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, 2003 (July 11, 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 7. Financial Statements and Exhibits
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(c) Exhibits:
99.1 Press Release dated July 11, 2003 of Ohio Valley Banc Corp.
Item 9. Regulation FD Disclosure
--------------------------------
The following information is disclosed pursuant to Item 12 on Form 8-K:
On July 11, 2003, Ohio Valley Banc Corp. issued a news release announcing its
earnings for the second quarter and year-to-date periods ending June 30, 2003.
The information contained in the news release, which is attached as Exhibit 99.1
to this Form 8-K, is incorporated herein by this reference.
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, 2003 By /s/ Jeffrey E. Smith
-------------------------------
Jeffrey E. Smith, President and
Chief Executive Officer
Page 3
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
99.1 Press release of Ohio Valley Banc Corp dated July
11, 2003, announcing the company's earnings for the
second quarter and year-to-date periods ending June
30, 2003.
Page 4
Exhibit 99.1
July 11, 2003 - For immediate release Contact:
Scott Shockey, CFO or Bryna Butler, Corporate Communications
1-800-468-6682 or (740) 446-2631
Ohio Valley Banc Corp Continues Earnings Growth
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Ohio Valley Banc Corp [Nasdaq: OVBC] reported consolidated net earnings for the
quarter ended June 30, 2003, of $1,573,000 representing an increase of 16.3
percent over the same time period last year. Earnings per share for the second
quarter of 2003 were $.45, up 15.4 percent from the $.39 earned the second
quarter of 2002. For the six months ended June 30, 2003, consolidated net
earnings were $3,032,000, up 16.4 percent compared to $2,605,000 a year ago.
Earnings per share were $.87 for 2003 versus $.75 last year, an increase of 16.0
percent.
OVBC's earnings represent another quarter of solid growth despite a challenging
economic environment. The double-digit earnings growth was driven by an increase
in revenue sources combined with a decline in operating expenses. For the second
quarter of 2003, net interest income increased $285,000 or 4.3 percent over the
prior year second quarter. For the six months ended June 30, 2003, net interest
income improved $828,000 or 6.3 percent over the prior year. For the first half
of 2003, the net interest margin was 4.36 percent compared to 4.40 percent for
the same time period last year.
Providing additional revenue growth was positive gains in noninterest income.
For the three months ended June 30, 2003, noninterest income increased $114,000
over the prior year second quarter and on a year-to-date basis noninterest
income was up $280,000 or 10.4% from 2002. The growth in noninterest income came
from the sales of secondary market real estate loans which generated an
additional $331,000 in revenue over the prior year.
For the second quarter of 2003, noninterest expense totaled $5,039,000, which is
a decline of $371,000 or 6.9 percent compared to the same time period last year.
On a year-to-date basis, noninterest expense totaled $9,963,000 in 2003, a
decrease of $220,000 compared to $10,183,000 the previous year. Salaries and
employee benefits grew $363,000 or 6.8 percent for the first six months of 2003,
as compared to the same time period in 2002. The increase was related to annual
merit increases and the rising cost of medical insurance. Contributing to the
decline in other noninterest expense was the charge off of fraudulent checks
during the second quarter of 2002 with the impact net of recoveries being
$454,000. The remaining noninterest expense categories are collectively down
from 2002. OVBC's efficiency ratio continues to improve driven by revenue growth
of 7.0 percent versus a decrease in total expense of 2.2 percent. The efficiency
ratio was 58.4 percent for the first half of 2003, as compared to 63.4 percent
the prior year.
For the six months ended 2003, the Company's provision for loan losses increased
$678,000 over the same time period last year. Nonperforming loans as a percent
of total loans decreased to 1.08 percent at June 30, 2003, compared to 1.44
percent at year end 2002. However, nonperfoming assets to total assets increased
to 1.36 percent at June 30, 2003 from 1.21 percent at December 31, 2002. The
decrease in nonperforming loans and increase in nonperforming assets was in
relation to two commercial loans moving from nonaccrual status to other real
estate owned. Net charge-offs for the first half of 2003 were up $902,000 from
the same time period last year which occurred primarily in commercial loans. The
allowance for loan losses was 1.32 percent of total loans at June 30, 2003, as
compared to 1.26 percent on December 31, 2002. Based on the evaluation of the
adequacy of the allowance for loan losses, management feels that the allowance
for loan losses is adequate to absorb probable losses in the portfolio.
Total assets increased $2,290,000 from year end 2002 to reach $698,646,000 at
June 30, 2002. Asset growth in 2003 has been challenged by a decline in loan
demand combined with more emphasis placed on selling long-term, fixed rate
residential real estate loans into the secondary market to reduce interest rate
risk. The real estate loan portfolio is down $12,633,000 from year end.
Commercial loans have increased modestly by $7,972,000 and installment loans
have been relatively level since year end. OVBC's funding growth has occurred
mostly in retail deposits. Interest-bearing deposits grew $9,337,000 led by
savings and NOW accounts. Furthermore, checking account balances are up
$4,064,000. Offsetting the increase in retail deposits was a decline in
repurchase agreements of $7,717,000 and other borrowed funds of $6,344,000.
President and CEO Jeff Smith stated, "We are pleased with the double-digit
earnings growth delivered by our employees which continues our commitment to
improving shareholder total cumulative return. The Company's improved efficiency
has enhanced return on equity which improved to 11.95 percent for the six months
ended June 30, 2003 versus 11.20 percent for the first six months of 2002."
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,
with 17 offices in Ohio and West Virginia; Loan Central, with five consumer
finance offices in Ohio, and Ohio Valley Financial Services, an insurance agency
based in Jackson, Ohio. Learn more about Ohio Valley Banc Corp at www.ovbc.com.
Forward-Looking Information
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Certain statements contained in this Annual Report on Form 10-K which are not
statements of historical fact constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as
"believes," "anticipates," "expects," "intends," "targeted" and similar
expressions are intended to identify forward-looking statements but are not the
exclusive means of identifying those statements. Forward-looking statements
involve risks and uncertainties. Actual results may differ materially from those
predicted by the forward-looking statements because of various factors and
possible events, including: (i) changes in political, economic or other factors
such as inflation rates, recessionary or expansive trends, and taxes; (ii)
competitive pressures; (iii) fluctuations in interest rates; (iv) the level of
defaults and prepayment on loans made by the Company; (v) unanticipated
litigation, claims, or assessments; (vi) fluctuations in the cost of obtaining
funds to make loans; and (vii) regulatory changes. Forward-looking statements
speak only as of the date on which they are made and Ohio Valley undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made to reflect
unanticipated events.
OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
PER SHARE DATA
Earnings per share $0.45 $0.39 $0.87 $0.75
Dividend per share $0.18 $0.17 $0.35 $0.33
Book value per share $15.07 $13.89 $15.07 $13.89
Dividend payout ratio 39.76% 43.51% 40.04% 43.83%
Weighted average shares
outstanding 3,477,455 3,460,731 3,473,290 3,459,987
PERFORMANCE RATIOS
Return on average equity 12.22% 11.53% 11.95% 11.20%
Return on average assets 0.91% 0.83% 0.89% 0.81%
Net interest margin 4.36% 4.42% 4.36% 4.40%
Efficiency Ratio 58.60% 65.51% 58.43% 63.42%
Average Earning Assets
(in 000's) $650,898 $617,096 $651,436 $608,233
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
Three months ended Six months ended
(in $000's) June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Interest income:
Interest and fees on loans $10,551 10,940 $21,239 21,587
Interest and dividends on
securities 942 947 1,866 1,909
Total interest income 11,493 11,887 23,105 23,496
Interest expense:
Deposits 3,174 3,740 6,490 7,640
Borrowings 1,337 1,450 2,717 2,786
Total interest expense 4,511 5,190 9,207 10,426
Net interest income 6,982 6,697 13,898 13,070
Provision for loan losses 1,246 813 2,632 1,954
Noninterest income:
Service charges on deposit
accounts 803 801 1,500 1,495
Trust fees 58 60 111 114
Income from bank owned insurance 172 168 344 340
Net gain on sale of loans 155 13 352 21
Other 340 372 667 724
Total noninterest income 1,528 1,414 2,974 2,694
Noninterest expense:
Salaries and employee benefits 2,885 2,700 5,682 5,319
Occupancy 317 324 649 635
Furniture and equipment 240 271 477 534
Data processing 139 145 299 291
Other 1,458 1,970 2,856 3,404
Total noninterest expense 5,039 5,410 9,963 10,183
Income before income taxes 2,225 1,888 4,277 3,627
Income taxes 652 535 1,245 1,022
NET INCOME $1,573 1,353 $3,032 2,605
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in 000's) June 30, December 31,
2003 2002
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ASSETS
Cash and noninterest-bearing
deposits with banks $17,082 $18,826
Federal funds sold 9,600 4,625
Total cash and cash equivalents 26,682 23,451
Interest-bearing balances with banks 1,542 1,505
Securities available-for-sale 74,469 75,264
Securities held-to-maturity
(estimated fair value: 2003 -
$15,572 , 2002 - $14,834) 14,495 13,990
Total loans 555,069 559,561
Less: Allowance for loan losses (7,341) (7,069)
Net loans 547,728 552,492
Premises and equipment, net 8,587 8,247
Accrued income receivable 3,049 3,144
Goodwill 1,267 1,267
Bank owned life insurance 12,966 12,673
Other assets 7,861 4,323
Total assets $698,646 $696,356
LIABILITIES
Noninterest-bearing deposits $63,061 $58,997
Interest-bearing deposits 447,744 438,407
Total deposits 510,805 497,404
Securities sold under agreements to
repurchase 25,335 33,052
Other borrowed funds 89,091 95,435
Obligated mandatorily redeemable
capital securities of subsidiary trust 13,500 13,500
Accrued liabilities 7,464 6,590
Total liabilities 646,195 645,981
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value,
10,000,000 shares authorized; 2003 -
3,637,595 shares issued,
2002 - 3,620,335 shares issued) 3,638 3,620
Additional paid-in capital 30,461 30,092
Retained Earnings 21,157 19,339
Accumulated other comprehensive income 1,310 1,439
Treasury stock at cost (2003 and 2002 -
157,115 shares) (4,115) (4,115)
Total shareholders' equity 52,451 50,375
Total liabilities and
shareholders' equity $698,646 $696,356