8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

April 25, 2011

Date of Report (Date of earliest event reported)

OHIO VALLEY BANC CORP.     

(Exact name of registrant as specified in its charter)

Ohio

(State or other jurisdiction of incorporation)

0-20914	31-1359191
(Commission File Number)	(IRS Employer Identification No.)

420 Third Avenue, Gallipolis, Ohio	45631
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:  (740) 446-2631

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02.   Results of Operations and Financial Condition

On April 25, 2011, Ohio Valley Banc Corp. will issue a press release announcing financial results for its first quarter ended March 31, 2011.  A copy of the press release is furnished with this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01.   Financial Statements and Exhibits

(a)  Not applicable

(b)  Not applicable

(c)  Not applicable

(d)  Exhibits – The following exhibit is being filed with this Current Report on Form 8-K:

Exhibit Number	Description
99.1	Press release to be issued by Ohio Valley Banc Corp. on April 25,  2011.

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:	April 25, 2011	By:	/s/ Jeffrey E. Smith
			Jeffrey E. Smith Chairman and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release to be issued by Ohio Valley Banc Corp. on April 25,  2011.

EX-99.1

EXHIBIT 99.1

April 25, 2011 - For immediate release

Contact:  Scott Shockey, CFO (740) 446-2631

Ohio Valley Banc Corp. Reports Higher 1st Quarter Earnings

GALLIPOLIS, Ohio - Ohio Valley Banc Corp. [Nasdaq: OVBC] (the “Company”) reported consolidated net income for the quarter ended March 31, 2011, of $2,033,000, representing an increase of $127,000, or 6.7 percent, from the same period the prior year.  Earnings per share for the first quarter of 2011 were $.51, up 6.3 percent from the $.48 earned the first quarter of 2010.  Return on average assets and return on average equity was .88 percent and 12.02 percent, respectively, for the first quarter of 2011, versus .90 percent and 11.57 percent, respectively, for the same period the prior year.

For the first quarter of 2011, net interest income increased $594,000, or 6.9 percent, from the same period last year.  The increase was primarily attributable to a greater decrease in interest expense than interest income.  Comparing the first quarter of 2011 to the first quarter of 2010, interest expense decreased $797,000, or 22.0 percent, and interest income decreased $203,000, or 1.7 percent.  Contributing to higher net interest income was the growth in average earning assets, which grew nearly $75 million, or 9.2 percent, primarily in short-term assets.  The growth in short-term assets was related to the clearing of tax refunds for a tax software provider during the first quarter.  During the short time we held such refunds, constituting noninterest-bearing deposits, we increased our deposits at the Federal Reserve.  However, the balances carried at the Federal Reserve only earn approximately .25 percent, which had a negative impact on our net interest margin.  The net interest margin for the three months ended March 31, 2011 was 4.25 percent, compared to 4.34 percent for the same period the prior year.  Even though the tax processing contributed to a lower net interest margin, it significantly increased noninterest income due to the collection of per item fees.  Furthermore, management considers our current net interest margin to be strong.

For the three months ended March 31, 2011, management provided $2,944,000 to the allowance for loan losses, an increase of $2,023,000 from the same period the prior year.  The higher provision expense was related to higher charge-offs and a corresponding increase in general allocations for loan losses.  For the three months ended March 31, 2011, net charge-offs were up $3,937,000 from the same three-month period in 2010.  During the first quarter, management charged off $3,839,000 on one impaired loan relationship, of which $2,906,000 had been previously identified and specifically allocated for in the allowance for loan losses.  However, due to the further deterioration of collateral values associated with the loan relationship, an additional impairment charge of $933,000 was recognized in the first quarter.  In addition, the higher net charge-offs had a corresponding impact on our average historical loss factor for commercial loans, which requires higher general allocations for loan losses going forward.  The ratio of nonperforming loans to total loans at March 31, 2011 of .77 percent was down from the 1.27 percent at March 31, 2010, and was stable from the .78 percent at December 31, 2010.  Since the commercial loan relationship discussed above was not past due, the charge off did not have an impact on the ratio of nonperforming loans to total loans.  Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at March 31, 2011 was adequate and reflects probable incurred losses in the portfolio.  The allowance for loan losses was 1.28 percent of total loans at March 31, 2011, compared to 1.46 percent at December 31, 2010 and 1.35 percent at March 31, 2010.  The decrease in the allowance for loan losses from year end was primarily related to the charge off of specific allocations.

    For the first quarter of 2011, noninterest income totaled $3,659,000, an increase of $1,794,000, or 96.2 percent, from the first quarter of 2010.  Contributing to the increase was the significant growth in transaction volume in processing tax refund payments for a tax software provider.  For the 2011 tax season, the tax software provider was able to expand the number of tax preparers utilizing their software.  With the growth in transaction volume, the associated fee income increased $1,624,000, or more than 250%, from the 2010 first quarter.  Also contributing to revenue growth was the increase in interchange fees earned on debit and credit card transactions.  By offering incentives to customers to utilize the bank’s debit and credit card for purchases, interchange income increased $90,000, or 42.9 percent, from the 2010 first quarter.  Lastly, a decrease of $116,000 in loss on sale of other real estate owned contributed to higher noninterest income.  Overall, management was pleased with the revenue growth derived from the utilization of technology, which enhances efficiency.

Noninterest expense totaled $7,098,000 for the first quarter of 2011, an increase of $217,000, or 3.2 percent, from the same period last year.  The Company’s largest noninterest expense, salaries and employee benefits, contributed $131,000 to the increase.  In addition, the Company’s FDIC insurance expense increased $68,000.  The total of all remaining noninterest expense categories increased only $18,000 from the prior year first quarter.  The limited growth in noninterest expense reflects management’s efforts to control expenditures.

“I am certainly pleased with the $2,033,000 in net income for the first quarter of 2011, representing a 6.7% increase from the same time period in 2010,” stated Jeffrey E. Smith, Chairman and CEO.  “We enjoyed positive net interest income growth of nearly 7%, while maintaining positive nonperforming loan and nonperforming asset metrics at .77% and 1.07%, respectively.  However, continued analysis of our lending portfolios indicates recurringweakness in collateral values and repayment potential of our borrowers.  Consequently, recognition of additional impairment amounts and higher net charge-offs required a $2,023,000 increase in the provision for loan losses for the quarter ended March 31, 2011 compared to the same period in 2010.  Our lenders and collectors continue to work diligently with borrowers who work with us to arrive at mutually beneficial repayment plans; however, the economies in rural America have yet to see the recovery about which we read in the business press.  We were pleased with the continued use of technology which permitted significant growth in tax refund processing volume as fee income increased $1,624,000 for the first quarter of 2011 compared to the same period in 2010.  The increased volume generated higher short-term Federal Reserve interest earning balances; and we enjoyed growth in fee income of $90,000 from processing of debit and credit card transactions from new incentive programs rewarding customer use of electronic payments.  On balance, we will continue to work with borrowers who evidence both attitudes and actions that move both the customer and the institution in a desirable direction.”

Ohio Valley Banc Corp. common stock is traded on the NASDAQ Global Market under the symbol OVBC.  The holding company owns Ohio Valley Bank, with 16 offices in Ohio and West Virginia, and Loan Central, with six consumer finance offices in Ohio.  Learn more about Ohio Valley Banc Corp. at www.ovbc.com.

Forward-Looking Information

Certain  statements  contained  in  this earnings  release which  are  not  statements of historical  fact constitute  forward-looking statements  within the  meaning of the Private Securities Litigation Reform Act of 1995.  Words such as “believes,” “anticipates,” “expects,” “appears,” “intends,” “targeted” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.  Forward-looking statements involve risks and uncertainties.  Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including: (i) changes in political, economic or other factors such as inflation rates, recessionary or expansive trends, and taxes; (ii) competitive pressures; (iii) fluctuations in interest rates; (iv) the level of defaults and prepayment on loans made by the Company; (v) unanticipated litigation, claims, or assessments; (vi) fluctuations in the cost of obtaining funds to make loans; and (vii) regulatory changes.  Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events.  See Item 1.A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, for further discussion of the risks affecting the business of the Company and the value of an investment in its shares.

OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)
	Three months ended
	March 31,
	2011			2010
PER SHARE DATA
Earnings per share	$	0.51		$	0.48
Dividends per share	$	0.21		$	0.21
Book value per share	$	17.36		$	16.93
Dividend payout ratio (a)		41.33	%		43.89	%
Weighted average shares outstanding		4,000,056			3,984,009
PERFORMANCE RATIOS
Return on average equity		12.02	%		11.57	%
Return on average assets		0.88	%		0.90	%
Net interest margin (b)		4.25	%		4.34	%
Efficiency ratio (c)		54.73	%		65.10	%
Average earning assets (in 000's)	$	887,972		$	813,041
(a) Total dividends paid as a percentage of net income.
(b) Fully tax-equivalent net interest income as a percentage of average earning assets.
(c) Noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income.
OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)
	Three months ended
(in $000's)	March 31,
		2011			2010
Interest income:
Interest and fees on loans	$	11,299		$	11,436
Interest and dividends on securities		726			792
Total interest income		12,025			12,228
Interest expense:
Deposits		2,356			2,905
Borrowings		466			714
Total interest expense		2,822			3,619
Net interest income		9,203			8,609
Provision for loan losses		2,944			921
Noninterest income:
Service charges on deposit accounts		540			556
Trust fees		59			61
Income from bank owned life insurance		179			179
Mortgage banking income		77			75
Electronic refund check / deposit fees		2,268			644
Debit / credit card interchange income		300			210
Gain (loss) on sale of other real estate owned		5			(111	)
Other		231			251
Total noninterest income		3,659			1,865
Noninterest expense:
Salaries and employee benefits		4,023			3,892
Occupancy		426			414
Furniture and equipment		280			292
FDIC insurance		327			259
Data processing		236			204
Other		1,806			1,820
Total noninterest expense		7,098			6,881
Income before income taxes		2,820			2,672
Income taxes		787			766
NET INCOME	$	2,033		$	1,906

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in $000's, except share and per share data)	March 31,			December 31,
	2011			2010
ASSETS
Cash and noninterest-bearing deposits with banks	$	11,011		$	8,979
Interest-bearing deposits with banks		75,091			50,772
Total cash and cash equivalents		86,102			59,751
Securities available for sale		91,708			85,839
Securities held to maturity
(estimated fair value:  2011 - $20,806; 2010 - $21,198)		21,467			22,178
Federal Home Loan Bank stock		6,281			6,281
Total loans		631,040			641,322
Less:  Allowance for loan losses		(8,052	)		(9,386	)
Net loans		622,988			631,936
Premises and equipment, net		9,686			9,738
Other real estate owned		4,526			4,403
Accrued income receivable		2,792			2,704
Goodwill		1,267			1,267
Bank owned life insurance		19,940			19,761
Prepaid FDIC insurance		2,268			2,576
Other assets		5,263			5,080
Total assets	$	874,288		$	851,514
LIABILITIES
Noninterest-bearing deposits	$	131,956		$	91,949
Interest-bearing deposits		594,769			602,832
Total deposits		726,725			694,781
Securities sold under agreements to repurchase		29,972			38,107
Other borrowed funds		24,518			27,743
Subordinated debentures		13,500			13,500
Accrued liabilities		10,140			9,255
Total liabilities		804,855			783,386
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value per share, 10,000,000 shares
authorized; 2011 and 2010 - 4,659,795 shares issued)		4,660			4,660
Additional paid-in capital		33,003			33,003
Retained earnings		47,153			45,960
Accumulated other comprehensive income		329			217
Treasury stock, at cost (2011 and 2010 - 659,739 shares)		(15,712	)		(15,712	)
Total shareholders' equity		69,433			68,128
Total liabilities and shareholders' equity	$	874,288		$	851,514