Note J - Subordinated Debentures and Trust Preferred Securities

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Subordinated Borrowings Disclosure [Text Block]

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

2.64%

at

December

31,

2016

and

2.19%

at

December

31,

2015.

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.