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