10-Q/A

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

o 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

OHIO VALLEY BANC CORP.

(Exact Name of Small Business Issuer as Specified in its Charter)

Ohio	31-1359191
(State of Incorporation)	(I.R.S. Employer Identification No.)

420 Third Avenue
Gallipolis, Ohio	45631
(Address of Principal Executive Offices)	(ZIP Code)

(740) 446-2631

(Issuer’s Telephone Number, Including Area Code)

_____________________

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.  Yesx   Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yesx   Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YesoNox

The number of common shares of the registrant outstanding as of August 8, 2011 was 4,000,056.

OHIO VALLEY BANC CORP.

Explanatory Note

The sole purpose of this amendment to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, originally filed with the Securities and Exchange Commission on August 9, 2011, is to furnish Exhibit 101 to the Form 10-Q which contains the XBRL (eXtensible Business Reporting Language) Interactive Data File for the financial statements and notes included in Part 1, Item 1 of the Form 10-Q. As permitted by Rule 405(a)(2)(ii) of Regulation S-T, Exhibit 101 was required to be furnished by amendment within 30 days of the original filing date of the Form 10-Q.

No changes have been made to the Form 10-Q other than the furnishing of Exhibit 101 described above. This amendment does not reflect subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the Interactive Data File on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.

EXHIBIT INDEX

The following exhibits are included in this Form 10-Q or are incorporated by reference as noted in the following table:

Exhibit Number	Exhibit Description
3(a)	Amended Articles of Incorporation of Ohio Valley (reflects amendments through April 7, 1999) [for SEC reporting compliance only - - not filed with the Ohio Secretary of State].  Incorporated herein by reference to Exhibit 3(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal  year ended December 31, 2007 (SEC File No. 0-20914).
3(b)	Code of Regulations of Ohio Valley (as amended by the shareholders on May 12, 2010): Incorporated herein by reference to Exhibit 3(b) to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010 (SEC File No. 0-20914).
4	Agreement to furnish instruments and agreements defining rights of holders of long-term debt: Incorporated herein by reference to Exhibit 4 to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (SEC File No. 0-20914).
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer):  Incorporated herein by reference to Exhibit 31.1 to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (SEC File No. 0-20914).
31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer):  Incorporated herein by reference to Exhibit 31.2 to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (SEC File No. 0-20914).
32	Section 1350 Certifications (Principal Executive Officer and Principal Accounting Officer): Incorporated herein by reference to Exhibit 32 to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (SEC File No. 0-20914).
101.INS	XBRL Instance Document: Filed herewith.
101.SCH	XBRL Taxonomy Extension: Filed herewith.
101.CAL	XBRL Extension Calculation Linkbase: Filed herewith.
101.LAB	XBRL Extension Label Linkbase: Filed herewith.
101.PRE	XBRL Presentation Linkbase: Filed herewith.

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:	September 2, 2011	By:	/s/Jeffrey E. Smith
			Jeffrey E. Smith
			Chairman and Chief Executive Officer
Date:	September 2, 2011	By:	/s/Scott W. Shockey
			Scott W. Shockey
			Vice President and Chief Financial Officer

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Securities held to maturity, fair value	$ 20,941	$ 21,198
SHAREHOLDERS' EQUITY
Common Stock, Stated Value Per Share (in dollars per share)	$ 1	$ 1
Common Stock, Shares Authorized (in shares)	10,000,000	10,000,000
Common Stock, Shares Issued (in shares)	4,659,795	4,659,795
Treasury Stock, Shares (in shares)	659,739	659,739

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Interest and dividend income:
Loans, including fees	$ 10,090	$ 10,807	$ 21,389	$ 22,243
Securities
Taxable	473	593	918	1,190
Tax exempt	137	112	280	216
Dividends	70	70	141	141
Other Interest	47	17	114	37
Interest and dividend income	10,817	11,599	22,842	23,827
Interest expense:
Deposits	2,227	2,802	4,583	5,707
Securities sold under agreements to repurchase	4	15	16	31
Other borrowed funds	160	332	342	758
Subordinated debentures	272	272	544	544
Interest expense	2,663	3,421	5,485	7,040
Net interest income	8,154	8,178	17,357	16,787
Provision for loan losses	759	721	3,703	1,642
Net interest income after provision for loan losses	7,395	7,457	13,654	15,145
Noninterest income:
Service charges on deposit accounts	553	573	1,093	1,129
Trust fees	56	58	115	119
Income from bank owned life insurance	182	185	361	364
Mortgage banking income	60	54	137	129
Electronic refund check / deposit fees	265	127	2,533	771
Debit / credit card interchange income	344	247	644	457
Gain (loss) on sale of other real estate owned	5	34	10	(77)
Other	222	246	453	497
Noninterest income	1,687	1,524	5,346	3,389
Noninterest expense:
Salaries and employee benefits	4,084	3,993	8,107	7,885
Occupancy	378	397	804	811
Furniture and equipment	282	304	562	596
FDIC insurance	285	262	612	521
Data processing	215	201	451	405
Other	1,737	1,819	3,543	3,639
Noninterest expense	6,981	6,976	14,079	13,857
Income before income taxes	2,101	2,005	4,921	4,677
Provision for income taxes	546	534	1,333	1,300
NET INCOME	$ 1,555	$ 1,471	$ 3,588	$ 3,377
Earnings per share (in dollars per share)	$ 0.39	$ 0.37	$ 0.90	$ 0.85

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Document And Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Entity Registrant Name	Ohio Valley Banc Corp.
Entity Central Index Key	0000894671
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float		$ 60,727,295
Entity Common Stock, Shares Outstanding	4,000,056
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011

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OTHER BORROWED FUNDS

6 Months Ended

Jun. 30, 2011

OTHER BORROWED FUNDS [Abstract]

OTHER BORROWED FUNDS

NOTE 6 - OTHER BORROWED FUNDS

Other borrowed funds at June 30, 2011 and December 31, 2010 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
June 30, 2011	$	20,003	$	4,215	$	494	$	24,712
December 31, 2010	$	23,406	$	3,835	$	502	$	27,743

Pursuant to collateral agreements with the FHLB, advances are secured by $236,205 in qualifying mortgage loans, $102,171 in commercial loans and $6,281 in FHLB stock at June 30, 2011.  Fixed-rate FHLB advances of $20,003 mature through 2033 and have interest rates ranging from 1.79% to 3.91% and a year-to-date weighted average cost of 2.59%.  There were no variable-rate FHLB borrowings at June 30, 2011.

At June 30, 2011, the Company had a cash management line of credit enabling it to borrow up to $95,000 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 was $95,000 available on this line of credit at June 30, 2011.

Based on the Company's current FHLB stock ownership, total assets and pledgeable loans, the Company had the ability to obtain borrowings from the FHLB up to a maximum of $174,966 at June 30, 2011.  Of this maximum borrowing capacity of $174,966, the Company had $117,963 available to use as additional borrowings, of which $95,000 could be used for short-term, cash management advances, as mentioned above.

Promissory notes, issued primarily by Ohio Valley, have fixed rates of 1.50% to 5.00% and are due at various dates through a final maturity date of December 8, 2014.  At June 30, 2011, there were $400 in promissory notes payable by Ohio Valley to related parties.

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. Treasury.  The interest rate for the Company's FRB notes was zero percent at June 30, 2011 and December 31, 2010.  Various investment securities from the Bank used to collateralize FRB notes totaled $725 at June 30, 2011 and $1,270 at December 31, 2010.

Letters of credit issued on the Bank's behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $37,000 at June 30, 2011 and $33,450 at December 31, 2010.

Scheduled principal payments as of June 30, 2011:

		FHLB Borrowings		Promissory Notes		FRB Notes		Totals
	2011	$	4,210	$	1,774	$	494	$	6,478
	2012		1,401		1,296		----		2,697
	2013		3,773		----		----		3,773
	2014		3,663		1,145		----		4,808
	2015		1,066		----		----		1,066
Thereafter			5,890		----		----		5,890
		$	20,003	$	4,215	$	494	$	24,712

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2011

Fair Value Disclosures [Abstract]

FAIR VALUE

NOTE 2 – FAIR VALUE

The measurement of fair value under US GAAP uses a hierarchy intended to maximize the use of observable inputs and minimize the use of unobservable inputs.  This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

Level 1:  Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2:  Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3:  Significant, unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and liabilities on a recurring or nonrecurring basis:

Securities Available For Sale:  Securities classified as available for sale are reported at fair value utilizing Level 2 inputs.  For these securities, the Company obtains fair value measurements using pricing models that vary based on asset class and include available trade, bid and other market information.  Fair value of securities available for sale may also be determined by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities.

Impaired Loans:  Impaired loans are reported at the fair value of the underlying collateral adjusted for selling costs or present value of estimated future cash flows.  Collateral values are estimated using Level 3 inputs based on third party appraisals.

Mortgage Servicing Rights:  Fair value is based on market prices for comparable mortgage servicing contracts.

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at June 30, 2011, Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable  Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury securities		----	$   22,566	----
U.S. Government sponsored entity securities		----	5,643	----
Agency mortgage-backed securities, residential		----	72,494	----

	Fair Value Measurements at December 31, 2010, Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable  Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury securities		----	$   17,079	----
U.S. Government sponsored entity securities		----	7,731	----
Agency mortgage-backed securities, residential		----	61,029	----

Assets and Liabilities Measured on a Nonrecurring Basis

Assets and liabilities measured at fair value on a nonrecurring basis are summarized below:

	Fair Value Measurements at June 30, 2011, Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Impaired Loans:
Commercial:
Commercial real estate-nonowner occupied		----	----	$      1,999
Mortgage servicing rights		----	----	417

	Fair Value Measurements at December 31, 2010, Using
		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Impaired Loans:
Commercial:
Commercial real estate-owner occupied		----	----	$      3,606
Commercial real estate-nonowner occupied		----	----	2,187
Commercial and industrial		----	----	3,785
Residential real estate		----	----	414
Mortgage servicing rights		----	----	434

Impaired loans had a principal balance of $15,578 at June 30, 2011. The portion of impaired loans that were measured for impairment using the fair value of the collateral for collateral dependent loans had a carrying amount of $2,423, with a valuation allowance of $424 at June 30, 2011, resulting in additional provision for loan loss expense of $1,306 for the six months ended June 30, 2011. This is compared to $1,666 in additional provision for loan loss expense for the six months ended June 30, 2010.  At December 31, 2010, impaired loans had a principal balance of $23,106. The portion of impaired loans that were measured for impairment using the fair value of the collateral for collateral dependent loans had a carrying amount of $15,222, with a valuation allowance of $5,230 at December 31, 2010.

Mortgage servicing rights, which are carried at lower of cost or fair value, were carried at their fair value of $417, which is made up of the outstanding balance of $592, net of a valuation allowance of $175 at June 30, 2011.  This is compared to a fair value of $471, made up of the outstanding balance of $617, net of a valuation allowance of $146 at June 30, 2010.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents: For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities:  The Company obtains fair value measurements using pricing models that vary based on asset class and include available trade, bid and other market information. Fair value of securities may also be determined by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities.

Federal Home Loan Bank stock: It is not practical to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its transferability.

Loans: The fair value of fixed-rate loans is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of loan commitments and standby letters of credit was not material at June 30, 2011 or December 31, 2010. The fair value for variable rate loans is estimated to be equal to carrying value. This fair value represents an entry price in accordance with ASC 825. While ASC 820 amended ASC 825 in several respects, this approach to fair value remains an acceptable approach under generally accepted accounting principles.

Deposit Liabilities: The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Borrowings: For other borrowed funds and subordinated debentures, rates currently available to the Bank for debt with similar terms and remaining maturities are used to estimate fair value. For securities sold under agreements to repurchase, carrying value is a reasonable estimate of fair value.

Accrued Interest Receivable and Payable: For accrued interest receivable and payable, the carrying amount is a reasonable estimate of fair value.

In addition, other assets and liabilities that are not defined as financial instruments were not included in the disclosures below, such as premises and equipment and life insurance contracts. The fair value of off-balance sheet items is not considered material (or is based on the current fees or cost that would be charged to enter into or terminate such arrangements).

The following table presents the fair values of financial assets and liabilities carried on the Company’s consolidated balance sheet at June 30, 2011 and December 31, 2010, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis:

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	47,966	$	47,966	$	59,751	$	59,751
Securities		122,048		121,644		108,017		107,037
Federal Home Loan Bank stock		6,281		N/A		6,281		N/A
Loans		616,891		627,239		631,936		637,986
Accrued interest receivable		2,611		2,611		2,704		2,704
Financial liabilities:
Deposits		681,554		684,508		694,781		698,199
Securities sold under agreements to repurchase		36,680		36,680		38,107		38,107
Other borrowed funds		24,712		24,385		27,743		26,968
Subordinated debentures		13,500		11,524		13,500		11,507
Accrued interest payable		2,493		2,493		2,600		2,600

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 7 – SEGMENT INFORMATION

The reportable segments are determined by the products and services offered, primarily distinguished between banking and consumer finance. They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business which are then aggregated if operating performance, products/services, and customers are similar. Loans, investments, and deposits provide the majority of the net revenues from the banking operation, while loans provide the majority of the net revenues for the consumer finance segment. All Company segments are domestic.

Total revenues from the banking segment, which accounted for the majority of the Company's total revenues, totaled 90.6% and 91.8% of total consolidated revenues for the years ended June 30, 2011 and 2010, respectively.

The accounting policies used for the Company's reportable segments are the same as those described in Note 1 - Summary of Significant Accounting Policies. Income taxes are allocated based on income before tax expense.

Information for the Company’s reportable segments is as follows:

	Three Months Ended June 30, 2011
	Banking		Consumer Finance			Total Company
Net interest income	$	7,550	$	604		$	8,154
Provision expense	$	822	$	(63	)	$	759
Tax expense	$	459	$	87		$	546
Net income	$	1,384	$	171		$	1,555
Assets	$	825,051	$	13,239		$	838,290

	Three Months Ended June 30, 2010
	Banking		Consumer Finance		Total Company
Net interest income	$	7,562	$	616	$	8,178
Provision expense	$	695	$	26	$	721
Tax expense	$	448	$	86	$	534
Net income	$	1,301	$	170	$	1,471
Assets	$	809,493	$	14,201	$	823,694

	Six Months Ended June 30, 2011
	Banking		Consumer Finance		Total Company
Net interest income	$	15,551	$	1,806	$	17,357
Provision expense	$	3,645	$	58	$	3,703
Tax expense	$	867	$	466	$	1,333
Net income	$	2,676	$	912	$	3,588
Assets	$	825,051	$	13,239	$	838,290

	Six Months Ended June 30, 2010
	Banking		Consumer Finance		Total Company
Net interest income	$	15,126	$	1,661	$	16,787
Provision expense	$	1,520	$	122	$	1,642
Tax expense	$	972	$	328	$	1,300
Net income	$	2,734	$	643	$	3,377
Assets	$	809,493	$	14,201	$	823,694

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Net cash provided by operating activities:	$ 9,907	$ 5,301
Investing activities:
Proceeds from maturities of securities available for sale	13,306	37,796
Purchases of securities available for sale	(27,534)	(31,086)
Proceeds from maturities of securities held to maturity	816	1,439
Purchases of securities held to maturity	0	3,389
Net change in loans	11,115	(3,897)
Proceeds from sale of other real estate owned	313	927
Purchases of premises and equipment	(343)	(463)
Purchases of bank owned life insurance	0	(287)
Net cash provided by investing activities	(2,327)	1,040
Financing activities:
Change in deposits	(13,227)	24,878
Cash dividends	(1,680)	(1,673)
Change in securities sold under agreements to repurchase	(1,427)	(2,554)
Proceeds from Federal Home Loan Bank borrowings	0	500
Repayment of Federal Home Loan Bank borrowings	(3,403)	(13,038)
Change in other short-term borrowings	372	(42)
Net cash provided by financing activities	(19,365)	8,071
Change in cash and cash equivalents	(11,785)	14,412
Cash and cash equivalents at beginning of period	59,751	15,670
Cash and cash equivalents at end of period	47,966	30,082
Supplemental disclosure:
Cash paid for interest	5,592	8,218
Cash paid for income taxes	330	1,611
Non-cash transfers from loans to other real estate owned	227	385
Other real estate owned sales financed by the Bank	$ 209	$ 35

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SECURITIES

6 Months Ended

Jun. 30, 2011

Investments, Debt and Equity Securities [Abstract]

SECURITIES

NOTE 3 – SECURITIES

The following table summarizes the amortized cost and estimated fair value of the available for sale and held to maturity investment securities portfolio at June 30, 2011 and December 31, 2010 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

Securities Available for Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 30, 2011
U.S. Treasury securities	$	22,554	$	12	$	----		$	22,566
U.S. Government sponsored entity securities		5,504		139		----			5,643
Agency mortgage-backed securities, residential		71,151		1,343		----			72,494
Total securities	$	99,209	$	1,494	$	----		$	100,703
December 31, 2010
U.S. Treasury securities	$	17,081	$	6	$	(8	)	$	17,079
U.S. Government sponsored entity securities		7,513		230		(12	)		7,731
Agency mortgage-backed securities, residential		60,916		383		(270	)		61,029
Total securities	$	85,510	$	619	$	(290	)	$	85,839

Securities Held to Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
June 30, 2011
Obligations of states and political subdivisions	$	21,319	$	270	$	(673	)	$	20,916
Agency mortgage-backed securities, residential		26		----		(1	)		25
Total securities	$	21,345	$	270	$	(674	)	$	20,941
December 31, 2010
Obligations of states and political subdivisions	$	22,149	$	130	$	(1,109	)	$	21,170
Agency mortgage-backed securities, residential		29		----		(1	)		28
Total securities	$	22,178	$	130	$	(1,110	)	$	21,198

The amortized cost and estimated fair value of the investment securities portfolio at June 30, 2011, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	26,551	$	26,703	$	556	$	560
Due in one to five years		1,507		1,506		4,418		4,261
Due in five to ten years		----		----		7,351		7,466
Due after ten years		----		----		8,994		8,629
Agency mortgage-backed securities, residential		71,151		72,494		26		25
Total debt securities	$	99,209	$	100,703	$	21,345	$	20,941

The following table summarizes the investment securities with unrealized losses at June 30, 2011 and December 31, 2010 by aggregated major security type and length of time in a continuous unrealized loss position. There were no available for sale securities with unrealized losses at June 30, 2011:

	Less Than 12 Months						12 Months or More					Total
June 30, 2011		Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Securities Held to Maturity
Obligations of states and
political subdivisions		$	3,321	$	(242	)	$	1,454	$	(431	)	$	4,775	$	(673	)
Agency mortgage-backed
securities, residential			----		----			18		(1	)		18		(1	)
Total held to maturity		$	3,321	$	(242	)	$	1,472	$	(432	)	$	4,793	$	(674	)

 Less Than 12 Months  12 Months or More  Total

December 31, 2010	Fair Value		Unrealized  Loss			Fair Value		Unrealized  Loss		Fair Value		Unrealized  Loss
Securities Available for Sale
U.S. Treasury securities	$	9,041	$	(8	)	$	----	$	----	$	9,041	$	(8	)
U.S. Government sponsored
entity securities		1,990		(12	)		----		----		1,990		(12	)
Agency mortgage-backed
securities, residential		27,953		(270	)		----		----		27,953		(270	)
Total available for sale	$	38,984	$	(290	)	$	----	$	----	$	38,984	$	(290	)

	Less Than 12 Months						12 Months or More					Total
		Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Securities Held to Maturity
Obligations of states and
political subdivisions		$	7,510	$	(690	)	$	970	$	(419	)	$	8,480	$	(1,109	)
Agency mortgage-backed
securities, residential			----		----			21		(1	)		21		(1	)
Total held to maturity		$	7,510	$	(690	)	$	991	$	(420	)	$	8,501	$	(1,110	)

Unrealized losses on the Company's debt securities have not been recognized into income because the issuers' securities are of high credit quality and management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.  Management does not believe any individual unrealized loss at June 30, 2011 represents an other-than-temporary impairment.

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LOANS AND ALLOWANCE FOR LOAN LOSSES

6 Months Ended

Jun. 30, 2011

Receivables [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are comprised of the following:	June 30,		December 31,
	2011		2010
Residential real estate	$	231,664	$	236,878
Commercial real estate:
Owner-occupied		149,453		149,042
Nonowner-occupied		58,920		55,989
Construction		22,235		21,591
Commercial and industrial		50,509		55,306
Consumer:
Automobile		51,445		58,271
Home equity		19,899		20,527
Other		39,245		43,718
		623,370		641,322
Less:  Allowance for loan losses		6,479		9,386
Loans, net	$	616,891	$	631,936

The Bank originated refund anticipation loans that contributed fee income of $561 and $655 during the six months ended June 30, 2011 and June 30, 2010, respectively.  As recommended by the FDIC, the Bank ceased offering refund anticipation loans effective April 19, 2011.

Activity in the allowance for loan losses was as follows:	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Beginning balance	$	8,052		$	8,778		$	9,386		$	8,198
Loans charged off:
Residential real estate		337			268			584			524
Commercial real estate		1,932			1,037			1,972			1,037
Commercial and industrial		862			184			4,701			184
Consumer		330			527			747			1,046
Total loans charged off		3,461			2,016			8,004			2,791
Recoveries of loans:
Residential real estate		29			6			37			9
Commercial real estate		804			----			911			70
Commercial and industrial		71			1			71			25
Consumer		225			333			375			670
Total recoveries of loans		1,129			340			1,394			774
Net loan charge-offs		(2,332	)		(1,676	)		(6,610	)		(2,017	)
Provision charged to operations		759			721			3,703			1,642
Balance, end of year	$	6,479		$	7,823		$	6,479		$	7,823

As a result of management’s evaluation of the trends in the real estate market, the status of long-term, collateral dependent impaired loans and the current regulatory environment, management decided to take partial charge-offs more quickly on collateral dependent impaired loans.

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2011:

June 30, 2011	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	993	$	3,141	$	3,795	$	1,457	$	----	$	9,386
Provision for loan losses		562		1,437		1,605		99		----		3,703
Loans charged off		584		1,972		4,701		747		----		8,004
Recoveries		37		911		71		375		----		1,394
Total ending allowance balance	$	1,008	$	3,517	$	770	$	1,184	$	----	$	6,479

The recorded investment of a loan is its carrying value excluding accrued interest and deferred loan fees.  The difference in the unpaid principal balance and recorded investment of the Company’s loans was not materially different at year-end 2010.

The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of June 30, 2011 and December 31, 2010:

June 30, 2011	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	----	$	424	$	----	$	----	$	424
Collectively evaluated for impairment		1,008		3,093		770		1,184		6,055
Total ending allowance balance	$	1,008	$	3,517	$	770	$	1,184	$	6,479
Loans:
Loans individually evaluated for impairment	$	764	$	11,675	$	3,139	$	----	$	15,578
Loans collectively evaluated for impairment		230,900		218,933		47,370		110,589		607,792
Total ending loans balance	$	231,664	$	230,608	$	50,509	$	110,589	$	623,370

December 31, 2010	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	125	$	1,698	$	3,407	$	----	$	5,230
Collectively evaluated for impairment		868		1,443		388		1,457		4,156
Total ending allowance balance	$	993	$	3,141	$	3,795	$	1,457	$	9,386
Loans:
Loans individually evaluated for impairment	$	1,784	$	13,460	$	7,862	$	----	$	23,106
Loans collectively evaluated for impairment		235,094		213,162		47,444		122,516		618,216
Total ending loans balance	$	236,878	$	226,622	$	55,306	$	122,516	$	641,322

Information regarding impaired loans is as follows:	June 30, 2011		December 31, 2010
Loans with no allocated allowance for loan losses	$	13,156	$	7,884
Loans with allocated allowance for loan losses		2,422		15,222
Total impaired loans	$	15,578	$	23,106
Amount of the allowance for loan losses allocated	$	424	$	5,230
Average of individually impaired loans during year	$	17,823	$	24,589

Average impaired loans during the six months ended June 30, 2011 and 2010 were $17,823 and $18,346, respectively.  Average impaired loans for the three months ended June 30, 2011 and 2010 were $18,513 and $21,816, respectively.  Interest recognized on impaired loans during the six months ended June 30, 2011 and 2010 were $568 and $168, respectively.  Interest recognized on impaired loans during the three months ended June 30, 2011 and 2010 were $223 and $84, respectively.  Accrual basis income was not materially different from cash basis income for the periods presented.

The following table presents loans individually evaluated for impairment by class of loans:

June 30, 2011	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
Residential real estate	$	826	$	764	$	----	$	773	$	9	$	3
Commercial real estate:
Owner-occupied		7,713		7,008		----		7,309		239		232
Nonowner-occupied		1,696		1,565		----		1,653		39		36
Construction		679		679		----		679		19		17
Commercial and industrial		7,257		3,139		----		4,986		192		159
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
With an allowance recorded:
Residential real estate		----		----		----		----		----		----
Commercial real estate:
Owner-occupied		----		----		----		----		----		----
Nonowner-occupied		2,423		2,423		424		2,423		70		60
Construction		----		----		----		----		----		----
Commercial and industrial		----		----		----		----		----		----
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
Total	$	20,594	$	15,578	$	424	$	17,823	$	568	$	507

December 31, 2010	Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Residential real estate	$	1,244	$	----
Commercial real estate:
Owner-occupied		4,234		----
Nonowner-occupied		992		----
Construction		743		----
Commercial and industrial		671		----
Consumer:
Automobile		----		----
Home equity		----		----
Other		----		----
With an allowance recorded:
Residential real estate		540		125
Commercial real estate:
Owner-occupied		4,731		1,125
Nonowner-occupied		2,760		573
Construction		----		----
Commercial and industrial		7,191		3,407
Consumer:
Automobile		----		----
Home equity		----		----
Other		----		----
Total	$	23,106	$	5,230

Nonaccrual loans and loans past due 90 days or more and still accruing were as follows:

	June 30, 2011		December 31, 2010
Loans past due 90 days or more and still accruing	$	1,315	$	1,714
Nonaccrual loans	$	4,489	$	3,295

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans:

June 30, 2011	Loans Past Due 90 Days And Still Accruing		Nonaccrual
Residential real estate	$	1,131	$	2,797
Commercial real estate:
Owner-occupied		13		1,577
Nonowner-occupied		86		----
Construction		----		----
Commercial and industrial		----		----
Consumer:
Automobile		46		----
Home equity		----		115
Other		39		----
Total	$	1,315	$	4,489

December 31, 2010	Loans Past Due 90 Days And Still Accruing		Nonaccrual
Residential real estate	$	1,487	$	2,200
Commercial real estate:
Owner-occupied		----		428
Nonowner-occupied		----		432
Construction		----		----
Commercial and industrial		----		----
Consumer:
Automobile		114		100
Home equity		43		104
Other		70		31
Total	$	1,714	$	3,295

The following table presents the aging of the recorded investment of past due loans by class of loans:

June 30, 2011	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	3,199	$	1,432	$	3,834	$	8,465	$	223,199	$	231,664
Commercial real estate:
Owner-occupied		631		----		1,590		2,221		147,232		149,453
Nonowner-occupied		364		----		86		450		58,470		58,920
Construction		----		----		----		----		22,235		22,235
Commercial and industrial		54		38		----		92		50,417		50,509
Consumer:
Automobile		693		140		46		879		50,566		51,445
Home equity		37		46		115		198		19,701		19,899
Other		419		105		39		563		38,682		39,245
Total	$	5,397	$	1,761	$	5,710	$	12,868	$	610,502	$	623,370

December 31, 2010	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate	$	4,731	$	1,951	$	3,448	$	10,130	$	226,748	$	236,878
Commercial real estate:
Owner-occupied		1,564		17		428		2,009		147,033		149,042
Nonowner-occupied		87		----		432		519		55,470		55,989
Construction		----		----		----		----		21,591		21,591
Commercial and industrial		15		----		----		15		55,291		55,306
Consumer:
Automobile		1,010		342		213		1,565		56,706		58,271
Home equity		78		50		147		275		20,252		20,527
Other		793		238		101		1,132		42,586		43,718
Total	$	8,278	$	2,598	$	4,769	$	15,645	$	625,677	$	641,322

Troubled Debt Restructurings:

The Company has $12,306 and $16,814 in loans classified as TDR’s, with specific reserve allocations of $424 and $3,791 as of June 30, 2011 and December 31, 2010, respectively.  The Company had no commitments to lend additional amounts to customers with outstanding loans that are classified as TDR’s at June 30, 2011 and December 31, 2010.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 10. The Company analyzes loans individually with a higher credit risk rating and groups these loans into a category called "classified" assets. The Company considers its classified assets to be loans that are graded 9 through 10 and generally have outstanding balances greater than $200. Loans graded a 9 or 10 that have outstanding balances of less than $200 may be included in the classified asset category if 1) a portion of the loan balance has been specifically allocated to the allowance for loan losses, or 2) the aggregate borrowings of the customer meet or exceed $200. While the Company uses these criteria for evaluating and establishing its higher risk, classified asset category, loans that do not meet these criteria may still be included as classified assets based on other subjective factors that indicate a concern over the borrower's ability to repay the loan. The Company's risk categories are reviewed annually on loans that have aggregate borrowing amounts that meet or exceed $500.

The Company uses the following definitions for its classified loan risk ratings:

Substandard (Loan Grade 9).Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful (Loan Grade 10).Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Classified loans will mostly consist of commercial and industrial and commercial real estate loans. The Company considers its loans that do not meet the criteria for a classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 8 (Special Mention). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date. As of June 30, 2011 and December 31, 2010, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

June 30, 2011	Pass		Classified		Total
Commercial real estate:
Owner-occupied	$	132,672	$	16,781	$	149,453
Nonowner-occupied		49,888		9,032		58,920
Construction		14,776		7,459		22,235
Commercial and industrial		38,243		12,266		50,509
Total	$	235,579	$	45,538	$	281,117

December 31, 2010	Pass		Classified		Total
Commercial real estate:
Owner-occupied	$	138,490	$	10,552	$	149,042
Nonowner-occupied		50,119		5,870		55,989
Construction		15,550		6,041		21,591
Commercial and industrial		43,668		11,638		55,306
Total	$	247,827	$	34,101	$	281,928

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau), but the scores are not updated. The Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower's credit score to be a significant influence in the determination of a loan's credit risk grading.

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of June 30, 2011 and December 31, 2010:

June 30, 2011	Consumer
	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	51,399	$	19,784	$	39,206	$	227,736	$	338,125
Nonperforming		46		115		39		3,928		4,128
Total	$	51,445	$	19,899	$	39,245	$	231,664	$	342,253

December 31, 2010	Consumer
	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	58,057	$	20,380	$	43,617	$	233,191	$	355,245
Nonperforming		214		147		101		3,687		4,149
Total	$	58,271	$	20,527	$	43,718	$	236,878	$	359,394

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 3.80% of total loans were unsecured at June 30, 2011, down from 3.93% at December 31, 2010.

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FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

6 Months Ended

Jun. 30, 2011

Risks and Uncertainties [Abstract]

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

NOTE 5 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank 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 include commitments to extend credit, standby letters of credit and financial guarantees.  The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual amount of those instruments.  The contract amounts of these instruments are not included in the consolidated financial statements.  At June 30, 2011, the contract amounts of these instruments totaled approximately $63,647, compared to $53,947 at December 31, 2010.  The Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.  Since many of these instruments are expected to expire without being drawn upon, the total contract amounts do not necessarily represent future cash requirements.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
Balance	$ 69,433	$ 67,461	$ 68,128	$ 66,521
Comprehensive income:
Net income	1,555	1,471	3,588	3,377
Change in unrealized gain on available for sale securities	995	370	1,166	173
Income tax effect	(338)	(126)	(397)	(59)
Total comprehensive income	2,212	1,715	4,357	3,491
Cash dividends	(840)	(837)	(1,680)	(1,673)
Balance	$ 70,805	$ 68,339	$ 70,805	$ 68,339
Cash dividends per share	$ 0.21	$ 0.21	$ 0.42	$ 0.42

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION:  The accompanying consolidated financial statements include the accounts of Ohio Valley Banc Corp. (“Ohio Valley”) and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc. (“Loan Central”), a consumer finance company, and Ohio Valley Financial Services Agency, LLC (“Ohio Valley Financial Services”), an insurance agency.  Ohio Valley and its subsidiaries are collectively referred to as the “Company”.  All material intercompany accounts and transactions have been eliminated in consolidation.

These interim financial statements are prepared by the Company 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 June 30, 2011, and its results of operations and cash flows for the periods presented.  The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the operating results to be anticipated for the full fiscal year ending December 31, 2011.  The accompanying consolidated financial statements do not purport to contain all the necessary financial disclosures required by U.S. generally accepted accounting principles (“US GAAP”) that might otherwise be necessary in the circumstances.  The Annual Report of the Company for the year ended December 31, 2010 contains consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements.

The consolidated financial statements for 2010 have been reclassified to conform to the presentation for 2011.  These reclassifications had no effect on the net results of operations.

USE OF ESTIMATES IN THE PREPARATION OF 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.  Areas involving the use of management’s estimates and assumptions that are more susceptible to change in the near term involve the allowance for loan losses, mortgage servicing rights, deferred tax assets, the fair value of certain securities, the fair value of financial instruments and the determination and carrying value of impaired loans and other real estate owned.

INDUSTRY SEGMENT INFORMATION:  Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

EARNINGS PER SHARE:  Earnings per share are computed based on net income divided by the weighted average number of common shares outstanding during the period.  The weighted average common shares outstanding were 4,000,056 for the three and six months ended June 30, 2011, and 3,984,009 for the three and six months ended June 30, 2010.  Ohio Valley had no dilutive effect and no potential common shares issuable under stock options or other agreements for any period presented.

ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS:

In December 2010, the Financial Accounting Standards Board (“FASB”) issued guidance within the Accounting Standards Update (“ASU”) 2010-20 Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.  ASU 2010-20 requires entities to provide disclosures designed to facilitate financial statement users’ evaluation of (i) the nature of credit risk inherent in the entity’s portfolio of financing receivables, (ii) how that risk is analyzed and assessed in arriving at the allowance for credit losses and (iii) the changes and reasons for those changes in the allowance for credit losses. Disclosures must be disaggregated by portfolio segment, the level at which an entity develops and documents a systematic method for determining its allowance for credit losses, and class of financing receivable, which is generally a disaggregation of portfolio segment. The required disclosures include, among other things, a roll forward of the allowance for credit losses as well as information about modified, impaired, nonaccrual and past due loans and credit quality indicators. ASU 2010-20 became effective for the Company’s financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period. Disclosures that relate to activity during a reporting period are required for the Company’s financial statements that include periods beginning on or after January 1, 2011. The adoption of this guidance added additional disclosures to Note 4 – Loans and Allowance for Loan Losses.

In April 2011, the FASB issued guidance within the ASU 2011-02 A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring (“TDR”). ASU 2011-02 clarifies when a loan modification or restructuring is considered a TDR. This guidance is effective for the first interim or annual period beginning on or after June 15, 2011, and will be applied retrospectively to the beginning of the annual period of adoption. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and noninterest-bearing deposits with banks	$ 10,631	$ 8,979
Interest-bearing deposits with banks	37,335	50,772
Total cash and cash equivalents	47,966	59,751
Securities available for sale	100,703	85,839
Securities held to maturity (estimated fair value: 2011 - $20,941; 2010 - $21,198)	21,345	22,178
Federal Home Loan Bank stock	6,281	6,281
Total loans	623,370	641,322
Less: Allowance for loan losses	(6,479)	(9,386)
Net loans	616,891	631,936
Premises and equipment, net	9,607	9,738
Other real estate owned	4,327	4,403
Accrued income receivable	2,611	2,704
Goodwill	1,267	1,267
Bank owned life insurance	20,122	19,761
Prepaid FDIC insurance	2,001	2,576
Other assets	5,169	5,080
Total assets	838,290	851,514
LIABILITIES
Noninterest-bearing deposits	108,119	91,949
Interest-bearing deposits	573,435	602,832
Total deposits	681,554	694,781
Securities sold under agreements to repurchase	36,680	38,107
Other borrowed funds	24,712	27,743
Subordinated debentures	13,500	13,500
Accrued liabilities	11,039	9,255
Total liabilities	767,485	783,386
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 5)	0	0
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 4,659,795 shares issued)	4,660	4,660
Additional paid-in capital	33,003	33,003
Retained earnings	47,868	45,960
Accumulated other comprehensive income	986	217
Treasury stock, at cost (659,739 shares)	(15,712)	(15,712)
Total shareholders' equity	70,805	68,128
Total liabilities and shareholders' equity	$ 838,290	$ 851,514