SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 January 18, 2002 (January 17, 2002) Date of Report (Date of earliest event reported) OHIO VALLEY BANC CORP (Exact name of registrant as specified in its charter) Ohio (State or other jurisdiction of incorporation) 0-20914 31-1359191 (Commission file number) (IRS Employer Identification Number) 420 Third Avenue, Gallipolis, Ohio 45631 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (740) 446-2631 Not Applicable (Former name or former address, if changed since last report.) Exhibit Index at Page 4. Item 1. Changes in Control of Registrant. Not applicable. Item 2. Acquisition or Disposition of Assets. Not applicable. Item 3. Bankruptcy or Receivership. Not applicable. Item 4. Changes in Registrant's Certifying Accountant. Not applicable. Item 5. Other Events. On January 17, 2002, Ohio Valley Banc Corp issued a news release announcing its earnings for the fourth quarter and three months ended December 31, 2001. The information contained in the news release, which is attached as Exhibit 99 to this Form 8-K, is incorporated herein by this reference. Item 6. Resignations of Registrant's Directors. Not applicable. Item 7. Financial Statements and Exhibits. (a) Financial statements of business acquired: Not applicable. (b) Pro forma financial information: Not applicable. (c) Exhibits: 99 Press release of Ohio Valley Banc Corp dated January 17, 2002, announcing the company's earnings for the fourth quarter and twelve months ended December 31, 2001. Item 8. Change in Fiscal Year. Not applicable. Item 9. Sales of Equity Securities Pursuant to Regulation S. Not applicable. Page 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OHIO VALLEY BANC CORP Date: January 18, 2002 By /s/ Jeffrey E. Smith ------------------------------- Jeffrey E. Smith, President and Chief Executive Officer Page 3 EXHIBIT INDEX Exhibit Number Description -------------- ----------- 99 Press release of Ohio Valley Banc Corp dated January 17, 2002, announcing the company's earnings for the fourth quarter and twelve months ended December 31, 2001. Page 4 Exhibit 99 OHIO VALLEY BANC CORP ANNOUNCES RECORD EARNINGS Gallipolis, Ohio, January 17, 2002 Ohio Valley Banc Corp today reported consolidated net earnings for the year ended December 31, 2001 of $4.90 million representing an 11.3% increase over the $4.40 million for the same time period a year ago. Consolidated net earnings on a per share basis were $1.41, a 12.8% increase over the $1.25 for the same period ending December 31, 2000. For the three months ended December 31, 2001, consolidated net income was $1.41 million, a 12.3% increase over the $1.26 million for the quarter ended December 31, 2000. Net earnings per share for the fourth quarter of 2001 ending December 31 were $.41, a 13.9% increase compared to the $.36 earned in the same period in 2000. Comparing the Company's return on equity (ROE) and return on assets (ROA) for the year 2001 to 2000, both measures improved. ROE was 10.80% and ROA was .83% for the current year as compared to a ROE of 10.29% and a ROA of .81% for the prior year. The earnings performance improved over the prior year due to a combination of a 10.5% increase in net interest income and a 32.9% increase in noninterest income. Net interest income benefited from the decline in interest rates that occurred throughout 2001. The Company's net interest margin improved from 4.21% in 2000 to 4.29% in 2001. The increase in the net interest margin was evident by total interest income growth of 5.3% or $2.4 million over 2000 versus total interest expense growth of .7% or $.2 million. "We are pleased with the growth in net interest income, and are equally pleased with the performance of its investments in insurance subsidiaries: Profinance Holdings Corporation, BSG Title Services Agency, LLC and Ohio Valley Financial Services Agency, LLC", commented Jeffrey E. Smith, President and Chief Executive Officer of Ohio Valley Banc Corp. "These investments have been a significant source of noninterest income growth and have benefited from the hardening insurance markets as well as the significant mortgage refinancing activity that has taken place in the last year." These new sources of income when combined with the growth in traditional banking services, such as service charges on deposit accounts, increased the Company's noninterest income by $1.3 million over the previous year. On a year-to-date basis, noninterest expense totaled $18.2 million in 2001, an increase of $1.2 million or 7.0%. Contributing the most to this increase was salary and employee benefits, which are up $.5 million over 2000. The increase was affected by annual merit increases, rising benefit costs and increases to incentive compensation plans based on improved earnings. The Company's efficiency ratio improved over last year as a result of the growth in revenue sources (net interest income and noninterest income) outpacing the growth in noninterest expense. The efficiency ratio for 2001 improved to 62.5% from 66.3% in 2000. For 2001, the Company's provision for loan losses increased $1.6 million in relation to an increase in net charge-offs of $1.1 million. Consumer and commercial loans comprised the largest portion of net charge-offs. During 2001, management has strived to improve the Company's asset quality. At year end 2001, nonperforming loans as a percent of total loans was 1.24% compared to 1.48% at year end 2000. At December 31, 2001, the allowance for loan losses totaled $6.3 million, or 1.23% of total loans, up $.9 million from year end 2000 when the allowance was 1.20% of total loans. Management increased the allowance as a percent of total loans based on a general decline in economic conditions and feels that the allowance for loan losses is adequate to absorb losses inherent in the loan portfolio. Total assets increased $73.3 million or 13.1% from year end 2000 to reach $635.0 million at December 31, 2001. Contributing to the growth in assets was loan growth of 13.5%, led primarily by commercial loans. Management funded the loan growth with a combination of FHLB borrowings and deposits. Other borrowed funds increased $37.2 million and deposits increased $23.5 million. Management utilized FHLB advances based on lower rates and the ability to borrow for longer time periods as compared to traditional retail sources of funds. Based on historical low interest rates, Management has extended the average term of its funding sources to protect against rising interest rates. Overall, Management is pleased with the financial results achieved in 2001. Management was able to achieve double-digit earnings growth, improve asset quality and establish new sources of revenue via insurance investments. In addition, the financial results represent Management's commitment to enhance earnings to improve shareholders' value. Ohio Valley Banc Corp common stock is traded on the NASDAQ Stock Market under the symbol OVBC. The holding company owns two subsidiaries: Ohio Valley Bank, with 17 offices in Ohio and West Virginia, and Loan Central, with four consumer finance company offices in Ohio. Learn more about Ohio Valley Banc Corp at www.ovbc.com. OHIO VALLEY BANC CORP - Financial Highlights (Unaudited) Three months ended Twelve months ended December 31, December 31, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- PER SHARE DATA Earnings per share $0.41 $0.36 $1.41 $1.25 Dividend per share $0.32 $0.15 $0.79 $0.59 Book value per share $13.42 $12.76 $13.42 $12.76 Dividend payout ratio 78.01% 41.69% 55.84% 47.14% Weighted average shares outstanding 3,444,312 3,494,781 3,461,856 3,516,205 PERFORMANCE RATIOS Return on average equity 12.10% 11.54% 10.80% 10.29% Return on average assets 0.90% 0.89% 0.83% 0.81% Net interest margin 4.34% 4.04% 4.29% 4.21% Efficiency Ratio 55.64% 60.43% 62.47% 66.31% Average Earning Assets (in 000's) $585,069 $525,201 $552,980 $510,316 OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited) Three months ended Twelve months ended (in $000's) December 31, December 31, 2001 2000 2001 2000 --------- --------- --------- --------- Interest income: Interest and fees on loans $11,060 10,659 $43,321 40,470 Interest and dividends on securities 976 1,157 4,264 4,725 Total interest income 12,036 11,816 47,585 45,195 Interest expense: Deposits 4,373 5,496 19,281 20,367 Borrowings 1,362 1,129 4,954 3,698 Total interest expense 5,735 6,625 24,235 24,065 Net interest income 6,301 5,191 23,350 21,130 Provision for loan losses 1,338 725 3,503 1,890 Noninterest income: Service charges on deposit accounts 773 861 3,003 2,016 Trust fees 54 54 222 217 Income from bank owned insurance 166 124 596 482 Other 386 301 1,308 1,143 Total noninterest income 1,379 1,340 5,129 3,858 Noninterest expense: Salaries and employee benefits 2,397 2,319 9,815 9,300 Occupancy expense 312 318 1,255 1,337 Furniture and equipment expense 335 324 1,141 1,253 Data processing expense 89 147 496 480 Other 1,226 937 5,464 4,608 Total noninterest expense 4,359 4,045 18,171 16,978 Income before income taxes 1,983 1,761 6,805 6,120 Income taxes 570 503 1,910 1,720 NET INCOME $1,413 1,258 $4,895 4,400 OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited) (in 000's) December 31, December 31, 2001 2000 ---------------- ----------------- ASSETS Cash and noninterest-bearing deposits with banks $17,288 14,569 Federal funds sold 9,000 Total cash and cash equivalents 26,288 14,569 Interest-bearing balances with banks 1,264 816 Securities available-for-sale 61,559 59,819 Securities held-to-maturity (estimated fair value: 2001 - $14,422 , 2000 - $16,111) 13,973 15,767 Total loans 508,660 448,303 Less: Allowance for loan losses (6,251) (5,385) Net loans 502,409 442,918 Premises and equipment, net 8,702 9,285 Accrued income receivable 3,420 4,104 Intangible assets, net 1,267 1,396 Bank owned life insurance 12,089 9,408 Other assets 4,028 3,576 Total assets $634,999 561,658 LIABILITIES Noninterest-bearing deposits $56,735 47,661 Interest-bearing deposits 399,126 384,710 Total deposits 455,861 432,371 Securities sold under agreements to repurchase 29,274 18,345 Other borrowed funds 90,856 53,622 Obligated mandatorily redeemable capital securities of subsidiary trust 5,000 5,000 Accrued liabilities 7,708 7,828 Total liabilities 588,699 517,166 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 10,000,000 shares authorized; 2001 - 3,579,250 shares issued, 2000 - 3,559,770 shares issued) 3,579 3,560 Additional paid-in capital 29,207 28,760 Retained earnings 15,979 13,817 Accumulated other comprehensive income 1,043 436 Treasury stock at cost (2001 - 129,990 shares, 2000 - 72,489 shares) (3,508) (2,081) Total shareholders' equity 46,300 44,492 Total liabilities and shareholders' equity $634,999 561,658 Contact: Scott Shockey or Chris Petro 1-800-468-6682 or (740) 446-2631