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
October 11, 2002 (October 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 October 11, 2002, Ohio Valley Banc Corp issued a news release
announcing its earnings for the third quarter and year-to-date periods ending
September 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 October
11, 2002, announcing the company's earnings for the
third quarter and year-to-date periods ending
September 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: October 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 October
11, 2002, announcing the company's earnings for the
third quarter and year-to-date periods ending
September 30, 2002.
Page 4
Exhibit 99
Ohio Valley Banc Corp Continues Earnings Growth
Gallipolis, Ohio, October 11, 2002
Ohio Valley Banc Corp [Nasdaq:OVBC] reported consolidated net earnings for the
quarter ended September 30, 2002, of $1,410,000 representing an increase of 15.6
percent over the prior year. Earnings per share for the third quarter of 2002
were $.41, up 17.1 percent from the $.35 earned the third quarter of 2001. For
the nine months ended September 30, 2002, consolidated net earnings were
$4,014,000, up 15.3 percent compared to $3,482,000 a year ago. Earnings per
share were $1.16 for the first nine months of 2002 versus $1.00 last year, an
increase of 16.0 percent.
Strong net interest income growth continues to drive OVBC's double-digit
earnings growth. For the nine months ended September 30, 2002, net interest
income improved $2,859,000 or 16.8 percent over last year. The increase in net
interest income was the result of a decline in total interest expense of
$2,793,000 or 15.1 percent versus relatively no change in total interest income
due to strong loan growth. For the third quarter of 2002, net interest income
increased $745,000 or 12.2 percent over the prior year third 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 4.36
percent for the first nine months of 2002 from 4.28 percent the prior year.
Providing additional revenue growth was an increase of $368,000 or 9.8 percent
in noninterest income which totaled $4,118,000 for the nine months ended
September 30, 2002, as compared to $3,750,000 for the same time period last
year. For the three months ended September 30, 2002, noninterest income
increased $152,000 over the prior year third quarter. Income from deposit and
loan service fees as well as bank owned life insurance provided a majority of
the growth.
On a year-to-date basis, noninterest expense totaled $14,935,000 in 2002, an
increase of $1,123,000 or 8.1 percent compared to $13,812,000 the previous year.
Salaries and employee benefits, OVBC's largest noninterest expense grew $628,000
or 8.5 percent for the first nine 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 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 $389,000 on other
noninterest expense. The remaining noninterest expense categories have increased
minimally from 2001. For the third quarter of 2002, noninterest expense totaled
$4,752,000, up $173,000 or 3.8 percent compared to the same time period last
year. OVBC's efficiency ratio continues to improve driven by revenue growth (net
interest income plus noninterest income) of 15.5 percent versus total expense
growth of 8.1 percent. The efficiency ratio was 61.0 percent for the nine months
ending September 30, 2002, as compared to 65.0 percent the prior year.
For the first nine months of 2002, the Company's provision for loan losses
increased $1,330,000 over the same time period last year in relation to an
increase in net charge-offs of $1,239,000. Nonperforming loans at September 30,
2002 stood at $9,216,000 compared to $7,036,000 at September 30, 2001 and
$6,310,000 at year end. The increase in nonperforming loans was the result of a
single commercial line which is in the process of collection. The commercial
line represented .79 percent of total loans. Nonperforming loans as a percentage
of total loans were 1.64 percent for the quarter ending September 30, 2002
compared to 1.42 percent at September 30, 2001 and 1.24 percent at year end
2001. The allowance for loan losses stood at 1.25 percent of total loans at
September 30, 2002, which included a specific allocation of $450,000 for the
commercial line mentioned above, should a loss become reality. The 1.25 percent
allowance for loan losses for September 30, 2002 compares to 1.21 percent at
September 30, 2001 and 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 $60,181,000 or 9.5 percent from year end 2001 to reach
$695,180,000 at September 30, 2002. Driving asset growth was an increase in
total loans of $51,906,000 or 10.2 percent from year end. For the first nine
months of 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 $50,773,000 or 11.1 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 third quarter
results which produced double digit earnings growth. Strong revenue growth and
expense control continues to make Ohio Valley a more efficient Company which is
reflected in shareholder value as return on equity improved to 11.33 percent for
the first nine months of 2002 from 10.35 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 Nine months ended
September 30, September 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
PER SHARE DATA
Earnings per share $0.41 $0.35 $1.16 $1.00
Dividend per share $0.17 $0.16 $0.50 $0.47
Book value per share $14.22 $13.39 $14.22 $13.39
Dividend payout ratio 41.68% 45.31% 43.07% 46.84%
Weighted average shares
outstanding 3,459,337 3,456,661 3,459,768 3,467,768
PERFORMANCE RATIOS
Return on average equity 11.58% 10.64% 11.33% 10.35%
Return on average assets 0.82% 0.81% 0.81% 0.80%
Net interest margin 4.28% 4.36% 4.36% 4.28%
Efficiency Ratio 56.68% 60.89% 61.02% 64.99%
Average Earning Assets
(in 000's) $643,279 $563,472 $620,009 $542,612
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
Three months ended Nine months ended
(in $000's) September 30, September 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Interest income:
Interest and fees on loans $11,159 11,145 $32,746 32,261
Interest and dividends on
securities 960 1,014 2,869 3,288
Total interest income 12,119 12,159 35,615 35,549
Interest expense:
Deposits 3,827 4,729 11,467 14,907
Borrowings 1,453 1,336 4,240 3,593
Total interest expense 5,280 6,065 15,707 18,500
Net interest income 6,839 6,094 19,908 17,049
Provision for loan losses 1,541 1,092 3,495 2,165
Noninterest income:
Service charges on deposit
accounts 806 757 2,301 2,229
Trust fees 51 53 164 168
Income from bank owned insurance 172 146 512 430
Other 395 316 1,141 923
Total noninterest income 1,424 1,272 4,118 3,750
Noninterest expense:
Salaries and employee benefits 2,726 2,464 8,045 7,417
Occupancy expense 324 317 959 943
Furniture and equipment expense 280 267 814 806
Data processing expense 144 185 435 408
Other 1,278 1,346 4,682 4,238
Total noninterest expense 4,752 4,579 14,935 13,812
Income before income taxes 1,970 1,695 5,596 4,822
Income taxes 560 475 1,582 1,340
NET INCOME $1,410 1,220 $4,014 3,482
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in 000's) September 30, December 31,
2002 2001
---------------- ----------------
ASSETS
Cash and noninterest-bearing
deposits with banks $19,592 $17,288
Federal funds sold 12,300 9,000
Total cash and cash equivalents 31,892 26,288
Interest-bearing balances with banks 1,495 1,264
Securities available-for-sale 63,338 61,559
Securities held-to-maturity
(estimated fair value: 2002 -
$16,193 , 2001 - $14,421) 15,119 13,973
Total loans 560,566 508,660
Less: Allowance for loan losses (6,982) (6,251)
Net loans 553,584 502,409
Premises and equipment, net 8,346 8,702
Accrued income receivable 3,512 3,420
Intangible assets, net 1,169 1,267
Bank owned life insurance 12,526 12,089
Other assets 4,199 4,028
Total assets $695,180 $634,999
LIABILITIES
Noninterest-bearing deposits $56,438 $56,735
Interest-bearing deposits 450,196 399,126
Total deposits 506,634 455,861
Securities sold under agreements to
repurchase 26,163 29,274
Other borrowed funds 91,299 90,856
Obligated mandatorily redeemable
capital securities of subsidiary trust 13,500 5,000
Accrued liabilities 8,435 7,708
Total liabilities 646,031 588,699
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value,
10,000,000 shares authorized; 2002 -
3,602,854 shares issued,
2001 - 3,579,250 shares issued) 3,603 3,579
Additional paid-in capital 29,751 29,207
Retained Earnings 18,264 15,979
Accumulated other comprehensive income 1,441 1,043
Treasury stock at cost (2002 -
147,115 shares, 2001 - 129,990 shares) (3,910) (3,508)
Total shareholders' equity 49,149 46,300
Total liabilities and
shareholders' equity $695,180 $634,999
Contact: Scott Shockey or Chris Petro
1-800-468-6682 or (740) 446-2631