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 10, 2003 (October 10, 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 October 10, 2003 of Ohio Valley Banc Corp.
Item 9. Regulation FD Disclosure
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The following information is disclosed pursuant to Item 12 on Form 8-K:
On October 10, 2003, Ohio Valley Banc Corp. issued a news release announcing its
earnings for the third quarter and year-to-date periods ending September 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: October 10, 2003 By /s/ Jeffrey E. Smith
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Jeffrey E. Smith, President and
Chief Executive Officer
Page 3
EXHIBIT INDEX
Exhibit Number Description
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99.1 Press release of Ohio Valley Banc Corp dated October
10, 2003, announcing the company's earnings for the
third quarter and year-to-date periods ending
September 30, 2003.
Page 4
Exhibit 99.1
October 10, 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 September 30, 2003, of $1,590,000 representing an increase of 12.8
percent over the prior year. Earnings per share for the third quarter of 2003
were $.46, up 12.2 percent from the $.41 earned the third quarter of 2002. For
the nine months ended September 30, 2003, consolidated net earnings were
$4,622,000, up 15.2 percent compared to $4,014,000 a year ago. Earnings per
share were $1.33 for the first nine months of 2003 versus $1.16 last year, an
increase of 14.7 percent.
"We are pleased with the work of our employees in delivering another quarter of
solid earnings growth even though we continue to operate in a historical low
interest rate environment and a challenged economy," stated Jeffrey E. Smith,
President and CEO. "The double-digit earnings growth represents our commitment
to the consistency in financial performance and to the enhancement of
shareholders' total return." For the nine months ended September 30, 2003
compared to the same time period last year, the Company's return on average
equity improved to 11.95 percent from 11.33 percent and return on average assets
improved to .89 percent from .81 percent. "Thanks to the hard work and
dedication of the employees of the Company for making these financial results
possible."
For the nine months ended September 30, 2003, net interest income improved
$902,000 or 4.5 percent over last year. For the third quarter of 2003, net
interest income increased $73,000 over the prior year third quarter reflecting
the slower growth in earning assets. Based on historical low interest rates, the
Company has emphasized loan mix to reduce interest rate risk. For 2003, total
loans are up $6 million, but real estate mortgage loans are down $11 million as
management sold long-term, fixed rate residential mortgage loans into the
secondary market. As a result, the Company is better positioned should a rise in
interest rates occur. The net interest margin for the nine months ending
September 30, 2003 was 4.33 percent compared to 4.36 percent for the same time
period the prior year.
Providing additional revenue growth was an increase of $340,000 or 8.3 percent
in noninterest income which totaled $4,458,000 for the nine months ended
September 30, 2003, as compared to $4,118,000 for the same time period last
year. For the three months ended September 30, 2003, noninterest income
increased $61,000 or 4.3 percent over the prior year third quarter. The growth
in noninterest income came from the sales of secondary market real estate loans
which generated an additional $409,000 in revenue over the prior year.
Management began selling secondary market loans in the third quarter of 2002.
On a year-to-date basis, noninterest expense totaled $15,114,000 in 2003, an
increase of only $179,000 or 1.2 percent compared to $14,935,000 the previous
year. Salaries and employee benefits grew $576,000 or 7.2 percent for the first
nine 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.
Impacting the 2002 year-to-date results for other noninterest expense was the
charge off of fraudulent checks during the second quarter with the impact net of
recoveries being $389,000. The remaining noninterest expense categories have
increased minimally from 2002 with the exception of furniture and equipment
expense which is down. OVBC's efficiency ratio was 59.2 percent for the nine
months ending September 30, 2003, as compared to 61.0 percent the prior year.
For the first nine months of 2003, the Company's provision for loan losses
increased $132,000 over the same time period last year. Nonperforming loans as a
percent of total loans decreased to .96 percent at September 30, 2003, compared
to 1.44 percent at year end 2002. Nonperforming assets to total assets also
decreased to 1.18 percent at September 30, 2003, from 1.21 percent at year end
2002 and 1.36 percent the prior quarter. The nonperforming ratios are impacted
primarily by two large lines which have been discussed in previous earnings
releases. For the quarter ending September 30, 2003, provision expense was down
$545,000 from the same quarter the prior year. The decline in provision expense
was in relation to the provision expense associated with a large line that
became nonperforming in the third quarter of 2002. Net charge-offs for the first
nine months of 2003 were up $491,000 from the same time period last year which
occurred primarily in commercial loans. The allowance for loan losses stands at
1.32 percent of total loans for September 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 of $697,185,000 are relatively unchanged from year end. Asset
growth in 2003 has been challenged by a decline in loan demand combined with
more emphasis placed on selling fixed rate real estate loans. Although real
estate loans are down from year end, the Company has been able to grow
adjustable rate mortgages nearly $40,000,000 which will be a benefit to interest
income in a rising rate environment. Commercial loans are up $12,324,000 or 6.0
percent from year end and consumer loans are up $4,601,000 or 3.6 percent. The
majority of the consumer loan growth occurred during the third quarter within
automobile loans and home equity capital lines. OVBC's funding growth occurred
within retail deposits. Interest-bearing deposits grew $13,148,000 from year end
2002 led by savings and NOW accounts. In addition, checking account balances
were up $3,097,000. Offsetting the increase in retail deposits was a decline in
repurchase agreements of $10,857,000 and other borrowed funds of $8,115,000.
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
Certain statements contained in this earnings release 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 Nine months ended
September 30, September 30,
2003 2002 2003 2002
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PER SHARE DATA
Earnings per share $0.46 $0.41 $1.33 $1.16
Dividend per share $0.18 $0.17 $0.53 $0.50
Book value per share $15.19 $14.22 $15.19 $14.22
Dividend payout ratio 39.41% 41.68% 39.82% 43.07%
Weighted average shares
outstanding 3,483,994 3,459,337 3,476,898 3,459,768
PERFORMANCE RATIOS
Return on average equity 11.96% 11.58% 11.95% 11.33%
Return on average assets 0.91% 0.82% 0.89% 0.81%
Net interest margin 4.28% 4.28% 4.33% 4.36%
Efficiency Ratio 60.69% 56.68% 59.18% 61.02%
Average Earning Assets
(in 000's) $649,616 $643,279 $650,854 $620,009
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
Three months ended Nine months ended
(in $000's) September 30, September 30,
2003 2002 2003 2002
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Interest income:
Interest and fees on loans $10,280 11,159 $31,518 32,746
Interest and dividends on
securities 899 960 2,766 2,869
Total interest income 11,179 12,119 34,284 35,615
Interest expense:
Deposits 2,951 3,827 9,441 11,467
Borrowings 1,316 1,453 4,033 4,240
Total interest expense 4,267 5,280 13,474 15,707
Net interest income 6,912 6,839 20,810 19,908
Provision for loan losses 996 1,541 3,627 3,495
Noninterest income:
Service charges on deposit
accounts 832 806 2,332 2,301
Trust fees 54 51 165 164
Income from bank owned insurance 172 172 516 512
Net gain on sale of loans 84 5 435 26
Other 343 390 1,010 1,115
Total noninterest income 1,485 1,424 4,458 4,118
Noninterest expense:
Salaries and employee benefits 2,938 2,726 8,621 8,045
Occupancy 331 324 980 959
Furniture and equipment 267 280 744 814
Data processing 177 144 475 435
Other 1,438 1,278 4,294 4,682
Total noninterest expense 5,151 4,752 15,114 14,935
Income before income taxes 2,250 1,970 6,527 5,596
Income taxes 660 560 1,905 1,582
NET INCOME $1,590 1,410 $4,622 4,014
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in 000's) September 30, December 31,
2003 2002
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ASSETS
Cash and noninterest-bearing
deposits with banks $16,301 $18,826
Federal funds sold 4,500 4,625
Total cash and cash equivalents 20,801 23,451
Interest-bearing balances with banks 877 1,505
Securities available-for-sale 69,242 75,264
Securities held-to-maturity
(estimated fair value: 2003 -
$14,945 , 2002 - $14,834) 14,227 13,990
Total loans 565,715 559,561
Less: Allowance for loan losses (7,442) (7,069)
Net loans 558,273 552,492
Premises and equipment, net 8,926 8,247
Accrued income receivable 3,113 3,144
Goodwill 1,267 1,267
Bank owned life insurance 13,113 12,673
Other assets 7,346 4,323
Total assets $697,185 $696,356
LIABILITIES
Noninterest-bearing deposits $62,094 $58,997
Interest-bearing deposits 451,555 438,407
Total deposits 513,649 497,404
Securities sold under agreements to
repurchase 22,195 33,052
Other borrowed funds 87,320 95,435
Obligated mandatorily redeemable
capital securities of subsidiary trust 13,500 13,500
Accrued liabilities 7,558 6,590
Total liabilities 644,222 645,981
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value,
10,000,000 shares authorized; 2003 -
3,644,550 shares issued,
2002 - 3,620,335 shares issued) 3,645 3,620
Additional paid-in capital 30,623 30,092
Retained Earnings 22,120 19,339
Accumulated other comprehensive income 706 1,439
Treasury stock at cost (2003 - 157,756 shares,
2002 - 157,115 shares) (4,131) (4,115)
Total shareholders' equity 52,963 50,375
Total liabilities and
shareholders' equity $697,185 $696,356