OHIO VALLEY BANC CORPOVBC

OHIO VALLEY BANC CORP Income Taxes Disclosure

10-KFiled Mar 13, 20263 min read
Note K - Income Taxes

Income taxes paid pursuant to the adoption of ASU 2023-09, on a retrospective basis:

   
2025
    
2024
  
Federal
  
$
4,394
    
$
3,350
  
States
                
West Virginia
    275       235  
Foreign
    —       —  
Total
  
$
4,669
    
$
3,585
  



Pretax income is entirely related to domestic activities; the Company did not have any foreign operations.



The provision for income taxes from continuing operations consists of the following:

   
2025
    
2024
  
Current tax expense:
          
Federal
   $ 4,299     $ 3,200  
State
     393       357  
Total
     4,692       3,557  
Deferred tax (benefit) expense:
                
Federal
     (796 )     (1,030 )
State
     (45 )     (150 )
Total
     (841 )     (1,180 )
                 
Net provision for income taxes from continuing operations
  
$
3,851
    
$
2,377
  


The Company did not have any income tax expense (benefit) in foreign jurisdictions.



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:

    2025
     2024  
    Amount
     % of Pretax Income
    Amount
   
 % of Pretax Income
 
Taxes at federal statutory rate
   $
4,085
    

21.00
%
   $ 2,809       21.00 %
State and local income tax, net of federal income tax benefit (a)
    
274
      
1.41
%
     164       1.23 %
Tax credits:                                
Qualified zone academy bond credits
    
(31
)
    
(0.16
)%
     (24 )     (0.18 )%
Nontaxable or nondeductible items:
                                
Tax-exempt income, net    
(420
)
    
(2.16
)%
     (422 )     (3.15 )%
Bank owned life insurance
    
(174
)
    
(0.89
)%
     (186 )     (1.39 )%
Other
     20       0.10 %     17       0.13 %
Other adjustments
     97       0.50 %     19       0.13 %
Total income taxes
  
$
3,851
      
19.80
%
   $ 2,377       17.77 %

(a) State taxes in West Virginia made up the majority (greater than 50%) of the tax effect in this category.


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

   
2025
    
2024
  
Items giving rise to deferred tax assets:
            
Other reserves
   $ 193     $ 130  
Allowance for credit losses
    
2,552
      
2,240
  
Unrealized loss on securities available for sale
     528       2,966  
Deferred compensation
    
2,456
      
2,295
  
Deferred loan fees/costs
    
198
      
172
  
Accrued bonus
    
333
      
325
  
Purchase accounting adjustments
    
61
      
62
  
Net operating loss
    
16
      
32
  
Lease liability
    
267
      
293
  
Nonaccrual interest income
     199       109  
Other
    
210
      
58
  
Items giving rise to deferred tax liabilities:
                
Mortgage servicing rights
    
(71
)
    
(79
)
FHLB stock dividends
    
(433
)
    
(434
)
Prepaid expenses
    
(33
)
    
(33
)
Depreciation and amortization
    
(307
)
    
(344
)
Right-of-use asset
    
(267
)
    
(293
)
Other
     (281 )     (281 )
Net deferred tax asset
  
$
5,621
    
$
7,218
  


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, 2025, the Company’s deferred tax asset related to Section 382 net operating loss carryforwards was $76, which will expire in 2026.



At December 31, 2025 and December 31, 2024, the Company had no unrecognized tax benefits. The Company is subject to federal income tax as well as West Virginia state income tax. The Company is no longer subject to federal or state examinations for years prior to 2022.

Historical Timeline

Fiscal YearFiled
2025Mar 13, 2026Showing above
2024Mar 14, 2025
2023Mar 15, 2024
2022Mar 23, 2023
2021Mar 17, 2022
2020Mar 24, 2021
2019Mar 16, 2020
2018Mar 18, 2019
2017Mar 16, 2018
2016Mar 16, 2017
2015Mar 15, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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