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 15, 2003 (January 15, 2003)
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 15, 2003, Ohio Valley Banc Corp issued a news release
announcing its earnings for the fourth quarter and year-to-date periods ending
December 31, 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 January
15, 2003, announcing the company's earnings for the
fourth quarter and year-to-date periods ending
December 31, 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: January 15, 2003 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
15, 2003, announcing the company's earnings for the
fourth quarter and year-to-date periods ending
December 31, 2002.
Page 4
Exhibit 99
Ohio Valley Banc Corp Continues Earnings Growth
Gallipolis, Ohio, January 15, 2003
Ohio Valley Banc Corp [Nasdaq: OVBC] reported consolidated net earnings for the
quarter ended December 31, 2002, of $1,661,000 representing an increase of 17.6
percent over the same time period last year. Earnings per share for the fourth
quarter of 2002 were $.48, up 17.1 percent from the $.41 earned the fourth
quarter of 2001. For the fiscal year ended December 31, 2002, consolidated net
earnings were $5,675,000, up 15.9 percent compared to $4,895,000 a year ago.
Earnings per share were $1.64 for 2002 versus $1.41 last year, an increase of
16.3 percent.
Contributing to OVBC's double-digit earnings growth was strong net interest
income growth. For the fourth quarter of 2002, net interest income increased
$752,000 or 11.9 percent over the prior year fourth quarter. For the fiscal year
ended December 31, 2002, net interest income improved $3,611,000 or 15.5 percent
over last year. The increase in net interest income was the result of strong
loan growth which kept total interest income unchanged despite falling interest
rates combined with a decline in total interest expense of $3,425,000 or 14.1
percent. 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 4.35 percent year-to-date for 2002 from 4.29 percent the prior year.
Providing additional revenue growth was positive gains in noninterest income.
For the three months ended December 31, 2002, noninterest income increased
$137,000 over the prior year fourth quarter and on a year-to-date basis
noninterest income was up $505,000 or 9.8% from 2001. Income from deposit and
loan service fees, bank owned life insurance and gain on sale of mortgage loans
provided a majority of the growth in revenue.
For the fourth quarter of 2002, noninterest expense totaled $4,241,000, which is
a decline of $118,000 or 2.7 percent compared to the same time period last year.
On a year-to-date basis, noninterest expense totaled $19,175,000 in 2002, an
increase of $1,004,000 or 5.5 percent compared to $18,171,000 the previous year.
Salaries and employee benefits, OVBC's largest noninterest expense grew $826,000
or 8.4 percent for fiscal year 2002, as compared to the same time period in
2001. The increase was related to annual merit increases, incentive-based
compensation and the rising cost of medical insurance. Impacting the 2002
year-to-date results was the charge off of fraudulent checks during the second
quarter with the impact net of recoveries being $374,000 on other noninterest
expense. The remaining noninterest expense categories have declined or increased
minimally from 2001. OVBC's efficiency ratio continues to improve driven by
revenue growth (net interest income plus noninterest income) of 14.5 percent
versus total expense growth of 5.5 percent. The efficiency ratio was 58.1
percent for 2002, as compared to 62.5 percent the prior year.
For the fiscal year 2002, the Company's provision for loan losses increased
$1,967,000 over the same time period last year in relation to an increase in net
charge-offs of $2,014,000. During 2002, Management emphasized asset quality by
charging off nonperforming loans, particularly commercial and installment loans.
Nonperforming loans at December 31, 2002 stood at $8,032,000 compared to
$6,310,000 at year end 2001. The increase in nonperforming loans was the result
of a single commercial line which was discussed in the third quarter's earnings
release. This line represented .70 percent of total loans which increased
nonperforming loans as a percentage of total loans to 1.44 percent for the year
ending December 31, 2002 compared to 1.24 percent at year end 2001. The
allowance for loan losses stood at $7,069,000 or 1.26 percent of total loans at
December 31, 2002, which included a specific allocation of $450,000 for the
commercial line mentioned above. The 1.26 percent allowance for loan losses for
December 31, 2002 compares to 1.23 percent at year end 2001. Management has
increased the ratio of allowance to total loans based on an increase in
nonperforming loans and the continued uncertainty of economic conditions. While
management is comfortable that the allowance for loan losses is adequate to
absorb future losses inherent in the loan portfolio, management is prepared to
increase the allowance should economic conditions dictate.
Total assets increased $61,357,000 or 9.7 percent from year end 2001 to reach
$696,356,000 at December 31, 2002. Driving asset growth was an increase in total
loans of $50,901,000 or 10.0 percent from 2001. For 2002, loan growth has
exceeded management's expectations, particularly in commercial real estate and
indirect automobile lending. Funding came primarily from deposits which are up
$41,543,000 or 9.1 percent from December 31, 2001. A significant portion of the
deposit growth occurred in NOW accounts and time deposits.
President and CEO Jeff Smith stated, "We are pleased with the double-digit
earnings growth delivered by our employees for the fourth quarter and fiscal
year 2002 which reflects our commitment to increasing financial performance. We
will continue to focus on revenue growth, expense control and asset quality to
make Ohio Valley a more efficient company. By doing so, we will continue to
enhance shareholder value by improving return on equity which increased to 11.85
percent for 2002 from 10.80 percent 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 three subsidiaries: Ohio Valley Bank,
Loan Central, and Ohio Valley Financial Services Agency. 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,
2002 2001 2002 2001
---------- ---------- ---------- ----------
PER SHARE DATA
Earnings per share $0.48 $0.41 $1.64 $1.41
Dividend per share $0.17 $0.32 $0.67 $0.79
Book value per share $14.55 $13.42 $14.55 $13.42
Dividend payout ratio 35.27% 78.01% 40.79% 55.84%
Weighted average shares
outstanding 3,453,944 3,444,312 3,458,300 3,461,856
PERFORMANCE RATIOS
Return on average equity 13.35% 12.10% 11.85% 10.80%
Return on average assets 0.95% 0.90% 0.85% 0.83%
Net interest margin 4.33% 4.34% 4.35% 4.29%
Efficiency Ratio 50.07% 55.64% 58.14% 62.47%
Average Earning Assets
(in 000's) $654,929 $585,069 $628,811 $552,980
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
Three months ended Twelve months ended
(in $000's) December 31, December 31,
2002 2001 2002 2001
--------- --------- --------- ---------
Interest income:
Interest and fees on loans $11,201 11,060 $43,947 43,321
Interest and dividends on
securities 955 976 3,824 4,264
Total interest income 12,156 12,036 47,771 47,585
Interest expense:
Deposits 3,662 4,373 15,129 19,281
Borrowings 1,441 1,362 5,681 4,954
Total interest expense 5,103 5,735 20,810 24,235
Net interest income 7,053 6,301 26,961 23,350
Provision for loan losses 1,974 1,338 5,470 3,503
Noninterest income:
Service charges on deposit
accounts 817 773 3,118 3,003
Trust fees 50 54 215 222
Income from bank owned insurance 172 166 684 596
Other 477 386 1,617 1,308
Total noninterest income 1,516 1,379 5,634 5,129
Noninterest expense:
Salaries and employee benefits 2,596 2,397 10,641 9,815
Occupancy expense 315 312 1,274 1,255
Furniture and equipment expense 269 335 1,083 1,141
Data processing expense 50 89 484 496
Other 1,011 1,226 5,693 5,464
Total noninterest expense 4,241 4,359 19,175 18,171
Income before income taxes 2,354 1,983 7,950 6,805
Income taxes 693 570 2,275 1,910
NET INCOME $1,661 1,413 $5,675 4,895
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in 000's) December 31, December 31,
2002 2001
---------------- ----------------
ASSETS
Cash and noninterest-bearing
deposits with banks $18,826 $17,288
Federal funds sold 4,625 9,000
Total cash and cash equivalents 23,451 26,288
Interest-bearing balances with banks 1,505 1,264
Securities available-for-sale 75,264 61,559
Securities held-to-maturity
(estimated fair value: 2002 -
$14,834 , 2001 - $14,421) 13,990 13,973
Total loans 559,561 508,660
Less: Allowance for loan losses (7,069) (6,251)
Net loans 552,492 502,409
Premises and equipment, net 8,247 8,702
Accrued income receivable 3,144 3,420
Intangible assets, net 1,226 1,267
Bank owned life insurance 12,673 12,089
Other assets 4,364 4,028
Total assets $696,356 $634,999
LIABILITIES
Noninterest-bearing deposits $58,997 $56,735
Interest-bearing deposits 438,407 399,126
Total deposits 497,404 455,861
Securities sold under agreements to
repurchase 33,052 29,274
Other borrowed funds 95,435 90,856
Obligated mandatorily redeemable
capital securities of subsidiary trust 13,500 5,000
Accrued liabilities 6,590 7,708
Total liabilities 645,981 588,699
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value,
10,000,000 shares authorized; 2002 -
3,620,335 shares issued,
2001 - 3,579,250 shares issued) 3,620 3,579
Additional paid-in capital 30,092 29,207
Retained Earnings 19,339 15,979
Accumulated other comprehensive income 1,439 1,043
Treasury stock at cost (2002 -
157,115 shares, 2001 - 129,990 shares) (4,115) (3,508)
Total shareholders' equity 50,375 46,300
Total liabilities and
shareholders' equity $696,356 $634,999
Contact: Scott Shockey or Chris Petro
1-800-468-6682 or (740) 446-2631