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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: DECEMBER 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ended:___________________
Commission file number: 0-20914
Ohio Valley Banc Corp.
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(Exact name of registrant as specified in its charter)
Ohio
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(State or other jurisdiction or organization)
31-1359191
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(I.R.S. Employer Identification Number)
420 Third Avenue, Gallipolis, Ohio 45631
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (740) 446-2631
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Shares, Without Par Value
--------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S - K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of February 28, 2001: $82,263,212
The number of common shares of the registrant outstanding
as of February 28, 2001: 3,477,282 common shares.
Exhibit Index begins on page 21. Page 1 of 67 pages.
Ohio Valley Banc Corp.
Form l0-K
December 31, 2000
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the 2000 Annual Report to Shareholders of Ohio Valley Banc
Corp. (Exhibit 13) are incorporated by reference into Part I, Item 1 and
Part II, Items 5, 6, 7A and 8.
(2) Portions of the Proxy Statement for the Annual Meeting of Shareholders to
be held April 11, 2001 are incorporated by reference into Part III, Items
10, 11, 12 and 13.
Contents of Form 10-K
PART I
Item 1 Business 3
Item 2 Properties 14
Item 3 Legal Proceedings 16
Item 4 Submission of Matters to a Vote of Security Holders 16
PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters 17
Item 6 Selected Financial Data 18
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 18
Item 7A Quantitative and Qualitative Disclosures about
Market Risk 18
Item 8 Financial Statements and Supplementary Data 18
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 18
PART III
Item 10 Directors and Executive Officers of the Registrant 19
Item 11 Executive Compensation 19
Item 12 Security Ownership of Certain Beneficial Owners and
Management 19
Item 13 Certain Relationships and Related Transactions 19
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on
Form 8-K 19
SIGNATURES 20
EXHIBIT INDEX 21
Page 2
PART I
ITEM 1 - BUSINESS
General Description of Business
Ohio Valley Banc Corp. (the Registrant), was incorporated under the laws of
the State of Ohio on January 8, 1992. The Registrant is registered under the
Bank Holding Company Act of 1956, as amended (BHC Act). A substantial portion of
the Registrant's revenue is derived from cash dividends paid by The Ohio Valley
Bank Company, the Registrant's wholly-owned subsidiary (the Bank). The principal
executive offices of the Registrant are located at 420 Third Avenue, Gallipolis,
Ohio 45631.
The Bank was organized on September 24, 1872, under the laws governing private
banking in Ohio. The Bank was incorporated in accordance with the general
corporation laws governing savings and loan associations of the State of Ohio on
January 8, 1901. The Articles of Incorporation of the Bank were amended on
January 25, 1935, for the purpose of authorizing the Bank to transact a
commercial savings bank and safe deposit business and again on January 26, 1950,
for the purpose of adding special plan banking. The Bank was approved for trust
powers in 1980 with trust services first being offered in 1981. The Bank's
deposits are insured up to applicable limits by the Federal Deposit Insurance
Corporation (FDIC).
The Registrant's wholly-owned subsidiary, Loan Central, Inc. (Loan Central),
was formed on February 1, 1996. Loan Central was incorporated under the Ohio
laws governing finance companies.
The Registrant has an equity interest in two minority-owned insurance
companies. The first company, ProFinance Holdings Corporation, was acquired on
October 5, 2000 and is engaged primarily in property and casualty insurance. The
second company, Ohio Valley Financial Services, was acquired on January 10, 2000
as a joint venture with an insurance agency and is engaged primarily in life,
homeowner and auto insurance. Both investments were approved under the
guidelines of the State of Ohio Department of Insurance.
The Bank is engaged in commercial and retail banking. Loan Central is engaged
in consumer finance. Reference is hereby made to Item 1 (E), "Statistical
Disclosure" and Item 8 of this Form 10-K for financial information pertaining to
the Registrant's business through its subsidiaries.
Description of Ohio Valley Banc Corp.'s Business
The Registrant's business is incident to its 100% ownership of the outstanding
stock of the Bank and Loan Central. The Bank is a full-service financial
institution offering a blend of commercial, retail and agricultural banking
services. Loans of all types and checking, savings and time deposits are
offered, along with such services as safe deposit boxes, issuance of travelers'
checks and administration of trusts. Loan Central, a consumer finance company,
offers smaller balance consumer loans to individuals with nonconforming or
nontraditional credit history. In addition to originating loans, the Bank
invests in U.S. Government and agency obligations, interest-bearing deposits in
other financial institutions and other investments permitted by applicable law.
Page 3
PART I (continued)
Revenues from loans accounted for 82.50% in 2000, 82.38% in 1999 and 80.50% in
1998 of total consolidated revenues. Revenues from interest and dividends on
securities accounted for 9.63%, 10.36% and 12.23% of total consolidated revenues
in 2000, 1999 and 1998, respectively. The Bank presently has sixteen offices,
all of which offer automatic teller machines. Seven of these offices also offer
drive-up services. The Bank accounted for substantially all of the Registrant's
consolidated assets at December 31, 2000.
The banking business is highly competitive. The market area for the Bank is
concentrated primarily in the Gallia, Jackson, Pike and Franklin Counties of
Ohio as well as the Mason, Kanawha and Cabell Counties of West Virginia. Some
additional business originates from the surrounding Ohio counties of Meigs,
Vinton, Scioto and Ross. Competition for deposits and loans comes primarily from
local banks and savings associations, although some competition is also
experienced from local credit unions, insurance companies and mutual funds. In
addition, larger regional institutions, with substantially greater resources,
are becoming increasingly visible. Loan Central's market presence further
strengthens the Registrant's ability to compete in Gallia, Jackson and Pike
County by serving a consumer base which may not meet the Bank's credit
standards. Loan Central also operates in Lawrence County which is outside the
Bank's primary market area. The principal methods of competition are the rates
of interest charged for loans, the rates of interest paid for deposits, the fees
charged for services and the availability and quality of services. The business
of the Registrant and its subsidiaries is not seasonal, nor is it dependent upon
a single or small group of customers.
The Bank deals with a wide cross-section of businesses and corporations which
are located primarily in southeastern Ohio. Few loans are made to borrowers
outside this area. Lending decisions are made in accordance with written loan
policies designed to maintain loan quality. The Bank originates commercial
loans, commercial leases, residential real estate loans, home equity lines of
credit, installment loans and credit card loans. The Bank believes that there is
no significant concentration of loans to borrowers engaged in the same or
similar industries and does not have any loans to foreign entities.
Commercial lending entails significant risks as compared with consumer lending
- - i.e., single-family residential mortgage lending, installment lending and
credit card loans. In addition, the payment experience on commercial loans is
typically dependent on adequate cash flows in order to evaluate whether
anticipated future cash flows will be adequate to service both interest and
principal due. Thus, commercial loans may be subject, to a greater extent, to
adverse conditions in the economy generally or adverse conditions in a specific
industry.
The Registrant's subsidiaries make installment credit available to customers
and prospective customers in their primary market area of southeastern Ohio.
Credit approval for consumer loans requires demonstration of sufficiency of
income to repay principal and interest due, stability of employment, a positive
credit record and sufficient collateral for secured loans. It is the policy of
the subsidiaries to adhere strictly to all laws and regulations governing
consumer lending. A qualified compliance officer is responsible for monitoring
the performance of their respective consumer portfolio and updating loan
personnel. The Registrant's subsidiaries make credit life insurance and health
and accident insurance available to all qualified buyers thus reducing their
risk of loss when a borrower's income is terminated or interrupted. The
Registrant's subsidiaries review their respective consumer loan portfolios
monthly to charge off loans which do not meet that subsidiary's standards.
Credit card accounts are administered in accordance with the same standards as
applied to other consumer loans.
Page 4
PART I (continued)
Consumer loans generally involve more risk as to collectibility than mortgage
loans because of the type and nature of collateral and, in certain instances,
the absence of collateral. As a result, consumer lending collections are
dependent upon the borrower's continued financial stability and thus are more
likely to be adversely affected by job loss, divorce or personal bankruptcy and
by adverse economic conditions.
The market area for real estate lending by the Bank is also located in
southeastern Ohio. The Bank generally requires that the loan amount with respect
to residential real estate loans be no more than 89% of the purchase price or
the appraisal value of the real estate securing the loan, unless private
mortgage insurance is obtained by the borrower for the percentage exceeding 89%.
These loans generally range from one year adjustable to thirty year fixed rate
mortgages. In the fourth quarter of 2000, the Bank began offering secondary
market real estate loans through the West Virginia Housing Authority to enhance
customer service and loan pricing. Real estate loans are secured by first
mortgages with evidence of title in favor of the Bank in the form of an
attorney's opinion of title or a title insurance policy. The Bank also requires
proof of hazard insurance with the Bank named as the mortgagee and as loss
payee. Home equity lines of credit are generally made as second mortgages by the
Bank. The home equity lines of credit are written with ten year terms but are
reviewed annually. A variable interest rate is generally charged on the home
equity lines of credit.
Beginning in December 1996, the Bank began a phase of SuperBank branch
openings with the objective of further enhancing customer service through
extended hours and convenience as well as expanding the new market area of
western West Virginia. From 1996 to 2000, the Bank opened seven SuperBank
facilities within supermarkets and Wal-Mart stores. These new branches service
the market areas of Gallia, Meigs and Lawrence counties in Ohio as well as the
growing Kanawha and Cabell counties in West Virginia.
In 1999, the Bank acquired two Huntington National Bank (HNB) branches in
Milton and Barboursville, West Virginia (Cabell County), with the Milton office
offering a traditional-style service. The Barboursville office, which
represented a SuperBank facility, ceased its operations in 2000 with the opening
of the nearby Huntington SuperBank office located in a Wal-Mart store.
The Registrant acquired Jackson Savings Bank (Jackson), an Ohio
state-chartered savings bank, in December 1998. Jackson then merged its
operations into the Bank on November 11, 2000 with management's objective of
improving operational efficiencies. The Registrant also continued to pursue
other ventures that took advantage of newly enacted federal legislation to
create new products and services. With the advent of the Gramm-Leach-Bliley Act,
the Registrant participated as an investor in the acquisition of ProFinance
Holdings Corporation, a property and casualty insurance underwriter and
reinsurance company. The acquisition was made possible by combining the
resources of five financial holding companies, a private equity firm and a group
of insurance executives to purchase the insurance company on October 5, 2000. In
addition, the Registrant formed a minority-owned subsidiary called Ohio Valley
Financial Services. The subsidiary, which opened for business on January 2,
2001, is a joint venture insurance agency with an existing insurance agency (The
Wiseman Agency, Inc.) that is located in Jackson, Ohio. Ohio Valley Financial
Services will be able to offer customers life, homeowners and auto insurance.
Page 5
PART I (continued)
Supervision and Regulation
The following is a summary of certain statutes and regulations affecting the
Registrant and the Bank. The summary is qualified in its entirety by reference
to such statutes and regulations.
The Registrant is subject to regulation under the BHC Act and to the reporting
requirements of, and examination and regulation by, the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"). Subsidiary banks of a
bank holding company are subject to certain restrictions imposed by the Federal
Reserve Act on transactions with affiliates, including any loans or extensions
of credit to the bank holding company or any of its subsidiaries, investments in
the stock or other securities thereof and the taking of such stock securities as
collateral for loans or extensions of credit to any borrower; the issuance of
guarantees, acceptances or letters of credit on behalf of the bank holding
company and its subsidiaries; purchases or sales of securities or other assets;
and the payment of money or furnishing of services to the bank holding company
and other subsidiaries. A bank holding company and its subsidiaries are
prohibited from engaging in certain tying arrangements in connection with
extensions of credit and/or the provision of other property or services to a
customer by the bank holding company or its subsidiaries.
In November of 1999, the Gramm-Leach-Bliley, or Financial Services
Modernization Act was enacted, amending the BHC Act, modernizing the laws
governing the financial services industry. This Act authorized the creation of
financial holding companies, a new type of bank holding company with powers
greatly exceeding those of traditional bank holding companies. The Registrant
became a financial holding company during 2000. In order to become a financial
holding company, a bank holding company and all of its depository institutions
must be well capitalized and well managed under federal banking regulations, and
the depository institutions must have received a Community Investment Act rating
of at least satisfactory.
Financial holding companies may engage in a wide variety of financial
activities; any activity in the future not already included in the list that the
Federal Reserve and the Treasury Department consider financial in nature or
incidental to financial activities; and any activity that the Federal Reserve
Board determines complementary to a financial activity and which does not pose a
substantial safety and soundness risk. These activities include securities
underwriting and dealing activities, insurance and underwriting activities and
merchant banking/equity investment activities. Because it has authority to
engage in all financial activities, a financial holding company may have several
affiliates that are functionally regulated by financial regulators other than
the Federal Reserve Board, such as the SEC and state insurance regulators. The
Gramm-Leach-Bliley Act directs the Federal Reserve Board to rely to the maximum
extent possible on examinations and reports prepared by functional regulators.
The Federal Reserve Board is also prohibited from applying any capital standard
directly to any functionally regulated subsidiary that is already in compliance
with the capital requirements of its functional regulator.
Page 6
PART I (continued)
If a subsidiary bank of a financial holding company fails to be both well
capitalized and well managed, the financial holding company must enter into a
written agreement with the Federal Reserve Board within 45 days to comply with
all applicable capital and management requirements. Until the Federal Reserve
Board determines that the bank is again well capitalized and well managed, the
Federal Reserve Board may impose additional limitations or conditions on the
conduct or activities of the financial holding company or any affiliate that the
Federal Reserve Board finds to be appropriate or consistent with federal banking
laws. If the financial holding company does not correct the capital or
management deficiencies within 180 days, the financial holding company may be
required to divest ownership or control of all banks, including state-chartered
non-member banks and other well capitalized institutions owned by the financial
holding company. If an insured bank subsidiary fails to maintain a satisfactory
rating under the Community Reinvestment Act, the financial holding company may
not engage in activities permitted only to financial holding companies until
such time as the bank receives a satisfactory rating.
In addition, the Gramm-Leach-Bliley Act fully closes the unitary thrift
loophole which permits commercial companies to own and operate thrifts, reforms
the Federal Home Loan Bank System to significantly increase community banks'
access to loan funding and protects banks from discriminatory state insurance
regulation. The Gramm-Leach-Bliley Act also includes new provisions in the
privacy area, restricting the ability of financial institutions to share
nonpublic personal customer information with third parties.
As an Ohio state-chartered bank, the Bank is supervised and regulated by the
Ohio Division of Financial Institutions. The Bank's deposits are insured up to
applicable limits by the FDIC and are subject to the applicable provisions of
the Federal Deposit Insurance Act. In addition, the holding company of any
insured financial institution that submits a capital plan under the federal
banking agencies' regulations on prompt corrective action guarantees a portion
of the institution's capital shortfall, as discussed below. The Registrant's
insurance company investments, ProFinance Holdings Corporation and Ohio Valley
Financial Services, are both supervised and regulated by the State of Ohio
Department of Insurance.
Various requirements and restrictions under the laws of the United States and
the State of Ohio affect the operations of the Bank including requirements to
maintain reserves against deposits, restrictions on the nature and amount of
loans which may be made and the interest that may be charged thereon,
restrictions relating to investments and other activities, limitations on credit
exposure to correspondent banks, limitations on activities based on capital and
surplus, limitations on payment of dividends, and limitations on branching.
Since June 1997, pursuant to federal legislation, the Bank has been authorized
to branch across state lines, unless the law of the other state specifically
prohibits the interstate branching authority granted by federal law.
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies and for state member banks. The risk-based capital guidelines
include both a definition of capital and a framework for calculating weighted
risk assets by assigning assets and off-balance sheet items to broad risk
categories. The minimum ratio of capital to risk weighted assets (including
certain off-balance sheet items, such as standby letters of credit) is 8%. At
least 4.0 percentage points is to be comprised of common stockholders' equity
(including retained earnings but excluding treasury stock), noncumulative
perpetual preferred stock, a limited amount of cumulative perpetual preferred
stock, and minority interests in equity accounts of
Page 7
PART I (continued)
consolidated subsidiaries, less goodwill and certain other intangible assets
("Tier 1 capital"). The remainder ("Tier 2 Capital") may consist, among other
things, of mandatory convertible debt securities, a limited amount of
subordinated debt, other preferred stock and a limited amount of allowance for
loan and lease losses. The Federal Reserve Board also imposes a minimum leverage
ratio (Tier 1 capital to total assets) of 3% for bank holding companies and
state member banks that meet certain specified conditions, including no
operational, financial or supervisory deficiencies, and including having the
highest regulatory rating. The minimum leverage ratio is 100-200 basis points
higher for other bank holding companies and state member banks based on their
particular circumstances and risk profiles and those experiencing or
anticipating significant growth. State non-member banks, such as the Bank, are
subject to similar capital requirements adopted by the FDIC.
The Registrant and the Bank currently satisfy all capital requirements.
Failure to meet applicable capital guidelines could subject a banking
institution to a variety of enforcement remedies available to federal and state
regulatory authorities, including the termination of deposit insurance by the
FDIC.
The federal banking regulators have established regulations governing prompt
corrective action to resolve capital deficient banks. Under these regulations,
institutions which become undercapitalized become subject to mandatory
regulatory scrutiny and limitations, which increase as capital continues to
decrease. Such institutions are also required to file capital plans with their
primary federal regulator, and their holding companies must guarantee the
capital shortfall up to 5% of the assets of the capital deficient institution at
the time it becomes undercapitalized.
The ability of a bank holding company to obtain funds for the payment of
dividends and for other cash requirements is largely dependent on the amount of
dividends which may be declared by its subsidiary banks and other subsidiaries.
However, the Federal Reserve Board expects the Registrant to serve as a source
of strength to these banks, which may require them to retain capital for further
investments in these banks, rather than for dividends for shareholders of the
Registrant. These banks may not pay dividends to the Registrant if, after paying
such dividends, they would fail to meet the required minimum levels under the
risk-based capital guidelines and the minimum leverage ratio requirements. These
banks must have the approval of their regulatory authorities if a dividend in
any year would cause the total dividends for that year to exceed the sum of
their current year's net profits and retained net profits for the preceding two
years, less required transfers to surplus. Payment of dividends by these banks
may be restricted at any time at the discretion of their regulatory authorities,
if they deem such dividends to constitute an unsafe and/or unsound banking
practice or if necessary to maintain adequate capital for these banks. These
provisions could have the effect of limiting the Registrant's ability to pay
dividends on its outstanding common shares.
Page 8
PART I (continued)
Deposit Insurance Assessments and Recent Litigation
The FDIC is authorized to establish separate annual assessment rates for
deposit insurance for members of the Bank Insurance Fund ("BIF") and the Savings
Association Insurance Fund ("SAIF"). The Bank is a member of the BIF. The FDIC
may increase assessment rates for either fund if necessary to restore the fund's
ratio of reserves to insured deposits to its target level within a reasonable
time and may decrease such rates if such target level has been met. The FDIC has
established a risk-based assessment system for both BIF and SAIF members. Under
this system, assessments vary based on the risk the institution poses to its
deposit insurance fund. The risk level is determined based on the institution's
capital level and the FDIC's level of supervisory concern about the institution.
Because BIF became fully funded, BIF assessments for healthy commercial banks
were reduced to $0 per year during 2000. Federal legislation, which became
effective September 30, 1996, provides, among other things, for the costs of
prior thrift failures to be shared by both the SAIF and the BIF. As a result of
such cost sharing, BIF assessments for healthy banks during 2001 will be $0.020
per $100 in deposits. Based upon their level of deposits at December 31, 2000,
the projected BIF assessment for the Bank would be $84,744 for 2001.
Monetary Policy and Economic Conditions
The business of commercial banks is affected not only by general economic
conditions, but also by the policies of various governmental regulatory
authorities, including the Federal Reserve Board. The Federal Reserve Board
regulates the money and credit conditions and interest rates in order to
influence general economic conditions primarily through open market operations
in U.S. Government securities, changes in the discount rate on bank borrowings
and changes in reserve requirements against bank deposits. These policies and
regulations significantly influence the amount of bank loans and deposits and
the interest rates charged and paid thereon, and thus have an effect on
earnings. The monetary policies of the Federal Reserve Board have had a
significant effect on the operating results of commercial banks in the past and
are expected to have significant effects in the future. In view of the changing
conditions in the economy and the money market and the activities of monetary
and fiscal authorities, no definitive predictions can be made as to future
changes in interest rates, credit availability or deposit levels.
Other Information
Management anticipates no material effect upon the capital expenditures,
earnings and competitive position of the Registrant or its subsidiaries by
reason of any laws regulating or protecting the environment. The Registrant
believes that the nature of the operations of the subsidiaries has little, if
any, environmental impact. The Registrant, therefore, anticipates no material
capital expenditures for environmental control facilities in its current fiscal
year or for
Page 9
PART I (continued)
the foreseeable future. The subsidiaries may be required to make capital
expenditures related to properties which they may acquire through foreclosure
proceedings in the future; however, the amount of such capital expenditures, if
any, is not currently determinable. Neither the Registrant nor its subsidiaries
have any material patents, trademarks, licenses, franchises or concessions. No
material amounts have been spent on research activities and no employees are
engaged full-time in research activities. As of December 31, 2000, the
Registrant and its subsidiaries employed 237 full-time equivalent employees.
Management considers its relationship with its employees to be good.
Financial Information About Foreign and Domestic Operations and Export Sales
The Registrant's subsidiaries do not have any offices located in a foreign
country and they have no foreign assets, liabilities, or related income and
expense.
Statistical Disclosure
The following section contains certain financial disclosures relating to the
Registrant as required under the Securities and Exchange Commission's Industry
Guide 3, "Statistical Disclosure by Bank Holding Companies", or a specific
reference as to the location of the required disclosures in the Registrant's
2000 Annual Report to Shareholders which are hereby incorporated herein by
reference.
Ohio Valley Banc Corp.
Statistical Information
I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
A. & B. The average balance sheet information and the related analysis of net
interest earnings for the years ending December 31, 2000, 1999 and 1998 are
included in Table I - "Consolidated Average Balance Sheet & Analysis of Net
Interest Income", within Management's Discussion and Analysis of Operations of
the Registrant's 2000 Annual Report to Shareholders and is incorporated into
this Item 1 by reference.
C. Tables setting forth the effect of volume and rate changes on interest income
and expense for the years ended December 31, 2000, 1999 and 1998 are included in
Table II - "Rate Volume Analysis of Changes in Interest Income & Expense",
within Management's Discussion and Analysis of Operations of the Registrant's
2000 Annual Report to Shareholders and is incorporated into this Item 1 by
reference. For purposes of these Tables, changes in interest due to volume and
rate were determined as follows:
Volume Variance - Change in volume multiplied by the previous
year's rate. Rate Variance - Change in rate multiplied by the
previous year's volume. Rate / Volume Variance - Change in
volume multiplied by the change in rate.
Page 10
PART I (continued)
Ohio Valley Banc Corp.
Statistical Information
II. SECURITIES
A. Types of Securities - Total securities on the balance sheet are comprised of
the following classifications at December 31:
(dollars in thousands) 2000 1999 1998
---- ---- ----
Securities Available-for-Sale
U.S. Treasury securities .......... $ 2,508 $ 7,510 $ 18,143
U.S. Government agency securities.. 50,796 41,522 4,114
Mortgage-backed securities......... 2,048 2,189
Marketable equity securities....... 4,467 4,150 3,998
--------- --------- ---------
Total securities available-for-sale $ 59,819 $ 55,371 $ 26,255
========= ========= =========
Securities Held-to-Maturity
U.S. Treasury securities........... $ 100
U.S. Government agency securities.. 27,693
Obligations of states and
political subdivisions........... $ 15,503 $ 15,690 17,195
Mortgage-backed securities......... 264 319 381
--------- --------- ---------
Total securities held-to-maturity $ 15,767 $ 16,009 $ 45,369
========= ========= =========
B. Information required by this item is included in Table III - "Securities",
within Management's Discussion and Analysis of Operations of the Registrant's
2000 Annual Report to Shareholders and is incorporated into this item 1 by
reference.
C. Excluding obligations of the U.S. Treasury and other agencies and
corporations of the U.S. Government, no concentration of securities exists of
any issuer that is greater than 10% of shareholders' equity of the Registrant.
III. LOAN PORTFOLIO
A. Types of Loans - Total loans on the balance sheet are comprised of the
following classifications at December 31:
(dollars in thousands) 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Real estate loans $209,724 $201,625 $163,650 $120,697 $112,635
Commercial loans 139,826 119,585 96,116 78,124 74,666
Consumer loans 98,013 88,942 85,664 78,878 75,047
All other loans 740 1,006 1,700 2,568 2,312
-------- -------- -------- -------- --------
$448,303 $411,158 $347,130 $280,267 $264,660
======== ======== ======== ======== ========
Page 11
PART I (continued)
Ohio Valley Banc Corp.
Statistical Information
B. Maturities and Sensitivities of Loans to Changes in Interest Rates -
Information required by this item is included in table VII - "Maturity and
Repricing Data of Loans", within Management's Discussion and Analysis of
Operations of the Registrant's 2000 Annual Report to Shareholders and is
incorporated into this Item 1 by reference.
C.1. Risk Elements - Information required by this item is included in Table VI -
"Summary of Nonperforming and Past Due Loans", within Management's Discussion
and Analysis of Operations of the Registrant's 2000 Annual Report to
Shareholders and is incorporated into this Item 1 by reference.
2. Potential Problem Loans - At December 31, 2000, there are approximately
$530,000 of loans, which are not included in Table VI - "Summary of
Nonperforming and Past Due Loans" within Management's Discussion and Analysis of
Operations of the Registrant's 2000 Annual Report to Shareholders, for which
management has some doubt as to the borrower's ability to comply with the
present repayment terms. These loans and their potential loss exposure have been
considered in management's analysis of the adequacy of the allowance for loan
losses.
3. Foreign Outstandings - There were no foreign outstandings at December 31,
2000, 1999 or 1998.
4. Loan Concentrations - As of December 31, 2000, there were no concentrations
of loans greater than 10% of total loans which are not otherwise disclosed as a
category of loans pursuant to Item III (A) above. Also refer to the Consolidated
Financial Statements regarding concentrations of credit found within Note A of
the Notes to the Consolidated Financial Statements of the Registrant's 2000
Annual Report to Shareholders incorporated herein by reference.
5. No material amount of loans that have been classified by regulatory examiners
as loss, substandard, doubtful, or special mention have been excluded from the
amounts disclosed as impaired, nonaccrual, past due 90 days or more,
restructured, or potential problem loans.
D. Other Interest-Bearing Assets - As of December 31, 2000, there were no other
interest-bearing assets that would be required to be disclosed under Item III
(C) if such assets were loans. At December 31, 2000, other real estate owned
totaled $34,000.
Page 12
PART I (continued)
Ohio Valley Banc Corp.
Statistical Information
IV. SUMMARY OF LOAN LOSS EXPERIENCE
A. The following schedule presents an analysis of the allowance for loan losses
for the years ended December 31:
(dollars in thousands) 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Balance, beginning of year.... $5,055 $4,277 $3,390 $3,180 $2,481
Loans charged-off:
Real estate............... 92 41 110 39 5
Commercial................ 61 454 130 215 78
Consumer.................. 1,642 1,298 1,433 961 673
-------- -------- -------- -------- --------
Total loans charged-off 1,795 1,793 1,673 1,215 756
Recoveries of loans:
Real estate............... 4 13 40 1
Commercial................ 23 47 41 73
Consumer.................. 231 232 178 138 54
-------- -------- -------- -------- --------
Total recoveries of loans 235 268 265 180 127
Net loan charge-offs.......... (1,560) (1,525) (1,408) (1,035) (629)
Provision charged to operations 1,890 2,303 2,295 1,245 1,328
-------- -------- -------- -------- --------
Balance, end of year.......... $5,385 $5,055 $4,277 $3,390 $3,180
======== ======== ======== ======== ========
Ratio of Net Charge-offs to Average Loans - Information required by this
item is included in Table V - "Allocation of the Allowance for Loan Losses",
within Management's Discussion and Analysis of Operations of the Registrant's
2000 Annual Report to Shareholders and is incorporated into this Item 1 by
reference. In addition, attention is directed to the caption "Loans" within
Management's Discussion and Analysis of Operations of the Registrant's 2000
Annual Report to Shareholders and is incorporated into this Item 1 by reference.
B. Allocation of the Allowance for Loan Losses - Information required by this
item is included in Table V - "Allocation of the Allowance for Loan Losses",
within Management's Discussion and Analysis of Operations of the Registrant's
2000 Annual Report to Shareholders and is incorporated into this Item 1 by
reference.
V. DEPOSITS
A. & B. Deposit Summary - Information required by this item is included in Table
I - "Consolidated Average Balance Sheet & Analysis of Net Interest Income",
within Management's Discussion and Analysis of Operations of the Registrant's
2000 Annual Report to Shareholders and is incorporated into this Item 1 by
reference.
Page 13
PART I (continued)
Ohio Valley Banc Corp.
Statistical Information
C. & E. Foreign Deposits - There were no foreign deposits outstanding at
December 31, 2000, 1999 or 1998.
D. Schedule of Maturities - The following table provides a summary of total time
deposits by remaining maturities for the period ended December 31, 2000:
Over Over
3 months 3 through 6 through Over
(dollars in thousands) or less 6 months 12 months 12 months
--------- --------- --------- ---------
Certificates of deposit of
$100,000 or greater.................. $ 20,023 $ 18,685 $ 25,181 $ 24,083
Other time deposits of
$100,000 or greater.................. 1,755 734 1,596 2,250
--------- --------- --------- ---------
Total time deposits of
$100,000 or greater.................. $ 21,778 $ 19,419 $ 26,777 $ 26,333
========= ========= ========= =========
VI. RETURN ON EQUITY AND ASSETS
Information required by this section is included in Table IX -
"Key Ratios", within Management's Discussion and Analysis of Operations of the
Registrant's 2000 Annual Report to Shareholders and is incorporated into this
Item 1 by reference.
VII. SHORT-TERM BORROWINGS
The following schedule is a summary of securities sold under agreements to
repurchase at December 31:
(dollars in thousands) 2000 1999 1998
-------- -------- --------
Balance outstanding at period-end........... $ 18,345 $ 16,788 $ 19,066
-------- -------- --------
Weighted average interest rate at period-end 5.28% 4.54% 3.96%
-------- -------- --------
Average amount outstanding during year...... $ 17,606 $ 13,961 $ 18,148
-------- -------- --------
Approximate weighted average interest rate
during the year.......................... 4.88% 3.65% 3.77%
-------- -------- --------
Maximum amount outstanding as of any
month-end................................ $ 22,690 $ 16,788 $ 25,112
-------- -------- --------
ITEM 2 - PROPERTIES
The Registrant owns no material physical properties except through the Bank.
The Bank conducts its operations from its main office building at 420 Third
Avenue, in Gallipolis, Ohio 45631. The main office building, Trust/Operations
Center and six of the fifteen branch facilities are owned by the Bank.
Page 14
PART I (continued)
The Bank has fifteen branch offices. A summary of these properties are as
follows:
1) Mini-Bank Office 437 Fourth Avenue, Gallipolis, OH 45631
2) Jackson Pike Office 3035 State Route 160, Gallipolis, OH 45631
3) Rio Grande Office 416 West College Avenue, Rio Grande, OH 45674
4) Jackson Office 738 East Main Street, Jackson, OH 45640
5) Waverly Office 507 W. Emmitt Avenue, Waverly, OH 45690
6) Columbus Office 3700 South High Street, Columbus, OH 43207
7) Point Pleasant Office 328 Viand Street, Point Pleasant, WV 25550
8) SuperBank-Gallipolis Office 236 Second Avenue, Gallipolis, OH 45631
9) SuperBank-Pomeroy Office 700 West Main Street, Pomeroy, OH 45769
10) Wal-Mart Gallipolis Office 2145 Eastern Avenue, Gallipolis, OH 45631
11) Wal-Mart Cross Lanes Office 100 Nitro Marketplace, Cross Lanes, WV 25315
12) Wal-Mart Southridge Office 2700 Mountaineer Blvd., S. Charleston, WV 25309
13) Wal-Mart Huntington Office 5170 US Rt. 60 East, Huntington, WV 25705
14) Milton Office 280 East Main Street, Milton, WV 25541
15) Wal-Mart South Point Office US Rt. 52, South Point, OH 45680
The Columbus, Point Pleasant, SuperBank and Wal-Mart offices are all leased.
The lease term for the Columbus facility is from November 1, 1999 to October 31,
2002, with a base rent of $10,680 per year. The Point Pleasant location has a
lease term from July 1, 1997 to June 30, 2017, with a base rent of $30,000 per
year. The lease term for the SuperBank-Gallipolis facility is from December 1,
1996 to November 30, 2001, with an option to renew for an additional five years.
The base rent is $8,900 per year. The lease term for the SuperBank-Pomeroy
facility is from August 1, 1998 to July 31, 2003, with a base rent of $13,000
per year. The lease term for the Wal-Mart Gallipolis location is from May 20,
1998 to May 31, 2003, with a base rent of $25,000 per year. The lease term for
the Wal-Mart Cross Lanes location is from August 19, 1998 to August 31, 2003,
with a base rent of $25,000 per year. The lease term for the Wal-Mart Southridge
location is from August 27, 1999 to August 31, 2004, with a base rent of $32,000
per year. The lease term for the Wal-Mart Huntington facility is from February
1, 2000 to January 31, 2005, with a base rent of $25,000 per year. The lease
term for the Wal-Mart South Point location is from November 4, 1999 to November
30, 2004, with a base rent of $25,000 per year.
The Bank owns a facility at 143 Third Avenue, Gallipolis, Ohio used for
additional office space. The Bank also owns a facility at 441 Second Avenue,
Gallipolis, Ohio, which it leases to Caldwell Miller Financial Group, Inc. The
primary lease term is from July 1, 1997 to June 30, 2002, with a base rent of
$13,800 per year.
Loan Central leases four facilities used as consumer finance offices located
at 2145-E Eastern Avenue, Gallipolis, Ohio 45631; 348 County Road 410, Suite 3,
South Point, Ohio 45680; 345 East Main Street, Jackson, Ohio 45640; and 505 West
Emmitt Avenue, Suite 3, Waverly, Ohio 45690. The lease term for the Gallipolis
office is from February 1, 1999 to February 1, 2004, with a base rent of $27,000
in 2000, $25,900 in 2001, $26,400 in 2002, $26,800 in 2003 and $2,200 for one
month in 2004. The lease term for the South Point office is from February 1,
1999 to February 1, 2004, with a base rent of $18,000 per year. The lease term
for the Jackson office is from August 1, 2000 to July 31, 2005, with a base rent
of $21,000
Page 15
PART I (continued)
per year. The lease term for the Waverly office is from April 1, 1999 to March
31, 2004, with a base rent of $9,600 per year.
Ohio Valley Financial Services and the Bank both conduct business in and lease
an office located at 221 Main Street, Jackson, Ohio 45640. Both businesses share
the lease cost of $5,400 per year. The lease term is from July 1, 1999 to July
1, 2002.
Management considers its properties to be satisfactory for its current
operations.
ITEM 3 - LEGAL PROCEEDINGS
There are no material pending legal proceedings against the Registrant or its
subsidiaries, other than ordinary litigation incidental to their respective
businesses.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There was no matter submitted during the fourth quarter of 2000 to a vote of
security holders, by solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to Executive Officers who
are directors is incorporated by reference to the information appearing under
the caption "Election of Directors" on page 3 of the Registrant's 2001 Proxy
Statement. Executive officers not required to be disclosed in the Proxy
Statement are presented in the table below. Executive officers serve at the
pleasure of the Board of Directors.
Current Position and
Name and Age Business Experience During Past 5 Years
- ------------------ ---------------------------------------
Sue Ann Bostic, 59 Vice President of the Registrant beginning 1996,
Senior Vice President, Administrative Group of the
Bank beginning 1996, Vice President, Support Services
Division of the Bank from 1993 to 1995.
Cherie A. Barr, 34 Vice President of the Registrant beginning 1998,
President of Loan Central beginning 2000, President
and Secretary of Loan Central from 1999 to 2000,
Senior Vice President and Secretary of Loan Central
from 1998 to 1999, Secretary of Loan Central from
1997 to 1998, Office Manager of Loan Central from
1996 to 1997, Office Manager, American General
Finance, Gallipolis, Ohio from 1994 to 1996.
Katrinka V. Hart, 42 Vice President of the Registrant beginning 1995,
Senior Vice President, Retail Bank Group of the Bank
beginning 1995.
Mario P. Liberatore, 55 Vice President of the Registrant beginning 1997,
Senior Vice President, West Virginia Bank Group of
the Bank beginning 1997, President of Bank One, Point
Pleasant, West Virginia, N.A. from 1995 to 1997.
Page 16
PART I (continued)
Current Position and
Name and Age Business Experience During Past 5 Years
- ------------------ ---------------------------------------
E. Richard Mahan, 55 Senior Vice President and Secretary of the Registrant
beginning 2000, Executive Vice President and
Secretary of the Bank beginning 2000, Senior Vice
President of the Registrant from 1999 to 2000,
Executive Vice President of the Bank from 1999 to
2000, Vice President of the Registrant from 1995 to
1998, Senior Vice President, Commercial Bank Group of
the Bank from 1995 to 1998.
Larry E. Miller, II, 36 Senior Vice President and Treasurer of the Registrant
beginning 2000, Executive Vice President and
Treasurer of the Bank beginning 2000, Senior Vice
President of the Registrant from 1999 to 2000,
Executive Vice President of the Bank from 1999 to
2000, Vice President of the Registrant from 1995 to
1998, Senior Vice President, Financial Bank Group of
the Bank from 1995 to 1998.
Harold A. Howe, 51 Vice President of the Registrant beginning 1998,
President of Jackson from 1994 to 2000.
David L. Shaffer, 42 Vice President of the Registrant beginning 2000,
Senior Vice President, Commercial Bank Group of the
Bank beginning 2000, Vice President, Commercial
Lending of the Bank from 1999 to 2000, Vice
President, Retail Lending of the Bank from 1994 to
1999.
Sandra L. Edwards, 53 Vice President of the Registrant beginning 2000,
Senior Vice President, Financial Bank Group of the
Bank beginning 2000, Vice President, Management
Information Systems of the Bank from 1999 to 2000,
Assistant Vice President, Operations Center Manager
of the Bank from 1993 to 1999.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information required under this item is located under the caption "Summary
of Common Stock Data" in the Registrant's 2000 Annual Report to Shareholders. In
addition, attention is directed to the caption "Capital Resources" within
Management's Discussion and Analysis of Operations of the Registrant's 2000
Annual Report to Shareholders and to Note P - "Regulatory Matters". All such
information is incorporated herein by reference. The Registrant was not involved
in any sale of unregistered securities.
Page 17
PART II (continued)
ITEM 6 - SELECTED FINANCIAL DATA
The information required under this item is incorporated by reference to the
information appearing under the caption "Selected Financial Data" of the
Registrant's 2000 Annual Report to Shareholders.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Operations" appears within the
Registrant's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The information required under this item is included in Table VIII - "Rate
Sensitivity Analysis" and the caption "Liquidity and Interest Rate Sensitivity"
found within Management's Discussion and Analysis of Operations of the
Registrant's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Registrant's consolidated financial statements and related notes are
listed below and incorporated herein by reference to the 2000 Annual Report to
Shareholders. The "Report of Independent Auditors" and the unaudited
supplementary "Consolidated Quarterly Financial Information (unaudited)"
specified by Item 302 of Regulation S-K appear within the 2000 Annual Report to
Shareholders and are incorporated by reference.
Consolidated Statements of Condition as of December 31, 2000 and 1999
Consolidated Statements of Income for the years ended December 31, 2000, 1999
and 1998
Consolidated Statements of Changes in Shareholders' Equity for the years
ended December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows for the years ended December 31, 2000,
1999 and 1998
Notes to the Consolidated Financial Statements
Report of Independent Auditors
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
No response required.
PART III
Information relating to the following items is included in the Registrant's
definitive proxy statement for the Annual Meeting of Shareholders to be held on
April 11, 2001 ("2001 Proxy Statement") filed with the Commission and is
incorporated by reference to the pages listed below into this Form 10-K Annual
Report, provided, that neither the report on executive compensation nor the
performance graph included in the Registrant's definitive proxy statement shall
be deemed to be incorporated herein by reference.
Page 18
PART III (continued)
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Discussion located at pages 4-5 of 2001 Proxy Statement.
See also Part I - "Executive Officers of the Registrant", beginning
on page 16 of this Form 10-K.
No facts exist which would require disclosure under Item 405 of
Regulation S-K.
ITEM 11 - EXECUTIVE COMPENSATION
Discussion located at pages 5-8 of 2001 Proxy Statement.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Discussion located at pages 1-3 of 2001 Proxy Statement.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Discussion located
at page 9 of 2001 Proxy Statement.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
A. (1) Financial Statements
The following consolidated financial statements of the Registrant appear in
the 2000 Annual Report to Shareholders, Exhibit 13, and are specifically
incorporated by reference under Item 8 of this Form 10-K:
Consolidated Statements of Condition as of December 31, 2000 and 1999
Consolidated Statements of Income for the years ended
December 31, 2000, 1999 and 1998
Consolidated Statements of Changes in Shareholders' Equity for the years ended
December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998
Notes to the Consolidated Financial Statements
Report of Independent Auditors
(2) Financial Statement Schedules
Financial statement schedules are omitted as they are not required or are not
applicable, or the required information is included in the financial statements.
(3) Exhibits
Reference is made to the Exhibit Index which is found on page 21 of this Form
10-K.
B. Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the year ended
December 31, 2000.
Page 19
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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: March 30, 2001 By /s/James L. Dailey
-----------------------------
James L. Dailey, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 30, 2001 by the following persons on
behalf of the Registrant and in the capacities indicated.
Name Capacity
---- --------
/s/James L. Dailey Chairman of the Board
- -----------------------------
James L. Dailey
/s/Jeffrey E. Smith President, Chief Executive Officer
- ----------------------------- and Director
Jeffrey E. Smith
/s/Lannes C. Williamson Director
- -----------------------------
Lannes C. Williamson
/s/Phil A. Bowman Director
- -----------------------------
Phil A. Bowman
/s/W. Lowell Call Director
- -----------------------------
W. Lowell Call
/s/Robert H. Eastman Director
- -----------------------------
Robert H. Eastman
/s/Merrill L. Evans Director
- -----------------------------
Merrill L. Evans
/s/Warren F. Sheets Director
- -----------------------------
Warren F. Sheets
/s/Thomas E. Wiseman Director
- -----------------------------
Thomas E. Wiseman
Page 20
EXHIBIT INDEX
The following exhibits are included in this Form 10-K or are incorporated by
reference as noted in the following table:
Exhibit Number Exhibit Description
3a Amended Articles of Ohio Valley Banc Corp. (as
filed with the Ohio Secretary of State on August
21, 1992) are incorporated herein by reference to
Form 10-K filed for the fiscal year ending
December 31, 1997 [Exhibit 3a] filed March 31,
1998.
3b Code of Regulations of the Registrant are
incorporated herein by reference to Form 8-K (File
# 2-71309) [Exhibit 3b] filed November 6, 1992.
10 Summary of Deferred Compensation Plan for
Directors and Executive Officers is incorporated
herein by reference to Form 10-K filed for the
fiscal year ending December 31, 1997.
11 Statement regarding computation of per share
earnings (included in Note A of the notes to the
Consolidated Financial Statements of this Annual
Report on Form 10-K.)
13 Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 2000. [Exhibit is
being filed herewith] (Not deemed filed except for
portions thereof which are specifically
incorporated by reference into this Annual Report
on Form 10-K.)
21 Subsidiaries of the Registrant [Exhibit is being
filed herewith.]
23 Consent of Independent Accountant - Crowe, Chizek
and Company LLP.[Exhibit is being filed herewith.]
Page 21