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 July 11, 2002 (July 11, 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 July 11, 2002, Ohio Valley Banc Corp issued a news release announcing its earnings for the second quarter and year-to-date periods ending June 30, 2002. 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 July 11, 2002, announcing the company's earnings for the second quarter and year-to-date periods ending June 30, 2002. 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: July 11, 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 July 11, 2002, announcing the company's earnings for the second quarter and year-to-date periods ending June 30, 2002. Page 4 Exhibit 99 Ohio Valley Banc Corp Continues Earnings Growth Gallipolis, Ohio, July 11, 2002 Ohio Valley Banc Corp reported consolidated net earnings for the quarter ended June 30, 2002, of $1,353,000 representing an increase of 17.2% over the prior year. Earnings per share for the second quarter of 2002 were $.39, up 18.2% from the $.33 earned the second quarter of 2001. For the six months ended June 30, 2002, consolidated net earnings were $2,605,000, up 15.2% compared to $2,261,000 a year ago. Earnings per share were $.75 for the first half of 2002 versus $.65 last year, an increase of 15.4%. The earnings performance improved over the prior year due to strong net interest income growth. For the six months ended June 30, 2002, net interest income improved $2,115,000 or 19.3% over last year. The increase in net interest income was the result of a decline in total interest expense of $2,009,000 or 16.2% versus relatively no change in total interest income due to strong loan growth. For the second quarter of 2002, net interest income increased $911,000 or 15.7% over the prior year second quarter. The Company`s net interest income has benefited from the current interest rate environment and is reflected in the net interest margin which improved to 4.40% for the first half of 2002 from 4.23% the prior year. Noninterest income totaled $2,694,000 for the six months ended and $1,414,000 for the three months ended June 30, 2002, as compared to $2,477,000 and $1,311,000 for the same time periods last year. Comparing year-to-date results noninterest income is up 8.8%. Income from bank owned life insurance and loan service fees provided a majority of the growth. On a year-to-date basis, noninterest expense totaled $10,183,000 in 2002, an increase of $950,000 or 10.3% compared to $9,233,000 the previous year. Salaries and employee benefits, the Company's largest noninterest expense grew $365,000 or 7.4% for the first six months of 2002, as compared to the same time period in 2001. The increase was related to annual merit increases, incentive-based compensation and the continuing rise in the cost of medical insurance. In the second quarter of 2002, noninterest expense totaled $5,410,000, up $556,000 or 11.5% compared to the same time period last year. Impacting the second quarter of 2002 was a one time charge off of $464,000 related to fraudulent checks which impacted other noninterest expense. Management is actively seeking a recovery of the charge off. The Company's efficiency ratio continues to improve driven by revenue growth (net interest income plus noninterest income) of 17.4% versus total expense growth of 10.3%. The efficiency ratio was 63.4% for the first half of 2002, as compared to 67.2% the prior year. Excluding the fraudulent check expense, total expense growth would have been limited to 5.3% and the efficiency ratio would have been 60.5%. For the first six months of 2002, the Company's provision for loan losses increased $881,000 over the same time period last year in relation to an increase in net charge-offs of $672,000. During 2002, management has continued to drive down nonperforming loans to strengthen the Company's asset quality. At June 30, 2002, nonperforming loans as a percent of total loans was .97% compared to 1.24% at year end 2001. The allowance for loan losses was 1.24% of total loans at June 30, 2002, up from 1.23% at year end 2001. Even though nonperforming loans have declined, management has maintained the ratio of allowance to total loans based on a general decline in economic conditions and is comfortable that the allowance for loan losses is adequate to absorb future losses inherent in the loan portfolio. Total assets increased $30,222,000 or 4.8% from year end 2001 to reach $665,221,000 at June 30, 2002. Driving asset growth was an increase in total loans of $36,135,000 or 7.1% from year end. The Company experienced strong loan growth during the second quarter which contributed to 75% of the year-to-date loan growth with a majority of the growth occurring in commercial and installment loans. Funding came primarily from deposits which are up $25,059,000 or 5.5% from December 31, 2001. Management was pleased that a significant portion of the deposit growth occurred in savings and NOW accounts to accompany time deposit growth. The results for the first half of 2002 reflect many accomplishments towards the Company's strategic initiatives such as double digit earnings growth, improved operating efficiency and improved asset quality. Management is committed to enhancing shareholders' value and these successes are reflected in the return on equity which improved to 11.20% for the first six months of 2002 from 10.19% the same time period last year. 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 Six months ended June 30, June 30, 2002 2001 2002 2001 ---------- ---------- ---------- ---------- PER SHARE DATA Earnings per share $0.39 $0.33 $0.75 $0.65 Dividend per share $0.17 $0.16 $0.33 $0.31 Book value per share $13.89 $13.12 $13.89 $13.12 Dividend payout ratio 43.51% 48.06% 43.83% 47.67% Weighted average shares outstanding 3,460,731 3,466,293 3,459,987 3,473,414 PERFORMANCE RATIOS Return on average equity 11.53% 10.27% 11.20% 10.19% Return on average assets 0.83% 0.81% 0.81% 0.80% Net interest margin 4.42% 4.39% 4.40% 4.23% Efficiency Ratio 65.51% 66.97% 63.42% 67.24% Average Earning Assets (in 000's) $617,096 $538,297 $608,233 $532,103 OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited) Three months ended Six months ended (in $000's) June 30, June 30, 2002 2001 2002 2001 --------- --------- --------- --------- Interest income: Interest and fees on loans $10,940 10,727 $21,587 21,116 Interest and dividends on securities 947 1,140 1,909 2,274 Total interest income 11,887 11,867 23,496 23,390 Interest expense: Deposits 3,740 4,922 7,640 10,178 Borrowings 1,450 1,159 2,786 2,257 Total interest expense 5,190 6,081 10,426 12,435 Net interest income 6,697 5,786 13,070 10,955 Provision for loan losses 813 646 1,954 1,073 Noninterest income: Service charges on deposit accounts 801 774 1,495 1,472 Trust fees 60 60 114 115 Income from bank owned insurance 168 146 340 284 Other 385 331 745 606 Total noninterest income 1,414 1,311 2,694 2,477 Noninterest expense: Salaries and employee benefits 2,700 2,591 5,319 4,954 Occupancy expense 324 310 635 626 Furniture and equipment expense 271 266 534 539 Data processing expense 145 115 291 222 Other 1,970 1,572 3,404 2,892 Total noninterest expense 5,410 4,854 10,183 9,233 Income before income taxes 1,888 1,597 3,627 3,126 Income taxes 535 443 1,022 865 NET INCOME $1,353 1,154 $2,605 2,261 OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited) (in 000's) June 30, December 31, 2002 2001 ---------------- ---------------- ASSETS Cash and noninterest-bearing deposits with banks $16,444 $17,288 Federal funds sold 6,325 9,000 Total cash and cash equivalents 22,769 26,288 Interest-bearing balances with banks 1,492 1,264 Securities available-for-sale 57,859 61,559 Securities held-to-maturity (estimated fair value: 2002 - $15,980 , 2001 - $14,421) 15,305 13,973 Total loans 544,795 508,660 Less: Allowance for loan losses (6,746) (6,251) Net loans 538,049 502,409 Premises and equipment, net 8,281 8,702 Accrued income receivable 3,434 3,420 Intangible assets, net 1,201 1,267 Bank owned life insurance 12,380 12,089 Other assets 4,451 4,028 Total assets $665,221 $634,999 LIABILITIES Noninterest-bearing deposits $57,929 $56,735 Interest-bearing deposits 422,991 399,126 Total deposits 480,920 455,861 Securities sold under agreements to repurchase 26,121 29,274 Other borrowed funds 88,788 90,856 Obligated mandatorily redeemable capital securities of subsidiary trust 13,500 5,000 Accrued liabilities 7,901 7,708 Total liabilities 617,230 588,699 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 10,000,000 shares authorized; 2002 - 3,592,964 shares issued, 2001 - 3,579,250 shares issued) 3,593 3,579 Additional paid-in capital 29,524 29,207 Retained Earnings 17,442 15,979 Accumulated other comprehensive income 1,101 1,043 Treasury stock at cost (2002 - 136,715 shares, 2001 - 129,990 shares) (3,669) (3,508) Total shareholders' equity 47,991 46,300 Total liabilities and shareholders' equity $665,221 $634,999 Contact: Scott Shockey or Chris Petro 1-800-468-6682 or (740) 446-2631