UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period
ended:
MARCH 31, 2005
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 0-20914
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OHIO VALLEY BANC CORP
----------------------
(Exact name of Registrant as specified in its charter)
Ohio
-------------------------------------------
(State or other jurisdiction of incorporation or organization)
31-1359191
----------
(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
Not Applicable
------------------------
Former name, former address and formal fiscal year, if changed since last report
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 whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
X Yes
No
The number of common shares of the Registrant outstanding as of April 29, 2005
was 3,430,859
OHIO VALLEY BANC CORP
FORM 10-Q
QUARTER ENDED MARCH 31, 2005
================================================================================
PART I - FINANCIAL INFORMATION 3
Item 1 - Financial Statements (Unaudited) 3
Consolidated Balance Sheets 3
Consolidated Statements Of Income 4
Condensed Consolidated Statements of Changes in Shareholders' Equity 5
Condensed Consolidated Statements of Cash Flows 6
Notes to the Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
Item 3 - Quantitative and Qualitative Disclosure About Market Risk 19
Item 4 - Controls and Procedures 20
PART II - OTHER INFORMATION 21
Item 1 - Legal Proceedings 21
Item 2 - Unregistered Sales of Equity Securities and
Use of Proceeds 21
Item 3 - Defaults Upon Senior Securities 22
Item 4 - Submission of Matters to a Vote of Security Holders 22
Item 5 - Other Information 22
Item 6 - Exhibits and Reports on Form 8-K 22
SIGNATURES 23
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OHIO VALLEY BANC CORP
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except share and per share data)
================================================================================
March 31, December 31,
2005 2004
------------ ------------
ASSETS
Cash and cash equivalents $ 15,523 $ 16,279
Interest-bearing deposits in other banks 516 525
Securities available-for-sale 70,820 74,155
Securities held-to-maturity (estimated fair
value: 2005 - $12,277; 2004 - $12,534) 11,801 11,994
Total loans 589,973 600,574
Less: Allowance for loan losses (7,162) (7,177)
------------ ------------
Net loans 582,811 593,397
Premises and equipment, net 8,962 8,860
Accrued income receivable 2,791 2,643
Goodwill 1,267 1,267
Bank owned life insurance 14,105 13,988
Other assets 6,613 6,012
------------ ------------
Total assets $ 715,209 $ 729,120
============ ============
LIABILITIES
Noninterest-bearing deposits $ 66,810 $ 69,936
Interest-bearing deposits 466,765 465,217
------------ ------------
Total deposits 533,575 535,153
Securities sold under agreements to repurchase 22,829 39,753
Other borrowed funds 79,969 76,550
Subordinated debentures 13,500 13,500
Accrued liabilities 8,409 7,585
----------- ------------
Total liabilities 658,282 672,541
----------- ------------
SHAREHOLDERS' EQUITY
Common stock ($1.00 par value per share, 10,000,000
shares authorized; 2005 - 3,689,829 shares
issued, 2004 - 3,689,828 shares issued) 3,690 3,690
Additional paid-in capital 31,931 31,931
Retained earnings 29,383 28,465
Accumulated other comprehensive loss (789) (219)
Treasury stock, at cost (2005 and
2004 - 258,970 shares) (7,288) (7,288)
----------- ------------
Total shareholders' equity 56,927 56,579
----------- ------------
Total liabilities and
shareholders' equity $ 715,209 $ 729,120
=========== ============
================================================================================
See notes to consolidated financial statements.
3
OHIO VALLEY BANC CORP
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
================================================================================
Three months ended
March 31,
2005 2004
------------- -------------
Interest and dividend income:
Loans, including fees $ 10,081 $ 9,959
Securities:
Taxable 682 734
Tax exempt 123 145
Dividends 60 52
Other Interest 6 1
------------- -------------
10,952 10,891
Interest expense:
Deposits 2,858 2,741
Securities sold under agreements
to repurchase 111 42
Other borrowed funds 882 950
Subordinated debentures 264 235
------------- -------------
4,115 3,968
------------- -------------
Net interest income 6,837 6,923
Provision for loan losses 317 768
------------- -------------
Net interest income after provision
for loan losses 6,520 6,155
Noninterest income:
Service charges on deposit accounts 705 759
Trust fees 53 52
Income from bank owned insurance 148 163
Gain on sale of loans 28 6
Other 319 326
------------- -------------
1,253 1,306
Noninterest expense:
Salaries and employee benefits 3,182 3,040
Occupancy 334 328
Furniture and equipment 295 283
Data processing 164 178
Other 1,509 1,358
------------- -------------
5,484 5,187
------------- -------------
Income before income taxes 2,289 2,274
Provision for income taxes 719 708
------------- -------------
NET INCOME $ 1,570 $ 1,566
============= =============
Earnings per share (1) $ 0.37 $ 0.36
============= =============
(1) Adjusted for a 25% stock split declared on April 13, 2005 to be distributed
on May 10, 2005 to shareholders of record as of April 25, 2005.
================================================================================
See notes to consolidated financial statements.
4
OHIO VALLEY BANC CORP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY (UNAUDITED)
(dollars in thousands, except share and per share data)
================================================================================
Three months ended
March 31,
2005 2004
------------ ------------
Balance at beginning of period $ 56,579 $ 54,408
Comprehensive income:
Net income 1,570 1,566
Change in unrealized gain (loss) on
available-for-sale securities (864) 109
Income tax effect 294 (37)
------------ ------------
Total comprehensive income 1,000 1,638
Proceeds from issuance of common
stock through dividend reinvestment plan ---- 263
Cash dividends (652) (630)
Shares acquired for treasury ---- (1,203)
------------ ------------
Balance at end of period $ 56,927 $ 54,476
============ ============
Cash dividends per share (1) $ 0.15 $ 0.14
============ ============
Shares from common stock issued
through dividend reinvestment plan 1 9,144
============ ============
Shares acquired for treasury ---- 40,484
============ ============
(1) Adjusted for a 25% stock split declared on April 13, 2005 to be distributed
on May 10, 2005 to shareholders of record as of April 25, 2005.
================================================================================
See notes to the consolidated financial statements.
5
OHIO VALLEY BANC CORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands, except per share data)
================================================================================
Three months ended March 31,
2005 2004
------------ ------------
Net cash from operating activities: $ 2,398 $ 2,731
Investing activities:
Proceeds from maturities of
securities available-for-sale 5,540 6,285
Purchases of securities available-
for-sale (3,037) (3,068)
Proceeds from maturities of
securities held-to-maturity 189 236
Change in interest-bearing deposits
in other banks 9 2
Net change in loans 10,269 (11,207)
Purchases of premises and equipment (389) (239)
------------ ------------
Net cash from (used) in investing
activities 12,581 (7,991)
Financing activities:
Change in deposits (1,578) 22,577
Cash dividends (652) (630)
Proceeds from issuance of common stock ---- 263
Purchases of treasury stock ---- (1,203)
Change in securities sold under
agreements to repurchase (16,924) 67
Proceeds from FHLB borrowings 5,000 3,000
Repayment of FHLB borrowings (4,259) (5,615)
Change in other short-term borrowings 2,678 (15,352)
------------ ------------
Net cash from (used) in financing
activities (15,735) 3,107
------------ ------------
Change in cash and cash equivalents (756) (2,153)
Cash and cash equivalents at beginning of period 16,279 17,753
------------ ------------
Cash and cash equivalents at end of period $ 15,523 $ 15,600
============ ============
SUPPLEMENTAL DISCLOSURE
- -----------------------
Cash paid for interest $ 4,427 $ 4,524
Cash paid for income taxes 425 207
Non-cash tranfers from loans to other real
estate owned ---- 50
================================================================================
See notes to consolidated financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of Ohio
Valley Banc Corp. (the "Company") and its wholly-owned subsidiaries, The Ohio
Valley Bank Company (the "Bank"), Loan Central, Inc., a consumer finance
company, and Ohio Valley Financial Services Agency, LLC, an insurance agency.
All material intercompany accounts and transactions have been eliminated in
consolidation.
These interim financial statements are prepared without audit and reflect all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary to present fairly the consolidated financial position of the
Company at March 31, 2005, and its results of operations and cash flows for the
periods presented. The results of operations for the three months ending March
31, 2005 are not necessarily indicative of the operating results to be
anticipated for the full fiscal year ending December 31, 2005. The accompanying
consolidated financial statements do not purport to contain all the necessary
financial disclosures required by accounting principles generally accepted in
the United States of America (US GAAP) that might otherwise be necessary in the
circumstances. The Annual Report of the Company for the year ended December 31,
2004 contains consolidated financial statements and related notes which should
be read in conjunction with the accompanying consolidated financial statements.
The accounting and reporting policies followed by the Company conform to US
GAAP. The preparation of financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from those estimates. The allowance for loan losses is particularly subject to
change.
The majority of the Company's income is derived from commercial and retail
lending activities. Management considers the Company to operate in one segment,
banking.
INCOME TAX
Income tax expense is the sum of the current year income tax due or refundable
and the change in deferred tax assets and liabilities. Deferred tax assets and
liabilities are the expected future tax consequences of temporary differences
between the carrying amounts and tax bases of assets and liabilities, computed
using enacted tax rates. A valuation allowance, if needed, reduces deferred tax
assets to the amount expected to be realized.
CASH FLOW
For consolidated financial statement classification and cash flow reporting
purposes, cash and cash equivalents include cash on hand, noninterest-bearing
deposits with banks and federal funds sold. Generally, federal funds are
purchased and sold for one-day periods. The Company reports net cash flows for
customer loan transactions, deposit transactions, short-term borrowings and
interest-bearing deposits with other financial institutions.
================================================================================
7
EARNINGS PER SHARE
Earnings per share is computed based on the weighted average shares outstanding
during the period. Weighted average shares outstanding were 3,430,859 and
3,500,359 for the three months ending March 31, 2005 and 2004, respectively.
STOCK SPLITS
On April 13, 2005, the Company's Board of Directors declared a five-for-four
stock split, effected in the form of a stock dividend, on the shares of the
Company's common stock. Each shareholder of record on April 25, 2005, will
receive an additional share of common stock for every four shares of common
stock then held. The stock will be issued on May 10, 2005. The stock split will
be recorded by transferring from retained earnings an amount equal to the stated
value of the shares issued. The Company will retain the current par value of
$1.00 per share for all shares of common stock. Earnings and cash dividends per
share amounts have been retroactively adjusted to reflect the effect of the
stock split.
LOANS
Loans are reported at the principal balance outstanding, net of unearned
interest, deferred loan fees and costs, and an allowance for loan losses.
Interest income on loans is reported on an accrual basis using the interest
method and includes amortization of net deferred loan fees and costs over the
loan term. Interest income on loans is not reported when full loan repayment is
in doubt, typically when the loan is impaired or payments are past due over 90
days.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is a valuation allowance for probable incurred
credit losses, increased by the provision for loan losses and decreased by
charge-offs less recoveries. Loan losses are charged against the allowance when
management confirms that a loan balance is uncollectible. Subsequent recoveries,
if any, are credited to the allowance. Management estimates the allowance
balance required using past loan loss experience, the nature and volume of the
portfolio, information about specific borrower situations and estimated
collateral values, economic conditions, and other factors. Allocations of the
allowance may be made for specific loans, but the entire allowance is available
for any loan that, in management's judgment, should be charged-off.
The allowance consists of specific and general components. The specific
component relates to loans that are individually classified as impaired or loans
otherwise classified as substandard or doubtful. The general component covers
non-classified loans and is based on historical loss experience adjusted for
current factors.
A loan is impaired when full payment under the loan terms is not expected.
Commercial and commercial real estate loans are individually evaluated for
impairment. Impaired loans are carried at the present value of expected cash
flows discounted at the loan's effective interest rate or at the fair value of
the collateral if the loan is collateral dependent. A portion of the allowance
for loan losses is allocated to impaired loans. Large groups of smaller balance
homogeneous loans, such as consumer and residential real estate loans, are
collectively evaluated for impairment, and accordingly, they are not separately
identified for impairment disclosures.
================================================================================
8
ACCOUNTING PRONOUNCEMENTS
In March 2004, the Financial Accounting Standards Board ("FASB") ratified the
consensus reached by the Emerging Issues Task Force in Issue 03-1, "The Meaning
of Other-Than-Temporary Impairment and Its Application to Certain Investments"
("EITF 03-1"). The basic model developed to evaluate whether an investment
within scope of EITF 03-1 is other-than-temporarily impaired involves a
three-step process including determining whether an investment is impaired (fair
value less amortized cost), evaluating whether the impairment is
other-than-temporary and, if other-than-temporary, requiring recognition of an
impairment equal to the difference between the investment's cost and fair value.
In September 2004, the FASB issued Staff Position ("FSP") No. 03-1-1 which
delayed the effective date for the measurement and recognition guidance
contained in paragraphs 10-20 of EITF 03-1. The delay of the effective date for
paragraphs 10-20 will be superseded concurrent with the final issuance of
proposed FSP EITF Issue 03-1-a, "Implication Guidance for the Application of
Paragraph 16 of EITF 03-1, 'The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments.'" The amount of other-than-temporary
impairment to be recognized, if any, will be dependent on market conditions,
management's intent and ability to hold investments until a forecasted recovery,
and the finalization of this proposed guidance by the FASB. This guidance has
not had a material impact on the Company's financial condition, results of
operations, or cash flows
In December 2003, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued AICPA Statement of Position No.
03-3, "Accounting for Certain Loans or Debt Securities Acquired in a Transfer"
("SOP 03-3"), to address accounting for differences between the contractual cash
flows of certain loans and debt securities and the cash flows expected to be
collected when loans or debt securities are acquired in a transfer and those
cash flow differences are attributable, at least in part, to credit quality. As
such, SOP 03-3 applies to such loans and debt securities purchased or acquired
in purchase business combinations and do not apply to originated loans. The
application of SOP 03-3 limits the interest income, including accretion of
purchase price discounts that may be recognized for certain loans and debt
securities. Additionally, SOP 03-3 requires that the excess of contractual cash
flows over cash flows expected to be collected (nonaccretable difference) not be
recognized as an adjustment of yield or valuation allowance, such as the
allowance for loan and lease losses. Subsequent to the initial investment,
increases in expected cash flows generally should be recognized prospectively
through adjustment of the yield on the loan or debt security over its remaining
life. Decreases in expected cash flows should be recognized as impairment. SOP
03-3 is effective for loans and debt securities acquired in fiscal years
beginning after December 15, 2004. This guidance has not had a material impact
on the Company's financial condition, results of operations, or cash flows.
NOTE 2 - LOANS
Total loans as presented on the balance sheet are comprised of the following
classifications:
March 31, December 31,
2005 2004
---------------- ----------------
Real estate loans $ 223,500 $ 227,234
Commercial and industrial loans 221,536 226,058
Consumer loans 144,738 146,965
Other loans 199 317
---------------- ----------------
$ 589,973 $ 600,574
================ ================
At March 31, 2005 and December 31, 2004, loans on nonaccrual status were
approximately $1,149 and $1,618, respectively. Loans past due more than 90 days
and still accruing at March 31, 2005 and December 31, 2004 were $1,244 and
$1,402, respectively.
================================================================================
9
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
Following is an analysis of changes in the allowance for loan losses for the
three months ended March 31:
2005 2004
---------------- ----------------
Balance - January 1, $ 7,177 $ 7,593
Loans charged off:
Real estate 161 106
Commercial 679 224
Consumer 491 447
---------------- ----------------
Total loans charged off 1,331 777
Recoveries of loans:
Real estate 43 120
Commercial 701 95
Consumer 255 241
---------------- ----------------
Total recoveries 999 456
---------------- ----------------
Net loan charge-offs (332) (321)
Provision charged to operations 317 768
---------------- ----------------
Balance - March 31, $ 7,162 $ 8,040
================ ================
Information regarding impaired loans is as follows:
March 31, December 31,
2005 2004
-------------- ---------------
Balance of impaired loans $ 4,874 $ 5,573
============== ===============
Less portion for which no specific
allowance is allocated $ ---- $ 619
============== ===============
Portion of impaired loan balance for
which a specific allowance for credit
losses is allocated $ 4,874 $ 4,954
============== ===============
Portion of allowance for loan losses
specifically allocated for the
impaired loan balance $ 2,024 $ 1,986
============== ===============
Average investment in impaired loans
year-to-date $ 4,914 $ 5,711
============== ===============
Interest on impaired loans was not material for the periods ended March 31, 2005
and 2004.
NOTE 4 - CONCENTRATIONS OF CREDIT RISK AND FINANCIAL
INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Company, through its subsidiaries, grants residential, consumer, and
commercial loans to customers located primarily in the central and southeastern
areas of Ohio as well as the western counties of West Virginia. Approximately
3.40% of total loans were unsecured at March 31, 2005 as compared to 3.36% at
December 31, 2004.
================================================================================
10
The Company is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments primarily include commitments to extend credit,
standby letters of credit and financial guarantees. The contract amounts of
these instruments are not included in the consolidated financial statements. At
March 31, 2005, the contract amounts of these instruments totaled approximately
$54,972 as compared to $61,667 at December 31, 2004. Since many of these
instruments are expected to expire without being drawn upon, the total contract
amounts do not necessarily represent future cash requirements.
NOTE 5 - OTHER BORROWED FUNDS
Other borrowed funds at March 31, 2005 and December 31, 2004 are comprised of
advances from the Federal Home Loan Bank (FHLB) of Cincinnati, promissory notes
and Federal Reserve Bank (FRB) Notes.
FHLB Borrowings Promissory Notes FRB Notes Totals
--------------- ---------------- --------- ----------
2005 $ 70,038 $ 7,566 $ 2,365 $ 79,969
2004 $ 67,222 $ 5,355 $ 3,973 $ 76,550
Pursuant to collateral agreements with the FHLB, advances are secured by
$205,564 in qualifying first mortgage loans and $5,481 in FHLB stock at March
31, 2005. Fixed rate FHLB advances of $67,763 mature through 2010 and have
interest rates ranging from 2.54% to 6.62%. In addition, variable rate FHLB
borrowings totaling $2,275 mature in 2005 with an interest rate of 2.97%.
At March 31, 2005, the Company had a cash management line of credit enabling it
to borrow up to $35,000 from the FHLB. All cash management advances have an
original maturity of 90 days. The line of credit must be renewed on an annual
basis. There were $32,275 available on this line of credit at March 31, 2005.
Based on the Company's current FHLB stock ownership, total assets and pledgeable
residential first mortgage loans, the Company had the ability to obtain
borrowings up to a maximum of $152,270 at March 31, 2005.
Promissory notes, issued primarily by the parent company, have fixed rates of
2.00% to 4.50% and are due at various dates through a final maturity date of
February 9, 2006.
FRB notes consist of the collection of tax payments from Bank customers under
the Treasury Tax and Loan program. These funds have a variable interest rate and
are callable on demand by the U.S. Treasusry. At March 31, 2005, the interest
rate for the Company's FRB notes was 2.55%.
Letters of credit issued on the Bank's behalf by the FHLB to collateralize
certain public unit deposits as required by law totaled $36,000 at March 31,
2005 and $29,500 at December 31, 2004. Various investment securites from the
Bank used to collateralize FRB notes totaled $6,070 at March 31, 2005 and $6,060
at December 31, 2004.
11
At March 31, 2005, scheduled principal payments through December 31 over the
next five years are as follows:
FHLB Borrowings Promissory Notes FRB Notes Totals
--------------- ---------------- --------- ----------
2005 $ 15,696 $ 7,109 $ 2,365 $ 25,170
2006 22,107 457 ---- 22,564
2007 8,061 ---- ---- 8,061
2008 14,010 ---- ---- 14,010
2009 3,007 ---- ---- 3,007
Thereafter 7,157 ---- ---- 7,157
---------------- ---------------- ---------- ----------
$ 70,038 $ 7,566 $ 2,365 $ 79,969
================ ================ ========== ==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion focuses on the consolidated financial condition of the
Company and its subsidiaries at March 31, 2005 compared to December 31, 2004,
and the consolidated results of operations for the quarterly period ending March
31, 2005 compared to the same period in 2004. The purpose of this discussion is
to provide the reader a more thorough understanding of the consolidated
financial statements. This discussion should be read in conjunction with the
interim consolidated financial statements and the footnotes included in this
Form 10-Q.
The Company is not aware of any trends, events or uncertainties that will have
or are reasonably likely to have a material effect on the liquidity, capital
resources or operations except as discussed herein. Also, the Company is not
aware of any current recommendations by regulatory authorities which would have
such effect if implemented.
Comparison of
Financial Condition
at March 31, 2005 and December 31, 2004
---------------------------------------
Introduction
The consolidated total assets of the Company decreased $13,911 or 1.9% during
the first three months of 2005 to finish at $715,209. This decrease in assets
was primarily due to a decrease in the Company's loan portfolio and
available-for-sale securities, which are down $10,601 and $3,335, respectively,
from year-end 2004. The excess funds that were generated as a result of
declining loan balances were used to support the decline in the Company's
securities sold under agreements to repurchase ("repurchase agreements"), which
decreased by $16,924 from year-end 2004. In addition, other borrowed funds
increased $3,419 during the first three months of 2005.
Cash and Cash Equivalents
The Company considers cash and cash equivalents to consist of cash and balances
due from banks and federal funds sold. The amounts of cash and cash equivalents
fluctuate on a daily basis due to customer activity and liquidity needs. At
March 31, 2005, cash and cash equivalents totaled $15,523, down 4.6% compared to
$16,279 at December 31, 2004. This decrease was primarily attributable to fewer
items in the process of collection at March 31, 2005. Management believes that
12
the current balance of cash and cash equivalents, although down from year-end
2004, remains at a level that will meet cash obligations and provide adequate
liquidity. Further information regarding the Company's liquidity can be found
under the caption "Liquidity" in this management's discussion and analysis.
Investments
During the first three months of 2005, investment securities decreased $3,528 or
4.1% driven by a decrease in U.S. government agency securities of $3,781 or
18.8% as compared to year-end 2004. The Company's demand for U.S. government
agency securities has primarily been to satisfy pledging requirements for
repurchase agreements and public fund deposits. In the first quarter of 2005,
the Company's repurchase agreements decreased 42.6%, lowering the need to secure
these balances and producing the slight runoff in U.S. government agency
securities. While the Company's focus is to generate interest revenue primarily
though loan growth, management will continue to invest excess funds in
securities when opportunities arise. Mortgage-backed securities continue to make
up the largest portion of the Company's investment portfolio, finishing at
$49,115, or 59.4% of total investments at March 31, 2005. Mortgage-backed
securities provide increased cash flows due to the more rapid repayment of
principal as compared to other investment security types which deliver proceeds
upon maturity or call date.
Loans
During the first three months of 2005, total loans were down $10,601 or 1.8%
from year-end 2004, due to economic factors and lower loan demand. Total loan
declines were led by commercial loans, which were down $4,522 or 2.0% from
year-end 2004 to reach $221,536. While the general demand for commercial loan
opportunities has declined in the first quarter of 2005, the Company also
experienced several loan payoffs from commercial business customers due to the
challenged economy, especially in Ohio. The primary market areas for the
Company's commercial loans are in the areas of Gallia, Jackson and Franklin
counties in Ohio, which accounted for 53.1% of total originations for the first
quarter of 2005 and the growing West Virginia markets, which accounted for 20.5%
of total originations for the same time period. Commercial loan volume in 2005
will continue to be dependent upon economic conditions as well as general demand
for loans in the Company's market area.
During the first three months of 2005, total real estate loans decreased $3,734
or 1.6% from year-end 2004 to reach $223,500. This reduction in loans was mostly
impacted by the Company's 15 and 30 year fixed real estate loans, which
decreased $3,885 or 3.5% from year-end 2004. The Company currently sells 30 year
fixed rate mortgages and for the first quarter of 2005, the Company sold
approximately $1,000 in secondary market real estate loans. Furthermore, the
high volume of refinancings in 2003 and a portion of 2004 at historical low
interest rates have reduced consumer demand for typical home loans in the first
quarter of 2005. In addition, the first quarter is seasonally a low volume
period for real estate loan demand, with originations typically increasing in
the second quarterly period. Real estate loan originations have steadily
increased throughout the first quarter of 2005.
During the first three months in 2005, consumer loans decreased $2,227 or 1.5%
since year-end 2004 to reach $144,738. Loan decreases were led by automobiles,
both direct and indirect, which were down $2,742 or 3.5% from year-end 2004.
While the automobile lending segment continues to represent the largest portion
of the Company's consumer loan portfolio, economic factors and a rising rate
environment have had an impact on the recent declining loan volume. The Company
was under a sustained low rate environment for 2003 and much of 2004, which
created better pricing opportunities for customers and, in turn, yielded
additional consumer demand for automobile loans during this period. As rates
have been aggressively moving up, continued competition with alternative methods
13
of financing, such as captive finance companies still offering 0% interest rate
loans, has challenged loan growth in this area during the first quarter of 2005.
While total loan balances are currently down, the Company remains committed to
sound underwriting practices without sacrificing asset quality and avoiding
exposure to unnecessary risk that could weaken the portfolio.
Allowance for Loan Losses
During the first three months of 2005, the Company's net charge offs remained
relatively flat, increasing $11 or 3.4% as compared to the same period in 2004,
mostly from increased collection efforts within commercial loans. The Company's
nonperforming loans continues to improve, ending at $2,392 for the first quarter
of 2005 as compared to $3,020 at year-end 2004 and $3,075 in the first quarter
ending 2004, which emphasizes management's continued focus on asset quality. The
decreased nonperforming loans improved the Company's ratio of nonperforming
loans as a percentage of total loans to .41% for the first quarter of 2005 as
compared to .50% at year-end 2004 and .53% at March 31, 2004. Due to the decline
in nonperforming loans impacted by sound underwriting practices and lower
portfolio risk, the ratio of allowance for loan losses to total loans decreased
to 1.21% at March 31, 2005 as compared to 1.38% at March 31, 2004. Management
believes that the allowance for loan losses is reflective of probable incurred
losses in the loan portfolio.
Deposits
During the first three months of 2005, total deposits were down $1,578 or .3%
from year-end 2004 primarily due to decreases in time deposits and noninterest
bearing demand deposits. Time deposits decreased $5,476 or 1.8% from year-end
2004 largely due to the maturity of one large commercial CD of over $6,000. This
maturity was partially offset by an increase in the Company's brokered CD issues
of $1,275 or 3.9% during the first three months of 2005 as compared to year-end
2004. Management will continue to utilize these brokered deposit sources from
local and national markets to supplement deposit growth. The Company's
interest-free funding source, noninterest bearing demand deposits, also
decreased $3,126 or 4.5% during the first three months of 2005. This decrease
occurred mostly in business checking account balances, which were down $4,006 or
10.3% compared to year-end 2004. Partially offsetting these declines in time and
noninterest bearing demand deposits was an increase to the Company's interest
bearing demand deposits, which were up $5,266 or 4.7% during the first three
months of 2005. This increase was related to the collection of real estate taxes
by local municipalities who maintain various deposit accounts (NOW accounts)
within the Bank. These deposits from tax collections are short-term in nature
and typically decrease in the second quarter.
Securities Sold Under Agreements to Repurchase
Repurchase agreements, which are financing arrangements that have overnight
maturity terms, were down $16,924 or 42.6% from year-end 2004. This decline was
mostly due to typical seasonal fluctuations of two commercial accounts in the
first quarter of 2005.
Other Borrowed Funds
Other borrowed funds are primarily advances from the Federal Home Loan Bank
("FHLB"), which are used to fund loan growth and short-term liquidity needs.
During the first three months of 2005, other borrowed funds were up $3,419 or
4.5% from December 31, 2004 primarily due to short-term FHLB advances which were
up $2,075.
14
Shareholders' Equity
Total shareholders' equity at March 31, 2005 of $56,927 was up by $348 as
compared to the balance of $56,579 on December 31, 2004. Contributing most to
this increase was year-to-date income of $1,570 less cash dividends paid of
$652, or $.15 per share year-to-date, adjusted for the stock split.
Partially offsetting the growth in capital was a decrease in the market value of
available-for-sale securities held by the Company, which lowered shareholders'
equity by $570, net of deferred income taxes. At March 31, 2005, the Company had
an unrealized loss, net of deferred income taxes, of $789 as compared to an
unrealized loss, net of deferred income taxes, of $219 at December 31, 2004. The
Company has approximately 85.7% of its securities classified as
available-for-sale. As a result, the securities and shareholders' equity
sections of the Company's balance sheet are more sensitive to the changing
market values of securities than if the securities were classified as
held-to-maturity.
At March 31, 2005, the Company had treasury stock totaling $7,288, unchanged
from year-end 2004. The Company anticipates repurchasing additional common
shares from time to time as authorized by its stock repurchase program. In the
first quarter of 2005, the Company's Board of Directors authorized the
repurchase up to 175,000 shares of the Company's common stock through open
market and privately negotiated purchases between February 16, 2005 and August
16, 2005.
Comparison of
Results of Operations
for the Quarters Ended March 31, 2005 and 2004
----------------------------------------------
Introduction
The Company's net income was $1,570 for the first quarter of 2005, up $4 or .3%
compared to $1,566 for the first quarter of 2004. Comparing March 31, 2005 to
March 31, 2004, the annualized quarter-to-date return on assets decreased from
..89% to .88%, and return on equity decreased from 11.54% to 11.23%. First
quarter 2005 earnings per share was $.37, up 2.2% over first quarter 2004
earnings per share of $.36, adjusted for the stock split. The minimal growth in
net income during the first quarter 2005 was primarily due to a decrease in
provision expense of $451 as a result of significant improvement in asset
quality being offset by reduced levels of net interest income and increases to
overhead expenses.
Net Interest Income
For the first quarter of 2005, net interest income was below the first quarter
results of 2004, showing a decrease of $86 or 1.2%. The lack of growth in net
interest income is largely due to growth in earning assets being completely
offset by the decline in net interest margin. The Company's net interest income
and net interest margin continue to be challenged by relatively low reinvestment
yields and increased competitive pricing on loans. Total interest income
increased by $61 or .6% to finish at $10,952 at March 31, 2005. Growth of
$15,212 or 2.3% in year-to-date average earning assets for the first quarter of
2005 compared to the same period in 2004 was partially offset by a decline in
asset yields, which were down 7 basis points as compared to the first three
months in 2004. While the Company has been experiencing a period of consistent
increases in short-term interest rates since June 2004, long-term rates continue
to remain flat, causing the real estate and consumer loan portfolio yields to
remain below the first quarter of 2004. Total interest expense increased $147 or
3.7% to finish at $4,115 at March 31, 2005. The increase in interest expense was
largely impacted by a 5 basis point increase in the Bank's average funding costs
due to the rising interest rate environment. As a result, the Company's net
interest margin decreased to 4.12% in the first quarter of 2005 from 4.24% in
the first quarter of 2004. While the Company's net interest margin is below a
year ago, the Federal Reserve's actions to increase interest rates have allowed
15
loan yields to stabilize and take some pressure off of the net interest margin.
This is evident with the improvement of the Company's net interest margin from
the fourth quarter of 2004 when it was 3.98%, an increase of 14 basis points.
Since many of the Company's loans are variable-rate, the anticipated increases
in rates for 2005 should result in higher interest income for the Company in the
near term. However, deposit customers will similarly expect higher rates of
interest on their accounts that could potentially offset some of this benefit of
rising interest rates. For additional discussion on the Company's rate sensitive
assets and liabilities, please see Item 3, Quantitative and Qualitative
Disclosure About Market Risk on page 19 of this Form 10-Q.
Provision Expense
The Company's provision expense was $317 in the first quarter of 2005, down $451
or 58.7% as compared to the same period in 2004. This decrease in provision is
based on management's quarterly evaluation of the factors that affect the
allowance for loan losses account. The results are directionally consistent with
the strong asset quality numbers that are discussed within this section under
the caption "Allowance for Loan Losses". Future provisions to the allowance for
loan losses will continue to be based on the quarterly evaluation that is
discussed further in detail under the caption "Critical Accounting Policies -
Allowance for Loan Losses" on page 17 of this Form 10-Q.
Noninterest Income
Total noninterest income decreased $53 or 4.1% for the first quarter of 2005 as
compared to the same period in 2004. Driving this change was the decline in
service charge income of $54 or 7.1%, primarily from the lower volume of
overdraft fees on the Company's deposit accounts. Income earned on life
insurance contracts from the Company's supplemental retirement program was down
$15 or 9.2% due to a lower earnings rate tied to each of the policies.
Offsetting a portion of the decline was an increase in revenue from interchange
fees on the Company's debit and credit cards of $34,000 as a result of higher
debit card activity and the gain on sale of secondary market real estate loans
of $22 from a year ago.
Noninterest Expense
Total noninterest expense increased $297 or 5.7% for the first quarter of 2005
as compared to the same period in 2004. Contributing most to this first quarter
increase was salaries and employee benefits, the Company's largest noninterest
expense item, which increased $142 or 4.7%. This increase was related to the
rising cost of medical insurance, annual merit increases and an increase in the
Bank's full-time equivalent employee base from 261 employees at March 31, 2004
to 270 employees at March 31, 2005. Also adding to the first quarter growth in
noninterest expense were occupancy, furniture and equipment costs being up $18
or 2.9% over the first quarter of 2004 largely due to the facility and
depreciation expenses related to the Company's various investments in facility
upgrades (Olive Street Annex), and newer "up-to-date" personal computers to
improve employee and network efficiency. Other noninterest expense was up $151
or 11.1% from 2004. This increase was related to the significant growth in
accounting fees which were up $117 as a result of higher exam and audit fees
associated with the new regulatory reporting environment under Sarbanes-Oxley
(Section 404). Offsetting a portion of these decreases was data processing
expense decreasing $12 or 4.2% as a result of lower negotiated monthly
processing charges from 2004.
16
Capital Resources
All of the capital ratio's exceeded the regulatory minimum guidelines as
identified in the following table:
Company Ratios Regulatory Well
3/31/05 12/31/04 Minimum Capitalized
------- -------- ----------- -----------
Tier 1 risk-based capital 12.5% 12.1% 4.00% 6.0%
Total risk-based capital ratio 13.7% 13.3% 8.00% 10.0%
Leverage ratio 9.7% 9.4% 4.00% 5.0%
Cash dividends paid of $652 for the first three months of 2005 represent a 3.5%
increase over the cash dividends paid during the same period in 2004. The
increase in cash dividends paid is largely due to an increase in the dividend
rate paid per share from $0.14 in 2004 to $0.15 in 2005, adjusted for the stock
split. The dividend rate has increased in proportion to the consistent growth in
retained earnings. At March 31, 2005, approximately 78% of the shareholders were
enrolled in the Company's dividend reinvestment plan. As part of the Company's
stock purchase program, management will continue to utilize reinvested dividends
and voluntary cash, if necessary, to purchase shares on the open market to be
redistributed through the dividend reinvestment plan.
Liquidity
Liquidity relates to the Bank's ability to meet the cash demands and credit
needs of its customers and is provided by the ability to readily convert assets
to cash and raise funds in the market place. Total cash and cash equivalents,
interest-bearing deposits with banks, held-to-maturity securities maturing
within one year and securities available-for-sale of $87,650 represented 12.3%
of total assets at March 31, 2005. In addition, the FHLB offers advances to the
Bank which further enhances the Bank's ability to meet liquidity demands. At
March 31, 2005, the Bank could borrow an additional $46 million from the FHLB.
The Company experienced a decrease of $756 in cash and cash equivalents for the
three months ended March 31, 2005. See the condensed consolidated statement of
cash flows on page 6 for further cash flow information.
Off-Balance Sheet Arrangements
The Company engages in certain off-balance sheet credit-related activities,
including commitments to extend credit and standby letters of credit, which
could require the Company to make cash payments in the event that specified
future events occur. Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established in the
contract. Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Standby letters of credit are
conditional commitments to guarantee the performance of a customer to a third
party. While off-balance sheet activities are necessary to meet the financing
needs of the Company's customers, many of these commitments are expected to
expire without being drawn upon; therefore, the total amount of commitments does
not necessarily represent future cash requirements.
Critical Accounting Policies
The most significant accounting policies followed by the Company are presented
in Note 1 to the consolidated financial statements. These policies, along with
the disclosures presented in the other financial statement notes, provide
information on how significant assets and liabilities are valued in the
financial statements and how those values are determined. Management views
critical accounting policies to be those which are highly dependent on
17
subjective or complex judgments, estimates and assumptions, and where changes in
those estimates and assumptions could have a significant impact on the financial
statements. Management currently views the adequacy of the allowance for loan
losses to be a critical accounting policy.
Allowance for loan losses
To arrive at the total dollars necessary to maintain an allowance level
sufficient to absorb probable losses incurred at a specific financial statement
date, management has developed procedures to establish and then evaluate the
allowance once determined. The allowance consists of the following components:
specific allocation, general allocation and other estimated general allocation.
To arrive at the amount required for the specific allocation component, the
Company evaluates loans for which a loss may be incurred either in part or
whole. To achieve this task, the Company has created a quarterly report
("Watchlist") which lists the loans from each loan portfolio that management
deems to be potential credit risks. The criteria to be placed on this report
are: past due 60 or more days, nonaccrual and loans management has determined to
be potential problem loans. These loans are reviewed and analyzed for potential
loss by the Large Loan Review Committee which consists of the President of the
Company and members of senior management with lending authority. The function of
the Committee is to review and analyze large borrowers for credit risk,
scrutinize the Watchlist and evaluate the adequacy of the allowance for loan
losses and other credit related issues. The Committee has established a grading
system to evaluate the credit risk of each commercial borrower on a scale of 1
(least risk) to 10 (greatest risk). After the Committee evaluates each
relationship listed in the report, a specific loss allocation may be assessed.
The specific allocation is currently made up of amounts allocated to the
commercial loan portfolio.
Included in the specific allocation are impaired loans, which consist of loans
with balances of $200 or more on nonaccrual status or non-performing in nature.
These loans are also individually analyzed and a specific allocation may be
assessed based on expected credit loss. Collateral dependent loans will be
evaluated to determine a fair value of the collateral securing the loan.
Non-performing loan balances continue to decline from year-end 2004 (down 21%).
Any changes in the impaired allocation will be reflected in the total specific
allocation.
The second component (general allowance) consists of the total loan portfolio
balances minus loan balances already reviewed (specific allocation). A quarterly
large loan report is prepared to provide management with a "snapshot" of
information on larger-balance loans (of $550 or greater), including loan grades,
collateral values, etc. This tool allows management to monitor this group of
borrowers. Therefore only small balance commercial loans and homogeneous loans
(consumer and real estate loans) have not been specifically reviewed to
determine minor delinquencies, current collateral values and present credit
risk. The Company utilizes actual historic loss experience as a factor to
calculate the probable losses for this component of the allowance for loan
losses. This risk factor reflects an actual 1 year or 3 year performance
evaluation of credit losses per loan portfolio, whichever is greater. The risk
factor is achieved by taking the average charge off per loan portfolio for the
last 12 or 36 consecutive months, whichever is greater, and dividing it by the
average loan balance for each loan portfolio over the same time period. The
Company believes that by using the greatest of the 12 or 36 month average loss
risk factor, the estimated allowance will more accurately reflect current
probable losses.
The final component used to evaluate the adequacy of the allowance includes five
additional areas that management believes can have an impact on collecting all
principal due. These areas are: 1) delinquency trends, 2) current local economic
conditions, 3) non-performing loan trends, 4) recovery vs. charge off, and 5)
personnel changes. Each of these areas is given a percentage factor, from a low
of 10% to a high of 30%, determined by the importance of the impact it may have
on the allowance. After evaluating each area, an overall factor of 13% was
18
determined for this reporting period. To calculate the impact of other economic
conditions on the allowance, the total general allowance is multiplied by this
factor. These dollars are then added to the other two components to provide for
economic conditions in the Company's assessment area. The Company's assessment
area takes in a total of ten counties in Ohio and West Virginia. Each assessment
area has its individual economic conditions; however, the Company has chosen to
average the risk factors for compiling the economic risk factor.
The adequacy of the allowance may be determined by certain specific and
nonspecific allocations; however, the total allocation is available for any
credit losses that may impact the loan portfolios.
Concentration of Credit Risk
The Company maintains a diversified credit portfolio, with real estate loans
currently comprising the most significant portion. Credit risk is primarily
subject to loans made to businesses and individuals in central and southeastern
Ohio as well as western West Virginia. Management believes this risk to be
general in nature, as there are no material concentrations of loans to any
industry or consumer group. To the extent possible, the Company diversifies its
loan portfolio to limit credit risk by avoiding industry concentrations.
Subsequent Events
On April 13, 2005, the Company issued a press release announcing that its Board
of Directors has approved a 25% split of the Company's common shares, without
par value. The additional common shares will be distributed on May 10, 2005 to
the Company's shareholders of record as of April 25, 2005. The Company also
announced in the press release that its Board of Directors has increased the
cash dividend, adjusted for the stock split, from $.15 per share to $.16 per
share. The cash dividend will be paid on May 10, 2005 to the Company's
shareholders of record as of April 25, 2005.
Forward Looking Statements
Except for the historical statements and discussions contained herein,
statements contained in this report constitute "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Act of 1934 and as defined in the Private Securities
Litigation Reform Act of 1995. Such statements are often, but not always,
identified by the use of such words as "believes," "anticipates," "expects," and
similar expressions. Such statements involve various important assumptions,
risks, uncertainties, and other factors, many of which are beyond our control,
which could cause actual results to differ materially from those expressed in
such forward looking statements. These factors include, but are not limited to:
changes in political, economic or other factors such as inflation rates,
recessionary or expansive trends, and taxes; competitive pressures; fluctuations
in interest rates; the level of defaults and prepayment on loans; unanticipated
litigation, claims, or assessments; fluctuations in the cost of obtaining funds
to make loans; and regulatory changes. Readers are cautioned not to place undue
reliance on such forward looking statements, which speak only as of the date
hereof. The Company undertakes no obligation and disclaims any intention to
republish revised or updated forward looking statements, whether as a result of
new information, unanticipated future events or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
The Company's goal for interest rate sensitivity management is to maintain a
balance between steady net interest income growth and the risks associated with
interest rate fluctuations. Interest rate risk ("IRR") is the exposure of the
Company's financial condition to adverse movements in interest rates. Accepting
this risk can be an important source of profitability, but excessive levels of
IRR can threaten the Company's earnings and capital.
19
The Company evaluates IRR through the use of an earnings simulation model to
analyze net interest income sensitivity to changing interest rates. The modeling
process starts with a base case simulation, which assumes a flat interest rate
scenario. The base case scenario is compared to rising and falling interest rate
scenarios assuming a parallel shift in all interest rates. Comparisons of net
interest income and net income fluctuations from the flat rate scenario
illustrate the risks associated with the projected balance sheet structure.
The Company's Asset/Liability Committee monitors and manages IRR within Board
approved policy limits. The current IRR policy limits anticipated changes in net
interest income over a 12 month horizon to plus or minus 10% of the base net
interest income assuming a parallel rate shock of up 100, 200 and 300 basis
points and down 100 basis points. Based on the current interest rate
environment, management did not test interest rates down 200 and 300 basis
points.
The following table presents the Company's estimated net interest income
sensitivity:
March 31, 2005 December 31, 2004
Change in Interest Rates Percentage Change in Percentage Change in
in Basis Points Net Interest Income Net Interest Income
- ------------------------ -------------------- --------------------
+300 1.00% (1.07%)
+200 .99% (.42%)
+100 .67% (.11%)
-100 (.07%) .35%
The estimated change in net interest income reflects minimal interest rate risk
exposure and is well within the policy guidelines established by the Board. At
March 31, 2005, the Company's analysis of net interest income reflects a modest
asset sensitive position due to management emphasizing variable rate and
short-term duration assets. With further rate increases anticipated in 2005, the
balance sheet is better positioned to increase net interest income when compared
to December 31, 2004.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
With the participation of the President and Chief Executive Officer (the
principal executive officer) and the Vice President and Chief Financial Officer
(the principal financial officer) of the Company, the Company's management has
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") as of the end of the quarterly period covered by
this Quarterly Report on Form 10-Q. Based on that evaluation, the Company's
President and Chief Executive Officer and Vice President and Chief Financial
Officer have concluded that:
o information required to be disclosed by the Company in this
Quarterly Report on Form 10-Q would be accumulated and
communicated to the Company's management, including its
principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required
disclosure;
o information required to be disclosed by the Company in this
Quarterly Report on Form 10-Q would be recorded, processed,
summarized and reported within the time periods specified in the
SEC's rules and forms; and
20
o the Company's disclosure controls and procedures are effective
as of the end of the quarterly period covered by this Quarterly
Report on Form 10-Q to ensure that material information relating
to the Company and its consolidated subsidiaries is made known
to them, particularly during the period in which this Quarterly
Report on Form 10-Q is being prepared.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company's internal control over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the
Company's fiscal quarter ended March 31, 2005, that have materially affected or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no pending legal proceedings involving the Company other than routine
litigation incidental to its business. In the opinion of the Company's
management, these proceedings should not, individually or in the aggregate, have
a material adverse effect on the Company's results of operations or financial
condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Not Applicable.
(b) Not Applicable.
(c) The following table provides information regarding the
Company's repurchases of its common shares during the fiscal
quarter ended March 31, 2005:
Total Number of Shares Maximum Number
Total Number Average Purchased as Part of of Shares That May
of Shares Price Paid per Publicly Announced Yet Be Purchased
Period Purchased Share Plans or Programs Under the Plan or Programs
-------------------------- ------------- -------------- ---------------------- --------------------------
January 1 - 31, 2005 ---- ---- ---- 75,831
February 1 - 28, 2005 ---- ---- ---- 175,000
March 1 - 31, 2005 ---- ---- ---- 175,000
--------------------------------------------------------------------------------------------
TOTAL ---- ---- ---- 175,000
============================================================================================
(1) On June 15, 1999, the Company's Board of Directors authorized
a stock repurchase program to repurchase up to 175,000 shares
of the Company's common stock through open market and
privately negotiated purchases. The Company's Board of
Directors approved annual extensions to the plan. Most
recently, the Board of Directors extended the stock
repurchase program from February 16, 2005 to August 16, 2005,
and authorized the Company to repurchase up to 175,000 shares
of its common stock through open market and privately
negotiated purchases. The timing of the purchases, the prices
paid and actual number of shares purchased will depend upon
market conditions and limitations imposed by applicable
federal securities laws.
21
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a)Exhibits:
31.1 - Rule 13a-14(a)/15d-14(a) Certification (Principal Executive
Officer)
31.2 - Rule 13a-14(a)/15d-14(a) Certification (Principal Financial
Officer)
32 - Section 1350 Certification (Principal Executive Officer and
Principal Financial Officer)
(b)Reports on Form 8-K:
On January 14, 2005, the Company furnished a report on Form 8-K to
report under Item 12. Results of Operations and Financial Condition
the issuance of a news release announcing its earnings for the fourth
quarter and year-to-date periods ending December 31, 2004.
On January 19, 2005, the Company furnished a report on Form 8-K to
report under Item 8.01 Other Events the issuance of a news release
announcing the authorization by the Board of Directors of the Company
to repurchase up to 175,000 shares of the Company's common stock
through open market and privately negotiated purchases between
February 16, 2005 and August 16, 2005.
22
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 May 10, 2005 By: /s/ Jeffrey E. Smith
-------------------------------------------
Jeffrey E. Smith
President and Chief Executive Officer
Date May 10, 2005 By: /s/ Scott W. Shockey
-------------------------------------------
Scott W. Shockey
Vice President and Chief Financial Officer
23