OHIO VALLEY BANC CORP (OVBC)

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(dollars in thousands, except share and per share data)

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q (the “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 Exchange 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 current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking statements. However, it is difficult to predict the effect of known factors,
and Ohio Valley Banc Corp. (“Ohio Valley”) cannot anticipate all factors that could affect future results. Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements
include, but are not limited to: the effects of fluctuating interest rates on our customers’ operations and financial condition; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs,
the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries
(collectively, 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, 2025 and
elsewhere in this document (including, without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”). All forward looking statements are qualified in their entirety by these and
other cautionary statements that the Company makes from time to time in its other SEC filings and public communications. 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 duty to update or revise any forward looking statements, whether as a result of new information, unanticipated future events or otherwise, except as required by applicable law.

BUSINESS OVERVIEW: The following discussion on consolidated
financial statements includes the accounts of Ohio Valley and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company (“Loan Central”), and Ohio Valley Financial Services Agency, LLC, an
insurance agency. The Bank has one active, wholly-owned subsidiary, Ohio Valley REO, LLC, an Ohio limited liability company.

The Company is primarily engaged in commercial and retail banking, 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 and commercial 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. Furthermore, the Bank offers 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.

FINANCIAL RESULTS OVERVIEW: Net income totaled $4,297 during the
first quarter of 2026, a decrease of $109 from the same period in 2025. Earnings per share for the first quarter of 2026 finished at $.91 per share, compared to $.94 per share during the first quarter of 2025. Lower net earnings had a corresponding
impact on the Company’s annualized net income to average asset ratio, or return on assets, which decreased 12 basis points to 1.08% during the first quarter of 2026, compared to the same period in 2025. In addition, the Company’s net income to average
equity ratio, or return on equity, decreased 165 basis points to 10.17% during the first quarter of 2026, compared to the same period in 2025.

Lower earnings during the first quarter of 2026 compared to the first quarter of 2025 were primarily impacted by a $1,206 increase in provision expense
caused by the collateral impairments of two commercial loan relationships. Lower earnings were also impacted by both noninterest income and noninterest expense. Noninterest income during the first quarter of 2026 decreased $358 compared to the same
period in 2025, impacted primarily by lower electronic refund check and deposit fees. Noninterest expense during the first quarter of 2026 increased $483 compared to the same period in 2025, impacted primarily by higher salaries and employee benefit
costs. These negative factors were partially offset by growth in net interest income, which increased $1,748 during the first quarter of 2026 over the same period in 2025, in large part due to an 8.6% increase in average earning assets and a 16 basis
point improvement to the quarterly net interest margin. Earning asset growth came largely from loans, the Company’s highest earning asset, while the yields on earning assets increased at a faster pace than the average costs on interest-bearing
liabilities.

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During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, over the same period in 2025. This increase was primarily
related to a $120,686 increase in average earning assets, led mostly by a 14.0% increase in average loans. The growth in average loans was related to the commercial and residential real estate lending segments. The emphasis on higher-yielding loan
growth during the first quarter of 2026 contributed to lower average securities and interest-bearing deposits with banks, which decreased 5.5% and 14.3%, respectively, compared to the same period in 2025. The decrease in average securities was also impacted by a reduced need for securities to be pledged as collateral to secure public fund deposits. Earnings were further enhanced by a higher net interest
margin, which finished at 4.01% at March 31, 2026 compared to 3.85% at March 31, 2025. Margin growth was related to an increase in the yield on earning assets, which outpaced the increase in average costs associated with the Company’s funding
sources. The improvement to earning asset yields was directly related to the growth in higher-yielding loans and a 59 basis point improvement in the average yield on securities. The growth in average securities yield was largely impacted by several
bond transactions that occurred in 2025 that replaced lower-yielding taxable securities with similar taxable securities at higher rates of return.  The cost of funding sources increased primarily within the Company’s Negotiable Order of Withdrawal
(“NOW”) and savings accounts, while the average cost on certificates of deposit (“CDs”) decreased.

During the three months ended March 31, 2026, the Company’s provision for credit loss expense increased $1,206 when compared to the same period in 2025. The
increase resulted primarily from a $2,031 specific allocation on two collateral dependent loans. This increase in reserves was partially offset by a decrease in certain qualitative risk factors and lower net charge offs.

During the three months ended March 31, 2026, noninterest income decreased $358, or 9.8%, from the same period in 2025. The decrease was primarily from
electronic refund check and deposit fees, which decreased $540 from 2025. This was due to the expiration of a tax processing agreement with a third party. Also contributing to the decrease was other noninterest income, which was down $68 from 2025,
impacted by less commercial loan servicing fees. The decreases were partially offset by a $138 increase in income from bank owned life insurance due to the receipt of life insurance proceeds and to the $86 increase in debit and credit card interchange
income.

During the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, over the same period in 2025. Noninterest expense was impacted
mostly by salaries and employee benefits, which increased $335 due to annual merit increases and higher health insurance premiums. Also increasing was software expense, which was up $132 over 2025, resulting from the investment in software to enhance
internal processes. Noninterest expense was further impacted by a $58 increase in FDIC insurance expense related to a higher assessment base and an increase in the assessment rate in relation to higher nonperforming loans.

The $190 decrease in the Company’s provision for income taxes during the three months ended March 31, 2026, compared to the same period in 2025, was largely
due to the decrease in operating income affected by the factors mentioned above, as well as a decrease in the effective tax rate.

At March 31, 2026, total assets were $1,677,502, an increase of $94,848 from year-end 2025. The increase in assets was primarily the result of a $78,020
increase in interest-bearing deposits with banks, and an $18,796 increase in loans. The increase in interest-bearing deposits with banks was primarily associated with balances maintained at the Federal Reserve Bank (“Federal Reserve”) that were
impacted by the first quarter growth in both interest- and noninterest-bearing deposit liabilities.

At March 31, 2026, total liabilities were $1,506,222, up $93,825 from year-end 2025. Contributing most to this increase were higher interest-bearing deposit
balances, up $75,378 from year-end 2025, consisting of higher balances from time deposits (+11.3%) and savings, NOW and money market balances (+3.8%), while noninterest-bearing demand deposits increased 5.9% from year-end 2025.

At March 31, 2026, total shareholders' equity was $171,280, up $1,023 from December 31, 2025. This increase consisted of year-to-date net income being
partially offset by an after-tax increase in net unrealized losses on AFS securities and year-to-date cash dividends paid. Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

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Comparison of Financial Condition

at March 31, 2026 and December 31, 2025

The following discussion focuses in more detail on the consolidated financial condition of the Company at March 31, 2026 compared to December 31, 2025.  This
discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Cash and Cash Equivalents

At March 31, 2026, cash and cash equivalents were $125,327, an increase of $79,430, or 173.1%, from December 31, 2025. The increase came primarily from
interest-bearing deposits with banks, which were up $78,020, or 251.3%, from year-end 2025. The Company’s interest-bearing FRB clearing account contributed most to the increase in interest

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