Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

BASIS OF PRESENTATION

:

The accompanying consolidated financial statements include the accounts of Ohio Valley Banc Corp. (“Ohio Valley”) and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc. (“Loan Central”), a consumer finance company, Ohio Valley Financial Services Agency, LLC, an insurance agency, and OVBC Captive, Inc. (the “Captive”), a limited purpose property and casualty insurance company. The Bank has

one

wholly-owned subsidiary, 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”. All material intercompany accounts and transactions have been eliminated in consolidation.

These interim financial statements are prepared by the Company without audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at

March 31, 2020,

and its results of operations and cash flows for the periods presented. The results of operations for the

three

months ended

March 31, 2020

are

not

necessarily indicative of the operating results to be anticipated for the full fiscal year ending

December 31, 2020.

The accompanying consolidated financial statements do

not

purport to contain all the necessary financial disclosures required by U.S. generally accepted accounting principles (“US GAAP”) that might otherwise be necessary in the circumstances. The Annual Report of the Company for the year ended

December 31, 2019

contains consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements.

The consolidated financial statements for

2019

have been reclassified to conform to the presentation for

2020.

  These reclassifications had

no

effect on net income or shareholders’ equity.

Effect of Covid-19 Pandemic, Policy [Policy Text Block]

RECENT EVENTS:

  In

March 2020,

the World Health Organization declared the outbreak of the coronavirus (“COVID-

19”

) as a global pandemic, which continues to spread throughout the United States and around the world. COVID-

19

has negatively impacted the global economy, disrupted global supply chains and increased unemployment levels. The resulting temporary closure of many businesses and the implementation of social distancing and sheltering-in-place policies has, and

may

continue to impact, many of the Company’s customers. While the full effects of the pandemic remain unknown, the Company is committed to supporting its customers, employees and communities during this difficult time.

On

March 27, 2020,

the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. Certain provisions within the CARES Act encourage financial institutions to practice prudent efforts to work with borrowers impacted by COVID-

19.

Under these provisions, modifications deemed to be COVID-

19

-related would

not

be considered a troubled debt restructuring if the loan was

not

more than

30

days past due as of

December 31, 2019

and the deferral was executed between

March 1, 2020

and the earlier of

60

days after the date of termination of the COVID-

19

national emergency or

December 31, 2020.

Also under the CARE Act, the Bank is a lender for the Small Business Administration's (“SBA”) Paycheck Protection Program ("PPP"), a program that provides assistance to small businesses. The PPP provides small businesses with funds to pay up to

8

weeks of payroll costs, including benefits. The funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities. The payments on these loans will be deferred for

six

months. Forgiveness of the PPP loans is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.

Use of Estimates, Policy [Policy Text Block]

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:

  The accounting and reporting policies followed by the Company conform to US GAAP established by the Financial Accounting Standards Board (“FASB”). The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

The potential financial impact of COVID-

19

is unknown at this time. However, if these actions are sustained, it

may

adversely impact several industries within our geographic footprint and impair the ability of our customers to fulfill their contractual obligations to the Company. This could cause the Company to experience a material adverse effect on our business operations, asset valuations, financial condition, and results of operations. Effects

may

include:

● The provision for loan losses could increase. Continued uncertainty regarding the severity and duration of the COVID- 19 pandemic and related economic effects will continue to affect the accounting for loan losses. It also is possible that asset quality could worsen, and loan charge-offs increase. The Company is actively participating in the PPP program providing loans to small businesses negatively impacted by the COVID- 19 pandemic. PPP loans are fully guaranteed by the U.S. government, if that should change, the Company could be required to increase its allowance for loan losses through an additional provision for loan losses charged to earnings.

● Valuation and fair value measurement challenges may occur. Material adverse impacts may include all or a combination of valuation impairments on the Company’s securities, impaired loans, other real estate owned, and interest rate swap agreements.

Segment Reporting, Policy [Policy Text Block]

INDUSTRY SEGMENT INFORMATION:

Internal financial information is primarily reported and aggregated in

two

lines of business: banking and consumer finance.

Earnings Per Share, Policy [Policy Text Block]

EARNINGS PER SHARE

:

Earnings per share are computed based on net income divided by the weighted average number of common shares outstanding during the period. The weighted average common shares outstanding were

4,787,446

and

4,748,474

for the

three

months ended

March 31, 2020

and

2019,

respectively. Ohio Valley had

no

dilutive effect and

no

potential common shares issuable under stock options or other agreements for any period presented.

New Accounting Pronouncements, Policy [Policy Text Block]

ADOPTION OF NEW ACCOUNTING STANDARD UPDATES (“ASU”):

In

August 2018,

the FASB issued ASU

2018

-

13,

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will

no

longer be required to disclose the amount of and reasons for transfers between Level

1

and Level

2

of the fair value hierarchy but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level

3

fair value measurements. ASU

2018

-

13

is effective for interim and annual reporting periods beginning after

December 15, 2019,

and early adoption is permitted. For non-public entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The adoption of this ASU did

not

have a material impact on the Company’s consolidated financial position or results of operations.

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. A 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.  At this time, the impact is being evaluated. On

October 16, 2019,

the FASB confirmed it would delay the effective date of this ASU for smaller reporting companies, such as the Company, until fiscal years beginning after

December 15, 2022.