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, 2004 (January 15, 2004)
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 January 15, 2004 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 January 15, 2004, Ohio Valley Banc Corp. issued a news release announcing its
earnings for the fourth quarter and year-to-date periods ending December 31,
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: January 15, 2004 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 January
15, 2004, announcing the company's earnings for the
fourth quarter and year-to-date periods ending
December 31, 2003.
Page 4
Exhibit 99.1
January 15, 2004 - 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 December 31, 2003, of $1,850,000 representing an increase of 11.4
percent over the prior year. Earnings per share for the fourth quarter of 2003
were $.53, up 10.4 percent from the $.48 earned the fourth quarter of 2002. For
the fiscal year ended December 31, 2003, consolidated net earnings were
$6,472,000, up 14.0 percent compared to $5,675,000 a year ago. Earnings per
share were $1.86 for 2003 versus $1.64 last year, an increase of 13.4 percent.
"We are pleased with the earnings growth delivered by our employees for the
fourth quarter and fiscal year 2003," stated Jeffrey E. Smith, President and
CEO. "The 2003 financial results represent our third consecutive year of
double-digit earnings growth. This reflects our commitment to the consistency in
financial performance and to the enhancement of shareholders' total return." For
the fiscal year ended December 31, 2003, the Company's return on average equity
improved to 12.43 percent from 11.85 percent the prior fiscal year. "In addition
to our income goals, we aggressively targeted asset quality. At December 31,
2003, our nonperforming assets to total assets were .76 percent, down from 1.22
percent the prior year. Thanks to the hard work and dedication of the employees
of the Company for making 2003 a successful year."
For the twelve months ended December 31, 2003, net interest income improved
$554,000 or 2.1 percent over last year. For the fourth quarter of 2003, net
interest income decreased $348,000 from the prior year fourth quarter reflecting
the slower growth in earning assets combined with a lower net interest margin.
Based on historical low interest rates, the Company has emphasized variable rate
loans to reduce interest rate risk. For 2003, total loans are up $14 million,
but real estate mortgage loans are down $6.6 million as management sold over $20
million in 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 twelve months ending December 31,
2003 was 4.28 percent compared to 4.35 percent for the same time period the
prior year.
Providing additional revenue growth was an increase of $348,000 or 6.2 percent
in noninterest income which totaled $5,982,000 for the twelve months ended
December 31, 2003, as compared to $5,634,000 for the same time period last year.
The growth in noninterest income came from the sales of secondary market real
estate loans which generated an additional $368,000 in revenue over the prior
year. Management began selling secondary market loans in the third quarter of
2002. With the decline in mortgage refinance volume in the fourth quarter of
2003, management has seen a decrease in secondary market income.
On a year-to-date basis, noninterest expense totaled $19,817,000 in 2003, an
increase of $642,000 or 3.4 percent compared to $19,175,000 the previous year.
For the three months ended December 31, 2003, noninterest expense increased
$462,000 or 10.9 percent over the prior year fourth quarter. Salaries and
employee benefits grew $930,000 or 8.7 percent for the twelve months ended
December 31, 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. 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 58.5 percent for the fiscal year December 31, 2003, as
compared to 58.1 percent the prior year.
Nonperforming loans as a percent of total loans decreased to .58 percent at
December 31, 2003, compared to .96 the prior quarter and 1.44 percent at year
end 2002. Nonperforming assets to total assets also decreased to .76 percent at
December 31, 2003, from 1.22 percent at year end 2002. The decline in
nonperforming ratios was impacted primarily by the liquidation of collateral on
a nonperforming loan during the fourth quarter. Nonperforming assets still
include a single line representing .29 percent of assets that has been discussed
in previous earnings releases. For the fiscal year 2003 and quarter ending
December 31, 2003, the Company's provision for loan losses decreased $1,131,000
and $1,262,000 from the same time periods last year. The decrease in provision
expense was in relation to a decline in both nonperforming loans and expected
future loan losses. Net charge-offs for fiscal year 2003 were down $836,000 from
2002. The allowance for loan losses stands at 1.32 percent of total loans on
December 31, 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 $10,971,000 from year end 2002 to reach $707,327,000 at
December 31, 2003. 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 2002, the Company has
been able to grow adjustable rate mortgages nearly $49 million which will
benefit interest income in a rising rate environment. Commercial loans are up
$15,216,000 or 7.4 percent from year end and consumer loans are up $6,058,000 or
4.7 percent. The majority of the consumer loan growth occurred within automobile
loans and home equity capital lines. OVBC's funding growth occurred within
retail deposits. Interest-bearing deposits grew $6,867,000 from year end 2002
led by savings and NOW accounts. In addition, checking account balances were up
$3,238,000. Offsetting the increase in retail deposits was a net decline in
repurchase agreements and other borrowed funds of $2,907,000.
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 Twelve months ended
December 31, December 31,
2003 2002 2003 2002
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PER SHARE DATA
Earnings per share $0.53 $0.48 $1.86 $1.64
Dividend per share $0.18 $0.17 $0.71 $0.67
Book value per share $15.55 $14.55 $15.55 $14.55
Dividend payout ratio 33.92% 35.27% 38.14% 40.79%
Weighted average shares
outstanding 3,490,118 3,453,944 3,480,230 3,458,300
PERFORMANCE RATIOS
Return on average equity 13.80% 13.35% 12.43% 11.85%
Return on average assets 1.05% 0.95% 0.93% 0.85%
Net interest margin 4.10% 4.33% 4.28% 4.35%
Efficiency Ratio 56.56% 50.07% 58.54% 58.14%
Average Earning Assets
(in 000's) $656,614 $654,929 $650,547 $628,811
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
Three months ended Twelve months ended
(in $000's) December 31, December 31,
2003 2002 2003 2002
--------- --------- --------- ---------
Interest income:
Interest and fees on loans $ 9,944 11,201 $41,462 43,947
Interest and dividends on
securities 933 955 3,698 3,824
Total interest income 10,877 12,156 45,160 47,771
Interest expense:
Deposits 2,882 3,662 12,322 15,129
Borrowings 1,290 1,441 5,323 5,681
Total interest expense 4,172 5,103 17,645 20,810
Net interest income 6,705 7,053 27,515 26,961
Provision for loan losses 712 1,974 4,339 5,470
Noninterest income:
Service charges on deposit
accounts 828 817 3,160 3,118
Trust fees 50 50 215 215
Income from bank owned insurance 141 172 657 684
Net gain on sale of loans 8 50 444 76
Other 496 427 1,506 1,541
Total noninterest income 1,523 1,516 5,982 5,634
Noninterest expense:
Salaries and employee benefits 2,950 2,596 11,571 10,641
Occupancy 328 315 1,308 1,274
Furniture and equipment 287 269 1,031 1,083
Data processing 79 50 554 484
Other 1,059 1,011 5,353 5,693
Total noninterest expense 4,703 4,241 19,817 19,175
Income before income taxes 2,813 2,354 9,341 7,950
Income taxes 963 693 2,869 2,275
NET INCOME $1,850 1,661 $6,472 5,675
OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in 000's) December 31, December 31,
2003 2002
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ASSETS
Cash and noninterest-bearing
deposits with banks $17,753 $18,826
Federal funds sold 0 4,625
Total cash and cash equivalents 17,753 23,451
Interest-bearing balances with banks 859 1,505
Securities available-for-sale 76,352 75,264
Securities held-to-maturity
(estimated fair value: 2003 -
$13,547 , 2002 - $14,834) 12,835 13,990
Total loans 573,704 559,561
Less: Allowance for loan losses (7,593) (7,069)
Net loans 566,111 552,492
Premises and equipment, net 9,142 8,247
Accrued income receivable 2,700 3,144
Goodwill 1,267 1,267
Bank owned life insurance 13,222 12,673
Other assets 7,086 4,323
Total assets $707,327 $696,356
LIABILITIES
Noninterest-bearing deposits $62,235 $58,997
Interest-bearing deposits 445,274 438,407
Total deposits 507,509 497,404
Securities sold under agreements to
repurchase 24,018 33,052
Other borrowed funds 101,562 95,435
Obligated mandatorily redeemable
capital securities of subsidiary trust 13,500 13,500
Accrued liabilities 6,330 6,590
Total liabilities 652,919 645,981
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value,
10,000,000 shares authorized; 2003 -
3,658,212 shares issued,
2002 - 3,620,335 shares issued) 3,658 3,620
Additional paid-in capital 30,962 30,092
Retained Earnings 23,343 19,339
Accumulated other comprehensive income 624 1,439
Treasury stock at cost (2003 - 159,611 shares,
2002 - 157,115 shares) (4,179) (4,115)
Total shareholders' equity 54,408 50,375
Total liabilities and
shareholders' equity $707,327 $696,356