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Section 2 - Financial Information Item 2.02 . Results of Operations and Financial Condition - GALLIPOLIS , Ohio Ohio Valley Banc Corp. [ Nasdaq : OVBC ] ( the “ Company ” ) reported consolidated net income for the quarter ended June 30 , 2021 , of $ 2,861,000 , an increase of $ 598,000 , or 26.4 % , from the same period the prior year . Earnings per share for the second quarter of 2021 were $ .60 compared to $ .47 for the prior year second quarter . For the six months ended June 30 , 2021 , net income totaled $ 6,392,000 , an increase of $ 3,127,000 , or 95.8 % , from the same period the prior year . Earnings per share were $ 1.34 for the first six months of 2021 versus $ .68 for the first six months of 2020. Return on average assets and return on average equity were 1.06 % and 9.39 % , respectively , for the first half of 2021 , compared to .62 % and 5.07 % , respectively , for the same period in the prior year . Ohio Valley Banc Corp. Chairman and CEO , Tom Wiseman said , “ It is interesting to note the pandemic had such a brief yet impactful effect on the banking industry , whether through direct assistance programs like stimulus payments and PPP loans or through changes in habits such as heightened use of debit and credit cards due to contactless shopping and food ordering . As we move forward and things return to normal , managers at Ohio Valley Bank and Loan Central are innovating to reduce expenses and augment product lines . A great example of that is OVB's Capital Express accounts receivable financing , which assists local businesses by allowing them to borrow on outstanding invoices and improve their cash flow , all while making invoicing and bookkeeping a snap . Advancements like this are positively positioning the Company for the days ahead . " For the second quarter of 2021 , net interest income increased $ 420,000 , and for the six months ended June 30 , 2021 , net interest income increased $ 464,000 from the same respective periods last year . Contributing to the increase in net interest income was the growth in average earning assets , which was partially offset by a decrease in the net interest margin . For the six months ended June 30 , 2021 , average earning assets increased $ 158 million from the same period the prior year . The increase was partly due to average loans , which increased $ 60 million from the first half of last year in relation to higher commercial loan balances . In general , commercial loan demand has been positive in our markets , particularly in the counties of Pike and Athens in Ohio and Cabell County in West Virginia . Approximately $ 13 million of the growth in average loans was related to the Company's participation in the SBA's Paycheck Protection Program ( PPP ) to assist various businesses in our market during the pandemic . The loan fees earned in association with the PPP loans for the six months ended June 30 , 2021 totaled $ 593,000 , an increase of $ 522,000 from the same period the prior year . Also contributing to earning asset growth was the $ 71 million increase in average balances maintained at the Federal Reserve . In relation to the various stimulus payments received by customers , the Company experienced a significant increase in deposit balances and , to the extent those deposits are not invested in loans or investments , they are invested at the Federal Reserve to be readily available for future funding needs . The earnings contribution from the higher balance of earning assets was mostly offset by a decrease in the net interest margin . For the six months ended June 30 , 2021 , the net interest margin was 3.65 % , compared to 4.13 % for the same period the prior year . The decrease was primarily related to the actions taken by the Federal Reserve to reduce interest rates by 150 basis points in March of 2020. In relation to the decrease in market rates , the Company experienced a greater decrease in yield on earning assets than the average cost on interest - bearing liabilities . This trend was partly due to certain deposits already being at or near their interest rate floor , which limited the Company's ability to reduce deposit costs to the same magnitude as experienced on earning assets . Furthermore , the current rate on balances maintained at the Federal Reserve is .15 % and , when combined with the heightened balances , it has a dilutive effect on the net interest margin . For the three months ended June 30 , 2021 , the provision for loan losses totaled $ 27,000 an increase of $ 420,000 from the same period last year . The increase was primarily related to the reduction in specific reserves on collateral - dependent , impaired loans during the second quarter of 2020 that led to negative provision expense for that quarter . For the six months ended June 30 , 2021 , the provision for loan losses was negative $ 25,000 , a decrease of $ 3,478,000 from the same period last year . The decrease in provision for loan loss expense from the first half of 2020 was due to a decrease in net loan charge - offs of $ 1,408,000 and to a decrease in the provision expense associated with the establishment of an economic risk factor for the pandemic during the first quarter of 2020 , which resulted in additional provision expense of $ 1,942,000 in the first quarter of 2020. The allowance for loan losses was .80 % of total loans at June 30 , 2021 , compared to .84 % at December 31 , 2020 and .96 % at June 30 , 2020. The ratio of nonperforming loans to total loans improved to .77 % at June 30 , 2021 , compared to .82 % at December 31 , 2020 and 1.00 % at June 30 , 2020 . For the three months ended June 30 , 2021 , noninterest income totaled $ 2,506,000 , an increase of $ 257,000 from the same period last year . For the six months ended June 30 , 2021 , noninterest income totaled $ 5,845,000 , a decrease of $ 846,000 from the same period last year . The primary reason for the decrease in year - to - date noninterest income was due to the receipt of a $ 2,000,000 settlement payment from a third - party tax software product provider for early termination of its contract during the first quarter of 2020. 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. For the second quarter of 2021 , the Bank recognized $ 135,000 , and for the six months ended June 30 , 2021 , the Bank recognized $ 675,000 of additional income under the agreement . Also improving noninterest revenue was interchange income on debit and credit card transactions as customers increased spending . During the three months ended June 30 , 2021 , interchange income increased $ 243,000 and increased $ 350,000 , or 18.7 % , during the first half of 2021 , as compared to the same periods in 2020 , respectively . During 2021 , the Company has experienced lower mortgage banking income following the heightened refinance boom that occurred during 2020. As a result , mortgage banking income decreased $ 245,000 and $ 156,000 during the three and six months ended June 30 , 2021 , when compared to the same periods in 2020 , respectively . For the three months ended June 30 , 2021 , noninterest expense totaled $ 9,297,000 , a decrease of $ 305,000 from the same period last year . For the six months ended June 30 , 2021 , noninterest expense totaled $ 18,484,000 , a decrease of $ 637,000 , or 3.3 % , from the same period last year . The Company's largest noninterest expense , salaries and employee benefits , decreased $ 147,000 as compared to the second quarter of 2020 and decreased $ 332,000 as compared to the first half of 2020. The decrease was primarily related to the expense savings associated with a lower number of employees . Further contributing to lower noninterest expense was professional fees . For the three months and six months ended June 30 , 2021 , professional fees decreased $ 46,000 and $ 214,000 , respectively , from the same periods last year . The decrease was related to lower legal fees associated with collecting troubled loans . Partially offsetting the expense reductions above was an