increase of $479 in PPP fees over 2020. During 2020, the Company’s commercial loan interest and fees decreased by $157, or 0.8%. The decrease was impacted by lower commercial loan yields that completely offset the positive impacts of higher average commercial loan balances and higher commercial loan fees during 2020. Commercial loan yields were negatively impacted by the low rate environment in 2020. Average commercial loans grew by 17.2% and came primarily from $35,141 in PPP loan originations.  Loan fees of $1,175 were collected from the SBA during this first round of PPP loans in 2020, of which, $705 were recorded to fee income. While PPP loans contributed to higher commercial loan balances in 2020, they also had a dilutive effect on loan yields as a result of the 1% interest rate associated with each loan.

56

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CONSOLIDATED AVERAGE BALANCE SHEET & ANALYSIS OF NET INTEREST INCOME

	December 31
Table I	2021								2020
(dollars in thousands)	Average Balance			Income/ Expense		Yield/ Average			Average Balance			Income/ Expense		Yield/ Average
Assets
Interest-earning assets:
Interest-bearing balances with banks	$	136,071		$	195		0.14	%	$	78,211		$	274		0.35	%
Securities:
Taxable		162,511			2,179		1.34			118,090			2,409		2.04
Tax exempt		8,646			297		3.44			9,231			359		3.90
Loans		841,681			42,519		5.05			811,434			43,571		5.37
Total interest-earning assets		1,148,909			45,190		3.93	%		1,016,966			46,613		4.58	%
Noninterest-earning assets:
Cash and due from banks		14,739								13,619
Other nonearning assets		77,254								73,395
Allowance for loan losses		(7,101	)							(7,789	)
Total noninterest-earning assets		84,892								79,225
Total assets	$	1,233,801							$	1,096,191
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
NOW accounts	$	211,636		$	680		0.32	%	$	177,170		$	618		0.35	%
Savings and money market		299,129			265		0.09			258,434			932		0.36
Time deposits		200,572			2,032		1.01			211,909			3,704		1.75
Other borrowed money		26,064			564		2.16			31,916			729		2.28
Subordinated debentures		8,500			158		1.86			8,500			208		2.44
Total int.-bearing liabilities		745,901			3,699		0.49	%		687,929			6,191		0.90	%
Noninterest-bearing liabilities:
Demand deposit accounts		331,027								258,802
Other liabilities		18,042								18,422
Total noninterest-bearing liabilities		349,069								277,224
Shareholders’ equity		138,831								131,038
Total liabilities and shareholders’ equity	$	1,233,801							$	1,096,191
Net interest earnings				$	41,491							$	40,422
Net interest margin							3.61	%							3.97	%
Net interest rate spread							3.44	%							3.68	%
Average interest-bearing liabilities to average earning assets							64.92	%							67.65	%

Fully taxable equivalent yields are reported for tax exempt securities and loans and calculated assuming a 21% tax rate, net of nondeductible interest expense. Tax-equivalent adjustments for securities during the years ended December 31, 2021 and 2020 totaled $61 and $73, respectively. Tax-equivalent adjustments for loans during the years ended December 31, 2021 and 2020 totaled $417 and $367, respectively. Average balances are computed on an average daily basis. The average balance for available for sale securities includes the market value adjustment. However, the calculated yield is based on the securities’ amortized cost. Average loan balances include nonaccruing loans. Loan income includes cash received on nonaccruing loans.

57

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RATE VOLUME ANALYSIS OF CHANGES IN INTEREST INCOME & EXPENSE

Table II

(dollars in thousands)	2021									2020
	Increase (Decrease) From Previous Year Due to									Increase (Decrease) From Previous Year Due to
	Volume			Yield/Rate			Total			Volume			Yield/Rate			Total
Interest income
Interest-bearing balances with banks	$	136		$	(215	)	$	(79	)	$	287		$	(1,285	)	$	(998	)
Securities:
Taxable		744			(974	)		(230	)		14			(540	)		(526	)
Tax exempt		(22	)		(40	)		(62	)		(64	)		(9	)		(73	)
Loans		1,587			(2,639	)		(1,052	)		2,048			(4,584	)		(2,536	)
Total interest income		2,445			(3,868	)		(1,423	)		2,285			(6,418	)		(4,133	)
Interest expense
NOW accounts		114			(52	)		62			49			31			80
Savings and money market		127			(794	)		(667	)		111			(469	)		(358	)
Time deposits		(189	)		(1,483	)		(1,672	)		(67	)		(427	)		(494	)
Other borrowed money		(128	)		(37	)		(165	)		(125	)		(29	)		(154	)
Subordinated debentures		----			(50	)		(50	)		----			(148	)		(148	)
Total interest expense		(76	)		(2,416	)		(2,492	)		(32	)		(1,042	)		(1,074	)
Net interest earnings	$	2,521		$	(1,452	)	$	1,069		$	2,317		$	(5,376	)	$	(3,059	)

     The change in interest due to volume and rate is determined as follows: Volume Variance - change in volume multiplied by the previous year's rate; Yield/Rate Variance - change in rate multiplied by the previous year's volume; Total Variance – change in volume multiplied by the change in rate. The change in interest due to both volume and rate has been allocated tovolume and rate changes in proportion  to the relationship  of the absolute dollar   amounts of the change  in  each.  The tax exempt securities and loan income is presented  on an FTE basis. FTE yield assumes a 21% tax rate, net of related nondeductible interest expense.

The Company’s interest and fees from its residential real estate loan portfolio decreased $2,113, or 16.2%, during 2021. The decrease was impacted by lower average balances, yields and fees on the residential real estate loan portfolio during 2021. Residential real estate loan yields were negatively impacted by a sustained low rate environment in 2021. Lower average residential real estate loan balances in 2021 came mostly from the Bank’s warehouse lending volume. Warehouse lending consists of a line of credit provided by the Bank to another mortgage lender that makes loans for the purchase of one- to four-family residential real estate properties. The mortgage lender eventually sells the loans and repays the Bank. As mortgage refinancings reached their peak during the second half of 2020, the volume of warehouse lending balances decreased to zero at June 30, 2021. As a result, average warehouse lending balances decreased from $25,110 in 2020 to $7,214 in 2021. The sustained low rate environment combined with less mortgage refinancings also contributed to a shift into more long-term fixed-rate mortgages (up $4,284) and less short-term adjustable-rate mortgages (down $11,044) during 2021. Lower real estate loan fees were the result of fewer loan modifications during 2021. During 2020, residential real estate loan interest and fees decreased by $679, or 5.0%. The change in 2020 was impacted by lower residential real estate loan yields that completely offset higher loan fees. Residential real estate loan yields were negatively impacted by the low rate environment in 2020. The impact of lower loan yields completely offset a $132 increase in loan fees during 2020.  Higher loan fees were largely the result of loan modifications that were generated under the CARES Act. The low interest rate environment in 2020 caused a significant amount of mortgage refinancings to occur. As a result, the Company experienced a portfolio shift from payoffs and maturities within its long-term fixed-rate mortgages to new short-term adjustable-rate mortgages during 2020.  Furthermore, the Company sold a portion of its long-term, fixed-rate real estate loans to the Federal Home Loan Mortgage Corporation, while retaining the servicing rights for those mortgages.  This strategy was successful in generating a significant amount of loan sale and servicing fee revenue within noninterest income during 2020.

58

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s interest income from taxable investment securities decreased $230, or 9.6%, in 2021 and $526, or 17.9%, in 2020.  For 2021, the Company took opportunities to reinvest a portion of excess deposits into new U.S. Government, U.S. Government sponsored entity and Agency mortgage-backed securities, which contributed to a $44,421 increase in average taxable securities. However, the positive impacts from higher average taxable securities was completely offset by a 70 basis point decline in taxable securities yield from 2.04% to 1.34%. This was primarily due to investment purchases and reinvestment of maturities at market rates lower than the average portfolio yield. For 2020, the decrease in income on taxable securities was heavily influenced by the short-term rate decreases from March 2020 in response to COVID-19.

Total interest expense incurred on the Company’s interest-bearing liabilities decreased $2,492, or 40.3%, during 2021, and $1,074, or 14.8%, during 2020. The decreases in interest expense during 2021 and 2020 were largely the result of a decline in market rates during March 2020.  The Company’s strategy continues to focus on funding earning asset growth with lower cost, core deposit funding sources to further reduce, or limit growth in, interest expense. With the FRB’s action to reduce short-term rates in 2020, the Bank saw many of its interest-bearing deposit products reprice downward. This led to a decrease in the Company’s weighted average costs from 0.90% at year-end 2020 to 0.49% at year-end 2021. This caused the interest cost on most deposit products to decrease during 2020 and 2021. However, the pace of interest expense savings was slowed during 2020 due to a lag in repricing on deposits. Given the Company’s asset-sensitivity, decreases in short-term interest rates had a negative impact on net interest income in that interest-earning assets repriced faster than interest-bearing liabilities. This delayed the positive impact that lower market rates had on reducing deposit expense during most of 2020, particularly with CDs.  The Company can only benefit from lower CD interest expense to the extent that new CDs at lower rates could be issued. As CD rates have continued to reprice downward, the Company has experienced more of an interest expense savings in 2021 than in 2020. The Company’s repricing efforts continued in 2021 with a rate reduction to the Company’s prime investment deposit account, which had a significant impact in lowering money market expense during 2021. Lower rates on deposits also contributed to less of a consumer demand for CDs in 2020 and 2021, which caused a shift into more NOW, savings and money market balances. This composition shift from higher-cost CDs to lower-cost NOW, savings and money market accounts helped to reduce the Company’s interest expense during 2020 and 2021.

The Company’s interest expenses were also impacted by other borrowed money and subordinated debentures, which were down collectively by $215, or 22.9%, during the year ended 2021, and $302, or 24.4% during the year ended 2020.  The decreases were primarily from the average balance decrease in FHLB borrowings caused by principal repayments during both 2020 and 2021, and the average cost decrease of subordinated debentures during both periods.

During 2021, the Company’s net interest margin was negatively impacted by the decreasing market rates that contributed to lower earning asset yields. The negative impact from 2020’s interest rate cuts by the FRB materially reduced interest income on earning assets during 2021. The margin was also negatively impacted by a larger amount of excess deposits being maintained at the Federal Reserve yielding below 0.25%. However, the margin benefited from a larger reduction to interest costs in 2021 due to the lagging effect in CD rates that limited cost savings in 2020. These factors contributed to a decline in the net interest margin from 3.97% in 2020 to 3.61% in 2021. The Company’s primary focus is to invest its funds into higher-yielding assets, particularly loans, as opportunities arise. However, if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

59

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PROVISION EXPENSE

Credit risk is inherent in the business of originating loans.  The Company sets aside an allowance for loan losses through charges to income, which are reflected in the consolidated statement of income as the provision for loan losses.  Provision for loan loss is recorded to achieve an allowance for loan losses that is adequate to absorb losses in the Company’s loan portfolio.  Management performs, on a quarterly basis, a detailed analysis of the allowance for loan losses that encompasses loan portfolio composition, loan quality, loan loss experience and other relevant economic factors.

The Company’s provision expense decreased $3,399 from 2020 to 2021 in large part due to the addition of a new risk reserve allocation in March 2020 for COVID-19 that was less impactful in 2021. The risk factor was necessary to account for the changes in economic conditions resulting from increases in unemployment that would produce higher anticipated losses as a result of COVID-19. Given that the economic scenarios deteriorated significantly since the pandemic was declared in early March 2020, it was determined the credit risk in the loan portfolio had increased, resulting in the need for an additional reserve for credit loss. As a result, the general reserve allocation related to COVID-19 totaled $2,315 at December 31, 2020, which had a corresponding impact to provision expense. During 2021, the Company did not experience any significant charge-offs related to COVID-19, but continued to monitor the related economic effects that the pandemic had on the allowance for loan losses.  At December 31, 2021, the general reserve allocation related to COVID-19 totaled $2,633.

Provision expense during 2021 was further impacted by a $1,332, or 83.8%, decrease in net-charge offs on loans that had not already been specifically allocated for in prior years. Gross charge-offs totaled $1,481 during 2021, a decrease of $1,552 compared to 2020.  Lower gross charge-offs during 2021 were experienced primarily within the commercial real estate and consumer loan portfolios.

Excluding the risk factors from COVID-19, the Company also recognized lower provision expense from general allocations during 2021. The Company’s general allocation evaluates several factors that include: loan volume, average historical loan loss trends, credit risk, regional unemployment conditions, asset quality, and changes in classified and criticized assets. Provision expense decreases arising from general allocations were mostly impacted by a decrease in the Company’s historical loan loss factor, which trended down from 0.24% at year-end 2020 to 0.18% at year-end 2021. Further contributing to lower provision expense were decreases in loan balances generally allocated for at December 31, 2021 compared to December 31, 2020, primarily within the residential real estate loan portfolio. The risk associated with the decline in loans generated lower general reserves and a corresponding decrease to provision expense.   Lower provision expense during 2021 also came from decreases in both criticized and classified assets, as well as lower nonperforming loans that yielded less general allocations. Criticized and classified assets within the commercial loan portfolio collectively decreased $4,610, or 28.2%, from year-end 2020 to year-end 2021. Furthermore, the Company’s nonperforming loans to total loans were 0.56% at year-end 2021, as compared to 0.82% at year-end 2020, while nonperforming assets to total assets were 0.37% at year-end 2021 and 0.59% at year-end 2020.

Partially offsetting the decreasing effects to provision expense mentioned above were higher specific allocations. Specific allocations of the allowance for loan losses identify loan impairment by measuring fair value of the underlying collateral and the present value of estimated future cash flows. The provision expense for specific allocations increased $315 during 2021 in large part to unused reserve allocations from 2020. During the first quarter of 2020, charge-offs of $502 were taken on two commercial real estate properties that contained an $807 specific allocation from the prior year. As a result, $305 of the unused specific reserve was reversed from the allowance for loan losses.  Therefore, provision expense was lowered by $305 in 2020 due to the unused reserve, which had a reverse impact to higher provision expense in 2021.

60

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management believes that the allowance for loan losses was adequate at December 31, 2021, and reflected probable incurred losses in the portfolio.  The allowance for loan losses was 0.78% of total loans at December 31, 2021, as compared to 0.84% at December 31, 2020.  There can be no assurance, however, that adjustments to the allowance for loan losses will not be required in the future.  Changes in the circumstances of particular borrowers, as well as adverse developments in the economy, particularly with respect to COVID-19, could cause further increases in the required allowance for loan losses and require additional provision expense. Asset quality will continue to remain a key focus, as management continues to stress not just loan growth, but quality in loan underwriting as well. Future provisions to the allowance for loan losses will continue to be based on management’s quarterly in-depth evaluation that is discussed in further detail below under the caption “Critical Accounting Policies - Allowance for Loan Losses” within this Management’s Discussion and Analysis.

NONINTEREST INCOME

During 2021, total noninterest income decreased $1,574, or 13.8%, as compared to 2020.  The decrease in noninterest revenue was primarily impacted by proceeds of $2,000 received in a litigation settlement with a third-party in 2020.  During the first quarter of 2020, the Bank entered into a settlement agreement related to the previously disclosed litigation the Bank had filed against a third-party tax software product provider for breach of contract. Under the settlement agreement, the third-party paid a $2,000 settlement payment to the Bank in March 2020, which was recorded as noninterest income.  As part of the settlement agreement, the Bank is processing a certain amount of tax items, which started in 2021 and will end in 2025. As a result, the Bank recognized $675 in ERC/ERD income during 2021, which helped to partially offset the effects of the settlement proceeds received in 2020.

Noninterest income during 2021 was also impacted by losses of $1,066 realized on the sale of investment securities.  During the fourth quarter of 2021, the Company received proceeds of $47,666 from the sale of thirteen securities totaling $48,732 at a weighted average yield of 0.89%.  The lower-yielding securities were replaced with similar securities with a higher weighted average yield of 1.30%. The transaction is expected to increase future income and have a positive impact to the margin.

Noninterest income was negatively impacted by a decrease in mortgage banking income affected by a lower volume of real estate loans sold to the secondary market in 2021. To help manage consumer demand for longer-term, fixed-rate real estate mortgages during a low interest rate environment, the Company will sell a portion of the real estate loan volume it originates during that period. The decision to sell long-term fixed-rate mortgages at lower rates will also help to minimize the interest rate risk exposure to rising rates. Market rates in 2020 were decreased in response to the pandemic, and as a result, the Company experienced a significant increase in the number of loans sold to the secondary market during that time. This period of significant mortgage refinancings generated more income during 2020 than 2021, which contributed to a $400, or 31.9%, decrease in mortgage banking income during the year ended December 31, 2021, as compared to the same period in 2020.

Noninterest income was positively impacted in 2021 by an increase in the Company’s interchange income from a higher volume of transactions and new card issuances of its debit and credit card products. This was largely impacted by the economic stimulus proceeds received by customers due to the COVID-19 pandemic that has increased consumer spending. As a result, debit and credit card interchange income increased $613, or 15.2%, during 2021, as compared to 2020.

61

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other noninterest income also increased $167, or 21.4%, during 2021, as compared to 2020. This was primarily impacted by the sale of Bank owned property during 2021, which contributed to a $193 increase in the gains on property sales.  The increases were impacted by the sale of vacant land in Lawrence County, Ohio and a branch building in Jackson, Ohio that had been acquired as part of the merger with the Milton Banking Company in 2016.

Noninterest income was also positively impacted in 2021 by an increase in the Company’s tax preparation fee income, which was up $110, or 17.1%, during the year ended December 31, 2021, as compared to the same period in 2020.   As previously discussed, the Company changed its business model in 2020 from assessing TAL fees to assessing tax preparation fees in response to a state law enacted in 2019. By charging for the tax preparation services, the Company recorded $754 in tax preparation fee income during the year ended December 31, 2021, as compared to $644 during the same period in 2020.

The Company’s remaining noninterest income categories increased $327, or 12.0%, during the year ended 2021 as compared to 2020.  This was in large part due to a $179 increase in service charges on deposits, impacted by a surge in consumer spending during 2021. The Company also experienced an $84 increase in income from bank owned life insurance (“BOLI”) and annuity assets during 2021, in part due to BOLI death benefit proceeds received in 2021.

NONINTEREST EXPENSE

Management continues to work diligently to minimize noninterest expense.  For 2021, total noninterest expense increased $1,147, or 3.2%, as compared to 2020.  The Company’s largest noninterest expense item, salaries and employee benefits, was limited to a $13, or 0.1%, increase during 2021. This minimal change in expense was partly impacted by the costs associated with the severance package payout of an employee from September 2020 that had a reverse effect in 2021. Expense savings were also impacted by a lower employee base, with the Bank’s average full-time equivalent employee base at 233 employees at year-end 2021 compared to 241 employees at year-end 2020. This cost savings helped to offset the expenses associated with annual merit increases associated with the improved financial performance achieved in 2021.

The Company also experienced an increase in software expense during 2021, which was up $404, or 27.8%, over the year ended 2020.  The increase was primarily related to the purchase of software to enhance the platform used for the loan origination process.  Software cost increases were also impacted by the use of a portal to process PPP loans during 2021. The loan portal costs were completely offset by the PPP loan fees that were recorded during 2021.

Data processing expense also increased $236, or 10.9%, during 2021. Higher costs in this category were the direct result of the large volume increase in debit and credit card transactions, which increased processing costs.  Transaction volume can be partly tied to the various stimulus programs offered by the government that benefited the consumer during 2021.

Also contributing to higher noninterest expense were the Company’s marketing costs, which increased $213, or 34.8%, during 2021 compared to 2020.  During 2020, COVID-19 significantly disrupted consumer behavior and caused banking center lobbies to be limited or closed. As a result, the opportunities to advertise and promote the brand of the Company were very limited in 2020. The pandemic environment, consisting of social distancing, self-quarantining and remote working arrangements, slowed many of the marketing goals that were set in 2020, which led to lower expense during that time.  The Company resumed its marketing campaigns during 2021, with less of an impact from the pandemic-related factors of the previous year.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FDIC insurance costs were up $161, or 97.6%, during 2021 compared to 2020. During 2020, the Bank utilized its remaining FDIC credits that were issued in September 2019. The Bank’s FDIC assessments during the first half of 2020 were reduced by $115 in credits. The Bank fully exhausted all of its credits as of June 30, 2020 and did not recognize any premium expense discounts during the rest of 2020.

Other noninterest expense increased $129, or 2.4%, during 2021 compared to 2020. During the fourth quarter of 2021, the Company redeemed $3,187 in long-term FHLB advances that had been used to fund fixed rate loans. The specific loans being funded were paid off, which permitted the Company to redeem the advances. By redeeming the advances, a prepayment penalty of $186 was incurred, which contributed to the increase in other noninterest expense. Also impacting other noninterest expense were various overhead costs from Race Day, including loan expense and consulting fees, being offset by a reduction in the Bank’s customer incentive costs during 2021.

The remaining noninterest expense categories decreased $9, or 0.2%, during the year-ended 2021, as compared to 2020.

The Company's efficiency ratio is defined as noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income. The effects from provision expense are excluded from the efficiency ratio. Management continues to place emphasis on managing its balance sheet mix and interest rate sensitivity as well as developing more innovative ways to generate noninterest revenue. During 2021, the Company’s asset yields were negatively impacted by market rate reductions related to COVID-19. Growth in average earning assets, higher loan fees, and redeploying excess Federal Reserve Bank balances into securities helped to generate a 2.6% increase in net interest income.  However, this increase was completely offset by a 13.8% decrease in noninterest income, which was impacted by the receipt of $2,000 in litigation proceeds in 2020 and $1,066 in realized losses from the sale of securities in 2021. This was also combined with a 3.2% increase in overhead costs impacted by higher software, data processing and marketing expenses during 2021. As a result, the Company’s efficiency number increased (regressed) from 69.67% at December 31, 2020, to 72.59% at December 31, 2021.

PROVISION FOR INCOME TAXES

The provision for income taxes during 2021 totaled $2,284, compared to $2,048 in 2020.  The effective tax rates for 2021 and 2020 were 16.3% and 16.6%, respectively. The decrease in the effective tax rate in 2021 was mostly impacted by additional costs associated with certain nondeductible retirement benefit plans during 2020.

FINANCIAL CONDITION:

CASH AND CASH EQUIVALENTS

The Company’s cash and cash equivalents consist of cash, as well as interest- and non-interest bearing balances due from other banks.  The amounts of cash and cash equivalents fluctuate on a daily basis due to customer activity and liquidity needs.  At December 31, 2021, cash and cash equivalents had increased $13,731 to $152,034, compared to $138,303 at December 31, 2020.  The increase in cash and cash equivalents came mostly from higher interest-bearing deposits on hand with correspondent banks. At December 31, 2021, the Company’s interest-bearing Federal Reserve clearing account represented over 89% of cash and cash equivalents. The Company utilizes its interest-bearing Federal Reserve clearing account to manage excess funds, as well as to assist in funding earning asset growth. The primary factor for the significant influx in clearing account balances was the investment of heightened deposit balances received during 2021 as a result of the pandemic environment. At December 31, 2021, total deposits increased $66,169 from year-end 2020 in relation to customers receiving stimulus funds from various government programs and their desire to preserve cash during the uncertain economic environment. Furthermore, several congressional acts led to the extension of the PPP loan program during the first half of 2021. Under the reopened PPP, commercial business customers received loan proceeds, which helped to generate higher levels of investable deposits during the first quarter of 2021.  During the second quarter of 2021, the Company utilized a portion of its clearing account balances and proceeds from the payoffs of PPP loans to reinvest in higher-yielding investment securities.  This redeployment of assets from year-end 2020 into higher-yielding investment securities lowered the dilutive effect that higher clearing account balances was having on the net interest margin. The interest rate paid on both the required and excess reserve balances of the Federal Reserve Bank account is based on the targeted federal funds rate established by the Federal Open Market Committee.  During the first quarter of 2020, the rate associated with the Company’s Federal Reserve Bank clearing account decreased 150 basis points due to concerns about the impact of COVID-19 on the economy, resulting in a target federal funds rate range of 0% to 0.25%.  Although interest-bearing deposits in the Federal Reserve Bank are the Company's lowest-yielding interest-earning asset, the investment rate is higher than the rate the Company would have received from its investments in federal funds sold. Furthermore, Federal Reserve balances are guaranteed by the U.S. Government.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As liquidity levels continuously vary based on consumer activities, amounts of cash and cash equivalents can vary widely at any given point in time. The Company’s focus during periods of heightened liquidity will be to invest excess funds into longer-term, higher-yielding assets, primarily loans, when the opportunities arise. Further information regarding the Company’s liquidity can be found below under the caption “Liquidity” in this Management’s Discussion and Analysis.

CERTIFICATES OF DEPOSIT IN FINANCIAL INSTITUTIONS

At December 31, 2021, the Company had $2,329 in CDs owned by the Captive, down $171, or 6.8%, from year-end 2020. The deposits on hand at December 31, 2021, consist of ten certificates with remaining maturity terms ranging from less than 5 months up to 21 months.

SECURITIES

Management's goal in structuring its investment securities portfolio is to maintain a prudent level of liquidity and to provide an acceptable rate of return without sacrificing asset quality.  During 2021, the balance of total securities increased $64,952, or 53.1%, compared to year-end 2020. The Company’s investment securities portfolio is made up mostly of Agency mortgage-backed securities, representing 69.9% of total investments at December 31, 2021. During the year ended 2021, the Company utilized a portion of its heightened excess deposits to purchase investment securities with the intent of minimizing the amount of funds being maintained within the lower-yielding interest-bearing Federal Reserve clearing account. This resulted in $75,231 of new Agency mortgage-backed securities, while receiving principal repayments of $35,976. The monthly repayment of principal has been the primary advantage of Agency mortgage-backed securities as compared to other types of investment securities, which deliver proceeds upon maturity or at a specified call date. The Company also used excess deposits to purchase $20,224 in U.S. Government securities, $8,900 in U.S. Government sponsored entity securities, and $826 in state and municipal securities, net of maturities.

Investment Portfolio Composition at December 31, 2021	at December 31, 2020

64

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Furthermore, during the fourth quarter of 2021, the Company received proceeds of $47,666 from the sale of thirteen securities totaling $48,732. These securities carrying a weighted average yield of 0.89% were replaced with similar securities at a higher weighted average yield of 1.30%. While this sale and repurchase of securities resulted in a realized loss of $1,066 with little change to the balance of earning assets, the Company will benefit from the shift to higher-yielding securities that is expected to increase future income and have a positive impact to the margin.

While short-term rates have remained low, the expectation of a rise in rates in the near future contributed to an increase in long-term reinvestment rates on securities during 2021. This led to a $2,187 decrease in the net unrealized gain position associated with the Company’s available for sale securities, which decreased the fair value of securities at December 31, 2021.  The fair value of an investment security moves inversely to interest rates, so as reinvestment rates increased, the unrealized gain in the portfolio decreased. These changes in rates are typical and do not impact earnings of the Company as long as the securities are held to full maturity.

Maturing securities provided the Company with sufficient liquidity in 2020 and 2021 so as to obviate the need for other sources of fundraising, such as debt offerings.

During the first quarter of 2020, short-term rates increased in large part due to COVID-19. As a result, the weighted average FTE yield on debt securities decreased from 2.11% at December 31, 2020 to 1.37% at December 31, 2021. The Company’s focus will be to generate interest revenue primarily through loan growth, as loans generate the highest yields of total earning assets.  Table III provides a summary of the securities portfolio by category and remaining contractual maturity.  Issues classified as equity securities have no stated maturity date and are not included in Table III.

 SECURITIES

 Table III

	MATURING
As of December 31, 2021	Within One Year						After One but Within Five Years						After Five but Within Ten Years						After Ten Years
(dollars in thousands)	Amount			Yield			Amount			Yield			Amount			Yield			Amount			Yield
U.S. Government securities		$	----		----			$	14,072		1.16	%		$	6,071		1.22	%		$	----		----
U.S. Government sponsored entity   securities			4,018		1.82	%			8,032		1.66	%			13,866		1.43	%			----		----
Obligations of states and political  subdivisions			234		5.11	%			4,366		3.96	%			3,419		2.58	%			2,429		2.82	%
Agency mortgage-backed   securities, residential			187		2.52	%			53,456		2.38	%			69,592		1.50	%			7,708		2.01	%
Total securities		$	4,439		2.02	%		$	79,926		2.18	%		$	92,948		1.51	%		$	10,137		2.20	%

     Tax-equivalent adjustments of $61 have been made in calculating yields on obligations of states and political subdivisions using a 21% rate. Weighted average yields are calculated on the basis of the cost and effective yields weighted for the scheduled maturity of each security. Mortgage-backed securities, which have prepayment provisions, are assigned to a maturity category based on estimated average lives. Securities are shown at their fair values, which include the market value adjustments for available for sale securities.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LOANS

In 2021, the Company's primary category of earning assets and most significant source of interest income, total loans, decreased $17,473, or 2.1%, to $831,191.  The decrease in loan balances from year-end 2020 came primarily from the residential real estate and commercial and industrial loan portfolios, being partially offset by balance increases in the commercial real estate and consumer loan portfolios.

Generating residential real estate loans remains a significant focus of the Company’s lending efforts. The residential real estate loan portfolio represents the largest class of the Company's overall loan portfolio at 33.0% and consists primarily of one-to-four family residential mortgages and carries many of the same customer and industry risks as the commercial loan portfolio. During 2021, residential real estate loans decreased $31,053, or 10.2%, as compared to year-end 2020. The decrease in residential real estate loans was largely from the Bank's warehouse lending volume. Warehouse lending consists of a line of credit provided by the Bank to another mortgage lender that makes loans for the purchase of one-to-four family residential real estate properties. The mortgage lender eventually sells the loans and repays the Bank. As mortgage refinances reached their peak during the second half of 2020, the volume of warehouse lending balances decreased  to zero by the end of the second quarter of 2021, as compared to $19,365 at year -end 2020. Furthermore, the low rate environment has contributed to a shift into more long-term fixed-rate mortgages (up $211) and less short-term adjustable-rate mortgages (down $16,444) at year-end 2021. As part of management’s interest rate risk strategy, the Company sold the majority of its long-term fixed-rate residential mortgages to the Federal Home Loan Mortgage Corporation during the heavy refinancing period, while maintaining the servicing rights for those mortgages.

Management continues to place emphasis on its commercial lending, which generally yields a higher return on investment as compared to other types of loans. The commercial lending segment increased $12,181, or 3.0%, from year-end 2020, which came mostly from commercial real estate loans. The commercial real estate loan segment comprised the largest portion of the Company's total commercial loan portfolio at December 31, 2021, representing 66.6% of such portfolio. Commercial real estate consists of owner-occupied, nonowner-occupied and construction loans. Owner-occupied loans consist of nonfarm, nonresidential properties.  A commercial owner-occupied loan is a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing operations conducted by the party, or an affiliate of the party, who owns the property. Owner-occupied loans of the Company include loans secured by hospitals, churches, and hardware and convenience stores.  Nonowner-occupied loans are property loans for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property, such as apartment buildings, condominiums, hotels and motels.  These loans are primarily impacted by local economic conditions, which dictate occupancy rates and the amount of rent charged. Commercial construction loans are extended to individuals as well as corporations for the construction of an individual property or multiple properties and are secured by raw land and the subsequent improvements.  Commercial real estate also includes loan participations with other banks outside the Company’s primary market area.  Although the Company is not actively seeking to participate in loans originated outside its primary market area, it has taken advantage of the relationships it has with certain lenders in those areas where the Company believes it can profitably participate with an acceptable level of risk. Commercial real estate loans totaled $281,797 at December 31, 2021, an increase of $28,348, or 11.2%, over the balance of commercial real estate loans at year-end 2020. Most of this growth came from owner- and nonowner-occupied loan originations, with balances collectively increasing $31,693, or 14.7%, from year-end 2020.  The increase came mostly from the Athens and Pike county market areas in Ohio and the Cabell county market area in West Virginia. Partially offsetting increases in the commercial owner- and nonowner-occupied loan segments were larger payoffs from construction loans related to one-to-four family residential homes, as well as multi-family residential and land development properties, which decreased $3,345, or 9.0%, from year-end 2020.

Loan Portfolio Composition at December 31, 2021	at December 31, 2020

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Partially offsetting the growth in commercial real estate loans was a decrease of $16,167, or 10.3%, in the commercial and industrial loan portfolio from year-end 2020. Commercial and industrial loans consist of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include service, retail and wholesale merchants. Collateral securing these loans includes equipment, inventory, and stock. The commercial and industrial loan segment also includes PPP loan balances that had the largest impact to the decrease in this loan segment. In response to COVID-19 during the first quarter of 2020, the Company was authorized to originate PPP loans under the CARES Act, and then again during the first half of 2021. PPP loans have an interest rate of 1.0%, a two-year loan term to maturity, and principal and interest payments are deferred for six months from the date of disbursement. PPP loans are guaranteed by the SBA as long as the small business borrower meets certain criteria on the use of loan proceeds. Although a second round of PPP loans were initiated by the Bank during the first half of 2021, the Bank experienced a $27,487 decrease in its PPP loan portfolio from year-end 2020. This was due to the payoffs of PPP loans from the initial round of originations in 2020 and the majority of the second round of originations during the first half of 2021.  As a result, there were $446 in PPP loans still outstanding as of December 31, 2021.

While management believes lending opportunities exist in the Company's markets, future commercial lending activities will depend upon economic and related conditions, such as general demand for loans in the Company's primary markets, interest rates offered by the Company, the effects of competitive pressure and normal underwriting considerations.

The Company’s loan balances were also impacted by an increase in the consumer loan portfolio, which was up $1,399, or 1.1%, from year-end 2020.  The Company’s consumer loans are primarily secured by automobiles, mobile homes, recreational vehicles and other personal property. Personal loans and unsecured credit card receivables are also included as consumer loans. As part of the Company’s efforts to invest the heightened cash provided by the various stimulus programs, the Company purchased multiple pools of loans issued to healthcare professionals during the first half of 2021. In relation to the purchase of these loans, the other consumer loan segment increased $6,052, or 10.7%, from year-end 2020. Partially offsetting this increase was a decrease in automobile loan balances of $7,035, or 12.7%, from year-end 2020.  Automobile loans represent the Company’s largest consumer loan segment at 36.1% of total consumer loans.  Automobile loans decreased primarily as a result of COVID-19 and the stay-at-home orders that resulted in limited automobile sales within the Company’s market areas during 2020. The pandemic environment continued to have a negative impact on auto loan originations in 2021 in part due to supply constraints that were impacted by a chip shortage. Further limiting the volume of automobile loan originations were heightened incentives being offered from the captive auto finance companies in response to the pandemic. The remaining consumer loan portfolio increased $2,382, or 11.9%, from year-end 2020, from higher home equity lines of credit. The Company will continue to attempt to increase its auto lending segment while maintaining strict loan underwriting processes to limit future loss exposure. However, the Company will place more emphasis on loan portfolios (i.e. commercial and, to a smaller extent, residential real estate) with higher returns than auto loans.  Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return.

67

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company will continue to follow its secondary market strategy until long-term interest rates increase to a range that falls within an acceptable level of interest rate risk for the Company.  Furthermore, the Company will continue to monitor the pace of its loan volume and will remain consistent in its approach to sound underwriting practices with a focus on asset quality.

MATURITY AND REPRICING DATA OF LOANS

As of December 31, 2021

Table IV

(dollars in thousands)
	Within One Year		After One but Within Five Years		After Five but Within Fifteen Years		After Fifteen Years		Total
Residential real estate loans	$	50,302	$	151,515	$	64,089	$	8,519	$	274,425
Commercial real estate loans		79,288		179,077		22,343		1,089		281,797
Commercial and industrial loans		47,305		41,272		27,823		25,125		141,525
Consumer loans(1)		41,467		58,766		33,211		----		133,444
Total loans	$	218,362	$	430,630	$	147,466	$	34,733	$	831,191

Loans maturing or repricing after one year with:		Variable interest rates		Fixed interest rates		Total
Residential real estate loans	$	162,762	$	61,361	$	224,123
Commercial real estate loans		188,442		14,067		202,509
Commercial and industrial loans		28,054		66,166		94,220
Consumer loans(1)		218		91,759		91,977
Total loans	$	379,476	$	233,353	$	612,829

 (1) Includes automobile, home equity and other consumer loans.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ALLOWANCE FOR LOAN LOSSES  

Tables V and VI have been provided to enhance the understanding of the loan portfolio and the allowance for loan losses.  Management evaluates the adequacy of the allowance for loan losses quarterly based on several factors, including, but not limited to, general economic conditions, loan portfolio composition, prior loan loss experience, and management's estimate of probable incurred losses. Management continually monitors the loan portfolio to identify potential portfolio risks and to detect potential credit deterioration in the early stages, and then establishes reserves based upon its evaluation of these inherent risks. Actual losses on loans are reflected as reductions in the reserve and are referred to as charge-offs. The amount of the provision for loan losses charged to operating expenses is the amount necessary, in management's opinion, to maintain the allowance for loan losses at an adequate level that is reflective of probable and inherent loss. The allowance required is primarily a function of the relative quality of the loans in the loan portfolio, the mix of loans in the portfolio and the rate of growth of outstanding loans. Impaired loans, which include loans classified as TDRs, are considered in the determination of the overall adequacy of the allowance for loan losses.

Management continues to focus on improving asset quality and lowering credit risk while working to maintain its relationships with its borrowers. During 2021, the Company’s allowance for loan losses decreased $677, or 9.5%, to $6,483, compared to $7,160 at year-end 2020.  During 2021, the Company experienced a $687 decrease in its general allocations of the allowance for loan losses.  As part of the Company’s quarterly analysis of the allowance for loan losses, management reviewed various factors that directly impact the general allocation needs of the allowance, which include:  historical loan losses, loan delinquency levels, local economic conditions and unemployment rates, criticized/classified asset coverage levels and loan loss recoveries. A lower historical loan loss factor and lower criticized and classified assets were the key factors to the year-to-date drop in general allocations. The historical loan loss factor decreased from 0.24% at year-end 2020 to 0.18% at year-end 2021, while both the criticized and classified risk factors decreased as a result of various commercial loan upgrades from improvements in the financial performance of certain borrowers’ ability to repay their loans. This contributed to lower criticized and classified assets from year-end 2021, particularly within the residential and commercial real estate segments. Additionally, the Company’s delinquency levels decreased from year-end 2020, with nonperforming loans to total loans of 0.56% at December 31, 2021 compared to 0.82% at December 31, 2020, and lower nonperforming assets to total assets of 0.37% at December 31, 2021 compared to 0.59% at year-end 2020.

During the first quarter of 2020, the Company added a new risk factor to the evaluation of the allowance for loan losses pertaining to the COVID-19 pandemic. The risk factor was necessary to account for the changes in economic conditions resulting from increases in unemployment that were expected to produce higher anticipated losses as a result of COVID-19. The general reserve allocation related to COVID-19 totaled $2,633 at December 31, 2021 as compared to $2,315 at December 31, 2020. While the Company has yet to experience any significant charge-offs related to COVID-19, the continued uncertainty regarding the severity and duration of the pandemic and related economic effects will continue to impact the Company’s estimate of its allowance for loan losses and resulting provision expense going forward.

Specific allocations of the allowance for loan losses identify loan impairment by measuring fair value of the underlying collateral and the present value of estimated future cash flows. At year-end 2021, the Company identified $10 in impairment on loans being specifically evaluated, as compared to no impairment at year-end 2020. The change in specific reserves from year-end 2020 was primarily attributable to the loan impairments of one borrower relationship during the fourth quarter of 2021.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

Table V

(dollars in thousands)
	Years Ended December 31
	2021			2020
Residential real estate loans	$	980		$	1,480
Percentage of loans to total loans		33.02	%		36.00	%
Percentage of net charge-offs to average loans		-.04	%		.06	%
Commercial real estate loans		2,548			2,431
Percentage of loans to total loans		33.90	%		29.86	%
Percentage of net charge-offs to average loans		-.07	%		.19	%
Commercial and industrial loans		1,571			1,776
Percentage of loans to total loans		17.03	%		18.58	%
Percentage of net charge-offs to average loans		-.04	%		.09	%
Consumer loans(1)		1,384			1,473
Percentage of loans to total loans		16.05	%		15.56	%
Percentage of net charge-offs to average loans		.45	%		1.01	%
Allowance for loan losses	$	6,483		$	7,160
Total loans percentage		100.00	%		100.00	%
Net charge-offs to average loans		.03	%		.26	%

     The above allocation is based on estimates and subjective judgments and is not necessarily indicative of the specific amounts or loan categories in which losses may ultimately occur.

 (1) Includes automobile, home equity and other consumer loans.

CREDIT RATIOS

Table VI

(dollars in thousands)
	Years Ended December 31
	2021			2020
Loans	$	831,191		$	848,664
Allowance for loan losses		6,483			7,160
Past due 90 days or more and still accruing		290			424
Nonaccrual		4,346			6,503
Allowance for loan losses to total loans		.78	%		.84	%
Nonaccrual loans to total loans		.52	%		.77	%
Allowance for loan losses to nonaccrual loans		149.17	%		110.10	%

     Management formally considers placing a loan on nonaccrual status when collection of principal or interest has become doubtful. Furthermore, generally, a loan is not returned to accrual status unless either all delinquent principal or interest has been brought current or the loan becomes well secured and is in the process of collection.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

At December 31, 2021, the ratio of the allowance for loan losses decreased to 0.78%, compared to 0.84% at December 31, 2020.  Management believes that the allowance for loan losses at December 31, 2021, was adequate and reflected probable incurred losses in the loan portfolio. There can be no assurance, however, that adjustments to the allowance for loan losses will not be required in the future. Changes in the circumstances of particular borrowers, as well as adverse developments in the economy, particularly with respect to COVID-19, are factors that could change, and management will make adjustments to the allowance for loan losses as needed. Asset quality will continue to remain a key focus of the Company, as management continues to stress not just loan growth, but also quality in loan underwriting.  Future provisions to the allowance for loan losses will continue to be based on management’s quarterly in-depth evaluation that is discussed in further detail below under the caption “Critical Accounting Policies - Allowance for Loan Losses” within this Management’s Discussion and Analysis.

DEPOSITS

Deposits are used as part of the Company’s liquidity management strategy to meet obligations for depositor withdrawals, to fund the borrowing needs of loan customers, and to fund ongoing operations.  Deposits, both interest- and noninterest-bearing, continue to be the most significant source of funds used by the Company to support earning assets.  Deposits are attractive sources of funding because of their stability and general low cost as compared to other funding sources.  The Company seeks to maintain a proper balance of core deposit relationships on hand while also utilizing various wholesale deposit sources, such as brokered and internet CD balances, as an alternative funding source to manage efficiently the net interest margin.  Deposits are influenced by changes in interest rates, economic conditions and competition from other banks.  Total deposits increased $66,169, or 6.7%, from year-end 2020 to $1,059,908 at December 31, 2021. This significant increase was largely attributable to the retention of proceeds from government stimulus programs, such as the PPP and consumer economic impact payments received, and a more cautious consumer.

Total deposits consist mostly of “core” deposits, which include noninterest-bearing deposits, as well as interest-bearing demand, savings, and money market deposits. The Bank focuses on core deposit relationships with consumers from local markets who can maintain multiple accounts and services at the Bank. The Company believes such core deposits are more stable and less sensitive to changing interest rates and other economic factors.  The increase in total deposits came primarily from noninterest-bearing balances, which increased $38,801, or 12.3%, from year-end 2020.  The increase came mostly from the Company’s business and incentive-based checking account balances.

Composition of Total Deposits at December 31, 2021	at December 31, 2020

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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Higher deposits also came from interest-bearing deposits, which increased $27,368, or 4.0%, from year-end 2020.  The increase in interest-bearing deposit balances came mostly from the Company’s savings deposits, which increased $26,490, or 22.1%, from year-end 2020. The increase came primarily from higher statement savings account balances impacted by the government stimulus proceeds previously mentioned. NOW account balances were also up $19,998, or 10.8%, from year-end 2020, largely driven by higher municipal NOW product balances within the Gallia County, Ohio, and Mason County, West Virginia, market areas. Interest-bearing deposit growth was partially offset by lower money market account balances, which were down $1,741, or 1.0%, from year-end 2020.  The deposit rate on the Company’s Prime Investment money market account was reduced during the first quarter of 2021 in response to decreasing market rates in 2020.  This contributed to a consumer shift from money market deposits into savings and noninterest-bearing deposit accounts.

Increases in interest-bearing deposit balances were partially offset by lower time deposits, which include CDs and individual retirement accounts. Total time deposits decreased $17,379, or 8.4%, from year-end 2020. This decrease came largely from the Company's use of brokered and internet CD issuances. While the Company's preference is to fund earning asset demand with retail core deposits, wholesale deposits are utilized to help satisfy earning asset growth.  Due to the heightened liquidity position from year-end 2020, brokered and internet CD issuances decreased $12,111, or 35.4%. The Company will continue to evaluate its use of wholesale deposits to manage the Company’s liquidity position and interest rate risk associated with longer-term, fixed-rate asset loan demand.   The Company’s retail CDs were also down $5,268, or 3.1% from year-end 2020. The FRB reduced short-term rates by 150 basis points due to COVID-19, which contributed to the decline in product rate offerings during 2020 and 2021. This has contributed to the decrease in CD balances from year-end 2020.

The Company expects to continue to experience increased competition for deposits in its market areas, which could challenge its net growth.  The Company will continue to emphasize growth and retention within its core deposit relationships during 2022, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improving net interest income.

OTHER BORROWED FUNDS

 The Company also accesses other funding sources, including short-term and long-term borrowings, to fund potential asset growth and satisfy short-term liquidity needs. Other borrowed funds consist primarily of FHLB advances and promissory notes. During 2021, other borrowed funds were down $8,249, or 29.6%, from year-end 2020.  The decrease was related primarily to the principal repayments applied to various FHLB advances during 2021. The decrease also included the redemption of $3,187 in long-term FHLB advances during the fourth quarter of 2021 that had been used to fund fixed rate loans to manage interest rate risk. The specific loans being funded were paid off, which permitted the Company to redeem the advances. By redeeming the advances, a prepayment penalty of $186 was incurred. The redemption of FHLB advances demonstrates management’s emphasis on reducing interest expense on higher-cost funding sources. While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize FHLB advances and promissory notes to help manage interest rate sensitivity and liquidity.

72

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUBORDINATED DEBENTURES

The Company received proceeds from the issuance of one trust preferred security on March 22, 2007, totaling $8,500 at a fixed rate of 6.58%.  The trust preferred security is now at an adjustable rate equal to the 3-month LIBOR plus 1.68%.  The Company does not report the securities issued by the trust as a liability, but instead, reports as a liability the subordinated debenture issued by the Company and held by the trust.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in Notes I and L to the financial statements at December 31, 2021 and 2020, the Company engages in certain off-balance sheet credit-related activities, including commitments to extend credit and standby letters of credit, which could require the Company to make cash payments in the event that specified future events occur. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. While these commitments are necessary to meet the financing needs of the Company’s customers, many of these commitments are expected to expire without being drawn upon. Therefore, the total amount of commitments does not necessarily represent future cash requirements. Management does not anticipate that the Company’s current off-balance sheet activities will have a material impact on the results of operations or financial condition.

CAPITAL RESOURCES

Federal regulators have classified and defined capital into the following components: (i) Tier 1 capital, which includes tangible shareholders’ equity for common stock, qualifying preferred stock and certain qualifying hybrid instruments, and (ii) Tier 2 capital, which includes a portion of the allowance for loan losses, certain qualifying long-term debt, preferred stock and hybrid instruments which do not qualify as Tier 1 capital.

In September 2019, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies issued a final rule providing simplified capital requirements for certain community banking organizations (banks and holding companies). Under the rule, a qualifying community banking organization (“QCBO”) is eligible to opt into the Community Bank Leverage Ratio (“CBLR”) framework in lieu of the Basel III capital requirements if it has less than $10 billion in total consolidated assets, limited amounts of certain trading assets and liabilities, limited amounts of off-balance sheet exposure and a leverage ratio greater than 9.0%. The new rule took effect January 1, 2020, and QCBOs were allowed to opt into the new CBLR framework in their Call Report beginning the first quarter of 2020.

A QCBO opting into the CBLR framework must maintain a CBLR of 9.0%, subject to a two quarter grace period to come back into compliance, provided that the QCBO maintains a leverage ratio of more than 8.0% during the grace period. A QCBO failing to satisfy these requirements must comply with the existing Basel III capital requirements as implemented by the banking regulators in July 2013.

The numerator of the CBLR is Tier 1 capital, as calculated under present rules. The denominator of the CBLR is the QCBO’s average assets, calculated in accordance with the QCBO’s Call Report instructions and less assets deducted from Tier 1 capital.

The Bank opted into the CBLR, and will, therefore, not be required to comply with the Basel III capital requirements. As of December 31, 2021, the Bank’s CBLR was 10.28%.

73

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Pursuant to the CARES Act, the federal banking regulators in April 2020 issued interim final rules to set the CBLR at 8% beginning in the second quarter of 2020 through the end of 2020. Beginning in 2021, the CBLR increased to 8.5% for the calendar year. Community banks will have until January 1, 2022 before the CBLR requirement will return to 9%.

As detailed in Note P to the financial statements at December 31, 2021, the Bank was deemed to be “well capitalized” under applicable prompt corrective action regulations.  Total shareholders' equity at December 31, 2021 of $141,356 increased $5,032, or 3.7%, as compared to $136,324 at December 31, 2020. Capital growth during 2021 came primarily from year-to-date net income of $11,732, less dividends paid of $4,018. Capital growth during 2021 was also partially offset by a $1,728 after-tax decrease in net unrealized gains on available for sale securities from year-end 2020, as long-term reinvestment rates increased  during 2021 causing a decrease in the fair value of the Company’s investment portfolio.

LIQUIDITY

Liquidity relates to the Company's ability to meet the cash demands and credit needs of its customers and is provided by the ability to readily convert assets to cash and raise funds in the market place. Total cash and cash equivalents, held to maturity securities maturing within one year, and available for sale securities, which totaled $329,264, represented 26.3% of total assets at December 31, 2021 compared to $252,641 and 21.3% of total assets at December 31, 2020. The COVID-19 pandemic had a significant impact on higher levels of excess funds during both 2020 and 2021, which included customer deposits of stimulus monies from various government relief programs. To further enhance the Bank’s ability to meet liquidity demands, the FHLB offers advances to the Bank. At December 31, 2021, the Bank could borrow an additional $90,241 from the FHLB. Furthermore, the Bank has established a borrowing line with the Federal Reserve. At December 31, 2021, this line had total availability of $55,783. Lastly, the Bank also has the ability to purchase federal funds from a correspondent bank. For further cash flow information, see the condensed consolidated statement of cash flows above.  Management does not rely on any single source of liquidity and monitors the level of liquidity based on many factors affecting the Company’s financial condition.

INFLATION

Consolidated financial data included herein has been prepared in accordance with US GAAP.  Presently, US GAAP requires the Company to measure financial position and operating results in terms of historical dollars with the exception of securities available for sale, which are carried at fair value.  Changes in the relative value of money due to inflation or deflation are generally not considered.

In management's opinion, changes in interest rates affect the financial institution to a far greater degree than changes in the inflation rate.  While interest rates are greatly influenced by changes in the inflation rate, they do not change at the same rate or in the same manner as the inflation rate.  Rather, interest rate volatility is based on changes in the expected rate of inflation, as well as monetary and fiscal policies.  A financial institution's ability to be relatively unaffected by changes in interest rates is a good indicator of its capability to perform in today's volatile economic environment.  The Company seeks to insulate itself from interest rate volatility by ensuring that rate sensitive assets and rate sensitive liabilities respond to changes in interest rates in a similar time frame and to a similar degree.

74

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The most significant accounting policies followed by the Company are presented in Note A to the consolidated financial statements.  These policies, along with the disclosures presented in the other financial statement notes, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.  Management views critical accounting policies to be those that are highly dependent on subjective or complex judgments, estimates, and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements.  Management currently views the adequacy of the allowance for loan losses and goodwill to be critical accounting policies.

Allowance for Loan Losses:

The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans generally consist of loans with balances of $200 or more on nonaccrual status or nonperforming in nature.  Loans for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. 

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. 

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

 The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years for the consumer and real estate portfolio segment and 5 years for the commercial portfolio segment. The total loan portfolio's actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. During 2020, the Company established a new economic risk factor in relation to the COVID-19 pandemic.  The risk factor captures the exposure of our current historical loss metrics to the heightened losses experienced following the Great Recession that occurred from 2007 to 2009.  To the extent the loss history incurred during an economic downturn exceeded our current loss history, a general allocation to the allowance for loan losses was made.  The COVID-19 risk factor allocation amount is subject to change based on the actual loss history experienced and may be removed when the risk of loss in relation to the pandemic environment diminishes.  The following portfolio segments have been identified: Commercial Real Estate, Commercial and Industrial, Residential Real Estate, and Consumer.

75

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write-down the value significantly to sell. 

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into one-to-four family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

KEY RATIOS

Table VII

	2021			2020			2019			2018			2017
Return on average assets		.95	%		.94	%		.96	%		1.12	%		.74	%
Return on average equity		8.45	%		7.83	%		8.10	%		10.63	%		6.95	%
Dividend payout ratio		34.25	%		39.20	%		40.37	%		33.20	%		52.36	%
Average equity to average assets		11.25	%		11.95	%		11.82	%		10.57	%		10.66	%

76

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Residential real estate loans consist of loans to individuals for the purchase of one-to-four family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination. 

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 6 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  During the last several years, one of the most significant portions of the Company’s net loan charge-offs have been from consumer loans.  Nevertheless, the Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

Goodwill:

Goodwill resulting from business combinations represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected December 31 as the date to perform the annual impairment test. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. No impairment to Goodwill was indicated based on year-end testing.

CONCENTRATIONS OF CREDIT RISK

The Company maintains a diversified credit portfolio, with residential real estate loans currently comprising the most significant portion.  Credit risk is primarily subject to loans made to businesses and individuals in southeastern Ohio and western West Virginia.  Management believes this risk to be general in nature, as there are no material concentrations of loans to any industry or consumer group.  To the extent possible, the Company diversifies its loan portfolio to limit credit risk by avoiding industry concentrations.

77

Ohio Valley Banc Corp.
Email: investorrelations@ovbc.com
Web: www.ovbc.com/shareholder
Phone: 800-468-6682

HQ: 420 Third Avenue, Gallipolis, OH 45631

Traded on The NASDAQ Global Market

Symbol: OVBC

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

NAME	STATE OF INCORPORATION	PERCENTAGE OF OWNERSHIP
The Ohio Valley Bank Company	Ohio	100%
Loan Central, Inc.	Ohio	100%
Ohio Valley Financial Services  Agency, LLC	Ohio	100%
Ohio Valley Statutory Trust III	Delaware	100%
OVBC Captive, Inc.	Nevada	100%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-178575 on Form S-3 of Ohio Valley Banc Corp. of our report dated March 16, 2022 relating to the financial statements appearing in this Annual Report on Form 10-K.

/s/Crowe LLP

Crowe LLP

Cleveland, Ohio

March 16, 2022

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Thomas E. Wiseman, certify that:

1.I have reviewed this Annual Report on Form 10-K of Ohio Valley Banc Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 16, 2022	By:	/s/Thomas E. Wiseman
		Thomas E. Wiseman, Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Scott W. Shockey, certify that:

1.I have reviewed this Annual Report on Form 10-K of Ohio Valley Banc Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: March 16, 2022	By:	/s/Scott W. Shockey
		Scott W. Shockey, Senior Vice President and CFO
		(Principal Financial Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATION

In connection with the Annual Report of Ohio Valley Banc Corp. (the “Corporation”) on Form 10‑K for the fiscal year ended December 31, 2021 (the “Report”), the undersigned Thomas E. Wiseman, Chief Executive Officer of the Corporation, and Scott W. Shockey, Senior Vice President and Chief Financial Officer of the Corporation, each certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

*/s/Thomas E.Wiseman	*Scott W. Shockey
Thomas E. Wiseman	Scott W. Shockey
Chief Executive Officer	Senior Vice President Chief Financial Officer
Dated:  March 16, 2022	Dated:  March 16, 2022

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Corporation specifically incorporates it by reference in any such filing.

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2021	Feb. 28, 2022	Jun. 30, 2021
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	00-20914
Entity Registrant Name	OHIO VALLEY BANC CORP
Entity Central Index Key	0000894671
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-1359191
Entity Address, Address Line One	420 Third Avenue
Entity Address, City or Town	Gallipolis
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45631
City Area Code	740
Local Phone Number	446-2631
Title of 12(b) Security	Common shares, without par value
Trading Symbol	OVBC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 101,766,157
Entity Common Stock, Shares Outstanding		4,771,774
Auditor Name	Crowe LLP
Auditor Location	Cleveland, Ohio
Auditor Firm ID	173

XML

CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and noninterest-bearing deposits with banks	$ 14,111	$ 14,989
Interest-bearing deposits with banks	137,923	123,314
Total cash and cash equivalents	152,034	138,303
Certificates of deposit in financial institutions	2,329	2,500
Securities available for sale	177,000	112,322
Securities held to maturity (estimated fair value: 2021 - $10,450; 2020 - $10,344)	10,294	10,020
Restricted investments in bank stocks	7,265	7,506
Total loans	831,191	848,664
Less: Allowance for loan losses	(6,483)	(7,160)
Net loans	824,708	841,504
Premises and equipment, net	20,730	21,312
Premises and equipment held for sale, net	438	637
Other real estate owned, net	15	49
Accrued interest receivable	2,695	3,319
Goodwill	7,319	7,319
Other intangible assets, net	64	112
Bank owned life insurance and annuity assets	37,281	35,999
Operating lease right-of-use asset, net	1,195	880
Other assets	6,402	5,150
Total assets	1,249,769	1,186,932
Liabilities
Noninterest-bearing deposits	353,578	314,777
Interest-bearing deposits	706,330	678,962
Total deposits	1,059,908	993,739
Other borrowed funds	19,614	27,863
Subordinated debentures	8,500	8,500
Operating lease liability	1,195	880
Other liabilities	19,196	19,626
Total liabilities	1,108,413	1,050,608
Commitments and Contingent Liabilities (See Note L)
Shareholders' Equity
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 5,447,185 shares issued)	5,447	5,447
Additional paid-in capital	51,165	51,165
Retained earnings	100,702	92,988
Accumulated other comprehensive income	708	2,436
Treasury stock, at cost (2021 - 693,933 shares, 2020 - 659,739 shares)	(16,666)	(15,712)
Total shareholders' equity	141,356	136,324
Total liabilities and shareholders' equity	$ 1,249,769	$ 1,186,932

XML

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets
Securities held to maturity, fair value	$ 10,450	$ 10,344
Shareholders' Equity
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	5,447,185	5,447,185
Treasury stock, shares (in shares)	693,933	659,739

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Interest and dividend income:
Loans, including fees		$ 42,102	$ 43,204
Securities:
Taxable		1,948	2,164
Tax exempt		236	286
Dividends		231	245
Interest-bearing deposits with banks		163	226
Other interest		32	48
Total interest and dividend income		44,712	46,173
Interest expense:
Deposits		2,977	5,254
Other borrowed funds		564	729
Subordinated debentures		158	208
Total interest expense		3,699	6,191
Net interest income		41,013	39,982
Provision for loan losses		(419)	2,980
Net interest income after provision for loan losses		41,432	37,002
Noninterest income:
Service charges on deposit accounts		1,864	1,685
Trust fees		285	257
Income from bank owned life insurance and annuity assets		904	820
Mortgage banking income		854	1,254
Electronic refund check / deposit fees		675	0
Debit / credit card interchange income		4,644	4,031
Gain (loss) on other real estate owned		1	(35)
Loss on sale of securities		(1,066)	0
Tax preparation fees		754	644
Litigation settlement		0	2,000
Other		949	782
Total noninterest income		9,864	11,438
Noninterest expense:
Salaries and employee benefits		21,649	21,636
Occupancy		1,796	1,817
Furniture and equipment		1,136	1,096
Professional fees		1,578	1,519
Marketing expense		826	613
FDIC insurance		326	165
Data processing		2,406	2,170
Software		1,858	1,454
Foreclosed assets		55	128
Amortization of intangibles		48	62
Other		5,602	5,473
Total noninterest expense		37,280	36,133
Income before income taxes		14,016	12,307
Provision for income taxes	[1]	2,284	2,048
NET INCOME		$ 11,732	$ 10,259
Earnings per share (in dollars per share)		$ 2.45	$ 2.14

[1] Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET INCOME	$ 11,732	$ 10,259
Other comprehensive income (loss):
Change in unrealized gain (loss) on available for sale securities	(3,253)	2,415
Reclassification adjustment for realized losses	1,066	0
Other comprehensive income (loss)	(2,187)	2,415
Related tax effect	459	(507)
Total other comprehensive income (loss), net of tax	(1,728)	1,908
Total comprehensive income	$ 10,004	$ 12,167

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balances at Dec. 31, 2019	$ 5,447	$ 51,165	$ 86,751	$ 528	$ (15,712)	$ 128,179
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	10,259	0	0	10,259
Other comprehensive income (loss), net	0	0	0	1,908	0	1,908
Cash dividends	0	0	(4,022)	0	0	(4,022)
Balances at Dec. 31, 2020	5,447	51,165	92,988	2,436	(15,712)	136,324
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	11,732	0	0	11,732
Other comprehensive income (loss), net	0	0	0	(1,728)	0	(1,728)
Cash dividends	0	0	(4,018)	0	0	(4,018)
Shares acquired for treasury, 34,194 shares	0	0	0	0	(954)	(954)
Balances at Dec. 31, 2021	$ 5,447	$ 51,165	$ 100,702	$ 708	$ (16,666)	$ 141,356

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract]
Cash dividends, per share (in dollars per share)	$ 0.84	$ 0.84
Shares acquired for treasury (in shares)	34,194

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net income	$ 11,732	$ 10,259
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment	1,461	1,341
Net amortization (accretion) of purchase accounting adjustments	37	(42)
Net amortization of securities	815	459
Net realized loss on sale of securities	1,066	0
Proceeds from sale of loans in secondary market	18,972	40,158
Loans disbursed for sale in secondary market	(18,118)	(38,904)
Amortization of mortgage servicing rights	103	126
Impairment (recovery) of mortgage servicing rights	(11)	11
Gain on sale of loans	(946)	(1,391)
Amortization of intangible assets	48	62
Deferred tax (benefit) expense	(130)	12
Provision for loan losses	(419)	2,980
Earnings on bank owned life insurance and annuity assets	(904)	(820)
Loss on sale of other real estate owned	(1)	35
Change in accrued interest receivable	624	(755)
Change in accrued liabilities	(113)	(632)
Change in other assets	(1,079)	(408)
Net cash provided by operating activities	13,137	12,491
Cash flows from investing activities:
Proceeds from sales of securities available for sale	47,666	0
Proceeds from maturities and paydowns of securities available for sale	41,301	36,154
Purchases of securities available for sale	(157,686)	(41,162)
Proceeds from calls and maturities of securities held to maturity	3,700	2,694
Purchases of securities held to maturity	(4,001)	(721)
Proceeds from maturities of certificates of deposit in financial institutions	935	980
Purchases of certificates of deposit in financial institutions	(763)	(1,120)
Redemptions of restricted investments in bank stocks	240	0
Net change in loans	17,181	(78,038)
Proceeds from sale of other real estate owned	49	548
Purchases of premises and equipment	(1,085)	(3,450)
Disposals of premises and equipment	486	13
Proceeds from bank owned life insurance	173	0
Purchases of bank owned life insurance and annuity assets	(550)	(4,583)
Net cash provided by (used in) investing activities	(52,354)	(88,685)
Cash flows from financing activities:
Change in deposits	66,169	172,290
Cash dividends	(4,018)	(4,022)
Purchases of treasury stock	(954)	0
Proceeds from Federal Home Loan Bank borrowings	600	0
Repayment of Federal Home Loan Bank borrowings	(7,789)	(5,093)
Change in other long-term borrowings	0	(405)
Change in other short-term borrowings	(1,060)	(629)
Net cash provided by financing activities	52,948	162,141
Cash and cash equivalents:
Change in cash and cash equivalents	13,731	85,947
Cash and cash equivalents at beginning of year	138,303	52,356
Cash and cash equivalents at end of year	152,034	138,303
Supplemental disclosure:
Cash paid for interest	4,360	6,681
Cash paid for income taxes	2,800	2,050
Transfers from loans to other real estate owned	15	92
Operating lease liability arising from obtaining right-of-use asset	$ 570	$ 0

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note A - Summary of Significant Accounting Policies

Description of Business: Ohio Valley Banc Corp. (“Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”), an Ohio state-chartered bank that is a member of the Federal Reserve Bank (“FRB”) and is regulated primarily by the Ohio Division of Financial Institutions and the Federal Reserve Board.  Ohio Valley also has a subsidiary that engages in consumer lending generally to individuals with higher credit risk history, Loan Central, Inc.; a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC; and a limited purpose property and casualty insurance company, OVBC Captive, Inc. The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages, and Ohio Valley REO, LLC ("Ohio Valley REO"), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley and its subsidiaries are collectively referred to as the “Company.”

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans. Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., Ohio Valley Financial Services Agency, LLC, and OVBC Captive, Inc. All material intercompany accounts and transactions have been eliminated.

Industry Segment Information: Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the U.S., management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, noninterest-bearing deposits with banks, federal funds sold and interest-bearing deposits with banks with maturity terms of less than 90 days. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Certificates of deposit in financial institutions: Certificates of deposit in financial institutions are carried at cost and have maturity terms of 90 days or greater.  The longest maturity date is September 22, 2023.

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

Other-Than-Temporary Impairments of Securities: In determining an other-than-temporary impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Restricted Investments in Bank Stocks: As a member of the Federal Home Loan Bank (“FHLB”) system and the FRB system, the Bank is required to own a certain amount of stock based on its level of borrowings and other factors and may invest in additional amounts. FHLB stock and FRB stock are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Company has additional investments in other restricted bank stocks that are not material to the financial statements.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments. The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Bank also originates long-term, fixed-rate mortgage loans, with full intention of being sold to the secondary market.  These loans are considered held for sale during the period of time after the principal has been advanced to the borrower by the Bank, but before the Bank has been reimbursed by the Federal Home Loan Mortgage Corporation or mortgage broker, typically within a few business days.  Loans sold to the secondary market are carried at the lower of aggregate cost or fair value.  Total loans on the balance sheet included $1,682 in loans held for sale by the Bank as of December 31, 2021, as compared to $70 loans held for sale at December 31, 2020.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years for the consumer and real estate portfolio segment and 5 years for the commercial portfolio segment. The total loan portfolio’s actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows  from operations  can  be adversely  affected  by current  market conditions  for their   product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 6 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2021, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentrations of Credit Risk: The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2021			2020
Residential real estate loans		33.02	%		36.00	%
Commercial real estate loans		33.90	%		29.86	%
Consumer loans		16.05	%		15.56	%
Commercial and industrial loans		17.03	%		18.58	%
		100.00	%		100.00	%

The Bank, in the normal course of its operations, conducts business with correspondent financial institutions. Balances in correspondent accounts, investments in federal funds, certificates of deposit and other short-term securities are closely monitored to ensure that prudent levels of credit and liquidity risks are maintained.  At December 31, 2021, the Bank’s primary correspondent balance was $135,995 on deposit at the FRB, Cleveland, Ohio.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line method over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

The Company enters into leases in the normal course of business primarily for branch buildings and office space to conduct business.  The Company’s leases have remaining terms ranging from 16 months to 20 years, some of which include options to extend the leases for up to 15 years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected to not recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date.  Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term.  Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.  At December 31, 2021, the Company did not have any finance leases.

The Company’s operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Foreclosed assets: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed.

Goodwill: Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. Goodwill is the only intangible asset with an indefinite life on our balance sheet. The Company has selected December 31 as the date to perform its annual qualitative impairment test. For the year ended December 31, 2021, the Company used a qualitative assessment based on profitability and positive equity to determine that it was more likely than not that the fair value of goodwill was more than the carrying amount, resulting in no impairment.  For the year ended December 31, 2020, management could not conclude using a qualitative assessment that its fair value of goodwill exceeded the carrying amount due to the Company’s stock price having traded below book value for an extended period throughout 2020. Therefore, the Company performed a quantitative impairment test to conclude that there was no goodwill impairment for the year ended December 31, 2020. See Note F for more specific disclosures related to goodwill impairment testing.

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Mortgage Servicing Rights: A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2021 and 2020, the Company’s MSR assets were $480 and $458, respectively.

Earnings Per Share: Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,780,609 for 2021 and 4,787,446 for 2020. Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized at the time of enactment of such change in tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Bank Owned Life Insurance and Annuity Assets: The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Dividend Reinvestment Plan: The Company maintains a Dividend Reinvestment Plan. The plan enables shareholders to elect to have their cash dividends on all or a portion of shares held automatically reinvested in additional shares of the Company’s common stock. The stock is issued out of the Company’s authorized shares and credited to participant accounts at fair market value. Dividends are reinvested on a quarterly basis.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note L for more specific disclosure related to loan commitments.

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note P for more specific disclosure related to dividend restrictions.

Restrictions on Cash: Cash on hand or on deposit with a third-party correspondent bank and the FRB totaled $136,379 and $121,432 at year-end 2021 and 2020, respectively, and were subject to clearing requirements but not subject to any regulatory reserve requirements.  The balances on deposit with a third-party correspondent do not earn interest.

Derivatives: At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2021 and 2020, the only derivative instruments used by the Company were interest rate swaps, which are classified as stand-alone derivatives.  See Note H for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note O.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications: The consolidated financial statements for 2020 have been reclassified to conform with the presentation for 2021.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

Current Events: In March 2020, the World Health Organization declared the outbreak of the coronavirus (“COVID-19”) as a global pandemic. COVID-19 has continued to negatively impact the global economy, disrupt global supply chains, create significant volatility, disrupt financial markets, and increase unemployment levels.

The continued financial impact of COVID-19 depends largely on the actions taken by governmental authorities and other third parties. In addition, COVID-19 may continue to adversely impact several industries within our geographic footprint for some time and impair the ability of our customers to fulfill their contractual obligations to the Company. This could result in a material adverse effect on our business operations, asset valuations, liquidity, financial condition, and results of operations. These effects may include an increase in the Company’s allowance for loan losses and valuation impairments on the Company’s securities, impaired loans, goodwill, other real estate owned, and interest rate swap agreements.

Accounting Guidance to be Adopted in Future Periods: In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”. ASU 2016-13 requires entities to replace the current “incurred loss” model with an “expected loss” model, which is referred to as the current expected credit loss (“CECL”) model.  These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. The Bank’s CECL steering committee has developed a CECL model and is evaluating the source data, various credit loss methodologies and model results in relation to the new ASU guidance.  Management expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective.  Management expects the adoption will result in a material increase to the allowance for loan losses balance. For SEC filers who are smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

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Securities

12 Months Ended

Dec. 31, 2021

Securities [Abstract]

Securities

Note B - Securities

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2021 and 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2021
U.S. Government securities	$	20,182	$	—	$	(39	)	$	20,143
U.S. Government sponsored entity securities		25,980		109		(173	)		25,916
Agency mortgage-backed securities, residential		129,942		1,476		(477	)		130,941
Total securities	$	176,104	$	1,585	$	(689	)	$	177,000
December 31, 2020
U.S. Government sponsored entity securities	$	17,814	$	339	$	—		$	18,153
Agency mortgage-backed securities, residential		91,425		2,748		(4	)		94,169
Total securities	$	109,239	$	3,087	$	(4	)	$	112,322

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2021
Obligations of states and political subdivisions	$	10,292	$	200	$	(44	)	$	10,448
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,294	$	200	$	(44	)	$	10,450
December 31, 2020
Obligations of states and political subdivisions	$	10,018	$	324	$	—		$	10,342
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,020	$	324	$	—		$	10,344

At year-end 2021, there were holdings of $18,500 in securities issued by the Federal Farm Credit Bank that exceeded 10% of shareholders’ equity. At year-end 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

During 2021, proceeds from the sales of debt securities totaled $47,666 with gross losses of $1,066 recognized. There were no sales of debt securities during 2020.

Securities with a carrying value of approximately $123,742 at December 31, 2021 and $83,344 at December 31, 2020 were pledged to secure public deposits and repurchase agreements and for other purposes as required or permitted by law.

Unrealized losses on the Company’s debt securities have not been recognized into income because the issuers’ securities are of high credit quality as of December 31, 2021, and management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.  Management does not believe any individual unrealized loss at December 31, 2021 and 2020 represents an OTTI.

The amortized cost and estimated fair value of debt securities at December 31, 2021, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities. Securities not due at a single maturity are shown separately.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	4,001	$	4,018	$	230	$	234
Due in one to five years		22,095		22,104		4,243		4,366
Due in five to ten years		20,066		19,937		3,408		3,419
Due after ten years		—		—		2,411		2,429
Agency mortgage-backed securities, residential		129,942		130,941		2		2
Total debt securities	$	176,104	$	177,000	$	10,294	$	10,450

The following table summarizes securities with unrealized losses at December 31, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position:

December 31, 2021	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government securities	$	20,143	$	(39	)	$	—	$	—	$	20,143	$	(39	)
U.S. Government sponsored entity securities		18,307		(173	)		—		—		18,307		(173	)
Agency mortgage-backed securities, residential		64,560		(477	)		—		—		64,560		(477	)
Total available for sale	$	103,010	$	(689	)	$	—	$	—	$	103,010	$	(689	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)
Total held to maturity	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)

December 31, 2020	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities, residential	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)
Total available for sale	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)

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Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2021

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

Note C - Loans and Allowance for Loan Losses

Loans are comprised of the following at December 31:

	2021			2020
Residential real estate	$	274,425		$	305,478
Commercial real estate:
Owner-occupied		71,979			51,863
Nonowner-occupied		176,100			164,523
Construction		33,718			37,063
Commercial and industrial		141,525			157,692
Consumer:
Automobile		48,206			55,241
Home equity		22,375			19,993
Other		62,863			56,811
		831,191			848,664
Less: Allowance for loan losses		(6,483	)		(7,160	)
Loans, net	$	824,708		$	841,504

Commercial and industrial loans include $446 of loans originated under the PPP at December 31, 2021, as compared to $27,933 at December 31, 2020. These loans are guaranteed by the SBA.

The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021, and 2020:

December 31, 2021	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160
Provision for loan losses		(615	)		(61	)		(258	)		515			(419	)
Loans charged off		(84	)		(115	)		(120	)		(1,162	)		(1,481	)
Recoveries		199			293			173			558			1,223
Total ending allowance balance	$	980		$	2,548		$	1,571		$	1,384		$	6,483

December 31, 2020	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,250		$	1,928		$	1,447		$	1,647		$	6,272
Provision for loan losses		413			946			443			1,178			2,980
Loans charged off		(340	)		(559	)		(185	)		(1,949	)		(3,033	)
Recoveries		157			116			71			597			941
Total ending allowance balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2021 and 2020:

December 31, 2021	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	10	$	—	$	10
Collectively evaluated for impairment		980		2,548		1,561		1,384		6,473
Total ending allowance balance	$	980	$	2,548	$	1,571	$	1,384	$	6,483
Loans:
Loans individually evaluated for impairment	$	—	$	5,411	$	4,531	$	81	$	10,023
Loans collectively evaluated for impairment		274,425		276,386		136,994		133,363		821,168
Total ending loans balance	$	274,425	$	281,797	$	141,525	$	133,444	$	831,191

December 31, 2020	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,480		2,431		1,776		1,473		7,160
Total ending allowance balance	$	1,480	$	2,431	$	1,776	$	1,473	$	7,160
Loans:
Loans individually evaluated for impairment	$	411	$	5,845	$	4,686	$	84	$	11,026
Loans collectively evaluated for impairment		305,067		247,604		153,006		131,961		837,638
Total ending loans balance	$	305,478	$	253,449	$	157,692	$	132,045	$	848,664

The following table presents information related to loans individually evaluated for impairment by class of loans as of the years ended December 31, 2021, and 2020:

December 31, 2021	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:
Commercial and industrial	$	1,993	$	1,993	$	10	$	1,987	$	94	$	94
With no related allowance recorded:
Commercial real estate:
Owner-occupied		5,052		5,027		—		5,151		309		309
Nonowner-occupied		384		384		—		387		29		29
Commercial and industrial		2,538		2,538		—		2,981		139		139
Consumer:
Home equity		31		31		—		32		2		2
Other		50		50		—		49		2		2
Total	$	10,048	$	10,023	$	10	$	10,587	$	575	$	575

December 31, 2020	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:	$	—	$	—	$	—	$	—	$	—	$	—
With no related allowance recorded:
Residential real estate		418		411		—		423		21		21
Commercial real estate:
Owner-occupied		5,256		5,256		—		3,417		260		260
Nonowner-occupied		632		589		—		626		29		29
Commercial and industrial		4,686		4,686		—		3,772		196		196
Consumer:
Home equity		34		34		—		28		2		2
Other		50		50		—		10		2		2
Total	$	11,076	$	11,026	$	—	$	8,276	$	510	$	510

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). As of December 31, 2021 and December 31, 2020, other real estate owned for residential real estate properties totaled $15 and $49, respectively. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $316 and $1,097 as of December 31, 2021 and December 31, 2020, respectively.

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of December 31, 2021 and 2020:

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2021
Residential real estate	$	10	$	2,683
Commercial real estate:
Owner-occupied		—		1,055
Nonowner-occupied		—		—
Construction		—		146
Commercial and industrial		65		150
Consumer:
Automobile		55		147
Home equity		—		148
Other		160		17
Total	$	290	$	4,346

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2020
Residential real estate	$	127	$	5,256
Commercial real estate:
Owner-occupied		—		205
Nonowner-occupied		—		362
Construction		—		156
Commercial and industrial		15		149
Consumer:
Automobile		146		129
Home equity		—		210
Other		136		36
Total	$	424	$	6,503

The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2021 and 2020:

December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,208	$	1,218	$	921	$	4,347	$	270,078	$	274,425
Commercial real estate:
Owner-occupied		895		—		153		1,048		70,931		71,979
Nonowner-occupied		100		—		—		100		176,000		176,100
Construction		36		53		33		122		33,596		33,718
Commercial and industrial		517		60		215		792		140,733		141,525
Consumer:
Automobile		656		148		194		998		47,208		48,206
Home equity		35		165		47		247		22,128		22,375
Other		401		133		177		711		62,152		62,863
Total	$	4,848	$	1,777	$	1,740	$	8,365	$	822,826	$	831,191

December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,845	$	496	$	1,663	$	5,004	$	300,474	$	305,478
Commercial real estate:
Owner-occupied		470		1,003		193		1,666		50,197		51,863
Nonowner-occupied		94		—		362		456		164,067		164,523
Construction		—		82		—		82		36,981		37,063
Commercial and industrial		1,112		11		164		1,287		156,405		157,692
Consumer:
Automobile		831		131		258		1,220		54,021		55,241
Home equity		204		81		113		398		19,595		19,993
Other		446		76		172		694		56,117		56,811
Total	$	6,002	$	1,880	$	2,925	$	10,807	$	837,857	$	848,664

Troubled Debt Restructurings:

A troubled debt restructuring (“TDR”) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  All TDRs are considered to be impaired.   The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms.

The Company has allocated reserves for a portion of its TDRs to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer.

The following table presents the types of TDR loan modifications by class of loans as of December 31, 2021 and December 31, 2020:

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2021
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	1,455	$	—	$	1,455
Maturity extension at lower stated rate than market rate		268		—		268
Credit extension at lower stated rate than market rate		375		—		375
Nonowner-occupied
Credit extension at lower stated rate than market rate		385		—		385
Commercial and industrial
Interest only payments		2,301		—		2,301
Total TDRs	$	4,784	$	—	$	4,784

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2020
Residential real estate:
Interest only payments	$	202	$	—	$	202
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments		1,486		—		1,486
Maturity extension at lower stated rate than market rate		351		—		351
Credit extension at lower stated rate than market rate		384		—		384
Nonowner-occupied
Credit extension at lower stated rate than market rate		390		—		390
Commercial and industrial
Interest only payments		4,400		—		4,400
Total TDRs	$	7,213	$	—	$	7,213

The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at December 31, 2021 and 2020. At December 31, 2021, the Company had $3,199 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $1,100 at December 31, 2020.

There were no TDR loan modifications that occurred during the years ended December 31, 2021 and 2020 that impacted provision expense or the allowance for loan losses. 

During the years ended December 31, 2021, and 2020, the Company had no TDRs that experienced any payment defaults within twelve months following their loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.  TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 and provided guidance on the modification of loans as a result of COVID-19, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers are considered current if they are less than 30 days past due on their contractual payments at the time of modification.As of December 31, 2021, the Company had modified 655 loans related to COVID-19 with an outstanding loan balance of $124,657 that were not reported as TDRs. As of December 31, 2021, the Company had 30 of those modified loans still operating under their COVID-19 related deferral terms with an outstanding loan balance of $374 that were not reported as TDRs in the tables presented above.

The terms of certain other loans were modified during the years ended December 31, 2021 and 2020 that did not meet the definition of a TDR.  These loans have a total recorded investment of $23,171 as of December 31, 2021 and $16,624 as of December 31, 2020.  The modification of these loans primarily involved the modification of the terms of a loan to borrowers who were not experiencing financial difficulties.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000.

The Company uses the following definitions for its criticized loan risk ratings:

Special Mention. Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.  Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring.

The Company uses the following definitions for its classified loan risk ratings:

Substandard. Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful. Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, and receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss. Loans classified as loss are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.  This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.  Amounts classified as loss should be promptly charged off.

Criticized and classified loans will mostly consist of commercial and industrial and commercial real estate loans. The Company considers its loans that do not meet the criteria for a criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date.

As of December 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

December 31, 2021	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	66,999	$	618	$	4,362	$	71,979
Nonowner-occupied		175,901		—		199		176,100
Construction		33,685		—		33		33,718
Commercial and industrial		134,983		1,862		4,680		141,525
Total	$	411,568	$	2,480	$	9,274	$	423,322

December 31, 2020	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	46,604	$	669	$	4,590	$	51,863
Nonowner-occupied		160,324		3,629		570		164,523
Construction		37,063		—		—		37,063
Commercial and industrial		150,786		2,064		4,842		157,692
Total	$	394,777	$	6,362	$	10,002	$	411,141

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau) but not thereafter. The Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower’s credit score to be a significant influence in the determination of a loan’s credit risk grading.

For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of December 31, 2021 and December 31, 2020:

	Consumer
December 31, 2021	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	48,004	$	22,227	$	62,686	$	271,732	$	404,649
Nonperforming		202		148		177		2,693		3,220
Total	$	48,206	$	22,375	$	62,863	$	274,425	$	407,869

	Consumer
December 31, 2020	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	54,966	$	19,783	$	56,639	$	300,095	$	431,483
Nonperforming		275		210		172		5,383		6,040
Total	$	55,241	$	19,993	$	56,811	$	305,478	$	437,523

The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the southeastern area of Ohio as well as the western counties of West Virginia.  Approximately 4.45% of total loans were unsecured at December 31, 2021, up from 4.22% at December 31, 2020.

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Premises and Equipment

12 Months Ended

Dec. 31, 2021

Premises and Equipment [Abstract]

Premises and Equipment

Note D - Premises and Equipment

Following is a summary of premises and equipment at December 31:

	2021		2020
Land	$	2,570	$	2,719
Buildings		22,360		22,081
Leasehold improvements		1,402		1,302
Furniture and equipment		9,528		8,892
		35,860		34,994
Less accumulated depreciation		15,130		13,682
Total premises and equipment	$	20,730	$	21,312

Following is a summary of premises and equipment held for sale at December 31:

	2021		2020
Land	$	105	$	153
Buildings		387		564
		492		717
Less accumulated depreciation		54		80
Total premises and equipment held for sale	$	438	$	637

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Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Note E – Leases

Balance sheet information related to leases at December 31 was as follows:

	2021		2020
Operating leases:
Operating lease right-of-use assets	$	1,195	$	880
Operating lease liabilities		1,195		880

The components of lease cost were as follows for the year ending:

	2021		2020
Operating lease cost	$	161	$	170
Short-term lease expense		36		31

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2021 are as follows:

	Operating Leases
2022	$	168
2023		127
2024		106
2025		106
2026		107
Thereafter		866
Total lease payments		1,480
Less: Imputed Interest		(285	)
Total operating leases	$	1,195

Other information at December 31 was as follows:

	2021		2020
Weighted-average remaining lease term for operating leases	13.7 years		9.6 years
Weighted-average discount rate for operating leases		2.29%		2.79%

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets [Abstract]

Goodwill and Intangible Assets

Note F – Goodwill and Intangible Assets

Goodwill:  The change in goodwill during the year is as follows:

	Gross Carrying Amount
	2021		2020
Goodwill	$	7,319	$	7,319

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2021, the Company’s reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that fair value of the reporting unit exceeded its carrying value, including goodwill.  The qualitative assessment indicated that it is more likely than not that fair value of goodwill is more than the carrying value, resulting in no impairment for the year ended December 31, 2021.  Therefore, the Company did not proceed to step one of the annual goodwill impairment testing requirement.

During 2020, the general economic conditions the Company operates in had trended from generally stable to somewhat challenged in relation to the pandemic. At December 31, 2020, the Company’s reporting unit remained profitable and had positive equity. However, earnings for 2020 were negatively impacted by adding general reserves to the allowance in relation to the pandemic and to a lower net interest margin in relation to the first quarter rate cuts. As a result, the Company’s stock price experienced a decrease in value during 2020, and was trading below book value at December 31, 2020. Given the economic outlook, the challenge of growing earnings going forward in this environment, and the Company’s stock price trading below book value, management could not conclude that evidence provided by a qualitative assessment would support that it would be more likely than not the fair value of goodwill is more than the carrying amount. Therefore, the Company proceeded to complete the quantitative impairment test.

The quantitative impairment test includes comparing the carrying value of the reporting unit, including the existing goodwill and intangible assets, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value of the reporting unit, up to the amount of goodwill attributed to the reporting unit. After performing the quantitative testing, it was determined that the reporting unit’s fair value exceeded the reporting unit’s carrying value, resulting in no impairment for the year ended December 31, 2020.

Acquired intangible assets:  Acquired intangible assets were as follows at year-end:

	2021				2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Core deposit intangibles	$	738	$	674	$	738	$	626

Aggregate amortization expense was $48 for 2021 and $62 for 2020.

Estimated amortization expense for each of the next five years:

2022	$	35
2023		21
2024		8
2025		—
2026		—
Total	$	64

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Deposits

12 Months Ended

Dec. 31, 2021

Deposits [Abstract]

Deposits

Note G - Deposits

Following is a summary of interest-bearing deposits at December 31:

	2021		2020
NOW accounts	$	205,362	$	185,364
Savings and Money Market		311,686		286,937
Time:
In denominations of $250,000 or less		147,000		165,834
In denominations of more than $250,000		42,282		40,827
Total time deposits		189,282		206,661
Total interest-bearing deposits	$	706,330	$	678,962

Following is a summary of total time deposits by remaining maturity at December 31, 2021:

2022	$	138,738
2023		41,386
2024		5,529
2025		1,329
2026		1,932
Thereafter		368
Total	$	189,282

Brokered deposits, included in time deposits, were $11,438 and $18,834 at December 31, 2021 and 2020, respectively.

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Interest Rate Swaps

12 Months Ended

Dec. 31, 2021

Interest Rate Swaps [Abstract]

Interest Rate Swaps

Note H - Interest Rate Swaps

The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities.  The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position.  As part of this strategy, the Company provides its customer with a fixed-rate loan while creating a variable-rate asset for the Company by the customer entering into an interest rate swap with the Company on terms that match the loan.  The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution.  These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative.  At December 31, 2021, the Company had offsetting interest rate swaps associated with commercial loans with a notional value of $13,843 and a fair value asset of $583 and a fair value liability for the same amount.  This is compared to offsetting interest rate swaps with a notional value of $10,967 and a fair value asset and liability of $913 at December 31, 2020.  The notional amount of the interest rate swaps does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreement.  To further offset the risk exposure related to market value fluctuations of its interest rate swaps, the Company maintains collateral deposits on hand with a third-party correspondent, which totaled $600 at December 31, 2021 and $1,250 at December 31, 2020.

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Other Borrowed Funds

12 Months Ended

Dec. 31, 2021

Other Borrowed Funds [Abstract]

Other Borrowed Funds

Note I - Other Borrowed Funds

Other borrowed funds at December 31, 2021 and 2020 are comprised of advances from the FHLB of Cincinnati and promissory notes.

	FHLB Borrowings		Promissory Notes		Totals
2021	$	17,476	$	2,138	$	19,614
2020		24,665		3,198		27,863

Pursuant to collateral agreements with the FHLB, advances are secured by $265,850 in qualifying mortgage loans, $37,091 in commercial loans and $5,125 in FHLB stock at December 31, 2021. Fixed-rate FHLB advances of $17,476 mature through 2042 and have interest rates ranging from 1.53% to 2.97% and a year-to-date weighted average cost of 2.39% and 2.40% at December 31, 2021 and 2020, respectively. There were no variable-rate FHLB borrowings at December 31, 2021.

At December 31, 2021, the Company had a cash management line of credit enabling it to borrow up to $100,000 from the FHLB, subject to the stock ownership and collateral limitations described in the next paragraph. All cash management advances have an original maturity of 90 days. The line of credit must be renewed on an annual basis.

Based on the Company’s current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $176,096 at December 31, 2021. Of this maximum borrowing capacity of $176,096, the Company had $90,241 available to use as additional borrowings.

Promissory notes, issued primarily by Ohio Valley, are due at various dates through a final maturity date of March 13, 2023, and have fixed rates ranging from 1.00% to 1.30% and a year-to-date weighted average cost of 1.23% at December 31, 2021, as compared to 2.20% at December 31, 2020. At December 31, 2021, there were six promissory notes payable by Ohio Valley to related parties totaling $2,138. See Note M for further discussion of related party transactions.  There were no promissory notes payable to other banks at December 31, 2021 and 2020, respectively.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $68,380 at December 31, 2021 and $76,740 at December 31, 2020.

Scheduled principal payments over the next five years:

	FHLB Borrowings		Promissory Notes		Totals
2022	$	2,109	$	1,031	$	3,140
2023		1,784		1,107		2,891
2024		1,693		—		1,693
2025		1,560		—		1,560
2026		1,434		—		1,434
Thereafter		8,896		—		8,896
	$	17,476	$	2,138	$	19,614

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Subordinated Debentures and Trust Preferred Securities

12 Months Ended

Dec. 31, 2021

Subordinated Debentures and Trust Preferred Securities [Abstract]

Subordinated Debentures and Trust Preferred Securities

Note J - Subordinated Debentures and Trust Preferred Securities

On March 22, 2007, a trust formed by Ohio Valley issued $8,500 of adjustable-rate trust preferred securities as part of a pooled offering of such securities.  The rate on these trust preferred securities was fixed at 6.58% for five years, and then converted to a floating-rate term on March 15, 2012, based on a rate equal to the 3-month LIBOR plus 1.68%.  The interest rate on these trust preferred securities was 1.88% at December 31, 2021 and 1.90% at December 31, 2020.  There were no debt issuance costs incurred with these trust preferred securities.  The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering.  The subordinated debentures must be redeemed no later than June 15, 2037.

Under the provisions of the related indenture agreements, the interest payable on the trust preferred securities is deferrable for up to five years and any such deferral is not considered a default. During any period of deferral, the Company would be precluded from declaring or paying dividends to shareholders or repurchasing any of the Company’s common stock.  Under generally accepted accounting principles, the trusts are not consolidated with the Company.  Accordingly, the Company does not report the securities issued by the trust as liabilities, and instead reports as liabilities the subordinated debentures issued by the Company and held by the trust.  Since the Company’s equity interest in the trusts cannot be received until the subordinated debentures are repaid, these amounts have been netted.  The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Taxes

Note K - Income Taxes

The provision for income taxes consists of the following components:

	2021			2020
Current tax expense	$	2,414		$	2,036
Deferred tax (benefit) expense		(130	)		12
Total income taxes	$	2,284		$	2,048

The source of deferred tax assets and deferred tax liabilities at December 31:

	2021			2020
Items giving rise to deferred tax assets:
Allowance for loan losses	$	1,410		$	1,557
Deferred compensation		2,007			1,822
Deferred loan fees/costs		148			136
Other real estate owned		—			1
Accrued bonus		286			212
Purchase accounting adjustments		2			18
Net operating loss		82			99
Lease liability		324			235
Nonaccrual interest income		174			—
Other		275			339
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(104	)		(100	)
FHLB stock dividends		(676	)		(676	)
Unrealized gain on securities available for sale		(188	)		(647	)
Prepaid expenses		(205	)		(202	)
Depreciation and amortization		(783	)		(894	)
Right-of-use asset		(324	)		(235	)
Net deferred tax asset	$	2,428		$	1,665

The Company determined that it was not required to establish a valuation allowance for deferred tax assets since management believes that the deferred tax assets are likely to be realized through the future reversals of existing taxable temporary differences, deductions against forecasted income and tax planning strategies.

At December 31, 2021, the Company’s deferred tax asset related to Section 382 net operating loss carryforwards was $391, which will expire in 2026.

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 21% to income before taxes is as follows:

	2021			2020
Statutory tax (21%)	$	2,943		$	2,584
Effect of nontaxable interest		(378	)		(348	)
Effect of nontaxable insurance premiums		(220	)		(210	)
Income from bank owned insurance, net		(168	)		(161	)
Effect of postretirement benefits		26			124
Effect of nontaxable life insurance death proceeds		(10	)		—
Effect of state income tax		150			125
Tax credits		(72	)		(102	)
Other items		13			36
Total income taxes(1)	$	2,284		$	2,048

(1) Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

At December 31, 2021 and December 31, 2020, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.  The Company did not recognize any interest and/or penalties related to income tax matters for the periods presented.

The Company is subject to U.S. federal income tax as well as West Virginia state income tax.  The Company is no longer subject to federal or state examination for years prior to 2018.  The tax years 2018-2020 remain open to federal and state examinations.

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Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2021

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities

Note L - Commitments and Contingent Liabilities

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.  The Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.

Following is a summary of such commitments at December 31:

	2021		2020
Fixed rate	$	1,014	$	1,127
Variable rate		84,929		83,956
Standby letters of credit		3,659		3,373

At December 31, 2021, the fixed-rate commitments have interest rates ranging from 2.50% to 6.25% and maturities ranging from 15 years to 30 years.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Bank evaluates each customer’s credit worthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

There are various contingent liabilities that are not reflected in the financial statements, including claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on financial condition or results of operations.

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Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Note M - Related Party Transactions

Certain directors, executive officers and companies with which they are affiliated were loan customers during 2021. A summary of activity on these borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2021	$	2,729
New loans		16,401
Repayments		(472	)
Other changes		(810	)
Total loans at December 31, 2021	$	17,848

Other changes include adjustments for loans applicable to one reporting period that are excludable from the other reporting period, such as changes in persons classified as directors, executive officers and companies’ affiliates.

Deposits from principal officers, directors, and their affiliates at year-end 2021 and 2020 were $110,405 and $94,056.  In addition, the Company had promissory notes outstanding with directors and their affiliates totaling $2,138 at year-end 2021 and $3,198 at year-end 2020.  The interest rates ranged from 1.00% to 2.85%, with terms ranging from 12 to 24 months.

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Employee Benefits

12 Months Ended

Dec. 31, 2021

Employee Benefits [Abstract]

Employee Benefits

Note N - Employee Benefits

The Bank has a profit-sharing plan for the benefit of its employees and their beneficiaries. Contributions to the plan are determined by the Board of Directors of Ohio Valley. Contributions charged to expense were $265 and $242 for 2021 and 2020.

Ohio Valley maintains an Employee Stock Ownership Plan (“ESOP”) covering substantially all employees of the Company. Ohio Valley issues shares to the ESOP, purchased by the ESOP with subsidiary cash contributions, which are allocated to ESOP participants based on relative compensation. The total number of shares held by the ESOP, all of which have been allocated to participant accounts, were 292,680 and 298,294 at December 31, 2021 and 2020.  In addition, the subsidiaries made contributions to the ESOP as follows:

	Years ended December 31
	2021		2020
Number of shares issued		—		—
Fair value of stock contributed	$	—	$	—
Cash contributed		580		614
Total expense	$	580	$	614

Life insurance contracts with a cash surrender value of $35,052 and annuity assets of $2,229 at December 31, 2021 have been purchased by the Company, the owner of the policies. The purpose of these contracts was to replace a current group life insurance program for executive officers, implement a deferred compensation plan for directors and executive officers, implement a director retirement plan and implement supplemental retirement plans for certain officers.  Under the deferred compensation plan, Ohio Valley pays each participant the amount of fees deferred plus interest over the participant’s desired term, upon termination of service.  Under the director retirement plan, participants are eligible to receive ongoing compensation payments upon retirement subject to length of service.  The supplemental retirement plans provide payments to select executive officers upon retirement based upon a compensation formula determined by Ohio Valley’s Board of Directors.  The present value of payments expected to be provided are accrued during the service period of the covered individuals and amounted to $8,973 and $8,377 at December 31, 2021 and 2020. Expenses related to the plans for each of the last three years amounted to $830 and $743. In association with the split-dollar life insurance plan, the present value of the postretirement benefit totaled $3,843 at December 31, 2021 and $3,721 at December 31, 2020.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2021

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Note O - Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and liabilities on a recurring or nonrecurring basis:

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans: At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement. Such adjustments would be classified as a Level 2 classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. In some instances, fair value adjustments can be made based on a quoted price from an observable input, such as a purchase agreement.  Such adjustments would be classified as a Level 2 classification.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.

On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that typically approximate 10%.

Interest Rate Swap Agreements: The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).  The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government securities		—	$	20,143			—
U.S. Government sponsored entity securities		—		25,916			—
Agency mortgage-backed securities, residential		—		130,941			—
Interest rate swap derivatives		—		599			—
Liabilities:
Interest rate swap derivatives		—		(599	)		—

	Fair Value Measurements at December 31, 2020, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government sponsored entity securities		—	$	18,153			—
Agency mortgage-backed securities, residential		—		94,169			—
Interest rate swap derivatives		—		928			—
Liabilities:
Interest rate swap derivatives		—		(928	)		—

Assets and Liabilities Measured on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2020. Assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2021 are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial and Industrial	$	—	$	—	$	1,983

At December 31, 2021, the recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans totaled $1,993, with a corresponding valuation allowance of $10, resulting in an increase of $10 in provision expense during the year ended December 31, 2021, with no corresponding charge-offs. At December 31, 2020, the Company had no recorded investment of impaired loans measured for impairment using the fair value of collateral for collateral-dependent loans and, therefore, recorded no impact to provision expense during the year ended December 31, 2020.

There was no other real estate owned that was measured at fair value less costs to sell at December 31, 2021 and 2020. Furthermore, there were no corresponding write-downs during the years ended December 31, 2021 and 2020.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2021:

December 31, 2021	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range	(Weighted Average)
Impaired loans:
Commercial and Industrial	$	1,983	Sales approach	Adjustment to comparables and equipment comparables	0% to 25%		18.5	%

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 and December 31, 2020 are as follows:

			Fair Value Measurements at December 31, 2021 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	152,034	$	152,034	$	—	$	—	$	152,034
Certificates of deposit in financial institutions		2,329		—		2,329		—		2,329
Securities available for sale		177,000		—		177,000		—		177,000
Securities held to maturity		10,294		—		6,063		4,387		10,450
Loans, net		824,708		—		—		821,899		821,899
Interest rate swap derivatives		599		—		599		—		599
Accrued interest receivable		2,695		—		363		2,332		2,695
Financial Liabilities:
Deposits		1,059,908		870,626		189,796		—		1,060,422
Other borrowed funds		19,614		—		20,279		—		20,279
Subordinated debentures		8,500		—		5,657		—		5,657
Interest rate swap derivatives		599		—		599		—		599
Accrued interest payable		439		1		438		—		439

			Fair Value Measurements at December 31, 2020 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	138,303	$	138,303	$	—	$	—	$	138,303
Certificates of deposit in financial institutions		2,500		—		2,500		—		2,500
Securities available for sale		112,322		—		112,322		—		112,322
Securities held to maturity		10,020		—		4,989		5,355		10,344
Loans, net		841,504		—		—		837,387		837,387
Interest rate swap derivatives		928		—		928		—		928
Accrued interest receivable		3,319		—		283		3,036		3,319
Financial Liabilities:
Deposits		993,739		787,078		208,552		—		995,630
Other borrowed funds		27,863		—		29,807		—		29,807
Subordinated debentures		8,500		—		5,556		—		5,556
Interest rate swap derivatives		928		—		928		—		928
Accrued interest payable		1,100		1		1,099		—		1,100

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

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Regulatory Matters

12 Months Ended

Dec. 31, 2021

Regulatory Matters [Abstract]

Regulatory Matters

Note P - Regulatory Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet capital requirements can initiate regulatory action. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 2021, the Bank met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations applicable to insured depository institutions provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2021 and 2020, the Bank met the capital requirements to be deemed well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since year-end 2021 and 2020 that management believes have changed the institution's well capitalized category.

In 2019, the federal banking agencies jointly issued a final rule that provides for an optional, simplified measure of capital adequacy, the community bank leverage ratio ("CBLR") framework, for qualifying community banking organizations (banks and holding companies), consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule became effective on January 1, 2020 and was elected by the Bank as of March 31, 2020. In April 2020, the federal banking agencies issued an interim final rule that made temporary changes to the CBLR framework, pursuant to Section 4012 of the CARES Act, and a second interim final rule that provided a graduated increase in the CBLR requirement after the expiration of the temporary changes implemented pursuant to Section 4012 of the CARES Act.

The CBLR removes the requirement for qualifying banking organizations to calculate and report risk-based capital and only requires a Tier 1 to average assets ("leverage") ratio. Qualifying banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than required minimums are considered to have satisfied the generally applicable risk based and leverage capital requirements in the agencies' capital rules and, if applicable, are considered to have met the well capitalized ratio requirements for purposes of Section 38 of the Federal Deposit Insurance Act. Under the interim final rules, the CBLR minimum requirement is 8% as of December 31, 2020, 8.5% for calendar year 2021, and 9% for calendar year 2022 and beyond. The interim rule allows for a two-quarter grace period to correct a ratio that falls below the required amount, provided that the Bank maintains a leverage ratio of 7% as of December 31, 2020, 7.5% for calendar year 2021, and 8% for calendar year 2022 and beyond.

Under the final rule, an eligible banking organization can opt out of the CBLR framework and revert back to the risk-weighting framework without restriction. As of December 31, 2021 and 2020, the Bank qualified as a community banking organization as defined by the federal banking agencies and elected to measure capital adequacy under the CBLR framework.

The following tables summarize the actual and required capital amounts of the Bank as of year-end.

	Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations
Bank	Amount		Ratio			Amount		Ratio
Tier 1 capital (to average assets)
December 31, 2021	$	126,201		10.3	%	$	104,387		8.5	%
December 31, 2020		120,989		10.7			90,407		8.0

Dividends paid by the subsidiaries are the primary source of funds available to Ohio Valley for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the subsidiaries to Ohio Valley is subject to restrictions by regulatory authorities and state law. These restrictions generally limit dividends to the current and prior two years retained earnings of the Bank and Loan Central, Inc., and 90% of the prior year’s net income of OVBC Captive, Inc. At January 1, 2022 approximately $12,747 of the subsidiaries’ retained earnings were available for dividends under these guidelines. The ability of Ohio Valley to borrow funds from the Bank is limited as to amount and terms by banking regulations. The Board of Governors of the Federal Reserve System also has a policy requiring Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

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Parent Company Only Condensed Financial Information

12 Months Ended

Dec. 31, 2021

Parent Company Only Condensed Financial Information [Abstract]

Parent Company Only Condensed Financial Information

Note Q - Parent Company Only Condensed Financial Information

Below is condensed financial information of Ohio Valley. In this information, Ohio Valley’s investment in its subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries since acquisition. This information should be read in conjunction with the consolidated financial statements of the Company.

CONDENSED STATEMENTS OF CONDITION

	Years ended December 31:
Assets	2021		2020
Cash and cash equivalents	$	5,366	$	4,112
Investment in subsidiaries		147,214		143,424
Notes receivable – subsidiaries		2,123		1,603
Other assets		38		32
Total assets	$	154,741	$	149,171
Liabilities
Notes payable	$	2,138	$	3,198
Subordinated debentures		8,500		8,500
Other liabilities		2,747		1,149
Total liabilities		13,385		12,847
Shareholders’ Equity
Total shareholders’ equity		141,356		136,324
Total liabilities and shareholders’ equity	$	154,741	$	149,171

CONDENSED STATEMENTS OF INCOME

	Years ended December 31:
Income:	2021		2020
Interest on notes	$	20	$	41
Dividends from subsidiaries		6,650		4,125
Expenses:
Interest on notes		31		82
Interest on subordinated debentures		158		208
Operating expenses		379		344
Income before income taxes and equity in undistributed earnings of subsidiaries		6,102		3,532
Income tax benefit		112		121
Equity in undistributed earnings of subsidiaries		5,518		6,606
Net Income	$	11,732	$	10,259
Comprehensive Income	$	10,004	$	12,167

CONDENSED STATEMENTS OF CASH FLOWS

	Years ended December 31:
Cash flows from operating activities:	2021			2020
Net Income	$	11,732		$	10,259
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(5,518	)		(6,606	)
Change in other assets		(6	)		16
Change in other liabilities		1,598			832
Net cash provided by operating activities		7,806			4,501
Cash flows from investing activities:
Change in notes receivable		(520	)		360
Net cash provided by investing activities		(520	)		360
Cash flows from financing activities:
Change in notes payable		(1,060	)		(1,035	)
Purchases of treasury stock		(954	)		—
Cash dividends paid		(4,018	)		(4,022	)
Net cash used in financing activities		(6,032	)		(5,057	)
Cash and cash equivalents:
Change in cash and cash equivalents		1,254			(196	)
Cash and cash equivalents at beginning of year		4,112			4,308
Cash and cash equivalents at end of year	$	5,366		$	4,112

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Segment Information

12 Months Ended

Dec. 31, 2021

Segment Information [Abstract]

Segment Information

Note R - Segment Information

The reportable segments are determined by the products and services offered, primarily distinguished between banking and consumer finance.  They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business which are then aggregated if operating performance, products/services, and customers are similar.  Loans, investments, and deposits provide the majority of the net revenues from the banking operation, while loans provide the majority of the net revenues for the consumer finance segment.  All Company segments are domestic.

Total revenues from the banking segment, which accounted for the majority of the Company’s total revenues, totaled 94.1% and 94.3% of total consolidated revenues for the years ended December 31, 2021 and 2020, respectively.

The accounting policies used for the Company’s reportable segments are the same as those described in Note A - Summary of Significant Accounting Policies.  Income taxes are allocated based on income before tax expense.  All goodwill is in the Banking segment.

Segment information is as follows:

	Year Ended December 31, 2021
	Banking			Consumer Finance		Total Company
Net interest income	$	38,883		$	2,130	$	41,013
Provision expense		(500	)		81		(419	)
Noninterest income		8,831			1,033		9,864
Noninterest expense		34,847			2,433		37,280
Tax expense		2,149			135		2,284
Net income		11,218			514		11,732
Assets		1,235,231			14,538		1,249,769

	Year Ended December 31, 2020
	Banking		Consumer Finance		Total Company
Net interest income	$	37,825	$	2,157	$	39,982
Provision expense		2,945		35		2,980
Noninterest income		10,344		1,094		11,438
Noninterest expense		33,693		2,440		36,133
Tax expense		1,886		162		2,048
Net income		9,645		614		10,259
Assets		1,173,820		13,112		1,186,932

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies [Abstract]

Description of Business

Description of Business: Ohio Valley Banc Corp. (“Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”), an Ohio state-chartered bank that is a member of the Federal Reserve Bank (“FRB”) and is regulated primarily by the Ohio Division of Financial Institutions and the Federal Reserve Board.  Ohio Valley also has a subsidiary that engages in consumer lending generally to individuals with higher credit risk history, Loan Central, Inc.; a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC; and a limited purpose property and casualty insurance company, OVBC Captive, Inc. The Bank has two wholly-owned subsidiaries, Race Day Mortgage, Inc., an Ohio corporation that provides online consumer mortgages, and Ohio Valley REO, LLC ("Ohio Valley REO"), an Ohio limited liability company, to which the Bank transfers certain real estate acquired by the Bank through foreclosure for sale by Ohio Valley REO. Ohio Valley and its subsidiaries are collectively referred to as the “Company.”

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans. Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Principles of Consolidation

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., Ohio Valley Financial Services Agency, LLC, and OVBC Captive, Inc. All material intercompany accounts and transactions have been eliminated.

Industry Segment Information

Industry Segment Information: Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the U.S., management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Cash and Cash Equivalents

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, noninterest-bearing deposits with banks, federal funds sold and interest-bearing deposits with banks with maturity terms of less than 90 days. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Certificates of Deposit in Financial Institutions

Certificates of deposit in financial institutions: Certificates of deposit in financial institutions are carried at cost and have maturity terms of 90 days or greater.  The longest maturity date is September 22, 2023.

Securities

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

Other-Than-Temporary Impairments of Securities

Other-Than-Temporary Impairments of Securities: In determining an other-than-temporary impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Restricted Investments in Bank Stocks

Restricted Investments in Bank Stocks: As a member of the Federal Home Loan Bank (“FHLB”) system and the FRB system, the Bank is required to own a certain amount of stock based on its level of borrowings and other factors and may invest in additional amounts. FHLB stock and FRB stock are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Company has additional investments in other restricted bank stocks that are not material to the financial statements.

Loans

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments. The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Bank also originates long-term, fixed-rate mortgage loans, with full intention of being sold to the secondary market.  These loans are considered held for sale during the period of time after the principal has been advanced to the borrower by the Bank, but before the Bank has been reimbursed by the Federal Home Loan Mortgage Corporation or mortgage broker, typically within a few business days.  Loans sold to the secondary market are carried at the lower of aggregate cost or fair value.  Total loans on the balance sheet included $1,682 in loans held for sale by the Bank as of December 31, 2021, as compared to $70 loans held for sale at December 31, 2020.

Allowance for Loan Losses

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years for the consumer and real estate portfolio segment and 5 years for the commercial portfolio segment. The total loan portfolio’s actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows  from operations  can  be adversely  affected  by current  market conditions  for their   product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 6 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2021, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentrations of Credit Risk

Concentrations of Credit Risk: The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2021			2020
Residential real estate loans		33.02	%		36.00	%
Commercial real estate loans		33.90	%		29.86	%
Consumer loans		16.05	%		15.56	%
Commercial and industrial loans		17.03	%		18.58	%
		100.00	%		100.00	%

The Bank, in the normal course of its operations, conducts business with correspondent financial institutions. Balances in correspondent accounts, investments in federal funds, certificates of deposit and other short-term securities are closely monitored to ensure that prudent levels of credit and liquidity risks are maintained.  At December 31, 2021, the Bank’s primary correspondent balance was $135,995 on deposit at the FRB, Cleveland, Ohio.

Premises and Equipment

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line method over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

The Company enters into leases in the normal course of business primarily for branch buildings and office space to conduct business.  The Company’s leases have remaining terms ranging from 16 months to 20 years, some of which include options to extend the leases for up to 15 years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected to not recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date.  Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term.  Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.  At December 31, 2021, the Company did not have any finance leases.

The Company’s operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Foreclosed Assets

Foreclosed assets: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed.

Goodwill

Goodwill: Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. Goodwill is the only intangible asset with an indefinite life on our balance sheet. The Company has selected December 31 as the date to perform its annual qualitative impairment test. For the year ended December 31, 2021, the Company used a qualitative assessment based on profitability and positive equity to determine that it was more likely than not that the fair value of goodwill was more than the carrying amount, resulting in no impairment.  For the year ended December 31, 2020, management could not conclude using a qualitative assessment that its fair value of goodwill exceeded the carrying amount due to the Company’s stock price having traded below book value for an extended period throughout 2020. Therefore, the Company performed a quantitative impairment test to conclude that there was no goodwill impairment for the year ended December 31, 2020. See Note F for more specific disclosures related to goodwill impairment testing.

Long-term Assets

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Mortgage Servicing Rights

Mortgage Servicing Rights: A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2021 and 2020, the Company’s MSR assets were $480 and $458, respectively.

Earnings Per Share

Earnings Per Share: Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,780,609 for 2021 and 4,787,446 for 2020. Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

Income Taxes

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized at the time of enactment of such change in tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Loss Contingencies

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Bank Owned Life Insurance and Annuity Assets

Bank Owned Life Insurance and Annuity Assets: The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Dividend Reinvestment Plan

Dividend Reinvestment Plan: The Company maintains a Dividend Reinvestment Plan. The plan enables shareholders to elect to have their cash dividends on all or a portion of shares held automatically reinvested in additional shares of the Company’s common stock. The stock is issued out of the Company’s authorized shares and credited to participant accounts at fair market value. Dividends are reinvested on a quarterly basis.

Loan Commitments and Related Financial Instruments

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note L for more specific disclosure related to loan commitments.

Dividend Restrictions

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note P for more specific disclosure related to dividend restrictions.

Restrictions on Cash

Restrictions on Cash: Cash on hand or on deposit with a third-party correspondent bank and the FRB totaled $136,379 and $121,432 at year-end 2021 and 2020, respectively, and were subject to clearing requirements but not subject to any regulatory reserve requirements.  The balances on deposit with a third-party correspondent do not earn interest.

Derivatives

Derivatives: At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2021 and 2020, the only derivative instruments used by the Company were interest rate swaps, which are classified as stand-alone derivatives.  See Note H for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note O.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications

Reclassifications: The consolidated financial statements for 2020 have been reclassified to conform with the presentation for 2021.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

Adoption of New Accounting Standard Updates ("ASU")

Accounting Guidance to be Adopted in Future Periods: In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”. ASU 2016-13 requires entities to replace the current “incurred loss” model with an “expected loss” model, which is referred to as the current expected credit loss (“CECL”) model.  These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. The Bank’s CECL steering committee has developed a CECL model and is evaluating the source data, various credit loss methodologies and model results in relation to the new ASU guidance.  Management expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective.  Management expects the adoption will result in a material increase to the allowance for loan losses balance. For SEC filers who are smaller reporting companies, such as the Company, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies [Abstract]

Composition of Loan Portfolio

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2021			2020
Residential real estate loans		33.02	%		36.00	%
Commercial real estate loans		33.90	%		29.86	%
Consumer loans		16.05	%		15.56	%
Commercial and industrial loans		17.03	%		18.58	%
		100.00	%		100.00	%

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Securities (Tables)

12 Months Ended

Dec. 31, 2021

Securities [Abstract]

Amortized Cost and Fair Value of Securities Available-for-sale

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2021 and 2020 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2021
U.S. Government securities	$	20,182	$	—	$	(39	)	$	20,143
U.S. Government sponsored entity securities		25,980		109		(173	)		25,916
Agency mortgage-backed securities, residential		129,942		1,476		(477	)		130,941
Total securities	$	176,104	$	1,585	$	(689	)	$	177,000
December 31, 2020
U.S. Government sponsored entity securities	$	17,814	$	339	$	—		$	18,153
Agency mortgage-backed securities, residential		91,425		2,748		(4	)		94,169
Total securities	$	109,239	$	3,087	$	(4	)	$	112,322

Amortized Cost and Fair Value of Securities Held-to-maturity

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2021
Obligations of states and political subdivisions	$	10,292	$	200	$	(44	)	$	10,448
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,294	$	200	$	(44	)	$	10,450
December 31, 2020
Obligations of states and political subdivisions	$	10,018	$	324	$	—		$	10,342
Agency mortgage-backed securities, residential		2		—		—			2
Total securities	$	10,020	$	324	$	—		$	10,344

Amortized Cost and Fair Value of Securities by Contractual Maturity

Securities not due at a single maturity are shown separately.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	4,001	$	4,018	$	230	$	234
Due in one to five years		22,095		22,104		4,243		4,366
Due in five to ten years		20,066		19,937		3,408		3,419
Due after ten years		—		—		2,411		2,429
Agency mortgage-backed securities, residential		129,942		130,941		2		2
Total debt securities	$	176,104	$	177,000	$	10,294	$	10,450

Securities with Unrealized Losses in Continuous Unrealized Loss Position

The following table summarizes securities with unrealized losses at December 31, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position:

December 31, 2021	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government securities	$	20,143	$	(39	)	$	—	$	—	$	20,143	$	(39	)
U.S. Government sponsored entity securities		18,307		(173	)		—		—		18,307		(173	)
Agency mortgage-backed securities, residential		64,560		(477	)		—		—		64,560		(477	)
Total available for sale	$	103,010	$	(689	)	$	—	$	—	$	103,010	$	(689	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)
Total held to maturity	$	2,617	$	(38	)	$	130	$	(6	)	$	2,747	$	(44	)

December 31, 2020	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities, residential	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)
Total available for sale	$	14,517	$	(4	)	$	—	$	—	$	14,517	$	(4	)

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Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2021

Loans and Allowance for Loan Losses [Abstract]

Portfolio Loans

Loans are comprised of the following at December 31:

	2021			2020
Residential real estate	$	274,425		$	305,478
Commercial real estate:
Owner-occupied		71,979			51,863
Nonowner-occupied		176,100			164,523
Construction		33,718			37,063
Commercial and industrial		141,525			157,692
Consumer:
Automobile		48,206			55,241
Home equity		22,375			19,993
Other		62,863			56,811
		831,191			848,664
Less: Allowance for loan losses		(6,483	)		(7,160	)
Loans, net	$	824,708		$	841,504

Activity in Allowance for Loan Losses by Portfolio Segment

The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021, and 2020:

December 31, 2021	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160
Provision for loan losses		(615	)		(61	)		(258	)		515			(419	)
Loans charged off		(84	)		(115	)		(120	)		(1,162	)		(1,481	)
Recoveries		199			293			173			558			1,223
Total ending allowance balance	$	980		$	2,548		$	1,571		$	1,384		$	6,483

December 31, 2020	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,250		$	1,928		$	1,447		$	1,647		$	6,272
Provision for loan losses		413			946			443			1,178			2,980
Loans charged off		(340	)		(559	)		(185	)		(1,949	)		(3,033	)
Recoveries		157			116			71			597			941
Total ending allowance balance	$	1,480		$	2,431		$	1,776		$	1,473		$	7,160

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2021 and 2020:

December 31, 2021	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	10	$	—	$	10
Collectively evaluated for impairment		980		2,548		1,561		1,384		6,473
Total ending allowance balance	$	980	$	2,548	$	1,571	$	1,384	$	6,483
Loans:
Loans individually evaluated for impairment	$	—	$	5,411	$	4,531	$	81	$	10,023
Loans collectively evaluated for impairment		274,425		276,386		136,994		133,363		821,168
Total ending loans balance	$	274,425	$	281,797	$	141,525	$	133,444	$	831,191

December 31, 2020	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,480		2,431		1,776		1,473		7,160
Total ending allowance balance	$	1,480	$	2,431	$	1,776	$	1,473	$	7,160
Loans:
Loans individually evaluated for impairment	$	411	$	5,845	$	4,686	$	84	$	11,026
Loans collectively evaluated for impairment		305,067		247,604		153,006		131,961		837,638
Total ending loans balance	$	305,478	$	253,449	$	157,692	$	132,045	$	848,664

Loans Individually Evaluated for Impairment by Class of Loans

The following table presents information related to loans individually evaluated for impairment by class of loans as of the years ended December 31, 2021, and 2020:

December 31, 2021	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:
Commercial and industrial	$	1,993	$	1,993	$	10	$	1,987	$	94	$	94
With no related allowance recorded:
Commercial real estate:
Owner-occupied		5,052		5,027		—		5,151		309		309
Nonowner-occupied		384		384		—		387		29		29
Commercial and industrial		2,538		2,538		—		2,981		139		139
Consumer:
Home equity		31		31		—		32		2		2
Other		50		50		—		49		2		2
Total	$	10,048	$	10,023	$	10	$	10,587	$	575	$	575

December 31, 2020	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With an allowance recorded:	$	—	$	—	$	—	$	—	$	—	$	—
With no related allowance recorded:
Residential real estate		418		411		—		423		21		21
Commercial real estate:
Owner-occupied		5,256		5,256		—		3,417		260		260
Nonowner-occupied		632		589		—		626		29		29
Commercial and industrial		4,686		4,686		—		3,772		196		196
Consumer:
Home equity		34		34		—		28		2		2
Other		50		50		—		10		2		2
Total	$	11,076	$	11,026	$	—	$	8,276	$	510	$	510

Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of December 31, 2021 and 2020:

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2021
Residential real estate	$	10	$	2,683
Commercial real estate:
Owner-occupied		—		1,055
Nonowner-occupied		—		—
Construction		—		146
Commercial and industrial		65		150
Consumer:
Automobile		55		147
Home equity		—		148
Other		160		17
Total	$	290	$	4,346

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2020
Residential real estate	$	127	$	5,256
Commercial real estate:
Owner-occupied		—		205
Nonowner-occupied		—		362
Construction		—		156
Commercial and industrial		15		149
Consumer:
Automobile		146		129
Home equity		—		210
Other		136		36
Total	$	424	$	6,503

Aging of Recorded Investment in Past Due Loans by Class of Loans

The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2021 and 2020:

December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,208	$	1,218	$	921	$	4,347	$	270,078	$	274,425
Commercial real estate:
Owner-occupied		895		—		153		1,048		70,931		71,979
Nonowner-occupied		100		—		—		100		176,000		176,100
Construction		36		53		33		122		33,596		33,718
Commercial and industrial		517		60		215		792		140,733		141,525
Consumer:
Automobile		656		148		194		998		47,208		48,206
Home equity		35		165		47		247		22,128		22,375
Other		401		133		177		711		62,152		62,863
Total	$	4,848	$	1,777	$	1,740	$	8,365	$	822,826	$	831,191

December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	2,845	$	496	$	1,663	$	5,004	$	300,474	$	305,478
Commercial real estate:
Owner-occupied		470		1,003		193		1,666		50,197		51,863
Nonowner-occupied		94		—		362		456		164,067		164,523
Construction		—		82		—		82		36,981		37,063
Commercial and industrial		1,112		11		164		1,287		156,405		157,692
Consumer:
Automobile		831		131		258		1,220		54,021		55,241
Home equity		204		81		113		398		19,595		19,993
Other		446		76		172		694		56,117		56,811
Total	$	6,002	$	1,880	$	2,925	$	10,807	$	837,857	$	848,664

Troubled Debt Restructuring Loan Modifications

The following table presents the types of TDR loan modifications by class of loans as of December 31, 2021 and December 31, 2020:

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2021
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	1,455	$	—	$	1,455
Maturity extension at lower stated rate than market rate		268		—		268
Credit extension at lower stated rate than market rate		375		—		375
Nonowner-occupied
Credit extension at lower stated rate than market rate		385		—		385
Commercial and industrial
Interest only payments		2,301		—		2,301
Total TDRs	$	4,784	$	—	$	4,784

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
December 31, 2020
Residential real estate:
Interest only payments	$	202	$	—	$	202
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments		1,486		—		1,486
Maturity extension at lower stated rate than market rate		351		—		351
Credit extension at lower stated rate than market rate		384		—		384
Nonowner-occupied
Credit extension at lower stated rate than market rate		390		—		390
Commercial and industrial
Interest only payments		4,400		—		4,400
Total TDRs	$	7,213	$	—	$	7,213

Financing Receivable Credit Quality Indicators

As of December 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

December 31, 2021	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	66,999	$	618	$	4,362	$	71,979
Nonowner-occupied		175,901		—		199		176,100
Construction		33,685		—		33		33,718
Commercial and industrial		134,983		1,862		4,680		141,525
Total	$	411,568	$	2,480	$	9,274	$	423,322

December 31, 2020	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	46,604	$	669	$	4,590	$	51,863
Nonowner-occupied		160,324		3,629		570		164,523
Construction		37,063		—		—		37,063
Commercial and industrial		150,786		2,064		4,842		157,692
Total	$	394,777	$	6,362	$	10,002	$	411,141

Recorded Investment of Residential and Consumer Loans

For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of December 31, 2021 and December 31, 2020:

	Consumer
December 31, 2021	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	48,004	$	22,227	$	62,686	$	271,732	$	404,649
Nonperforming		202		148		177		2,693		3,220
Total	$	48,206	$	22,375	$	62,863	$	274,425	$	407,869

	Consumer
December 31, 2020	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	54,966	$	19,783	$	56,639	$	300,095	$	431,483
Nonperforming		275		210		172		5,383		6,040
Total	$	55,241	$	19,993	$	56,811	$	305,478	$	437,523

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Premises and Equipment [Abstract]

Premises and Equipment

Following is a summary of premises and equipment at December 31:

	2021		2020
Land	$	2,570	$	2,719
Buildings		22,360		22,081
Leasehold improvements		1,402		1,302
Furniture and equipment		9,528		8,892
		35,860		34,994
Less accumulated depreciation		15,130		13,682
Total premises and equipment	$	20,730	$	21,312

Premises and Equipment Held for Sale

Following is a summary of premises and equipment held for sale at December 31:

	2021		2020
Land	$	105	$	153
Buildings		387		564
		492		717
Less accumulated depreciation		54		80
Total premises and equipment held for sale	$	438	$	637

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Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Balance Sheet Information

Balance sheet information related to leases at December 31 was as follows:

	2021		2020
Operating leases:
Operating lease right-of-use assets	$	1,195	$	880
Operating lease liabilities		1,195		880

Components of Lease Cost

The components of lease cost were as follows for the year ending:

	2021		2020
Operating lease cost	$	161	$	170
Short-term lease expense		36		31

Maturities of Lease Liabilities

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2021 are as follows:

	Operating Leases
2022	$	168
2023		127
2024		106
2025		106
2026		107
Thereafter		866
Total lease payments		1,480
Less: Imputed Interest		(285	)
Total operating leases	$	1,195

Other Information

Other information at December 31 was as follows:

	2021		2020
Weighted-average remaining lease term for operating leases	13.7 years		9.6 years
Weighted-average discount rate for operating leases		2.29%		2.79%

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets [Abstract]

Goodwill

The change in goodwill during the year is as follows:

	Gross Carrying Amount
	2021		2020
Goodwill	$	7,319	$	7,319

Acquired Intangible Assets

Acquired intangible assets were as follows at year-end:

	2021				2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Core deposit intangibles	$	738	$	674	$	738	$	626

Estimated Amortization Expense

Estimated amortization expense for each of the next five years:

2022	$	35
2023		21
2024		8
2025		—
2026		—
Total	$	64

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Deposits (Tables)

12 Months Ended

Dec. 31, 2021

Deposits [Abstract]

Interest Bearing Deposits

Following is a summary of interest-bearing deposits at December 31:

	2021		2020
NOW accounts	$	205,362	$	185,364
Savings and Money Market		311,686		286,937
Time:
In denominations of $250,000 or less		147,000		165,834
In denominations of more than $250,000		42,282		40,827
Total time deposits		189,282		206,661
Total interest-bearing deposits	$	706,330	$	678,962

Maturities of Time Deposits

Following is a summary of total time deposits by remaining maturity at December 31, 2021:

2022	$	138,738
2023		41,386
2024		5,529
2025		1,329
2026		1,932
Thereafter		368
Total	$	189,282

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Other Borrowed Funds (Tables)

12 Months Ended

Dec. 31, 2021

Other Borrowed Funds [Abstract]

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank

Other borrowed funds at December 31, 2021 and 2020 are comprised of advances from the FHLB of Cincinnati and promissory notes.

	FHLB Borrowings		Promissory Notes		Totals
2021	$	17,476	$	2,138	$	19,614
2020		24,665		3,198		27,863

Schedule of Maturities of Long-term Debt

Scheduled principal payments over the next five years:

	FHLB Borrowings		Promissory Notes		Totals
2022	$	2,109	$	1,031	$	3,140
2023		1,784		1,107		2,891
2024		1,693		—		1,693
2025		1,560		—		1,560
2026		1,434		—		1,434
Thereafter		8,896		—		8,896
	$	17,476	$	2,138	$	19,614

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Components of Provision for Income Taxes

The provision for income taxes consists of the following components:

	2021			2020
Current tax expense	$	2,414		$	2,036
Deferred tax (benefit) expense		(130	)		12
Total income taxes	$	2,284		$	2,048

Deferred Tax Assets and Liabilities

The source of deferred tax assets and deferred tax liabilities at December 31:

	2021			2020
Items giving rise to deferred tax assets:
Allowance for loan losses	$	1,410		$	1,557
Deferred compensation		2,007			1,822
Deferred loan fees/costs		148			136
Other real estate owned		—			1
Accrued bonus		286			212
Purchase accounting adjustments		2			18
Net operating loss		82			99
Lease liability		324			235
Nonaccrual interest income		174			—
Other		275			339
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(104	)		(100	)
FHLB stock dividends		(676	)		(676	)
Unrealized gain on securities available for sale		(188	)		(647	)
Prepaid expenses		(205	)		(202	)
Depreciation and amortization		(783	)		(894	)
Right-of-use asset		(324	)		(235	)
Net deferred tax asset	$	2,428		$	1,665

Reconciliation of Income Tax Provision

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 21% to income before taxes is as follows:

	2021			2020
Statutory tax (21%)	$	2,943		$	2,584
Effect of nontaxable interest		(378	)		(348	)
Effect of nontaxable insurance premiums		(220	)		(210	)
Income from bank owned insurance, net		(168	)		(161	)
Effect of postretirement benefits		26			124
Effect of nontaxable life insurance death proceeds		(10	)		—
Effect of state income tax		150			125
Tax credits		(72	)		(102	)
Other items		13			36
Total income taxes(1)	$	2,284		$	2,048

(1) Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

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Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingent Liabilities [Abstract]

Commitments

Following is a summary of such commitments at December 31:

	2021		2020
Fixed rate	$	1,014	$	1,127
Variable rate		84,929		83,956
Standby letters of credit		3,659		3,373

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Summary of Activity on Borrower Relationships with Aggregate Debt

A summary of activity on these borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2021	$	2,729
New loans		16,401
Repayments		(472	)
Other changes		(810	)
Total loans at December 31, 2021	$	17,848

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2021

Employee Benefits [Abstract]

Contributions to ESOP

In addition, the subsidiaries made contributions to the ESOP as follows:

	Years ended December 31
	2021		2020
Number of shares issued		—		—
Fair value of stock contributed	$	—	$	—
Cash contributed		580		614
Total expense	$	580	$	614

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value of Financial Instruments [Abstract]

Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government securities		—	$	20,143			—
U.S. Government sponsored entity securities		—		25,916			—
Agency mortgage-backed securities, residential		—		130,941			—
Interest rate swap derivatives		—		599			—
Liabilities:
Interest rate swap derivatives		—		(599	)		—

	Fair Value Measurements at December 31, 2020, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
U.S. Government sponsored entity securities		—	$	18,153			—
Agency mortgage-backed securities, residential		—		94,169			—
Interest rate swap derivatives		—		928			—
Liabilities:
Interest rate swap derivatives		—		(928	)		—

Assets and Liabilities Measured on Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2020. Assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2021 are summarized below:

	Fair Value Measurements at December 31, 2021, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial and Industrial	$	—	$	—	$	1,983

Quantitative Information about Level 3 Inputs

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2021:

December 31, 2021	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range	(Weighted Average)
Impaired loans:
Commercial and Industrial	$	1,983	Sales approach	Adjustment to comparables and equipment comparables	0% to 25%		18.5	%

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at December 31, 2021 and December 31, 2020 are as follows:

			Fair Value Measurements at December 31, 2021 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	152,034	$	152,034	$	—	$	—	$	152,034
Certificates of deposit in financial institutions		2,329		—		2,329		—		2,329
Securities available for sale		177,000		—		177,000		—		177,000
Securities held to maturity		10,294		—		6,063		4,387		10,450
Loans, net		824,708		—		—		821,899		821,899
Interest rate swap derivatives		599		—		599		—		599
Accrued interest receivable		2,695		—		363		2,332		2,695
Financial Liabilities:
Deposits		1,059,908		870,626		189,796		—		1,060,422
Other borrowed funds		19,614		—		20,279		—		20,279
Subordinated debentures		8,500		—		5,657		—		5,657
Interest rate swap derivatives		599		—		599		—		599
Accrued interest payable		439		1		438		—		439

			Fair Value Measurements at December 31, 2020 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	138,303	$	138,303	$	—	$	—	$	138,303
Certificates of deposit in financial institutions		2,500		—		2,500		—		2,500
Securities available for sale		112,322		—		112,322		—		112,322
Securities held to maturity		10,020		—		4,989		5,355		10,344
Loans, net		841,504		—		—		837,387		837,387
Interest rate swap derivatives		928		—		928		—		928
Accrued interest receivable		3,319		—		283		3,036		3,319
Financial Liabilities:
Deposits		993,739		787,078		208,552		—		995,630
Other borrowed funds		27,863		—		29,807		—		29,807
Subordinated debentures		8,500		—		5,556		—		5,556
Interest rate swap derivatives		928		—		928		—		928
Accrued interest payable		1,100		1		1,099		—		1,100

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Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2021

Regulatory Matters [Abstract]

Capital Ratios Excluding the Capital Conservation Buffer

The following tables summarize the actual and required capital amounts of the Bank as of year-end.

	Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations
Bank	Amount		Ratio			Amount		Ratio
Tier 1 capital (to average assets)
December 31, 2021	$	126,201		10.3	%	$	104,387		8.5	%
December 31, 2020		120,989		10.7			90,407		8.0

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Parent Company Only Condensed Financial Information (Tables)

12 Months Ended

Dec. 31, 2021

Parent Company Only Condensed Financial Information [Abstract]

Condensed Statements of Condition

CONDENSED STATEMENTS OF CONDITION

	Years ended December 31:
Assets	2021		2020
Cash and cash equivalents	$	5,366	$	4,112
Investment in subsidiaries		147,214		143,424
Notes receivable – subsidiaries		2,123		1,603
Other assets		38		32
Total assets	$	154,741	$	149,171
Liabilities
Notes payable	$	2,138	$	3,198
Subordinated debentures		8,500		8,500
Other liabilities		2,747		1,149
Total liabilities		13,385		12,847
Shareholders’ Equity
Total shareholders’ equity		141,356		136,324
Total liabilities and shareholders’ equity	$	154,741	$	149,171

Condensed Statements of Income

CONDENSED STATEMENTS OF INCOME

	Years ended December 31:
Income:	2021		2020
Interest on notes	$	20	$	41
Dividends from subsidiaries		6,650		4,125
Expenses:
Interest on notes		31		82
Interest on subordinated debentures		158		208
Operating expenses		379		344
Income before income taxes and equity in undistributed earnings of subsidiaries		6,102		3,532
Income tax benefit		112		121
Equity in undistributed earnings of subsidiaries		5,518		6,606
Net Income	$	11,732	$	10,259
Comprehensive Income	$	10,004	$	12,167

Condensed Statements of Cash Flows

CONDENSED STATEMENTS OF CASH FLOWS

	Years ended December 31:
Cash flows from operating activities:	2021			2020
Net Income	$	11,732		$	10,259
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(5,518	)		(6,606	)
Change in other assets		(6	)		16
Change in other liabilities		1,598			832
Net cash provided by operating activities		7,806			4,501
Cash flows from investing activities:
Change in notes receivable		(520	)		360
Net cash provided by investing activities		(520	)		360
Cash flows from financing activities:
Change in notes payable		(1,060	)		(1,035	)
Purchases of treasury stock		(954	)		—
Cash dividends paid		(4,018	)		(4,022	)
Net cash used in financing activities		(6,032	)		(5,057	)
Cash and cash equivalents:
Change in cash and cash equivalents		1,254			(196	)
Cash and cash equivalents at beginning of year		4,112			4,308
Cash and cash equivalents at end of year	$	5,366		$	4,112

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2021

Segment Information [Abstract]

Segment Information

Segment information is as follows:

	Year Ended December 31, 2021
	Banking			Consumer Finance		Total Company
Net interest income	$	38,883		$	2,130	$	41,013
Provision expense		(500	)		81		(419	)
Noninterest income		8,831			1,033		9,864
Noninterest expense		34,847			2,433		37,280
Tax expense		2,149			135		2,284
Net income		11,218			514		11,732
Assets		1,235,231			14,538		1,249,769

	Year Ended December 31, 2020
	Banking		Consumer Finance		Total Company
Net interest income	$	37,825	$	2,157	$	39,982
Provision expense		2,945		35		2,980
Noninterest income		10,344		1,094		11,438
Noninterest expense		33,693		2,440		36,133
Tax expense		1,886		162		2,048
Net income		9,645		614		10,259
Assets		1,173,820		13,112		1,186,932

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Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Subsidiaries Office Business shares	Dec. 31, 2020 USD ($) shares
Description of Business [Abstract]
Number of subsidiaries | Subsidiaries	1
Number of stores | Office	22
Industry Segment Information [Abstract]
Number of reported lines of business | Business	2
Loans [Abstract]
Loans held for sale	$ 1,682	$ 70
Concentrations of Credit Risk [Abstract]
% Total Loans	100.00%	100.00%
Due from Banks	$ 135,995
Property, Plant and Equipment [Abstract]
Finance lease	0
Goodwill [Abstract]
Goodwill impairment	0	$ 0
Mortgage Servicing Rights [Abstract]
MSR assets	$ 480	$ 458
Earnings Per Share [Abstract]
Number of weighted average common shares outstanding (in shares) | shares	4,780,609	4,787,446
Restrictions on Cash [Abstract]
Restricted cash	$ 136,379	$ 121,432
Minimum [Member]
Property, Plant and Equipment [Abstract]
Operating lease term	16 months
Maximum [Member]
Property, Plant and Equipment [Abstract]
Operating lease term	20 years
Operating lease renewal term	15 years
Equipment Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Property, plant and equipment, useful life	3 years
Equipment Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Property, plant and equipment, useful life	8 years
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Abstract]
Property, plant and equipment, useful life	7 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Abstract]
Property, plant and equipment, useful life	39 years
Residential Real Estate Loans [Member]
Concentrations of Credit Risk [Abstract]
% Total Loans	33.02%	36.00%
Commercial Real Estate Loans [Member]
Allowance for Loan Losses [Abstract]
Period of actual loss history experienced	3 years
Concentrations of Credit Risk [Abstract]
% Total Loans	33.90%	29.86%
Consumer Loans [Member]
Allowance for Loan Losses [Abstract]
Period of actual loss history experienced	3 years
Loans maturity period	6 years
Concentrations of Credit Risk [Abstract]
% Total Loans	16.05%	15.56%
Commercial and Industrial Loans [Member]
Allowance for Loan Losses [Abstract]
Period of actual loss history experienced	5 years
Concentrations of Credit Risk [Abstract]
% Total Loans	17.03%	18.58%

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Securities, Amortized Cost and Fair Value of Securities Available-for-sale (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Available-for-sale Investment Securities [Abstract]
Amortized Cost	$ 176,104	$ 109,239
Gross Unrealized Gains	1,585	3,087
Gross Unrealized Losses	(689)	(4)
Estimated Fair Value	177,000	112,322
U.S. Government Securities [Member]
Available-for-sale Investment Securities [Abstract]
Amortized Cost	20,182
Gross Unrealized Gains	0
Gross Unrealized Losses	(39)
Estimated Fair Value	20,143
U.S. Government Sponsored Entity Securities [Member]
Available-for-sale Investment Securities [Abstract]
Amortized Cost	25,980	17,814
Gross Unrealized Gains	109	339
Gross Unrealized Losses	(173)	0
Estimated Fair Value	25,916	18,153
Agency Mortgage-backed Securities, Residential [Member]
Available-for-sale Investment Securities [Abstract]
Amortized Cost	129,942	91,425
Gross Unrealized Gains	1,476	2,748
Gross Unrealized Losses	(477)	(4)
Estimated Fair Value	$ 130,941	$ 94,169

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Securities, Amortized Cost and Fair Value of Securities Held-to-maturity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Debt Securities, Held-to-maturity, Maturity, Amortized Cost [Abstract]
Amortized Cost	$ 10,294	$ 10,020
Gross Unrealized Gains	200	324
Gross Unrecognized Losses	(44)	0
Estimated Fair Value	10,450	10,344
Unrealized Losses and Other-than-temporary Impairment [Abstract]
Holding of securities issued by Federal Farm Credit Bank	18,500
Proceeds from sale of debt securities	47,666	0
Loss on sale of securities	(1,066)	0
Debt securities	123,742	83,344
Other than temporary impairment losses	0	0
Obligations of States and Political Subdivisions [Member]
Debt Securities, Held-to-maturity, Maturity, Amortized Cost [Abstract]
Amortized Cost	10,292	10,018
Gross Unrealized Gains	200	324
Gross Unrecognized Losses	(44)	0
Estimated Fair Value	10,448	10,342
Agency Mortgage-backed Securities, Residential [Member]
Debt Securities, Held-to-maturity, Maturity, Amortized Cost [Abstract]
Amortized Cost	2	2
Gross Unrealized Gains	0	0
Gross Unrecognized Losses	0	0
Estimated Fair Value	$ 2	$ 2

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Securities, Amortized Cost and Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Amortized cost of Available-for-sale Securities by Contractual Maturity [Abstract]
Due in one year or less	$ 4,001
Due in one to five years	22,095
Due in five to ten years	20,066
Due after ten years	0
Agency mortgage-backed securities, residential	129,942
Amortized Cost	176,104	$ 109,239
Fair Value of Available-for-sale Securities by Contractual Maturity [Abstract]
Due in one year or less	4,018
Due in one to five years	22,104
Due in five to ten years	19,937
Due after ten years	0
Agency mortgage-backed securities, residential	130,941
Estimated Fair Value	177,000	112,322
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Net [Abstract]
Due in one year or less	230
Due in one to five years	4,243
Due in five to ten years	3,408
Due after ten years	2,411
Agency mortgage-backed securities, residential	2
Amortized Cost	10,294	10,020
Debt Securities, Held-to-maturity, Maturity, Fair Value [Abstract]
Due in one year or less	234
Due in one to five years	4,366
Due in five to ten years	3,419
Due after ten years	2,429
Agency mortgage-backed securities, residential	2
Estimated Fair Value	10,450	10,344
Agency Mortgage-backed Securities, Residential [Member]
Amortized cost of Available-for-sale Securities by Contractual Maturity [Abstract]
Amortized Cost	129,942	91,425
Fair Value of Available-for-sale Securities by Contractual Maturity [Abstract]
Estimated Fair Value	130,941	94,169
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Net [Abstract]
Amortized Cost	2	2
Debt Securities, Held-to-maturity, Maturity, Fair Value [Abstract]
Estimated Fair Value	$ 2	$ 2

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Securities, Available-for-sale Securities with Unrealized Losses in Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Available-for-sale Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 Months - Fair Value	$ 103,010	$ 14,517
12 Months or More - Fair Value	0	0
Fair Value	103,010	14,517
Available-for-sale Securities with Continuous Unrealized Loss Position, Unrealized Loss [Abstract]
Less than 12 Months - Unrealized Loss	(689)	(4)
12 Months or More - Unrealized Loss	0	0
Unrealized Loss	(689)	(4)
U.S. Government Securities [Member]
Available-for-sale Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 Months - Fair Value	20,143
12 Months or More - Fair Value	0
Fair Value	20,143
Available-for-sale Securities with Continuous Unrealized Loss Position, Unrealized Loss [Abstract]
Less than 12 Months - Unrealized Loss	(39)
12 Months or More - Unrealized Loss	0
Unrealized Loss	(39)
U.S. Government Sponsored Entity Securities [Member]
Available-for-sale Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 Months - Fair Value	18,307
12 Months or More - Fair Value	0
Fair Value	18,307
Available-for-sale Securities with Continuous Unrealized Loss Position, Unrealized Loss [Abstract]
Less than 12 Months - Unrealized Loss	(173)
12 Months or More - Unrealized Loss	0
Unrealized Loss	(173)
Agency Mortgage-backed Securities, Residential [Member]
Available-for-sale Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 Months - Fair Value	64,560	14,517
12 Months or More - Fair Value	0	0
Fair Value	64,560	14,517
Available-for-sale Securities with Continuous Unrealized Loss Position, Unrealized Loss [Abstract]
Less than 12 Months - Unrealized Loss	(477)	(4)
12 Months or More - Unrealized Loss	0	0
Unrealized Loss	$ (477)	$ (4)

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Securities, Held-to-Maturity Securities with Unrealized Losses in Continuous Unrealized Loss Position (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Held-to-maturity Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than 12 Months - Fair Value	$ 2,617
12 Months or More - Fair Value	130
Fair Value	2,747
Held-to-maturity Securities with Unrealized Loss Position, Unrealized Loss [Abstract]
Less Than 12 Months - Unrecognized Loss	(38)
12 Months or More - Unrecognized Loss	(6)
Unrecognized Loss	(44)
Obligations of States and Political Subdivisions [Member]
Held-to-maturity Securities with Continuous Unrealized Loss Position, Fair Value [Abstract]
Less Than 12 Months - Fair Value	2,617
12 Months or More - Fair Value	130
Fair Value	2,747
Held-to-maturity Securities with Unrealized Loss Position, Unrealized Loss [Abstract]
Less Than 12 Months - Unrecognized Loss	(38)
12 Months or More - Unrecognized Loss	(6)
Unrecognized Loss	$ (44)

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Loans and Allowance for Loan Losses, Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Loans [Abstract]
Total loans	$ 831,191	$ 848,664
Less: Allowance for loan losses	(6,483)	(7,160)	$ (6,272)
Net loans	824,708	841,504
Residential Real Estate [Member]
Loans [Abstract]
Total loans	274,425	305,478
Less: Allowance for loan losses	(980)	(1,480)	(1,250)
Commercial Real Estate [Member]
Loans [Abstract]
Total loans	281,797	253,449
Less: Allowance for loan losses	(2,548)	(2,431)	(1,928)
Commercial Real Estate [Member] | Owner-occupied [Member]
Loans [Abstract]
Total loans	71,979	51,863
Commercial Real Estate [Member] | Nonowner-occupied [Member]
Loans [Abstract]
Total loans	176,100	164,523
Commercial Real Estate [Member] | Construction [Member]
Loans [Abstract]
Total loans	33,718	37,063
Commercial and Industrial [Member]
Loans [Abstract]
Total loans	141,525	157,692
Less: Allowance for loan losses	(1,571)	(1,776)	(1,447)
Commercial and Industrial [Member] | PPP [Member]
Loans [Abstract]
Total loans	446	27,933
Consumer [Member]
Loans [Abstract]
Total loans	133,444	132,045
Less: Allowance for loan losses	(1,384)	(1,473)	$ (1,647)
Consumer [Member] | Automobile [Member]
Loans [Abstract]
Total loans	48,206	55,241
Consumer [Member] | Home Equity [Member]
Loans [Abstract]
Total loans	22,375	19,993
Consumer [Member] | Other [Member]
Loans [Abstract]
Total loans	$ 62,863	$ 56,811

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Loans and Allowance for Loan Losses, Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 7,160	$ 6,272
Provision for loan losses	(419)	2,980
Loans charged off	(1,481)	(3,033)
Recoveries	1,223	941
Ending balance	6,483	7,160
Residential Real Estate [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,480	1,250
Provision for loan losses	(615)	413
Loans charged off	(84)	(340)
Recoveries	199	157
Ending balance	980	1,480
Commercial Real Estate [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,431	1,928
Provision for loan losses	(61)	946
Loans charged off	(115)	(559)
Recoveries	293	116
Ending balance	2,548	2,431
Commercial and Industrial [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,776	1,447
Provision for loan losses	(258)	443
Loans charged off	(120)	(185)
Recoveries	173	71
Ending balance	1,571	1,776
Consumer [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,473	1,647
Provision for loan losses	515	1,178
Loans charged off	(1,162)	(1,949)
Recoveries	558	597
Ending balance	$ 1,384	$ 1,473

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Loans and Allowance for Loan Losses, Allowance for Loans Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Ending allowance balance attributable to loans [Abstract]
Individually evaluated for impairment	$ 10	$ 0
Collectively evaluated for impairment	6,473	7,160
Total ending allowance balance	6,483	7,160	$ 6,272
Loans [Abstract]
Loans individually evaluated for impairment	10,023	11,026
Loans collectively evaluated for impairment	821,168	837,638
Total ending loans balance	831,191	848,664
Residential Real Estate [Member]
Ending allowance balance attributable to loans [Abstract]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	980	1,480
Total ending allowance balance	980	1,480	1,250
Loans [Abstract]
Loans individually evaluated for impairment	0	411
Loans collectively evaluated for impairment	274,425	305,067
Total ending loans balance	274,425	305,478
Commercial Real Estate [Member]
Ending allowance balance attributable to loans [Abstract]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	2,548	2,431
Total ending allowance balance	2,548	2,431	1,928
Loans [Abstract]
Loans individually evaluated for impairment	5,411	5,845
Loans collectively evaluated for impairment	276,386	247,604
Total ending loans balance	281,797	253,449
Commercial and Industrial [Member]
Ending allowance balance attributable to loans [Abstract]
Individually evaluated for impairment	10	0
Collectively evaluated for impairment	1,561	1,776
Total ending allowance balance	1,571	1,776	1,447
Loans [Abstract]
Loans individually evaluated for impairment	4,531	4,686
Loans collectively evaluated for impairment	136,994	153,006
Total ending loans balance	141,525	157,692
Consumer [Member]
Ending allowance balance attributable to loans [Abstract]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1,384	1,473
Total ending allowance balance	1,384	1,473	$ 1,647
Loans [Abstract]
Loans individually evaluated for impairment	81	84
Loans collectively evaluated for impairment	133,363	131,961
Total ending loans balance	$ 133,444	$ 132,045

XML

Loans and Allowance for Loan Losses, Impaired Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
With an allowance recorded [Abstract]
Unpaid principal balance		$ 0
Recorded investment	$ 1,993	0
Total [Abstract]
Unpaid principal balance	10,048	11,076
Recorded investment	10,023	11,026
Allowance for Loan Losses Allocated	10
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded		0
Interest income recognized - with no allowance recorded		0
Cash basis interest recognized - with no allowance recorded		0
Average impaired loans	10,587	8,276
Interest income recognized	575	510
Cash basis interest recognized	575	510
Residential Real Estate [Member]
With no related allowance recorded [Abstract]
Unpaid principal balance		418
Recorded investment		411
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded		423
Interest income recognized - with no allowance recorded		21
Cash basis interest recognized - with no allowance recorded		21
Commercial Real Estate [Member] | Owner-occupied [Member]
With no related allowance recorded [Abstract]
Unpaid principal balance	5,052	5,256
Recorded investment	5,027	5,256
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded	5,151	3,417
Interest income recognized - with no allowance recorded	309	260
Cash basis interest recognized - with no allowance recorded	309	260
Commercial Real Estate [Member] | Nonowner-occupied [Member]
With no related allowance recorded [Abstract]
Unpaid principal balance	384	632
Recorded investment	384	589
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded	387	626
Interest income recognized - with no allowance recorded	29	29
Cash basis interest recognized - with no allowance recorded	29	29
Commercial and Industrial [Member]
With an allowance recorded [Abstract]
Unpaid principal balance	1,993
Recorded investment	1,993
With no related allowance recorded [Abstract]
Unpaid principal balance	2,538	4,686
Recorded investment	2,538	4,686
Total [Abstract]
Allowance for Loan Losses Allocated	10
Impaired loans [Abstract]
Average impaired loans - with an allowance recorded	1,987
Interest income recognized - with an allowance recorded	94
Cash basis interest recognized - with an allowance recorded	94
Average impaired loans - with no allowance recorded	2,981	3,772
Interest income recognized - with no allowance recorded	139	196
Cash basis interest recognized - with no allowance recorded	139	196
Consumer [Member] | Home Equity [Member]
With no related allowance recorded [Abstract]
Unpaid principal balance	31	34
Recorded investment	31	34
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded	32	28
Interest income recognized - with no allowance recorded	2	2
Cash basis interest recognized - with no allowance recorded	2	2
Consumer [Member] | Other [Member]
With no related allowance recorded [Abstract]
Unpaid principal balance	50
Recorded investment	50
Total [Abstract]
Unpaid principal balance		50
Recorded investment		50
Impaired loans [Abstract]
Average impaired loans - with no allowance recorded	49
Interest income recognized - with no allowance recorded	2
Cash basis interest recognized - with no allowance recorded	$ 2
Average impaired loans		10
Interest income recognized		2
Cash basis interest recognized		$ 2

XML

Loans and Allowance for Loan Losses, Nonaccrual Loans and Loans Past Due 90 Days or More and Still Accruing (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	$ 290	$ 424
Nonaccrual	4,346	6,503
Residential Real Estate [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Real estate acquired	15	49
Mortgage loans in process of foreclosure	316	1,097
Loans past due 90 days and still accruing	10	127
Nonaccrual	2,683	5,256
Commercial Real Estate [Member] | Owner-occupied [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	0	0
Nonaccrual	1,055	205
Commercial Real Estate [Member] | Nonowner-occupied [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	0	0
Nonaccrual	0	362
Commercial Real Estate [Member] | Construction [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	0	0
Nonaccrual	146	156
Commercial and Industrial [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	65	15
Nonaccrual	150	149
Consumer [Member] | Automobile [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	55	146
Nonaccrual	147	129
Consumer [Member] | Home Equity [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	0	0
Nonaccrual	148	210
Consumer [Member] | Other [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over90 Days Still on Accrual by Class of Loans [Abstract]
Loans past due 90 days and still accruing	160	136
Nonaccrual	$ 17	$ 36

XML

Loans and Allowance for Loan Losses, Past Due Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	$ 831,191	$ 848,664
Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	274,425	305,478
Commercial Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	281,797	253,449
Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	71,979	51,863
Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	176,100	164,523
Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	33,718	37,063
Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	141,525	157,692
Consumer [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	133,444	132,045
Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	48,206	55,241
Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	22,375	19,993
Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	62,863	56,811
Total Past Due [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	8,365	10,807
Total Past Due [Member] | Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	4,347	5,004
Total Past Due [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	1,048	1,666
Total Past Due [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	100	456
Total Past Due [Member] | Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	122	82
Total Past Due [Member] | Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	792	1,287
Total Past Due [Member] | Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	998	1,220
Total Past Due [Member] | Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	247	398
Total Past Due [Member] | Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	711	694
30 to 59 Days Past Due [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	4,848	6,002
30 to 59 Days Past Due [Member] | Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	2,208	2,845
30 to 59 Days Past Due [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	895	470
30 to 59 Days Past Due [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	100	94
30 to 59 Days Past Due [Member] | Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	36	0
30 to 59 Days Past Due [Member] | Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	517	1,112
30 to 59 Days Past Due [Member] | Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	656	831
30 to 59 Days Past Due [Member] | Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	35	204
30 to 59 Days Past Due [Member] | Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	401	446
60 to 89 Days Past Due [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	1,777	1,880
60 to 89 Days Past Due [Member] | Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	1,218	496
60 to 89 Days Past Due [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	0	1,003
60 to 89 Days Past Due [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	0	0
60 to 89 Days Past Due [Member] | Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	53	82
60 to 89 Days Past Due [Member] | Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	60	11
60 to 89 Days Past Due [Member] | Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	148	131
60 to 89 Days Past Due [Member] | Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	165	81
60 to 89 Days Past Due [Member] | Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	133	76
90 Days or More Past Due [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	1,740	2,925
90 Days or More Past Due [Member] | Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	921	1,663
90 Days or More Past Due [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	153	193
90 Days or More Past Due [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	0	362
90 Days or More Past Due [Member] | Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	33	0
90 Days or More Past Due [Member] | Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	215	164
90 Days or More Past Due [Member] | Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	194	258
90 Days or More Past Due [Member] | Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	47	113
90 Days or More Past Due [Member] | Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	177	172
Loans Not Past Due [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	822,826	837,857
Loans Not Past Due [Member] | Residential Real Estate [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	270,078	300,474
Loans Not Past Due [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	70,931	50,197
Loans Not Past Due [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	176,000	164,067
Loans Not Past Due [Member] | Commercial Real Estate [Member] | Construction [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	33,596	36,981
Loans Not Past Due [Member] | Commercial and Industrial [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	140,733	156,405
Loans Not Past Due [Member] | Consumer [Member] | Automobile [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	47,208	54,021
Loans Not Past Due [Member] | Consumer [Member] | Home Equity [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	22,128	19,595
Loans Not Past Due [Member] | Consumer [Member] | Other [Member]
Aging of Recorded Investment in Past Due Loans by Class of Loans [Abstract]
Total loans balance	$ 62,152	$ 56,117

XML

Loans and Allowance for Loan Losses, TDR Loan Modifications (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Loan	Dec. 31, 2020 USD ($) Loan
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	$ 4,784	$ 7,213
Specific allocations in reserves to customers	0	0
Commitments to lend additional amounts to customers	$ 3,199	$ 1,100
Number of TDRs occurred | Loan	0	0
Aggregate loan balances	$ 824,708	$ 841,504
TDR recorded investment	$ 23,171	16,624
CARES Act [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Total number of loans modified related to COVID 19 | Loan	655
Total Loans Modified, Non-trouble Debt Restructuring	$ 124,657
Number of remaining loans modified related to COVID 19 | Loan	30
Aggregate loan balances	$ 374
Aggregate loan amount that are reviewed risk categories	1,000
Residential Real Estate [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring		202
Commercial Real Estate [Member] | Owner-occupied [Member] | Reduction of Principal and Interest Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	1,455	1,486
Commercial Real Estate [Member] | Owner-occupied [Member] | Maturity Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	268	351
Commercial Real Estate [Member] | Owner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	375	384
Commercial Real Estate [Member] | Nonowner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	385	390
Commercial and Industrial [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	2,301	4,400
Performing to Modified Terms [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	4,784	7,213
Performing to Modified Terms [Member] | Residential Real Estate [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring		202
Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Reduction of Principal and Interest Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	1,455	1,486
Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Maturity Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	268	351
Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	375	384
Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	385	390
Performing to Modified Terms [Member] | Commercial and Industrial [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	2,301	4,400
Not Performing to Modified Terms [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	0	0
Not Performing to Modified Terms [Member] | Residential Real Estate [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring		0
Not Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Reduction of Principal and Interest Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	0	0
Not Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Maturity Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	0	0
Not Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Owner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	0	0
Not Performing to Modified Terms [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member] | Credit Extension at Lower Stated Rate than Market Rate [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	0	0
Not Performing to Modified Terms [Member] | Commercial and Industrial [Member] | Interest Only Payments [Member]
Troubled Debt Restructuring Loan Modifications [Abstract]
Troubled Debt Restructuring	$ 0	$ 0

XML

Loans and Allowance for Loan Losses, Risk Category of Commercial Loans by Class of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loans Receivable [Abstract]
Loans receivable	$ 831,191	$ 848,664
Commercial Real Estate [Member]
Loans Receivable [Abstract]
Loans receivable	281,797	253,449
Commercial Real Estate [Member] | Owner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	71,979	51,863
Commercial Real Estate [Member] | Nonowner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	176,100	164,523
Commercial Real Estate [Member] | Construction [Member]
Loans Receivable [Abstract]
Loans receivable	33,718	37,063
Commercial and Industrial [Member]
Loans Receivable [Abstract]
Loans receivable	141,525	157,692
Commercial [Member]
Loans Receivable [Abstract]
Loans receivable	423,322	411,141
Pass [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	66,999	46,604
Pass [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	175,901	160,324
Pass [Member] | Commercial Real Estate [Member] | Construction [Member]
Loans Receivable [Abstract]
Loans receivable	33,685	37,063
Pass [Member] | Commercial and Industrial [Member]
Loans Receivable [Abstract]
Loans receivable	134,983	150,786
Pass [Member] | Commercial [Member]
Loans Receivable [Abstract]
Loans receivable	411,568	394,777
Criticized [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	618	669
Criticized [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	0	3,629
Criticized [Member] | Commercial Real Estate [Member] | Construction [Member]
Loans Receivable [Abstract]
Loans receivable	0	0
Criticized [Member] | Commercial and Industrial [Member]
Loans Receivable [Abstract]
Loans receivable	1,862	2,064
Criticized [Member] | Commercial [Member]
Loans Receivable [Abstract]
Loans receivable	2,480	6,362
Classified [Member] | Commercial Real Estate [Member] | Owner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	4,362	4,590
Classified [Member] | Commercial Real Estate [Member] | Nonowner-occupied [Member]
Loans Receivable [Abstract]
Loans receivable	199	570
Classified [Member] | Commercial Real Estate [Member] | Construction [Member]
Loans Receivable [Abstract]
Loans receivable	33	0
Classified [Member] | Commercial and Industrial [Member]
Loans Receivable [Abstract]
Loans receivable	4,680	4,842
Classified [Member] | Commercial [Member]
Loans Receivable [Abstract]
Loans receivable	$ 9,274	$ 10,002

XML

Loans and Allowance for Loan Losses, Recorded Investment of Residential and Consumer Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loans Receivable [Abstract]
Loans receivable	$ 831,191	$ 848,664
Percentage of unsecured loans	4.45%	4.22%
Consumer [Member]
Loans Receivable [Abstract]
Loans receivable	$ 133,444	$ 132,045
Consumer [Member] | Automobile [Member]
Loans Receivable [Abstract]
Loans receivable	48,206	55,241
Consumer [Member] | Home Equity [Member]
Loans Receivable [Abstract]
Loans receivable	22,375	19,993
Consumer [Member] | Other [Member]
Loans Receivable [Abstract]
Loans receivable	62,863	56,811
Residential Real Estate [Member]
Loans Receivable [Abstract]
Loans receivable	274,425	305,478
Consumer and Residential [Member]
Loans Receivable [Abstract]
Loans receivable	407,869	437,523
Performing [Member] | Consumer [Member] | Automobile [Member]
Loans Receivable [Abstract]
Loans receivable	48,004	54,966
Performing [Member] | Consumer [Member] | Home Equity [Member]
Loans Receivable [Abstract]
Loans receivable	22,227	19,783
Performing [Member] | Consumer [Member] | Other [Member]
Loans Receivable [Abstract]
Loans receivable	62,686	56,639
Performing [Member] | Residential Real Estate [Member]
Loans Receivable [Abstract]
Loans receivable	271,732	300,095
Performing [Member] | Consumer and Residential [Member]
Loans Receivable [Abstract]
Loans receivable	404,649	431,483
Nonperforming [Member] | Consumer [Member] | Automobile [Member]
Loans Receivable [Abstract]
Loans receivable	202	275
Nonperforming [Member] | Consumer [Member] | Home Equity [Member]
Loans Receivable [Abstract]
Loans receivable	148	210
Nonperforming [Member] | Consumer [Member] | Other [Member]
Loans Receivable [Abstract]
Loans receivable	177	172
Nonperforming [Member] | Residential Real Estate [Member]
Loans Receivable [Abstract]
Loans receivable	2,693	5,383
Nonperforming [Member] | Consumer and Residential [Member]
Loans Receivable [Abstract]
Loans receivable	$ 3,220	$ 6,040

XML

Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Premises and Equipment [Abstract]
Premises and equipment, gross	$ 35,860	$ 34,994
Less accumulated depreciation	15,130	13,682
Total premises and equipment	20,730	21,312
Premises and Equipment Held for Sale [Abstract]
Premises and equipment held for sale, Gross	492	717
Less accumulated depreciation	54	80
Total premises and equipment held for sale	438	637
Land [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	2,570	2,719
Premises and Equipment Held for Sale [Abstract]
Premises and equipment held for sale, Gross	105	153
Buildings [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	22,360	22,081
Premises and Equipment Held for Sale [Abstract]
Premises and equipment held for sale, Gross	387	564
Leasehold Improvements [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	1,402	1,302
Furniture and Equipment [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	$ 9,528	$ 8,892

XML

Leases, Balance Sheet Information (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Balance Sheet Information Related to Leases [Abstract]
Operating lease right-of-use assets	$ 1,195	$ 880
Operating lease liabilities	$ 1,195	$ 880

XML

Leases, Components of Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Lease, Cost [Abstract]
Operating lease cost	$ 161	$ 170
Short-term lease expense	$ 36	$ 31

XML

Leases, Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
2022	$ 168
2023	127
2024	106
2025	106
2026	107
Thereafter	866
Total lease payments	1,480
Less: Imputed Interest	(285)
Total operating leases	$ 1,195	$ 880

XML

Leases, Other Information (Details)	Dec. 31, 2021	Dec. 31, 2020
Other Information [Abstract]
Weighted-average remaining lease term for operating leases	13 years 8 months 12 days	9 years 7 months 6 days
Weighted-average discount rate for operating leases	2.29%	2.79%

XML

Goodwill and Intangible Assets, Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Gross Carrying Amount [Abstract]
Goodwill	$ 7,319	$ 7,319
Goodwill impairment	$ 0	$ 0

XML

Goodwill and Intangible Assets, Acquired Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Acquired Intangible Assets [Abstract]
Aggregate amortization expense	$ 48	$ 62
Core Deposits Intangibles [Member]
Acquired Intangible Assets [Abstract]
Gross Carrying Amount	738	738
Accumulated Amortization	$ 674	$ 626

XML

Goodwill and Intangible Assets, Future Estimated Amortization Expense (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Estimated Amortization Expense [Abstract]
2022	$ 35
2023	21
2024	8
2025	0
2026	0
Total	$ 64

XML

Deposits, Interest-Bearing Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Interest-bearing Deposits [Abstract]
NOW accounts	$ 205,362	$ 185,364
Savings and Money Market	311,686	286,937
Time [Abstract]
In denominations of $250,000 or less	147,000	165,834
In denominations of more than $250,000	42,282	40,827
Total time deposits	189,282	206,661
Total interest-bearing deposits	$ 706,330	$ 678,962

XML

Deposits, Time Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Maturities of Time Deposits [Abstract]
2022	$ 138,738
2023	41,386
2024	5,529
2025	1,329
2026	1,932
Thereafter	368
Total time deposits	189,282	$ 206,661
Brokered deposits	$ 11,438	$ 18,834

XML

Interest Rate Swaps (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Interest Rate Swaps [Abstract]
Derivative asset, notional amount	$ 13,843	$ 10,967
Derivative asset, fair value	583	913
Derivative liability, fair value	583	913
Collateral deposits	$ 600	$ 1,250

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Other Borrowed Funds (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Promissorynote	Dec. 31, 2020 USD ($)
Other Borrowed Funds [Abstract]
Other borrowings	$ 19,614	$ 27,863
FHLB Advances - variable rate loans	0
Cash management advances, maximum borrowing amount	$ 100,000
Cash management advances, maturity period	90 days
Number of promissory notes payable to related parties | Promissorynote	6
Scheduled Repayments of FHLB Advances [Abstract]
2022	$ 3,140
2023	2,891
2024	1,693
2025	1,560
2026	1,434
Thereafter	8,896
Other borrowings	$ 19,614	$ 27,863
Minimum [Member]
Other Borrowed Funds [Abstract]
Fixed-rate FHLB advances interest rate	1.53%
Maximum [Member]
Other Borrowed Funds [Abstract]
Fixed-rate FHLB advances interest rate	2.97%
Weighted Average [Member]
Other Borrowed Funds [Abstract]
Fixed-rate FHLB advances interest rate	2.39%	2.40%
Mortgage Loans [Member]
Other Borrowed Funds [Abstract]
Collateral pledged for FHLB Advances	$ 265,850
Commercial Loans [Member]
Other Borrowed Funds [Abstract]
Collateral pledged for FHLB Advances	37,091
FHLB Stock [Member]
Other Borrowed Funds [Abstract]
Collateral pledged for FHLB Advances	5,125
Cash management advances, maximum borrowing amount	176,096
Cash management advances, available borrowing amount	90,241
FHLB Borrowings [Member]
Other Borrowed Funds [Abstract]
Other borrowings	17,476	$ 24,665
Scheduled Repayments of FHLB Advances [Abstract]
2022	2,109
2023	1,784
2024	1,693
2025	1,560
2026	1,434
Thereafter	8,896
Other borrowings	17,476	24,665
Promissory Notes [Member]
Other Borrowed Funds [Abstract]
Other borrowings	$ 2,138	$ 3,198
Maturity date of promissory notes issued	Mar. 13, 2023
Weighted average interest rate	1.23%	2.20%
Notes payable to related parties	$ 2,138
Notes payable to other banks	0	$ 0
Scheduled Repayments of FHLB Advances [Abstract]
2022	1,031
2023	1,107
2024	0
2025	0
2026	0
Thereafter	0
Other borrowings	$ 2,138	3,198
Promissory Notes [Member] | Minimum [Member]
Other Borrowed Funds [Abstract]
Interest rate	1.00%
Promissory Notes [Member] | Maximum [Member]
Other Borrowed Funds [Abstract]
Interest rate	1.30%
FHLB Line of Credit [Member]
Other Borrowed Funds [Abstract]
Letters of credit issued	$ 68,380	$ 76,740

XML

Subordinated Debentures and Trust Preferred Securities (Details) - USD ($) $ in Thousands			12 Months Ended
	Mar. 15, 2012	May 22, 2007	Dec. 31, 2021	Dec. 31, 2020
Subordinated Debentures and Trust Preferred Securities [Abstract]
Proceeds from issuance of adjustable rate trust preferred securities		$ 8,500
Interest rate		6.58%	1.88%	1.90%
Interest payable term			5 years
Term of variable rate			3 months
Debt issuance costs			$ 0	$ 0
Subordinated debentures must be redeemed no later than			Jun. 15, 2037
Trust preferred securities deferrable period for not considering default			5 years
3-month LIBOR [Member]
Subordinated Debentures and Trust Preferred Securities [Abstract]
Basis spread on variable rate	1.68%

XML

Income Taxes, Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Provision for Income Taxes [Abstract]
Current tax expense		$ 2,414	$ 2,036
Deferred tax (benefit) expense		(130)	12
Total income taxes	[1]	$ 2,284	$ 2,048

[1] Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

XML

Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Items Giving Rise to Deferred Tax Assets [Abstract]
Allowance for loan losses	$ 1,410	$ 1,557
Deferred compensation	2,007	1,822
Deferred loan fees/costs	148	136
Other real estate owned	0	1
Accrued bonus	286	212
Purchase accounting adjustments	2	18
Net operating loss	82	99
Lease liability	324	235
Nonaccrual interest income	174	0
Other	275	339
Items Giving Rise to Deferred Tax Liabilities [Abstract]
Mortgage servicing rights	(104)	(100)
FHLB stock dividends	(676)	(676)
Unrealized gain on securities available for sale	(188)	(647)
Prepaid expenses	(205)	(202)
Depreciation and amortization	(783)	(894)
Right-of-use asset	(324)	(235)
Net deferred tax asset	2,428	$ 1,665
Operating Loss Carryforwards [Abstract]
Operating loss carryforwards	$ 391
Operating loss carryforwards, expiration date	Dec. 31, 2026

XML

Income Taxes, Income Tax Reconciliation (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Income Taxes [Abstract]
Federal income tax rate		21.00%	21.00%
Reconciliation of Financial Statement Tax Provision [Abstract]
Statutory tax		$ 2,943	$ 2,584
Effect of nontaxable interest		(378)	(348)
Effect of nontaxable insurance premiums		(220)	(210)
Income from bank owned insurance, net		(168)	(161)
Effect of postretirement benefits		26	124
Effect of nontaxable life insurance death proceeds		(10)	0
Effect of state income tax		150	125
Tax credits		(72)	(102)
Other items		13	36
Total income taxes	[1]	$ 2,284	$ 2,048
Effective income tax rate		16.30%	16.60%
Unrecognized tax benefits		$ 0	$ 0
Interest and/or penalties related to income tax		$ 0	$ 0
Open tax years		2018 2019 2020

[1] Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

XML

Commitments and Contingent Liabilities, Commitments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fixed Rate [Member] | Minimum [Member]
Commitments and conditional obligations [Abstract]
Interest rate	2.50%
Maturity period	15 years
Fixed Rate [Member] | Maximum [Member]
Commitments and conditional obligations [Abstract]
Interest rate	6.25%
Maturity period	30 years
Standby Letters of Credit [Member]
Commitments and conditional obligations [Abstract]
Commitments and conditional obligations	$ 3,659	$ 3,373
Standby Letters of Credit [Member] | Fixed Rate [Member]
Commitments and conditional obligations [Abstract]
Commitments and conditional obligations	1,014	1,127
Standby Letters of Credit [Member] | Variable Rate [Member]
Commitments and conditional obligations [Abstract]
Commitments and conditional obligations	$ 84,929	$ 83,956

XML

Related Party Transactions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Period	Dec. 31, 2020 USD ($)
Related Party Transactions [Abstract]
Minimum related party loan	$ 120
Loans and Leases Receivable, Related Parties [Roll Forward]
Total loans at January 1, 2020	2,729
New loans	16,401
Repayments	(472)
Other changes	(810)
Total loans at December 31, 2020	$ 17,848
Related Party Transactions [Abstract]
Number of reporting period of loan | Period	1
Principal Officers, Directors and their Affiliates [Member]
Related Party Transactions [Abstract]
Related party deposit liabilities	$ 110,405	$ 94,056
Directors and their Affiliates [Member]
Related Party Transactions [Abstract]
Notes payable to related parties	$ 2,138	$ 3,198
Directors and their Affiliates [Member] | Minimum [Member]
Related Party Transactions [Abstract]
Interest rate	1.00%
Debt instrument, term	12 months
Directors and their Affiliates [Member] | Maximum [Member]
Related Party Transactions [Abstract]
Interest rate	2.85%
Debt instrument, term	24 months

XML

Employee Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Employee Benefit Plans [Abstract]
Total number of shares held by ESOP (in shares)	292,680	298,294
Number of ESOP shares allocated (in shares)	292,680	298,294
ESOP [Abstract]
Number of shares issued (in shares)	0	0
Fair value of stock contributed	$ 0	$ 0
Cash contributed	580	614
Total expense	580	614
Cash surrender value of life insurance contracts	35,052
Cash surrender value of annuity assets	2,229
Expected payments of covered individuals	8,973	8,377
Deferred Profit Sharing [Member]
Employee Benefit Plans [Abstract]
Contributions charged to expense	265	242
Supplemental Employee Retirement Plan [Member]
ESOP [Abstract]
Expenses related to plan	830	743
Postretirement Benefit [Member]
ESOP [Abstract]
Total postretirement benefit	$ 3,843	$ 3,721

XML

Fair Value of Financial Instruments, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value of Financial Instruments [Abstract]
Selling costs percentage	10.00%
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Interest Rate Swap Derivatives [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	$ 0	$ 0
Liabilities, fair value	0	0
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government Sponsored Entity Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0	0
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Agency Mortgage-backed Securities, Residential [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0	0
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap Derivatives [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	599	928
Liabilities, fair value	(599)	(928)
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	20,143
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Sponsored Entity Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	25,916	18,153
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Agency Mortgage-backed Securities, Residential [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	130,941	94,169
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Swap Derivatives [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0	0
Liabilities, fair value	0	0
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Sponsored Entity Securities [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0	0
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Agency Mortgage-backed Securities, Residential [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	$ 0	$ 0

XML

Fair Value of Financial Instruments, Assets and Liabilities Measured on Nonrecurring Basis (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value		$ 0
Liabilities, fair value		$ 0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Impaired Loans [Member] | Commercial and Industrial [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	$ 0
Significant Other Observable Inputs (Level 2) [Member] | Impaired Loans [Member] | Commercial and Industrial [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	0
Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member] | Commercial and Industrial [Member]
Fair Value, Asset and Liabilities [Abstract]
Assets, fair value	$ 1,983

XML

Fair Value of Financial Instruments, Quantitative Information about Level 3 Inputs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Impaired loans measurement [Abstract]
Impaired financing receivable, with related allowance, recorded investment	$ 1,993	$ 0
Impaired financing receivable, related allowance	10
Financing receivable, provision expense	10	0
Financing receivable, charge-offs	0
Other real estate	0	0
Other real estate, write-down	0	$ 0
Commercial and Industrial [Member]
Impaired loans measurement [Abstract]
Impaired financing receivable, with related allowance, recorded investment	1,993
Impaired financing receivable, related allowance	10
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Commercial and Industrial [Member]
Significant Unobservable Inputs Related to Assets and Liabilities Measured at Fair Value [Abstract]
Impaired loans, fair value	$ 1,983
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Commercial and Industrial [Member] | Adjustment to Comparables and Equipment Comparables [Member] | Sales Approach [Member] | Minimum [Member]
Significant Unobservable Inputs Related to Assets and Liabilities Measured at Fair Value [Abstract]
Impaired loans, measurement inputs	0
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Commercial and Industrial [Member] | Adjustment to Comparables and Equipment Comparables [Member] | Sales Approach [Member] | Maximum [Member]
Significant Unobservable Inputs Related to Assets and Liabilities Measured at Fair Value [Abstract]
Impaired loans, measurement inputs	0.25
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Commercial and Industrial [Member] | Adjustment to Comparables and Equipment Comparables [Member] | Sales Approach [Member] | Weighted Average [Member]
Significant Unobservable Inputs Related to Assets and Liabilities Measured at Fair Value [Abstract]
Impaired loans, measurement inputs	0.185

XML

Fair Value of Financial Instruments, Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Financial Assets [Abstract]
Securities available for sale	$ 177,000	$ 112,322
Carrying Amount [Member]
Financial Assets [Abstract]
Cash and cash equivalents	152,034	138,303
Certificates of deposit in financial institutions	2,329	2,500
Securities available for sale	177,000	112,322
Securities held to maturity	10,294	10,020
Loans, net	824,708	841,504
Interest rate swap derivatives	599	928
Accrued interest receivable	2,695	3,319
Financial Liabilities [Abstract]
Deposits	1,059,908	993,739
Other borrowed funds	19,614	27,863
Subordinated debentures	8,500	8,500
Interest rate swap derivatives	599	928
Accrued interest payable	439	1,100
Estimated Fair Value [Member]
Financial Assets [Abstract]
Cash and cash equivalents	152,034	138,303
Certificates of deposit in financial institutions	2,329	2,500
Securities available for sale	177,000	112,322
Securities held to maturity	10,450	10,344
Loans, net	821,899	837,387
Interest rate swap derivatives	599	928
Accrued interest receivable	2,695	3,319
Financial Liabilities [Abstract]
Deposits	1,060,422	995,630
Other borrowed funds	20,279	29,807
Subordinated debentures	5,657	5,556
Interest rate swap derivatives	599	928
Accrued interest payable	439	1,100
Estimated Fair Value [Member] | Level 1 [Member]
Financial Assets [Abstract]
Cash and cash equivalents	152,034	138,303
Certificates of deposit in financial institutions	0	0
Securities available for sale	0	0
Securities held to maturity	0	0
Loans, net	0	0
Interest rate swap derivatives	0	0
Accrued interest receivable	0	0
Financial Liabilities [Abstract]
Deposits	870,626	787,078
Other borrowed funds	0	0
Subordinated debentures	0	0
Interest rate swap derivatives	0	0
Accrued interest payable	1	1
Estimated Fair Value [Member] | Level 2 [Member]
Financial Assets [Abstract]
Cash and cash equivalents	0	0
Certificates of deposit in financial institutions	2,329	2,500
Securities available for sale	177,000	112,322
Securities held to maturity	6,063	4,989
Loans, net	0	0
Interest rate swap derivatives	599	928
Accrued interest receivable	363	283
Financial Liabilities [Abstract]
Deposits	189,796	208,552
Other borrowed funds	20,279	29,807
Subordinated debentures	5,657	5,556
Interest rate swap derivatives	599	928
Accrued interest payable	438	1,099
Estimated Fair Value [Member] | Level 3 [Member]
Financial Assets [Abstract]
Cash and cash equivalents	0	0
Certificates of deposit in financial institutions	0	0
Securities available for sale	0	0
Securities held to maturity	4,387	5,355
Loans, net	821,899	837,387
Interest rate swap derivatives	0	0
Accrued interest receivable	2,332	3,036
Financial Liabilities [Abstract]
Deposits	0	0
Other borrowed funds	0	0
Subordinated debentures	0	0
Interest rate swap derivatives	0	0
Accrued interest payable	$ 0	$ 0

XML

Regulatory Matters (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Classification	Dec. 31, 2020 USD ($)
Regulatory Matters [Abstract]
Number of classifications of prompt corrective action regulations | Classification	5
Tier 1 capital (to average assets) [Abstract]
Minimum assets SBHCP requires	$ 12,747
Bank [Member]
Tier 1 capital (to average assets) [Abstract]
Actual Amount	$ 126,201	$ 120,989
Actual Ratio	0.103	0.107
To Be Well Capitalized Under Prompt Corrective Action Regulations Amount	$ 104,387	$ 90,407
To Be Well Capitalized Under Prompt Corrective Action Regulations Ratio	0.085	0.080

XML

Parent Company Only Condensed Financial Information, Condensed Statements of Condition (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Assets [Abstract]
Cash and cash equivalents	$ 152,034	$ 138,303
Other assets	6,402	5,150
Total assets	1,249,769	1,186,932
Liabilities [Abstract]
Subordinated debentures	8,500	8,500
Other liabilities	19,196	19,626
Total liabilities	1,108,413	1,050,608
Shareholders' Equity [Abstract]
Total shareholders' equity	141,356	136,324	$ 128,179
Total liabilities and shareholders' equity	1,249,769	1,186,932
Parent Company [Member]
Assets [Abstract]
Cash and cash equivalents	5,366	4,112	$ 4,308
Investment in subsidiaries	147,214	143,424
Notes receivable - subsidiaries	2,123	1,603
Other assets	38	32
Total assets	154,741	149,171
Liabilities [Abstract]
Notes payable	2,138	3,198
Subordinated debentures	8,500	8,500
Other liabilities	2,747	1,149
Total liabilities	13,385	12,847
Shareholders' Equity [Abstract]
Total shareholders' equity	141,356	136,324
Total liabilities and shareholders' equity	$ 154,741	$ 149,171

XML

Parent Company Only Condensed Financial Information, Condensed Statements of Income (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Income [Abstract]
Dividends from subsidiaries		$ 231	$ 245
Expenses [Abstract]
Interest on subordinated debentures		158	208
Income tax benefit	[1]	(2,284)	(2,048)
NET INCOME		11,732	10,259
Comprehensive Income		10,004	12,167
Parent Company [Member]
Income [Abstract]
Interest on notes		20	41
Dividends from subsidiaries		6,650	4,125
Expenses [Abstract]
Interest on notes		31	82
Interest on subordinated debentures		158	208
Operating expenses		379	344
Income before income taxes and equity in undistributed earnings of subsidiaries		6,102	3,532
Income tax benefit		112	121
Equity in undistributed earnings of subsidiaries		5,518	6,606
NET INCOME		11,732	10,259
Comprehensive Income		$ 10,004	$ 12,167

[1] Effective income tax rates were 16.3% for 2021 and 16.6% for 2020

XML

Parent Company Only Condensed Financial Information, Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities [Abstract]
Net Income	$ 11,732	$ 10,259
Adjustments to reconcile net income to net cash provided by operating activities [Abstract]
Change in other assets	(1,079)	(408)
Net cash provided by operating activities	13,137	12,491
Cash flows from investing activities [Abstract]
Net cash provided by (used in) investing activities	(52,354)	(88,685)
Cash flows from financing activities [Abstract]
Purchases of treasury stock	(954)	0
Cash dividends paid	(4,018)	(4,022)
Net cash provided by financing activities	52,948	162,141
Cash and cash equivalents [Abstract]
Cash and cash equivalents at beginning of year	138,303
Cash and cash equivalents at end of year	152,034	138,303
Parent Company [Member]
Cash flows from operating activities [Abstract]
Net Income	11,732	10,259
Adjustments to reconcile net income to net cash provided by operating activities [Abstract]
Equity in undistributed earnings of subsidiaries	(5,518)	(6,606)
Change in other assets	(6)	16
Change in other liabilities	1,598	832
Net cash provided by operating activities	7,806	4,501
Cash flows from investing activities [Abstract]
Change in notes receivable	(520)	360
Net cash provided by (used in) investing activities	(520)	360
Cash flows from financing activities [Abstract]
Change in notes payable	(1,060)	(1,035)
Purchases of treasury stock	(954)	0
Cash dividends paid	(4,018)	(4,022)
Net cash provided by financing activities	(6,032)	(5,057)
Cash and cash equivalents [Abstract]
Change in cash and cash equivalents	1,254	(196)
Cash and cash equivalents at beginning of year	4,112	4,308
Cash and cash equivalents at end of year	$ 5,366	$ 4,112

XML

Segment Information (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Segment Information [Abstract]
Net interest income		$ 41,013	$ 39,982
Provision expense		(419)	2,980
Noninterest income		9,864	11,438
Noninterest expense		37,280	36,133
Tax expense	[1]	2,284	2,048
Net income		11,732	10,259
Assets		1,249,769	1,186,932
Banking [Member]
Segment Information [Abstract]
Net interest income		38,883	37,825
Provision expense		(500)	2,945
Noninterest income		8,831	10,344
Noninterest expense		34,847	33,693
Tax expense		2,149	1,886
Net income		11,218	9,645
Assets		$ 1,235,231	$ 1,173,820
Banking [Member] | Revenues [Member] | Customer Concentration Risk [Member]
Segment Information [Abstract]
Concentration percentage		94.10%	94.30%
Consumer Finance [Member]
Segment Information [Abstract]
Net interest income		$ 2,130	$ 2,157
Provision expense		81	35
Noninterest income		1,033	1,094
Noninterest expense		2,433	2,440
Tax expense		135	162
Net income		514	614
Assets		$ 14,538	$ 13,112

[1] Effective income tax rates were 16.3% for 2021 and 16.6% for 2020