<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
-------------------------------------------
OR
[ ] 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 0-26876
---------------
OAK HILL FINANCIAL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-1010517
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
14621 State Route 93
Jackson, Ohio 45640
- --------------------- -------------
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (614) 286-3283
Check whether the issuer (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.
Yes [X] No [ ]
As of November 6, 1996, the latest practicable date, 2,873,500 shares of the
registrant's common stock, $.50 stated value, were issued and outstanding.
Page 1 of 16 pages
<PAGE> 2
Oak Hill Financial, Inc.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II - OTHER INFORMATION 15
SIGNATURES 16
2
<PAGE> 3
OAK HILL FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1996 1995
<S> <C> <C>
Cash and due from banks $ 7,502 $ 6,250
Federal funds 2,796 10,557
Investment securities designated as
available for sale - at market 37,013 25,755
Mortgage-backed securities designated
as available for sale - at market 4,052 4,146
Loans receivable - net 178,242 157,615
Loans held for sale - at lower of cost or market 139 177
Office premises and equipment - net 3,212 2,788
Federal Home Loan Bank stock - at cost 1,557 914
Accrued interest receivable 1,433 1,266
Prepaid expenses and other assets 235 232
Deferred federal income taxes 787 629
-------- --------
Total assets $236,968 $210,329
======== ========
</TABLE>
3
<PAGE> 4
OAK HILL FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(CONTINUED)
(In thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
<S> <C> <C>
Deposits $202,021 $181,889
Advances from the Federal Home Loan Bank 11,871 7,529
Accrued interest payable and other liabilities 755 456
Federal income taxes payable 62 29
Dividends payable 144 --
-------- --------
Total liabilities 214,853 189,903
Stockholders' equity
Common stock - $.50 stated value; authorized
5,000,000 shares, 2,884,700 and 2,883,700
shares issued at September 30, 1996 and
December 31, 1995, respectively 1,442 1,442
Additional paid-in capital 4,227 4,217
Retained earnings 16,632 14,685
Treasury stock (11,200 shares at cost) (28) (28)
Unrealized gains (losses) on securities designated
as available for sale, net of related tax effects (158) 110
-------- --------
Total stockholders' equity 22,115 20,426
-------- --------
Total liabilities and stockholders' equity $236,968 $210,329
======== ========
</TABLE>
4
<PAGE> 5
OAK HILL FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share data)
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income
Loans $11,925 $10,029 $ 4,157 $ 3,571
Investment securities 1,829 1,502 666 537
Interest-bearing deposits and other 387 523 76 158
------- ------- ------- -------
Total interest income 14,141 12,054 4,899 4,266
Interest expense
Deposits 6,032 5,635 2,034 1,982
Borrowings 559 510 212 159
------- ------- ------- -------
Total interest expense 6,591 6,145 2,246 2,141
------- ------- ------- -------
Net interest income 7,550 5,909 2,653 2,125
Provision for losses on loans 535 200 243 200
------- ------- ------- -------
Net interest income after
provision for losses on loans 7,015 5,709 2,410 1,925
Other income
Gain on sale of loans 66 52 13 36
Gain (loss) on sale of securities designated
as available for sale 27 (114) -- --
Service fees, charges and other operating 816 693 284 239
------- ------- ------- -------
Total other income 909 631 297 275
General, administrative and other expense
Employee compensation and benefits 2,481 2,148 864 899
Occupancy and equipment 640 553 231 170
Federal deposit insurance premiums 1 174 -- (9)
Franchise taxes 217 177 67 58
Other operating 1,054 820 324 297
------- ------- ------- -------
Total general, administrative
and other expense 4,393 3,872 1,486 1,415
------- ------- ------- -------
Earnings before income taxes 3,531 2,468 1,221 785
Federal income taxes
Current 1,173 771 451 226
Deferred (20) 57 (39) 39
------- ------- ------- -------
Total federal income taxes 1,153 828 412 265
------- ------- ------- -------
NET EARNINGS $ 2,378 $ 1,640 $ 809 $ 520
======= ======= ======= =======
EARNINGS PER SHARE $.83 $.70 $.28 $.22
==== ==== ==== ====
</TABLE>
5
<PAGE> 6
OAK HILL FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30,
(In thousands)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from activities:
Net earnings for the period $2,378 $ 1,640
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 290 258
Amortization of premium (discount) on investment
and mortgage-backed securities-net (33) 4
Amortization of deferred loan origination costs 47 149
Federal Home Loan Bank stock dividends (82) (40)
Loans originated for sale in secondary market (5,939) (2,972)
Proceeds from sale of loans in the secondary market 6,043 3,054
(Gain) loss on sale of loans (66) (52)
Provision for losses on loans 535 200
Gain on sale of investment and mortgage-backed securities (27) 114
Gain on sale of office equipment (7) --
Increase(decrease) in cash due to changes in:
Accrued interest receivable (168) (190)
Prepaid expenses and other assets (3) 37
Accrued expenses and other liabilities 444 (74)
Federal income taxes
Current 33 43
Deferred (20) 57
------- --------
Net cash provided by operating activities 3,425 2,228
Cash flows provided by (used in) investing activities:
Loan principal repayments 64,432 40,607
Loan disbursements (85,641) (56,951)
Principal repayments on mortgage-backed securities 1,042 1,350
Proceeds from maturity and redemption of investment securities 11,472 4,300
Proceeds from sale of investment and mortgage-backed
securities designated as available for sale 1,973 6,231
Purchase of office premises and equipment (739) (672)
Proceeds from sale of office equipment 32 --
Purchase of investment securities designated as available for sale (24,965) (11,991)
Purchase of mortgage-backed securities designated as available for sale (1,031) --
Purchase of Federal Home Loan Bank stock (561) (372)
Increase (decrease) in federal funds sold - net 7,761 (7,568)
------- --------
Net cash used in investing activities (26,225) (25,066)
------- --------
Net cash used in operating and investing
activities (balance carried forward) (22,800) (22,838)
------- --------
</TABLE>
6
<PAGE> 7
OAK HILL FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the nine months ended September 30,
(In thousands)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Net cash used in operating and investing
activities (balance brought forward) $(22,800) $(22,838)
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 20,132 20,507
Proceeds from Federal Home Loan Bank advances 14,043 7,000
Repayment of Federal Home Loan Bank advances (9,701) (3,953)
Dividends paid on common shares (432) (148)
Proceeds from exercise of stock options 10 504
Proceeds from sale of treasury stock -- 20
Repayments of notes payable -- (2,100)
Issuance of Restricted Shares under the 1993 Stock Option Plan -- 310
-------- --------
Net cash provided by financing activities 24,052 22,140
-------- --------
Net increase (decrease) in cash and cash equivalents 1,252 (698)
Cash and cash equivalents at beginning of period 6,250 6,672
-------- --------
Cash and cash equivalents at end of period $ 7,502 $ 5,974
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 1,139 $ 571
======== ========
Interest on deposits and borrowed money $ 6,571 $ 6,069
======== ========
Supplemental disclosure of noncash investing activities:
Unrealized gains (losses) on securities designated
as available for sale, net of related tax effects $(268) $294
===== ====
</TABLE>
7
<PAGE> 8
OAK HILL FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. Accordingly, these financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto of Oak Hill Financial, Inc.'s (the "Company") included in it's
Annual Report on Form 10-KSB for the year ended December 31, 1995. However,
all adjustments (consisting only of normal recurring accruals) which, in the
opinion of management, are necessary for a fair presentation of the
consolidated financial statements have been included. The results of
operations for the three and nine month periods ended September 30, 1996 and
1995, are not necessarily indicative of the results which may be expected for
the entire year.
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary Oak Hill Banks (the "Bank"). All significant
intercompany balances and transactions have been eliminated.
3. EARNINGS PER SHARE
Earnings per share for each of the three and nine month periods ended
September 30, 1996 is based on 2,873,500 and 2,872,833 weighted average
shares outstanding, respectively. Earnings per share for each of the three
and nine month periods ended September 30, 1995 is based on 2,379,300 and
2,331,700 weighted average shares outstanding, respectively.
4. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
In May 1995, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 122 "Accounting for Mortgage
Servicing Rights", which requires that the Company recognize as separate
assets, rights to service mortgage loans for others, regardless of how those
servicing rights are acquired. An institution that acquires mortgage
servicing rights through either the purchase or origination of mortgage loans
and sells those loans with servicing rights retained would allocate some of
the cost of the loans to the mortgage servicing rights.
SFAS No. 122 requires that securitizations of mortgage backed loans be
accounted for as sales of mortgage-backed securities. Additionally, SFAS No.
122 requires that capitalized mortgage servicing rights and capitalized
excess servicing receivables be assessed for impairment. Impairment is
measured based on fair value.
8
<PAGE> 9
OAK HILL FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS (continued)
SFAS No. 122 is applicable to fiscal years beginning after December 15, 1995,
(January 1, 1996, as to the Company) to transactions in which an entity
acquires mortgage servicing rights and to impairment evaluations of all
capitalized mortgage servicing rights and capitalized excess servicing
receivables whenever acquired. Retroactive application is prohibited.
Management adopted SFAS No. 122 on January 1, 1996 without material effect on
the Company's consolidated financial position or results of operations.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" establishing financial accounting and reporting standards for
stock-based employee compensation plans. SFAS No. 123 encourages all entities
to adopt a new method of accounting to measure compensation cost of all
employee stock compensation plans based on the estimated fair value of the
award at the financial statement date. Companies are, however, allowed to
continue to measure compensation cost for those plans using the intrinsic
value based method of accounting, which generally does not result in
compensation expense recognition for most plans. Companies that elect to
remain with the existing accounting are required to disclose in a footnote to
the financial statements pro forma net earnings and, if presented, earnings
per share, as if SFAS No. 123 had been adopted. The accounting requirements
of SFAS No. 123 are effective for transactions entered into during fiscal
years that begin after December 15, 1995, although companies are required to
disclose information for awards granted in their first fiscal year beginning
after December 15, 1994. Management has determined that the Company will
continue to account for stock-based compensation pursuant to Accounting
Principles Board Opinion No. 25, and therefore the disclosure provisions of
SFAS No. 123 will have no effect on its consolidated financial position or
results of operations.
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers of
Financial Assets, Servicing Rights, and Extinguishment of Liabilities", that
provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities. SFAS No. 125 introduces
an approach to accounting for transfers of financial assets that provides a
means of dealing with more complex transactions in which the sellers disposes
of only a partial interest in the assets, retains rights or obligations,
makes use of special purpose entities in the transaction, or otherwise has
continuing involvement with the transferred assets. The new accounting
method, the financial components approach, provides that the carrying amount
of the financial assets transferred be allocated to components of the
transaction based on their relative fair values. SFAS No. 125 provides
criteria for determining whether control of assets has been relinquished and
whether a sale has occurred. If the transfer does not qualify as a sale, it
is accounted for as a secured borrowing. Transactions subject to the
provisions of SFAS No. 125 include, among others, transfer involving
repurchase agreements, securitizations of financial assets, loan
participations, factoring arrangements, and transfers of receivables with
recourse.
9
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OAK HILL FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
As entity that undertakes an obligation to service financial assets
recognizes either a servicing asset or liability for the servicing contract
(unless related to a securitization of assets, and all the securitized assets
are retained and classified as held-to-maturity). A servicing asset or
liability that is purchased or assumed is initially recognized at its fair
value. Servicing assets and liabilities are amortized in proportion to and
over the period of estimated net servicing income or net servicing loss and
are subject to subsequent assessments for impairment based on fair value.
The Statements provide that a liability is removed from the balance sheet
only if the debtor either pays the creditor and is relieved of its obligation
for the liability or is legally released from being the primary obligor.
SFAS No. 125 is effective for transfers and servicing of financial assets and
extinguishment of liabilities occurring after December 31, 1996, and is to be
applied prospectively. Earlier or retroactive application is not permitted.
Management does not believe that adoption of SFAS No. 125 will have a
material adverse effect on the Company's consolidated financial position or
results of operations.
10
<PAGE> 11
OAK HILL FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the three and nine month periods ended September 30, 1996 and 1995
FINANCIAL CONDITION
At September 30, 1996, the Company had total assets of $237.0 million, an
increase of approximately $26.6 million, or 12.7%, from December 31, 1995. The
increase in total assets was funded primarily by growth in the deposit portfolio
of $20.1 million, an increase in Federal Home Loan Bank advances of $4.3 million
and undistributed net earnings of $1.9 million.
Cash, federal funds sold, investment securities and mortgage-backed
securities totaled $51.4 million at September 30, 1996, an increase of $4.7
million, or 10.0%, over December 31, 1995 levels. The increase reflects
management's efforts to maintain adequate levels of liquidity while maximizing
yield on short-term investments.
Loans receivable and loans held for sale totaled $178.4 million at
September 30, 1996, an increase of $20.6 million, or 13.0%, over the total at
December 31, 1995. Loan disbursements totaled approximately $91.6 million during
the 1996 nine month period, while principal repayments and sales amounted to
$64.4 million and $5.9 million, respectively.
The Company's allowance for loan losses amounted to $2.5 million at
September 30, 1996, an increase of $332,000 or 15.6% over the total at December
31, 1995. The allowance for loan losses represented 1.38% of the total loan
portfolio at September 30, 1996, as compared to 1.33% at December 31, 1995. The
Company's allowance represented 352.2% and 189.3% of non-performing loans, which
totaled $715,000 and $1.1 million at September 30, 1996 and December 31, 1995,
respectively. Although management believes that its allowance for loan losses at
September 30, 1996, was adequate based on facts and circumstances available to
it, there can be no assurances that additions to such allowance will not be
necessary in future periods, which could adversely affect the Corporations'
results of operations.
The deposit portfolio totaled $202.0 million at September 30, 1996, an
increase of $20.1 million, or 11.1%, over December 31, 1995 levels. The increase
resulted primarily from management's marketing efforts and continued growth at
newer branch facilities.
The Bank is required to maintain minimum regulatory capital pursuant to
federal regulations. At September 30, 1996, the Bank's regulatory capital
substantially exceeded all regulatory capital requirements.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER
30, 1996 AND 1995
GENERAL
Net earnings for the nine months ended September 30, 1996, totaled $2.4
million, an increase of $738,000, or 45.0%, over the $1.6 million in net
earnings reported in the comparable 1995 period. The increase in earnings in the
1996 period is primarily attributable to a $1.3 million increase in net interest
income after provision for losses on loans, a $278,000 increase in other income
and a $173,000 decrease in federal deposit insurance premiums, which were
partially offset by a $694,000 increase in general, administrative and other
expenses and a $325,000 increase in the provision for federal income taxes.
11
<PAGE> 12
OAK HILL FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER
30, 1996 AND 1995 (continued)
NET INTEREST INCOME
Total interest income for the nine months ended September 30, 1996
increased by $2.1 million, or 17.3%, generally reflecting the effects of growth
in interest-earning assets from $198.8 million to $226.4 million for the nine
month periods ending September 30, 1995 and 1996, respectively, coupled with an
increase in the weighted-average yield year-to-year. Similarly, total interest
expense increased for the nine months ended September 30, 1996 by $446,000 or
7.3%, also reflecting the growth in interest-bearing liabilities from $173.9
million to $192.6 million, as well as an increase in the weighted-average cost
of funds, during the respective nine month periods.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans totaled $535,000 for the nine months
ended September 30, 1996, an increase of $335,000 from the comparable 1995
period. The increase in the provision for 1996 was primarily attributable to
growth in the loan portfolio year-to-year. There can be no assurance that the
loan loss allowance will be adequate to absorb losses on known nonperforming
assets or that the allowance will be adequate to cover losses on nonperforming
loans in the future.
OTHER INCOME
Other income increased for the nine months ended September 30, 1996 by
$278,000, or 44.1%, over the comparable 1995 period. The increase in other
income is primarily attributable to a $123,000, or 17.7%, increase in service
fees, charges and other operating income, a $14,000 increase in gain on sale of
loans and an increase of $141,000 in gain on the sale of securities designated
as available for sale.
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
General, administrative and other expense increased for the nine months
ended September 30, 1996 by $521,000, or 13.5%. The increase is due primarily to
a $333,000, or 15.5%, increase in employee compensation and benefits, an $87,000
or 15.7%, increase in occupancy and equipment, a $40,000 or 22.6%, increase in
franchise taxes and a $234,000 or 28.5% increase in other expense, which were
partially offset by a $173,000, or 99.4%, decrease in federal deposit insurance
premiums.
The increase in employee compensation and benefits is due primarily to
normal merit increases and additional personnel costs associated with new branch
openings, which were partially offset by an increase in deferred loan
origination costs related to greater lending volume year-to-year. The increase
in office occupancy and equipment resulted primarily from the addition of
computer software and equipment, while the increase in franchise taxes resulted
from greater levels of stockholders' equity in 1996. The decline in federal
deposit insurance premiums resulted from lower premium rates assessed in 1996.
The increase in other operating expense resulted primarily from additional
professional, reporting and shareholder marketing fees associated with the
reporting requirements of a public stock company.
12
<PAGE> 13
OAK HILL FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER
30, 1996 AND 1995 (CONTINUED)
FEDERAL INCOME TAXES
The provision for federal income taxes increased by $325,000, or 39.3%,
during the nine months ended September 30, 1996, as compared to the same period
in 1995. The effective tax rates were 32.7% and 33.5% for the 1996 and 1995
periods, respectively.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER
30, 1996 AND 1995
GENERAL
Net earnings for the three months ended September 30, 1996 totaled
$809,000, an increase of $289,000, or 55.6%, over the $520,000 in net earnings
reported in the comparable 1995 period. The increase in net earnings is
primarily attributable to an increase in net interest income after provision for
losses on loans of $485,000 and an increase in other income of $22,000, which
were partially offset by an increase in general, administrative and other
expenses of $71,000 and an increase in the provision for federal income taxes of
$147,000.
NET INTEREST INCOME
Total interest income for the three months ended September 30, 1996 totaled
$4.9 million, an increase of $633,000, or 14.8%, over the comparable 1995
quarter. As stated previously, such increase is primarily attributable to growth
in outstanding interest-earning assets, coupled with an increase in yield
year-to-year. Total interest expense increased $105,000 or 4.9%, for the three
months ended September 30, 1996. The increase was primarily attributable to the
growth of interest-bearing liabilities, as well as an increase in the cost of
funds year to year.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans increased during the three months ended
September 30, 1996 by $43,000, or 21.5%, over the comparable 1995 quarter. This
increase is primarily attributable to the growth in the loan portfolio
year-to-year.
OTHER INCOME
Other income increased for the quarter ended September 30, 1996 by $22,000,
or 8.0%, as compared to the 1995 quarter. The increase is attributable to a
$45,000 increase in service fees, charges and other operating income, which was
partially offset by a decrease of $23,000 in gain on the sale of loans.
13
<PAGE> 14
OAK HILL FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER
30, 1996 AND 1995 (continued)
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
General administrative and other expense increased $71,000, or 5.0%, during
the three months ended September 30, 1996. The increase is primarily
attributable to a $61,000, or 35.9%, increase in occupancy and equipment expense
and a $27,000, or 9.1%, increase in other operating expense, which were
partially offset by a decrease of $35,000, or 3.9%, in employee compensation and
benefits.
The decrease in employee compensation and benefits is primarily due to an
increase in deferred costs related to greater lending volume year to year. The
increase in occupancy and equipment was due primarily to additional computer
related purchases and costs related to the addition of a new ATM installation
and to the opening of a new loan origination office.
FEDERAL INCOME TAXES
The provision for federal income taxes increased for the three months ended
September 30, 1996 by $147,000, or 55.5%. The effective tax rates for the three
month periods ended September 30, 1996 and 1995, were 33.7% and 33.8%,
respectively.
14
<PAGE> 15
OAK HILL FINANCIAL, INC.
PART II
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
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
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27-Financial Data Schedule
(b) Reports on Form 8-K
None
15
<PAGE> 16
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.
Date: November 7, 1996 By: /s/ John D. Kidd
---------------- -------------------------------------
John D. Kidd
President
Date: November 6, 1996 By: /s/ H. Tim Bichsel
---------------- -------------------------------------
H. Tim Bichsel
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 7,502
<INT-BEARING-DEPOSITS> 105
<FED-FUNDS-SOLD> 2,796
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,065
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 178,242
<ALLOWANCE> 2,459
<TOTAL-ASSETS> 236,968
<DEPOSITS> 202,021
<SHORT-TERM> 0
<LIABILITIES-OTHER> 961
<LONG-TERM> 11,871
<COMMON> 1,442
0
0
<OTHER-SE> 20,673
<TOTAL-LIABILITIES-AND-EQUITY> 236,968
<INTEREST-LOAN> 11,925
<INTEREST-INVEST> 1,829
<INTEREST-OTHER> 387
<INTEREST-TOTAL> 14,141
<INTEREST-DEPOSIT> 6,032
<INTEREST-EXPENSE> 6,591
<INTEREST-INCOME-NET> 7,550
<LOAN-LOSSES> 535
<SECURITIES-GAINS> 27
<EXPENSE-OTHER> 4,393
<INCOME-PRETAX> 3,531
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,378
<EPS-PRIMARY> .83
<EPS-DILUTED> .83
<YIELD-ACTUAL> 8.76
<LOANS-NON> 612
<LOANS-PAST> 103
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 715
<ALLOWANCE-OPEN> 2,128
<CHARGE-OFFS> 270
<RECOVERIES> 67
<ALLOWANCE-CLOSE> 535
<ALLOWANCE-DOMESTIC> 2,460
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
