10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2012

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

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Shares, Without Par Value	The NASDAQ Stock Market LLC
	(The NASDAQ Global Market)

Securities registered pursuant to Section 12(g) of the Act:

None

    Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES ¨   NO þ

    Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 YES o   NO þ

    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.

YES þ   NO ¨

    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).

YES þ   NO ¨

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

YES þ   NO ¨

    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  þ
Non-accelerated filer  o	Smaller reporting company  o
(Do not check if a smaller reporting company)

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

YES o   NO x

    Based on the closing sales price of $19.26 per share on June 30, 2012, the aggregate market value of the issuer’s shares held by non-affiliates on such date was $71,090,226.  For this purpose, shares held by non-affiliates are all outstanding shares except those held by the directors and executive officers of the issuer and those held by The Ohio Valley Bank Company as trustee with respect to which The Ohio Valley Bank Company has sole or shared voting or dispositive power.

    The number of common shares of the registrant outstanding as of February 28, 2013 was 4,062,204.

Documents Incorporated By Reference:

(1)   Portions of the 2012 Annual Report to Shareholders of Ohio Valley Banc Corp. (Exhibit 13) are incorporated by reference into Part I, Item 1 and Part II, Items 5, 6, 7, 7A, 8 and 9A.

(2)   Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held May 8, 2013 are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14.

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PART I

ITEM 1 - BUSINESS

Organizational History and Subsidiaries

Ohio Valley Banc Corp. (“Ohio Valley” or the “Company”) is an Ohio corporation registered as a financial holding company pursuant to the Bank Holding Company Act of 1956, as amended (“BHC Act”).  Ohio Valley was incorporated under the laws of the State of Ohio on January 8, 1992 and began conducting business on October 23, 1992.  The principal executive offices of Ohio Valley are located at 420 Third Avenue, Gallipolis, Ohio 45631.  Ohio Valley’s common shares are listed on The NASDAQ Global Market under the symbol “OVBC”.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the “Bank”).  Ohio Valley also owns two nonbank subsidiaries, Loan Central, Inc. (“Loan Central”) and Ohio Valley Financial Services Agency, LLC (“Ohio Valley Financial Services”), which engage in lending and insurance agency services, and one wholly-owned subsidiary trust formed solely to issue a trust preferred security.  Ohio Valley also owns a minority interest in an insurance company.  Ohio Valley and its subsidiaries are collectively referred to as the “Company.” Ohio Valley’s financial service operations are considered by management to be aggregated in two reportable segments:  banking and consumer finance.  Total revenues from the banking segment, which  accounted for the majority of the Company’s total revenues, totaled 91.2%, 91.8% and 92.9% of total consolidated revenues for the years ended December 31, 2012, 2011 and 2010, respectively.

Interested readers can access Ohio Valley’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, through Ohio Valley’s Internet website at www.ovbc.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate the information contained on Ohio Valley’s website into this Annual Report on Form 10-K).  These reports can be accessed free of charge through a link to The NASDAQ Stock Market’s website from Ohio Valley’s website as soon as reasonably practicable after Ohio Valley electronically files such materials with, or furnishes them to, the Securities and Exchange Commission (“SEC”).

Business of Ohio Valley

As a financial holding company registered under the BHC Act, Ohio Valley’s primary business is community banking.  As of December 31, 2012, Ohio Valley’s consolidated assets approximated to $769,223,000, and total shareholders’ equity approximated to $75,820,000.

Ohio Valley is also permitted to engage in certain non-banking activities under the provisions of the Gramm-Leach-Bliley Act (“GLB Act”), such as securities underwriting and dealing activities, insurance agency and underwriting activities and merchant banking/equity investment activities.  The Company presently engages in insurance underwriting activities through a minority interest in ProAlliance Corp.  Ohio Valley also has an insurance agency in Ohio Valley Financial Services that is used to facilitate the commission receipts on insurance sold by the Bank and Loan Central.  Management will consider opportunities to engage in additional nonbanking activities as they arise.

Business of Bank Subsidiary

A substantial portion of Ohio Valley’s revenue is derived from cash dividends paid by the Bank.   The Bank presently has fifteen offices located in Ohio and West Virginia, all but one offering automatic teller machines (ATMs).  Seven of these offices also offer drive-up services.  The Bank accounted for substantially all of Ohio Valley’s consolidated assets at December 31, 2012.

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The Bank is primarily engaged in commercial and retail banking.  The Bank is a full-service financial institution offering a blend of commercial and consumer banking services within southeastern Ohio as well as western West Virginia.  The banking services offered by the Bank include the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, floor plan and student loans; and the making of construction and real estate loans.  The Bank also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.  As part of its lending function, the Bank offers credit card services.  The Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”).  In addition to originating loans, the Bank invests in U.S. government and agency obligations, interest-bearing deposits in other financial institutions, and other investments permitted by applicable law.

The Bank began offering trust services in 1981.   The trust department acts as trustee under wills, trusts and profit sharing plans, as executor and administrator of estates, and as guardian for estates of minors and incompetents.  In addition, the trust department performs a variety of investment and security services where the Bank acts as an agent on behalf of the client.  Trust services are available to all customers of the Bank.

Bank customers may conveniently establish new deposit accounts at their own home.  In addition, the Bank offers an automated telephone banking system, OVB Line, which allows customers to access their personal accounts or business account information, make loan payments or fund transfers and obtain current rate information, all from a touch-tone telephone.  The Bank also offers Internet banking to its customers, which allows customers to perform various transactions using a computer from any location as long as they have access to the Internet and a secure browser.  Specifically, customers can check personal account balances, receive information about transactions within their accounts, make transfers between accounts, stop payment on a check, and reorder checks.  Customers may also pay bills online and can make payments to virtually any business or individual.  Furthermore, the Bank offers other financial management online services, such as cash management and news updates related to repossession auctions, current rates and general bank news.

Business of Loan Central

Loan Central is engaged in consumer finance, offering smaller balance personal and mortgage loans to individuals with higher credit risk history.  Loan Central’s line of business also includes seasonal tax refund loan services.  Loan Central presently has seven offices, all located within southeastern Ohio.

Business of Financial Services Subsidiaries

Ohio Valley Financial Services is a licensed insurance agency that is used to facilitate the receipt of commissions on insurance sold by the Bank and Loan Central.  Ohio Valley Financial Services is licensed by the State of Ohio Department of Insurance.

Ohio Valley also holds a non-majority equity interest in ProAlliance Corp., an insurance company.  ProAlliance Corp. is engaged primarily in specialty property and casualty insurance coverage and has been approved under the guidelines of the State of Ohio Department of Insurance.

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Variable Interest Entities

Ohio Valley owns one special purpose entity, Ohio Valley Statutory Trust III, which has issued $8,500,000 in trust preferred securities.  Ohio Valley has issued a like amount of subordinated debentures to the Trust in exchange for the proceeds of the issuance of the trust preferred securities.  Ohio Valley used the proceeds to provide additional capital to the Bank to support growth.  Further detail on Ohio Valley Statutory Trust III is located in Ohio Valley’s 2012 Annual Report to Shareholders under “Note H – Subordinated Debentures and Trust Preferred Securities,” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2012.

Financial Information

 Financial information regarding the Company as of December 31, 2012 and 2011 and results of operations for the past three fiscal years is contained in the Company’s consolidated financial statements for the fiscal year ended December 31, 2012.

Lending Activities

The Company’s loan portfolio decreased $40,020,000 to finish at $558,288,000 in 2012.  The loan portfolio is comprised of commercial (commercial real estate and commercial and industrial), residential real estate and consumer loans, including credit card and home equity loans.  Commercial  loans decreased $20,406,000, or 8.1%, while residential real estate and consumer loans loans decreased $12,468,000, or 5.2%, and $7,146,000, or 6.7%, respectively, as compared to 2011.  Consolidated interest and fee revenue from loans accounted for 76.51%, 80.49%, and 82.52% of total consolidated revenues in 2012, 2011 and 2010, respectively.  The Company’s market area for lending is primarily located in southeastern Ohio and portions of western West Virginia.The Company believes that there is no significant concentration of loans to borrowers engaged in the same or similar industries and does not have any loans to foreign entities.

Residential Real Estate Loans

The Company’s residential real estate loans consist primarily of one- to four-family residential mortgages and carry many of the same customer and industry risks as the commercial loan portfolio.  Real estate loans to consumers are secured primarily by a first lien mortgage or deed of trust  with evidence of title in favor of the Bank.  The Company also requires proof of hazard insurance, required at the time of closing, with the Bank or Loan Central named as the mortgagee and as loss payee.  The Company generally requires the amount of a residential real estate loan be no more than 80% of the purchase price or the appraisal value (whichever is the lesser) of the real estate securing the loan, unless private mortgage insurance is obtained by the borrower for the percentage exceeding 80%.  These loans generally range from one-year adjustable to thirty-year fixed-rate mortgages.  The Company’s market area for real estate lending is primarily located in southeastern Ohio and portions of western West Virginia.  The Bank continues to sell a portion of its new fixed-rate real estate loan originations to the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to enhance customer service and loan pricing.  Secondary market sales of these real estate loans, which have fixed rates with fifteen- to thirty-year terms, have assisted in meeting the consumer preference for long-term fixed-rate loans as well as minimized the Bank’s exposure to interest rate risk. Currently, the Bank’s real estate loan offerings are limited to maturity terms up to fifteen years, with 100% of its thirty-year real estate loan demand being sold to to Freddie Mac.

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Commercial Loans

The Company’s commercial loan portfolio consists of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include service, retail and wholesale merchants.  Collateral securing these loans includes equipment, inventory, stock, commercial real estate and rental property.  Commercial loans are considered to have a higher level of risk compared to other types of loans (i.e., single-family residential mortgages, installment loans and credit card loans), although care is taken to minimize these risks.  Numerous risk factors impact this portfolio, such as the economy, new technology, labor rates, cash flow, financial structure and asset quality.  The payment experience on commercial loans is dependent on adequate cash flows from the business to service both interest and principal due.  Thus, commercial loans may be more sensitive to adverse conditions in the economy generally or adverse conditions in a specific industry.  The Company diversifies risk within this portfolio by closely monitoring industry concentrations and portfolios to ensure that it does not exceed established lending guidelines.  Underwriting standards require a comprehensive credit analysis and independent evaluation of virtually all larger balance commercial loans prior to approval. The Bank’s loan committee will review and approve all new commercial loan originations according to the following lending limits:  up to $750,000 unsecured, up to $1,500,000 secured, and up to $3,000,000 aggregate.  The  Executive Committee of the Bank’s Board of Directors will review and approve all new commercial loan originations up to $5,000,000.

Consumer Loans

Consumer loans are secured by automobiles, mobile homes, recreational vehicles and other personal property.  Personal loans and unsecured credit card receivables are also included as consumer loans.  The Company makes installment credit available to customers in their primary market area of southeastern Ohio and portions of western West Virginia.  Credit approval for consumer loans requires demonstration of sufficient income to repay principal and interest due, stability of employment, a positive credit record and sufficient collateral for secured loans.  The Company monitors the risk associated with these types of loans by monitoring factors such as portfolio growth, lending policies and economic conditions.  Underwriting standards are continually evaluated and modified based upon these factors.  A qualified compliance officer is responsible for monitoring the performance of his or her respective consumer portfolio and updating loan personnel.  The Company makes credit life insurance and health and accident insurance available to all qualified borrowers, thus reducing their risk of loss when their income is terminated or interrupted.  The Company reviews its respective consumer loan portfolios monthly to charge off loans which do not meet applicable standards.  Credit card accounts are administered in accordance with the same standards as those applied to other consumer loans.  Consumer loans generally involve more risk as to collectibility than mortgage loans because of the type and nature of collateral and, in certain instances, the absence of collateral.  As a result, consumer lending collections are dependent upon the borrower’s continued financial stability and are adversely affected by job loss, divorce or personal bankruptcy and by adverse economic conditions.  Also included in the category of consumer loans are home equity loans.  Home equity lines of credit are generally made as second mortgages and charged a variable interest rate.  Home equity lines are written with ten-year terms but are reviewed annually.  The Company’s consumer loans also consist of seasonal refund anticipation loans (“RAL’s”) offered by Loan Central during the tax season.  RAL’s are short-term cash advances against a customer's anticipated income tax refund.

Underwriting Standards

The Company’s underwriting guidelines and standards are updated  periodically and are presented to the Board of Director s of the holding company for approval.  The purpose of the standards and guidelines is to grant loans on a sound and collectible basis; to invest available funds in a safe, profitable

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manner; to serve the legitimate credit needs of the Company’s primary market areas; and to ensure that all loan applicants receive fair and equal treatment in the lending process.  It is the intent of the underwriting guidelines and standards to:  minimize losses by carefully investigating the credit history of each applicant, verify the source of repayment and the ability of the applicant to repay, collateralize those loans in which collateral is deemed to be required, exercise care in the documentation of the application, review, approval, and origination process, and administer a comprehensive loan collection program.  The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application.  A loan officer may grant, with justification, a loan with variances from the underwriting guidelines and standards.  However, a loan officer may not exceed his or her respective lending authority without obtaining the prior, proper approval from a superior.

Investment Activities

The Company’s investment policy stresses the management of  the investment securities portfolio, which includes both  securities held to maturity and  securities available for sale, to maximize the return over the long-term in a manner that is consistent with good banking practices and relative safety of principal.  The Company’s investment portfolio is comprised of U.S. government sponsored entity and mortgage-backed securities as well as obligations of state and political subdivisions.  Revenues from interest and dividends on securities accounted for 5.22%, 5.10% and 5.62% of total consolidated revenues in 2012, 2011 and 2010, respectively.The Company currently does not engage in trading account activity.

Funding Activities

Sources of funds for loan and investment activities include “core deposits.”  Core deposits include demand deposits, savings and NOW accounts, and certificates of deposit less than $100,000.  The Company will also utilize certificates of deposit from wholesale markets, when necessary, to support growth in assets.  Short- and long-term advances from the Federal Home Loan Bank have also been a significant source of funding.  Further fundinghas come fromtwo trust preferred securities offerings through Ohio Valley Statutory Trust I and Ohio Valley Statutory Trust III, totaling $13,500,000.  Ohio Valley used the proceeds to provide additional capital to the Bank to support growth.  

Electronic Refund Check / Electronic Refund Deposit Activities

The Company began its participation in a tax refund loan service in 2006, in which it serves as  a facilitator for the clearing of tax refunds for a single  tax software provider.  A tax refund clearing agreement between the Bank and software provider requires the Bank to process electronic refund checks (“ERC’s”) and electronic refund deposits (“ERD’s”) presented for payment on behalf of taxpayers containing taxpayer refunds.  The Bank will, in turn, receive a fee paid by the third-party tax software provider for each transaction that is processed.  During the year ended 2012, the Company’s ERC/ERD fees totaled $2,289,000, a decrease of $270,000, or 10.6%, as compared to the same period in 2011. For the 2012 tax season, the volume of ERC/ERD items increased over 2011.  However, the fee per ERC/ERD transaction was reduced from the prior year, which contributed to lower fee revenue.  While ERC/ERD fee income generated less income during 2012, management is pleased with the significant contribution this revenue source has made, accounting for 27.0% of the overall noninterest income during the year ended 2012.  As a result of ERC/ERD fee activity being mostly seasonal, the majority of income will generally be recorded during the first half of the fiscal year, with only minimal income recorded thereafter.

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Competition

Competition among providers of financial products and services continues to increase, with consumers having the opportunity to select from a growing variety of traditional and nontraditional alternatives.  The principal factors of competition for the Company’s banking business are the rates of interest charged for loans, the rates of interest paid for deposits, the fees charged for services and the availability and quality of services.  The market area for the Bank is concentrated primarily in the Gallia, Jackson, Pike, Lawrence and Meigs Counties of Ohio as well as the Mason and Cabell Counties of West Virginia.  Some additional business originates from the surrounding Ohio counties of Vinton, Scioto and Ross.  Competition for deposits and loans comes primarily from local banks and savings associations, although some competition is also experienced from local credit unions and insurance companies.  The Company also competes with non-financial institutions that offer financial products and services.  Some of the Company’s competitors are not subject to the same level of regulation and oversight that is required of banks and bank holding companies.  As a result, some of these competitors may have lower cost structures.

Loan Central’s market presence further strengthens the Company’s ability to compete in the Gallia, Jackson, Lawrence and Pike Counties by serving a consumer base which may not meet the Bank’s credit standards.  Loan Central also operates in Scioto and Ross counties of Ohio, which is outside the Bank’s primary market area.  With the exception of Loan Central’s tax refund loan activities and the Bank’s ERC/ERD activities, the Company’s business is not seasonal, nor is it dependent upon a single or small group of customers.

To continue the expansion of the Bank’s market presence and further enhance customer service, the Bank began a phase of SuperBank branch openings in December 1996.  From 1996 to 2001, the Bank opened eight SuperBank facilities within supermarkets and Wal-Mart stores.  The Bank currently has five SuperBank branches in operation that currently service the market areas of Gallia, Meigs and Lawrence Counties of Ohio as well as Cabell County of West Virginia.

Historically, larger regional institutions, with substantially greater resources, have been generating a growing market presence.  Yet, in recent years, the financial industry continues to consolidate, which affects competition by eliminating some regional and local institutions, while strengthening the acquiring companies.  Many financial institutions are experiencing significant challenges as a result of the economic crisis, resulting in bank failures and significant intervention from the U.S. Government.

Overall, the Company believes it is able to compete  effectively in both current and newer markets.  There  can be no assurance,  however, that  our ability to market products and services successfully or to obtain adequate yield on our loans will not be impacted by the nature of the competition that now exists or may later develop.

Supervision and Regulation

The following is a summary of certain statutes and regulations affecting Ohio Valley as well as the Bank and Loan Central.  The summary is qualified in its entirety by reference to such statutes and regulations.

Regulation of Bank Holding Company

Ohio Valley is subject to the requirements of the BHC Act and to the reporting requirements of, and examination and regulation by, the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).  

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The Federal Reserve Board also has extensive enforcement authority over bank holding companies, including, among other things, the ability to:

·   assess civil money penalties;

·   issue cease and desist or removal orders; and

·   require that a bank holding company divest subsidiaries (including its banking subsidiaries).

In general, the Federal Reserve Board may initiate enforcement action for violations of laws and regulations and unsafe or unsound practices.

A bank holding company is required to serve as a source of financial strength to each subsidiary bank and to commit resources to support those subsidiary banks.  The Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to the shareholders of the bank holding company if the Federal Reserve Board believes the payment would be an unsafe or unsound practice. In 2009, the Federal Reserve Board issued guidance and regulations which require bank holding companies to provide advance notification of planned dividends under certain circumstances.

The BHC Act requires the prior approval of the Federal Reserve Board in any case where a bank holding company proposes to:

·   acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank that is not already majority-owned by it;

·   acquire all or substantially all of the assets of another bank or bank holding company; or

·   merge or consolidate with any other bank holding company.

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act").  This law is significantly changing the regulation of financial institutions and the financial services industry.  Because the Dodd-Frank Act requires various federal agencies to adopt a broad range of regulations with significant discretion, some of which still have not been adopted, some of the effects they will have on our company are not yet known.

Many of the provisions of the Dodd-Frank Act apply directly only to institutions much larger than ours, and some will affect only institutions with different charters than ours or institutions that engage in activities in which we do not engage.  Among the changes to occur pursuant to the Dodd-Frank Act that can be expected to have an effect on our business are the following:

·   the Dodd-Frank Act creates a Consumer Financial Protection Bureau with broad powers to adopt and enforce consumer protection regulations;

·   new capital regulations for bank holding companies will be adopted, which may impose stricter requirements, and any new trust preferred securities will no longer count toward Tier I capital;

·   the federal law prohibition on the payment of interest on commercial demand deposit accounts was eliminated effective in July 2011;

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·   the standard maximum amount of deposit insurance per customer is permanently increased to $250,000, and non-interest bearing transaction accounts had unlimited insurance through December 31, 2012;

·   the assessment base for determining deposit insurance premiums has been expanded effective April 1, 2011, to include liabilities other than just deposits; and

·   new corporate governance requirements applicable generally to all public companies in all industries will require new compensation practices, including providing shareholders the opportunity to cast a non-binding vote on executive compensation and considering the independence of compensation advisers, and new executive compensation disclosure requirements.  In addition, companies will be required to “claw back” incentive compensation under certain circumstances, although regulations have not yet been adopted.

In addition, new regulations regarding debit card fees were enacted by the Federal Reserve in October 2011.  The new rules cap debit card interchange fees for banks with $10 billion or more in assets and prohibit network exclusivity arrangements and routing restrictions.  Although the fee standards do not apply to Ohio Valley, competition and other market forces may result in a loss of revenue to us from these fees.

Although it is impossible for us to predict at this time all the effects the Dodd-Frank Act will have on us and the rest of our industry, it is possible that our revenue could decrease, our interest expense could increase and deposit insurance premiums could change, and steps may need to be taken to increase qualifying capital.  We expect that our operating and compliance costs will increase and could adversely affect our financial condition and results of operations.

We cannot predict what other legislation or economic policies of the various regulatory authorities might be enacted or adopted or what other regulations might be adopted or the effects thereof. Future legislation and policies and the effects thereof might have a significant influence on overall growth and distribution of loans, investments and deposits and affect interest rates charged on loans or paid on time and savings deposits. Such legislation and policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.

Transactions with Affiliates, Directors, Executive Officers and Shareholders

Section 23A and 23B of the Federal Reserve Act and Regulation W restrict transactions by banks and their subsidiaries with their affiliates.  An affiliate of a bank is any company or entity which controls, is controlled by or is under common control with the bank.

Generally, Sections 23A and 23B and Regulation W:

·   limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of that bank’s capital stock and surplus (i.e., tangible capital);

·   limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to 20% of that bank’s capital stock and surplus; and

·    require that all such transactions be on terms substantially the same, or at least as favorable to the bank subsidiary, as those provided to a non-affiliate.

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The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, the issuance of a guarantee on behalf of the affiliate, the purchase of securities issued by the affiliate, and other similar types of transactions.

A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve Board.  Among other things, these loans must be made on terms substantially the same as those offered to unaffiliated individuals or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment.  In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

Regulation of Ohio State Chartered Banks

As an Ohio state-chartered bank that is not a member of the Federal Reserve Bank (“FRB”), the Bank is supervised and regulated by the Ohio Division of Financial Institutions and the FDIC.

The Bank’s deposits are insured up to applicable limits by the FDIC, and the Bank is subject to the applicable provisions of the Federal Deposit Insurance Act and the regulations of the FDIC.

Various requirements and restrictions under the laws of the United States, the State of Ohio and the State of West Virginia affect the operations of the Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on payment of dividends, and limitations on branching.

Holding Company Activities

Ohio Valley became a financial holding company during 2000, permitting it to engage in activities beyond those permitted for traditional bank holding companies.  In order to become a financial holding company, a bank holding company and all of its depository institutions must be well capitalized and well managed under federal banking regulations, and the depository institutions must have received a Community Investment Act rating of at least satisfactory.

Financial holding companies may engage in a wide variety of financial activities, including any activity that the Federal Reserve Board and the Treasury Department consider financial in nature or incidental to financial activities, and any activity that the Federal Reserve Board determines complementary to a financial activity and which does not pose a substantial safety and soundness risk.  These activities include securities underwriting and dealing activities, insurance and underwriting activities and merchant banking/equity investment activities.  Because it has authority to engage in a broad array of financial activities, a financial holding company may have several affiliates that are functionally regulated by financial regulators other than the Federal Reserve Board, such as the SEC and state insurance regulators.

Loan Central is supervised and regulated by the State of Ohio Department of Financial Institutions, Division of Consumer Finance.  Ohio Valley’s insurance business investments, Ohio Valley Financial Services and ProAlliance Corp., are both supervised and regulated by the State of Ohio Department of Insurance. The insurance laws and regulations applicable to insurance agencies, including

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Ohio Valley Financial Services, require education and licensing of individual agents and agencies, require reports and impose business conduct rules.

The GLB Act provides that if a subsidiary bank of a financial holding company fails to be both well capitalized and well managed, the financial holding company must enter into a written agreement with the Federal Reserve Board within 45 days to comply with all applicable capital and management requirements.  Until the Federal Reserve Board determines that the bank is again well capitalized and well managed, the Federal Reserve Board may impose additional limitations or conditions on the conduct or activities of the financial holding company or any affiliate that the Federal Reserve Board finds to be appropriate or consistent with federal banking laws.  If the financial holding company does not correct the capital or management deficiencies within 180 days, the financial holding company may be required to divest ownership or control of all banks, including state-chartered non-member banks and other well-capitalized institutions owned by the financial holding company.  If an insured bank subsidiary fails to maintain a satisfactory rating under the Community Reinvestment Act, the financial holding company may not engage in activities permitted only to financial holding companies until such time as the bank receives a satisfactory rating.

Capital Requirements

The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies.  The risk-based capital guidelines include both a definition of capital and a framework for calculating weighted risk assets by assigning assets and off-balance sheet items to broad risk categories.  The minimum ratio of capital to risk weighted assets (including certain off-balance sheet items, such as standby letters of credit) to be considered adequately capitalized is 8%.  At least 4.0 percentage points is to be comprised of common shareholders’ equity (including retained earnings but excluding treasury stock), noncumulative perpetual preferred stock, a limited amount of cumulative perpetual preferred stock, and minority interests in equity accounts of consolidated subsidiaries, less goodwill and certain other intangible assets (“Tier 1 Capital”).  The remainder (“Tier 2 Capital”) may consist of certain amounts of hybrid capital instruments,  mandatory convertible debt securities, subordinated debt, preferred stock not qualifying as Tier 1 Capital and a limited amount of allowance for loan and lease losses.  The Federal Reserve Board also imposes a minimum leverage ratio (Tier 1 Capital to total assets) of 3% for bank holding companies that meet certain specified conditions, including no operational, financial or supervisory deficiencies, and including having the highest regulatory rating.  The minimum leverage ratio is 100-200 basis points higher for other bank holding companies and state member banks based on their particular circumstances and risk profiles and those experiencing or anticipating significant growth.

In addition to such capital requirements, Dodd-Frank requires that financial holding companies be “well capitalized,” which requires that they have, on a consolidated basis, a total risk-based capital ratio of 10% or greater and a Tier 1 risk-based capital ratio of 6% or greater, as calculated under the capital adequacy guidelines for bank holding companies.

State non-member banks, such as the Bank, are subject to similar capital requirements adopted by the FDIC.  Ohio Valley and the Bank currently satisfy all applicable capital requirements.  Failure to meet applicable capital guidelines could subject a banking institution to a variety of enforcement remedies available to federal and state regulatory authorities, including the termination of deposit insurance by the FDIC.

Federal banking regulators have established regulations governing prompt corrective action to resolve capital deficient banks.  Under these regulations, institutions which become undercapitalized become subject to mandatory regulatory scrutiny and limitations, which increase as capital continues to

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decrease.  Such institutions are also required to file capital plans with their primary federal regulator, and their holding companies must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes undercapitalized.

The current capital requirements are based on the 1998 capital accord of the Basel Committee on Banking Supervision (the “Basel Committee”).  In December 2010 and January 2011, the Basel Committee released a new framework, referred to as “Basel III.”  During the second quarter of 2012, the federal bank regulatory agencies jointly issued notices of proposed rulemaking (“NPRs”) that would revise and replace the agencies’ current capital rules.  The NPRs would result in higher risk-based and leverage capital requirements, to be phased in over several years.  The regulators are still considering the NPRs.  The final regulations ultimately applicable to Ohio Valley and the Bank may be substantially different from those proposed.  The banking regulators are considering the extent to which they will apply the Basel III principles to smaller financial institutions, such as Ohio Valley and the Bank.

Limits on Dividends

The ability of a bank holding company to obtain funds for the payment of dividends and for other cash requirements is largely dependent on the amount of dividends that may be declared by its subsidiary banks and other subsidiaries.  However, the Federal Reserve Board expects Ohio Valley to serve as a source of strength to the Bank, which may require it to retain capital for further investments in the Bank, rather than for dividends for shareholders of Ohio Valley.  The Bank may not pay dividends to Ohio Valley if, after paying such dividends, it would fail to meet the required minimum levels under the risk-based capital guidelines and the minimum leverage ratio requirements.  The Bank must have the approval of its regulatory authorities if a dividend in any year would cause the total dividends for that year to exceed the sum of its current year’s net profits and retained net profits for the preceding two years, less required transfers to surplus.  Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice or if necessary to maintain adequate capital for the Bank.  These provisions could have the effect of limiting Ohio Valley’s ability to pay dividends on its outstanding common shares.

In addition, FRB policy requires Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

Dividend restrictions are also listed within the provisions of Ohio Valley’s trust preferred security arrangements.  Under the provisions of these agreements, the interest payable on the trust preferred securities is deferral for up to five years and any such deferral would not be considered a default.  During any period of deferral, Ohio Valley would be precluded from declaring or paying dividends to its shareholders or repurchasing any of its common stock.

Deposit Insurance Assessments

The FDIC is an independent federal agency which insures deposits, up to prescribed statutory limits, of federally-insured banks and savings associations and safeguards the safety and soundness of the financial institution industry.

The deposits of the Bank are insured up to statutorily prescribed limits by the FDIC, generally up to a maximum of $250,000 per separately insured depositor and, until December 31, 2012, with no limit for non-interest bearing transactional accounts.  Insurance premiums for insured institutions are determined based upon the member's capital level and supervisory rating provided to the FDIC

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by the bank's primary federal regulatory and other information the FDIC determines to be relevant to the risk posed to the deposit insurance fund (“DIF”).  Until a change in regulations adopted by the FDIC in February 2011, the assessment rate determined by considering such factors was then applied to the amount of the bank's deposits to determine the bank's insurance premium.  On April 1, 2011, the assessment base was changed from total domestic deposits to average total assets minus average tangible equity.  The new regulations also change the assessment for larger institutions and the assessment rate schedules.

Insurance of deposits may be terminated by the FDIC upon a finding that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the bank's regulatory agency.  Notice would be given to all depositors before the deposit insurance was terminated.

On May 22, 2009, the FDIC adopted a final rule imposing a 5 basis point special assessment on each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009. The special assessment was paid on September 30, 2009 and totaled $373,000.

On November 12, 2009, the FDIC adopted a final rule requiring insured depository institutions to prepay their estimated quarterly risk-based assessments for all of 2010, 2011, and 2012.  The Bank paid a total of $3,567,000 on December 30, 2009 that was recorded as a prepaid asset and was charged to expense during the periods to which it relates.

The FDIC may impose an additional special assessment if the FDIC estimates that the DIF reserve will fall to a level that would adversely affect public confidence or to a level that will be close to or below zero. Any future special assessments will increase insurance premium expense on deposits if and when they become effective. We cannot provide any assurance as to the ultimate amount or timing of any future special assessments.

Monetary Policy and Economic Conditions

The business of commercial banks is affected not only by general economic conditions, but also by the policies of various governmental regulatory authorities, including the Federal Reserve Board.  The Federal Reserve Board regulates the money and credit conditions and interest rates in order to influence general economic conditions primarily through open market operations in U.S. Government securities, changes in the discount rate on bank borrowings and changes in reserve requirements against bank deposits.  These policies and regulations significantly influence the amount of bank loans and deposits and the interest rates charged and paid thereon, and thus have an effect on earnings.

Patriot Act

The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorist Act of 2001 (the “Patriot Act”) gives the federal government new powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements.  Title III of the Patriot Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies.  Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions.  Among other requirements, Title III and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity.  The Company has established policies and procedures to comply with the requirements of the Patriot Act.

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Employees

As of December 31, 2012, Ohio Valley and its subsidiaries had approximately 277 full-time equivalent employees and officers.  Management considers its relationship with its employees and officers to be good.

Other Information

Management anticipates no material effect upon the capital expenditures, earnings and competitive position of the Company by reason of any laws regulating or protecting the environment.  Ohio Valley believes that the nature of the operations of its subsidiaries has little, if any, environmental impact.  Ohio Valley, therefore, anticipates no material capital expenditures for environmental control facilities in its current fiscal year or for the foreseeable future.

The Bank and Loan Central may be required to make capital expenditures related to properties which they may acquire through foreclosure proceedings in the future.  However, the amount of such capital expenditures, if any, is not currently determinable.

Neither Ohio Valley nor its subsidiaries have any material patents, trademarks, licenses, franchises or concessions.  No material amounts have been spent on research activities, and no employees are engaged full-time in research activities.

Financial Information About Foreign and Domestic Operations and Export Sales

Ohio Valley’s subsidiaries do not have any offices located in a foreign country, and they have no foreign assets, liabilities, or related income and expense.

Statistical Disclosure

The following section contains certain financial disclosures relating to Ohio Valley as required under the SEC’s Industry Guide 3, “Statistical Disclosure by Bank Holding Companies,” or a specific reference as to the location of the required disclosures in Ohio Valley’s 2012 Annual Report to Shareholders, which are incorporated herein by reference.

I.           DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL

  A. & B.   The average balance sheet information and the related analysis of net interest earnings for the years ended December 31, 2012, 2011 and 2010 are incorporated herein by reference to the information appearing under the caption “Table I – Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

C.  Tables setting forth the effect of volume and rate changes on interest income and expense for the years ended December 31, 2012 and 2011 is incorporated herein by reference to the information appearing under the caption “Table II - Rate Volume Analysis of Changes in Interest Income & Expense,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

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II.        INVESTMENT PORTFOLIO

A. Types of Securities - Total securities on the balance sheet were comprised of the following classifications at December 31:

(dollars in thousands)	2012		2011		2010
Securities Available for Sale
U.S. Treasury securities	$	----	$	5,513	$	17,079
U.S. Government sponsored entity securities		1,012		2,559		7,731
Agency mortgage-backed securities, residential		93,953		77,598		61,029
Total securities available for sale	$	94,965	$	85,670	$	85,839
Securities Held to Maturity
Obligations of states of the U.S. and
political subdivisions	$	23,494	$	22,825	$	22,149
Agency mortgage-backed securities, residential		17		23		29
Total securities held to maturity	$	23,511	$	22,848	$	22,178

B. Information required by this item is incorporated herein by reference to the information appearing under the caption “Table III - Securities,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

C. Excluding obligations of the U.S. Government and its agencies, no concentration of securities exists of any issuer that is greater than 10% of shareholders’ equity of Ohio Valley.

III.           LOAN PORTFOLIO

A. Types of Loans - Total loans on the balance sheet were comprised of the following classifications at December 31:

(dollars in thousands)	2012		2011		2010		2009		2008
Residential real estate	$	226,022	$	238,490	$	236,878	$	242,975	$	252,693
Commercial real estate		175,010		207,455		226,622		211,004		198,559
Commercial and industrial		57,239		45,200		55,306		66,958		52,022
Consumer		100,017		107,163		122,516		130,419		127,117
	$	558,288	$	598,308	$	641,322	$	651,356	$	630,391

B. Maturities and Sensitivities of Loans to Changes in Interest Rates - Information required by this item is incorporated herein by reference to the information appearing under the caption “Table VI - Maturity and Repricing Data of Loans”, within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

C.        1. Risk Elements - Gross interest income that would have been recorded on loans that were classified as nonaccrual or troubled debt restructurings if the loans had been in accordance with their original terms is estimated to be $1,098,000, $726,000 and $1,255,000 for the fiscal years ended December 31, 2012, 2011 and 2010, respectively.  The amount of interest income that was included in net income recorded on such loans was $921,000, $456,000 and $717,000 for the fiscal years ended December 31, 2012, 2011 and 2010, respectively. Additional information required by this item is incorporated herein by reference to the information appearing under the caption “Table V - Summary of Nonperforming and Past Due Loans,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

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2.  Potential Problem Loans - At December 31, 2012 and 2011, there were no loans that are not already included in “Table V - Summary of Nonperforming and Past Due Loans” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders, for which management has some doubt as to the borrower’s ability to comply with the present repayment terms.  These loans and their loss exposure have been considered in management’s analysis of the adequacy of the allowance for loan losses.

3.  Foreign Outstandings - There were no foreign outstandings at December 31, 2012, 2011 or 2010.

4.  Loan Concentrations - As of December 31, 2012 and 2011, there were no concentrations of loans greater than 10% of total loans which are not otherwise disclosed as a category of loans pursuant to Item III.A. above.  Also refer to the Consolidated Financial Statements regarding concentrations of credit risk found within “Note A-Summary of Significant Accounting Policies” of the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2012, located in Ohio Valley’s 2012 Annual Report to Shareholders which is incorporated herein by reference.

D. Other Interest-Bearing Assets - As of December 31, 2012 and 2011, there were no other interest-bearing assets that would be required to be disclosed under Item III.C. if such assets were loans.

IV.           SUMMARY OF LOAN LOSS EXPERIENCE

A. The following schedule presents an analysis of the allowance for loan losses for the fiscal years ended December 31:

(dollars in thousands)	2012			2011			2010			2009			2008
Balance, beginning of year	$	7,344		$	9,386		$	8,198		$	7,799		$	6,737
Loans charged off:
Residential real estate		1,066			2,034			971			1,172			225
Commercial real estate		1,949			1,913			2,766			59			950
Commercial and industrial		499			4,725			191			568			214
Consumer		1,622			1,750			1,951			2,532			2,140
Total loans charged off		5,136			10,422			5,879			4,331			3,529
Recoveries of loans:
Residential real estate		140			201			40			41			61
Commercial real estate		35			1,391			70			58			----
Commercial and industrial		2,027			1,127			25			672			95
Consumer		912			765			1,061			747			719
Total recoveries of loans		3,114			3,484			1,196			1,518			875
Net loan charge-offs		(2,022	)		(6,938	)		(4,683	)		(2,813	)		(2,654	)
Provision charged to operations		1,583			4,896			5,871			3,212			3,716
Balance, end of year	$	6,905		$	7,344		$	9,386		$	8,198		$	7,799
Ratio of net charge-offs to average loans outstanding		.35	%		1.11	%		.72	%		.44	%		.42	%
Ratio of allowance for loan losses to
non-performing assets		90.24	%		99.34	%		99.72	%		76.98	%		78.25	%

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Discussion of factors that influenced management in determining the amount of additions charged to provision expense is incorporated herein by reference to the information appearing under the caption “Allowance for Loan Losses and Provision Expense” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

B. Allocation of the Allowance for Loan Losses - Information required by this item is incorporated herein by reference to the information appearing under the caption  “Table IV - Allocation of the Allowance for Loan Losses,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

V.           DEPOSITS

A. Deposit Summary - Information required by this item is incorporated herein by reference to the information appearing under the caption “Table I - Consolidated Average Balance Sheet & Analysis of Net Interest Income,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

        C.&E. Foreign Deposits - There were no foreign deposits outstanding at December 31, 2012, 2011, or 2010.

D. Schedule of Maturities - The following table provides a summary of total time deposits of $100,000 or greater by remaining maturities for the fiscal year ended December 31, 2012 and 2011:

December 31, 2012			Over		Over
	3 months		3 through		6 through		Over
(dollars in thousands)	or less		6 months		12 months		12 months
Total time deposits of $100,000 or greater	$	21,352	$	12,297	$	25,804	$	42,440

December 31, 2011			Over		Over
	3 months		3 through		6 through		Over
(dollars in thousands)	or less		6 months		12 months		12 months
Total time deposits of $100,000 or greater	$	22,317	$	10,473	$	31,119	$	57,150

VI.           RETURN ON EQUITY AND ASSETS

Information required by this section is incorporated herein by reference to the information appearing under the caption “Table X - Key Ratios” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

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VII.           SHORT-TERM BORROWINGS

The following schedule is a summary of securities sold under agreements to repurchase at December 31:

(dollars in thousands)	2012		2011			2010
Balance outstanding at period-end		----	$	----		$	38,107
Weighted average interest rate at period-end		----		.00	%		.15	%
Average amount outstanding during year		----	$	19,196		$	26,991
Approximate weighted average interest rate
during the year		----		.09	%		.21	%
Maximum amount outstanding as of any
month-end		----	$	36,680		$	38,107

Newly enacted banking regulations during the third quarter of 2011 permitted the Company to begin paying interest on its business checking accounts and contributed to the decrease in securities sold under agreements to repurchase balances since 2010.  At December 31, 2012, the Company had no securities sold under agreements to repurchase on hand.

ITEM 1A – RISK FACTORS

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this Annual Report on Form 10-K which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements specifically identified as forward-looking statements within this document.  In addition, certain statements in future filings by Ohio Valley with the SEC, in press releases, and in oral and written statements made by or with the approval of Ohio Valley which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act.  Examples of forward-looking statements include:  (i) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of Ohio Valley or our management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.

The Private Securities Litigation Reform Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statements.  We desire to take advantage of the “safe harbor” provisions of that Act.

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 those factors identified below.  There is also the risk that Ohio Valley’s management or Board of Directors incorrectly analyzes these risks and forces, or that the strategies Ohio Valley develops to address them are unsuccessful.

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Forward-looking statements speak only as of the date on which they are made, and, except as may be required by law, Ohio Valley 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.  All subsequent written and oral forward-looking statements attributable to Ohio Valley or any person acting on our behalf are qualified in their entirety by the following cautionary statements.

The following are certain risks that management believes are specific to our business.  This should not be viewed as an all-inclusive list of risks or presenting the risk factors listed in any particular order.

Difficult conditions in the financial markets, the real estate market and economic conditions generally may adversely affect our business and results of operations.

Negative developments in the capital markets in recent years resulted in uncertainty in the financial markets and an economic downturn.  The housing market declined, resulting in decreasing home prices and increasing delinquencies and foreclosures.  The credit performance of all types of mortgage and real estate assets, including loans and equity securities, resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks.  Many financial institutions have been forced to seek additional capital or to merge with larger and stronger institutions.  Some financial institutions have failed.

Concerns over the stability of the financial markets and the economy caused some financial institutions to reduce their lending to customers and to each other.  This tightening of credit led to increased loan delinquencies, lack of customer confidence, increased market volatility and a widespread reduction in general business activity.    

While some improvements in the U.S. economy have occurred, housing prices are still depressed and unemployment remains high compared to levels prior to the recession.  Debt concerns in Europe have added to volatility in the capital markets and concerns over whether improvements in the U.S. economy will continue.  Business activity across a wide range of industries and regions is greatly reduced, and local governments and many companies are in serious difficulty.  In fact, improvements may be reversed if current economic turmoil in Europe becomes global or the United States Congress fails to raise the federal government’s debt ceiling in time to avoid a default or agree on other budget matters.  A worsening of current conditions would likely adversely affect our business and results of operations, as well as those of our customers.  As a result, we may experience increased delinquencies, foreclosures and customer bankruptcies, as well as decreased loan demand.

New laws and increased regulatory oversight may significantly affect our business, financial condition and results of operations.

Congress, the Treasury and the financial institution regulators have taken numerous actions to address the current liquidity and credit situation in the financial markets.  These measures include actions to encourage loan restructuring and modification for homeowners; the establishment of significant liquidity and credit facilities for financial institutions and investment banks; the lowering of the federal funds rate; and coordinated efforts to address liquidity and other weaknesses in the banking sector.  The long-term effect of actions already taken as well as new legislation is unknown.  Continued or renewed instability in the financial markets could weaken public confidence in financial institutions and adversely affect our ability to attract and retain new customers.

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act").  This law is significantly changing the

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regulation of financial institutions and the financial services industry.  Because the Dodd-Frank Act requires various federal agencies to adopt a broad range of regulations with significant discretion, some of the effects they will have are not yet known.

Many of the provisions of the Dodd-Frank Act apply directly only to institutions much larger than ours, and some will affect only institutions with different charters than ours or institutions that engage in activities in which we do not engage.  Among the changes to occur pursuant to the Dodd-Frank Act that can be expected to have an effect on our business are the following:

·   the Dodd-Frank Act creates a Consumer Financial Protection Bureau with broad powers to adopt and enforce consumer protection regulations;

·   new capital regulations for bank holding companies will be adopted, which may impose stricter requirements, and any new trust preferred securities will no longer count toward Tier I capital;

·   the federal law prohibition on the payment of interest on commercial demand deposit accounts was eliminated effective in July 2011;

·   the standard maximum amount of deposit insurance per customer is permanently increased to $250,000, and non-interest bearing transaction accounts had unlimited insurance through December 31, 2012;

·   the assessment base for determining deposit insurance premiums has been expanded effective April 1, 2011, to include liabilities other than just deposits; and

·   new corporate governance requirements applicable generally to all public companies in all industries will require new compensation practices, including providing shareholders the opportunity to cast a non-binding vote on executive compensation and considering the independence of compensation advisers, and new executive compensation disclosure requirements.  In addition, companies will be required to “claw back” incentive compensation under certain circumstances, although regulations have not yet been adopted.

In addition, new regulations regarding debit card fees were enacted by the Federal Reserve in October 2011.  The new rules cap debit card interchange fees for banks with $10 billion or more in assets and prohibit network exclusivity arrangements and routing restrictions.  Although the fee standards do not apply to Ohio Valley, competition and other market forces may result in a loss of revenue to us from these fees.

In addition to laws, regulations and actions directed at the operations of banks, proposals to reform the housing finance market consider winding down Fannie Mae and Freddie Mac, which could negatively affect our ability to sell loans.

Although it is impossible for us to predict at this time all the effects the Dodd-Frank Act or other legislation not yet adopted will have on us and the rest of our industry, it is possible that our revenue could decrease, our interest expense could increase and deposit insurance premiums could change, and steps may need to be taken to increase qualifying capital.  We expect that our operating and compliance costs will increase and could adversely affect our financial condition and results of operations.

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Changes in economic and political conditions, both national and local, could adversely affect our earnings, cash flows and capital, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline.

Our success depends, to a certain extent, upon economic and political conditions, local and national, as well as governmental fiscal and monetary policies.  Inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore, our financial condition and results of operations.  Because a significant amount of our loans are secured by real estate, additional decreases in real estate values likely would adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.  Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.

In addition, consistent with our community banking philosophy, substantially all of our loans are to individuals and businesses in Ohio and West Virginia.  Therefore, our local and regional economies have a direct impact on our ability to generate deposits to support loan growth, the demand for loans, the ability of borrowers to repay loans, the value of collateral securing our loans (particularly loans secured by real estate), and our ability to collect, liquidate and restructure problem loans.  Consequently, any decline in the economy of this market area could have a material adverse effect on our financial condition and results of operations.  We are less able than larger financial institutions to spread risks of unfavorable local economic conditions across a large number of diversified economies.

Our earnings are significantly affected by the fiscal and monetary policies of the U.S. Government and its agencies, sometimes adversely.

           The policies of the Federal Reserve Board impact us significantly.  The Federal Reserve Board regulates the supply of money and credit in the United States.  Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold.  Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict.  Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans.  For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services.  This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.

Our small to medium-sized business target market may have fewer financial resources to weather a downturn in the economy.

We target our business development and marketing strategy primarily to serve the banking and financial services needs of small to medium-sized businesses.  These small to medium-sized businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger companies.  If general economic conditions negatively impact our Ohio and West Virginia markets or the other geographic markets in which we operate, our results of operations and financial condition may be negatively affected.

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The discontinuance of tax refund services pursuant to an arrangement with a single tax software provider could have an adverse effect on our net income.

Through our relationship with a single tax software provider, the Bank offers products to facilitate the payment of tax refunds for customers who electronically file their tax returns. Under this program, the taxpayer may receive an electronic refund check or electronic refund deposit (“ERC/ERD”).  In return, the Bank charges a fee for the service.  For the 2012 tax season, the Company recorded ERC/ERD fee income of $2,289,000.

Prior to April 2011, the Bank also offered refund anticipation loans (“RALs”).  On February 3, 2011, the Bank received a recommendation from the FDIC to discontinue offering RALs through third parties following the completion of the current tax filing season.  The FDIC expressed concerns regarding the underwriting of RALs based on the 2010 decision by the Internal Revenue Service (the "IRS") to cease providing debt indicator information.  The debt indicator information provided an indication of whether an individual taxpayer would have any portion of the anticipated tax refund offset for delinquent taxes or other debts, such as unpaid child support or delinquent federally funded student loans.  In response to the FDIC's expressions of concern, the Bank discontinued offering RALs through unrelated third-party vendors after April 19, 2011.  The Bank’s termination of this product had a negative effect on its results of operations.  The Bank has, though, continued offering ERCs and ERDs through its tax refund clearing agreement with the current software provider.  Furthermore, the FDIC's recommendation did not affect the offerings of RALs by Loan Central.

The Company will continue to face risks within its ERC/ERD business that could potentially terminate its agreement with the third-party software provider.  These risks include not being able to perform the required ERC/ERD clearing services and/or regulatory scrutiny that could lead to a discontinuation in offering the ERC/ERD product.  Also, having an agreement with just one tax software provider, a termination of that relationship could significantly reduce the Company’s ability to offer ERC’s and ERD’s due to limited alternatives of replacement.  The termination of the ERC/ERD product would have a negative effect on earnings.

Periodic regulatory reviews may affect our financial condition.

The Company is subject to periodic reviews from state and federal regulators, which may impact our financial condition.  As part of the regulatory review, the loan portfolio and the allowance for loan losses are evaluated.  As a result, the incurred loss identified on loans or the assigned loan rating could change and may require us to increase our provision for loan losses or loan charge-offs.  In addition, any downgrade in loan ratings could impact our level of impaired loans or classified assets.  Any increase in our provision for loan losses or loan charge-offs as required by these regulatory authorities could have a material adverse affect on our financial condition and results of operations.

Adverse changes in the financial markets may adversely impact our results of operations.

While we generally invest in securities with limited credit risk, certain investment securities we hold possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages.  Regardless of the level of credit risk, all investment securities are subject to changes in market value due to changing interest rates and implied credit spreads.

Over the last few years, structured investments have been subject to significant market volatility due to the uncertainty of the credit ratings, deterioration in credit losses occurring within certain types of residential mortgages, changes in prepayments of the underlying collateral and the lack of transparency related to the investment structures and the collateral underlying the structured investment vehicles.

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We may be compelled to seek additional capital in the future but may not be able to access capital when needed.

Ohio Valley and the Bank are required by regulatory authorities to maintain specified levels of capital.  Federal banking agencies have proposed extensive changes to their capital requirements, including raising required amounts and eliminating inclusion of certain instruments from the calculation of capital.  The final form of such regulations and their impact on Ohio Valley is unknown at this time but may require us to raise additional capital.  If Ohio Valley experiences increased loan losses, additional capital may need to be obtained.  In addition, Ohio Valley may elect to raise additional capital to support its business, to finance acquisitions, if any, or for other purposes.  Our ability to raise additional capital, if needed, will depend on our financial performance, conditions in the capital markets, economic conditions and a number of other factors, many of which are outside of our control.  There can be no assurance, therefore, that we can raise additional capital at all or on terms acceptable to us.  If we cannot raise additional capital when needed or desired, it may have a material adverse effect on our financial condition, results of operations and prospects.

A default by another larger financial institution could adversely affect financial markets generally.

The commercial soundness of many financial institutions may be closely interrelated as a result of relationships between the institutions.  As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions.  This “systemic risk” may adversely affect our business.

Increases in FDIC insurance premiums may have a material adverse affect on our earnings.

Bank failures increased dramatically in recent years, which greatly increased resolution costs of the FDIC and depleted the deposit insurance fund.  In order to maintain a strong funding position and restore reserve ratios of the deposit insurance fund, the FDIC increased assessment rates of insured institutions uniformly by 7 basis points (7 cents for every $100 of deposits), beginning with the first quarter of 2009.  Additional changes required riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels.

The Emergency Economic Stabilization Act of 2008 (the “EESA”) instituted two temporary programs effective through December 31, 2009 to further insure customer deposits at FDIC-member banks: deposit accounts became insured up to $250,000 per customer (up from $100,000) and noninterest bearing transactional accounts became fully insured (unlimited coverage). Since then, the Dodd-Frank Act made the increase in the standard maximum insurance amount permanent, and the unlimited coverage of non-interest bearing transaction accounts was extended until December 31, 2012.

The FDIC also imposed a special assessment for the second quarter of 2009 and required insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012.  An institution’s total base assessment rate for purposes estimating an institution’s assessment for 2011 and 2012 was increased by 3 basis points.  Effective April 1, 2011, the assessment base was changed from total domestic deposits to average total assets minus average tangible equity.  The new regulations also changed the assessment for larger institutions and the assessment rate schedules.

We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance.  If there are additional financial institution failures, we may be required to pay even higher

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FDIC premiums. Increases in FDIC insurance premiums may materially adversely affect our results of operations and our ability to continue to pay dividends on our common shares at the current rate or at all.

The expiration of unlimited FDIC insurance coverage of non-interest bearing transaction accounts effective December 31, 2012, may have an adverse effect on our liquidity and cost of funds.

The Dodd-Frank Act provided for unlimited FDIC insurance coverage of non-interest bearing transaction accounts through December 31, 2012.  The end of such insurance may cause us to lose certain large deposits or may result in our needing to pledge additional securities to secure public fund deposits, which could have a material adverse effect on our liquidity.  In order to ensure adequate liquidity, we may need to raise rates we pay on deposits, resulting in a decrease in profitability.

Changes in interest rates could have a material adverse effect on our financial condition and results of operations.

Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates we earn on loans, securities and other earning assets and (ii) the interest rates we pay on deposits and other borrowings.  These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities.  While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will be effective in avoiding undue interest rate risk.  As market interest rates rise, we will have competitive pressures to increase the rates we pay on deposits, which will result in a decrease of our net interest income and could have a material adverse effect on our financial condition and results of operations.

Our exposure to credit risk could adversely affect our earnings and financial condition.

Making loans carries inherent risks, including interest rate changes over the time period in which loans may be repaid, risks resulting from changes in the economy, risks in dealing with borrowers and, in the case of loans secured by collateral, risks resulting from uncertainties about the future value of the collateral.

Commercial and commercial real estate loans comprise a significant portion of our loan portfolio.  Commercial loans generally are viewed as having a higher credit risk than residential real estate or consumer loans because they usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn.  Since our loan portfolio contains a significant number of commercial and commercial real estate loans, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans, and ultimately could have a material adverse effect on our earnings and financial condition.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information provided to us by customers and counterparties, including financial statements and other financial information.  We may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors.  For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer.  We may also rely on the audit report covering those financial statements.  Our financial condition, results of operations and cash flows could be negatively impacted to the extent that we rely on financial statements that do not comply with GAAP or on financial statements and other financial information that are materially misleading.

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If our actual loan losses exceed our allowance for loan losses, our net income will decrease.

Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance.  We may experience significant loan losses, which could have a material adverse effect on our operating results.  In accordance with accounting principles generally accepted in the United States, we maintain an allowance for loan losses to provide for loan defaults and non-performance, which when combined, we refer to as the allowance for loan losses.  Our allowance for loan losses may not be adequate to cover actual credit losses, and future provisions for credit losses could have a material adverse effect on our operating results.  Our allowance for loan losses is based on prior experience, as well as an evaluation of the risks in the current portfolio.  The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates.  Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses.  Moreover, the Financial Accounting Standards Board may change its requirements for establishing the allowance.  We cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance.  Either of these occurrences could have a material adverse effect on our financial condition and results of operations.

We operate in an extremely competitive market, and our business will suffer if we are unable to compete effectively.

In our market area, we encounter significant competition from other commercial banks, savings and loan associations, credit unions, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions.  The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers.  Many of our competitors have substantially greater resources and lending limits than we do and may offer services that we do not or cannot provide.  Technology and other changes are allowing parties to complete financial transactions that historically have involved banks at one or both ends of the transaction.  For example, consumers can now pay bills and transfer funds directly without banks.  The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the loss of customer deposits and income generated from those deposits.  Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend in part on our continued ability to compete successfully in our market area and on our ability to expand our scope of available financial services as needed to meet the needs and demands of our customers.

If we foreclose on collateral property and own the underlying real estate, we may be subject to the increased costs associated with the ownership of real property, resulting in reduced revenues.

We may have to foreclose on collateral property to protect our investment and may thereafter own and operate such property, in which case we will be exposed to the risks inherent in the ownership of real estate.  The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including, but not limited to:  (i) general or local economic conditions; (ii) neighborhood values; (iii) interest rates; (iv) real estate tax rates; (v) operating expenses of the mortgaged properties; (vi) supply of and demand for rental units or properties; (vii) ability to obtain and maintain adequate occupancy of the properties; (viii) zoning laws; (ix) governmental rules, regulations and fiscal policies; and (x) acts of God.  Certain expenditures associated with the ownership of real estate, principally real estate taxes and maintenance costs, may adversely affect the income from the real estate.  Therefore, the cost of operating a real property may exceed the rental income earned from such property, and we may have to advance funds in order to protect our investment, or we may be required to dispose of the real property at a loss.  The foregoing expenditures and costs could adversely affect our ability to generate revenues, resulting in reduced levels of profitability.

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Environmental liability associated with commercial lending could have a material adverse effect on our business, financial condition and results of operations.

In the course of our business, we may acquire, through foreclosure, commercial properties securing loans that are in default.  There is a risk that hazardous substances could be discovered on those properties.  In this event, we could be required to remove the substances from and remediate the properties at our cost and expense.  The cost of removal and environmental remediation could be substantial.  We may not have adequate remedies against the owners of the properties or other responsible parties and could find it difficult or impossible to sell the affected properties.  These events could have a material adverse effect on our financial condition and results of operation.

Our business strategy includes growth plans.  Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

We intend to continue pursuing a profitable growth strategy.  Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in significant growth stages of development.  We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations.  Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could adversely affect our ability to successfully implement our business strategy.  Also, if we grow more slowly than anticipated, our operating results could be materially adversely affected.

Our ability to grow successfully will depend on a variety of factors, including the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas, our ability to raise sufficient capital and our ability to manage our growth.  While we believe we have the management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or growth will be successfully managed.

Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future even if we would like to do so.

We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common stock.  The payment of dividends by us is also subject to certain regulatory restrictions.  As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our subsidiaries’ earnings, capital requirements, financial condition and other factors.  Although our financial earnings and financial condition have allowed us to declare and pay periodic cash dividends to our shareholders, there can be no assurance that our dividend policy or size of dividend distribution will continue in the future.  Our failure to pay dividends on our common shares could have a material adverse effect on the market price of our common shares.

The loss of key members of our senior management team could adversely affect our business.

We believe that our success depends largely on the efforts and abilities of our senior management.  Their experience and industry contacts significantly benefit us.  In addition, our success depends in part upon senior management’s ability to implement our business strategy.  The competition

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for qualified personnel in the financial services industry is intense, and the loss of services of any of our senior executive officers or an inability to continue to attract, retain and motivate key personnel could adversely affect our business.  We cannot assure you that we will be able to retain our existing key personnel or attract additional qualified personnel.

Loss of key employees may disrupt relationships with certain customers.

Our business is primarily relationship-driven in that many of our key employees have extensive customer relationships.  Loss of a key employee with such customer relationships may lead to the loss of business if the customers were to follow that employee to a competitor.  While we believe our relationships with our key producers is good, we cannot guarantee that all of our key personnel will remain with our organization.  Loss of such key personnel, should they enter into an employment relationship with one of our competitors, could result in the loss of some of our customers.

Management’s accounting policies and methods are the basis of how we report our financial condition and results of operations, and these policies may require management to make estimates about matters that are inherently uncertain.

Management’s accounting policies and methods are fundamental to how we record and report our financial condition and results of operations.  Our management must exercise judgment in selecting and applying many of these accounting policies and methods in order to ensure that they comply with generally accepted accounting principles and reflect management’s judgment as to the most appropriate manner in which to record and report our financial condition and results of operations.  In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet might result in reporting materially different amounts than would have been reported under a different alternative.

Management has identified several accounting policies that are considered significant (one as being “critical”) to the presentation of our financial condition and results of operations because they require management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions.  Because of the inherent uncertainty of estimates about these matters, no assurance can be given that the application of alternative policies or methods might not result in our reporting materially different amounts.

A limited trading market exists for our common shares, which could lead to price volatility.

Your ability to sell or purchase our common shares depends upon the existence of an active trading market for our common shares.  Although our common shares are quoted on The NASDAQ Global Market, the volume of trades on any given day has been limited historically.  As a result, you may be unable to sell or purchase our common shares at the volume, price and time that you desire.  Additionally, a fair valuation of the purchase or sales price of our common shares also depends upon an active trading market, and thus the price you receive for a thinly-traded stock such as our common shares, may not reflect its true value.  The limited trading market for our common shares may cause fluctuations in the market value of our common shares to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market.

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Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other branches in the security of our systems could severely harm our business.

As part of our business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties.  Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.  If information security is breached, information can be lost or misappropriated, resulting in financial loss or costs to us or damages to others.  Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, expose us to the risks of litigation and liability, disrupt our operations and have a material adverse effect on our business.  Moreover, some larger banks have been the victims of computer attacks designed to prevent customers from being able to access their accounts electronically.  Such attacks could discourage customers from use of their accounts or cause customers to move their business to other financial institutions.

Our organizational documents may have the effect of discouraging a third party from acquiring us  by means of a tender offer, proxy contest or otherwise.

Our articles of incorporation contain provisions that make it more difficult for a third party to gain control or acquire us without the consent of our board of directors.  These provisions also could discourage proxy contests and may make it more difficult for dissident shareholders to elect representatives as directors and take other corporate actions.  These provisions of our governing documents may have the effect of delaying, deferring or preventing a transaction or a change in control that might be in the best interests of our shareholders.

ITEM 1B – UNRESOLVED STAFF COMMENTS

Not applicable

ITEM 2 - PROPERTIES

Ohio Valley does not own or lease any real or personal property.

The principal executive offices of Ohio Valley and the Bank are located at 420 Third Avenue, Gallipolis, Ohio.  The Bank owns seven financial service centers located in Gallipolis (Gallia Co.), Jackson (Jackson Co.) and Waverly (Pike Co.) in Ohio and Milton (Cabell Co.) in West Virginia.  The Bank leases eight additional financial service centers located in Gallipolis (Gallia Co.), Pomeroy (Meigs Co.), and South Point (Lawrence Co.) in Ohio and Point Pleasant (Mason Co.), and Huntington (Cabell Co.) in West Virginia.   The Bank also owns and operates twenty-six ATMs, including twelve off-site ATMs.  Furthermore, the Bank owns a facility and leases one facility in Gallipolis (Gallia Co.), Ohio which are used for additional office space.   The Bank also owns a facility in Gallipolis (Gallia Co.), Ohio and leases a facility in Point Pleasant (Mason Co.), West Virginia which are both leased out to third parties.

Loan Central conducts its consumer finance operations through seven offices located in Gallipolis (Gallia Co.), Jackson (Jackson Co.), Waverly (Pike Co.), South Point and Ironton (Lawrence Co.), Wheelersburg (Scioto Co.) and Chillicothe (Ross Co.), all in Ohio.  All of these facilities are leased by Loan Central, except for the Wheelersburg (Scioto Co.) facility.  Loan Central leases a portion of its Wheelersburg (Scioto Co.) facility to a third party.

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Management considers all of these properties to be satisfactory for the Company’s current operations.  The Bank and Loan Centrals’ leased facilities are all subject to commercially standard leasing arrangements.

  Information concerning the value of the Company’s owned and leased real property and a summary of future lease payments is contained in “Note D – Premises and Equipment” of the notes to the Company’s consoldiated financial statements for the fiscal year ended December 31, 2012, located in Ohio Valley’s 2012 Annual Report to Shareholders.

ITEM 3 - LEGAL PROCEEDINGS

Not applicable

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER

                 MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The information required under this Item 5 by Items 201(a) through (c) of SEC Regulation S-K is incorporated herein by reference to the information presented under the captions “Summary of Common Stock Data” and “Performance Graph” located in Ohio Valley’s 2012 Annual Report to Shareholders and “Note N - Regulatory Matters” of the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2012 located in Ohio Valley’s 2012 Annual Report to Shareholders.

On December 31, 2012, Ohio Valley sold 32,765 of its common shares, without par value, to the Ohio Valley Banc Corp. Employee Stock Ownership Plan (the "ESOP") for an aggregate of $617,000.  No underwriters were involved, and no underwriting discount or commissions were paid.  The sale was exempt from registration under Section 4(2) of the Securities Act of 1933 as a transaction by the issuer not involving any public offering, made only to the ESOP, with respect to which The Ohio Valley Bank Company serves as the Trustee.

Ohio Valley did not purchase any of its shares during the three months ended December 31, 2012.

ITEM 6 - SELECTED FINANCIAL DATA

The information required under this Item 6 by Item 301 of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Selected Financial Data” located in Ohio Valley’s 2012 Annual Report to Shareholders.

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS

The information required under this Item 7 by Item 303 of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in Ohio Valley’s 2012 Annual Report to Shareholders.

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ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to interest rate risk, exchange rate risk, equity price risk and commodity price risk.  Ohio Valley does not maintain a trading account for any class of financial instruments, and is not currently subject to foreign currency exchange rate risk, equity price risk or commodity price risk.  Ohio Valley’s market risk is composed primarily of interest rate risk.

The information required under this Item 7A by Item 305 of SEC Regulation S-K is incorporated herein by reference to the information presented under the captions “Interest Rate Sensitivity and Liquidity” and “Interest Rate Sensitivity -- Table VIII” found within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located inOhio Valley’s 2012 Annual Report to Shareholders.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Ohio Valley’s consolidated financial statements and related notes are listed below and incorporated herein by reference to Ohio Valley’s 2012 Annual Report to Shareholders.  The supplementary data “Consolidated Quarterly Financial Information (unaudited)” and the “Report of Independent Registered Public Accounting Firm” located in Ohio Valley’s 2012 Annual Report to Shareholders is also incorporated herein by reference.

Consolidated Statements of Condition as of December 31, 2012 and 2011

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010

Notes to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

                 ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

ITEM 9A – CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

With the participation of the Chief Executive Officer (the principal executive officer) and the Vice President and Chief Financial Officer (the principal financial officer) of Ohio Valley, Ohio Valley's management has evaluated the effectiveness of Ohio Valley's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Annual Report on Form 10-K.

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Based on that evaluation, Ohio Valley's Chief Executive Officer and Vice President and Chief Financial Officer have concluded that:

·   information required to be disclosed by Ohio Valley in this Annual Report on Form 10-K and other reports that Ohio Valley files or submits under the Exchange Act would be accumulated and communicated to Ohio Valley's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure;

·   information required to be disclosed by Ohio Valley in this Annual Report on Form 10-K and other reports that Ohio Valley files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and

·   Ohio Valley's disclosure controls and procedures are effective as of the end of the period covered by this Annual Report on Form 10-K.

Management’s Report on Internal Control Over Financial Reporting

“Management’s Report on Internal Control Over Financial Reporting” located in Ohio Valley’s 2012 Annual Report to Shareholders is incorporated into this Item 9A by reference.

Report of Registered Public Accounting Firm

The “Report of Independent Registered Public Accounting Firm” located in Ohio Valley’s 2012 Annual Report to Shareholders is incorporated into this Item 9A by reference.

Changes In Internal Control Over Financial Reporting

There were no changes in Ohio Valley's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during Ohio Valley's fiscal quarter ended December 31, 2012, that have materially affected, or are reasonably likely to materially affect, Ohio Valley's internal control over financial reporting.

ITEM 9B – OTHER INFORMATION

None

PART III

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required under this Item 10 by Items 401, 405, and 407(c)(3), (d)(4) and (d)(5) of SEC Regulation S-K is incorporated herein by reference to the information presented in Ohio Valley’s definitive proxy statement relating to the annual meeting of shareholders of Ohio Valley to be held on May 8, 2013 (the “2013 Proxy Statement”), under the captions “Proxy Item 1:  Election of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance” and “Compensation of Executive Officers and Directors” of the 2013 Proxy Statement.

The Board of Directors of Ohio Valley has adopted a Code of Ethics covering the directors, officers and employees of Ohio Valley and its affiliates, including, without limitation, the principal

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executive officer, the principal financial officer and the principal accounting officer of Ohio Valley.  The Code of Ethics is posted on Ohio Valley’s website at www.ovbc.com.  Amendments to the Code of Ethics and the waivers of the provisions of the Code of Ethics will also be posted on Ohio Valley’s website.  Interested persons may obtain copies of the Code of Ethics without charge by writing to Ohio Valley Banc Corp., Attention: Larry E. Miller, Secretary, P.O. Box 240, Gallipolis, Ohio 45631.

ITEM 11 - EXECUTIVE COMPENSATION

The information required under this Item 11 by Items 402 and 407(e)(4) and (e)(5) of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Compensation of Executive Officers and Directors” and “Proxy item 1: Election of Directors – Committees of the Board – Compensation and Management Succession Committee” of the 2013 Proxy Statement.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

                   AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required under this Item 12 by Item 403 of SEC Regulation S-K is incorporated herein by reference to the information presented under the caption “Ownership of Certain Beneficial Owners and Management” of the 2013 Proxy Statement.

Ohio Valley does not maintain any equity compensation plans requiring disclosure pursuant to Item 201(d) of SEC Regulation S-K.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

                   INDEPENDENCE

The information required under this Item 13 by Item 404 and Item 407(a) of SEC Regulation S-K is incorporated herein by reference to the information presented under the captions “Certain Relationships and Related Transactions” and “Proxy Item 1:  Election of Directors” of the 2013 Proxy Statement.

ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required under this Item 14 by Item 9(e) of Schedule 14A is incorporated herein by reference to the information presented under the captions “Pre-Approval of Services Performed by Independent Registered Public Accounting Firm” and “Services Rendered by the Independent Registered Public Accounting Firm” of the 2013 Proxy Statement.

PART IV

ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A. (1) Financial Statements

The following consolidated financial statements of Ohio Valley appear in the 2012 Annual Report to Shareholders, Exhibit 13, and are specifically incorporated herein by reference under Item 8 of this Form 10-K:

        Consolidated Statements of Condition as of December 31, 2012 and 2011

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010

        Notes to the Consolidated Financial Statements

        Report of Independent Registered Public Accounting Firm

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 (2) Financial Statement Schedules

Financial statement schedules are omitted as they are not required or are not applicable, or the required information is included in the financial statements.

 (3) Exhibits

Reference is made to the Exhibit Index beginning on page 36 of this Form 10-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Ohio Valley has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			OHIO VALLEY BANC CORP.
Date:	March 18, 2013	By:	/s/  Thomas E. Wiseman
			Thomas E. Wiseman
			President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 18, 2013 by the following persons on behalf of Ohio Valley and in the capacities indicated.

Name	Capacity
/s/Thomas E. Wiseman	President and Chief Executive Officer
Thomas E. Wiseman	(principal executive officer)
/s/Scott W. Shockey	Vice President and Chief Financial Officer
Scott W. Shockey	(principal financial officer and principal accounting officer)
/s/Jeffrey E. Smith	Chairman
Jeffrey E. Smith
/s/Lannes C. Williamson	Director
Lannes C. Williamson
/s/Anna P. Barnitz	Director
Anna P. Barnitz
/s/David W. Thomas	Director
David W. Thomas
/s/Brent A. Saunders	Director
Brent A. Saunders
/s/Steven B. Chapman	Director
Steven B. Chapman
/s/Harold A. Howe	Director
Harold A. Howe

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EXHIBIT INDEX

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

Exhibit Number	Exhibit Description
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: Incorporated herein by reference to Exhibit 3(b) to Ohio Valley’s quarterly report on Form 10-Q for the quarter ended June 30, 2010 (SEC File No. 0-20914).
4	Agreement to furnish instruments and agreements defining rights of holders of long-term debt: Filed herewith.
10.1*	The Ohio Valley Bank Company Executive Group Life Split Dollar Plan Agreement, dated April 29, 2003, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.1 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2006 (SEC File No. 0-20914).
10.2*	Schedule A to Exhibit 10.1 identifying other identical Executive Group Life Split Dollar Agreements between The Ohio Valley Bank Company and certain executive officers of Ohio Valley Banc Corp.:  Incorporated herein by reference to Exhibit 10.2 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ended December 31, 2011 (SEC File No. 0-20914).
10.3(a)*	The Ohio Valley Bank Company Director Retirement Agreement, dated December 18, 2012, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Filed herewith.
10.3(b)*	Schedule A to Exhibit 10.3(a) identifying other identical Director Retirement Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Filed herewith.
10.4(a)*	The Ohio Valley Bank Company Determination of Director’s Fees Agreement, supplemental to the Director Retirement Agreement, dated December 28, 2007, between Thomas E. Wiseman and The Ohio Valley Bank Company:  Filed herewith.
10.4(b)*	The Ohio Valley Bank Company Determination of Director’s Fees Agreement, supplemental to the Director Retirement Agreement, dated March 2, 2010, between David W. Thomas and The Ohio Valley Bank Company:  Filed herewith.

36

Exhibit Number	Exhibit Description
10.5*	The Ohio Valley Bank Company Salary Continuation Agreement, dated December 18, 2012, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Filed herewith.
10.6(a)*	The Ohio Valley Bank Company Director Deferred Fee Agreement, dated December 18, 2012, between Anna P. Barnitz and The Ohio Valley Bank Company:  Filed herewith.
10.6(b)*	The Ohio Valley Bank Company Executive Deferred Compensation Agreement, dated December 18, 2012, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Filed herewith.
10.7(a)*	Schedule A to Exhibit 10.6(a) identifying other identical Director Deferred Fee Agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Filed herewith.
10.7(b)*	Schedule A to Exhibit 10.6(b) identifying other identical Executive Deferred Compensation Agreements between The Ohio Valley Bank Company and executive officers of Ohio Valley Banc Corp.:  Filed herewith.
10.8*	Summary of Compensation for Directors and Named Executive Officers of Ohio Valley Banc Corp.:  Filed herewith.
10.9*	Summary of Bonus Program of Ohio Valley Banc Corp.:  Filed herewith.
10.10*	The Ohio Valley Bank Company Supplemental Executive Retirement Plan agreement, dated March 6, 2012, between Thomas E. Wiseman and The Ohio Valley Bank Company; Incorporated herein by reference to Exhibit 10.1 to Ohio Valley’s Current Report on Form 8-K filed on March 9, 2012 (SEC File No. 0-20914).
11	Statement regarding computation of per share earnings (included in Note A of the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.)
13	Ohio Valley’s Annual Report to Shareholders for the fiscal year ended December 31, 2012:  Filed  herewith.  (Not  deemed filed except for portions thereof specifically incorporated by reference into this Annual Report on Form 10-K.)

37

Exhibit Number	Exhibit Description
21	Subsidiaries of Ohio Valley:  Filed herewith.
23	Consent of Crowe Horwath LLP.:  Filed herewith.
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer):  Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer):  Filed herewith.
32	Section 1350 Certifications (Principal Executive Officer and Principal Accounting Officer): Filed herewith.
101.INS #	XBRL Instance Document:  Submitted electronically herewith. #
101.SCH #	XBRL Taxonomy Extension Schema:  Submitted electronically herewith. #
101.CAL #	XBRL Taxonomy Extension Calculation Linkbase:  Submitted electronically herewith. #
101.DEF #	XBRL Taxonomy Extension Definition Linkbase:  Submitted electronically herewith. #
101.LAB #	XBRL Taxonomy Extension Label Linkbase: Submitted electronically herewith. #
101.PRE #	XBRL Taxonomy Extension Presentation Linkbase:  Submitted electronically herewith. #

* Compensatory plan or arrangement.

# Attached as Exhibit 101 to Ohio Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 are the following documents formatted in XBRL (eXtensive Business Reporting Language): (i) Consolidated Statements of Condition at December 31, 2012 and December 31, 2011; (ii) Consolidated Statements of Income for the years ended December 31, 2012, 2011 and 2010; (iii) Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2012, 2011 and 2010; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010; and (v) Notes to the Consolidated Financial Statements.

In accordance with Rule 406T of SEC Regulation S-T, the XBRL related documents in Exhibit 101 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2012 are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these Sections.

38

EX-4

EXHIBIT 4

OHIO VALLEY BANC CORP.

420 Third Avenue, PO Box 240

Gallipolis, OH  45631

(740) 446-2631

March 18, 2013

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.  20549

RE: Ohio Valley Banc Corp. – Form 10-K for the fiscal year ended December 31, 2012

Gentlemen:

Ohio Valley Banc Corp., an Ohio corporation (“Ohio Valley”), is today filing an Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”), as executed on March 18, 2013.

Pursuant to the instructions relating to the Exhibits in Item 601(b)(4)(iii) of Regulation S-K, Ohio Valley hereby agrees to furnish the Commission, upon request, copies of instruments and agreements defining the rights of holders of its long-term debt and of the long-term debt of its consolidated subsidiaries, which are not being filed as exhibits to the Form 10-K.  No such instrument or agreement represents long-term debt exceeding  10% of the total assets of Ohio Valley Banc Corp. and its subsidiaries on a consolidated basis.

Very truly yours,

/s/Thomas E. Wiseman

Thomas E. Wiseman

President and Chief Executive Officer

Ohio Valley Banc Corp.

EX-10.3A

EXHIBIT 10.3(a)

THE OHIO VALLEY BANK COMPANY

THIRD AMENDED AND RESTATED

DIRECTOR RETIREMENT AGREEMENT

This THIRD AMENDED AND RESTATED DIRECTOR RETIREMENT AGREEMENT (this “Agreement”) is adopted this 18th day of December, 2012 by and between THE OHIO VALLEY BANK COMPANY, a state-chartered commercial bank located in Gallipolis, Ohio (the “Company”), and Jeffrey E. Smith (the “Director”).  This Agreement amends and restates the prior Second Amended and Restated Director Retirement Agreement between the Company and the Director dated December 28, 2007(the “2007 Amendment”) which amended and restated the prior Amended and Restated Director Retirement Agreement between the Company and the Director dated January 12, 2004 (the “2004 Agreement”).

The parties intended the 2007 Amendment to be a material modification of the 2004 Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject to the provisions of Section 409A of the Code and the regulations promulgated thereunder.  The purpose of the amendment and restatement reflected in this Agreement is to clarify certain provisions with respect to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and Section 409A of Code.  The terms of this Agreement do not materially change the terms of the 2007 Amendment.

This Agreement provides specified benefits to the Director, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company.  This Agreement shall be unfunded for tax purposes.

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1           “Beneficiary” means each designated person or entity, or the estate of the deceased Director, entitled to any benefits upon the death of the Director pursuant to Article 4.

1.2           “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Director completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.3           “Board” means the Board of Directors of the Company as from time to time constituted.

1.4           “Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, as may be amended from time to time.

1.5           “Disability” means the Director:  (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees or directors of the Company, provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Director must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

1.6           “Effective Date” means January 1, 2005.

1.7           “Normal Retirement Age” means the Annual Meeting of Shareholders following the calendar year in which the Director attains age seventy (70).

1.8           “Normal Retirement Date” means the later of Normal Retirement Age or Termination of Service.

1.9           “Plan Administrator” means the plan administrator described in Article 6.

1.10           “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.

1.11           “Specified Employee” means an employee who at the time of Termination of Service is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

1.12           “Termination for Cause” has the meaning set forth in Article 5.

1.13           “Termination of Service” means a “separation of service” within the meaning of Treasury Regulation §1.409A-1(h) of the Director’s service with the Company and any person with whom the Company would be considered a single employer under Code Sections 414(b) and (c) for reasons other than death or Disability.

1.14           “Years of Service” means the total number of twelve (12) month periods during which the Director has served on the Board.

Article 2

Distributions During Lifetime

2.1           Normal Retirement Benefit.  Upon Termination of Service on or after Normal Retirement Age, the Company shall distribute to the Director the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

2.1.1           Amount of Benefit.  The annual benefit under this Section 2.1 is the greater of: (i) fifty percent (50%) of the Director’s three (3) prior years average total annual or monthly Fees; or (ii) fifty percent (50%) of any consecutive three (3) prior years average total annual or monthly Fees.

2.1.2           Payment of Benefit.  The Company shall distribute the annual benefit to the Director in twelve (12) equal monthly installments commencing on the first day of the month following Termination of Service.  The annual benefit shall be distributed to the Director for two hundred forty (240) monthly installments.

2.2           Disability Benefit.  If the Director experiences a Disability prior to Normal Retirement Age which results in Termination of Service, the Company shall distribute to the Director the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

2.2.1           Amount of Benefit.  The annual benefit under this Section 2.2 is the greater of: (i) fifty percent (50%) of the Director’s three (3) prior years average total annual or monthly Fees; or (ii) fifty percent (50%) of any consecutive three (3) prior years average total annual or monthly Fees.

2.2.2           Payment of Benefit.  The Company shall distribute the annual benefit to the Director in twelve (12) equal monthly installments commencing on the first day of the month following Termination of Service.  The annual benefit shall be distributed to the Director for two hundred forty (240) monthly installments.

2.3           Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Director is considered a Specified Employee, the provisions of this Section 2.3 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Director due to Termination of Service are limited because the Director is a Specified Employee, then such distributions shall not be made during the first six (6) months following Termination of Service.  Rather, any distribution which would otherwise be paid to the Director during such period shall be accumulated and paid to the Director in a lump sum on the first day of the seventh month following Termination of Service.  All subsequent distributions shall be paid in the manner specified.

2.4           Distributions Upon Taxation of Amounts Deferred.  If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Director becomes subject to tax on the amounts deferred hereunder, then the Company may make a limited distribution to the Director in a manner that conforms to the requirements of Code section 409A.  Any such distribution will decrease the Director’s benefits distributable under this Agreement.

2.5           Change in Form or Timing of Distributions.  All changes in the form or timing of distributions hereunder must comply with the following requirements.  The changes:

(a)           may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A and the regulations thereunder;

(b)           must, for benefits distributable under Sections 2.1 and 2.2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

(c)            must take effect not less than twelve (12) months after the election is made.

Article 3

Distribution at Death

3.1           Death During Active Service.  If the Director dies while in the active service of the Company, the Company shall distribute to the Beneficiary the benefit described in this Section 3.1.  This benefit shall be distributed in lieu of the benefits under Article 2.

3.1.1           Amount of Benefit.  The annual benefit under this Section 3.1 is the greater of: (i) fifty percent (50%) of the Director’s three (3) prior years average total annual or monthly Fees; or (ii) fifty percent (50%) of any consecutive three (3) prior years average total annual or monthly Fees.

3.1.2           Payment of Benefit.  The Company shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing the first day of the fourth month following the Director’s death.  The annual benefit shall be distributed to the Beneficiary for sixty (60) months.

3.2           Death During Benefit Period or Before Benefit Distributions Commence.  If the Director dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, or if the Director is entitled to benefit distributions under this Agreement but dies prior to the commencement of said benefit distributions, the Company shall distribute to the Beneficiary the lesser of: (i) the remaining benefits due the Director; or (ii) sixty (60) additional monthly benefits, commencing on the first day of the fourth month following the Director’s death.

Article 4

Beneficiaries

4.1           In General.  The Director shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Director.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Company in which the Director participates.

4.2           Designation.  The Director shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Director names someone other than the Director’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Director’s spouse and returned to the Plan Administrator.  The Director’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Director or if the Director names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Director shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Director and accepted by the Plan Administrator prior to the Director’s death.

4.3           Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

4.4           No Beneficiary Designation.  If the Director dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Director, then the Director’s spouse shall be the designated Beneficiary.  If the Director has no surviving spouse, any benefit shall be paid to the personal representative of the Director’s estate.

4.5           Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Director and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

Article 5

General Limitations

5.1           Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Company terminates the Director’s service for:

(a)           Gross negligence or gross neglect of duties to the Company;

(b)           Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c)           Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Director’s service and resulting in a material adverse effect on the Company.

5.2           Suicide or Misstatement.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Director commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Director and owned by the Company denies coverage (i) for material misstatements of fact made by the Director on an application for such life insurance, or (ii) for any other reason.

5.3           Removal.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Director is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

5.4           Excess Parachute Payment.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement to the extent the benefit would be an excess parachute payment under Section 280G of the Code.

Article 6

Administration of Agreement

6.1           Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

6.2           Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Company.

6.3           Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

6.4           Indemnity of Plan Administrator.  The Company shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

6.5           Bank Information.  To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Director’s death, Disability or Termination of Service, and such other pertinent information as the Plan Administrator may reasonably require.

Article 7

Claims And Review Procedures

7.1           Claims Procedure.  The Director or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

7.1.1           Initiation - Written Claim.  The claimant initiates a claim by submitting to the Company a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

7.1.2           Timing of Company Response.  The Company shall respond to such claimant within ninety (90) days after receiving the claim (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional ninety (90) days (or, if such claim is on account of disability, for not more than two additional thirty (30) day periods) by notifying the claimant in writing, prior to the end of the initial period, which an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.  (If the claim is on account of disability, the notice will also include the standards for entitlement for a benefit, unresolved issues, and information needed to resolve those issues.  The claimant will be given at least 45 days to supply any needed information.  The period that the claimant takes to produce the needed information does not count against the period for deciding the claim.)

7.1.3           Notice of Decision.  If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)           The specific reasons for the denial,

(b)           A reference to the specific provisions of the Agreement on which the denial is based,

(c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d) An explanation of the Agreement’s review procedures and the time limits applicable to such procedures,

(e) A statement of the claimant’s right to bring a civil action following an adverse benefit determination on review, and

(f) In the case of an adverse determination of a claim on account of disability, the information to the claimant shall include, to the extent necessary, the information set forth in Department of Labor Regulation Section 2560.503-1(g)(1).

7.2           Review Procedure.  If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows:

7.2.1           Initiation - Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Company’s notice of denial (or, if such claim is a claim on account of disability, within one-hundred-eighty (180) days), must file with the Company a written request for review.

7.2.2           Additional Submissions - Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.

7.2.3           Considerations on Review.  In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

7.2.4           Timing of Company Response.  The Company shall respond in writing to such claimant within sixty (60) days after receiving the request for review (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional sixty (60) days (or, if such claim is on account of disability, no later than forty-five (45) days) by notifying the claimant in writing prior to the end of the initial period that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

7.2.5           Notice of Decision.  The Company shall notify the claimant in writing of its decision on review.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a) The specific reasons for the denial,

(b) A reference to the specific provisions of the Agreement on which the denial is based,

(c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and

(d) A statement of the claimant’s right to bring a civil action, and

(e) In the case of an adverse determination of a claim on account of disability, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either (i) the specific rule, guideline, protocol, or other similar criterion; or (ii) a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request.

Article 8

Amendments and Termination

8.1           Amendments.  This Agreement may be amended only by a written agreement signed by the Company and the Director.  However, the Company may unilaterally amend this Agreement to conform to written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Section 409A of the Code and any and all Treasury regulations and guidance promulgated thereunder.

8.2           Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Company and the Director.  Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, after such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3.

8.3           Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary in Section 8.2, if this Agreement terminates in the following circumstances:

(a) Within thirty (30) days before or twelve (12) months after a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as described in Section 409A(a)(2)(A)(v) of the Code, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Company’s arrangements which are substantially similar to the Agreement are terminated so the Director and all participants in the Similar Arrangements (as defined below) are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

(b) Upon the Company’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Director’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

(c) Upon the Company’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Director participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Company does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Agreement;

the Company may distribute the amount the Bank has accrued with respect to the Bank’s obligations hereunder, determined as of the date of the termination of the Agreement, to the Director in a lump sum subject to the above terms.

Article 9

Miscellaneous

9.1           Binding Effect.  This Agreement shall bind the Director and the Company and their beneficiaries, survivors, executors, administrators and transferees.

9.2           No Guarantee of Service.  This Agreement is not a contract for employment.  It does not give the Director the right to remain as a member of the Board, nor does it interfere with the Company’s right to discharge the Director.  It also does not require the Director to remain a member of the Board nor interfere with the Director’s right to terminate service at any time.

9.3           Non-Transferability.  Benefits under this Agreement cannot sold, transferred, assigned, pledged, attached or encumbered in any manner.

9.4           Tax Withholding and Reporting.  The Company shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement.  Director acknowledges that the Company’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Company shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

9.5           Applicable Law.  This Agreement and all rights hereunder shall be governed by the laws of the State of Ohio, except to the extent preempted by the laws of the United States of America.

9.6           Unfunded Arrangement.  The Director and the Beneficiary are general unsecured creditors of the Company for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Company to distribute such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors.  Any insurance on the Director’s life or other informal funding asset is a general asset of the Company to which the Director and the Beneficiary have no preferred or secured claim.

9.7           Reorganization.  The Company shall not merge or consolidate into or with another Company, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement.  Upon the occurrence of such event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

9.8           Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Director as to the subject matter hereof.  No rights are granted to the Director by virtue of this Agreement other than those specifically set forth herein.

9.9           Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural

9.10           Alternative Action.  In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Agreement, the Company or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative acts do not violate Section 409A of the Code.

9.11           Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

9.12           Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

9.13           Notice.  Any notice or filing required or permitted to be given to the Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

The Ohio Valley Bank Company

Attn:  BOLI Administrator

P O Box 240 420 Third Avenue

Gallipolis OH  45631-0240

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Director under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Director.

9.14           Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Director and an authorized representative of the Company have signed this Agreement.

DIRECTOR:                                                                                  THE OHIO VALLEY BANK COMPANY

By:                                                                

Jeffrey E. Smith                                                                           Title:  AVP and Assistant Secretary

EX-10.3B

EXHIBIT 10.3(b)

SCHEDULE A TO EXHIBIT 10.3(a)

The following individuals entered into Director Retirement Plans with The Ohio Valley Bank Company identified below which are identical to the Director Retirement Plan, dated December 18, 2012, between Jeffrey E. Smith and The Ohio Valley Bank Company filed herewith.

Name	Date of Director Retirement Plan
Anna P. Barnitz	December 18, 2012
Steven B. Chapman	December 18, 2012
Harold A. Howe	December 18, 2012
Brent A. Saunders	December 18, 2012
David W. Thomas	December 18, 2012
Lannes C. Williamson	December 18, 2012
Thomas E. Wiseman	December 18, 2012

EX-10.4A

EXHIBIT 10.4(a)

DETERMINATION OF DIRECTOR’S FEES

DIRECTOR RETIREMENT PLAN AGREEMENT

AND PAYMENT OF BENEFITS

FOR

THOMAS E. WISEMAN

THIS AGREEMENT is made this 11th day of March, 2008, by and between THE OHIO VALLEY BANK COMPANY located in Gallipolis, Ohio (the “Company”), and THOMAS E. WISEMAN (the “Director”).

The Company and the Director entered into an AMENDED AND RESTATED DIRECTOR RETIREMENT PLAN AGREEMENT on December 28, 2007 (the “Agreement”).

The Director agrees that Director’s total annual or monthly fees in sections 2.1 Normal Retirement Benefit, 2.2 Disability Benefit, and 3.1 Death During Active Service will include the Independent or Non-Independent Directors’ Fees paid monthly plus the Annual Retainer (formerly called Annual Bonus) and will not include additional fees paid to said Director as Lead Director.

The parties, by executing this Agreement hereby agree to the terms stated herein.

DIRECTOR:                                                                                          OHIO VALLEY BANK COMPANY

By:                                                                

Thomas E. Wiseman                                                                           Title:  President and Chief Executive Officer

EX-10.4B

EXHIBIT 10.4(b)

DETERMINATION OF DIRECTOR’S FEES

DIRECTOR RETIREMENT PLAN AGREEMENT

AND PAYMENT OF BENEFITS

FOR

DAVID W. THOMAS

THIS AGREEMENT is made this 2nd day of March, 2010, by and between THE OHIO VALLEY BANK COMPANY located in Gallipolis, Ohio (the “Company”), and DAVID W. THOMAS (the “Director”).

The Company and the Director entered into an AMENDED AND RESTATED DIRECTOR RETIREMENT PLAN AGREEMENT on December 28, 2007 (the “Agreement”).

The Director agrees that Director’s total annual or monthly fees in sections 2.1 Normal Retirement Benefit, 2.2 Disability Benefit, and 3.1 Death During Active Service will include the Independent or Non-Independent Directors’ Fees paid monthly plus the Annual Retainer (formerly called Annual Bonus) and will not include additional fees paid to said Director as Lead Director.

The parties, by executing this Agreement hereby agree to the terms stated herein.

DIRECTOR:                                                                                     OHIO VALLEY BANK COMPANY

                                                                                                            By:                                                                

David W. Thomas                                                                           Title:  President and Chief Executive Officer

EX-10.5

EXHIBIT 10.5

THE OHIO VALLEY BANK COMPANY

THIRD AMENDED AND RESTATED

SALARY CONTINUATION AGREEMENT

This THIRD AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT (this “Agreement”) is adopted this 18th day of December, 2012 by and between THE OHIO VALLEY BANK COMPANY, a state-chartered commercial bank located in Gallipolis, Ohio (the “Company”), and Jeffrey E. Smith (the “Executive”).  This Agreement amends and restates the prior Second Amended and Restated Salary Continuation Agreement between the Company and the Director dated December 28, 2007(the “2007 Amendment”) which amended and restated the Amended and Restated Salary Continuation Agreement between the Company and the Executive dated November 1, 2002 and amended on January 12, 2004 (the “2002 Agreement”).

The parties intended the 2007 Amendment to be a material modification of the 2002 Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject to the provisions of Section 409A of the Code and the regulations promulgated thereunder.  The purpose of the amendment and restatement reflected in this Agreement is to clarify certain provisions with respect to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and Section 409A of Code.  The terms of this Agreement do not materially change the terms of the 2007 Amendment.

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company.  This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act (“ERISA”).

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1 “Accrual Balance” means the liability that should be accrued by the Company, under Generally Accepted Accounting Principles (“GAAP”), for the Company’s obligation to the Executive under this Agreement, by applying Accounting Principles Board Opinion Number 12 (“APB 12”) as amended by Statement of Financial Accounting Standards Number 106 (“FAS 106”) and the Discount Rate.  Any one of a variety of amortization methods may be used to determine the Accrual Balance.  However, once chosen, the method must be consistently applied.  The Accrual Balance shall be reported annually by the Company to the Executive.

1.2 “Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4.

1.3 “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.4 “Board” means the Board of Directors of the Company as from time to time constituted.

 1.5 “Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, as may be amended from time to time.

1.6 “Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees or directors of the Company, provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

1.7 “Discount Rate” means the rate used by the Plan Administrator for determining the Accrual Balance.  The Plan Administrator, in its discretion, may adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory guidance.

1.8 “Early Involuntary Termination” means Termination of Employment (other than a Termination for Cause) prior to Normal Retirement Age due to the independent exercise of the unilateral authority of the Company to terminate the Executive’s employment, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services.

1.9 “Early Retirement Date” means the Executive attaining age sixty (60) or completing twenty (20) Years of Service.

1.10 “Early Retirement” means Early Voluntary Termination after the Early Retirement Date and before Normal Retirement Age.

1.11 “Early Voluntary Termination” means Termination of Employment before Early Retirement Date except when such Termination of Employment occurs due to death, Disability, Early Involuntary Termination or Termination for Cause.

1.12 “Effective Date” means January 1, 2005.

1.13 “Normal Retirement Age” means the Executive attaining age sixty five (65).

1.14 “Normal Retirement Date” means the later of Normal Retirement Age or Termination of Employment.

1.15 “Plan Administrator” means the plan administrator described in Article 6.

1.16 “Plan Year” means each twelve-month period commencing on January 1 and ending on December 31 of each year.

1.17 “Specified Employee” means an employee who at the time of Termination of Employment is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

1.18 “Termination for Cause” has the meaning set forth in Article 5.

1.19 “Termination of Employment” means a “separation of service” within the meaning of Treasury Regulation §1.409A-1(h) of the Executive’s service with the Company and any person with whom the Company would be considered a single employer under Code Sections 414(b) and (c) for reasons other than death.

1.20 “Years of Service” means each twelve consecutive month period beginning on an Executive’s date of hire and any twelve (12) month anniversary thereof, during the entirety of which time the Executive is an employee of the Company.  Employment with a subsidiary or other entity controlled by the Company before the time such entity became a subsidiary or under such control shall not be considered “credited service.”

Article 2

Distributions During Lifetime

2.1 Normal Retirement Benefit.  Upon the Normal Retirement Date, the Company shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

2.1.1 Amount of Benefit.  The annual benefit under this Section 2.1 is One Hundred Seventeen Thousand One Hundred Dollars ($117,100).

2.1.2 Payment of Benefit.  The Company shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement Date.  The annual benefit shall be distributed to the Executive for twenty (20) years.

2.2 Early Retirement Benefit.  If Early Retirement occurs, the Company shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

2.2.1 Amount of Benefit.  The benefit under this Section 2.2 is the Accrual Balance determined as of the end of the Plan Year preceding Termination of Employment.

2.2.2 Payment of Benefit.  The Company shall distribute the benefit to the Executive in two hundred forty (240) equal monthly installments commencing on the first day of the month following Termination of Employment.

2.3 Disability Benefit.  If the Executive experiences a Disability which results in Termination of Employment prior to Normal Retirement Age, the Company shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

2.3.1 Amount of Benefit.  The benefit under this Section 2.3 is the Accrual Balance determined as of the end of the Plan Year preceding Termination of Employment.

2.3.2 Payment of Benefit.  The Company shall distribute the benefit to the Executive in two hundred forty (240) equal monthly installments commencing on the first day of the month following Termination of Employment.

2.4 Early Involuntary Termination.  If Early Involuntary Termination occurs, the Company shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article.

2.4.1 Amount of Benefit.  The benefit under this Section 2.4 is the Accrual Balance determined as of the end of the Plan Year preceding Termination of Employment.

2.4.2 Payment of Benefit.  The Company shall distribute the benefit to the Executive in two hundred forty (240) equal monthly installments commencing on the first day of the month following Termination of Employment.

2.5 Restriction on Timing of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Termination of Employment, the provisions of this Section 2.5 shall govern all distributions hereunder.  Benefit distributions that are made due to a Termination of Employment occurring while the Executive is a Specified Employee shall not be made during the first six (6) months following Termination of Employment.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Termination of Employment.  All subsequent distributions shall be paid in the manner specified.

2.6 Distributions Upon Taxation of Amounts Deferred.  If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Company may make a limited distribution to the Executive in a manner that conforms to the requirements of Code section 409A.  Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

2.7 Change in Form or Timing of Distributions.  All changes in the form or timing of distributions hereunder must comply with the following requirements.  The changes:

(a) may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder;

(b) must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

(c) must take effect not less than twelve (12) months after the election is made.

Article 3

Distribution at Death

3.1 Death During Active Service.  If the Executive dies while in the active service of the Company, the Company shall distribute to the Beneficiary the benefit described in this Section 3.1.  This benefit shall be distributed in lieu of the benefits under Article 2.

3.1.1 Amount of Benefit.  The benefit under this Section 3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.

3.1.2 Payment of Benefit.  The Company shall distribute the benefit to the Beneficiary in two hundred forty (240) equal monthly installments commencing on the first day of the fourth month following the Executive’s death.

3.2 Death During Distribution of a Benefit.  If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Company shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts that would have been distributed to the Executive had the Executive survived.

3.3 Death After Termination of Employment But Before Benefit Distributions Commence.  If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Company shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit distributions shall commence on the first day of the fourth month following the Executive’s death.

Article 4

Beneficiaries

4.1 In General.  The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Company in which the Executive participates.

4.2 Designation.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.  The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

4.3 Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

4.4 No Beneficiary Designation.  If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, any benefit shall be paid to the personal representative of the Executive’s estate.

4.5 Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

Article 5

General Limitations

5.1 Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Company terminates the Executive’s employment for:

(a)           Gross negligence or gross neglect of duties to the Company;

(b)           Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c) Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Company.

5.2 Confidentiality.  The Executive shall not disclose any trade secrets or confidential information of any kind, type or description.  In the event the Executive does disclose said information, such disclosure shall constitute a breach of this Agreement and benefits shall cease immediately.

5.3 Non-Compete.  The Executive agrees that during the term of this Agreement the Executive will not accept employment with any bank or financial or lending organization which is in competition directly or indirectly with the Company.  In the event the Executive does accept such employment, this Agreement shall immediately terminate.

5.4 Suicide or Misstatement.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Company denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

5.5 Removal.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

5.6 Excess Parachute Payment.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement to the extent the benefit would be an excess parachute payment under Section 280G of the Code.

Article 6

Administration of Agreement

6.1 Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

6.2 Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Company.

6.3 Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

6.4 Indemnity of Plan Administrator.  The Company shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

6.5 Bank Information.  To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Executive’s death, Disability or Termination of Employment, and such other pertinent information as the Plan Administrator may reasonably require.

Article 7

Claims And Review Procedures

  7.1 Claims Procedure.  The Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

7.1.1           Initiation - Written Claim.  The claimant initiates a claim by submitting to the Company a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

7.1.2           Timing of Company Response.  The Company shall respond to such claimant within ninety (90) days after receiving the claim (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional ninety (90) days (or, if such claim is on account of disability, for not more than two additional thirty (30) day periods) by notifying the claimant in writing, prior to the end of the initial period, which an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.  (If the claim is on account of disability, the notice will also include the standards for entitlement for a benefit, unresolved issues, and information needed to resolve those issues.  The claimant will be given at least 45 days to supply any needed information.  The period that the claimant takes to produce the needed information does not count against the period for deciding the claim.)

7.1.3           Notice of Decision.  If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)           The specific reasons for the denial,

(b)           A reference to the specific provisions of the Agreement on which the denial is based,

(c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d) An explanation of the Agreement’s review procedures and the time limits applicable to such procedures,

(e) A statement of the claimant’s right to bring a civil action following an adverse benefit determination on review under ERISA Section 502(a), and

(f) In the case of an adverse determination of a claim on account of disability, the information to the claimant shall include, to the extent necessary, the information set forth in Department of Labor Regulation Section 2560.503-1(g)(1).

7.2           Review Procedure.  If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows:

7.2.1           Initiation - Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Company’s notice of denial (or, if such claim is a claim on account of disability, within one-hundred-eighty (180) days), must file with the Company a written request for review.

7.2.2           Additional Submissions - Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

7.2.3           Considerations on Review.  In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

7.2.4           Timing of Company Response.  The Company shall respond in writing to such claimant within sixty (60) days after receiving the request for review (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional sixty (60) days (or, if such claim is on account of disability, no later than forty-five (45) days) by notifying the claimant in writing prior to the end of the initial period that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

7.2.5           Notice of Decision.  The Company shall notify the claimant in writing of its decision on review.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a) The specific reasons for the denial,

(b) A reference to the specific provisions of the Agreement on which the denial is based,

(c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and

(d) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), and

(e) In the case of an adverse determination of a claim on account of disability, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either (i) the specific rule, guideline, protocol, or other similar criterion; or (ii) a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request.

Article 8

Amendments and Termination

8.1           Amendments.  This Agreement may be amended only by a written agreement signed by the Company and the Executive.  However, the Company may unilaterally amend this Agreement to conform to written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Section 409A of the Code and any and all Treasury regulations and guidance promulgated thereunder.

8.2           Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Company and the Executive.  Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, after such termination benefit distributions will be made at the earliest distribution event permitted under Article 4 or Article 5.

8.3           Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary in Section 8.2, if this Agreement terminates in the following circumstances:

(a) Within thirty (30) days before or twelve (12) months after a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as described in Section 409A(a)(2)(A)(v) of the Code, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Company’s arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the Similar Arrangements (as defined below) are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

(b) Upon the Company’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executive’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

(c) Upon the Company’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Company does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Agreement; the Company may distribute the Accrual Balance, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms.

Article 9

Miscellaneous

9.1 Binding Effect.  This Agreement shall bind the Executive and the Company and their beneficiaries, survivors, executors, administrators and transferees.

9.2 No Guarantee of Employment.  This Agreement is not a contract for employment.  It does not give the Executive the right to remain as an employee of the Company, nor does it interfere with the Company’s right to discharge the Executive.  It also does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time.

9.3 Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

9.4 Tax Withholding and Reporting.  The Company shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement.  Executive acknowledges that the Company’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Company shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

9.5 Applicable Law.  The Agreement and all rights hereunder shall be governed by the laws of the State of Ohio, except to the extent preempted by the laws of the United States of America.

9.6 Unfunded Arrangement.  The Executive and the Beneficiary are general unsecured creditors of the Company for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Company to distribute such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors.  Any insurance on the Executive’s life or other informal funding asset is a general asset of the Company to which the Executive and the Beneficiary have no preferred or secured claim.

9.7 Reorganization.  The Company shall not merge or consolidate into or with another Company, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement.  Upon the occurrence of such event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

9.8 Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof.  No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.

9.9 Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

9.10 Alternative Action.  In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Agreement, the Company or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative acts do not violate Section 409A of the Code.

9.11 Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

9.12 Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

9.13 Notice.  Any notice or filing required or permitted to be given to the Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

The Ohio Valley Bank Company

Attn:  BOLI Administrator

P O Box 240 420 Third Avenue

Gallipolis OH  45631

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive.

9.14 Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Executive and an authorized representative of the Company have signed this Agreement.

EXECUTIVE:                                                                           THE OHIO VALLEY BANK COMPANY

                                                                                                       By:                                                                

Jeffrey E. Smith                                                                           Title:  AVP and Assistant Secretary

EX-10.6A

EXHIBIT 10.6(a)

THE OHIO VALLEY BANK COMPANY

SECOND AMENDED AND RESTATED

DIRECTOR DEFERRED FEE AGREEMENT

This SECOND AMENDED AND RESTATED DIRECTOR DEFERRED FEE AGREEMENT (this “Agreement”) is adopted this 18th day of December, 2012 by and between THE OHIO VALLEY BANK COMPANY, a state-chartered commercial bank located in Gallipolis, Ohio (the “Company”), and Anna P. Barnitz (the “Director”).  This Agreement amends and restates the prior Amended and Restated Director Deferred Fee Agreement between the Company and the Director dated December 28, 2007(the “2007 Amendment”) which amended and restated the prior Director Deferred Fee Agreement between the Company and the Director dated November 19, 2002 and amended on January 20, 2004 (the “2002 Agreement”).

The parties intended that the 2007 Amendment to be a material modification of the 2002 Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject to the provisions of Section 409A of the Code and the regulations promulgated thereunder.  The purpose of the amendment and restatement reflected in this Agreement is to clarify certain provisions with respect to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and Section 409A of Code.  The terms of this Agreement do not materially change the terms of the 2007 Amendment.

The purpose of this Agreement is to provide specified benefits to the Director, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company.  This Agreement shall be unfunded for tax purposes.

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1 “Beneficiary” means each designated person or entity, or the estate of the deceased Director, entitled to any benefits upon the death of the Director pursuant to Article 6.

1.2 “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Director completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.3 “Board” means the Board of Directors of the Company as from time to time constituted.

1.4 “Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, as may be amended from time to time.

1.5 “Deferral Account” means the Company’s accounting of the Director’s accumulated Deferrals plus accrued interest.

1.6 “Deferral Election Form” means the form or forms established from time to time by the Plan Administrator that the Director completes, signs and returns to the Plan Administrator to designate the amount of Deferrals.

1.7 “Deferrals” means the amount of Fees which the Director elects to defer according to this Agreement.

1.8 “Disability” means the Director:  (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees or directors of the Company, provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Director must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

1.9 “Effective Date” means January 1, 2005.

1.10 “Fees” means the total fees earned by the Director during a Plan Year.

1.11 “Normal Retirement Age” means the Annual Meeting of Shareholders following the calendar year in which the Director attains age seventy (70).

1.12 “Plan Administrator” means the plan administrator described in Article 8.

1.13 “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.

1.14 “Specified Employee” means an employee who at the time of Termination of Service is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

1.15 “Termination for Cause” has the meaning set forth in Article 7.

1.16 “Termination of Service” means a “separation of service” within the meaning of Treasury Regulation §1.409A-1(h) of the Director’s service with the Company and any person with whom the Company would be considered a single employer under Code Sections 414(b) and (c) for reasons other than death or Disability.

1.17 “Unforeseeable Emergency” means a severe financial hardship to the Director within the meaning of Treasury Regulation §1.409A-3(i)(3) resulting from an illness or accident of the Director, the Director’s spouse, the Beneficiary, or the Director’s dependent (as defined in Code Section 152 without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Director’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Director.

Article 2

Deferral Election

2.1 Elections Generally.  The Director may annually file a Fees Deferral Election Form with the Plan Administrator no later than the end of the Plan Year preceding the Plan Year in which services leading to such Fees will be performed.  Notwithstanding anything to the contrary, the Director may not elect to defer Fees in an amount greater than $10,000 each Plan Year, or such greater or lesser amount as may be established by the Board each Plan Year.

2.2 Initial Election.  After being notified by the Plan Administrator of becoming eligible to participate in this Agreement, the Director may make an initial deferral election by delivering to the Plan Administrator a signed Deferral Election Form and a Beneficiary Designation Form within thirty (30) days of becoming eligible, with respect to any Fees to be paid for services to be performed after such election is made.  The Deferral Election Form shall set forth the amount of Fees to be deferred.  However, if the Director was eligible to participate in any other account balance plans sponsored by the Company (as referenced in Code Section 409A) prior to becoming eligible to participate in this Agreement, the initial election to defer Fees under this Agreement shall not be effective until the Plan Year following the Plan Year in which the Director became eligible to participate in this Agreement.

2.3 Election Changes.  The Director may modify the amount of Fees to be deferred annually by filing a new Deferral Election Form with the Company.  The modified deferral shall not be effective until the calendar year following the year in which such subsequent Deferral Election Form is received by the Company.

2.4 Hardship.  If an Unforeseeable Emergency occurs, the Director, by written instructions to the Company, may discontinue deferrals hereunder.  Any subsequent Deferral Elections may be made only in accordance with Section 2.3 hereof.

Article 3

Deferral Account

3.1 Establishing and Crediting.  The Company shall establish a Deferral Account on its books for the Director and shall credit to the Deferral Account the following amounts:

(a)           Any Deferrals hereunder; and

(b)           Interest as follows:

(i)           At the end of each Plan Year and immediately prior to the payment of any benefits, interest shall be credited on the Deferral Account balance at an annual rate determined by the Board of Directors in its sole discretion, compounded annually; and

(ii)           At the end of each Plan Year during any applicable installment period, interest shall be credited on the Deferral Account balance at an annual rate determined by the Board of Directors in its sole discretion, compounded annually.

3.2 Statement of Accounts.  The Plan Administrator shall provide to the Director, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.

3.3 Accounting Device Only.  The Deferral Account is solely a device for measuring amounts to be paid under this Agreement.  The Deferral Account is not a trust fund of any kind.  The Director is a general unsecured creditor of the Company for the distribution of benefits.  The benefits represent the mere Company promise to distribute such benefits.  The Director’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by the Director’s creditors.

Article 4

Distributions During Lifetime

4.1 Normal Retirement Benefit.  Upon Termination of Service, the Company shall distribute to the Director the benefit described in this Section 4.1 in lieu of any other benefit under this Article.

4.1.1           Amount of Benefit.  The benefit under this Section 4.1 is the Deferral Account balance at Termination of Service.

4.1.2           Payment of Benefit.  The Company shall distribute the benefit to the Director in one hundred twenty (120) consecutive monthly installments commencing on the first day of the month following Termination of Service.

4.2 Disability Benefit.  If the Director experiences a Disability which results in Termination of Service, the Company shall distribute to the Director the benefit described in this Section 4.2 in lieu of any other benefit under this Article.

4.2.1           Amount of Benefit.  The benefit under this Section 4.2 is the Deferral Account balance at Termination of Service.

4.2.2           Payment of Benefit.  The Company shall distribute the benefit to the Director in one hundred twenty (120) consecutive monthly installments commencing on the first day of the month following Termination of Service.

4.3 Hardship Distribution.  If an Unforeseeable Emergency occurs, the Director may petition the Board to receive a distribution from the Agreement (a “Hardship Distribution”).  The Board in its sole discretion may grant such petition.  If granted, the Director shall receive, within sixty (60) days, a distribution from the Agreement only to the extent deemed necessary by the Board to remedy the Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably anticipated as a result of the distribution.  In any event, the maximum amount which may be paid out pursuant to this Section 4.3 is the Deferral Account balance as of the day the Director petitioned the Board to receive a Hardship Distribution.  Such a distribution shall reduce the Deferral Account balance.  A distribution under this Section 4.3 may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Director’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cancellation of deferrals in accordance with Section 2.4 of this Agreement.

4.4 Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Director is considered a Specified Employee, the provisions of this Section 4.4 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Director due to Termination of Service are limited because the Director is a Specified Employee, then such distributions shall not be made during the first six (6) months following Termination of Service.  Rather, any distribution which would otherwise be paid to the Director during such period shall be accumulated and paid to the Director in a lump sum on the first day of the seventh month following Termination of Service.  All subsequent distributions shall be paid in the manner specified.

4.5 Distributions Upon Taxation of Amounts Deferred.  If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Director becomes subject to tax on the amounts deferred hereunder, then the Company may make a limited distribution to the Director in a manner that conforms to the requirements of Code section 409A.  Any such distribution will decrease the Director’s benefits distributable under this Agreement.

4.6 Change in Form or Timing of Distributions.  All changes in the form or timing of distributions hereunder must comply with the following requirements.  The changes:

(a) may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A and the regulations thereunder;

(b) must, for benefits distributable under Sections 4.1 and 4.2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

(c) must take effect not less than twelve (12) months after the election is made.

Article 5

Distributions at Death

5.1 Death During Active Service.  If the Director dies while in active service to the Company, the Company shall distribute to the Beneficiary the benefit described in this Section 5.1.  This benefit shall be distributed in lieu of the benefits under Article 4.

5.1.1 Amount of Benefit.  The benefit under Section 5.1 is the greater of: a) the Deferral Account balance as of the Director’s death; or b) the projected Deferral Account balance had the Director continued to defer at the current rate until Normal Retirement Age.

5.1.2           Payment of Benefit.  The Company shall distribute the benefit to the Beneficiary in one hundred twenty (120) consecutive monthly installments commencing on the first day of the fourth month following the Director’s death.

5.2 Death During Distribution of a Benefit.  If the Director dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Company shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts that would have been distributed to the Director had the Director survived.

5.3 Death After Termination of Service But Before Payment of a Lifetime Benefit Commences.  If the Director is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Company shall pay to the Director’s beneficiary the same benefits that the Director was entitled to prior to death except that the benefit distributions shall commence on the first day of the fourth month following the Director’s death.

Article 6

Beneficiaries

6.1 In General.  The Director shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Director.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Company in which the Director participates.

6.2 Designation.  The Director shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Director names someone other than the Director’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Director’s spouse and returned to the Plan Administrator.  The Director’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Director or if the Director names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Director shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Director and accepted by the Plan Administrator prior to the Director’s death.

6.3 Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

6.4 No Beneficiary Designation.  If the Director dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Director, then the Director’s spouse shall be the designated Beneficiary.  If the Director has no surviving spouse, any benefit shall be paid to the personal representative of the Director’s estate.

6.5 Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Director and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

Article 7

General Limitations

7.1 Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals if the Company terminates the Director’s service for:

(a) Gross negligence or gross neglect of duties to the Company;

(b) Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c) Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Director’s service and resulting in a material adverse effect on the Company.

7.2 Suicide or Misstatement.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals if the Director commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Director and owned by the Company denies coverage (i) for material misstatements of fact made by the Director on an application for such life insurance, or (ii) for any other reason.

7.3 Removal.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals (i.e., Deferral Account minus interest credited thereon) if the Director is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

7.4 Excess Parachute Payment.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals to the extent the benefit would be an excess parachute payment under Section 280G of the Code.

Article 8

Administration of Agreement

8.1 Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

8.2 Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Company.

8.3 Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

8.4 Indemnity of Plan Administrator.  The Company shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

8.5 Bank Information.  To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Director’s death, Disability or Termination of Service, and such other pertinent information as the Plan Administrator may reasonably require.

Article 9

Claims and Review Procedures

9.1           Claims Procedure.  The Director or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

9.1.1           Initiation - Written Claim.  The claimant initiates a claim by submitting to the Company a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

9.1.2           Timing of Company Response.  The Company shall respond to such claimant within ninety (90) days after receiving the claim (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional ninety (90) days (or, if such claim is on account of disability, for not more than two additional thirty (30) day periods) by notifying the claimant in writing, prior to the end of the initial period, which an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.  (If the claim is on account of disability, the notice will also include the standards for entitlement for a benefit, unresolved issues, and information needed to resolve those issues.  The claimant will be given at least 45 days to supply any needed information.  The period that the claimant takes to produce the needed information does not count against the period for deciding the claim.)

9.1.3           Notice of Decision.  If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a)           The specific reasons for the denial,

(b)           A reference to the specific provisions of the Agreement on which the denial is based,

(c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d) An explanation of the Agreement’s review procedures and the time limits applicable to such procedures,

(e) A statement of the claimant’s right to bring a civil action following an adverse benefit determination on review, and

(f) In the case of an adverse determination of a claim on account of disability, the information to the claimant shall include, to the extent necessary, the information set forth in Department of Labor Regulation Section 2560.503-1(g)(1).

9.2           Review Procedure.  If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows:

9.2.1           Initiation - Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Company’s notice of denial (or, if such claim is a claim on account of disability, within one-hundred-eighty (180) days), must file with the Company a written request for review.

9.2.2           Additional Submissions - Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.

9.2.3           Considerations on Review.  In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

9.2.4           Timing of Company Response.  The Company shall respond in writing to such claimant within sixty (60) days after receiving the request for review (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional sixty (60) days (or, if such claim is on account of disability, no later than forty-five (45) days) by notifying the claimant in writing prior to the end of the initial period that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

9.2.5           Notice of Decision.  The Company shall notify the claimant in writing of its decision on review.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a) The specific reasons for the denial,

(b) A reference to the specific provisions of the Agreement on which the denial is based,

(c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and

(d) A statement of the claimant’s right to bring a civil action, and

(e) In the case of an adverse determination of a claim on account of disability, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either (i) the specific rule, guideline, protocol, or other similar criterion; or (ii) a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request.

Article 10

Amendments and Termination

10.1 Amendments.  This Agreement may be amended only by a written agreement signed by the Company and the Director.  However, the Company may unilaterally amend this Agreement to conform to written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Section 409A of the Code and any and all Treasury regulations and guidance promulgated thereunder.

10.2 Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Company and the Director.  Except as provided in Section 10.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, after such termination benefit distributions will be made at the earliest distribution event permitted under Article 4 or Article 5.

10.3 Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary in Section 10.2, if this Agreement terminates in the following circumstances:

(a) Within thirty (30) days before or twelve (12) months after a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as described in Section 409A(a)(2)(A)(v) of the Code, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Company’s arrangements which are substantially similar to the Agreement are terminated so the Director and all participants in the Similar Arrangements (as defined below) are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

(b) Upon the Company’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Director’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

(c) Upon the Company’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Director participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Company does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Agreement;

the Company may distribute Deferral Account balance, determined as of the date of the termination of the Agreement, to the Director in a lump sum subject to the above terms.

Article 11

Miscellaneous

11.1 Binding Effect.  This Agreement shall bind the Director and the Company and their beneficiaries, survivors, executors, administrators and transferees.

11.2 No Guarantee of Service.  This Agreement is not a contract for employment.  It does not give the Director the right to remain as a member of the Board, nor does it interfere with the Company’s right to discharge the Director.  It also does not require the Director to remain a member of the Board nor interfere with the Director’s right to terminate service at any time.

11.3 Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

11.4 Tax Withholding and Reporting.  The Company shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement.  Director acknowledges that the Company’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Company shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

11.5 Applicable Law.  This Agreement and all rights hereunder shall be governed by the laws of the State of Ohio, except to the extent preempted by the laws of the United States of America.

11.6 Unfunded Arrangement.  The Director and the Beneficiary are general unsecured creditors of the Company for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Company to distribute such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors.  Any insurance on the Director’s life or other informal funding asset is a general asset of the Company to which the Director and the Beneficiary have no preferred or secured claim.

11.7 Reorganization.  The Company shall not merge or consolidate into or with another Company, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement.  Upon the occurrence of such event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

11.8 Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Director as to the subject matter hereof.  No rights are granted to the Director by virtue of this Agreement other than those specifically set forth herein.

11.9 Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural

11.10 Alternative Action.  In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Agreement, the Company or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative acts do not violate Section 409A of the Code.

11.11 Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

11.12 Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

11.13 Notice.  Any notice or filing required or permitted to be given to the Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

The Ohio Valley Bank Company

Attn:  BOLI Administrator

P O Box 240  420 Third Avenue

Gallipolis OH  45631-0240

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Director under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Director.

11.14 Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Director and an authorized representative of the Company have signed this Agreement.

DIRECTOR:                                                                                 THE OHIO VALLEY BANK COMPANY

                                                                                                       By:                                                                

Anna P. Barnitz                                                                           Title:  AVP and Assistant Secretary

EX-10.6B

EXHIBIT 10.6(b)

THE OHIO VALLEY BANK COMPANY

SECOND AMENDED AND RESTATED

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

This SECOND AMENDED AND RESTATED EXECUTIVE DEFERRED COMPENSATION AGREEMENT (this “Agreement”) is adopted this 18th day of December 2012 by and between THE OHIO VALLEY BANK COMPANY, located in Gallipolis, Ohio (the “Company”), and Jeffrey E. Smith (the “Executive”).  This Agreement amends and restates the prior Amended and Restated Executive Deferred Compensation Agreement between the Company and the Executive dated December 28, 2007(the “2007 Amendment”) which amended and restated the prior Executive Deferred Compensation Agreement between the Company and the Executive dated April 17, 2003 (the “2003 Agreement”).  The 2007 Agreement was subsequently amended on May 17, 2010.

The parties intended the 2007 Amendment to be a material modification of the 2003 Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject to the provisions of Section 409A of the Code and the regulations promulgated thereunder.  The purpose of the amendment and restatement reflected in this Agreement is to clarify certain provisions with respect to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and Section 409A of Code.  The terms of this Agreement do not materially change the terms of the 2007 Amendment.

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company.  This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act (“ERISA”).

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.0 “Base Salary” means the annual cash Compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, and other fees, and automobile and other allowances paid to the Executive for employment rendered (whether or not such allowances are included in the Executive’s gross income).  Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Executive pursuant to all qualified or non-qualified plans of the Company and shall be calculated to include amounts not otherwise included in the Executive’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Company; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Executive.

1.1 “Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 6.

1.2 “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.3           “Board” means the Board of Directors of the Company as from time to time constituted.

1.4 “Bonus” means the cash bonus, if any, awarded to the Executive for services performed during the Plan Year that does not qualify as Performance-Based Compensation.

1.5 “Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, as may be amended from time to time.

1.6 “Compensation” means the total annual Bonus, Base Salary and Performance-Based Compensation paid to the Executive during a Plan Year.

1.7 “Deferral Account” means the Company’s accounting of the Executive’s accumulated Deferrals plus accrued interest.

1.8 “Deferral Election Form” means the form or forms established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate the amount of Deferrals.

1.9 “Deferrals” means the amount of Compensation which the Executive elects to defer according to this Agreement.

1.10 “Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees or directors of the Company, provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

1.11           “Effective Date” means January 1, 2005.

1.12           “Normal Retirement Age” means the Executive’s age sixty-five (65).

1.13 “Performance-Based Compensation” means any amount earned over a period of at least twelve (12) months that is awarded to the Executive and qualifies as “performance-based compensation” under Code Section 409A.

1.14           “Plan Administrator” means the plan administrator described in Article 8.

1.15 “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.

1.16 “Specified Employee”means an employee who at the time of Termination of Employment is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

1.17           “Termination for Cause” has the meaning set forth in Article 7.

1.18 “Termination of Employment” means a “separation of service” within the meaning of Treasury Regulation §1.409A-1(h) of the Executive’s service with the Company and any person with whom the Company would be considered a single employer under Code Sections 414(b) and (c) for reasons other than death.

1.19 “Unforeseeable Emergency” means a severe financial hardship to the Executive within the meaning of Treasury Regulation §1.409A-3(i)(3)resulting from an illness or accident of the Executive, the Executive’s spouse, the Beneficiary, or the Executive’s dependent (as defined in Code Section 152 without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Executive’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Executive.

Article 2

Deferral Election

2.1 Elections Generally.  The Executive may annually file a Deferral Election Form with the Plan Administrator no later than the end of the Plan Year preceding the Plan Year in which services leading to such Compensation will be performed.  Notwithstanding the foregoing, if any Compensation is determined to be Performance-Based Compensation, the Executive shall have until six (6) months before the end of the service period on which the Performance-Based Compensation is based to file a Deferral Election Form with respect to such Performance-Based Compensation provided that (i) the election satisfies all the requirements in Treas. Reg. §1.409A-2(a)(8) and (ii) such Performance-Based Compensation has not become readily ascertainable.  Notwithstanding anything to the contrary, the Executive may not elect to defer Compensation in an amount greater than $10,000 each Plan Year, or such greater or lesser amount as may be established by the Board each Plan Year.

2.2 Initial Election.  After being notified by the Plan Administrator of becoming eligible to participate in this Agreement, the Executive may make an initial deferral election by delivering to the Plan Administrator signed Deferral Election Forms and a Beneficiary Designation Form within thirty (30) days of becoming eligible with respect to Compensation to be paid for services to be performed after such election is made.  The Deferral Election Form shall set forth the amount of Compensation, Bonus and/or Performance-Based Compensation to be deferred.  However, if the Executive was eligible to participate in any other account balance plans sponsored by the Company (as referenced in Code Section 409A) prior to becoming eligible to participate in this Agreement, (i) the initial election to defer any Compensation under this Agreement shall not be effective until the Plan Year following the Plan Year in which the Executive became eligible to participate in this Agreement, and (ii) any election to defer Compensation that is determined to be Performance-Based Compensation shall be effective immediately if made more than six (6) months prior to the end of the period to which the Performance-Based Compensation relates, provided that (a) the election satisfies all the requirements in Treas. Reg. §1.409A-2(a)(8) and (b) such Performance-Based Compensation has not become readily ascertainable, otherwise it too shall be effective beginning the Plan Year following the Plan Year in which the Executive became eligible to participate in this Agreement.

2.3 Election Changes.  The Executive may modify the amount of Compensation, Bonus and/or Performance-Based Compensation to be deferred annually by filing a new Deferral Election Form with the Company.  The modified deferral shall not be effective until the calendar year following the year in which such subsequent Deferral Election Form is received by the Company.

2.4 Hardship.  If an Unforeseeable Emergency occurs, the Executive, by written instructions to the Company, may discontinue deferrals hereunder.  Any subsequent Deferral Elections may be made only in accordance with Section 2.3 hereof.

Article 3

Deferral Account

3.1 Establishing and Crediting.  The Company shall establish a Deferral Account on its books for the Executive and shall credit to the Deferral Account the following amounts:

(a)           Any Deferrals hereunder; and

(b)           Interest as follows:

(i) At the end of each Plan Year and immediately prior to the payment of any

benefits, interest shall be credited on the Deferral Account balance at an annual rate determined by the Board of Directors in its sole discretion, compounded annually; and

(ii) At the end of each Plan Year during any applicable installment period,

interest shall be credited on the Deferral Account balance at an annual rate determined by the Board of Directors in its sole discretion, compounded annually.

3.2 Statement of Accounts.  The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.

3.3 Accounting Device Only. The Deferral Account is solely a device for measuring amounts to be paid under this Agreement. The Deferral Account is not a trust fund of any kind.  The Executive is a general unsecured creditor of the Company for the distribution of benefits.  The benefits represent the mere Company promise to distribute such benefits.  The Executive’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by the Executive’s creditors.

Article 4

Distributions During Lifetime

4.1 Normal Retirement Benefit.  Upon Termination of Employment, the Company shall distribute to the Executive the benefit described in this Section 4.1 in lieu of any other benefit under this Article.

4.1.1 Amount of Benefit.  The benefit under this Section 4.1 is the Deferral Account balance at Termination of Employment.

4.1.2 Payment of Benefit.  The Company shall distribute the benefit to the Executive in one hundred twenty (120) consecutive monthly installments commencing on the first day of the month following Termination of Employment.

4.2 Disability Benefit.  If the Executive experiences a Disability which results in Termination of Employment, the Company shall distribute to the Executive the benefit described in this Section 4.2 in lieu of any other benefit under this Article.

4.2.1 Amount of Benefit.  The benefit under this Section 4.2 is the Deferral Account balance at Termination of Employment.

4.2.2 Payment of Benefit.  The Company shall distribute the benefit to the Executive in one hundred twenty (120) consecutive monthly installments commencing on the first day of the month following Termination of Employment.

4.3 Hardship Distribution.  If an Unforeseeable Emergency occurs, the Executive may petition the Board to receive a distribution from the Agreement (a “Hardship Distribution”).  The Board in its sole discretion may grant such petition.  If granted, the Executive shall receive, within sixty (60) days, a distribution from the Agreement only to the extent deemed necessary by the Board to remedy the Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably anticipated as a result of the distribution.  In any event, the maximum amount which may be paid out pursuant to this Section 4.3 is the Deferral Account balance as of the day the Executive petitioned the Board to receive a Hardship Distribution.  Such a distribution shall reduce the Deferral Account balance.  A distribution under this Section 4.3 may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Executive’s assets to the extent the liquidation of such assets would not cause severe financial hardship, or by cancellation of deferrals in accordance with Section 2.4 of this Agreement.

4.4 Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 4.4 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Executive due to Termination of Employment are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months following Termination of Employment.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Termination of Employment.  All subsequent distributions shall be paid in the manner specified.

4.5 Distributions Upon Taxation of Amounts Deferred.  If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Company may make a limited distribution to the Executive in a manner that conforms to the requirements of Code section 409A.  Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

4.6 Change in Form or Timing of Distributions.  All changes in the form or timing of distributions hereunder must comply with the following requirements.  The changes:

(a) may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A and the regulations thereunder;

(b) must, for benefits distributable under Sections 4.1 and 4.2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

(c) must take effect not less than twelve (12) months after the election is made.

Article 5

Distributions at Death

5.1 Death During Active Service.  If the Executive dies [while in active service to the Company/prior to Termination of Employment], the Company shall distribute to the Beneficiary the benefit described in this Section 5.1.  This benefit shall be distributed in lieu of the benefits under Article 4.

5.1.1 Amount of Benefit.  The benefit under Section 5.1 is the greater of: a) the Deferral Account balance as of the Executive’s death; or b) the projected Deferral Account balance had the Executive continued to defer at the current rate until Normal Retirement Age.

5.1.2 Payment of Benefit.  The Company shall distribute the benefit to the Beneficiary in one hundred twenty (120) consecutive monthly installments commencing on the first day of the fourth month following the date of the Executive’s death.

5.2 Death During Distribution of a Benefit.  If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Company shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts that would have been distributed to the Executive had the Executive survived.

5.3 Death After Termination of Employment But Before Payment of a Lifetime Benefit Commences.  If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Company shall pay to the Executive’s beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit distributions shall commence on the first day of the fourth month following the Executive’s death.

Article 6

Beneficiaries

6.1 In General.  The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Company in which the Executive participates.

6.2 Designation.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.  The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

6.3 Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

6.4 No Beneficiary Designation.  If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, any benefit shall be paid to the personal representative of the Executive’s estate.

6.5 Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

Article 7

General Limitations

7.1 Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals if the Company terminates the Executive’s employment for:

(a) Gross negligence or gross neglect of duties to the Company;

(b) Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c) Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Company.

7.2 Suicide or Misstatement.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Company denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

7.3 Removal.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals (i.e., Deferral Account minus interest credited thereon) if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

7.4 Excess Parachute Payment.  Notwithstanding any provision of this Agreement to the contrary, the Company shall not distribute any benefit under this Agreement in excess of the Deferrals to the extent the benefit would be an excess parachute payment under Section 280G of the Code.

Article 8

Administration of Agreement

8.1 Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

8.2 Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Company.

8.3 Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

8.4 Indemnity of Plan Administrator.  The Company shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

8.5 Bank Information.  To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Executive’s death, Disability or Termination of Employment, and such other pertinent information as the Plan Administrator may reasonably require.

Article 9

Claims and Review Procedures

9.1 Claims Procedure.  The Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

9.1.1           Initiation - Written Claim.  The claimant initiates a claim by submitting to the Company a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

9.1.2           Timing of Company Response.  The Company shall respond to such claimant within ninety (90) days after receiving the claim (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional ninety (90) days (or, if such claim is on account of disability, for not more than two additional thirty (30) day periods) by notifying the claimant in writing, prior to the end of the initial period, which an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.  (If the claim is on account of disability, the notice will also include the standards for entitlement for a benefit, unresolved issues, and information needed to resolve those issues.  The claimant will be given at least 45 days to supply any needed information.  The period that the claimant takes to produce the needed information does not count against the period for deciding the claim.)

9.1.3           Notice of Decision.  If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a) The specific reasons for the denial,

(b) A reference to the specific provisions of the Agreement on which the denial is based,

(c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d) An explanation of the Agreement’s review procedures and the time limits applicable to such procedures,

(e) A statement of the claimant’s right to bring a civil action following an adverse benefit determination on review under ERISA Section 502(a), and

(f) In the case of an adverse determination of a claim on account of disability, the information to the claimant shall include, to the extent necessary, the information set forth in Department of Labor Regulation Section 2560.503-1(g)(1).

9.2 Review Procedure.  If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows:

9.2.1           Initiation - Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Company’s notice of denial (or, if such claim is a claim on account of disability, within one-hundred-eighty (180) days), must file with the Company a written request for review.

9.2.2           Additional Submissions - Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

9.2.3           Considerations on Review.  In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

9.2.4           Timing of Company Response.  The Company shall respond in writing to such claimant within sixty (60) days after receiving the request for review (or, if such claim is on account of disability, no later than forty-five (45) days).  If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional sixty (60) days (or, if such claim is on account of disability, no later than forty-five (45) days) by notifying the claimant in writing prior to the end of the initial period that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

9.2.5           Notice of Decision.  The Company shall notify the claimant in writing of its decision on review.  The Company shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

(a) The specific reasons for the denial,

(b) A reference to the specific provisions of the Agreement on which the denial is based,

(c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and

(d) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a), and

(e) In the case of an adverse determination of a claim on account of disability, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either (i) the specific rule, guideline, protocol, or other similar criterion; or (ii) a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request.

Article 10

Amendments and Termination

10.1 Amendments.  This Agreement may be amended only by a written agreement signed by the Company and the Executive.  However, the Company may unilaterally amend this Agreement to conform to written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Section 409A of the Code and any and all Treasury regulations and guidance promulgated thereunder.

10.2 Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Company and the Executive.  Except as provided in Section 10.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, after such termination benefit distributions will be made at the earliest distribution event permitted under Article 4 or Article 5.

10.3 Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary in Section 10.2, if this Agreement terminates in the following circumstances:

(a) Within thirty (30) days before or twelve (12) months after a change in the

ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as described in Section 409A(a)(2)(A)(v) of the Code, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Company’s arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the Similar Arrangements (as defined below) are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

(b) Upon the Company’s dissolution or with the approval of a bankruptcy court

provided that the amounts deferred under the Agreement are included in the Executive’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

(c) Upon the Company’s termination of this and all other arrangements that would be

aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Company does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Agreement;

the Company may distribute Deferral Account balance, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms.

Article 11

Miscellaneous

11.1 Binding Effect.  This Agreement shall bind the Executive and the Company and their beneficiaries, survivors, executors, administrators and transferees.

11.2 No Guarantee of Employment.  This Agreement is not a contract for employment.  It does not give the Executive the right to remain as an employee of the Company, nor does it interfere with the Company’s right to discharge the Executive.  It also does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time.

11.3 Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

11.4 Tax Withholding and Reporting.  The Company shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement.  Executive acknowledges that the Company’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Company shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

11.5 Applicable Law.  The Agreement and all rights hereunder shall be governed by the laws of the State of Ohio, except to the extent preempted by the laws of the United States of America.

11.6 Unfunded Arrangement.  The Executive and the Beneficiary are general unsecured creditors of the Company for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Company to distribute such benefits.  The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors.  Any insurance on the Executive’s life or other informal funding asset is a general asset of the Company to which the Executive and the Beneficiary have no preferred or secured claim.

11.7 Reorganization.  The Company shall not merge or consolidate into or with another Company, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement.  Upon the occurrence of such event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

11.8 Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof.  No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.

11.9 Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural

11.10 Alternative Action.  In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Agreement, the Company or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative acts do not violate Section 409A of the Code.

11.11 Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

11.12 Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

11.13 Notice.  Any notice or filing required or permitted to be given to the Company and/or the Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

The Ohio Valley Bank Company

Attn:  BOLI Administrator

P O Box 240 420 Third Avenue

Gallipolis OH 45631

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive.

11.14 Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Executive and an authorized representative of the Company have signed this Agreement.

EXECUTIVE:	COMPANY: THE OHIO VALLEY BANK COMPANY
Jeffrey E. Smith	By:                                                       Title:

EX-10.7A

EXHIBIT 10.7(a)

SCHEDULE A TO EXHIBIT 10.6(a)

The following individuals entered into Director Deferred Fee Plans with The Ohio Valley Bank Company identified below which are identical to the Director Deferred Fee Plan, dated December 18, 2012, between Anna P. Barnitz and The Ohio Valley Bank Company filed herewith.

Name	Date of Director Deferred Fee Plan
Thomas E. Wiseman	December 18, 2012
Steven B. Chapman	December 18, 2012
Harold A. Howe	December 18, 2012
Brent A. Saunders	December 18, 2012
David W. Thomas	December 18, 2012
Lannes C. Williamson	December 18, 2012
Jeffrey E. Smith	May 20, 2003

EX-10.7B

EXHIBIT 10.7(b)

SCHEDULE A TO EXHIBIT 10.6(b)

The following individuals entered into Executive Deferred Compensation Plans with The Ohio Valley Bank Company identified below which are identical to the Executive Deferred Compensation Plan, dated December 18, 2012, between Jeffrey E. Smith and The Ohio Valley Bank Company filed herewith.

Name	Date of Director Deferred Fee Plan
Thomas E. Wiseman	December 18, 2012
Scott W. Shockey	December 18, 2012
Katrinka V. Hart	December 18, 2012
E. Richard Mahan	December 18, 2012

EX-10.8

EXHIBIT 10.8

SUMMARY OF COMPENSATION FOR

DIRECTORS AND NAMED EXECUTIVE OFFICERS

OF OHIO VALLEY BANC CORP.

Directors

All of the directors of Ohio Valley Banc Corp. (“Ohio Valley”) also serve as directors of its subsidiary, The Ohio Valley Bank Company (the “Bank”).  The directors of Ohio Valley are paid by the Bank for their services rendered as directors of the Bank, not Ohio Valley.  Each director of the Bank who is not an employee of Ohio Valley or any of its subsidiaries (a “Non-Employee Director”) receives $550 per month for his or her services.  Each director of the Bank who is an employee of Ohio Valley or any of its subsidiaries (an “Employee Director”) receives $350 per month for his or her services.  In addition, each director of the Bank receives an annual retainer of $14,700 paid in December of each year for services to be rendered during the following year.

Each Non-Employee Director who is a member of the Executive Committee of the Bank receives $2,000.00 per month for his or her services.  In addition, each Non-Employee Director receives an annual retainer of $16,695 paid in December of each year for services to be rendered during the following year.  This figure was pro-rated for time served for new members.  Included in the Executive Committee Chairman’s current salary is an annual fee of $60,000 for his duties as such.  Employee Directors receive no additional compensation for serving on the Executive Committee.

Brent A. Saunders, LPA received retainer fees of $19,000 for legal services to the Company and its subsidiaries during the Company’s 2012 fiscal year, as approved by the Board of Directors in December 2011, and is expected to render legal services to the Company and its subsidiaries during the Company’s 2013 fiscal year.  The Board of Directors determined that such a relationship does not interfere with Mr. Saunders’ exercise of independent judgment in carrying out his responsibilities as a director; rather, in fact, Mr. Saunders’ legal experience provides value to his service as a director.

The Bank maintains a life insurance policy for all directors with a death benefit of two times annual director fees at time of death reduced by 35% at age 65 and 50% at age 70 as part of the Bank’s group term life insurance program.  The life insurance policies terminate upon retirement.  Messrs. Smith and Wiseman, as employees of the Bank, are excluded from this benefit under the terms of the Bank’s group term life insurance program.  The Bank also maintains a Director Retirement Plan for all directors of the Bank and a Deferred Compensation Plan for all directors and executive officers of the Bank.  These documents are filed as Exhibit 10.1, Exhibit 10.3(a), Exhibit 10.4(a), and Exhibit 10.6(a) and Exhibit 10.6(b), respectively, to Ohio Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (SEC File No. 0-20914).

Named Executive Officers

  The following sets forth the current salaries of the executive officers of Ohio Valley named in the Summary Compensation Table in Ohio Valley’s proxy statement (the “Named Executive Officers”):

Name	Current Salary
Jeffrey E. Smith	$242,678
Thomas E. Wiseman	260,634
Scott W. Shockey	140,390
Katrinka V. Hart	159,059
E. Richard Mahan	159,010
Larry E. Miller, II	158,579

Certain Named Executive Officers are entitled to participate in several benefit arrangements, including the Ohio Valley Banc Corp. Bonus Program, the Ohio Valley Bank Company Executive Group Life Split Dollar Plan, the Executive Deferred Compensation Plan, and a supplemental  executive retirement plan (currently only for Messrs. Smith and Wiseman), as set forth in exhibits 10.1, 10.2, 10.3(a), 10.3(b), 10.4(a), 10.4(b), 10.5, 10.6(a), 10.6(b), 10.7(a), 10.7(b), 10.8, 10.9 and 10.10 to Ohio Valley's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, SEC File No. 0-20914.  In addition, Named Executive Officers are entitled to participate in various benefit plans available to all employees, including a Profit Sharing Retirement Plan, a 401(k) plan, an employee stock ownership plan, group term life insurance, health insurance, disability insurance and a flexible compensation/cafeteria plan, all as described in Ohio Valley's proxy statement for its 2013 annual meeting of shareholders.

EX-10.9

EXHIBIT 10.9

SUMMARY OF BONUS PROGRAM

OF OHIO VALLEY BANC CORP.

The following is a description of the Bonus Program (the "Bonus Program") of Ohio Valley Banc Corp. ("Ohio Valley") provided pursuant to Item 601(b)(10)(iii) of Regulation S-K promulgated by the Securities and Exchange Commission, which requires a written description of a compensatory plan when no formal document contains the compensation information.

The executive officers of the Company receive no compensation from the Company.  Instead they are paid by subsidiaries for services rendered in their capacities as executive officers of subsidiaries of the Company.

The objectives of the bonus component of the Company's compensation program are to: (a) motivate executive officers and other employees and reward such persons for the accomplishment of both annual and long range goals of the Company and its subsidiaries, (b) reinforce a strong performance orientation with differentiation and variability in individual awards based on contribution to long-range business results and (c) provide a fully competitive compensation package that will attract, reward, and retain individuals of the highest quality.   All employees of the Company's subsidiaries holding positions with a pay grade of 9 or above, as well as some employees who were graded 9 or above before the redesign of the salary structure, are eligible to participate in the bonus program, including all of the named executive officers.

Bonuses payable to participants in the bonus program are based on (a) the performance of the Company and its subsidiaries as measured against specific performance targets; and (b) each employee's individual performance.    At the beginning of each fiscal year, the Compensation Committee sets specific performance targets for the Company and its subsidiaries based on a combination of some or all of a number of performance criteria set forth in the Company’s strategic plan.  The targets are based on one or more of the following performance criteria: net income, net income per share, return on assets, return on equity, asset quality (as measured by the ratio of adversely classified assets to tier 1 capital plus the ALLL), tier 1 leverage ratio and efficiency ratio.  It is the objective of the Compensation Committee to establish goals that are “reaching” but “reachable.”  The Compensation Committee may not consider the goals to be of equal weight, but, in the aggregate, it considers them to be fundamental metrics which are important to the long-term performance of the Company and which, at the same time, do not expose the Company to, nor incent the employees to undertake, excessive risks which would threaten the Company’s long-term value.  At the end of the fiscal year, the aggregate amount available for the payment of a bonus, if any at all, is determined by the Company’s Board of Directors upon recommendation of its Compensation Committee based on an evaluation of the accomplishment of the performance targets.  A bonus may be paid without targets having been established or achieved.  No officer or employee has any right to the payment of a bonus until the Board of Directors has exercised its discretion to award one and the amount to be paid to each person has been determined and announced.

Once the aggregate amount of the bonus pool is determined, individual bonus awards, for eligible employees in grades 11 and below, are determined through a formula that applies each employee's performance evaluation score to a “bonus grid,” reflecting the individual employee's job grade and individual job performance using the performance criteria referenced above.  For employees in grades 12 and above, individual bonus awards are determined by the level of achievement by the Company and its subsidiaries of some or all of a number of previously mentioned performance metrics. Upon the recommendation of the Compensation Committee and approval by the Board, individual bonus awards for grades 12 and above are typically awarded as a percent of base compensation.  Employees are evaluated by their supervisors, except for Mr. Smith and Mr. Wiseman, who are evaluated by the Compensation Committee.  The Company’s Board of Directors approves the bonuses payable to the executive officers under the Bonus Program based upon the recommendation of the Compensation Committee.

Bonuses are normally paid in February in cash in a single lump sum, subject to payroll taxes and tax withholdings.

EX-13

OVBC

Annual Report 2012

community first

DEAR SHAREHOLDERS

& FRIENDS OF OUR

VALUED COMMUNITIES,

Thank you for supporting OVBC through another successful year. We are pleased to report that for the fourth quarter of 2012 your company saw earnings reach the third highest level in the company’s history.

Ohio Valley Banc Corp. reported net income of over $7 million for 2012, an increase of 20.9 percent. Earnings per share were up to $1.75 for 2012 versus $1.46 for 2011, an increase of 19.9 percent, a fantastic way to celebrate the company’s 140th birthday.

So many community banks say that their people make the difference. Well, we’ve set the bar a little higher.

In 2012, Brenda Henson and Angela Kinnaird received the American Bankers Association Community Bank Award for their outstanding work with the OVBC Christmas Express, a program with the lofty goal of filling a semi-truck with new toys and coats to be distributed to underprivileged children in our area. Our own Mario Liberatore received not one, but three, major honors for his ongoing commitment to the community of Mason County, West Virginia.

During the year, a new tradition called Community Service Days gained traction. Officially, this is listed as an employee benefit, but the rewards go much further. Each Ohio Valley Bank and Loan Central staffer is entitled to one day off with pay per year to be spent in duty to a local cause. We are immensely proud of our employees who have used these days to help build homes with Habitat for Humanity, plant flowers with America in Bloom, spread cancer prevention awareness with Relay for Life, and even to take homeless dogs for a walk to brighten their lonely day at the local animal shelter. No job is too big or too small when it benefits our community.

And like our people, our products and services gained much attention in 2012 too. Ohio Valley Bank’s Right Start Checking account was named one of the nation’s “Top 10 Student Checking Accounts at Community Banks” by the financial blog, NerdWallet. MoneyIsland, OVB’s financial literacy partner for middle grade, won an Excellence In Financial Literacy Education award for instructional game of the year from the Institute for Financial Literacy. OVB’s BANKit! financial literacy program for high school received an American Bankers Association award for its impact on students.

We are excited by the enthusiasm our employees have shown in keeping this momentum going. Our management team has crafted an ambitious and inspired strategic plan for 2013 which includes careful attention to loan growth both in commercial and consumer arenas, expansion of OVB’s digital and physical presence, a fundamental change in the way we care for and nurture the partnerships we’ve built with our customers, and a sweeping new movement to consider Community First when making purchasing decisions.

Your support is invaluable. We invite you to review this report of our work from 2012 and to join us for the Annual Meeting of Shareholders on May 8, 2013. Thank you for your commitment to the success of OVBC.

Sincerely,

/s/Jeffrey E. Smith	/s/Thomas E. Wiseman
Jeffrey E. Smith	Thomas E. Wiseman
Chairman of the Board	President and CEO
Ohio Valley Banc Corp.	Ohio Valley Banc Corp.

COMMUNITY FIRST STARTS AT OVB

At Ohio Valley Bank, it is our privilege to be able to pay our success forward to the charities and civic organizations of our communities. Below are some of the beneficiaries of OVB’s charitable giving efforts in 2012.

American Cancer Society	Gallia Co. Community Foundation	Jackson Co. Fair Auction
Amer. Free Enterprise Leadership	Gallia Co. CVB	Jackson Co. Friends of 4-H
American Diabetes Assn.	Gallia Co. Emancipation Day	Jackson Co. Humane Society
American Legion	Gallia Co. Farm Bureau	Jackson Co. Red Cross
American Red Cross	Gallia Co. Gospel Sing	Jackson Elks
Amish School Auction	Gallia Co. Health Dept.	Jackson Firefighters Assn.
Angels Among Us 5-K Run	Gallia Co. Junior Fair	Jackson Freedom Fest
Aultman Hospice Program	Gallia Co. Local Schools	Jackson Ironmen Football Mothers
Beaver OktoberFest	Gallia Co. Relay for Life	Jackson Jaycees
Bend Area C.A.R.E.	Gallia Co. River Recreation Festival	Jackson Pee-Wee Football
Beverly Hills (WV) Youth B-Ball	Gallia Co. Sheriff’s Dept.	Jackson Stay-at-Home
Buckeye Hills Career Center	Gallia Co. Snack Pack	Jackson Support Our Soccer
Cabell Co. 4-H	Gallia Senior Citizens Ctr.	Jackson SWCD
Cabell Co. Canine Drug Program	Gallipolis Bass Busters	Jackson/Vinton Farm Bureau
Cabell Co. Fair	Gallipolis City Schools	Junior Achievement
Cabell Co. FFA	Gallipolis Elks	Juvenile Diabetes Research
Cabell Co. Fraternal Order of Police	Gallipolis In Bloom	JVAC Industries
Cabell Foundation	Gallipolis Jr. Women's Club	Kickin’ Summer Bash
Cabell Midland High School	Gallipolis Kiwanis	Lawrence Co. 4-H Horse
Chester Shade Historical Society	Gallipolis Lions Club	Lawrence Co. Beef Sweepstakes
Childrens Center of Ohio	Gallipolis Shrine Club	Lawrence Co. Fair Auction
Christian Life Academy	Garnet Wilson Public Library	Lawrence Co. Humane Society
City of Milton Fireworks	Golden Girls Group Home	Lillian Jones Museum
Delta Theta Sorority Cancer Walk	Greenfield Fire Dept. Ladies Aux.	Little Victories Animal Shelter
Digital River Project	Holzer Foundation, Camp Beaver	Main Street Point Pleasant
Earl Neff Pediatric Toy Fund	Holzer Medical Center	Marshall University
Elm Grove Youth League	Holzer Senior Care	Mason Co. 4-H
Field of Hope	Holzer Senior Outreach	Mason Co. Board of Education
Financial Ed. & Advocacy Initiative	Hospice of Huntington	Mason Co. Camp Sunshine
French Art Colony	Jackson ALS Walk	Mason Co. Chamber of Commerce
French City Chili Fest	Jackson Area YMCA	Mason Co. Fair & Queen Pageant
Friends Club of Oak Hill	Jackson Chamber of Commerce	Mason Co. Little League
Friends of Lake Alma	Jackson City Library	Mason Co. Schools
Gallia Co. 4-H	Jackson City Schools	Mason Co. Special Olympics
Gallia Co. Agricultural Society	Jackson Co. 4-H	Meigs Co. 4-H
Gallia Co. Animal Shelter	Jackson Co. Apple Festival	Meigs Co. Council on Aging
Gallia Co. Cattlemen Assn.	Jackson Co. Baseball	Meigs Co. Fair Bleacher Project
Gallia Co. Chamber of Commerce	Jackson Co. Dog Shelter	Meigs Co. Fair Livestock Auction
Gallia Co. Chautauqua	Jackson Co. Economic Development	Meigs Co. Schools

“You’ll never find me delivering a boring lecture. Our elementary, middle grade,

and high school programs deliver practical knowledge in a way that is engaging

and interactive. Just ask the 300+ students who completed our classroom

curriculum in 2012.”

- OVB Financial Literacy Leader Hope Roush

Hope is pictured at Washington Elementary’s 2012 Math & Science Night

with students Alex Russell, Mason Angel, and Justin Butler.

Meigs Cooperative Parish

Meigs Library

Meigs Soil & Water Conservation

Meigs VFW

Mercerville VFD

Middleport Sternwheeler Riverfest

Middleport Youth League

Milton Little League

Milton Rotary

Multiple Sclerosis Society

NAACP

National Child Safety Council

National Wild Turkey Federation

Oak Hill Festival of Flags

Oak Hill Local Schools

Ohio 4-H Foundation

Ohio Chautauqua

Ohio Valley Christian School

Ohio Valley Symphony

Ohio Valley Youth Orchestra

Ole Car Club

OVB 4-H Scholarship Program

Pike Co. 4-H

Pike Co. Fair Livestock Auction

Pike Co. Humane Society

Pike Co. Outreach Council

Pike Co. Shrine Club

Pike Co. Spelling Bee

Pike Co. YMCA

Pike Co. Youth Leagues

Point Pleasant River Museum

Point Pleasant Sternwheel Regatta

Pt. Pleasant, NY Sister City Recovery

Racine’s Party in Park

Rio Grande Neighborhood Watch

River Cities Alumni MU Scholars

River Cities Military Support Group

Rockets Over Rio

Sacred Heart Parish

Salt Rock Youth Basketball

Scott Porter Memorial Fund

Serenity House

SOS Car Club

South Point Athletic Boosters

Southern Hills Arts Council

Southern Ohio Seniors

Special Olympics

Susan G. Komen Foundation

Symmes Valley Band Boosters

Syracuse Fire Department

Transitions for Youth

Tri-County Mental Health

United Fund of Jackson County

University of Rio Grande

Village of Rio Grande Police

Vinton Bean Dinner

Vinton Integrity Baseball

Washington Elem. Ohio Reads

Waverly Jingle Bell Parade

Waverly Leo Club

Waverly Lions Club

Waverly Local Schools

Waverly Street Festival

Wellston Ohillco Festival

West Virginia Pumpkin Festival

Woodland Centers Summer Youth

Top: OVB’s Tony Staley (left) and Dan Short (right) present a

much needed donation toward new bleachers and improvements

at the Meigs County Fair.

Middle: OVB’s Judy Hess (left), Pam Smith (right), and Chris

Preston (above in announcer’s stand) present the Top Born &

Raised Steer award to Chaston Holley at the Cabell County Fair.

Bottom: Snow White (a.ka. OVB’s Ashley Hill) poses with real life

princess, Little Miss Apple Festival Katelyn Webb, during the

bank’s community reception and exhibit opening celebrating this

dynamic young lady.

Ohio Valley Bank	Ohio Valley Bank ATMs can be found at
Gallipolis, Ohio	each office and also at these convenient locations.
Main Office - 420 Third Ave.
Mini Bank - 437 Fourth Ave.	Red’s Truck Center, Kerr Road, Bidwell, Ohio
Inside Foodland - 236 Second Ave.
Inside Walmart - 2145 Eastern Ave.	Sav-a-Lot, State Rt. 160, Bidwell, Ohio
Jackson Pike - 3035 State Route 160
Inside Holzer - 100 Jackson Pike	Gallia Academy, 2855 Centenary Road, Gallipolis, Ohio
Loan Office - Walmart Plaza, 2145 Eastern Ave.
	Gallipolis Justice Center, 518 Second Ave., Gallipolis, Ohio
Jackson, Ohio
740 East Main St.	Holzer Medical Center Cafeteria, 100 Jackson Pike, Gallipolis, Ohio
Pomeroy, Ohio	Holzer Clinic, 280 Pattonsville Road, Jackson, Ohio
Inside Sav-a-Lot - 700 W. Main St.
	Foodland, 409 N. Front Street, Oak Hill, Ohio
Rio Grande, Ohio
27 North College Ave.	Bob Evans Sausage Shop, State Rt. 588, Rio Grande, Ohio
South Point, Ohio	JC’s Marathon, 77 State Rte. 325, Rio Grande, Ohio
Inside Walmart - 354 Private Drive
	BP, Rt 35 & 5 Mile Creek, Fraziers Bottom, WV
Waverly, Ohio
507 West Emmitt Ave.	Sunoco Foodmart, 3175 Route 60 E., Huntington, WV
Huntington, West Virginia	Pleasant Valley Hospital, 2520 Valley Drive, Point Pleasant, WV
3331 U.S. Route 60 East
	Mason Co. Courthouse, 200 6th Street, Point Pleasant, WV
Milton, West Virginia
280 East Main St.	See our Intelli-Deposit ATM inside the Gallipolis Walmart where
	you can make a deposit without a deposit slip!
Point Pleasant, West Virginia
328 Viand St.
Web Branch
www.ovbc.com or www.ohiovalleybank.com
Loan Central
Chillicothe, Ohio
1080 N. Bridge Street, Unit 43
Gallipolis, Ohio
2145 Eastern Avenue
Jackson, Ohio
345 Main Street
Ironton, Ohio
710 Park Avenue
South Point, Ohio
348 County Road 410
Waverly, Ohio
505 West Emmitt Avenue
Wheelersburg, Ohio
326 Center Street

In 2012, our co-worker and friend Mario Liberatore, President, OVB West Virginia received, not one, but three very distinguished honors...

West Virginia Volunteer Banker of the Year

Main Street

Director of the Year

for the State of WV

Point Pleasant

Rotarian of the Year

Congratulations, Mario. We are so proud of your accomplishments.

DIRECTORS & OFFICERS

OVBC OFFICERS

Jeffrey E. Smith, Chairman of the Board

Thomas E. Wiseman, President and Chief Executive Officer

E. Richard Mahan, Senior Vice President Special Assets

Larry E. Miller, II, Senior Vice President & Secretary

Katrinka V. Hart, Senior Vice President & Chief Lending Officer

Mario P. Liberatore, Vice President

Cherie A. Elliott, Vice President

Jennifer L. Osborne, Vice President

Tom R. Shepherd, Vice President

Scott W. Shockey, Vice President & Chief Financial Officer

Bryan F. Stepp, Vice President

Frank W. Davison, Vice President

Bryan W. Martin, Vice President

David K. Nadler, Vice President

Paula W. Clay, Assistant Secretary

Cindy H. Johnston, Assistant Secretary

OVBC DIRECTORS

Jeffrey E. Smith

Chairman, Ohio Valley Banc Corp. and Ohio Valley Bank

Thomas E. Wiseman

President & CEO, Ohio Valley Banc Corp. and Ohio Valley Bank

David W. Thomas, Lead Director

Former Chief Examiner, Ohio Division of Financial Institutions

bank supervision and regulation

Lannes C. Williamson

Retired President, L. Williamson Pallets, Inc.

sawmill, pallet manufacturing, and wood processing

Steven B. Chapman

Certified Public Accountant, Steven B. Chapman CPA

Anna P. Barnitz

Treasurer & CFO, Bob’s Market & Greenhouses, Inc.

wholesale horticultural products and retail landscaping stores

Brent A. Saunders

Attorney, Halliday, Sheets & Saunders

President & CEO, Holzer Consolidated Health Systems

healthcare

Harold A. Howe

Self-employed, Real Estate Investment and Rental Property

OHIO VALLEY BANK DIRECTORS

Jeffrey E. Smith                 Steven B. Chapman

Thomas E. Wiseman                Anna P. Barnitz

David W. Thomas               Brent A. Saunders

Lannes C. Williamson             Harold A. Howe

DIRECTORS EMERITUS

W. Lowell Call                     Charles C. Lanham

James L. Dailey                    Barney A. Molnar

Robert E. Daniel                    C. Leon Saunders

Art E. Hartley, Sr.              Wendell B. Thomas

WEST VIRGINIA ADVISORY BOARD

Mario P. Liberatore           Lannes C. Williamson

Anna P. Barnitz                      Stephen L. Johnson

Richard L. Handley                             E. Allen Bell

Gregory K. Hartley                         John A. Myers

Trenton M. Stover                                                   

GenNEXT ADVISORY BOARD

Anthony W. Staley                       Taryn D. Strawser

W. Graham Woodyard                       Heidi J. Wood

Bryan L. Minear                            Mark A. Crawford

Rheadon L. Remy                            Jodie L. McCalla

Benjamin M. Sandy                                      

OHIO VALLEY BANK OFFICERS

Jeffrey E. Smith                           Chairman of the Board

Thomas E. Wiseman                  President and Chief Executive Officer

E. Richard Mahan                       Executive Vice President, Special Assets

Larry E. Miller, II                         Executive Vice President & Secretary

Katrinka V. Hart                          Executive Vice President & Chief Lending Officer

                Mario P. Liberatore                     President, Ohio Valley Bank West Virginia 

SENIOR VICE PRESIDENTS

Jennifer L. Osborne                    Retail Lending Group

Tom R. Shepherd                        Chief Deposit Officer

Scott W. Shockey                       Chief Financial Officer

Bryan F. Stepp                            Chief Credit Officer

Frank W. Davison                      Financial Bank Group

Bryan W. Martin                        Administrative Services/Human Resources

David K. Nadler                          Chief Risk Officer

VICE PRESIDENTS

Richard D. Scott                         Trust

Patrick H. Tackett                       Corporate Banking

Marilyn E. Kearns                      Director of Human Resources

Fred K. Mavis                             Business Development Officer

Rick A. Swain                             Western Division Branch Manager

Bryna S. Butler                            Market & E-Strategies Officer

Tamela D. LeMaster                   Branch Administration/CRM

Christopher L. Preston               Branch Administration/Business Development

Gregory A. Phillips                     Retail Lending

ASSISTANT VICE PRESIDENTS

Melissa P. Mason                       Trust Officer

Diana L. Parks                              Internal Auditor

Christopher S. Petro                    Comptroller

Linda L. Plymale                           Transit Officer

Kimberly R. Williams                   Systems Officer

Deborah A. Carhart                     Shareholder Relations

Pamela D. Edwards                      Special Assets

Paula W. Clay                               Assistant Secretary

Cindy H. Johnston                       Assistant Secretary

Kyla R. Carpenter                         Director of Marketing

Toby M. Mannering                    Collection Manager

Joe J. Wyant                                 Region Manager Jackson County

Allen W. Elliott                             Bank Card Manager

Brenda G. Henson                        Manager Deposit Services

Gabriel U. Stewart                         Chief Information Security Officer

Randall L. Hammond                    Security Officer/Loss Prevention

Barbara A. Patrick                         BSA Officer/Loss Prevention

Richard P. Speirs                           Facilities/Technical Manager and Director of Administrative Services

Aaron S. Rykowski                       Senior Compliance Officer

E. Kate Cox                                     Regional Branch Administrator

John A. Anderson                        Corporate Banking Operations Manager

Lori A. Edwards                             Secondary Market Manager

                Raymond G. Polcyn                       Manager of Loan Production Office

                Stephanie L. Stover                        Retail Lending Operations Manager

                Shawn R. Siders                              Senior Credit Analyst

                Brandon O. Huff                             AS400 Administrator

ASSISTANT CASHIERS

                Lois J. Scherer                                 Assistant Transit Officer

               Angela S. Kinnaird                          Sales and Support Manager for Deposit Services

               Linda K. Roe                                     Employee Development Manager

               Anita M. Good                                 Regional Branch Manager

               Glen P. Arrowood II                        Manager of Indirect Lending

               Shelly N. Boothe                              Holzer Business Development & Sr. Personal Banker

               Michelle L. Hammond                     Retail Lending Operations Supervisor

               Patricia G. Hapney                           Retail Lending & Personal Banker

              Anthony W. Staley                          Director of Product Development

LOAN CENTRAL OFFICERS

Larry E. Miller II                              Chairman of the Board

Cherie A. Elliott                               President

Timothy R. Brumfield                     Vice President & Secretary

                                                           Manager, Gallipolis Office

T. Joe Wilson                                  Manager, South Point Office

Joseph I. Jones                                Manager, Waverly Office

John J. Holtzapfel                            Manager, Wheelersburg Office

Deborah G. Moore                          Manager, Jackson Office

Gregory G. Kauffman                      Manager, Chillicothe Office

Ohio Valley Bank pledges to its community...

The Ohio Valley Bank pledges to support the principles set forth in Community First .

We will encourage our employees to support local businesses first.

We will actively participate in promoting local businesses that adhere to the principles of Community First.

We will recognize our employees that best exemplify the spirit of Community First.

We will reward our employees for buying local.

We will encourage our employees to promote buying local to their family, friends, and associates.

We will make a difference in our community.

Ohio Valley Bank employees

pledge to their community...

We pledge to supportCommunity First .

We will make every effort to purchase goods and services from local businesses.

We will encourage our family, friends and associates to also support Community First.

We will make a difference in our community.

For the good of our community,

join us by pledging...

In an effort to ensure our community remains strong,

I,________________, choose to support Community First.

I will make every effort to purchase goods and services from local businesses.

I will encourage my family, friends and associates to also support Community First.

I will make a difference in my community.

OHIO VALLEY BANC CORP.

Symbol: OVBC

Email: investorrelations@ovbc.com

www.ovbc.com

Selected Financial Data

	Years Ended December 31
	2012			2011			2010			2009			2008
(dollars in thousands, except share and per share data)
SUMMARY OF OPERATIONS:
Total interest income	$	39,001		$	44,040		$	46,514		$	47,623		$	51,533
Total interest expense		6,346			10,169			13,547			16,932			20,828
Net interest income		32,655			33,871			32,967			30,691			30,705
Provision for loan losses		1,583			4,896			5,871			3,212			3,716
Total other income		8,483			7,222			6,154			7,598			6,046
Total other expenses		29,741			28,299			26,643			26,160			23,178
Income before income taxes		9,814			7,898			6,607			8,917			9,857
Income taxes		2,762			2,063			1,511			2,272			2,729
Net income		7,052			5,835			5,096			6,645			7,128
PER SHARE DATA:
Earnings per share	$	1.75		$	1.46		$	1.28		$	1.67		$	1.77
Cash dividends declared per share	$	1.09		$	0.84		$	0.84		$	.80		$	0.76
Book value per share	$	18.66		$	17.84		$	17.03		$	16.70		$	15.83
Weighted average number of common shares outstanding		4,030,322			4,001,435			3,984,229			3,983,034			4,018,367
AVERAGE BALANCE SUMMARY:
Total loans	$	570,166		$	625,603		$	653,557		$	641,878		$	629,225
Securities(1)		202,413			185,684			148,974			134,117			101,100
Deposits		705,111			720,936			693,845			652,453			606,126
Other borrowed funds(2)		33,538			56,975			77,131			89,945			102,218
Shareholders’ equity		74,031			69,866			67,606			64,941			61,346
Total assets		822,573			858,017			848,702			818,952			782,312
PERIOD END BALANCES:
Total loans	$	558,288		$	598,308		$	641,322		$	651,356		$	630,391
Securities(1)		159,791			157,515			165,070			113,307			99,218
Deposits		655,064			687,886			694,781			647,644			592,361
Shareholders’ equity		75,820			71,843			68,128			66,521			63,056
Total assets		769,223			804,177			851,514			811,988			781,108
KEY RATIOS:
Return on average assets		0.86	%		0.68	%		0.60	%		0.81	%		0.91	%
Return on average equity		9.53	%		8.35	%		7.54	%		10.23	%		11.62	%
Dividend payout ratio		62.29	%		57.59	%		65.67	%		47.95	%		42.94	%
Average equity to average assets		9.00	%		8.14	%		7.97	%		7.93	%		7.84	%

(1) Securities include interest-bearing deposits with banks and FHLB stock.

(2) Other borrowed funds include subordinated debentures.

1

Consolidated Statements of Condition

	As of December 31
	2012			2011
(dollars in thousands, except share and per share data)
Assets
Cash and noninterest-bearing deposits with banks	$	10,617		$	8,914
Interest-bearing deposits with banks		35,034			42,716
Total cash and cash equivalents		45,651			51,630
Securities available for sale		94,965			85,670
Securities held to maturity (estimated fair value: 2012 - $24,624; 2011 - $22,847)		23,511			22,848
Federal Home Loan Bank stock		6,281			6,281
Total loans		558,288			598,308
Less: Allowance for loan losses		(6,905	)		(7,344	)
Net loans		551,383			590,964
Premises and equipment, net		8,680			9,216
Other real estate owned		3,667			4,256
Accrued interest receivable		2,057			2,872
Goodwill		1,267			1,267
Bank owned life insurance and annuity assets		25,056			23,097
Other assets		6,705			6,076
Total assets	$	769,223		$	804,177
Liabilities
Noninterest-bearing deposits	$	139,526		$	138,143
Interest-bearing deposits		515,538			549,743
Total deposits		655,064			687,886
Other borrowed funds		14,285			20,296
Subordinated debentures		13,500			13,500
Accrued liabilities		10,554			10,652
Total liabilities		693,403			732,334
Commitments and Contingent Liabilities (See Note J)		-			-
Shareholders’ Equity
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 2012 - 4,721,943 shares issued; 2011 - 4,686,295 shares issued)		4,722			4,686
Additional paid-in capital		34,109			33,473
Retained earnings		51,094			48,435
Accumulated other comprehensive income		1,607			961
Treasury stock, at cost (659,739 shares)		(15,712	)		(15,712	)
Total shareholders’ equity		75,820			71,843
Total liabilities and shareholders’ equity	$	769,223		$	804,177

See accompanying notes to consolidated financial statements

2

Consolidated Statements of Income and Comprehensive Income

For the years ended December 31	2012			2011			2010
(dollars in thousands, except per share data)
Interest and dividend income:
Loans, including fees	$	36,329		$	41,263		$	43,462
Securities:
Taxable		1,608			1,776			2,187
Tax exempt		590			571			497
Dividends		279			267			275
Other interest		195			163			93
		39,001			44,040			46,514
Interest expense:
Deposits		5,064			8,436			11,053
Other borrowed funds		493			644			1,405
Subordinated debentures		789			1,089			1,089
		6,346			10,169			13,547
Net interest income		32,655			33,871			32,967
Provision for loan losses		1,583			4,896			5,871
Net interest income after provision for loan losses		31,072			28,975			27,096
Noninterest income:
Service charges on deposit accounts		1,831			2,218			2,202
Trust fees		199			215			233
Income from bank owned life insurance and annuity assets		782			725			741
Mortgage banking income		626			386			362
Electronic refund check / deposit fees		2,289			2,559			780
Debit/credit card interchange income		1,700			1,387			998
Net loss on other real estate owned		(150	)		(1,224	)		(177	)
Other		1,206			956			1,015
		8,483			7,222			6,154
Noninterest expense:
Salaries and employee benefits		17,418			16,650			15,647
Occupancy		1,565			1,585			1,609
Furniture and equipment		954			1,143			1,214
Corporation franchise tax		780			744			745
FDIC insurance		755			1,029			1,061
Data processing		1,021			891			685
Foreclosed assets		446			650			67
Other		6,802			5,607			5,615
		29,741			28,299			26,643
Income before income taxes		9,814			7,898			6,607
Provision for income taxes		2,762			2,063			1,511
NET INCOME	$	7,052		$	5,835		$	5,096
Other Comprehensive income:
Change in unrealized gains/losses on securities		979			1,127			(693	)
Income tax effect		(333	)		(383	)		236
Net of tax		646			744			(457	)
Comprehensive income	$	7,698		$	6,579		$	4,639
Earnings per share	$	1.75		$	1.46		$	1.28

See accompanying notes to consolidated financial statements

3

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2012, 2011, and 2010
(dollars in thousands, except share and per share data)
	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total Shareholders' Equity
Balances at January 1, 2010	$	4,644	$	32,704	$	44,211		$	674		$	(15,712	)	$	66,521
Net income		-		-		5,096			-			-			5,096
Other comprehensive income (loss), net		-		-		-			(457	)		-			(457	)
Common stock issued to ESOP, 16,047 shares		16		299		-			-			-			315
Cash dividends, $.84 per share		-		-		(3,347	)		-			-			(3,347	)
Balances at December 31, 2010		4,660		33,003		45,960			217			(15,712	)		68,128
Net income		-		-		5,835			-			-			5,835
Other comprehensive income (loss), net		-		-		-			744			-			744
Common stock issued to ESOP, 26,500 shares		26		470		-			-			-			496
Cash dividends, $.84 per share		-		-		(3,360	)		-			-			(3,360	)
Balances at December 31, 2011		4,686		33,473		48,435			961			(15,712	)		71,843
Net income		-		-		7,052			-			-			7,052
Other comprehensive income (loss), net		-		-		-			646			-			646
Common stock issued to ESOP, 32,765 shares		33		584		-			-			-			617
Common stock issued through dividend reinvestment, 2,883 shares		3		52		-			-			-			55
Cash dividends, $1.09 per share		-		-		(4,393	)		-			-			(4,393	)
Balances at December 31, 2012	$	4,722	$	34,109	$	51,094		$	1,607		$	(15,712	)	$	75,820

See accompanying notes to consolidated financial statements

4

Consolidated Statements of Cash Flows

For the years ended December 31	2012			2011			2010
(dollars in thousands)
Cash flows from operating activities:
Net income	$	7,052		$	5,835		$	5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		973			971			1,067
Net amortization of securities		1,483			1,059			666
Proceeds from sale of loans in secondary market		29,573			13,637			16,825
Loans disbursed for sale in secondary market		(28,947	)		(13,251	)		(16,463	)
Amortization of mortgage servicing rights		179			121			122
(Recovery) impairment of mortgage servicing rights		(21	)		(33	)		30
Gain on sale of loans		(784	)		(474	)		(514	)
Deferred tax (benefit) expense		(206	)		340			(462	)
Provision for loan losses		1,583			4,896			5,871
Common stock issued to ESOP		617			496			315
Earnings on bank owned life insurance and annuity assets		(782	)		(725	)		(741	)
(Gain) loss on other real estate owned		(181	)		(42	)		177
Write-down of other real estate owned		331			1,266			-
Change in accrued interest receivable		815			(168	)		192
Change in accrued liabilities		(98	)		1,397			(718	)
Change in other assets		(756	)		857			866
Net cash provided by operating activities		10,831			16,182			12,329
Cash flows from investing activities:
Proceeds from maturities of securities available for sale		33,696			43,193			65,698
Purchases of securities available for sale		(43,436	)		(43,007	)		(69,014	)
Proceeds from maturities of securities held to maturity		2,213			1,449			3,523
Purchases of securities held to maturity		(2,935	)		(2,068	)		(9,126	)
Net change in loans		36,731			34,243			4,829
Proceeds from sale of other real estate owned		1,706			756			1,511
Purchases of premises and equipment		(437	)		(449	)		(673	)
Purchases of bank owned life insurance and annuity assets		(1,177	)		(2,611	)		(286	)
Net cash provided by (used in) investing activities		26,361			31,506			(3,538	)
Cash flows from financing activities:
Change in deposits		(32,822	)		(6,895	)		47,137
Proceeds from common stock through dividend reinvestment		55			-			-
Cash dividends		(4,393	)		(3,360	)		(3,347	)
Change in securities sold under agreements to repurchase		-			(38,107	)		6,466
Proceeds from Federal Home Loan Bank borrowings		2,000			703			11,475
Repayment of Federal Home Loan Bank borrowings		(7,789	)		(7,562	)		(26,278	)
Change in other short-term borrowings		(222	)		(588	)		(163	)
Net cash provided by (used in) financing activities		(43,171	)		(55,809	)		35,290
Cash and cash equivalents:
Change in cash and cash equivalents		(5,979	)		(8,121	)		44,081
Cash and cash equivalents at beginning of year		51,630			59,751			15,670
Cash and cash equivalents at end of year	$	45,651		$	51,630		$	59,751
Supplemental disclosure:
Cash paid for interest	$	6,863		$	10,875		$	15,022
Cash paid for income taxes		4,033			445			2,016
Transfers from loans to other real estate owned		1,267			1,833			522
Other real estate owned sales financed by the Bank		1,133			344			159

See accompanying notes to consolidated financial statements

5

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6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Amounts are in thousands, except share and per share data.

Note A - Summary of Significant Accounting Policies

Description of Business:  Ohio Valley Banc Corp. (”Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the ”Bank”), as well as a subsidiary that engages in consumer lending to individuals with higher credit risk history, Loan Central, Inc., and a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC.  Ohio Valley and its subsidiaries are collectively referred to as the “Company”.

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans.  Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services.  The Bank’s deposits are insured by the Federal Deposit Insurance Corporation.  In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., a consumer finance company, and Ohio Valley Financial Services Agency, LLC, an insurance agency.   All material intercompany accounts and transactions have been eliminated.

Industry Segment Information:  Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. 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.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, interest and noninterest-bearing deposits with banks and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

Other-Than-Temporary-Impairments of Securities:  In determining an other-than-temporary-impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its

7

Notes to the Consolidated Financial Statements

Note A - Summary of Significant Accounting Policies (continued)

anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. 

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Federal Home Loan Bank (”FHLB”) Stock:  The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments.  The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.  Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans generally consist of loans with balances of $200 or more on nonaccrual status or nonperforming in nature.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

8

Notes to the Consolidated Financial Statements

Note A - Summary of Significant Accounting Policies (continued)

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure which may require the Company to write-down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

9

Notes to the Consolidated Financial Statements

Note A - Summary of Significant Accounting Policies (continued)

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 5 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2012, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentrations of Credit Risk:  The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2012			2011
Residential real estate loans		40.49	%		39.86	%
Commercial real estate loans		31.35	%		34.67	%
Consumer loans		17.91	%		17.92	%
Commercial and industrial loans		10.25	%		7.55	%
		100.00	%		100.00	%

Approximately 4.87% of total loans are unsecured.

The Bank, in the normal course of its operations, conducts business with correspondent financial institutions. Balances in correspondent accounts, investments in federal funds, certificates of deposit and other short-term securities are closely monitored to ensure that prudent levels of credit and liquidity risks are maintained.  At December 31, 2012, the Bank’s primary correspondent balance was $34,383 on deposit at the Federal Reserve Bank, Cleveland, Ohio.

Premises and Equipment:  Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line or declining balance methods over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

Foreclosed assets:  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed. Foreclosed assets totaled $3,667 and $4,256 at December 31, 2012 and 2011.

Goodwill:  Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired.  Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected December 31, 2012 as the date to perform the annual impairment test.  Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Long-term Assets:  Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

10

Notes to the Consolidated Financial Statements

Note A - Summary of Significant Accounting Policies (continued)

Mortgage Servicing Rights:  A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2012 and 2011, the Company’s MSR asset portfolio was  $450 and $430, respectively.

Earnings Per Share:  Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,030,322 for 2012; 4,001,435 for 2011; 3,984,229 for 2010.  Ohio Valley had no dilutive securities outstanding for any period presented.

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is ”more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the ”more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Bank Owned Life Insurance and Annuity Assets:  The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note J for more specific disclosure related to loan commitments.

11

Notes to the Consolidated Financial Statements

Note A - Summary of Significant Accounting Policies (continued)

Dividend Restrictions:  Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note N for more specific disclosure related to dividend restrictions.

Restrictions on Cash:  Cash on hand or on deposit with Fifth Third Bank and the Federal Reserve Bank of $37,964 and $44,018 was required to meet regulatory reserve and clearing requirements at year-end 2012 and 2011.  The balances at Fifth Third Bank do not earn interest.

Derivatives:  At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2012 and 2011, the Company’s only derivatives on hand were interest rate swaps, which are classified as stand-alone derivatives.  See Note F for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note M.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications: The consolidated financial statements for 2011 and 2010 have been reclassified to conform with the presentation for 2012.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

Adoption of New Accounting Standards:

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-4, “Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  Some amendments in this update clarify the FASB’s intent about the application of existing fair value measurement requirements.  Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  The amendments in this update are effective during interim and annual reporting periods beginning after December 15, 2011.  The Company complied with the revised disclosure requirements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-5, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income.”  This update amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and retrospective application is required.  The Company complied with the revised disclosure requirements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, “Intangibles —Goodwill and Other (Topic 350), Testing Goodwill for Impairment.”  The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent.  The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The effect of adopting this new guidance did not have a material effect on the Company’s financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.”  This update defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately within their respective components of net income and other comprehensive income.  As such, the amendments in this update supersede only those paragraphs in Accounting Standards Update No. 2011-05 that pertain to how and where reclassification adjustments are presented.  The amendments were effective at the same time as the amendments in Accounting Standards Update 2011-05.  The Company complied with the revised disclosure requirements.

12

Notes to the Consolidated Financial Statements

Note B - Securities

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2012 and 2011 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2012
U.S. Government sponsored entity securities	$	1,009	$	3	$	-		$	1,012
Agency mortgage-backed securities, residential		91,521		2,432		-			93,953
Total securities	$	92,530	$	2,435	$	-		$	94,965
December 31, 2011
U.S. Treasury securities	$	5,510	$	3	$	-		$	5,513
U.S. Government sponsored entity securities		2,501		58		-			2,559
Agency mortgage-backed securities, residential		76,203		1,407		(12	)		77,598
Total securities	$	84,214	$	1,468	$	(12	)	$	85,670

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2012
Obligations of states and political subdivisions	$	23,494	$	1,178	$	(65	)	$	24,607
Agency mortgage-backed securities, residential		17		-		-			17
Total securities	$	23,511	$	1,178	$	(65	)	$	24,624
December 31, 2011
Obligations of states and political subdivisions	$	22,825	$	558	$	(559	)	$	22,824
Agency mortgage-backed securities, residential		23		-		-			23
Total securities	$	22,848	$	558	$	(559	)	$	22,847

At year-end 2012 and 2011, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

There were no sales of debt securities during 2012, 2011 and 2010.

Securities with a carrying value of approximately $72,471 at December 31, 2012 and $46,683 at December 31, 2011 were pledged to secure public deposits and repurchase agreements and for other purposes as required or permitted by law.

13

Notes to the Consolidated Financial Statements

Note B - Securities (continued)

The amortized cost and estimated fair value of debt securities at December 31, 2012, 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. Securities not due at a single maturity are shown separately.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less		-		-		-		-
Due in one to five years	$	1,009	$	1,012	$	4,529	$	4,684
Due in five to ten years		-		-		10,959		11,579
Due after ten years		-		-		8,006		8,344
Agency mortgage-backed securities, residential		91,521		93,953		17		17
Total debt securities	$	92,530	$	94,965	$	23,511	$	24,624

The following table summarizes securities with unrealized losses at December 31, 2012 and December 31, 2011, aggregated by major security type and length of time in a continuous unrealized loss position:

December 31, 2012	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)
Total held to maturity	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)

December 31, 2011	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss
Agency mortgage-backed securities, residential	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)
Total available for sale	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)
Total held to maturity	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)

     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 December 31, 2012 and 2011 represents an other-than-temporary impairment.

14

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses

Loans are comprised of the following at December 31:

	2012		2011
Residential real estate	$	226,022	$	238,490
Commercial real estate:
Owner-occupied		104,842		129,364
Nonowner-occupied		52,792		56,620
Construction		17,376		21,471
Commercial and industrial		57,239		45,200
Consumer:
Automobile		41,168		45,702
Home equity		18,332		20,507
Other		40,517		40,954
		558,288		598,308
Less: Allowance for loan losses		6,905		7,344
Loans, net	$	551,383	$	590,964

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2012 and 2011:

December 31, 2012	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344
Provision for loan losses		395			2,367			(1,381	)		202			1,583
Loans charged off		(1,066	)		(1,949	)		(499	)		(1,622	)		(5,136	)
Recoveries		140			35			2,027			912			3,114
Total ending allowance balance	$	1,329		$	3,946		$	783		$	847		$	6,905

December 31, 2011	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,051		$	3,083		$	3,795		$	1,457		$	9,386
Provision for loan losses		2,642			932			439			883			4,896
Loans charged off		(2,034	)		(1,913	)		(4,725	)		(1,750	)		(10,422	)
Recoveries		201			1,391			1,127			765			3,484
Total ending allowance balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344

Activity in the allowance for loan losses was as follows:

	2010
Allowance for loan losses:
Beginning balance	$	8,198
Provision for loan losses		5,871
Loans charged off		(5,879	)
Recoveries		1,196
Total ending allowance balance	$	9,386

15

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

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 December 31, 2012 and 2011:

December 31, 2012	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	128	$	1,979	$	-	$	-	$	2,107
Collectively evaluated for impairment		1,201		1,967		783		847		4,798
Total ending allowance balance	$	1,329	$	3,946	$	783	$	847	$	6,905
Loans:
Loans individually evaluated for impairment	$	827	$	16,354	$	-	$	220	$	17,401
Loans collectively evaluated for impairment		225,195		158,656		57,239		99,797		540,887
Total ending loans balance	$	226,022	$	175,010	$	57,239	$	100,017	$	558,288

December 31, 2011	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	130	$	525	$	-	$	-	$	655
Collectively evaluated for impairment		1,730		2,968		636		1,355		6,689
Total ending allowance balance	$	1,860	$	3,493	$	636	$	1,355	$	7,344
Loans:
Loans individually evaluated for impairment	$	1,505	$	9,733	$	334	$	-	$	11,572
Loans collectively evaluated for impairment		236,985		197,722		44,866		107,163		586,736
Total ending loans balance	$	238,490	$	207,455	$	45,200	$	107,163	$	598,308

16

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents information related to loans individually evaluated for impairment by class of loans as of the year ended December 31, 2012 and December 31, 2011:

December 31, 2012	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	$	619	$	407	$	-	$	493	$	-	$	-
Commercial real estate:
Owner-occupied		5,528		5,528		-		4,729		338		338
Nonowner-occupied		10,085		8,847		-		4,767		456		456
Commercial and industrial		426		-		-		-		-		-
Consumer:
Home equity		220		220		-		176		9		9
With an allowance recorded:
Residential real estate		420		420		128		420		23		23
Commercial real estate:
Nonowner-occupied		1,979		1,979		1,979		1,132		38		38
Total	$	19,277	$	17,401	$	2,107	$	11,717	$	864	$	864

December 31, 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	$	1,136	$	1,085	$	-	$	748	$	36	$	31
Commercial real estate:
Owner-occupied		2,774		2,531		-		2,418		207		309
Nonowner-occupied		4,131		4,131		-		4,339		174		57
Commercial and industrial		614		334		-		483		40		40
With an allowance recorded:
Residential real estate		420		420		130		84		27		22
Commercial real estate:
Nonowner-occupied		2,396		2,396		437		2,414		128		118
Construction		675		675		88		677		35		31
Total	$	12,146	$	11,572	$	655	$	11,163	$	647	$	608

The recorded investment of a loan is its carrying value excluding accrued interest and deferred loan fees.

17

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents information for impaired loans as of December 31:

	2010
Average of individually impaired loans during year	$	24,589
Interest income recognized during impairment	$	1,158
Cash basis interest income recognized	$	1,083

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 as of December 31, 2012 and 2011:

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2012
Residential real estate	$	341	$	2,533
Commercial real estate:
Owner-occupied		-		675
Nonowner-occupied		-		352
Consumer:
Automobile		11		4
Home equity		-		62
Other		7		-
Total	$	359	$	3,626

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2011
Residential real estate	$	439	$	2,536
Commercial real estate:
Owner-occupied		-		125
Consumer:
Automobile		13		12
Home equity		-		5
Other		7		-
Total	$	459	$	2,678

18

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2012 and 2011:

December 31, 2012	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	$	5,525	$	1,033	$	2,797	$	9,355	$	216,667	$	226,022
Commercial real estate:
Owner-occupied		753		111		675		1,539		103,303		104,842
Nonowner-occupied		–		–		352		352		52,440		52,792
Construction		–		–		–		–		17,376		17,376
Commercial and industrial		202		–		–		202		57,037		57,239
Consumer:
Automobile		905		138		13		1,056		40,112		41,168
Home equity		112		37		62		211		18,121		18,332
Other		1,066		162		7		1,235		39,282		40,517
Total	$	8,563	$	1,481	$	3,906	$	13,950	$	544,338	$	558,288

December 31, 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	$	3,731	$	1,144	$	2,975	$	7,850	$	230,640	$	238,490
Commercial real estate:
Owner-occupied		182		-		125		307		129,057		129,364
Nonowner-occupied		-		232		-		232		56,388		56,620
Construction		204		-		-		204		21,267		21,471
Commercial and industrial		171		14		-		185		45,015		45,200
Consumer:
Automobile		864		110		13		987		44,715		45,702
Home equity		75		76		5		156		20,351		20,507
Other		506		162		7		675		40,279		40,954
Total	$	5,733	$	1,738	$	3,125	$	10,596	$	587,712	$	598,308

Troubled Debt Restructurings:

A troubled debt restructuring (“TDR”) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  All TDR’s are considered to be impaired.   The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms.

The Company has allocated reserves for a portion of its TDR’s to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer.

19

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

The following table presents the types of TDR loan modifications by class of loans as of December 31, 2012 and December 31, 2011:

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2012
Residential real estate
Interest only payments	$	-	$	180	$	180
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		-		675		675
Rate reduction		440		-		440
Maturity extension at lower stated rate than market rate		191		-		191
Reduction of principal and interest payments		4,222		-		4,222
Nonowner-occupied
Interest only payments		9,856		300		10,156
Reduction of principal and interest payments		670		-		670
Total TDR’s	$	15,799	$	1,155	$	16,954

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2011
Residential real estate
Interest only payments	$	-	$	283	$	283
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		680		-		680
Rate reduction		449		-		449
Maturity extension at lower stated rate than market rate		219		-		219
Nonowner-occupied
Interest only payments		6,296		-		6,296
Construction
Interest only payments		674		-		674
Commercial and industrial
Interest only payments		334		-		334
Total TDR’s	$	9,072	$	283	$	9,355

The troubled debt restructurings described above increased the allowance for loan losses by $2,169 and $33, resulted in charge-offs of $536 and $271 during the years ended December 31, 2012 and 2011.

20

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

At December 31, 2012, the balance in TDR loans increased $7,599, or 81.2%, from year-end 2011. This was largely impacted by the modification of two commercial real estate loans totaling $10,206. During the first quarter of 2012, the contractual terms of one commercial real estate loan totaling $4,222 were adjusted, reducing principal and interest payments that created a concession to the borrower. During the fourth quarter of 2012, the contractual terms of one commercial real estate loan totaling $5,984 were adjusted to permit short-term, interest-only payments that created a concession to the borrower. At December 31, 2012 and December 31, 2011, 93% and 97% of the Company’s TDR’s were performing according to their modified terms, respectively. The Company allocated $2,107 and $655 in reserves to customers whose loan terms have been modified in TDR’s as of December 31, 2012 and December 31, 2011, respectively. At December 31, 2012, the Company had $109 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDR’s, as compared to $81 at December 31, 2011.

The following table presents the pre- and post-modification balances of TDR loan modifications by class of loans that occurred during the year ended December 31, 2012 and 2011:

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2012
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	4,308	$	4,308		-		-
Nonowner-occupied
Interest only payments		5,984		5,984		-		-
Reduction of principal and interest payments		686		686		-		-
Total TDR’s	$	10,978	$	10,978		-		-

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2011
Commercial real estate:
Owner-occupied
Rate reduction	$	959	$	959		-		-
Maturity extension at lower stated rate than market rate		226		226		-		-
Nonowner-occupied
Interest only payments		400		400		-		-
Total TDR’s	$	1,585	$	1,585		-		-

21

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

All of the Company’s TDR’s that occurred during the years ended December 31, 2012 and 2011 were performing in accordance with their modified term. Furthermore, there were no TDR’s described above at December 31, 2012 and 2011 that experienced any payment defaults within twelve months following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The TDR’s described above during the year ended December 31, 2012 had no impact on the allowance for losses or charge-offs. The TDR’s described above during the year ended December 31, 2011 increased the allowance for loan losses by $544 and resulted in charge-offs of $414. The Company had no specific allocations reserved to customers whose loan terms have been modified during the year ended December 31, 2012. The Company had allocated $130 of reserves to customers whose loan terms have been modified during the year ended December 31, 2011.

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 categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 10. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $500.

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

Special Mention (Loan Grade 8). Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.  Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring.

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 considered likely to satisfy debt.

22

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

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.

Criticized and 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 criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date. As of December 31, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

December 31, 2012	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	87,614	$	14,057	$	3,171	$	104,842
Nonowner-occupied		39,627		2,171		10,994		52,792
Construction		16,276		-		1,100		17,376
Commercial and industrial		47,226		4,793		5,220		57,239
Total	$	190,743	$	21,021	$	20,485	$	232,249

December 31, 2011	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	103,743	$	15,030	$	10,591	$	129,364
Nonowner-occupied		30,375		12,815		13,430		56,620
Construction		19,519		-		1,952		21,471
Commercial and industrial		36,633		3,250		5,317		45,200
Total	$	190,270	$	31,095	$	31,290	$	252,655

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau) but 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.

23

Notes to the Consolidated Financial Statements

Note C - Loans and Allowance for Loan Losses (continued)

For residential and consumer loan classes, the Company 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 December 31, 2012 and December 31, 2011:

	Consumer
December 31, 2012	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	41,153	$	18,270	$	40,510	$	223,148	$	323,081
Nonperforming		15		62		7		2,874		2,958
Total	$	41,168	$	18,332	$	40,517	$	226,022	$	326,039

	Consumer
December 31, 2011	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	45,677	$	20,502	$	40,947	$	235,515	$	342,641
Nonperforming		25		5		7		2,975		3,012
Total	$	45,702	$	20,507	$	40,954	$	238,490	$	345,653

The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the  southeastern area of Ohio as well as the western counties of West Virginia.  Approximately 4.87% of total loans were unsecured at December 31, 2012, up from 3.98% at December 31, 2011.

24

Notes to the Consolidated Financial Statements

Note D - Premises and Equipment

Following is a summary of premises and equipment at December 31:

	2012		2011
Land	$	1,802	$	1,890
Buildings		10,235		10,334
Leasehold improvements		2,872		2,855
Furniture and equipment		14,281		13,961
		29,190		29,040
Less accumulated depreciation		20,510		19,824
Total premises and equipment	$	8,680	$	9,216

The following is a summary of the future minimum lease payments for facilities leased by the Company. Lease expense was $492 in 2012, $492 in 2011, and $490 in 2010.

2013	$	452
2014		319
2015		187
2016		160
2017		122
Thereafter		-
	$	1,240

Note E - Deposits

Following is a summary of interest-bearing deposits at December 31:

	2012		2011
NOW accounts	$	106,581	$	101,907
Savings and Money Market		197,062		200,072
Time:
In denominations under $100,000		110,002		126,705
In denominations of $100,000 or more		101,893		121,059
Total time deposits		211,895		247,764
Total interest-bearing deposits	$	515,538	$	549,743

Following is a summary of total time deposits by remaining maturity at December 31, 2012:

2013	$	119,568
2014		66,277
2015		15,767
2016		5,502
2017		3,983
Thereafter		798
Total	$	211,895

Brokered deposits, included in time deposits, were $23,839 and $31,271 at December 31, 2012 and 2011, respectively.

25

Notes to the Consolidated Financial Statements

Note F —Interest Rate Swaps

The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities.  The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position.  As part of this strategy, the Company provides its customer with a fixed-rate loan while creating a variable-rate asset for the Company by the customer entering into an interest rate swap with the Company on terms that match the loan.  The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution.  These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative.  At December 31, 2012, the Company had interest rate swaps associated with commercial loans with a notional value of $13,276 and a fair value of $223.  This is compared to interest rate swaps with a notional value of $1,021 and a fair value of $2 at December 31, 2011.  The notional amount of the interest rate swaps does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreement.

Note G - Other Borrowed Funds

Other borrowed funds at December 31, 2012 and 2011 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

	FHLB Borrowings		Promissory Notes		Totals
2012	$	10,759	$	3,526	$	14,285
2011	$	16,548	$	3,748	$	20,296

Pursuant to collateral agreements with the FHLB, advances are secured by $251,487 in qualifying mortgage loans, $96,434 in commercial loans and $6,281 in FHLB stock at December 31, 2012. Fixed-rate FHLB advances of $10,759 mature through 2042 and have interest rates ranging from 1.79% to 3.42% and a year-to-date weighted average cost of 2.31%. There were no variable-rate FHLB borrowings at December 31, 2012.

At December 31, 2012, 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 December 31, 2012.

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 $186,286 at December 31, 2012. Of this maximum borrowing capacity of $186,286, the Company had $161,237 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 1.15% to 5.00% (weighted average rate of 2.45%) and are due at various dates through a final maturity date of December 8, 2014. At December 31, 2012, there were no promissory notes payable by Ohio Valley to related parties. See Note K for further discussion of related party transactions.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $14,200 at December 31, 2012 and $27,000 at December 31, 2011.

Scheduled principal payments over the next five years:

	FHLB Borrowings		Promissory Notes		Totals
2013	$	1,329	$	1,909	$	3,238
2014		1,156		1,617		2,773
2015		1,058				1,058
2016		974		-		974
2017		901		-		901
Thereafter		5,341		-		5,341
	$	10,759	$	3,526	$	14,285

26

Notes to the Consolidated Financial Statements

Note H - Subordinated Debentures and Trust Preferred Securities

On September 7, 2000, a trust formed by Ohio Valley issued $5,000 of 10.6% fixed-rate trust preferred securities as part of a pooled offering of such securities. The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering, which debentures represent the sole asset of the trust. Beginning September 7, 2010, the Company’s subordinated debentures were callable upon demand at a premium of 105.30% with the call price declining .53% per year until reaching a call price of par at year twenty through maturity.  The subordinated debentures are required to be redeemed no later than September 7, 2030. Given the current capital levels and interest cost savings, the Company redeemed the full amount of the subordinated debentures on March 7, 2013, at a redemption price of 104.24%. The redemption was funded by a capital distribution from the Bank.

On March 22, 2007, a trust formed by Ohio Valley issued $8,500 of adjustable-rate trust preferred securities as part of a pooled offering of such securities.  The rate on these trust preferred securities were fixed at 6.58% for five years, and then converted to a floating-rate term on March 15, 2012, based on a rate equal to the 3-month LIBOR plus 1.68%.  There were no debt issuance costs incurred with these trust preferred securities.  The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering.  The subordinated debentures must be redeemed no later than June 15, 2037.

Under the provisions of the related indenture agreements, the interest payable on the trust preferred securities is deferrable for up to five years and any such deferral is not considered a default. During any period of deferral, the Company would be precluded from declaring or paying dividends to shareholders or repurchasing any of the Company’s common stock.  Under  generally accepted accounting principles, the trusts are not consolidated  with  the  Company.  Accordingly, the Company does not report the  securities  issued by the trust as liabilities, and instead reports as liabilities  the  subordinated debentures issued by the Company and held by the  trust.  Since  the  Company’s  equity interest in the trusts cannot be received  until  the subordinated debentures are repaid, these amounts have been netted.

27

Notes to the Consolidated Financial Statements

Note I - Income Taxes

The provision for income taxes consists of the following components:

	2012			2011		2010
Current tax expense	$	2,968		$	1,723	$	1,973
Deferred tax (benefit) expense		(206	)		340		(462	)
Total income taxes	$	2,762		$	2,063	$	1,511

The source of deferred tax assets and deferred tax liabilities at December 31:

	2012			2011
Items giving rise to deferred tax assets:
Allowance for loan losses	$	2,394		$	2,551
Deferred compensation		1,709			1,558
Deferred loan fees/costs		322			376
Other real estate owned		554			440
Other		199			179
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(156	)		(149	)
FHLB stock dividends		(1,081	)		(1,081	)
Unrealized gain on securities available for sale		(828	)		(495	)
Depreciation		(146	)		(250	)
Prepaid expenses		(73	)		(140	)
Intangibles		(363	)		(330	)
Other		-			(1	)
Net deferred tax asset	$	2,531		$	2,658

The Company determined that it was not required to establish a valuation allowance for deferred tax assets since management believes that the deferred tax assets are likely to be realized through a carry back to taxable income in prior years or the future reversals of existing taxable temporary differences.

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 34% to income before taxes is as follows:

	2012			2011			2010
Statutory tax	$	3,337		$	2,685		$	2,246
Effect of nontaxable interest		(314	)		(299	)		(279	)
Nondeductible interest expense		12			16			20
Income from bank owned insurance, net		(100	)		(169	)		(236	)
Effect of state income tax		53			56			46
Tax credits		(250	)		(245	)		(224	)
Other items		24			19			(62	)
Total income taxes	$	2,762		$	2,063		$	1,511

At December 31, 2012 and December 31, 2011, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months. The Internal Revenue Service has proposed that Loan Central, as a tax return preparer, be assessed a penalty for allegedly negotiating or endorsing checks issued by the U.S. Treasury to taxpayers.  The penalty, if formally assessed in the amount proposed, would amount to approximately $1.2 million.  Based on consultation with legal counsel, management feels that it is highly unlikely that the penalty recommendation will be sustained or an assessment issued.  Therefore, the Company did not recognize any interest and/or penalties related to income tax matters for the periods presented.

The Company is subject to U.S. federal income tax as well as West Virginia state income tax.  The Company is no longer subject to federal or state examination for years prior to 2009.  The tax years 2009-2011 remain open to federal  and state examinations.

28

Notes to the Consolidated Financial Statements

Note J - Commitments and Contingent Liabilities

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 Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.

Following is a summary of such commitments at December 31:

	2012		2011
Fixed rate	$	678	$	1,456
Variable rate		50,488		54,860
Standby letters of credit		5,959		5,486

The interest rate on fixed-rate commitments ranged from 3.38%  to 6.50%  at December 31, 2012.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Bank evaluates each customer’s credit worthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

The Company participates as a facilitator of tax refunds pursuant to a clearing agreement with a third-party tax software provider. The clearing agreement is effective through December 31, 2015 and is renewable in 5-year increments. The agreement requires the Bank to process electronic refund checks (“ERC’s”) and electronic refund deposits (“ERD’s”) presented for payment on behalf of taxpayers containing taxpayer refunds. The Bank will, in turn, receive a fee paid by the third-party tax software provider for each transaction that is processed. The agreement is subject to termination if the Bank fails to perform the required clearing services and/or the Bank’s regulators would require the Bank to cease offering the product presented within the agreement.

There are various contingent liabilities that are not reflected in the financial statements, including claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on financial condition or results of operations.

Note K - Related Party Transactions

Certain directors, executive officers and companies with which they are affiliated were loan customers during 2012. A summary of activity on these borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2012	$	5,088
New loans		1,427
Repayments		(797	)
Other changes		-
Total loans at December 31, 2012	$	5,718

Other changes include adjustments for loans applicable to one reporting period that are excludable from the other reporting period, such as changes in persons classified as directors, executive officers and companies’ affiliates.

Deposits from principal officers, directors, and their affiliates at year-end 2012 and 2011 were $17,616 and $15,807.

29

Notes to the Consolidated Financial Statements

Note L - Employee Benefits

The Bank has a profit-sharing plan for the benefit of its employees and their beneficiaries. Contributions to the plan are determined by the Board of Directors of Ohio Valley. Contributions charged to expense were $222, $218, and $210 for 2012, 2011 and 2010.

Ohio Valley maintains an Employee Stock Ownership Plan (ESOP) covering substantially all employees of the Company. Ohio Valley issues shares to the ESOP, purchased by the ESOP with subsidiary cash contributions, which are allocated to ESOP participants based on relative compensation. The total number of shares held by the ESOP, all of which have been allocated to participant accounts, were 280,028 and 255,381 at December 31, 2012 and 2011.  In addition, the subsidiaries made contributions to its ESOP Trust as follows:

	Years ended December 31
	2012		2011		2010
Number of shares issued		32,765		26,500		16,047
Fair value of stock contributed	$	617	$	497	$	315
Cash contributed		82		65		105
Total expense	$	699	$	562	$	420

Life insurance contracts with a cash surrender value of $23,134 and annuity assets of $1,922 at December 31, 2012 have been purchased by the Company, the owner of the policies.  The purpose of these contracts was to replace a current group life insurance program for executive officers, implement a deferred compensation plan for directors and executive officers, implement a director retirement plan and implement supplemental retirement plans for certain officers.  Under the deferred compensation plan, Ohio Valley pays each participant the amount of fees deferred plus interest over the participant’s desired term, upon termination of service.  Under the director retirement plan, participants are eligible to receive ongoing compensation payments upon retirement subject to length of service.  The supplemental retirement plans provide payments to select executive officers upon retirement based upon a compensation formula determined by Ohio Valley’s Board of Directors.  The present value of payments expected to be provided are accrued during the service period of the covered individuals and amounted to $4,919 and $4,480 at December 31, 2012 and 2011. Expenses related to the plans for each of the last three years amounted to $536, $318, and $317. In association with the split-dollar life insurance plan, the present value of the postretirement benefit totaled $2,041 at December 31, 2012 and $1,580 at December 31, 2011.

30

Notes to the Consolidated Financial Statements

Note M - Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

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, or 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:  The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans:  At the time a loan is considered impaired, it is valued at the lower of cost or fair value.  Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses.  For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.  Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.  Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned:  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.  Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.  On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that are typically in the range of 10%.

31

Notes to the Consolidated Financial Statements

Note M - Fair Value of Financial Instruments (continued)

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 December 31, 2012, 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. Government sponsored entity securities		-	$	1,012		-
Agency mortgage-backed securities, residential		-		93,953		-

	Fair Value Measurements at December 31, 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		-	$	5,513		-
U.S. Government sponsored entity securities		-		2,559		-
Agency mortgage-backed securities, residential		-		77,598		-

There were no transfers between Level 1 and Level 2 during 2012 or 2011.

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 December 31, 2012, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other real estate owned:
Commercial real estate:
Construction		-		-	$	1,562
Commercial and industrial		-		-		1,055

32

Notes to the Consolidated Financial Statements

Note M - Fair Value of Financial Instruments (continued)

	Fair Value Measurements at December 31, 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 real estate:
Owner-occupied		-		-	$	290
Nonowner-occupied		-		-		1,959
Construction		-		-		587
Other real estate owned:
Commercial real estate:
Construction		-		-		1,814
Commercial and industrial		-		-		1,134

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a recorded investment of $1,979 with a valuation allowance of $1,979 at December 31, 2012.  At December 31, 2011, impaired loans had a recorded investment of $3,491 with a valuation allowance of $655.  Changes in fair value recognized for partial charge-offs of loans and impairment reserves on loans was a net increase of $2,479 and $218 during the years ended December 31, 2012 and 2011, respectively.

Other real estate owned that was measured at fair value less costs to sell at December 31, 2012 had a net carrying amount of $2,617, which is made up of the outstanding balance of $4,214, net of a valuation allowance of $1,597 at December 31, 2012, which resulted in a corresponding write-down of $331 for the year ended December 31, 2012. Other real estate owned that was measured at fair value less costs to sell at December 31, 2011 had a net carrying amount of $2,948, which is made up of the outstanding balance of $4,214, net of a valuation allowance of $1,266 at December 31, 2011, which resulted in a corresponding write-down of $1,266 for the year ended December 31, 2011.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range			(Weighted Average)
Other real estate owned:
Commercial real estate:
Construction	$	1,562	Sales approach	Adjustment to comparables		15	%		15	%
Commercial		1,055	Sales approach	Adjustment to comparables		15	%		15	%

33

Notes to the Consolidated Financial Statements

Note M - Fair Value of Financial Instruments (continued)

The carrying amounts and estimated fair values of financial instruments at December 31, 2012 and December 31, 2011 are as follows:

			Fair Value Measurements at December 31, 2012 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	45,651	$	45,651	$	-	$	-	$	45,651
Securities available for sale		94,965		-		94,965		-		94,965
Securities held to maturity		23,511		-		11,569		13,055		24,624
Federal Home Loan Bank stock		6,281		N/A		N/A		N/A		N/A
Loans, net		551,383		-		-		564,059		564,059
Accrued interest receivable		2,057		-		283		1,774		2,057
Financial Liabilities:
Deposits		655,064		139,526		517,680		-		657,206
Other borrowed funds		14,285		-		14,536		-		14,536
Subordinated debentures		13,500		-		10,146		-		10,146
Accrued interest payable		1,377		2		1,375		-		1,377

	2011
	Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	51,630	$	51,630
Securities available for sale		85,670		85,670
Securities held to maturity		22,848		22,847
Federal Home Loan Bank stock		6,281		N/A
Loans, net		590,964		599,782
Accrued interest receivable		2,872		2,872
Financial liabilities:
Deposits		687,886		690,607
Other borrowed funds		20,296		20,565
Subordinated debentures		13,500		11,085
Accrued interest payable		1,894		1,894

34

Notes to the Consolidated Financial Statements

Note M - Fair Value of Financial Instruments (continued)

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Securities Held to Maturity:  The fair values for securities held to maturity are determined in the same manner as securities held for sale and discussed earlier in this note.  Level 3 securities consist of nonrated municipal bonds and tax credit (“QZAB”) bonds.

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: Fair values of loans are estimated as follows:  The fair value of fixed rate loans is estimated by discounting future cash flows using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.  For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification.  Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Deposit Liabilities: The fair values disclosed for noninterest-bearing deposits are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Other Borrowed Funds: The carrying values of the Company’s short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification. The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Subordinated Debentures: The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable and Payable: The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification.

Off-balance Sheet Instruments:  Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

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.

35

Notes to the Consolidated Financial Statements

Note N - Regulatory Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  Management believes that as of December 31, 2012, the Company and the Bank met all capital adequacy requirements to which they were subject.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. At year-end 2012 and 2011,  the Bank’s capital met the requirements for the Bank to be deemed well capitalized under the regulatory framework for prompt corrective action.

At year-end, consolidated actual capital levels and minimum required levels for the Company and the Bank were:

	Actual					Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2012
Total capital (to risk weighted assets)
Consolidated	$	93,158		17.2	%	$	43,234		8.0	%	$	54,043		N/A
Bank		84,267		15.9			42,506		8.0			53,132		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		86,401		16.0			21,617		4.0			32,426		N/A
Bank		77,690		14.6			21,253		4.0			31,879		6.0
Tier 1 capital (to average assets)
Consolidated		86,401		10.9			31,571		4.0			39,464		N/A
Bank		77,690		10.0			31,010		4.0			38,763		5.0
2011
Total capital (to risk weighted assets)
Consolidated	$	90,288		15.6	%	$	46,174		8.0	%	$	57,718		N/A
Bank		81,991		14.4			45,544		8.0			56,930		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		83,072		14.4			23,087		4.0			34,631		N/A
Bank		74,975		13.2			22,772		4.0			34,158		6.0
Tier 1 capital (to average assets)
Consolidated		83,072		10.3			32,414		4.0			40,517		N/A
Bank		74,975		9.4			31,969		4.0			39,962		5.0

Dividends paid by the subsidiaries are the primary source of funds available to Ohio Valley for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the subsidiaries to Ohio Valley is subject to restrictions by regulatory authorities. These restrictions generally limit dividends to the current and prior two years retained earnings. At January 1, 2013 approximately $6,427 of the subsidiaries’ retained earnings were available for dividends under these guidelines. In addition to these restrictions, dividend payments cannot reduce regulatory capital levels below minimum regulatory guidelines. The Board of Governors of the Federal Reserve System also has a policy requiring Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

36

Notes to the Consolidated Financial Statements

Note O - Parent Company Only Condensed Financial Information

Below is condensed financial information of Ohio Valley. In this information, Ohio Valley’s investment in its subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries since acquisition. This information should be read in conjunction with the consolidated financial statements of the Company.

CONDENSED STATEMENTS OF CONDITION

	Years ended December 31:
Assets	2012		2011
Cash and cash equivalents	$	1,700	$	1,462
Investment in subsidiaries		87,950		84,038
Notes receivable - subsidiaries		3,423		3,743
Other assets		310		406
Total assets	$	93,383	$	89,649
Liabilities
Notes payable	$	3,526	$	3,748
Subordinated debentures		13,500		13,500
Other liabilities		537		558
Total liabilities	$	17,563	$	17,806
Shareholders’ Equity
Total shareholders’ equity		75,820		71,843
Total liabilities and shareholders’ equity	$	93,383	$	89,649

CONDENSED STATEMENTS OF INCOME

	Years ended December 31:
Income:	2012		2011		2010
Interest on notes	$	114	$	134	$	158
Other operating income		84		65		68
Dividends from subsidiaries		4,500		3,500		4,500
Expenses:
Interest on notes		114		134		159
Interest on subordinated debentures		789		1,089		1,089
Operating expenses		364		287		538
Income before income taxes and equity in undistributed earnings of subsidiaries		3,431		2,189		2,940
Income tax benefit		355		439		522
Equity in undistributed earnings of subsidiaries		3,266		3,207		1,634
Net Income	$	7,052	$	5,835	$	5,096

37

Notes to the Consolidated Financial Statements

Note O - Parent Company Only Condensed Financial Information (continued)

CONDENSED STATEMENTS OF CASH FLOWS

	Years ended December 31:
Cash flows from operating activities:	2012			2011			2010
Net Income	$	7,052		$	5,835		$	5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(3,266	)		(3,207	)		(1,634	)
Common stock issued to ESOP		617			496			315
Change in other assets		96			(92	)		(12	)
Change in other liabilities		(21	)		105			64
Net cash provided by operating activities		4,478			3,137			3,829
Cash flows from investing activities:
Change in notes receivable		320			85			402
Net cash provided by investing activities		320			85			402
Cash flows from financing activities:
Change in notes payable		(222	)		(87	)		(412	)
Proceeds from common stock through dividend reinvestment		55			-			-
Cash dividends paid		(4,393	)		(3,360	)		(3,347	)
Net cash used in financing activities		(4,560	)		(3,447	)		(3,759	)
Cash and cash equivalents:
Change in cash and cash equivalents		238			(225	)		472
Cash and cash equivalents at beginning of year		1,462			1,687			1,215
Cash and cash equivalents at end of year	$	1,700		$	1,462		$	1,687

38

Notes to the Consolidated Financial Statements

Note P - 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 91.2%, 91.8% and 92.9%  of total consolidated revenues for the years ended December 31, 2012, 2011 and 2010, respectively.

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

Segment information for the years ended December 31, is as follows:

	Year Ended December 31, 2012
	Banking		Consumer Finance		Total Company
Net interest income	$	29,445	$	3,210	$	32,655
Provision expense	$	1,527	$	56	$	1,583
Noninterest income	$	7,734	$	749	$	8,483
Noninterest expense	$	27,384	$	2,357	$	29,741
Tax expense	$	2,240	$	522	$	2,762
Net income	$	6,028	$	1,024	$	7,052
Assets	$	754,490	$	14,733	$	769,223

	Year Ended December 31, 2011
	Banking		Consumer Finance		Total Company
Net interest income	$	30,792	$	3,079	$	33,871
Provision expense	$	4,809	$	87	$	4,896
Noninterest income	$	6,327	$	895	$	7,222
Noninterest expense	$	26,130	$	2,169	$	28,299
Tax expense	$	1,483	$	580	$	2,063
Net income	$	4,697	$	1,138	$	5,835
Assets	$	789,744	$	14,433	$	804,177

	Year Ended December 31, 2010
	Banking		Consumer Finance		Total Company
Net interest income	$	30,074	$	2,893	$	32,967
Provision expense	$	5,717	$	154	$	5,871
Noninterest income	$	5,578	$	576	$	6,154
Noninterest expense	$	24,756	$	1,887	$	26,643
Tax expense	$	1,029	$	482	$	1,511
Net income	$	4,149	$	947	$	5,096
Assets	$	837,359	$	14,155	$	851,514

39

Notes to the Consolidated Financial Statements

Note Q - Consolidated Quarterly Financial Information (unaudited)

	Quarters Ended
2012	Mar. 31		Jun. 30		Sept. 30		Dec. 31
Total interest income	$	10,665	$	9,657	$	9,405	$	9,274
Total interest expense		1,753		1,604		1,538		1,451
Net interest income		8,912		8,053		7,867		7,823
Provision for loan losses(1)		1,316		524		1,183		(1,440	)
Noninterest income		3,479		1,974		1,674		1,356
Noninterest expense		7,332		7,162		6,957		8,290
Net income		2,622		1,719		1,107		1,604
Earnings per share	$	0.65	$	0.43	$	0.27	$	.40
2011
Total interest income	$	12,025	$	10,817	$	10,693	$	10,505
Total interest expense		2,822		2,663		2,509		2,175
Net interest income		9,203		8,154		8,184		8,330
Provision for loan losses(2)		2,944		759		1,152		41
Noninterest income		3,659		1,687		1,058		818
Noninterest expense		7,098		6,981		7,001		7,219
Net income		2,033		1,555		886		1,361
Earnings per share	$	0.51	$	0.39	$	0.22	$	0.34
2010
Total interest income	$	12,228	$	11,599	$	11,438	$	11,249
Total interest expense		3,619		3,421		3,328		3,179
Net interest income		8,609		8,178		8,110		8,070
Provision for loan losses(3)		921		721		2,225		2,004
Noninterest income		1,865		1,524		1,382		1,383
Noninterest expense		6,881		6,976		6,863		5,923
Net income		1,906		1,471		421		1,298
Earnings per share	$	0.48	$	0.37	$	.10	$	0.33

(1) During the fourth quarter of 2012, the Company experienced a large recovery of $1,250 on a previously charged-off commercial loan which lowered net charge-offs. The large decrease in net charge-offs contributed to a lower historical loan loss factor that created a lower level of general allocations within the allowance for loan losses.

(2) During the first quarter of 2011, the Company began taking partial charge-offs more quickly on collateral dependent impaired loans 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.  The increases in partial charge-offs contributed to a higher historical loan loss factor, which required additional general allocations within the allowance for loan losses.

(3) During the third and fourth quarters of 2010, the Bank experienced an increase in its provision expense as a result of continued credit quality issues with three commercial relationships that resulted in additional impairment charges and partial charge-offs.

40

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Ohio Valley Banc Corp.

We have audited the accompanying consolidated statements of condition of Ohio Valley Banc Corp. (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2012. We also have audited the Company's internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ohio Valley Banc Corp. as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Ohio Valley Banc Corp. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ Crowe Horwath LLP

      Crowe Horwath LLP

Louisville, Kentucky

March 18, 2013

41

MANAGEMENT'S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Board of Directors and Shareholders

Ohio Valley Banc Corp.

The management of Ohio Valley Banc Corp. (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

The system of internal control over financial reporting as it relates to the consolidated financial statements is evaluated for effectiveness by management. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed Ohio Valley Banc Corp.’s system of internal control over financial reporting as of December 31, 2012, in relation to criteria for effective internal control over financial reporting as described in “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2012, its system of internal control over financial reporting is effective and meets the criteria of the “Internal Control Integrated Framework”.

Crowe Horwath LLP, independent registered public accounting firm, has issued an audit report dated March 18, 2013 on the Company's internal control over financial reporting. That report is contained in Ohio Valley's Annual Report to Shareholders under the heading "Report of Independent Registered Public Accounting Firm”.

Ohio Valley Banc Corp.

/s/Thomas E. Wiseman

     Thomas E. Wiseman

     President, CEO

/s/ Scott W. Shockey

      Scott W. Shockey

      Vice President, CFO

       March 18, 2013

42

SUMMARY OF COMMON STOCK DATA

OHIO VALLEY BANC CORP.

Years ended December 31, 2012 and 2011

INFORMATION AS TO STOCK PRICES AND DIVIDENDS: Ohio Valley’s common shares are traded on The NASDAQ Stock Market under the symbol “OVBC”. The following table summarizes the high and low sales prices for Ohio Valley’s common shares on the NASDAQ Global Market for each quarterly period since January 1, 2011.

2012	High		Low
First Quarter	$	19.90	$	17.07
Second Quarter		20.56		17.75
Third Quarter		19.87		18.00
Fourth Quarter		19.60		17.80

2011	High		Low
First Quarter	$	23.26	$	19.21
Second Quarter		23.10		16.50
Third Quarter		18.70		16.01
Fourth Quarter		19.09		17.00

Shown below is a table which reflects the dividends declared per share on Ohio Valley’s common shares. As of February 28, 2013, the number of holders of record of common shares was 2,159.

Dividends per share	2012		2011
First Quarter	$	.21	$	.21
Second Quarter		.25		.21
Third Quarter		.21		.21
Fourth Quarter		.42		.21

Dividends paid by the subsidiaries are the primary source of funds available to Ohio Valley for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the subsidiaries to Ohio Valley is subject to restrictions by regulatory authorities. These restrictions generally limit dividends to the amount of retained earnings for the current and prior two years.

In addition, policy of the Board of Governors of the Federal Reserve System requires Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley's shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

Dividend restrictions are also listed within the provisions of Ohio Valley's trust preferred security arrangements. Under the provisions of these agreements, the interest payable on the trust preferred securities is deferrable for up to five years and any such deferral would not be considered a default. During any period of deferral, Ohio Valley would be precluded from declaring or paying dividends to its shareholders or repurchasing any of its common stock.

43

PERFORMANCE GRAPH

OHIO VALLEY BANC CORP.

Year ended December 31, 2012

The following graph sets forth a comparison of five-year cumulative total returns among the Company's common shares (indicated “Ohio Valley Banc Corp.” on the Performance Graph), the S & P 500 Index (indicated “S & P 500” on the Performance Graph), and SNL Securities SNL $500 Million-$1 Billion Bank Asset-Size Index (indicated “SNL” on the Performance Graph) for the fiscal years indicated. Information reflected on the graph assumes an investment of $100 on December 31, 2007 in each of the common shares of the Company, the S & P 500 Index, and the SNL Index. Cumulative total return assumes reinvestment of dividends. The SNL Index represents stock performance of 66 of the nation's banks located throughout the United States with total assets between $500 Million and $1 Billion as selected by SNL Securities of Charlottesville, Virginia. The Company is included as one of the 66 banks in the SNL Index.

Period Ending
Index	12/31/07		12/31/08		12/31/09		12/31/10		12/31/11		12/31/12
Ohio Valley Banc Corp.		100.00		77.40		93.37		86.25		85.90		91.73
SNL $500M-$1B Bank Index		100.00		64.08		61.03		66.62		58.61		75.14
S&P 500		100.00		63.00		79.68		91.68		93.61		108.59

44

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this discussion is to provide an analysis of the financial condition and results of operations of Ohio Valley Banc Corp. (“Ohio Valley” or the “Company”) that is not otherwise apparent from the audited consolidated financial statements included in this report.  The accompanying consolidated financial information has been prepared by management in conformity with U.S. generally accepted accounting principles (“US GAAP”) and is consistent with that reported in the consolidated statements.  Reference should be made to those statements and the selected financial data presented elsewhere in this report for an understanding of the following tables and related discussion. All dollars are reported in thousands, except share and per share data.

RESULTS OF OPERATIONS:

SUMMARY

Ohio Valley generated net income of $7,052 for 2012, an increase of 20.9% from 2011.  Earnings per share were $1.75 for 2012, an increase of 19.9% from 2011.  The increase in net income and earnings per share for 2012 was primarily due to lower provision for loan loss expense, which was down $3,313, or 67.7%, combined with higher noninterest income, which increased $1,261, or 17.5%, compared to 2011. The decrease in provision for loan loss expense was due to lower net charge-offs, which were down $4,916, or 70.9%, compared to 2011, due to increased charge-offs recognized during the first quarter of 2011 on select impaired loans.  Furthermore, during the fourth quarter of 2012, the Company experienced a large recovery of $1,250 on a commercial loan that had been previously charged off during the first quarter of 2011.

Further contributing to the Company’s improved net income was noninterest income, which increased $1,261, or 17.5%, during 2012 as compared to the previous year.  Noninterest income was largely impacted by lower net losses associated with write-downs and sales of other real estate owned (“OREO”), increased debit and credit card interchange income, and increased mortgage banking revenue. Net losses from sales and write-downs of OREO losses finished at $150 during the year ended 2012, as compared to $1,224 in losses during the year ended 2011.  Higher OREO losses in 2011 were the result of impairment charges recognized on two commercial real estate OREO properties.  These losses are the result of updated appraisal information received for both OREO properties, which identified $1,266 in total asset impairment in 2011 and $331 in 2012.  The impairment charges were recorded as write-downs to the carrying values of both properties during 2011 and 2012.

Partially offsetting the benefits from lower provision expense and higher noninterest income was a reduction in net interest income, which decreased $1,216, or 3.6%, as compared to 2011.  Contributing to the overall decrease in net interest income were lower average earning assets, which decreased during 2012 by $38,708, or 4.8%, as compared to 2011, largely from loans.  Also contributing to lower net interest income was the elimination of the Bank’s refund anticipation loan (“RAL”) product.  After the 2011 tax season, the Bank ceased offering RALs as recommended by the FDIC and, as a result, did not record any RAL fee income during 2012, as compared to $561 in RAL fees during 2011.  Loan Central continues to provide RALs to customers. RAL volumes at Loan Central have remained at comparable levels in 2012 as compared to 2011. The sustained low-rate environment continues to have an impact in lowering funding costs, as well as causing management to emphasize growing lower-costing, core deposit relationship balances. However, the Company’s deposit accounts are perceived to be at, or near, their interest rate floors, which have limited the pace at which funding cost savings can be fully recognized. Along with lower average earning assets, reduction of RAL fees, combined with the reduction in the Company’s interest expense, the Company’s net interest income reduced to $32,655 for the year ended 2012 compared to $33,871 for the year ended 2011.

Also partially offsetting net revenue growth in 2012 were increases in salaries and employee benefits, which increased $768, or 4.6%, during 2012, as compared to 2011, in large part due to higher healthcare and retirement benefit costs, as well as annual merit increases.  The Company also recognized during 2012 a combined year-to-date increase of $917 in various other noninterest expense categories related to donations, advertising, customer incentives on debit and credit card usage, and a prepayment penalty associated with the extinguishment of above market Federal Home Loan Bank (“FHLB”) advances.

During 2011, Ohio Valley generated net income of $5,835, an increase of 14.5% from 2010.  Earnings per share were $1.46 for 2011, an increase of 14.1% from 2010.  The increase in net income and earnings per share for 2011 was primarily due to higher noninterest income combined with improvements in higher net interest income and lower provision for loan loss expense.  Noninterest income grew $1,068, or 17.4%, during 2011, largely from the Company’s tax processing fees.  The Company generates fee income by facilitating tax refund payments in the form of electronic refund check/deposit (“ERC/ERD”) transactions.  ERC/ERD transactions involve the issuing of a tax refund to the taxpayer after the Bank has received the refund from the federal/state government.     In 2011, ERC/ERD fees increased $1,779 over the previous year due to the significant growth in transaction volume of processing tax refund payments during the first half of 2011. This activity was mostly seasonal and had little impact on Company earnings during the third and fourth quarters of 2011.

Further contributing to the Company’s successful year in net income was lower provision for loan loss expense, which decreased $975, or 16.6%, during 2011 as compared to the previous year.  The decrease was in large part due to significant recoveries of commercial loans experienced in 2011 as well as larger impairment charges recorded in 2010.  Net charge-offs during 2011 were up $2,255, or 48.2%, over 2010, but the majority of these charge-offs had already been specifically allocated for within the allowance for loan losses.  As a result, no provision expense was required to be taken against the majority of these additional charge-offs.  Conversely, recoveries of loans did have an immediate impact on lowering provision expense.  Total recoveries during 2011 were $3,484, which increased $2,288, or 191.3%, from 2010, in large part due to successful collection efforts of commercial loan balances that had been previously charged off.  Provision expense also benefited from impairment charges recorded during 2010 that had an opposite effect in 2011.  During the fourth quarter of 2010, the Company identified asset impairment of $1,406 related to one commercial loan relationship with two loans classified as troubled debt restructurings (“TDR’s”).  This impairment charge required specific reserves within the allowance for loan losses, which required a corresponding increase in provision for loan loss expense in 2010 that had the effect of lowering provision expense during 2011.

Further contributing to higher earnings in 2011 was an improved net interest income, which increased $904, or 2.7%, over 2010.  The sustained low-rate environment continued to have an impact in lowering funding costs, as well as causing management to emphasize growing lower-costing, core deposit relationship balances. As a result, interest expense decreased $3,378 during 2011, as compared to 2010. This cost savings completely offset the decrease in interest income of $2,474 during 2011, as compared to 2010.

Partially offsetting the benefits from higher ERC/ERD fees, lower provision expense and higher net interest income were increases in OREO losses, as well as increases in salaries and employee benefit and foreclosed asset expenses.  OREO losses finished at $1,224 at year-end 2011, up from $177 in losses at year-end 2010.  Higher OREO losses were impacted most by impairment charges taken on two commercial real estate foreclosed properties classified as OREO.  These losses were the result of re-evaluations of the carrying values in 2011 for both OREO properties, which identified $1,266 in total asset impairment.  The impairment charges were recorded as write-downs to the carrying values of both properties and limited the growth in noninterest income during 2011.  Salaries and employee benefit expense increased $1,003, or 6.4%, during 2011, as compared to 2010, in large part due to annual merit increases, higher health insurance premiums and a larger number of employees.  The Company’s foreclosed asset costs also grew to $650 during 2011, an increase of $583 from the previous year.  The increase was mostly related to the foreclosure expenses of two commercial real estate properties, which included taxes and other general costs to maintain both properties.

NET INTEREST INCOME

The most significant portion of the Company's revenue, net interest income, results from properly managing the spread between interest income on earning assets and interest expense incurred on interest-bearing liabilities.  The Company earns interest and dividend income from loans, investment securities and short-term investments while incurring interest expense on interest-bearing deposits and short- and long-term borrowings.  Net interest income is affected by changes in both the average volume and mix of assets and liabilities and the level of interest rates for financial instruments.  Changes in net interest income are measured by net interest margin and net interest spread.  Net interest margin is expressed as net interest income divided by average interest-earning assets.  Net interest spread is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities.  Both of these are reported on a fully tax-equivalent (“FTE”) basis.  Net interest margin is greater than net interest spread due to the interest earned on interest-earning assets funded from noninterest-bearing funding sources, primarily demand deposits and shareholders' equity.  Following is a discussion of changes in interest-earning assets, interest-bearing liabilities and the associated impact on interest income and interest expense for the three years ended December 31, 2012.  Tables I and II have been prepared to summarize the significant changes outlined in this analysis.

Net interest income on an FTE basis decreased $1,188 in 2012, or 3.5%, compared to the $34,300 earned in 2011.  The decrease in net interest income was mainly due to a decline in average earning assets. For the year ended December 31, 2012, average earning assets decreased $38,708, or 4.8%, from 2011, which occurred primarily in loans.  A portion of the decline in average loan balances was due to a targeted reduction in certain underperforming loans and loans with less than desirable interest rate characteristics, such as fixed-rate mortgages.  Yet, as average earning assets lagged behind the prior year, the Company was able to maintain a stronger net interest margin over 2011.  At December 31, 2012, the Company’s FTE net interest margin increased 6 basis points from 4.23% in 2011 to 4.29% in 2012.  This result was mainly due to lower rates paid on interest-bearing deposits and a continued change in deposit mix to lower-cost core deposits from certificates of deposit (“CD”) accounts and FHLB borrowings.  The Federal Reserve continues to hold the prime interest rate at 3.25%, and the target federal funds rate remains at a range from 0.0% to 0.25%. The sustained low short-term rates have continued to impact the repricings of various Bank deposit products, including public fund NOW, Gold Club and Market Watch accounts. Interest rates on CD balances continue to reprice to lower rates, which continues to lower funding costs.  Management continues to emphasize lower-cost core deposit relationship balances which contributed to higher average NOW, savings and money market balances in 2012 (increasing $10,957) while experiencing a lower level of higher-cost time deposit and other borrowed money balances (decreasing $76,384).  Average earning assets decreased 4.8% during 2012 compared to 2011, largely from lower average balances in loans.

Net interest income on an FTE basis increased $940 in 2011, or 2.8%, compared to the $33,360 earned in 2010, while the Company’s FTE net interest margin increased 7 basis points from 4.16% in 2010 to 4.23% in 2011.  The improvements in both net interest income and net interest margin were mainly due to lower rates paid on interest-bearing deposits, a change in deposit mix to lower-cost core deposits and an increase in the Company’s average earning assets.  The Federal Reserve continued to hold the prime interest rate at 3.25%, and the target federal funds rate remained at a range from 0.0% to 0.25%. The sustained low short-term rates have continued to impact the repricings of various Bank deposit products, including public fund NOW, Gold Club and Market Watch accounts. Interest rates on CD balances have also repriced to lower rates (as a lagging effect to the Federal Reserve’s action to maintain short-term interest rates at their low levels), which continues to lower funding costs.  Management continued to emphasize lower-cost core deposit relationship balances which contributed to higher average NOW, savings and money market balances in 2011 (increasing $36,898) while experiencing a lower level of higher-cost time deposit and other borrowed money balances (decreasing $65,622).  Average earning assets grew 1.1% during 2011 compared to 2010, largely from higher average balances being carried at the Federal Reserve and growth in average securities.

For 2012, average earning assets decreased $38,708, or 4.8%, as compared to growth of $8,756, or 1.1%, in 2011.  Contributing most to this decrease in 2012 and only modest increase in 2011 were the Company’s average loans, which decreased $55,437, or 8.9%, during 2012 and $27,954, or 4.3%, during 2011.  Average loans continue to be the Company’s highest portion of earning assets.  Yet, the Company’s market area for lending continues to be limited due to economic pressures that have negatively impacted consumer and commercial spending and have decreased loan demand. Lower average loans were mostly affected by the commercial loan portfolio, which has experienced significant charge-offs of underperforming commercial loans, as well as large payoffs of various commercial loans during 2012 and 2011. The average installment loan portfolio has decreased primarily from auto loan balances, where competition for loan demand continues to be challenged by other financial institutions and captive finance companies.  Decreases in the average residential real estate loan portfolio have been largely the result of management’s strategy to sell the majority of its long-term, fixed-rate real estate loans to the secondary market.  As a result, average loans as a percentage of earning assets have decreased to 73.8% for 2012, as compared to 77.1% for 2011 and 81.4% for 2010, as most of the average earning asset growth in 2012 and 2011 has came from short-term balances with banks and investment securities.

While average loans were down in 2012 and 2011, the Company did experience increases in its average interest-bearing balances with banks and investment securities.  At year-end 2012, average interest-bearing balances with banks totaled $81,387, up from $67,947 at year-end 2011 and $43,450 at year-end 2010.  The increasing trend of larger interest-bearing balances with banks is primarily due to seasonal excess funds resulting from the clearing of tax refund checks and deposits.  These ERC/ERD deposits occurred primarily during the first half of 2012 and 2011 and are the result of the Company’s relationship with a third-party tax software provider.  The Company acts as the facilitator for these ERC/ERD transactions and earns a fee for each cleared item.  For the short time the Company holds such refunds, constituting noninterest-bearing deposits, the Company increases its deposits with the Federal Reserve.  This has caused the interest-bearing balances with banks to represent a large percentage of earning assets during the time the Company holds the refunds, although such balances decrease at year-end.  For the year-end December 31, 2012, average interest-bearing balances with banks totaled 10.5% of earning assets, as compared to 8.4% for 2011 and 5.4% for 2010.  As loan growth was challenged during 2012 and 2011, the Company re-invested a portion of its short-term Federal Reserve balances into longer-term investment securities.  As a result, the Company’s average investment securities, both taxable and tax exempt, increased during 2012, with its percentage of earning assets averaging 15.7% for the year, compared to 14.5% for 2011 and 13.1% for 2010.

Management continues to focus on generating loan growth as this portion of earning assets provides the greatest return to the Company.  Although loans make up the largest percentage of earning assets, management is comfortable with the current level of loans based on collateral values, the balance of the allowance for loan losses, strict underwriting standards and the Company's well-capitalized status.  Management maintains securities at a dollar level adequate enough to provide ample liquidity and cover pledging requirements.

Average interest-bearing liabilities decreased 10.2% between 2011 and 2012, and decreased 4.3% between 2010 and 2011, largely due to decreasing time deposits and other borrowings partially offset by increasing savings and money market accounts.  The fluctuations of interest-bearing deposits since 2010 are in large part due to the Company’s preference of core deposit relationship balances over higher-costing time deposits and other borrowing liabilities, which have changed the funding composition mix during this time. Interest-bearing liabilities continue to be comprised largely of time deposits, which represented 39.8% of total interest-bearing liabilities in 2012. This composition mix, however, has decreased the most since 2010, which represented 44.0% and 48.9% of total interest-bearing liabilities in 2011 and 2010, respectively.  As interest rates on time deposits have continued to readjust to current market rates in 2012, competitive pricing pressures have grown, contributing to a significant maturity runoff of CD’s during 2012 and 2011.  In addition, other borrowings have lowered to 3.5% of total interest-bearing liabilities in 2012, as compared to 6.8% in 2011 and 9.5% in 2010.

The Company’s core deposit segment of interest-bearing liabilities, which include NOW and savings and money market accounts, together represented 54.3% of total interest-bearing liabilities in 2012, as compared to 47.1% in 2011 and 39.5% in 2010.  The primary reason for this composition increase has particularly been in the Company's statement savings and Market Watch products.  As CD market rates continue to adjust downward, the spread between a short-term CD rate and a statement savings rate has become small enough for the customer to invest balances into a more liquid statement savings account, causing the average statement savings product to grow.  The Market Watch product is a limited transaction investment account with tiered rates that competes with current market rate offerings and serves as an alternative to certificates of deposit for some customers.  With an added emphasis on further building and maintaining core deposit relationships, the Company has marketed several attractive incentive offerings in the past several years to draw customers to this particular product.  While, the terms of these special incentive offerings have ended, the Company continues to maintain higher average balances within this product than in previous years.

The overall composition shift from 2010 to 2012 with higher NOW, savings and money market balances and lower time deposits and other borrowed money has served as a cost effective contribution to the net interest margin.  The average cost of the “growing” NOW, savings and money market account core segment was 0.55%, 0.90% and 1.14% during the years ended 2012, 2011 and 2010, respectively.  The higher average costs of time deposits and other borrowed money segment were 1.54%, 1.96% and 2.42% during the years ended 2012, 2011 and 2010, respectively.

The net interest margin increased to 4.29% in 2012 from 4.23% in 2011 and 4.16% in 2010.  The 6 basis point and 7 basis point improvement in 2012 and 2011 was largely the result of lower average costs on interest-bearing liabilities completely offsetting the lower yields on earning assets, which improved the Company’s net interest rate spread.  During 2012, the net interest rate spread increased 11 basis points to 4.00%, resulting from the decrease in average cost of interest-bearing liabilities of 48 basis points from 1.59% to 1.11%, completely offsetting the decrease in average yield on interest-earning assets of 37 basis points from 5.48% to 5.11%.  Partially offsetting the net interest rate spread increase in 2012 was a 5 basis point decrease in contributions from interest-free funds (i.e., demand deposits, shareholders' equity), which lowered from 0.34% in 2011 to 0.29% in 2012.  During 2011, the net interest rate spread increased 7 basis points to 3.89%, resulting from the decrease in average cost of interest-bearing liabilities of 44 basis points from 2.03% to 1.59%, completely offsetting the decrease in average yield on interest-earning assets of 37 basis points from 5.85% to 5.48%.

Lower asset yields and decreases in average earning loans caused interest income on an FTE basis to decrease $5,011, or 11.3%, during 2012, and $2,438, or 5.2%, during 2011.  Lower asset yields were mostly impacted by decreasing market rates and the reduction of RAL fees in 2012.  Asset yields were also negatively impacted by an average balance increase in the Company’s interest-bearing Federal Reserve Bank clearing account.  The increase came from higher excess funds from continued loan payoffs and paydowns, as well as an increased volume of short-term tax refund deposits.  The Company continues to invest the majority of its excess funds into its interest-bearing Federal Reserve Bank clearing account, which yields just 0.25%. While these increases in Federal Reserve Bank balances contributed most to the Company’s average interest-bearing balances with banks growth during 2012 and 2011, these balances also contributed most to the decrease in earning asset yields, with the majority of this growth yielding just 0.25%.  The intention for these short-term Federal Reserve Bank balances that were not related to tax refund clearing items or other seasonal deposits was to re-invest them into future loan growth or longer-term securities with higher interest rate yields to improve the net interest margin.  Further contributing to lower asset yields were yields on loans decreasing 22 basis points from 2011 to 2012 and 5 basis points from 2010 to 2011.  This decrease reflects the extended low interest rate environment the Federal Reserve has been maintaining since it began reducing short-term rates in 2008.  The Company's commercial, participation and real estate loan portfolios have been most sensitive to these decreases in short-term interest rates since that time, particularly the prime interest rate, which remained at 3.25% at year-end 2012.

The decrease in interest and fee income came largely from the commercial loan portfolio.  The Company experienced lower average balances within the commercial loan portfolio during 2012 and 2011 primarily from significant charge-offs of underperforming commercial loans, as well as large payoffs of various commercial loans.  These lower loan balances have contributed to a $2,202, or 14.3%, decrease in commercial interest and fee revenue during the year ended 2012, as compared to 2011, and a $233, or 1.5%, decrease during the year ended 2011, as compared to 2010.

Further contributing to lower interest income during 2012 and 2011 were decreases in mortgage loan volume as a result of management’s strategy to sell most of its long-term, fixed-rate real estate loans to the secondary market, while retaining the servicing rights to these loans.  As previously discussed, the Federal Reserve continues to maintain interest rates at their low levels, which has had an impact on long-term interest rates that affect mortgage loan pricing.  The lower rates have contributed to a consumer demand for mortgage loan refinancing to help lower their monthly costs.  The interest rate risks associated with satisfying this demand for long-term fixed-rate mortgages prompted management to sell the majority of these real estate loans to the secondary market, while retaining the servicing rights.  This action continues to generate loan sale and servicing fee revenue within noninterest income, but has contributed to a $1,201, or 8.1%, decrease in real estate interest and fee income during the year ended 2012, as compared to 2011, and an $889, or 5.7%, decrease during the year ended 2011, as compared to 2010.

The Company’s consumer loan interest and fee income also decreased $1,517, or 13.5%, during the year ended 2012 compared to 2011, and $1,081, or 8.8%, during the year ended 2011 compared to 2010.  Contributing to this were lower consumer loan average balances during 2012, primarily from auto loan balances, where competition for loan demand continues to be challenged by other financial institutions and captive finance companies.  Also contributing to this decrease was the reduction of tax refund anticipation loan fees during the year ended 2012.  The Company’s participation with a third-party tax software provider had given the Bank the opportunity to make RALs during the tax refund loan season, typically from January through March. During the year ended 2011, the Company recognized $561 in RAL fees.  In response to the FDIC's expressions of concern about RALs, the Bank decided to discontinue offering RALs after April 19, 2011. As a result, the Bank did not originate RAL loans during the year ended 2012.  Additionally, during 2011, the Bank recognized $561 in RAL fees, compared to $655 during 2010, a decrease of $94, or 14.4%.  The FDIC's concern and recommendation does not affect the Bank's offering of other tax refund products, such as ERC’s and ERD’s. Furthermore, the FDIC’s recommendation does not affect the offerings of RALs by Loan Central, which has remained comparable from 2010 to 2012.

In relation to lower earning asset yields, the Company’s interest-bearing liability costs also decreased 48 basis points during 2012 and 44 basis points during 2011.  The lower costs have caused interest expense to drop $3,823, or 37.6%, from 2011 to 2012 and $3,378, or 24.9%, from 2010 to 2011 as a result of lower rates paid on interest-bearing liabilities.  The Federal Reserve continues to hold the prime interest rate at 3.25%, and the target federal funds rate remains at a range from 0.0% to 0.25%.    The sustained low short-term rates have continued to impact the repricings of various Bank deposit products, including public fund NOW, Gold Club and Market Watch accounts. However, contributing most to the decrease in funding costs were interest rates on time deposit balances, which continued to reprice at lower rates during 2012 and 2011 (as a continued lagging effect to the Federal Reserve action to drop short-term interest rates).  The year-to-date weighted average costs of the Company’s time deposits have decreased from 2.46% at year-end 2010 to 2.03% at year-end 2011 and 1.46% at year-end 2012.

Further contributing to lower interest-bearing deposit expense has been the Company’s continued emphasis on growing core deposits during 2012 and 2011.  The Company continues to experience a deposit composition shift from a higher level of average time deposits to an increasing level of average core deposit balances in NOW, savings and money market balances.  During 2012, the Company’s average time deposit balances, with a weighted average cost of 1.46%, decreased $52,947, as compared to the average time deposit balances during 2011.  This is compared to an average balance increase of $10,957 in the Company’s lower costing, average core deposit balances, with a weighted average cost of 0.55% during 2012, as compared to 2011.  As a result of decreases in the average market interest rates mentioned above and the deposit composition shift to lower costing deposit balances, the Company’s total weighted average funding costs have decreased to 1.11% at year-end 2012 as compared to 1.59% at year-end 2011 and 2.03% at year-end 2010.

The Company has experienced margin improvement during 2012 and 2011 due to a higher deposit mix of lower-costing NOW, savings and money market balances while also benefiting from a sustained low interest rate environment.  However, the pace of improvement lowered in 2012, as the net interest margin increased 6 basis points as compared to a 7 basis point improvement in 2011.  The lower pace of improvement was partly due to higher average balances being carried at the Federal Reserve yielding just 0.25% during 2012.  This, combined with declining average loan balances, has placed increased pressure on net interest margin growth during 2012.

The Company will continue to focus on re-deploying the Federal Reserve balances earning 0.25% into higher yielding instruments as opportunities arise. Net interest margin will benefit if these deposits with the Federal Reserve Bank can be re-invested in loans and other longer-term, higher yielding investments. It is difficult to speculate on future changes in net interest margin and the frequency and size of changes in market interest rates. The past several years has seen the banking industry under continued stress due to declining real estate values and asset impairments. Earlier in 2012, the Federal Reserve announced it would maintain the current state of low interest rates through 2014 or longer to help boost the economy as its recovery has been short of expectations. However, further decreases in interest rates by the Federal Reserve are estimated to have a negative effect on the Company’s net interest income, as most of its deposit balances are perceived to be at or near their interest rate floors. The Company will also continue to face pressure on its net interest income and margin improvement unless loan balances begin to expand and become a larger component of overall earning assets.  For additional discussion on the Company's rate sensitive assets and liabilities, please see “Interest Rate Sensitivity and Liquidity” and “Table VIII” within this Management's Discussion and Analysis.

PROVISION EXPENSE

Credit risk is inherent in the business of originating loans.  The Company sets aside an allowance for loan losses through charges to income, which are reflected in the consolidated statement of income as the provision for loan losses.  This provision charge is recorded to achieve an allowance for loan losses that is adequate to absorb losses in the Company’s loan portfolio.  Management performs, on a quarterly basis, a detailed analysis of the allowance for loan losses that encompasses loan portfolio composition, loan quality, loan loss experience and other relevant economic factors.

The Company’s provision expense decreased during 2012 by $3,313, or 67.7%, as compared to 2011.  The impact to provision expense during 2012 is largely related to the changes in net charge-offs, as well as changes in both specific and general allocations of the allowance for loan losses.  During 2012, the Company’s net charge-offs totaled $2,022, a decrease of $4,916, or 70.9%, from the $6,938 in net charge-offs recognized during 2011. This was largely due to the partial charge-offs of various commercial and residential real estate loans classified as impaired and TDRs during the first two quarters of 2011. Management believed these charge-offs of collateral dependent loans were necessary given the status of the economy and the customers’ continued financial weakness. The largest of these charge-offs occurred during the first quarter of 2011, when the Company partially charged off $3,839 on two commercial loans classified as TDRs from one relationship due to a continued deterioration in collateral values.  Of this partially charged-off amount, a specific allocation of approximately $2,906 already had been reserved in the allowance for loan losses from prior impairment analysis.  Additional analysis of the loans’ collateral values revealed a $933 impairment that required a corresponding increase to provision expense that was used to absorb part of the $3,839 write-down during the first quarter of 2011.  Most recently, during the fourth quarter of 2012, the Company was successful in recovering approximately $1,250 from these previously charged-off commercial loan balances.  The recovery had a direct effect in decreasing net charge-offs and lowering provision expense during 2012 as compared to 2011.

As a result of the previously mentioned impaired and TDR loan charge-offs during the first and second quarters of 2011, the Company’s historical loan loss factors increased, which increased the Company’s general allocations in the Company’s allowance for loan losses.  The Company’s general allocation evaluates, among other things, the average historical loan losses over the previous 36 months.  These charge-offs contributed to an increase in the Company’s general allocation from $4,156 at December 31, 2010 to $6,689 at December 31, 2011.  In 2012, the historical loan loss factors decreased as compared to 2011 as the net charge-offs for 2012 were less than the 2009 net charge-off activity which were replaced by the 2012 net charge-offs in the Company’s allowance for loan loss calculations.  This caused the Company’s general allocation of the allowance for loan losses to decrease $1,891, or 28.3%, from December 31, 2011, which contributed to lower provision expense during the year ended December 31, 2012.  Furthermore, the general allocation also evaluates other factors, such as economic risk, as well as changes in classified and criticized assets.

Partially offsetting the benefits of lower net charge-offs and lower general allocations was an increase in the Company’s specific allocations.  The portion of allowance for loan losses that was specifically allocated to loans that were individually evaluated for impairment totaled $2,107 at December 31, 2012, increasing from $655 at December 31, 2011.  The increase in specific allocations was largely related to an asset impairment of $1,979 on one commercial real estate loan classified as a TDR.  The Company continues to monitor and make loan modifications to certain TDR loans that will ease payment performance pressures off of the borrower.  For TDR loans that have had existing loan terms modified, an impairment analysis would be measured by comparing the present value of expected future cash flows discounted at the loan’s effective interest rate to the cash flows based on the original contractual terms of the loan or based upon an evaluation of collateral.  The difference between the two measurements results in an impairment charge.  Any impairment deficiency resulting from either analysis method would require a specific allocation of the allowance for loan losses and a corresponding increase to provision for loan losses expense.  The impairment charge of $1,979 on the previously mentioned commercial real estate TDR loan was based on collateral values and required a corresponding increase to provision for loan losses expense.

During 2011, the Company recognized lower provision expense, decreasing $975, or 16.6%, as compared to 2010.  The impact to provision expense during 2011 is largely related to actions taken on one commercial loan during the previous year of 2010.  During 2010, the Company experienced an increase in provision expense from $1,995 in partial charge-offs taken on one commercial loan classified as impaired due to a continued deterioration in collateral values.  At the time of charge-off, the Company had specific allocations of $1,825 within the allowance for loan losses, for which approximately $820 had been recognized prior to 2010.  As a result, the $1,995 in partial charge-offs led to $990 in additional provision expense charges during 2010.  This action had an opposite effect in 2011, contributing to the Company’s lower provision expense.

While the Company’s allowance for loan losses decreased $439, or 6.0%, from year-end 2011, the allowance-to-total-loan ratio remained higher than the previous year.  The allowance for loan losses finished at 1.24% of total loans at December 31, 2012, as compared to 1.23% at December 31, 2011.  This was largely due to a decrease in loans of $40,020 from year-end 2011.  Management believes that the allowance for loan losses was adequate at December 31, 2012 to absorb probable losses in the portfolio. Future provisions to the allowance for loan losses will continue to be based on management’s quarterly in-depth evaluation that is discussed in further detail under the caption “Critical Accounting Policies - Allowance for Loan Losses” within this Management’s Discussion and Analysis.

NONINTEREST INCOME

Total noninterest income increased $1,261, or 17.5%, in 2012 as compared to 2011.  Contributing most to the 2012 growth in noninterest income were lower losses related to OREO, as well as increases in debit/credit card interchange and mortgage banking income.

The successful growth in noninterest revenue was largely due to lower net OREO losses of $150 recorded in 2012, as compared to net losses of $1,224 recorded in 2011.  Lower OREO costs were primarily related to the impairment charges taken on two commercial real estate foreclosed properties classified as OREO in 2011.  These losses were derived from a re-evaluation of the carrying values for both OREO properties during the third and fourth quarters of 2011.  Based on weakened market conditions, management applied a discount to the appraised value of the properties and increased the estimated liquidation expenses associated with both properties.  The result was a $1,266 impairment charge that was recorded in 2011, as compared to a $331 additional impairment charge identified during the fourth quarter of 2012.  The impairment charges recognized during 2011 and 2012 were recorded as write-downs to the carrying values of both properties.

The Company also experienced noninterest income growth from its debit and credit interchange income, which increased $313, or 22.6%, during the year ended 2012 as compared to 2011.  The volume of transactions utilizing the Company’s credit card and Jeanie® Plus debit card continue to increase from a year ago. Beginning in the second half of 2010, the Company began offering incentive based credit cards that would permit its users to redeem accumulated points for merchandise, as well as cash incentives paid, particularly to business users based on transaction criteria. In addition, similar incentives were introduced to the Company’s Jeanie® Plus debit cards during the first quarter of 2011 to promote customer spending. While incenting debit/credit card customers has increased customer use of electronic payments, which has contributed to higher interchange revenue, the strategy also fits well with the Company’s emphasis on growing and enhancing its customer relationships.

Noninterest revenue improvement was also driven by higher mortgage banking income affected by an increase in the volume of real estate loans sold to the secondary market.  To help manage consumer demand for longer-termed, fixed-rate real estate mortgages during the year ended 2012, the Company sold a portion of the real estate loans it originated during that period.  Historic low interest rates on long-term fixed-rate mortgage loans continue to provide consumers with opportunities to refinance their existing mortgages.  The decision to sell long-term fixed-rate mortgages at lower rates also helps to minimize the interest rate risk exposure to rising rates.  During 2012, the Company experienced an increase in the number of loans sold to the secondary market by 112 loans, as compared to 2011.  This generated an increase in mortgage banking income of $240 during the year ended 2012, as compared to the same period in 2011.

Contributing most to the $250, or 26.2%, increase in other noninterest income during the year ended December 31, 2012 were revenues received from the Company’s interest rate swap agreements.  The Company utilizes interest rate swaps to satisfy the desire of large commercial customers to have a fixed-rate loan while permitting the Company to originate a variable-rate loan, which helps mitigate interest rate risk.  In association with establishing an interest rate swap agreement, the Company earns a swap fee at the time of origination.  The increase in transactions involving an interest rate swap during 2012 led to an increase in swap fees of $202 during the year ended December 31, 2012, as compared to the same period in 2011.

Partially offsetting the noninterest improvements mentioned above was a reduction in income from service charges on deposit accounts, which decreased $387, or 17.4%, during the year ended December 31, 2012, as compared to the same period in 2011.  This decrease was in large part due to lower overdraft fees related to a lower volume of non-sufficient fund transactions that were processed due to customer behavior.

The Company also experienced less income from lower seasonal tax refund processing fees classified as ERC/ERD fees.  During the year ended December 31, 2012, the Company’s ERC/ERD fees decreased by $270, or 10.6%, as compared to the same period in 201. During the first and second quarters of 2012, the volume of ERC/ERD items increased over the same periods in 2011.  However, the fee per ERC/ERD transaction was reduced from the prior year, which contributed to lower fee revenue.  While ERC/ERD fee income has generated less income during 2012, management is pleased with the significant contribution this revenue source has made, accounting for 27.0% of the overall noninterest income at year-end 2012. As a result of ERC/ERD fee activity being mostly seasonal, the majority of income was recorded during the first half of 2012.

The remaining noninterest income categories were up $89, or 4.8%, during the year ended 2012, as compared to 2011.  These changes were due mostly to higher earnings from BOLI and annuity investments, and gains recorded on the sale of land in Jackson, Ohio, partially offset by lower trust fee income.

In 2011, total noninterest income increased $1,068, or 17.4%, in 2011 as compared to 2010.  Contributing most to the 2011 growth in noninterest income was largely due to increased ERC/ERD fees. During 2011, the Company’s ERC/ERD fees increased by $1,779, or 228.1%, as compared to the same period in 2010. The increase was due to a volume increase in the number of ERC/ERD transactions that were processed during the first and second quarters of 2011. For the 2011 tax season, the tax software provider was able to expand the number of tax preparers utilizing its software, which contributed to the volume increase.  The Company also experienced noninterest income growth from its debit and credit interchange income, which increased $389, or 39.0%, during the year ended 2011 as compared to 2010.  The volume of transactions utilizing the Company’s credit card and Jeanie® Plus debit card continued to increase from a year ago. Beginning in the second half of 2010, the Company began offering incentive-based credit cards that would permit its users to redeem accumulated points for merchandise, as well as cash incentives paid, particularly to business users based on transaction criteria. In addition, similar incentives were introduced to the Company’s Jeanie® Plus debit cards during the first quarter of 2011 to promote customer spending.  Partially offsetting the noninterest revenue improvements in 2011 from ERC/ERD and debit/credit card interchange fees were higher net losses on the sales of OREO.  During the year ended 2011, sales of OREO resulted in a net loss of $1,224, which was up from the $177 in net OREO losses experienced during the year ended 2010.  The increase in net losses during 2011 was largely attributed to impairment charges taken on two commercial real estate foreclosed properties.  These losses were the result re-evaluations of the carrying values for both properties. Based on weakened market conditions, management applied a discount to the appraised value of the properties and increased the estimated liquidation expenses associated with both properties. The results were a $480 impairment charge recorded in September 2011 and a $786 impairment charge recorded in December 2011.  The remaining noninterest income categories were down $53, or 1.2%, during the year ended 2011, as compared to 2010.  These changes were due mostly to lower trust fee income, lower earnings from tax-free BOLI investments and lower loan insurance income due to the decline in loan demand, which has limited insurance sale opportunities.

NONINTEREST EXPENSE

Management continues to work diligently to minimize the growth in noninterest expense.  For 2012, total noninterest expense increased $1,442, or 5.1%.  Contributing most to the growth in net overhead expense were higher salaries and employee benefits, as well as increases in various other noninterest expense categories related to donations, advertising, customer incentives on debit and credit card usage, and a prepayment penalty associated with the extinguishment of above market FHLB advances.

The Company’s largest noninterest expense item, salaries and employee benefits, increased $768, or 4.6%, during 2012 as compared to 2011.  The increase was largely due to higher healthcare and retirement benefit costs.  Salary expense remained relatively stable, increasing $188, or 1.5%, over 2011, in large part to annual merit increases.  During 2012, the Company experienced a lower full-time equivalent employee base, decreasing from 285 employees at year-end 2011 to 277 employees at year-end 2012.  During 2011, salary and employee benefits increased $1,003, or 6.4%, during 2011 as compared to 2010.  The increase was largely due to annual merit increases, higher health insurance premiums and an increase in the number of employees.  During 2011, the Company experienced a higher full-time equivalent employee base, increasing from 279 employees at year-end 2010 to 285 employees at year-end 2011, increasing salaries and employee benefit expenses during 2011.

 In 2012, the Company’s other noninterest expenses increased $1,195, or 21.3%, as compared to 2011.  The increases were led by donation, advertising, customer incentive and prepayment penalty costs.  Donation costs increased $340, or 156.8%, during 2012 largely from contributions to various communities within the Company’s market areas.  This action was part of the Company’s new “Community First” initiative that emphasizes giving back to the communities in which it serves.  The Company also increased its marketing efforts by utilizing more paper media and billboard images, which contributed to additional advertising costs of $184, or 34.3%, during 2012. Customer incentive costs also increased $190, or 76.7%, on debit and credit card usage.  These customer card incentives incurred during 2012 was part of management’s added emphasis on further building and maintaining core deposit relationships while increasing interchange revenue.  Also contributing to higher other noninterest expense was a $203 prepayment penalty that was realized as part of the Company’s strategy to prepay three FHLB advances totaling $5,689.  The three FHLB advances were extinguished in December 2012 and had interest rate costs ranging from 2.2% to 3.4%.  The prepayment penalty allowed management to, in effect, accelerate the interest expense on these higher-costing FHLB advances into 2012 to further reduce interest expense and promote net interest margin improvement in 2013.

Further impacting noninterest expense was the Company’s data processing costs, which increased $130, or 14.6%, during the year ended 2012, as compared to 2011.  The Company continues to take great strides in utilizing the growing technology offered to financial institutions to enhance its loan and deposit products to better serve its customers. Data processing costs include processing services for the Company’s debit and credit cards as well as online and mobile banking technology.  During 2011, data processing expense increased $206, or 30.1%, as compared to 2010.

Various noninterest expense categories decreased during 2012, as compared to 2011, which partially offset the expense increases described above.  The Company’s FDIC premium expense decreased $274, or 26.6%, during the year ended December 31, 2012, as compared to the same period in 2011.  The Company has benefited from lower FDIC assessment rates and a change in assessment method.  Beginning April 1, 2011, the assessment base for deposit insurance premiums changed from total domestic deposits to average total assets minus average tangible equity.  The new assessment method has afforded the Company lower net premium assessments. While the Company has benefited from these changes in calculation methods, continued declines in the Deposit Insurance Fund could result in the FDIC imposing assessments in the future, which could adversely affect the Company's capital levels and earnings.  The Company’s FDIC premium expense decreased $32, or 3.0%, during the year ended 2011, as compared to 2010.  This was impacted most by the new assessment method which began in April 2011 and afforded the Company lower net premium assessments during the third and fourth quarters of 2011.

Also partially offsetting overhead expense increases during 2012 were decreases in the Company’s occupancy and furniture/equipment costs, which decreased $209, or 7.7%, during the year ended 2012, as compared to the same period in 2011.  This decrease was largely due to lower depreciation expense on equipment due to a reduction in recent equipment purchases. Also contributing to lower facility and equipment costs was the closing of the Company’s Columbus, Ohio branch during the fourth quarter of 2011.  Occupancy and furniture/equipment costs decreased $95, or 3.4%, during 2011, as compared to 2010, largely due to lower depreciation expense on purchased equipment from prior years based on a declining balance method.

During 2012, the Company also recognized overhead expense savings within its foreclosed asset costs, which decreased $204, or 31.4%, as compared to 2011. Conversely, foreclosed asset costs increased $583 to $650 during the year ended 2011 as compared to just $67 during 2010.  The changes in foreclosed asset costs during 2012 and 2011 were mostly related to two commercial real estate properties. Foreclosure expenses include the costs in maintaining the properties, which consist of taxes and general maintenance.

The Company’s efficiency ratio is defined as noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income. Management continues to place emphasis on managing its balance sheet mix and interest rate sensitivity to help expand the net interest margin as well as developing more innovative ways to generate noninterest revenue.  During 2012, revenue levels have been negatively affected by lower net interest income due to decreases in RAL fees combined with lower average earning assets.  Furthermore, higher overhead expense during 2012 was the result of increased salaries and employee benefits, as well as various other noninterest expense categories which placed additional pressure on efficiency improvement during 2012.  As a result, overhead expense during 2012 outpaced revenue levels, causing the year-to-date efficiency ratio to increase (worsen) to 71.5% at December 31, 2012, as compared to 68.2% at December 31, 2011.  During 2011, the Company’s efficiency ratio also increased to 68.2% from the 67.4% experienced during 2010.  A strong net interest income due to lower funding costs combined with higher noninterest income from ERC/ERD fees had a positive effect on efficiency during 2011. However, the Company experienced non-recurring OREO impairment charges of $1,266 which limited the growth in noninterest revenue during 2011.  Furthermore, the Company experienced increased foreclosure costs of $583, primarily during the fourth quarter of 2011, on two commercial real estate properties which contributed to higher overhead expense.  As a result, overhead expense for 2011 outpaced revenue levels, which caused the efficiency ratio to worsen from 2010.

FINANCIAL CONDITION:

CASH AND CASH EQUIVALENTS

The Company’s cash and cash equivalents consist of cash, as well as interest- and non-interest bearing balances due from banks.  The amounts of cash and cash equivalents fluctuate on a daily basis due to customer activity and liquidity needs.  At December 31, 2012, cash and cash equivalents had decreased $5,979, or 11.6%, to $45,651 as compared to $51,630 at December 31, 2011.  The decrease in cash and cash equivalents was largely affected by the Company’s decrease in interest-bearing Federal Reserve Bank clearing account balances. The Company continues to utilize its interest-bearing Federal Reserve Bank clearing account to manage its excess funds during periods of significant liquidity.  In 2012, loan demand continued to be challenged, causing proceeds from loan payments to exceed disbursements from new loan originations, which contributed to excess funds.  During 2012, the Company utilized its Federal Reserve Bank clearing account to manage both investment security purchases and maturities, as well as to fund continued maturities of retail and wholesale CD’s.  At December 31, 2012, the Company experienced a net increase of $9,958 in investment security balances, while its retail and wholesale CD’s decreased $34,246 from maturity runoff.  In addition, during the first quarter of 2012, the Company experienced higher levels of excess funds due to increased tax refund deposits from its ERC/ERD tax clearing business. The Company will generally experience higher levels of excess funds during the first quarter than any other part of the year as a result of this.  However, these liquidity levels normalized during the second and third quarters of 2012 as most of these short-term tax refund deposits were fully disbursed from the Federal Reserve Bank clearing account.

The interest rate paid on both the required and excess reserve balances of the Company’s Federal Reserve Bank clearing account is based on the targeted federal funds rate established by the Federal Open Market Committee. As of the filing date of this report, the interest rate calculated by the Federal Reserve continues to be 0.25%. This interest rate is similar to what the Company would have received from its investments in federal funds sold, currently in a range of less than 0.25%. Furthermore, Federal Reserve Bank balances are 100% secured.

As liquidity levels vary continuously based on consumer activities, amounts of cash and cash equivalents can vary widely at any given point in time.  The Company’s focus will be to continue to re-invest these liquid funds back into longer-term, higher yielding assets, such as loans and investment securities during 2013 when the opportunities arise.  Further information regarding the Company’s liquidity can be found under the caption “Liquidity” in this Management’s Discussion and Analysis.

SECURITIES

Management's goal in structuring the portfolio is to maintain a prudent level of liquidity while providing an acceptable rate of return without sacrificing asset quality.  Maturing securities have historically provided sufficient liquidity such that management has not sold a debt security in several years, other than renewals or replacements of maturing securities.

During 2012, the balance of total securities increased $9,958, or 9.2%, as compared to 2011, with the ratio of securities to total assets also increasing to 15.4% at December 31, 2012, compared to 13.5% at December 31, 2011.  The Company’s investment securities portfolio has consisted of U.S. Treasury securities, U.S. Government sponsored entity (“GSE”) securities, Agency mortgage-backed securities and obligations of states and political subdivisions.  During 2012, the Company experienced an increase in its liquidity position impacted by retained excess funds from seasonal tax clearing activities and increased loan payments and payoffs.  As a result, the Company invested a portion of its excess funds into new long-term Agency mortgage-backed securities, which increased $16,349, or 21.1%, from year-end 2011.  Typically, the primary advantage of Agency mortgage-backed securities has been the increased cash flows due to the more rapid monthly repayment of principal as compared to other types of investment securities, which deliver proceeds upon maturity or call date.  However, with the current low interest rate environment and loan balances at a declining pace, the cash flow that is being collected is being reinvested at lower rates.  Principal repayments from Agency mortgage-backed securities totaled $25,297 during 2012.

While security growth has been evident within the Agency mortgage-backed securities portfolio, the Company saw its U.S. Treasury and GSE securities balances decrease $7,060, or 87.5%, collectively, from year-end 2011. In addition to helping achieve diversification within the Company’s investment securities portfolio, U.S. Treasury and GSE securities had been used to satisfy pledging requirements for repurchase agreements. However, during the third quarter of 2011, newly enacted legislation permitted business checking accounts to earn interest on their deposits. This legislation prompted all of the Company’s repurchase agreement accounts to reinvest into either interest-bearing demand accounts subject to normal FDIC insurance coverage or noninterest-bearing demand accounts with unlimited FDIC insurance coverage until the end of 2012. As a result, the Company no longer has any repurchase agreement balances on hand, eliminating the need to secure these balances with U.S. Treasury and GSE investment securities.

With the general decrease in interest rates evident since 2008, the reinvestment rates on debt securities continue to show lower returns during 2012.  The weighted average FTE yield on debt securities at year-end 2012 was 2.17%, as compared to 2.36% at year-end 2011 and 2.94% at year-end 2010.  As a result, the Company’s focus will be to generate interest revenue primarily through loan growth, as loans generate the highest yields of total earning assets.  Table III provides a summary of the portfolio by category and remaining contractual maturity.  Issues classified as equity securities have no stated maturity date and are not included in Table III.

LOANS

In 2012, the Company's primary category of earning assets and most significant source of interest income, total loans, decreased $40,020, or 6.7%, to finish at $558,288.  Lower loan balances were mostly influenced by the commercial loan portfolio, which includes both commercial real estate and commercial and industrial loans.  While commercial loans were down, management continues to place emphasis on its commercial lending, which generally yields a higher return on investment as compared to other types of loans.

Commercial real estate, the Company’s largest segment of commercial loans, decreased $32,445, or 15.6%, from year-end 2011.  Commercial real estate consists of owner-occupied, nonowner-occupied and construction loans.  Commercial real estate also includes loan participations with other banks outside the Company’s primary market area.  Although the Company is not actively seeking to participate in loans originated outside its primary market area, it has taken advantage of the relationships it has with certain lenders in those areas where the Company believes it can profitably participate with an acceptable level of risk.  Commercial real estate loans were down largely from its owner-occupied portfolio during 2012, which decreased $24,522, or 19.0%, from year-end 2011.  This decrease was mostly due to large loan payoffs during the first quarter of 2012 totaling $18,381 on various owner-occupied commercial real estate loans with three borrowers.  Owner-occupied loans consist of nonfarm, nonresidential properties.  A commercial owner-occupied loan is a loan secured by a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans of the Company include loans secured by hospitals, churches, and hardware and convenience stores.  Nonowner-occupied loans decreased $3,828, or 6.8%, from year-end 2011 in large part due to loan payoffs and paydowns during the first and fourth quarters of 2012 with three borrowers.  Nonowner-occupied loans are property loans for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property, such as apartment buildings, condominiums, hotels and motels.  These loans are primarily impacted by local economic conditions, which dictate occupancy rates and the amount of rent charged. Commercial construction loans, which decreased $4,095, or 19.1%, from year-end 2011, are extended to individuals as well as corporations for the construction of an individual property or multiple properties and are secured by raw land and the subsequent improvements.  The decrease was in large part due to one commercial loan relationship that transitioned from the construction/land development phase of its borrowing arrangement during the third quarter of 2012.

At December 31, 2012, the Company’s commercial and industrial loan portfolio was up from year-end 2011 by $12,039, or 26.6%.  The increase was largely due to $8,770 in new loans and advances during 2012 with two commercial loan borrowers.  Commercial and industrial loans consist of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include service, retail and wholesale merchants.  Collateral securing these loans includes equipment, inventory, and stock.

 Over sixty-two percent of the Company’s total commercial loan portfolio, including participation loans, consists of rental property loans (28.3% of portfolio), hotel and motel loans (7.1% of portfolio),  government and education loans (6.7% of portfolio), church loans (5.2% of portfolio),  construction and remodeling loans (5.1% of portfolio), and manufacturing loans (5.0% of portfolio). At December 31, 2012, the primary market areas for the Company’s commercial loan originations, excluding loan participations, were in the areas of Gallia, Jackson and Pike counties of Ohio, which accounted for 42.6% of total originations.  The growing West Virginia markets also accounted for 29.2% of total originations for the same time period.  While management believes lending opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and related conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, the effects of competitive pressure and normal underwriting considerations.

Generating residential real estate loans remains a significant focus of the Company’s lending efforts. Residential real estate loan balances comprise the largest portion of the Company’s loan portfolio and consist primarily of one- to four-family residential mortgages and carry many of the same customer and industry risks as the commercial loan portfolio. During 2012, total residential real estate loan balances decreased $12,468, or 5.2%, from year-end 2011. The decrease was mostly from the Company’s 15-, 20- and 30-year fixed-rate loans, which declined $27,980, or 17.0%, from year-end 2011. Long-term interest rates continue to remain at historic low levels and have prompted periods of increased refinancing demand for long-term, fixed-rate real estate loans in recent years. Management has determined that originating 100% of the demand for long-term fixed-rate real estate loans to the loan portfolio at such low rates would present an unacceptable level of interest rate risk. Therefore, to help manage interest rate risk while also satisfying the demand for long-term, fixed-rate real estate loans, the Company has strategically chosen to originate and sell most of its fixed-rate mortgage loans to the secondary market, which allowed its customers to take advantage of low rates and reduce their monthly costs.  The Company maintains its relationship with the customer by servicing the loan. The customer must qualify to take advantage of a secondary market loan based on various criteria which could limit volume growth.  The Company has experienced an increase in refinancing volume, which has led to higher secondary market sales in 2012 versus 2011.  During 2012, a total of 230 loans totaling $29,573 were sold, compared to 118 loans sold totaling $13,637 during 2011.  The remaining real estate loan portfolio balances increased $15,512, or 20.9%.  This increase came primarily from the Company’s other variable-rate loan products being offered to its customers as alternative financing options.  A customer that may not qualify for a long-term, secondary market loan may choose from one of the Company’s other adjustable-rate mortgage products.  This has contributed to higher balances of five-year, adjustable-rate mortgages, which were up $17,227 or 103.9%, from year-end 2011.  The Company believes it has limited its interest rate risk exposure due to its practice of promoting and selling residential mortgage loans to the secondary market. The Company will continue to follow this secondary market strategy until long-term interest rates increase back to a range that falls within an acceptable level of interest rate risk.

Lower loan balances during 2012 were also influenced by the Company’s total consumer loans, which decreased $7,146, or 6.7%, from year-end 2011.  The Company’s consumer loans are primarily secured by automobiles, mobile homes, recreational vehicles and other personal property. Personal loans and unsecured credit card receivables are also included as consumer loans. The decrease in consumer loans came mostly from the Company’s automobile lending portfolio, which decreased $4,534, or 9.9%, from year-end 2011. The automobile lending component comprises the largest portion of the Company’s consumer loan portfolio, representing 41.2% of total consumer loans at December 31, 2012. In recent years, growing economic factors have weakened the economy and have limited consumer spending. During this time of economic challenge, the Company continues to maintain a strict loan underwriting process on its consumer auto loan offerings to limit future loss exposure. The Company’s interest rates offered on indirect automobile opportunities have struggled to compete with the more aggressive lending practices of local banks and alternative methods of financing, such as captive finance companies offering loans at below-market interest rates related to this segment. The decreasing trend of auto loan balances should continue during 2013, as the larger institutions and captive finance companies will continue to aggressively compete for a larger share of the market.

The remaining consumer loan products not discussed above declined $2,612, or 4.2%, which include general decreases in loan balances from recreational vehicles, mobile homes, home equity lines of credit and unsecured loans.  Management will continue to place more emphasis on other loan portfolios (i.e. commercial and, to a smaller extent, residential real estate) that will promote increased profitable loan growth and higher returns.  Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return.

The Company continues to monitor the pace of its loan volume. The well-documented housing market crisis and other disruptions within the economy have negatively impacted consumer spending, which has continued to limit the lending opportunities within the Company's market locations. Declines in the housing market since 2007, with falling home prices and increasing foreclosures and unemployment, have continued to result in significant write-downs of asset values by financial institutions. To combat this ongoing potential for loan loss, the Company will remain consistent in its approach to sound underwriting practices and a focus on asset quality. The Company anticipates its overall loan growth in 2013 to remain challenged.

ALLOWANCE FOR LOAN LOSSES                                                                           

Tables IV and V have been provided to enhance the understanding of the loan portfolio and the allowance for loan losses.  Management evaluates the adequacy of the allowance for loan losses quarterly based on several factors, including, but not limited to, general economic conditions, loan portfolio composition, prior loan loss experience, and management's estimate of probable incurred losses. Management continually monitors the loan portfolio to identify potential portfolio risks and to detect potential credit deterioration in the early stages, and then establishes reserves based upon its evaluation of these inherent risks. Actual losses on loans are reflected as reductions in the reserve and are referred to as charge-offs. The amount of the provision for loan losses charged to operating expenses is the amount necessary, in management's opinion, to maintain the allowance for loan losses at an adequate level that is reflective of probable and inherent loss. The allowance required is primarily a function of the relative quality of the loans in the loan portfolio, the mix of loans in the portfolio and the rate of growth of outstanding loans. Impaired loans, which include loans classified as TDR’s, are considered in the determination of the overall adequacy of the allowance for loan losses.

The struggles of our U.S. economy in recent years have had a direct impact on the Company’s borrowers, as they continue to experience financial difficulties and liquidity strains. The Company is faced with the ongoing decision of whether to foreclose on these troubled loans and take possession of the collateral or to work with the borrower to modify the original terms of the loan. A successful loan modification not only avoids costly foreclosure proceedings but, more importantly, could result in the full repayment of the loan principal amount. The Company continues to monitor and make loan modifications to certain troubled loans that would ease payment pressures on the borrower. Most generally, the modification “period” of the original terms of the loan is only temporary (i.e. 12 months), after which the loan would resume under the original contractual terms of the loan. GAAP and regulatory guidance identifies certain loan modifications as TDR’s, which, in general, is when a bank, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the bank would not otherwise consider. One such qualification would be if the bank modified the original terms of the loan for the remaining original life of the debt. Modifications of the original terms would include temporarily adjusting the contractual interest rate of the loan or converting the payment method from principal and interest amortization payments to interest-only for a temporary period of time.

During 2012, the Company’s allowance for loan losses decreased $439, or 6.0%, to finish at $6,905 as compared to $7,344 at year-end 2011.  This decrease in the allowance was largely from a decrease of $1,891 in general allocations related to improving economic risk trends, lower average historical loan losses, and lower loan balances.  As previously mentioned, the U.S. economy has been under financial stress in recent years, causing the Company’s borrowers to experience financial difficulties and liquidity strains.  Management has focused on improving asset quality and lowering credit risk while working to maintain its relationships with its borrowers.  The Company has continued to work with its borrowers during their periods of financial hardship to grant temporary concessions on their loan terms in the form of TDRs.  As part of the Company’s quarterly analysis of the allowance for loan losses, an improving trend has been identified within its economic risk allocation, which, among other things, accounts for unemployment rates and classified/criticized asset levels.  Since year-end 2011, unemployment rates within the Company’s lending markets have decreased, while classified and criticized asset balances have also decreased.  These improving trends have placed less pressure on the economic risk allocation of the allowance for loans losses.

Average historical loan losses have also decreased since 2011, due to lower net charge-offs in 2012.  During 2012, net charge-offs decreased $4,916, or 70.9%, from 2011, largely due to the partial charge-offs of various commercial and residential real estate loans classified as impaired and TDR’s during the first half of 2011.  Beginning in 2011, the Company began to take partial charge-offs more quickly on collateral dependent loans.  As management further evaluated the trends in the real estate market, as well as the status of long-term, collateral dependent impaired loans, the decision to charge off these specific allocations was made.  Given that a majority of these loan losses had been previously identified and specifically allocated for in periods prior to 2011, increases in provision expense were not required. However, these TDR and impaired loan charge-offs had an immediate impact on increasing the Company’s general allocations related to the historical loan loss factor. This general allocation evaluates the average historical loan losses over the past 36 months and requires general allocations of the allowance for loan losses to be recorded as average loan losses increase. Due to the surge in net charge-offs during the first half of 2011, the Company’s annualized ratio of net charge-offs to average loans grew to 1.11%, as compared to 0.72% during 2010.  During 2012, the net charge-off ratio has lowered to 0.35% contributing to a lower historical loss factor allocation of the allowance for loan losses at December 31, 2012.  This lower charge-off ratio in 2012 was also impacted by a large loan recovery of $1,250 from previously charged-off commercial loan balances which had a direct effect in decreasing net charge-offs.

In addition, the Company’s total loan portfolio balance decreased $40,020 from year-end 2011, having a direct impact on lowering the general allocations of the allowance.

Partially offsetting the decreases in the allowance mentioned above were higher specific allocations related to various loan impairments which contributed to a $1,452 increase in specific allocations from year-end 2011. These additional specific allocations include the impairments in collateral values and ongoing cash flows of two commercial real estate loan relationships.  Both impairments required specific allocations within the allowance for loan losses and corresponding increases to provision for loan losses expense.

The Company’s impaired loans increased $5,829, or 50.4%, from year-end 2011 in large part due to the addition of one commercial real estate loan totaling $4,244.  Modifications of the contractual terms of this loan were performed during the first quarter of 2012, which provided the borrower a temporary concession.  An impairment analysis was performed on the collateral values of the loan which revealed no need for a specific allocation of the allowance for loan losses.  The portions of impaired loans for which there are specific allocations reflect losses that the Company expects to incur, as they will not likely be able to collect all amounts due according to the contractual terms of the loan.  Although impaired loans have been identified as potential problem loans, they may never become delinquent or classified as nonperforming.

The Company experienced an $848 increase in its nonperforming loans from year-end 2011.  Nonperforming loans consist of nonaccruing loans and accruing loans past due 90 days or more.  Nonperforming loans finished at $3,985 at December 31, 2012, compared to $3,137 at year-end 2011.  The increase was mostly related to two impaired commercial real estate loans totaling $975 that were classified as nonaccrual during the first and third quarters of 2012.  As a result, the Company’s ratio of nonperforming loans to total loans increased from 0.52% at December 31, 2011 to 0.71% at December 31, 2012.  Furthermore, the Company experienced an increase in its nonperforming assets to total assets ratio, increasing from 0.92% at December 31, 2011 to 0.99% at December 31, 2012.  Approximately 34.2% of nonperforming assets is related to two loans with one commercial borrower totaling $2,617 that was transferred into other real estate owned during the second quarter of 2008.  Both nonperforming loans and nonperforming assets at December 31, 2012 continue to be in various stages of resolution for which management believes such loans are adequately collateralized or otherwise appropriately considered in its determination of the adequacy of the allowance for loan losses.

While the allowance for loan losses decreased $439 from year-end 2011 due to lower general allocations, the ratio of the allowance for loan losses to total loans still increased to 1.24% at December 31, 2012, compared to 1.23% at December 31, 2011.  The effects of lower general allocations were completely offset by the effects of lower loan balances since year-end 2011.  Management believes that the allowance for loan losses at December 31, 2012 was adequate and reflected probable incurred losses in the loan portfolio.  There can be no assurance, however, that adjustments to the allowance for loan losses will not be required in the future.  Changes in the circumstances of particular borrowers, as well as adverse developments in the economy are factors that could change and make adjustments to the allowance for loan losses necessary.  Asset quality will continue to remain a key focus, as management continues to stress not just loan growth, but quality in loan underwriting as well.

DEPOSITS

Deposits are used as part of the Company’s liquidity management strategy to meet obligations for depositor withdrawals, to fund the borrowing needs of loan customers, and to fund ongoing operations.  Deposits, both interest- and noninterest-bearing, continue to be the most significant source of funds used by the Company to support earning assets.  The Company seeks to maintain a proper balance of core deposit relationships on hand while also utilizing various wholesale deposit sources, such as brokered and internet CD balances, as an alternative funding source to manage efficiently the net interest margin.  Deposits are influenced by changes in interest rates, economic conditions and competition from other banks.  The accompanying table VII shows the composition of total deposits as of December 31, 2012, 2011 and 2010.  Total deposits decreased $32,822, or 4.8%, to finish at $655,064 at December 31, 2012, mostly from lower time deposits.  This change in time deposits from year-end 2011 fits within management’s strategy of focusing on more “core” deposit balances that include interest-bearing demand, savings, money market and noninterest-bearing deposit balances. Core relationship deposits are considered by management as a primary source of the Bank’s liquidity. The Bank focuses on these kinds of deposit relationships with consumers from local markets who can maintain multiple accounts and services at the Bank. The Company views core deposits as the foundation of its long-term funding sources because it believes such core deposits are more stable and less sensitive to changing interest rates and other economic factors. As a result, the Bank’s core customer relationship strategy has resulted in a higher portion of its deposits being held in NOW, savings and money market accounts at December 31, 2012 than at December 31, 2011. This is combined with a lesser portion of deposits being held in brokered and retail time deposits at December 31, 2012 than at December 31, 2011. Furthermore, the Company’s core noninterest-bearing demand account balances increased from year-end 2011.

Due to the increased emphasis on core relationship deposits, time deposits represented 32.3% of total deposits at December 31, 2012 compared to 36.0% of total deposits December 31, 2011, a decrease of $35,869, or 14.5%.  With loan balances down 6.7% from year-end 2011, the Company has not needed to employ aggressive measures, such as offering higher rates, to attract customer investments in CD’s.  Furthermore, as market rates remain at low levels, the Company has seen the cost of its retail CD balances continue to reprice downward to reflect current deposit rates.  As a result, the Bank’s CD customers have been more likely to consider re-investing their matured CD balances into other short-term deposit products or with other institutions offering the most attractive rates.  This has led to an increased maturity runoff within its “customer relation” retail CD portfolio.  Furthermore, with the significant downturn in economic conditions, the Bank’s CD customers in general have experienced reduced funds available to deposit with structured terms, choosing to remain more liquid.  As a result, the Company has experienced a decrease within its retail CD balances, which were down $19,915 from year-end 2011.  The Company’s preference of core deposit funding sources has created a lesser reliance on wholesale funding deposits (i.e., brokered and internet CD issuances), which were also down $15,954 from year-end 2011.  The Company will continue to evaluate its use of brokered CD’s to manage interest rate risk associated with longer-term, fixed-rate loan demand.

Further decreases in the Company’s deposit balances came from money market accounts, which were down $8,449, or 5.5%, from year-end 2011. The decrease came largely from the Company’s Market Watch product. The Market Watch product is a limited transaction investment account with tiered rates that competes with current market rate offerings and serves as an alternative to certificates of deposit for some customers. With an added emphasis on further building and maintaining core deposit relationships, the Company has marketed several attractive incentive offerings in the past several years to draw customers to this particular product.  As the terms of these special incentive offerings have ended, the interest rates have adjusted down to current market rates, which has resulted in the decrease in Market Watch balances.

Partially offsetting the decreases in time deposits and money market account balances was growth in the Company’s interest-bearing NOW account balances, which increased $4,674, or 4.6%, during 2012.  This increase was largely driven by general increases in public fund account balances.  While the Company feels confident in the relationships it has with its public fund customers, these balances will continue to experience larger fluctuations than other deposit account relationships due to the nature of the account activity. Larger public fund balance fluctuations are, at times, seasonal and can be predicted while most other large fluctuations are outside of management’s control. The Company values these public fund relationships it has secured and will continue to market and service these accounts to maintain its long-term relationships.

Also partially offsetting overall deposit decreases was growth in the Company’s savings account balances, which increased $5,439, or 11.6%, from year-end 2011, coming primarily from the statement savings product.  As CD market rates continue to adjust downward, the spread between a short-term CD rate and a statement savings rate has become small enough for the customer to invest balances into a more liquid statement savings account, perhaps hoping for rising rates in the near future.

The Company’s interest-free funding source, noninterest-bearing demand deposits, also was up during 2012, increasing $1,383, or 1.0%, from year-end 2011.  Decreases within the Company’s business checking accounts from year-end 2011 were completely offset by growth in the Company’s other noninterest-bearing products, particularly those offering incentive rewards to customers.

The Company will continue to experience increased competition for deposits in its market areas that could challenge growth within its core deposit products.  The Company will continue to emphasize growth in its core deposit relationships during 2013, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improving net interest income.

OTHER BORROWED FUNDS

The Company also accesses other funding sources, including short-term and long-term borrowings, to fund potential asset growth and satisfy short-term liquidity needs. Other borrowed funds consist primarily of Federal Home Loan Bank (“FHLB”) advances and promissory notes. During 2012, other borrowed funds were down $6,011, or 29.6%, from year-end 2011. This was primarily due to the Company’s strategy to prepay three higher-costing FHLB advances totaling $5,689.  The three FHLB advances were paid off in December 2012 with interest rate costs ranging from 2.2% to 3.4%.  A prepayment penalty of $203 was recorded into other noninterest expense as part of this early extinguishment.  Management’s intent was to accelerate the interest expense on these higher-costing FHLB advances into 2012 to further reduce interest expense and promote net interest margin improvement in 2013.  With net loan demand continuing on a declining pace during 2012, management will consider the use of its core deposit growth and retained deposit proceeds from the first quarter’s seasonal tax activity to repay FHLB borrowings, as necessary. While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale borrowings to help manage interest rate sensitivity and liquidity.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in Notes G and J, the Company engages in certain off-balance sheet credit-related activities, including commitments to extend credit and standby letters of credit, which could require the Company to make cash payments in the event that specified future events occur. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. While these commitments are necessary to meet the financing needs of the Company’s customers, many of these commitments are expected to expire without being drawn upon. Therefore, the total amount of commitments does not necessarily represent future cash requirements.

CAPITAL RESOURCES

The Company maintains a capital level that exceeds regulatory requirements as a margin of safety for its depositors. As detailed in Note N to the financial statements at December 31, 2012, the Bank’s capital exceeded the requirements to be deemed “well capitalized” under applicable prompt corrective action regulations.  Total shareholders' equity at December 31, 2012 of $75,820 was up $3,977, or 5.5%, as compared to the balance of $71,843 at December 31, 2011. Contributing most to this increase was year-to-date net income of $7,052, partially offset by cash dividends paid of $4,393, or $1.09 per share.

INTEREST RATE SENSITIVITY AND LIQUIDITY

The Company’s goal for interest rate sensitivity management is to maintain a balance between steady net interest income growth and the risks associated with interest rate fluctuations.  Interest rate risk (“IRR”) is the exposure of the Company’s financial condition to adverse movements in interest rates.  Accepting this risk can be an important source of profitability, but excessive levels of IRR can threaten the Company’s earnings and capital.

The Company evaluates IRR through the use of an earnings simulation model to analyze net interest income sensitivity to changing interest rates.  The modeling process starts with a base case simulation, which assumes a static balance sheet and flat interest rates.  The base case scenario is compared to rising and falling interest rate scenarios assuming a parallel shift in all interest rates.  Comparisons of net interest income and net income fluctuations from the flat rate scenario illustrate the risks associated with the current balance sheet structure.

The Company’s Asset/Liability Committee monitors and manages IRR within Board approved policy limits.  The current IRR policy limits anticipated changes in net interest income to an instantaneous increase or decrease in market interest rates over a 12 month horizon to +/- 5% for a 100 basis point rate shock, +/- 7.5% for a 200 basis point rate shock and +/- 10% for a 300 basis point rate shock.  Based on the level of interest rates, management did not test interest rates down 200 or 300 basis points.

 The estimated percentage change in net interest income due to a change in interest rates was within the policy guidelines established by the Board.  With the historical low interest rate environment, management generally has been focused on limiting the duration of assets, while trying to extend the duration of our funding sources to the extent customer preferences will permit us to do so.  At December 31, 2012, the interest rate risk profile reflects a liability sensitive position, which produces lower net interest income due to an increase in interest rates.  In a declining rate environment, net interest income decreases due to the interest rate on many deposit accounts not being able to adjust downward.  With interest rates so low, deposit accounts are perceived to be at or near an interest rate floor.  Overall, management is comfortable with the current interest rate risk profile which reflects minimal exposure to interest rate changes.

Liquidity relates to the Company's ability to meet the cash demands and credit needs of its customers and is provided by the ability to readily convert assets to cash and raise funds in the market place. Total cash and cash equivalents, held to maturity securities maturing within one year and available for sale securities, totaling $140,616, represented 18.3% of total assets at December 31, 2012. In addition, the FHLB offers advances to the Bank, which further enhances the Bank's ability to meet liquidity demands. At December 31, 2012, the Bank could borrow an additional $161,328 from the FHLB, of which $95,000 could be used for short-term, cash management advances. Furthermore, the Bank has established a borrowing line with the Federal Reserve. At December 31, 2012, this line had total availability of $41,317. Lastly, the Bank also has the ability to purchase federal funds from a correspondent bank. For further cash flow information, see the condensed consolidated statement of cash flows.  Management does not rely on any single source of liquidity and monitors the level of liquidity based on many factors affecting the Company’s financial condition.

INFLATION

Consolidated financial data included herein has been prepared in accordance with US GAAP.  Presently, US GAAP requires the Company to measure financial position and operating results in terms of historical dollars with the exception of securities available for sale, which are carried at fair value.  Changes in the relative value of money due to inflation or deflation are generally not considered.

In management's opinion, changes in interest rates affect the financial institution to a far greater degree than changes in the inflation rate.  While interest rates are greatly influenced by changes in the inflation rate, they do not change at the same rate or in the same magnitude as the inflation rate.  Rather, interest rate volatility is based on changes in the expected rate of inflation, as well as monetary and fiscal policies.  A financial institution's ability to be relatively unaffected by changes in interest rates is a good indicator of its capability to perform in today's volatile economic environment.  The Company seeks to insulate itself from interest rate volatility by ensuring that rate sensitive assets and rate sensitive liabilities respond to changes in interest rates in a similar time frame and to a similar degree.

CRITICAL ACCOUNTING POLICIES

The most significant accounting policies followed by the Company are presented in Note A to the consolidated financial statements.  These policies, along with the disclosures presented in the other financial statement notes, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.  Management views critical accounting policies to be those that are highly dependent on subjective or complex judgments, estimates and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements.  Management currently views the adequacy of the allowance for loan losses to be a critical accounting policy.

The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans generally consist of loans with balances of $200 or more on nonaccrual status or nonperforming in nature.  Loans for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. 

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. 

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial Real Estate, Commercial and Industrial, Residential Real Estate, and Consumer. 

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure, which may require the Company to write-down the value significantly to sell. 

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into one- to four-family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of one- to four-family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination. 

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 5 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  During the last several years, one of the most significant portions of the Company’s net loan charge-offs have been from consumer loans.  Nevertheless, the Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

CONCENTRATIONS OF CREDIT RISK

The Company maintains a diversified credit portfolio, with residential real estate loans currently comprising the most significant portion.  Credit risk is primarily subject to loans made to businesses and individuals in southeastern Ohio and western West Virginia.  Management believes this risk to be general in nature, as there are no material concentrations of loans to any industry or consumer group.  To the extent possible, the Company diversifies its loan portfolio to limit credit risk by avoiding industry concentrations.

FORWARD LOOKING STATEMENTS

Except for the historical statements and discussions contained herein, statements contained in this report constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and as defined in the Private Securities Litigation Reform Act of 1995.  Such statements are often, but not always, identified by the use of such words as "believes," "anticipates," "expects," and similar expressions.  Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control that could cause actual results to differ materially from those expressed in such forward looking statements.  These factors include, but are not limited to:  changes in political, economic or other factors such as inflation rates, recessionary or expansive trends, taxes, the effects of implementation of the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012 and the continuing economic uncertainty in various parts of the world; competitive pressures; fluctuations in interest rates; the level of defaults and prepayment on loans made by the Company; unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes.  Additional detailed information concerning a number of important factors which could cause actual results to differ materially from the forward-looking statements contained in management’s discussion and analysis is available in the Company’s filings with the Securities and Exchange Commission, under the Securities Exchange Act of 1934, including the disclosure under the heading “Item 1A. Risk Factors” of Part 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.  The Company undertakes no obligation and disclaims any intention to republish revised or updated forward looking statements, whether as a result of new information, unanticipated future events or otherwise.

CONSOLIDATED AVERAGE BALANCE SHEET & ANALYSIS OF NET INTEREST INCOME
Table I

(dollars in thousands)	December 31
	2012								2011								2010
	Average Balance			Income/ Expense		Yield/ Average			Average Balance			Income/ Expense		Yield/ Average			Average Balance			Income/ Expense		Yield/ Average
Assets
Interest-earning assets:
Interest-bearing balances with banks	$	81,387		$	195		0.24	%	$	67,947		$	163		0.24	%	$	43,450		$	93		0.21	%
Securities:
Taxable		104,178			1,887		1.81			102,740			2,043		1.99			93,846			2,462		2.62
Tax exempt		16,848			882		5.24			14,997			849		5.66			11,678			735		6.30
Loans		570,166			36,494		6.40			625,603			41,414		6.62			653,557			43,617		6.67
Total interest-earning assets		772,579			39,458		5.11	%		811,287			44,469		5.48	%		802,531			46,907		5.85	%
Noninterest-earning  assets:
Cash and due from banks		10,777								9,855								8,836
Other nonearning assets		47,249								44,957								46,057
Allowance for loan losses		(8,032	)							(8,082	)							(8,722	)
Total noninterest-earning assets		49,994								46,730								46,171
Total assets	$	822,573							$	858,017							$	848,702
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
NOW accounts	$	109,206		$	1,114		1.02	%	$	104,937		$	1,393		1.33	%	$	100,054		$	1,428		1.43	%
Savings and Money Market		203,000			597		0.29			196,312			1,317		0.67			164,297			1,582		0.96
Time deposits		228,917			3,353		1.46			281,864			5,726		2.03			327,330			8,043		2.46
Other borrowed money		20,038			493		2.46			43,475			644		1.48			63,631			1,405		2.21
Subordinated debentures		13,500			789		5.85			13,500			1,089		8.07			13,500			1,089		8.07
Total int.-bearing liabilities		574,661			6,346		1.11	%		640,088			10,169		1.59	%		668,812			13,547		2.03	%
Noninterest-bearing liabilities:
Demand deposit accounts		163,988								137,823								102,164
Other liabilities		9,893								10,240								10,120
Total noninterest-bearing liabilities		173,881								148,063								112,284
Shareholders’ equity		74,031								69,866								67,606
Total liabilities and shareholders’ equity	$	822,573							$	858,017							$	848,702
Net interest earnings				$	33,112							$	34,300							$	33,360
Net interest earnings as a percent of interest-earning assets							4.29	%							4.23	%							4.16	%
Net interest rate spread							4.00	%							3.89	%							3.82	%
Average interest-bearing liabilities to average earning assets							74.38	%							78.90	%							83.34	%

Fully taxable equivalent yields are calculated assuming a 34% tax rate, net of nondeductible interest expense. Average balances are computed on an average daily basis. The average balance for available for sale securities includes the market value adjustment. However, the calculated yield is based on the securities’ amortized cost. Average loan balances include nonaccruing loans. Loan income includes cash received on nonaccruing loans.

RATE VOLUME ANALYSIS OF CHANGES IN INTEREST INCOME & EXPENSE

Table II

(dollars in thousands)	2012									2011
	Increase (Decrease) From Previous Year Due to									Increase (Decrease) From Previous Year Due to
	Volume			Yield/Rate			Total			Volume			Yield/Rate			Total
Interest income
Interest-bearing balances with banks	$	32		$	-		$	32		$	57		$	13		$	70
Securities:
Taxable		29			(185	)		(156	)		217			(636	)		(419	)
Tax exempt		100			(67	)		33			194			(80	)		114
Loans		(3,581	)		(1,339	)		(4,920	)		(1,853	)		(350	)		(2,203	)
Total interest income		(3,420	)		(1,591	)		(5,011	)		(1,385	)		(1,053	)		(2,438	)
Interest expense
NOW accounts		55			(334	)		(279	)		68			(103	)		(35	)
Savings and Money Market		43			(763	)		(720	)		272			(537	)		(265	)
Time deposits		(955	)		(1,418	)		(2,373	)		(1,031	)		(1,286	)		(2,317	)
Other borrowed money		(450	)		299			(151	)		(396	)		(365	)		(761	)
Subordinated debentures		-			(300	)		(300	)		-			-			-
Total interest expense		(1,307	)		(2,516	)		(3,823	)		(1,087	)		(2,291	)		(3,378	)
Net interest earnings	$	(2,113	)	$	925		$	(1,188	)	$	(298	)	$	1,238		$	940

The change in interest due to volume and rate is determined as follows: Volume Variance - change in volume multiplied by the previous year's rate; Yield/Rate Variance - change in rate multiplied by the previous year's volume; Total Variance - change in volume multiplied by the change in rate. The change in interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. Fully taxable equivalent yield assumes a 34% tax rate, net of related nondeductible interest expense.

SECURITIES

Table III

	MATURING
as of December 31, 2012	Within One Year					After One but Within Five Years					After Five but Within Ten Years					After Ten Years
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
U.S. Government sponsored entity securities	$	-		-		$	1,012		0.70	%	$	-		-		$	-		-
Obligations of states and political subdivisions		-		-			4,610		4.65	%		11,357		3.33	%		8,640		4.82	%
Agency mortgage-backed securities, residential		365		5.06	%		75,184		3.46	%		18,421		2.88	%		-		-
Total securities	$	365		5.06	%	$	80,806		3.49	%	$	29,778		3.05	%	$	8,640		4.82	%

Tax-equivalent adjustments have been made in calculating yields on obligations of states and political subdivisions using a 34% rate. Weighted average yields are calculated on the basis of the cost and effective yields weighted for the scheduled maturity of each security. Mortgage-backed securities, which have prepayment provisions, are assigned to a maturity category based on estimated average lives. Securities are shown at their fair values, which include the market value adjustments for available for sale securities.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

Table IV

(dollars in thousands)	Years Ended December 31
	2012			2011			2010			2009			2008
Commercial loans(1)	$	4,729		$	4,129		$	6,936		$	5,777		$	5,898
Percentage of loans to total loans		41.60	%		42.22	%		43.96	%		42.68	%		39.78	%
Residential real estate loans		1,329			1,860			993			822			806
Percentage of loans to total loans		40.49	%		39.86	%		36.94	%		37.30	%		40.09	%
Consumer loans(2)		847			1,355			1,457			1,599			1,095
Percentage of loans to total loans		17.91	%		17.92	%		19.10	%		20.02	%		20.13	%
Allowance for Loan Losses	$	6,905		$	7,344		$	9,386		$	8,198		$	7,799
		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%
Ratio of net charge-offs to average loans		.35	%		1.11	%		.72	%		.44	%		.42	%

The above allocation is based on estimates and subjective judgments and is not necessarily indicative of the specific amounts or loan categories in which losses may ultimately occur.

(1) Includes commercial and industrial and commercial real estate loans.

(2) Includes automobile, home equity and other consumer loans.

SUMMARY OF NONPERFORMING AND PAST DUE LOANS

Table V

(dollars in thousands)	At December 31
	2012			2011			2010			2009			2008
Impaired loans	$	17,401		$	11,572		$	23,106		$	27,644		$	21,153
Past due 90 days or more and still accruing		359			459			1,714			1,639			1,878
Nonaccrual		3,626			2,678			3,295			3,619			3,396
Accruing loans past due 90 days or more to total loans		.06	%		.08	%		.27	%		.25	%		.30	%
Nonaccrual loans as a % of total loans		.65	%		.45	%		.51	%		.56	%		.54	%
Impaired loans as a % of total loans		3.12	%		1.93	%		3.60	%		4.24	%		3.36	%
Allowance for loan losses as a % of total loans		1.24	%		1.23	%		1.46	%		1.26	%		1.24	%

Management believes that the impaired loan disclosures are comparable to the nonperforming loan disclosures except that the impaired loan disclosures do not include single family residential or consumer loans which are analyzed in the aggregate for loan impairment purposes.

Management formally considers placing a loan on nonaccrual status when collection of principal or interest has become doubtful. Furthermore, a loan should not be returned to the accrual status unless either all delinquent principal or interest has been brought current or the loan becomes well secured and is in the process of collection.

In 2009, the Company changed its methodology for identifying impaired loans. Amounts as of December 31, 2008 have been reclassified to be consistent with the 2009 methodology. The change resulted in reclassifying current or performing loans as impaired loans for which full payment under the original terms is not probable. As of December 31, 2008, $13,054 of loans were reclassified as impaired loans and the related general allowance for loan losses allocation of $2,450 was reclassified as a specific allowance for loan losses. Prior to the change in methodology, the general allowance for loan losses allocation related to these loans was based on historical credit losses, and these allocations were materially consistent with amounts that would have been determined had the loans been classified as impaired. The reclassification had no impact on the allowance for loan losses, the provision for loan losses, net income or retained earnings. Amounts as of December 31, 2008 have been reclassified to be consistent with the 2009 methodology; however, amounts prior to December 31, 2008 have not been reclassified.

MATURITY AND REPRICING DATA OF LOANS

Table VI

(dollars in thousands)	MATURING / REPRICING
	Within One Year		After One but Within Five Years		After Five Years		Total
Residential real estate loans	$	35,696	$	54,999	$	135,327	$	226,022
Commercial loans(1)		120,716		91,494		20,039		232,249
Consumer loans(2)		34,565		48,974		16,478		100,017
Total loans	$	190,977	$	195,467	$	171,844	$	558,288

Loans maturing or repricing after one year with:
Variable interest rates	$	124,727
Fixed interest rates		242,584
Total	$	367,311

(1) Includes commercial and industrial and commercial real estate loans.

(2) Includes automobile, home equity and other consumer loans.

DEPOSITS

Table VII

	as of December 31
(dollars in thousands)	2012		2011		2010
Interest-bearing deposits:
NOW accounts	$	106,581	$	101,907	$	101,833
Money Market		144,831		153,280		149,165
Savings accounts		52,231		46,792		42,751
IRA accounts		47,401		49,024		49,429
Certificates of Deposit		164,494		198,740		259,654
		515,538		549,743		602,832
Noninterest-bearing deposits:
Demand deposits		139,526		138,143		91,949
Total deposits	$	655,064	$	687,886	$	694,781

INTEREST RATE SENSITIVITY TABLE VIII
Change in Interest Rates Basis Points	December 31, 2012 % Change in Net Interest Income	December 31, 2011 % Change in Net Interest Income
+300	(3.20%)	(2.89%)
+200	(1.87%)	(1.75%)
+100	(.80%)	(.76%)
-100	(2.32%)	(2.36%)

CONTRACTUAL OBLIGATIONS

Table IX

	Payments Due In
(dollars in thousands)	Note Reference	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
Deposits without a stated maturity	E	$	443,169	$	-	$	-	$	-	$	443,169
Consumer and brokered time deposits	E		119,568		82,044		9,485		798		211,895
Other borrowed funds	G		3,238		3,831		1,875		5,341		14,285
Subordinated debentures	H		-		-		-		13,500		13,500
Lease obligations	D		452		506		282		-		1,240

KEY RATIOS

Table X

	2012			2011			2010			2009			2008
Return on average assets		.86	%		.68	%		.60	%		.81	%		.91	%
Return on average equity		9.53	%		8.35	%		7.54	%		10.23	%		11.62	%
Dividend payout ratio		62.29	%		57.59	%		65.67	%		47.95	%		42.94	%
Average equity to average assets		9.00	%		8.14	%		7.97	%		7.93	%		7.84	%

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

NAME	STATE OF  INCORPORATION	PERCENTAGE OF OWNERSHIP
The Ohio Valley Bank Company	Ohio	100%
Loan Central, Inc.	Ohio	100%
Ohio Valley Financial Services Agency, LLC	Ohio	100%
Ohio Valley Statutory Trust III	Delaware	100%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-178575 on Form S-3 of Ohio Valley Banc Corp of our report dated March 18, 2013 related to the consolidated financial statements and effectiveness of internal controls over financial reporting appearing in this Annual Report on Form 10-K of Ohio Valley Banc Corp for the year ended December 31, 2012.

/s/ Crowe Horwath LLP

     Crowe Horwath LLP

Louisville, Kentucky

March 18, 2013

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Thomas E. Wiseman, certify that:

1.           I have reviewed this Annual Report on Form 10-K of Ohio Valley Banc Corp.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 18, 2013	By:	/s/Thomas E. Wiseman
		Thomas E. Wiseman, President and CEO
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Scott W. Shockey, certify that:

1.           I have reviewed this Annual Report on Form 10-K of Ohio Valley Banc Corp.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: March 18, 2013	By:	/s/Scott W. Shockey
		Scott W. Shockey, Vice President and CFO
		(Principal Financial Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATION

In connection with the Annual Report of Ohio Valley Banc Corp. (the “Corporation”) on Form 10-K for the fiscal year ended December 31, 2012 (the “Report”), the undersigned Thomas E. Wiseman, President and Chief Executive Officer of the Corporation, and Scott W. Shockey, Vice President and Chief Financial Officer of the Corporation, each certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

* /s/Thomas E. Wiseman	* /s/Scott W. Shockey
Thomas E. Wiseman	Scott W. Shockey
President and Chief Executive Officer	Vice President Chief Financial Officer
Dated:  March 18, 2013	Dated:  March 18, 2013

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Corporation specifically incorporates it by reference in any such filing.

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Note 16 - Segment Information (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Year Ended December 31, 2012
	Banking		Consumer Finance		Total Company
Net interest income	$	29,445	$	3,210	$	32,655
Provision expense	$	1,527	$	56	$	1,583
Noninterest income	$	7,734	$	749	$	8,483
Noninterest expense	$	27,384	$	2,357	$	29,741
Tax expense	$	2,240	$	522	$	2,762
Net income	$	6,028	$	1,024	$	7,052
Assets	$	754,490	$	14,733	$	769,223

	Year Ended December 31, 2011
	Banking		Consumer Finance		Total Company
Net interest income	$	30,792	$	3,079	$	33,871
Provision expense	$	4,809	$	87	$	4,896
Noninterest income	$	6,327	$	895	$	7,222
Noninterest expense	$	26,130	$	2,169	$	28,299
Tax expense	$	1,483	$	580	$	2,063
Net income	$	4,697	$	1,138	$	5,835
Assets	$	789,744	$	14,433	$	804,177

	Year Ended December 31, 2010
	Banking		Consumer Finance		Total Company
Net interest income	$	30,074	$	2,893	$	32,967
Provision expense	$	5,717	$	154	$	5,871
Noninterest income	$	5,578	$	576	$	6,154
Noninterest expense	$	24,756	$	1,887	$	26,643
Tax expense	$	1,029	$	482	$	1,511
Net income	$	4,149	$	947	$	5,096
Assets	$	837,359	$	14,155	$	851,514

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Loans Individually Evaluated for Impairment (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
With related allowance recorded recorded investment	$ 1,979,000
With related allowance recorded allowance for loan losses allocated	1,979	655
Individually Evaluated for Impairment [Member] | Residential Real Estate Loans [Member]
With no related allowance recorded unpaid principal balance	619,000	1,136,000
With no related allowance recorded recorded investment	407,000	1,085,000
With no related allowance recorded interest income recognized		36,000
With no related allowance recorded cash basis interest recognized		31,000
With no related allowance recorded average impaired loans	493,000	748,000
With related allowance recorded unpaid principal balance	420,000	2,396,000
With related allowance recorded recorded investment	420,000	2,396,000
With related allowance recorded allowance for loan losses allocated	128,000	437,000
With related allowance recorded interest income recognized	23,000	128,000
With related allowance recorded cash basis interest recognized	23,000	118,000
With related allowance recorded average impaired loans	420,000	2,414,000
Individually Evaluated for Impairment [Member] | Commercial Real Estate Owner Occupied [Member]
With no related allowance recorded unpaid principal balance	5,528,000	2,774,000
With no related allowance recorded recorded investment	5,528,000	2,531,000
With no related allowance recorded interest income recognized	338,000	207,000
With no related allowance recorded cash basis interest recognized	338,000	309,000
With no related allowance recorded average impaired loans	4,729,000	2,418,000
Individually Evaluated for Impairment [Member] | Commercial Real Estate Nonowner Occupied [Member]
With no related allowance recorded unpaid principal balance	10,085,000	4,131,000
With no related allowance recorded recorded investment	8,847,000	4,131,000
With no related allowance recorded interest income recognized	456,000	174,000
With no related allowance recorded cash basis interest recognized	456,000	57,000
With no related allowance recorded average impaired loans	4,767,000	4,339,000
With related allowance recorded unpaid principal balance	1,979,000	675,000
With related allowance recorded recorded investment	1,979,000	675,000
With related allowance recorded allowance for loan losses allocated	1,979,000	88,000
With related allowance recorded interest income recognized	38,000	35,000
With related allowance recorded cash basis interest recognized	38,000	31,000
With related allowance recorded average impaired loans	1,132,000	677,000
Individually Evaluated for Impairment [Member] | Commercial and Industrial [Member]
With no related allowance recorded unpaid principal balance	426,000	614,000
With no related allowance recorded recorded investment	0	334,000
With no related allowance recorded interest income recognized		40,000
With no related allowance recorded cash basis interest recognized		40,000
With no related allowance recorded average impaired loans	0	483,000
With no related allowance recorded allowance for loan losses allocated	0
Individually Evaluated for Impairment [Member] | Home Equity Loans [Member]
With no related allowance recorded unpaid principal balance	220,000	420,000
With no related allowance recorded recorded investment	220,000	420,000
With no related allowance recorded interest income recognized	9,000	27,000
With no related allowance recorded cash basis interest recognized	9,000	22,000
With no related allowance recorded average impaired loans	176,000	84,000
With no related allowance recorded allowance for loan losses allocated		130,000
Individually Evaluated for Impairment [Member]
With related allowance recorded unpaid principal balance	19,277,000	12,146,000
With related allowance recorded recorded investment	17,401,000	11,572,000
With related allowance recorded allowance for loan losses allocated	2,107,000	655,000
With related allowance recorded interest income recognized	864,000	647,000
With related allowance recorded cash basis interest recognized	864,000	608,000
With related allowance recorded average impaired loans	$ 11,717,000	$ 11,163,000

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Note 2 - Securities (Detail) - Securities Available for Sale (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Less than 12 Months - Fair Value	$ 7,621
Less than 12 Months - Unrecognized Loss	(12)
Fair Value	7,621
Unrecognized Loss	$ (12)

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Note 7 - Other Borrowed Funds (Detail) - Other Borrowed Funds (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Other borrowed funds	$ 14,285	$ 20,296
Federal Home Loan Bank Advances [Member]
Other borrowed funds	10,759	16,548
Promissory Notes [Member]
Other borrowed funds	3,526	3,748
Federal Reserve Bank Notes [Member]
Other borrowed funds	$ 14,285	$ 20,296

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Imformation Regarding Impaired Loans (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010
Average of individually impaired loans during year	$ 24,589
Interest income recognized during impairment	1,158
Cash basis interest income recognized	$ 1,083

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Note 10 - Commitments and Contingent Liabilities (Detail) - Commitments (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Standby letters of credit	$ 5,959	$ 5,486
Fixed Rate Commitments [Member]
Commitments	678	1,456
Variable Rate Commitments [Member]
Commitments	$ 50,488	$ 54,860

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Note 2 - Securities (Detail) - The Amortized Cost and Estimated Fair Value of Investment Securities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Due in one year or less	$ 0
Due in one year or less	0
Due in one year or less	0
Due in one year or less	0
Due in one to five years	4,529
Due in one to five years	4,684
Due in one to five years	1,009
Due in one to five years	1,012
Due in five to ten years	0
Due in five to ten years	0
Due in five to ten years	10,959
Due in five to ten years	11,579
Due after ten years	8,006
Due after ten years	8,344
Due after ten years	0
Due after ten years	0
Agency mortgage-backed securities, residential	91,521
Agency mortgage-backed securities, residential	93,953
Agency mortgage-backed securities, residential	17
Agency mortgage-backed securities, residential	17
Total debt securities	92,530
Total debt securities	94,965
Total debt securities	23,511
Total debt securities	$ 24,624

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Note 10 - Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Amounts Recognized in Balance Sheet [Table Text Block]

	2012		2011
Fixed rate	$	678	$	1,456
Variable rate		50,488		54,860
Standby letters of credit		5,959		5,486

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Note 11 - Related Party Transactions (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2011 Principal Officers, Directors, and Their Affiliates [Member]	Dec. 31, 2010 Principal Officers, Directors, and Their Affiliates [Member]
Minimum Related Party Loan		$ 120
Deposits	$ 655,064	$ 687,886	$ 15,807	$ 17,616

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Note 9 - Income Taxes (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Effective Income Tax Rate, Continuing Operations	34.00%	34.00%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate			34.00%
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit (in Dollars)	$ 1.2

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Note 14 - Regulatory Matters (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Retained Earnings Available for Dividends	$ 6,427

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Aging of the Recorded Investment of Past Due Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
30-59 Days Past Due	$ 8,563	$ 5,733
60-89 Days Past Due	1,481	1,738
90 or More Days Past Due	3,906	3,125
Total Past Due	13,950	10,596
Loans Not Past Due	544,338	587,712
Total	558,288	598,308
Residential Real Estate Loans [Member]
30-59 Days Past Due	5,525	3,731
60-89 Days Past Due	1,033	1,144
90 or More Days Past Due	2,797	2,975
Total Past Due	9,355	7,850
Loans Not Past Due	216,667	230,640
Total	226,022	238,490
Commercial Real Estate Owner Occupied [Member]
30-59 Days Past Due	753	182
60-89 Days Past Due	111
90 or More Days Past Due	675	125
Total Past Due	1,539	307
Loans Not Past Due	103,303	129,057
Total	104,842	129,364
Commercial Real Estate Nonowner Occupied [Member]
60-89 Days Past Due		232
90 or More Days Past Due	352
Total Past Due	352	232
Loans Not Past Due	52,440	56,388
Total	52,792	56,620
Construction [Member]
30-59 Days Past Due		204
60-89 Days Past Due	0	0
90 or More Days Past Due	0	0
Total Past Due		204
Loans Not Past Due	17,376	21,267
Total	17,376	21,471
Commercial and Industrial [Member]
30-59 Days Past Due	202	171
60-89 Days Past Due		14
90 or More Days Past Due	0	0
Total Past Due	202	185
Loans Not Past Due	57,037	45,015
Total	57,239	45,200
Automobile Loans [Member]
30-59 Days Past Due	905	864
60-89 Days Past Due	138	110
90 or More Days Past Due	13	13
Total Past Due	1,056	987
Loans Not Past Due	40,112	44,715
Total	41,168	45,702
Home Equity Loans [Member]
30-59 Days Past Due	112	75
60-89 Days Past Due	37	76
90 or More Days Past Due	62	5
Total Past Due	211	156
Loans Not Past Due	18,121	20,351
Total	18,332	20,507
Other Consumer Loans [Member]
30-59 Days Past Due	1,066	506
60-89 Days Past Due	162	162
90 or More Days Past Due	7	7
Total Past Due	1,235	675
Loans Not Past Due	39,282	40,279
Total	$ 40,517	$ 40,954

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Note 9 - Income Taxes (Detail) - Income Tax Reconciliation (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Statutory tax	$ 3,337	$ 2,685	$ 2,246
Effect of state income tax	53	56	46
Tax credits	(250)	(245)	(224)
Other items	24	19	(62)
Total income taxes	2,762	2,063	1,511
Nondeductible interest expense	12	16	20
Nontaxable Interest Income [Member]
Nontaxable income	(314)	(299)	(279)
Bank Owned Insurance Income [Member]
Nontaxable income	$ (100)	$ (169)	$ (236)

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Note 13 - Fair Value of Financial Instruments (Detail) - Quantitative information about Level 3 fair value measurements (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Minimum [Member] | Construction Other Real Estate Owned [Member]
Commercial real estate:
Range	15.00%
Minimum [Member] | Commercial Other Real Estate Owned [Member]
Commercial real estate:
Range	15.00%
Construction Other Real Estate Owned [Member]
Commercial real estate:
Fair Value (in Dollars)	1,562
Valuation Technique(s)	Sales approach
Unobservable Input(s)	Adjustment to comparables
Range	15.00%
Commercial Other Real Estate Owned [Member]
Commercial real estate:
Fair Value (in Dollars)	1,055
Valuation Technique(s)	Sales approach
Unobservable Input(s)	Adjustment to comparables
Range	15.00%

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Note 12 - Employee Benefits (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2012
Defined Contribution Plan, Cost Recognized	$ 218	$ 210	$ 222
Employee Stock Ownership Plan (ESOP), Shares in ESOP (in Shares)	255,381	280,028
Cash Surrender Value of Life Insurance	23,134
Other Assets	6,076			6,705
Defined Benefit Plan, Expected Future Benefit Payments, Year Two		4,919
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	4,480
Defined Benefit Plan, Benefit Obligation	1,580	2,041
Supplemental Retirement Plans [Member]
Defined Contribution Plan, Cost Recognized	318	317	536
Annuity Assets [Member]
Other Assets	$ 1,922

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Note 13 - Fair Value of Financial Instruments (Detail) - Fair Value Measurements (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash and cash equivalents	$ 45,651	$ 51,630	$ 59,751	$ 15,670
Cash and cash equivalents	45,651	51,630
Securities available for sale	94,965	85,670
Securities available for sale	94,965	85,670
Securities held to maturity	23,511	22,848
Securities held to maturity	24,624	22,847
Federal Home Loan Bank stock	6,281	6,281
Loans, net	551,383
Loans, net	564,059	599,782
Accrued interest receivable	2,057	2,872
Accrued interest receivable	2,057	2,872
Deposits	655,064	687,886
Deposits	657,206	690,607
Other borrowed funds	14,285
Other borrowed funds	14,536	20,565
Subordinated debentures	13,500	13,500
Subordinated debentures	10,146	11,085
Accrued interest payable	1,377	1,894
Accrued interest payable	1,377	1,894
Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	45,651
Deposits	139,526
Accrued interest payable	2
Fair Value, Inputs, Level 2 [Member]
Securities available for sale	94,965
Securities held to maturity	11,569
Accrued interest receivable	283
Accrued interest receivable	283
Deposits	517,680
Other borrowed funds	14,536
Subordinated debentures	10,146
Accrued interest payable	1,375
Fair Value, Inputs, Level 3 [Member]
Securities held to maturity	13,055
Loans, net	564,059
Accrued interest receivable	1,774
Accrued interest receivable	$ 1,774

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Note 10 - Commitments and Contingent Liabilities (Detail)	Mar. 22, 2007	Sep. 07, 2000	Dec. 31, 2011 Minimum [Member] Fixed Rate Commitments [Member]	Dec. 31, 2011 Maximum [Member] Fixed Rate Commitments [Member]
Debt Instrument, Interest Rate, Stated Percentage	6.58%	10.60%	3.38%	6.50%

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Note 7 - Other Borrowed Funds (Detail) - Scheduled Principal Payments (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
	$ 14,285	$ 20,296
Federal Home Loan Bank Advances [Member]
2013	1,329
2014	1,156
2015	1,058
2016	974
2017	901
Thereafter	5,341
	10,759	16,548
Promissory Notes [Member]
2013	1,909
2014	1,617
	3,526	3,748
Federal Reserve Bank Notes [Member]
2013	3,238
2014	2,773
2015	1,058
2016	974
2017	901
Thereafter	5,341
	$ 14,285	$ 20,296

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2012

Basis of Accounting, Policy [Policy Text Block]

Description of Business:  Ohio Valley Banc Corp. (”Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the ”Bank”), as well as a subsidiary that engages in consumer lending to individuals with higher credit risk history, Loan Central, Inc., and a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC.  Ohio Valley and its subsidiaries are collectively referred to as the “Company”.

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans.  Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services.  The Bank’s deposits are insured by the Federal Deposit Insurance Corporation.  In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., a consumer finance company, and Ohio Valley Financial Services Agency, LLC, an insurance agency.   All material intercompany accounts and transactions have been eliminated.

Segment Reporting, Policy [Policy Text Block]

Industry Segment Information:  Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. 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.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, interest and noninterest-bearing deposits with banks and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Marketable Securities, Policy [Policy Text Block]

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block]

Other-Than-Temporary-Impairments of Securities:  In determining an other-than-temporary-impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Investment, Policy [Policy Text Block]

Federal Home Loan Bank (”FHLB”) Stock:  The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments.  The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.  Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans generally consist of loans with balances of $200 or more on nonaccrual status or nonperforming in nature.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure which may require the Company to write-down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 5 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2012, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of Credit Risk:  The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment:  Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line or declining balance methods over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

Real Estate, Policy [Policy Text Block]

Foreclosed assets:  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed. Foreclosed assets totaled $3,667 and $4,256 at December 31, 2012 and 2011.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill:  Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired.  Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected December 31, 2012 as the date to perform the annual impairment test.  Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-term Assets:  Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Mortgage Servicing Rights:  A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2012 and 2011, the Company’s MSR asset portfolio was  $450 and $430, respectively.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share:  Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,030,322 for 2012; 4,001,435 for 2011; 3,984,229 for 2010.  Ohio Valley had no dilutive securities outstanding for any period presented.

Income Tax, Policy [Policy Text Block]

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is ”more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the ”more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Commitments and Contingencies, Policy [Policy Text Block]

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Life Insurance, Corporate or Bank Owned [Text Block]

Bank Owned Life Insurance and Annuity Assets:  The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan (ESOP), Policy [Policy Text Block]

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Loan Commitments, Policy [Policy Text Block]

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note J for more specific disclosure related to loan commitments.

Dividend Restrictions [Policy Text Block]

Dividend Restrictions:  Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note N for more specific disclosure related to dividend restrictions.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restrictions on Cash:  Cash on hand or on deposit with Fifth Third Bank and the Federal Reserve Bank of $37,964 and $44,018 was required to meet regulatory reserve and clearing requirements at year-end 2012 and 2011.  The balances at Fifth Third Bank do not earn interest.

Derivatives, Policy [Policy Text Block]

Derivatives:  At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2012 and 2011, the Company’s only derivatives on hand were interest rate swaps, which are classified as stand-alone derivatives.  See Note F for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note M.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification, Policy [Policy Text Block]

Reclassifications: The consolidated financial statements for 2011 and 2010 have been reclassified to conform with the presentation for 2012.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Standards:

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-4, “Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  Some amendments in this update clarify the FASB’s intent about the application of existing fair value measurement requirements.  Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  The amendments in this update are effective during interim and annual reporting periods beginning after December 15, 2011.  The Company complied with the revised disclosure requirements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-5, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income.”  This update amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and retrospective application is required.  The Company complied with the revised disclosure requirements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, “Intangibles —Goodwill and Other (Topic 350), Testing Goodwill for Impairment.”  The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent.  The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The effect of adopting this new guidance did not have a material effect on the Company’s financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.”  This update defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately within their respective components of net income and other comprehensive income.  As such, the amendments in this update supersede only those paragraphs in Accounting Standards Update No. 2011-05 that pertain to how and where reclassification adjustments are presented.  The amendments were effective at the same time as the amendments in Accounting Standards Update 2011-05.  The Company complied with the revised disclosure requirements.

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Loans	$ 558,288	$ 598,308
Less: Allowance for loan losses	6,905	7,344
Loans, net	551,383	590,964
Residential Portfolio Segment [Member]
Loans	226,022	238,490
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied [Member]
Loans	104,842	129,364
Commercial Real Estate Portfolio Segment [Member] | Nonowner Occupied [Member]
Loans	52,792	56,620
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans	17,376	21,471
Commercial and Industrial [Member]
Loans	57,239	45,200
Consumer Portfolio Segment [Member] | Automobile Loan [Member]
Loans	41,168	45,702
Consumer Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans	18,332	20,507
Consumer Portfolio Segment [Member] | Consumer Other Financing Receivable [Member]
Loans	$ 40,517	$ 40,954

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Note 1 - Summary of Significant Accounting Policies (Detail) - Composition of Loan Portfolio	Dec. 31, 2012	Dec. 31, 2011
Percent of loan portfolio	100.00%	100.00%
Residential Real Estate Loans [Member]
Percent of loan portfolio	40.49%	39.86%
Commercial Real Estate Loans [Member]
Percent of loan portfolio	31.35%	34.67%
Consumer Loans [Member]
Percent of loan portfolio	17.91%	17.92%
Commercial and Industrial [Member]
Percent of loan portfolio	10.25%	7.55%

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Note 9 - Income Taxes (Detail) - Deferred Tax Assets Liabilities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Items giving rise to deferred tax assets:
Allowance for loan losses	$ 2,394	$ 2,551
Deferred compensation	1,709	1,558
Deferred loan fees/costs	322	376
Other real estate owned	554	440
Other	199	179
Items giving rise to deferred tax liabilities:
Mortgage servicing rights	(156)	(149)
FHLB stock dividends	(1,081)	(1,081)
Unrealized gain on securities available for sale	(828)	(495)
Depreciation	(146)	(250)
Prepaid expenses	(73)	(140)
Intangibles	(363)	(330)
Other		(1)
Net deferred tax asset	$ 2,531	$ 2,658

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Note 17 - Consolidated Quarterly Financial Information (unaudited) (Detail) - Selected Quarterly Financial Data (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Total interest income	$ 39,001		$ 44,040		$ 46,514
Total interest expense	6,346		10,169		13,547
Net interest income	32,655		33,871		32,967
Provision for loan losses	1,583		4,896		5,871
Noninterest income	8,483		7,222		6,154
Noninterest expense	29,741		28,299		26,643
Earnings per share (in Dollars per share)	$ 1.75		$ 1.46		$ 1.28
First Quarter [Member]
Total interest income	10,665		12,025		12,228
Total interest expense	1,753		2,822		3,619
Net interest income	8,912		9,203		8,609
Provision for loan losses	1,316	[1]	2,944	[2]	921
Noninterest income	3,479		3,659		1,865
Noninterest expense	7,332		7,098		6,881
Net income	2,622		2,033		1,906
Earnings per share (in Dollars per share)	$ 0.65		$ 0.51		$ 0.48
Second Quarter [Member]
Total interest income	9,657		10,817		11,599
Total interest expense	1,604		2,663		3,421
Net interest income	8,053		8,154		8,178
Provision for loan losses	524	[1]	759	[2]	721
Noninterest income	1,974		1,687		1,524
Noninterest expense	7,162		6,981		6,976
Net income	1,719		1,555		1,471
Earnings per share (in Dollars per share)	$ 0.43		$ 0.39		$ 0.37
Third Quarter [Member]
Total interest income	9,405		10,693		11,438
Total interest expense	1,538		2,509		3,328
Net interest income	7,867		8,184		8,110
Provision for loan losses	1,183	[1]	1,152	[2]	2,225
Noninterest income	1,674		1,058		1,382
Noninterest expense	6,957		7,001		6,863
Net income	1,107		886		421
Earnings per share (in Dollars per share)	$ 0.27		$ 0.22		$ 0.10
Fourth Quarter [Member]
Total interest income	9,274		10,505		11,249
Total interest expense	1,451		2,175		3,179
Net interest income	7,823		8,330		8,070
Provision for loan losses	(1,440)	[1]	41	[2]	2,004
Noninterest income	1,356		818		1,383
Noninterest expense	8,290		7,219		5,923
Net income	$ 1,604		$ 1,361		$ 1,298
Earnings per share (in Dollars per share)	$ 0.40		$ 0.34		$ 0.33

[1] During the first quarter of 2011, the Company began taking partial charge-offs more quickly on collateral dependent impaired loans 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. The increases in partial charge-offs contributed to a higher historical loan loss factor, which required additional general allocations within the allowance for loan losses.

[2] During the third and fourth quarters of 2010, the Bank experienced an increase in its provision expense as a result of continued credit quality issues with three commercial relationships that resulted in additional impairment charges and partial charge-offs.

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Note 14 - Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

	Actual					Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2012
Total capital (to risk weighted assets)
Consolidated	$	93,158		17.2	%	$	43,234		8.0	%	$	54,043		N/A
Bank		84,267		15.9			42,506		8.0			53,132		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		86,401		16.0			21,617		4.0			32,426		N/A
Bank		77,690		14.6			21,253		4.0			31,879		6.0
Tier 1 capital (to average assets)
Consolidated		86,401		10.9			31,571		4.0			39,464		N/A
Bank		77,690		10.0			31,010		4.0			38,763		5.0
2011
Total capital (to risk weighted assets)
Consolidated	$	90,288		15.6	%	$	46,174		8.0	%	$	57,718		N/A
Bank		81,991		14.4			45,544		8.0			56,930		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		83,072		14.4			23,087		4.0			34,631		N/A
Bank		74,975		13.2			22,772		4.0			34,158		6.0
Tier 1 capital (to average assets)
Consolidated		83,072		10.3			32,414		4.0			40,517		N/A
Bank		74,975		9.4			31,969		4.0			39,962		5.0

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Activity in the Allowance for Loan Losses (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Allowance for loan losses			$ 8,198
Provision for loan losses	1,583	4,896	5,871
Loans charged off	5,136	10,422	(5,879)
Recoveries	3,114	3,484	1,196
Beginning Balance [Member]
Allowance for loan losses		7,344	9,386
Ending Balance [Member]
Allowance for loan losses	$ 6,905	$ 7,344	$ 9,386

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Note 5 - Deposits (Detail) - Time Deposits by Remaining Maturity (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
2013	$ 119,568
2014	66,277
2015	15,767
2016	5,502
2017	3,983
Thereafter	798
Total	$ 211,895	$ 247,764

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Recorded Investment of Residential and Consumer Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Automobile Loans [Member] | Performing Loans [Member]
Consumer Loans	$ 41,153	$ 45,677
Automobile Loans [Member] | Nonperforming Loans [Member]
Consumer Loans	15	25
Automobile Loans [Member]
Consumer Loans	41,168	45,702
Home Equity Loans [Member] | Performing Loans [Member]
Consumer Loans	18,270	20,502
Home Equity Loans [Member] | Nonperforming Loans [Member]
Consumer Loans	62	5
Home Equity Loans [Member]
Consumer Loans	18,332	20,507
Other Consumer Loans [Member] | Performing Loans [Member]
Consumer Loans	40,510	40,947
Other Consumer Loans [Member] | Nonperforming Loans [Member]
Consumer Loans	7	7
Other Consumer Loans [Member]
Consumer Loans	40,517	40,954
Residential Real Estate Loans [Member] | Performing Loans [Member]
Consumer Loans	223,148	235,515
Residential Real Estate Loans [Member] | Nonperforming Loans [Member]
Consumer Loans	2,874	2,975
Residential Real Estate Loans [Member]
Consumer Loans	226,022	238,490
Consumer Loans [Member] | Performing Loans [Member]
Consumer Loans	323,081	342,641
Consumer Loans [Member] | Nonperforming Loans [Member]
Consumer Loans	2,958	3,012
Consumer Loans [Member]
Consumer Loans	$ 326,039	$ 345,653

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Note 2 - Securities (Detail) - Securities Held to Maturity with Unrealized Losses (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Less Than 12 Months - Fair Value	$ 2,018	$ 664
Less Than 12 Months - Unrecognized Loss	(63)	(21)
12 Months or More - Fair Value	260	3,557
12 Months or More - Unrecognized Loss	(2)	(538)
Fair Value	2,278	4,221
Unrecognized Loss	(65)	(559)
US States and Political Subdivisions Debt Securities [Member]
Less Than 12 Months - Fair Value	2,018	664
Less Than 12 Months - Unrecognized Loss	(63)	(21)
12 Months or More - Fair Value	260	3,557
12 Months or More - Unrecognized Loss	(2)	(538)
Fair Value	2,278	4,221
Unrecognized Loss	$ (65)	$ (559)

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Note 2 - Securities

12 Months Ended

Dec. 31, 2012

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note B - Securities

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2012 and 2011 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2012
U.S. Government sponsored entity securities	$	1,009	$	3		-		$	1,012
Agency mortgage-backed securities, residential		91,521		2,432		-			93,953
Total securities	$	92,530	$	2,435		-		$	94,965
December 31, 2011
U.S. Treasury securities	$	5,510	$	3	$	-		$	5,513
U.S. Government sponsored entity securities		2,501		58		-			2,559
Agency mortgage-backed securities, residential		76,203		1,407		(12	)		77,598
Total securities	$	84,214	$	1,468	$	(12	)	$	85,670

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2012
Obligations of states and political subdivisions	$	23,494	$	1,178	$	(65	)	$	24,607
Agency mortgage-backed securities, residential		17		-		-			17
Total securities	$	23,511	$	1,178	$	(65	)	$	24,624
December 31, 2011
Obligations of states and political subdivisions	$	22,825	$	558	$	(559	)	$	22,824
Agency mortgage-backed securities, residential		23		-		-			23
Total securities	$	22,848	$	558	$	(559	)	$	22,847

At year-end 2012 and 2011, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

There were no sales of debt securities during 2012, 2011 and 2010.

Securities with a carrying value of approximately $72,471 at December 31, 2012 and $46,683 at December 31, 2011 were pledged to secure public deposits and repurchase agreements and for other purposes as required or permitted by law.

The amortized cost and estimated fair value of debt securities at December 31, 2012, 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. Securities not due at a single maturity are shown separately.

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less		-		-		-		-
Due in one to five years	$	1,009	$	1,012	$	4,529	$	4,684
Due in five to ten years		-		-		10,959		11,579
Due after ten years		-		-		8,006		8,344
Agency mortgage-backed securities, residential		91,521		93,953		17		17
Total debt securities	$	92,530	$	94,965	$	23,511	$	24,624

The following table summarizes securities with unrealized losses at December 31, 2012 and December 31, 2011, aggregated by major security type and length of time in a continuous unrealized loss position:

December 31, 2012	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)
Total held to maturity	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)

December 31, 2011	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss
Agency mortgage-backed securities, residential	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)
Total available for sale	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)
Total held to maturity	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)

     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 December 31, 2012 and 2011 represents an other-than-temporary impairment.

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Note 4 - Premises and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating Leases, Rent Expense, Net	$ 492	$ 490	$ 492

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Note 2 - Securities (Detail) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities Pledged as Collateral	$ 46,683	$ 72,471

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Note 4 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Table Text Block]

	2012		2011
Land	$	1,802	$	1,890
Buildings		10,235		10,334
Leasehold improvements		2,872		2,855
Furniture and equipment		14,281		13,961
		29,190		29,040
Less accumulated depreciation		20,510		19,824
Total premises and equipment	$	8,680	$	9,216

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2013	$	452
2014		319
2015		187
2016		160
2017		122
Thereafter		-
	$	1,240

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Note 3 - Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	2012		2011
Residential real estate	$	226,022	$	238,490
Commercial real estate:
Owner-occupied		104,842		129,364
Nonowner-occupied		52,792		56,620
Construction		17,376		21,471
Commercial and industrial		57,239		45,200
Consumer:
Automobile		41,168		45,702
Home equity		18,332		20,507
Other		40,517		40,954
		558,288		598,308
Less: Allowance for loan losses		6,905		7,344
Loans, net	$	551,383	$	590,964

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

December 31, 2012	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344
Provision for loan losses		395			2,367			(1,381	)		202			1,583
Loans charged off		(1,066	)		(1,949	)		(499	)		(1,622	)		(5,136	)
Recoveries		140			35			2,027			912			3,114
Total ending allowance balance	$	1,329		$	3,946		$	783		$	847		$	6,905

December 31, 2011	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,051		$	3,083		$	3,795		$	1,457		$	9,386
Provision for loan losses		2,642			932			439			883			4,896
Loans charged off		(2,034	)		(1,913	)		(4,725	)		(1,750	)		(10,422	)
Recoveries		201			1,391			1,127			765			3,484
Total ending allowance balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	2010
Allowance for loan losses:
Beginning balance	$	8,198
Provision for loan losses		5,871
Loans charged off		(5,879	)
Recoveries		1,196
Total ending allowance balance	$	9,386

Allowance for Loan Losses and the Recorded Investment of Loans [Table Text Block]

December 31, 2012	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	128	$	1,979	$	-	$	-	$	2,107
Collectively evaluated for impairment		1,201		1,967		783		847		4,798
Total ending allowance balance	$	1,329	$	3,946	$	783	$	847	$	6,905
Loans:
Loans individually evaluated for impairment	$	827	$	16,354	$	-	$	220	$	17,401
Loans collectively evaluated for impairment		225,195		158,656		57,239		99,797		540,887
Total ending loans balance	$	226,022	$	175,010	$	57,239	$	100,017	$	558,288

December 31, 2011	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	130	$	525	$	-	$	-	$	655
Collectively evaluated for impairment		1,730		2,968		636		1,355		6,689
Total ending allowance balance	$	1,860	$	3,493	$	636	$	1,355	$	7,344
Loans:
Loans individually evaluated for impairment	$	1,505	$	9,733	$	334	$	-	$	11,572
Loans collectively evaluated for impairment		236,985		197,722		44,866		107,163		586,736
Total ending loans balance	$	238,490	$	207,455	$	45,200	$	107,163	$	598,308

Schedule of Loans Individually Evaluated for Impairment [Table Text Block]

December 31, 2012	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	$	619	$	407	$	-	$	493	$	-	$	-
Commercial real estate:
Owner-occupied		5,528		5,528		-		4,729		338		338
Nonowner-occupied		10,085		8,847		-		4,767		456		456
Commercial and industrial		426		-		-		-		-		-
Consumer:
Home equity		220		220		-		176		9		9
With an allowance recorded:
Residential real estate		420		420		128		420		23		23
Commercial real estate:
Nonowner-occupied		1,979		1,979		1,979		1,132		38		38
Total	$	19,277	$	17,401	$	2,107	$	11,717	$	864	$	864

December 31, 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	$	1,136	$	1,085	$	-	$	748	$	36	$	31
Commercial real estate:
Owner-occupied		2,774		2,531		-		2,418		207		309
Nonowner-occupied		4,131		4,131		-		4,339		174		57
Commercial and industrial		614		334		-		483		40		40
With an allowance recorded:
Residential real estate		420		420		130		84		27		22
Commercial real estate:
Nonowner-occupied		2,396		2,396		437		2,414		128		118
Construction		675		675		88		677		35		31
Total	$	12,146	$	11,572	$	655	$	11,163	$	647	$	608

	2010
Average of individually impaired loans during year	$	24,589
Interest income recognized during impairment	$	1,158
Cash basis interest income recognized	$	1,083

Schedule of Recorded Investment in Nonaccrual Loans [Table Text Block]

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2012
Residential real estate	$	341	$	2,533
Commercial real estate:
Owner-occupied		-		675
Nonowner-occupied		-		352
Consumer:
Automobile		11		4
Home equity		-		62
Other		7		-
Total	$	359	$	3,626

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2011
Residential real estate	$	439	$	2,536
Commercial real estate:
Owner-occupied		-		125
Consumer:
Automobile		13		12
Home equity		-		5
Other		7		-
Total	$	459	$	2,678

Past Due Financing Receivables [Table Text Block]

December 31, 2012	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	$	5,525	$	1,033	$	2,797	$	9,355	$	216,667	$	226,022
Commercial real estate:
Owner-occupied		753		111		675		1,539		103,303		104,842
Nonowner-occupied		–		–		352		352		52,440		52,792
Construction		–		–		–		–		17,376		17,376
Commercial and industrial		202		–		–		202		57,037		57,239
Consumer:
Automobile		905		138		13		1,056		40,112		41,168
Home equity		112		37		62		211		18,121		18,332
Other		1,066		162		7		1,235		39,282		40,517
Total	$	8,563	$	1,481	$	3,906	$	13,950	$	544,338	$	558,288

December 31, 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	$	3,731	$	1,144	$	2,975	$	7,850	$	230,640	$	238,490
Commercial real estate:
Owner-occupied		182		-		125		307		129,057		129,364
Nonowner-occupied		-		232		-		232		56,388		56,620
Construction		204		-		-		204		21,267		21,471
Commercial and industrial		171		14		-		185		45,015		45,200
Consumer:
Automobile		864		110		13		987		44,715		45,702
Home equity		75		76		5		156		20,351		20,507
Other		506		162		7		675		40,279		40,954
Total	$	5,733	$	1,738	$	3,125	$	10,596	$	587,712	$	598,308

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2012
Residential real estate
Interest only payments	$	-	$	180	$	180
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		-		675		675
Rate reduction		440		-		440
Maturity extension at lower stated rate than market rate		191		-		191
Reduction of principal and interest payments		4,222		-		4,222
Nonowner-occupied
Interest only payments		9,856		300		10,156
Reduction of principal and interest payments		670		-		670
Total TDR’s	$	15,799	$	1,155	$	16,954

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2011
Residential real estate
Interest only payments	$	-	$	283	$	283
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		680		-		680
Rate reduction		449		-		449
Maturity extension at lower stated rate than market rate		219		-		219
Nonowner-occupied
Interest only payments		6,296		-		6,296
Construction
Interest only payments		674		-		674
Commercial and industrial
Interest only payments		334		-		334
Total TDR’s	$	9,072	$	283	$	9,355

Troubled Debt Restructurings on Financing Receivables, Pre and Post Modification (Table Text Block)

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2012
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	4,266	$	4,222		-		-
Nonowner-occupied
Interest only payments		5,984		5,984		-		-
Reduction of principal and interest payments		686		671		-		-
Total TDR’s	$	10,936	$	10,877		-		-

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2011
Commercial real estate:
Owner-occupied
Rate reduction	$	959	$	868		-		-
Maturity extension at lower stated rate than market rate		226		219		-		-
Nonowner-occupied
Interest only payments		400		400		-		-
Total TDR’s	$	1,585	$	1,487		-		-

Financing Receivable Credit Quality Indicators [Table Text Block]

December 31, 2012	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	87,614	$	14,057	$	3,171	$	104,842
Nonowner-occupied		39,627		2,171		10,994		52,792
Construction		16,276		-		1,100		17,376
Commercial and industrial		47,226		4,793		5,220		57,239
Total	$	190,743	$	21,021	$	20,485	$	232,249

December 31, 2011	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	103,743	$	15,030	$	10,591	$	129,364
Nonowner-occupied		30,375		12,815		13,430		56,620
Construction		19,519		-		1,952		21,471
Commercial and industrial		36,633		3,250		5,317		45,200
Total	$	190,270	$	31,095	$	31,290	$	252,655

Performing and Nonperforming Loans [Table Text Block]

	Consumer
December 31, 2012	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	41,153	$	18,270	$	40,510	$	223,148	$	323,081
Nonperforming		15		62		7		2,874		2,958
Total	$	41,168	$	18,332	$	40,517	$	226,022	$	326,039

	Consumer
December 31, 2011	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	45,677	$	20,502	$	40,947	$	235,515	$	342,641
Nonperforming		25		5		7		2,975		3,012
Total	$	45,702	$	20,507	$	40,954	$	238,490	$	345,653

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Recorded Investment of Nonaccrual Loans and Loans Past Due 90 days (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Loans past due 90 days and still accruing	$ 359	$ 459
Nonaccrual	3,626	2,678
Residential Real Estate Loans [Member]
Loans past due 90 days and still accruing	341	439
Nonaccrual	2,533	2,536
Commercial Real Estate Owner Occupied [Member]
Loans past due 90 days and still accruing	0	0
Nonaccrual	675	125
Commercial Real Estate Nonowner Occupied [Member]
Loans past due 90 days and still accruing	0
Nonaccrual	352
Automobile Loans [Member]
Loans past due 90 days and still accruing	11	13
Nonaccrual	4	12
Home Equity Loans [Member]
Loans past due 90 days and still accruing	0
Nonaccrual	62	5
Other Consumer Loans [Member]
Loans past due 90 days and still accruing	7	7
Nonaccrual	$ 0

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Note 2 - Securities (Detail) - Amortized Cost and Estimated Fair Value of Available-for-Sale Securities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Amortized Cost	$ 92,530	$ 84,214
Gross Unrealized Gains	2,435	1,468
Gross Unrealized Losses		(12)
Estimated Fair Value	94,965	85,670
US Government-sponsored Enterprises Debt Securities [Member]
Amortized Cost	1,009	2,501
Gross Unrealized Gains	3	58
Estimated Fair Value	1,012	2,559
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Amortized Cost	91,521	76,203
Gross Unrealized Gains	2,432	1,407
Gross Unrealized Losses		(12)
Estimated Fair Value	93,953	77,598
US Treasury Securities [Member]
Amortized Cost		5,510
Gross Unrealized Gains		3
Estimated Fair Value		$ 5,513

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Note 5 - Deposits (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Interest-Bearing Deposits [Table Text Block]

	2012		2011
NOW accounts	$	106,581	$	101,907
Savings and Money Market		197,062		200,072
Time:
In denominations under $100,000		110,002		126,705
In denominations of $100,000 or more		101,893		121,059
Total time deposits		211,895		247,764
Total interest-bearing deposits	$	515,538	$	549,743

Maturities of Time Deposits [Table Text Block]

2013	$	119,568
2014		66,277
2015		15,767
2016		5,502
2017		3,983
Thereafter		798
Total	$	211,895

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Note 7 - Other Borrowed Funds (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

	FHLB Borrowings		Promissory Notes		Totals
2012	$	10,759	$	3,526	$	14,285
2011	$	16,548	$	3,748	$	20,296

Schedule of Maturities of Long-term Debt [Table Text Block]

	FHLB Borrowings		Promissory Notes		Totals
2013	$	1,329	$	1,909	$	3,238
2014		1,156		1,617		2,773
2015		1,058				1,058
2016		974		-		974
2017		901		-		901
Thereafter		5,341		-		5,341
	$	10,759	$	3,526	$	14,285

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Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Significant Accounting Policies [Text Block]

Note A - Summary of Significant Accounting Policies

Description of Business:  Ohio Valley Banc Corp. (”Ohio Valley”) is a financial holding company registered under the Bank Holding Company Act of 1956.  Ohio Valley has one banking subsidiary, The Ohio Valley Bank Company (the ”Bank”), as well as a subsidiary that engages in consumer lending to individuals with higher credit risk history, Loan Central, Inc., and a subsidiary insurance agency that facilitates the receipts of insurance commissions, Ohio Valley Financial Services Agency, LLC.  Ohio Valley and its subsidiaries are collectively referred to as the “Company”.

The Company provides a full range of commercial and retail banking services from 22 offices located in southeastern Ohio and western West Virginia.  It accepts deposits in checking, savings, time and money market accounts and makes personal, commercial, floor plan, student, construction and real estate loans.  Substantially all loans are secured by specific items of collateral, including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. The Company also offers safe deposit boxes, wire transfers and other standard banking products and services.  The Bank’s deposits are insured by the Federal Deposit Insurance Corporation.  In addition to accepting deposits and making loans, the Bank invests in U. S. Government and agency obligations, interest-bearing deposits in other financial institutions and investments permitted by applicable law.

The Bank’s trust department provides a wide variety of fiduciary services for trusts, estates and benefit plans and also provides investment and security services as an agent for its customers.

Principles of Consolidation: The consolidated financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, the Bank, Loan Central, Inc., a consumer finance company, and Ohio Valley Financial Services Agency, LLC, an insurance agency.   All material intercompany accounts and transactions have been eliminated.

Industry Segment Information:  Internal financial information is primarily reported and aggregated in two lines of business, banking and consumer finance.

Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. 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.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, interest and noninterest-bearing deposits with banks and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. The Company reports net cash flows for customer loan transactions, deposit transactions, short-term borrowings and interest-bearing deposits with other financial institutions.

Securities: The Company classifies securities into held to maturity and available for sale categories. Held to maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Securities classified as available for sale include securities that could be sold for liquidity, investment management or similar reasons even if there is not a present intention of such a sale. Available for sale securities are reported at fair value, with unrealized gains or losses included in other comprehensive income, net of tax.

Premium amortization is deducted from, and discount accretion is added to, interest income on securities using the level yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recognized upon the sale of specific identified securities on the completed trade date.

Other-Than-Temporary-Impairments of Securities:  In determining an other-than-temporary-impairment (“OTTI”), management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an OTTI decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When an OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

Federal Home Loan Bank (”FHLB”) Stock:  The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the Bank’s level of borrowings from the FHLB and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Interest income is reported on an accrual basis using the interest method and includes amortization of net deferred loan fees and costs over the loan term using the level yield method without anticipating prepayments.  The amount of the Company’s recorded investment is not materially different than the amount of unpaid principal balance for loans.

Interest income is discontinued and the loan moved to non-accrual status when full loan repayment is in doubt, typically when the loan is impaired or payments are past due 90 days or over unless the loan is well-secured or in process of collection. Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days or over and still accruing include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.  Interest received on such loans is accounted for on the cash-basis method until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans generally consist of loans with balances of $200 or more on nonaccrual status or nonperforming in nature.  Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment.  If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Smaller balance homogeneous loans, such as consumer and most residential real estate, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and impaired loans that are not individually reviewed for impairment and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 3 years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  Commercial and Industrial, Commercial Real Estate, Residential Real Estate, and Consumer.

Commercial and industrial loans consist of borrowings for commercial purposes to individuals, corporations, partnerships, sole proprietorships, and other business enterprises.  Commercial and industrial loans are generally secured by business assets such as equipment, accounts receivable, inventory, or any other asset excluding real estate and generally made to finance capital expenditures or operations.  The Company’s risk exposure is related to deterioration in the value of collateral securing the loan should foreclosure become necessary.  Generally, business assets used or produced in operations do not maintain their value upon foreclosure which may require the Company to write-down the value significantly to sell.

Commercial real estate consists of nonfarm, nonresidential loans secured by owner-occupied and nonowner-occupied commercial real estate as well as commercial construction loans.  An owner-occupied loan relates to a borrower purchased building or space for which the repayment of principal is dependent upon cash flows from the ongoing business operations conducted by the party, or an affiliate of the party, who owns the property.  Owner-occupied loans that are dependent on cash flows from operations can be adversely affected by current market conditions for their product or service.  A nonowner-occupied loan is a property loan for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property.  Nonowner-occupied loans that are dependent upon rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged.  Commercial construction loans consist of borrowings to purchase and develop raw land into 1-4 family residential properties.  Construction loans are extended to individuals as well as corporations for the construction of an individual or multiple properties and are secured by raw land and the subsequent improvements.  Repayment of the loans to real estate developers is dependent upon the sale of properties to third parties in a timely fashion upon completion.  Should there be delays in construction or a downturn in the market for those properties, there may be significant erosion in value which may be absorbed by the Company.

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower.  The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Consumer loans are comprised of loans to individuals secured by automobiles, open-end home equity loans and other loans to individuals for household, family, and other personal expenditures, both secured and unsecured.  These loans typically have maturities of 5 years or less with repayment dependent on individual wages and income.  The risk of loss on consumer loans is elevated as the collateral securing these loans, if any, rapidly depreciate in value or may be worthless and/or difficult to locate if repossession is necessary.  The Company has allocated the highest percentage of its allowance for loan losses as a percentage of loans to the other identified loan portfolio segments due to the larger dollar balances associated with such portfolios.

At December 31, 2012, there were no changes to the accounting policies or methodologies within any of the Company’s loan portfolio segments from the prior period.

Concentrations of Credit Risk:  The Company grants residential, consumer and commercial loans to customers located primarily in the southeastern Ohio and western West Virginia areas.

The following represents the composition of the Company’s loan portfolio as of December 31:

	% of Total Loans
	2012			2011
Residential real estate loans		40.49	%		39.86	%
Commercial real estate loans		31.35	%		34.67	%
Consumer loans		17.91	%		17.92	%
Commercial and industrial loans		10.25	%		7.55	%
		100.00	%		100.00	%

Approximately 4.87% of total loans are unsecured.

The Bank, in the normal course of its operations, conducts business with correspondent financial institutions. Balances in correspondent accounts, investments in federal funds, certificates of deposit and other short-term securities are closely monitored to ensure that prudent levels of credit and liquidity risks are maintained.  At December 31, 2012, the Bank’s primary correspondent balance was $34,383 on deposit at the Federal Reserve Bank, Cleveland, Ohio.

Premises and Equipment:  Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation, which is computed using the straight-line or declining balance methods over the estimated useful life of the owned asset and, for leasehold improvement, over the remaining term of the leased facility, whichever is shorter. The useful lives range from 3 to 8 years for equipment, furniture and fixtures and 7 to 39 years for buildings and improvements.

Foreclosed assets:  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  Operating costs after acquisition are expensed. Foreclosed assets totaled $3,667 and $4,256 at December 31, 2012 and 2011.

Goodwill:  Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired.  Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected December 31, 2012 as the date to perform the annual impairment test.  Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Long-term Assets:  Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Mortgage Servicing Rights:  A mortgage servicing right (“MSR”) is a contractual agreement where the right to service a mortgage loan is sold by the original lender to another party. When the Company sells mortgage loans to the secondary market, it retains the servicing rights to these loans. The Company’s MSR is recognized separately when acquired through sales of loans and is initially recorded at fair value with the income statement effect recorded in mortgage banking income. Subsequently, the MSR is then amortized in proportion to and over the period of estimated future servicing income of the underlying loan. The MSR is then evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount, with any impairment being recognized through a valuation allowance. Fair value of the MSR is based on market prices for comparable mortgage servicing contracts. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type.  If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.  At December 31, 2012 and 2011, the Company’s MSR asset portfolio was  $450 and $430, respectively.

Earnings Per Share:  Earnings per share is based on net income divided by the following weighted average number of common shares outstanding during the periods: 4,030,322 for 2012; 4,001,435 for 2011; 3,984,229 for 2010.  Ohio Valley had no dilutive securities outstanding for any period presented.

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is ”more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the ”more likely than not” test, no tax benefit is recorded.  The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Bank Owned Life Insurance and Annuity Assets:  The Company has purchased life insurance policies on certain key executives.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company also purchased an annuity investment for a certain key executive that earns interest.

Employee Stock Ownership Plan: Compensation expense is based on the market price of shares as they are committed to be allocated to participant accounts.

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  These financial instruments are recorded when they are funded.  See Note J for more specific disclosure related to loan commitments.

Dividend Restrictions:  Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Ohio Valley or by Ohio Valley to its shareholders.   See Note N for more specific disclosure related to dividend restrictions.

Restrictions on Cash:  Cash on hand or on deposit with Fifth Third Bank and the Federal Reserve Bank of $37,964 and $44,018 was required to meet regulatory reserve and clearing requirements at year-end 2012 and 2011.  The balances at Fifth Third Bank do not earn interest.

Derivatives:  At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge.  These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”).

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged.  Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

At December 31, 2012 and 2011, the Company’s only derivatives on hand were interest rate swaps, which are classified as stand-alone derivatives.  See Note F for more specific disclosures related to interest rate swaps.

Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note M.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications: The consolidated financial statements for 2011 and 2010 have been reclassified to conform with the presentation for 2012.  These reclassifications had no effect on the net results of operations or shareholders’ equity.

Adoption of New Accounting Standards:

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-4, “Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  Some amendments in this update clarify the FASB’s intent about the application of existing fair value measurement requirements.  Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  The amendments in this update are effective during interim and annual reporting periods beginning after December 15, 2011.  The Company complied with the revised disclosure requirements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-5, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income.”  This update amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and retrospective application is required.  The Company complied with the revised disclosure requirements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, “Intangibles —Goodwill and Other (Topic 350), Testing Goodwill for Impairment.”  The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent.  The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The effect of adopting this new guidance did not have a material effect on the Company’s financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.”  This update defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately within their respective components of net income and other comprehensive income.  As such, the amendments in this update supersede only those paragraphs in Accounting Standards Update No. 2011-05 that pertain to how and where reclassification adjustments are presented.  The amendments were effective at the same time as the amendments in Accounting Standards Update 2011-05.  The Company complied with the revised disclosure requirements.

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Note 9 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	2012			2011		2010
Current tax expense	$	2,968		$	1,723	$	1,973
Deferred tax (benefit) expense		(206	)		340		(462	)
Total income taxes	$	2,762		$	2,063	$	1,511

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	2012			2011
Items giving rise to deferred tax assets:
Allowance for loan losses	$	2,394		$	2,551
Deferred compensation		1,709			1,558
Deferred loan fees/costs		322			376
Other real estate owned		554			440
Other		199			179
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(156	)		(149	)
FHLB stock dividends		(1,081	)		(1,081	)
Unrealized gain on securities available for sale		(828	)		(495	)
Depreciation		(146	)		(250	)
Prepaid expenses		(73	)		(140	)
Intangibles		(363	)		(330	)
Other		-			(1	)
Net deferred tax asset	$	2,531		$	2,658

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2012			2011			2010
Statutory tax	$	3,337		$	2,685		$	2,246
Effect of nontaxable interest		(314	)		(299	)		(279	)
Nondeductible interest expense		12			16			20
Income from bank owned insurance, net		(100	)		(169	)		(236	)
Effect of state income tax		53			56			46
Tax credits		(250	)		(245	)		(224	)
Other items		24			19			(62	)
Total income taxes	$	2,762		$	2,063		$	1,511

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Note 13 - Fair Value of Financial Instruments (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Selling Costs, Percentage	10.00%
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 1,979,000
Impaired Financing Receivable, Related Allowance	1,979	655
Impaired Financing Receivable, Unpaid Principal Balance		3,491,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	2,479,000
Allowance for Loan and Lease Losses, Adjustments, Net		218,000
Other Real Estate	2,617	2,948,000
Other Real Estate, Gross	4,214
Real Estate Owned, Valuation Allowance	1,597
Real Estate, Write-down or Reserve, Amount	331	1,266,000
Real Estate, Gross		4,214,000
Real Estate Owned, Valuation Allowance, Amounts Applied		$ 1,266,000

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Note 17 - Consolidated Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Quarterly Financial Information [Table Text Block]

	Quarters Ended
2012	Mar. 31		Jun. 30		Sept. 30		Dec. 31
Total interest income	$	10,665	$	9,657	$	9,405	$	9,274
Total interest expense		1,753		1,604		1,538		1,451
Net interest income		8,912		8,053		7,867		7,823
Provision for loan losses(1)		1,316		524		1,183		(1,440	)
Noninterest income		3,479		1,974		1,674		1,356
Noninterest expense		7,332		7,162		6,957		8,290
Net income		2,622		1,719		1,107		1,604
Earnings per share	$	0.65	$	0.43	$	0.27	$	.40
2011
Total interest income	$	12,025	$	10,817	$	10,693	$	10,505
Total interest expense		2,822		2,663		2,509		2,175
Net interest income		9,203		8,154		8,184		8,330
Provision for loan losses(2)		2,944		759		1,152		41
Noninterest income		3,659		1,687		1,058		818
Noninterest expense		7,098		6,981		7,001		7,219
Net income		2,033		1,555		886		1,361
Earnings per share	$	0.51	$	0.39	$	0.22	$	0.34
2010
Total interest income	$	12,228	$	11,599	$	11,438	$	11,249
Total interest expense		3,619		3,421		3,328		3,179
Net interest income		8,609		8,178		8,110		8,070
Provision for loan losses(3)		921		721		2,225		2,004
Noninterest income		1,865		1,524		1,382		1,383
Noninterest expense		6,881		6,976		6,863		5,923
Net income		1,906		1,471		421		1,298
Earnings per share	$	0.48	$	0.37	$	.10	$	0.33

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Allowance for Loan Losses and the Recorded Investment of Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 2,107	$ 655
Collectively evaluated for impairment	4,798	6,689
Total ending allowance balance			8,198
Loans:
Loans individually evaluated for impairment	17,401	11,572
Loans collectively evaluated for impairment	540,887	586,736
Total ending loans balance	558,288	598,308
Residential Portfolio Segment [Member] | Evaluated for Impairment [Member]
Loans:
Total ending loans balance	226,022	238,490
Residential Portfolio Segment [Member] | Allowance for Loan and Lease Losses [Member]
Ending allowance balance attributable to loans:
Total ending allowance balance	1,329	1,860
Residential Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	128	130
Collectively evaluated for impairment	1,201	1,730
Loans:
Loans individually evaluated for impairment	827	1,505
Loans collectively evaluated for impairment	225,195	236,985
Total ending loans balance	226,022	238,490
Commercial Real Estate Portfolio Segment [Member] | Evaluated for Impairment [Member]
Loans:
Total ending loans balance	175,010	207,455
Commercial Real Estate Portfolio Segment [Member] | Allowance for Loan and Lease Losses [Member]
Ending allowance balance attributable to loans:
Total ending allowance balance	3,946	3,493
Commercial Real Estate Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	1,979	525
Collectively evaluated for impairment	1,967	2,968
Loans:
Loans individually evaluated for impairment	16,354	9,733
Loans collectively evaluated for impairment	158,656	197,722
Commercial and Industrial [Member] | Evaluated for Impairment [Member]
Loans:
Total ending loans balance	57,239	45,200
Commercial and Industrial [Member] | Allowance for Loan and Lease Losses [Member]
Ending allowance balance attributable to loans:
Total ending allowance balance	783	636
Commercial and Industrial [Member]
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	783	636
Loans:
Loans individually evaluated for impairment		334
Loans collectively evaluated for impairment	57,239	44,866
Total ending loans balance	57,239	45,200
Consumer Portfolio Segment [Member] | Evaluated for Impairment [Member]
Loans:
Total ending loans balance	100,017	107,163
Consumer Portfolio Segment [Member] | Allowance for Loan and Lease Losses [Member]
Ending allowance balance attributable to loans:
Total ending allowance balance	847	1,355
Consumer Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	847	1,355
Loans:
Loans individually evaluated for impairment	220
Loans collectively evaluated for impairment	99,797	107,163
Evaluated for Impairment [Member]
Loans:
Total ending loans balance	558,288	598,308
Allowance for Loan and Lease Losses [Member]
Ending allowance balance attributable to loans:
Total ending allowance balance	$ 6,905	$ 7,344

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Note 8 - Subordinated Debentures and Trust Preferred Securities (Detail) (USD $) In Thousands, unless otherwise specified	0 Months Ended	1 Months Ended	0 Months Ended
	Mar. 07, 2013	Mar. 22, 2007	Sep. 07, 2000
Proceeds from Issuance of Trust Preferred Securities (in Dollars)		$ 8,500	$ 5,000
Debt Instrument, Interest Rate, Stated Percentage		6.58%	10.60%
Callable Premium at Issuance			105.30%
Annual Decrease in Callable Premium			53.00%
Redemption of Subordinated Debentures, Percent of total amount	104.24%
Debt Instrument, Basis Spread on Variable Rate		1.68%

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Consolidated Statements of Condition (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Assets
Cash and noninterest-bearing deposits with banks	$ 10,617	$ 8,914
Interest-bearing deposits with banks	35,034	42,716
Total cash and cash equivalents	45,651	51,630
Securities available for sale	94,965	85,670
Securities held to maturity (estimated fair value: 2012 - $24,624; 2011 - $22,847)	23,511	22,848
Federal Home Loan Bank stock	6,281	6,281
Total loans	558,288	598,308
Less: Allowance for loan losses	(6,905)	(7,344)
Net loans	551,383	590,964
Premises and equipment, net	8,680	9,216
Other real estate owned	3,667	4,256
Accrued interest receivable	2,057	2,872
Goodwill	1,267	1,267
Bank owned life insurance and annuity assets	25,056	23,097
Other assets	6,705	6,076
Total assets	769,223	804,177
Liabilities
Noninterest-bearing deposits	139,526	138,143
Interest-bearing deposits	515,538	549,743
Total deposits	655,064	687,886
Other borrowed funds	14,285	20,296
Subordinated debentures	13,500	13,500
Accrued liabilities	10,554	10,652
Total liabilities	693,403	732,334
Commitments and Contingent Liabilities (See Note J)
Shareholders’ Equity
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 2012 - 4,721,943 shares issued; 2011 - 4,686,295 shares issued)	4,722	4,686
Additional paid-in capital	34,109	33,473
Retained earnings	51,094	48,435
Accumulated other comprehensive income	1,607	961
Treasury stock, at cost (659,739 shares)	(15,712)	(15,712)
Total shareholders’ equity	75,820	71,843
Total liabilities and shareholders’ equity	$ 769,223	$ 804,177

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Note 2 - Securities (Detail) - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Amortized Cost	$ 23,511	$ 22,848
Gross Unrecognized Gains	1,178	558
Gross Unrecognized Losses	(65)	(559)
Estimated Fair Value	24,624	22,847
US States and Political Subdivisions Debt Securities [Member]
Amortized Cost	23,494	22,825
Gross Unrecognized Gains	1,178	558
Gross Unrecognized Losses	(65)	(559)
Estimated Fair Value	24,607	22,824
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Amortized Cost	17	23
Estimated Fair Value	$ 17	$ 23

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Note 17 - Consolidated Quarterly Financial Information (unaudited) (Detail) (USD $)	3 Months Ended
	Dec. 31, 2012
Proceeds from Recoveries of Loans Previously Charged off	$ 1,250

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Consolidated Statements Of Changes In Shareholders' Equity (Parentheticals) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Common stock, shares issued	32,765	26,500	16,047
Cash dividends per share (in Dollars per share)	$ 1.09	$ 0.84	$ 0.84
Common stock issued through dividend reinvestment	2,883
Common Stock [Member]
Common stock, shares issued	32,765	26,500	16,047
Cash dividends per share (in Dollars per share)	$ 1.09	$ 0.84	$ 0.84
Common stock issued through dividend reinvestment	2,883

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Note 16 - Segment Information (Detail) (Banking [Member])	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Banking [Member]
Percentage of Revenue	91.80%	92.90%	91.20%

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Note 3 - Loans and Allowance for Loan Losses (Detail) - TDR's Pre-Modification and Post-Modification (Performing to Modified Terms [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Owner-occupied
Pre-Modification of Recorded Investment	$ 10,936	$ 1,585
Post-Modification of Recorded Investment	10,877	1,487
Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Owner-occupied
Pre-Modification of Recorded Investment	4,266
Post-Modification of Recorded Investment	4,222
Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Owner-occupied
Pre-Modification of Recorded Investment	686
Post-Modification of Recorded Investment	671
Interest Only Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Owner-occupied
Pre-Modification of Recorded Investment	5,984	400
Post-Modification of Recorded Investment	5,984	400
Rate Reduction [Member] | Commercial Real Estate Owner Occupied [Member]
Owner-occupied
Pre-Modification of Recorded Investment		959
Post-Modification of Recorded Investment		868
Maturity Extension at Lower Stated Rate Than Market Rate [Member] | Commercial Real Estate Owner Occupied [Member]
Owner-occupied
Pre-Modification of Recorded Investment		226
Post-Modification of Recorded Investment		$ 219

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Note 12 - Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Employee Stock Ownership Plan (ESOP) Disclosures [Table Text Block]

	Years ended December 31
	2012		2011		2010
Number of shares issued		32,765		26,500		16,047
Fair value of stock contributed	$	617	$	497	$	315
Cash contributed		82		65		105
Total expense	$	699	$	562	$	420

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Note 5 - Deposits (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Interest-bearing Domestic Deposit, Brokered	$ 31,271	$ 23,839

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Note 15 - Parent Company Only Condensed Financial Information

12 Months Ended

Dec. 31, 2012

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

Note O - Parent Company Only Condensed Financial Information

Below is condensed financial information of Ohio Valley. In this information, Ohio Valley’s investment in its subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries since acquisition. This information should be read in conjunction with the consolidated financial statements of the Company.

CONDENSED STATEMENTS OF CONDITION

	Years ended December 31:
Assets	2012		2011
Cash and cash equivalents	$	1,700	$	1,462
Investment in subsidiaries		87,950		84,038
Notes receivable - subsidiaries		3,423		3,743
Other assets		310		406
Total assets	$	93,383	$	89,649
Liabilities
Notes payable	$	3,526	$	3,748
Subordinated debentures		13,500		13,500
Other liabilities		537		558
Total liabilities	$	17,563	$	17,806
Shareholders’ Equity
Total shareholders’ equity		75,820		71,843
Total liabilities and shareholders’ equity	$	93,383	$	89,649

CONDENSED STATEMENTS OF INCOME

	Years ended December 31:
Income:	2012		2011		2010
Interest on notes	$	114	$	134	$	158
Other operating income		84		65		68
Dividends from subsidiaries		4,500		3,500		4,500
Expenses:
Interest on notes		114		134		159
Interest on subordinated debentures		789		1,089		1,089
Operating expenses		364		287		538
Income before income taxes and equity in undistributed earnings of subsidiaries		3,431		2,189		2,940
Income tax benefit		355		439		522
Equity in undistributed earnings of subsidiaries		3,266		3,207		1,634
Net Income	$	7,052	$	5,835	$	5,096

CONDENSED STATEMENTS OF CASH FLOWS

	Years ended December 31:
Cash flows from operating activities:	2012			2011			2010
Net Income	$	7,052		$	5,835		$	5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(3,266	)		(3,207	)		(1,634	)
Common stock issued to ESOP		617			496			315
Change in other assets		96			(92	)		(12	)
Change in other liabilities		(21	)		105			64
Net cash provided by operating activities		4,478			3,137			3,829
Cash flows from investing activities:
Change in notes receivable		320			85			402
Net cash provided by investing activities		320			85			402
Cash flows from financing activities:
Change in notes payable		(222	)		(87	)		(412	)
Proceeds from common stock through dividend reinvestment		55			-			-
Cash dividends paid		(4,393	)		(3,360	)		(3,347	)
Net cash used in financing activities		(4,560	)		(3,447	)		(3,759	)
Cash and cash equivalents:
Change in cash and cash equivalents		238			(225	)		472
Cash and cash equivalents at beginning of year		1,462			1,687			1,215
Cash and cash equivalents at end of year	$	1,700		$	1,462		$	1,687

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Note 13 - Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair Value Measurements at December 31, 2012, 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. Government sponsored entity securities		-	$	1,012		-
Agency mortgage-backed securities, residential		-		93,953		-

	Fair Value Measurements at December 31, 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		-	$	5,513		-
U.S. Government sponsored entity securities		-		2,559		-
Agency mortgage-backed securities, residential		-		77,598		-

Fair Value Measurements, Nonrecurring [Table Text Block]

	Fair Value Measurements at December 31, 2012, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other real estate owned:
Commercial real estate:
Construction		-		-	$	1,562
Commercial and industrial		-		-		1,055

	Fair Value Measurements at December 31, 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 real estate:
Owner-occupied		-		-	$	290
Nonowner-occupied		-		-		1,959
Construction		-		-		587
Other real estate owned:
Commercial real estate:
Construction		-		-		1,814
Commercial and industrial		-		-		1,134

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range			(Weighted Average)
Other real estate owned:
Commercial real estate:
Construction	$	1,562	Sales approach	Adjustment to comparables		15	%		15	%
Commercial		1,055	Sales approach	Adjustment to comparables		15	%		15	%

Fair Value, by Balance Sheet Grouping [Table Text Block]

			Fair Value Measurements at December 31, 2012 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	45,651	$	45,651	$	-	$	-	$	45,651
Securities available for sale		94,965		-		94,965		-		94,965
Securities held to maturity		23,511		-		11,569		13,055		24,624
Federal Home Loan Bank stock		6,281		N/A		N/A		N/A		N/A
Loans, net		551,383		-		-		564,059		564,059
Accrued interest receivable		2,057		-		283		1,774		2,057
Financial Liabilities:
Deposits		655,064		139,526		517,680		-		657,206
Other borrowed funds		14,285		-		14,536		-		14,536
Subordinated debentures		13,500		-		10,146		-		10,146
Accrued interest payable		1,377		2		1,375		-		1,377

Fair Value and Carrying Value Disclosure (Table Text Block)

	2011
	Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	51,630	$	51,630
Securities available for sale		85,670		85,670
Securities held to maturity		22,848		22,847
Federal Home Loan Bank stock		6,281		N/A
Loans, net		590,964		599,782
Accrued interest receivable		2,872		2,872
Financial liabilities:
Deposits		687,886		690,607
Other borrowed funds		20,296		20,565
Subordinated debentures		13,500		11,085
Accrued interest payable		1,894		1,894

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Note 17 - Consolidated Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information [Text Block]

Note Q - Consolidated Quarterly Financial Information (unaudited)

	Quarters Ended
2012	Mar. 31		Jun. 30		Sept. 30		Dec. 31
Total interest income	$	10,665	$	9,657	$	9,405	$	9,274
Total interest expense		1,753		1,604		1,538		1,451
Net interest income		8,912		8,053		7,867		7,823
Provision for loan losses(1)		1,316		524		1,183		(1,440	)
Noninterest income		3,479		1,974		1,674		1,356
Noninterest expense		7,332		7,162		6,957		8,290
Net income		2,622		1,719		1,107		1,604
Earnings per share	$	0.65	$	0.43	$	0.27	$	.40
2011
Total interest income	$	12,025	$	10,817	$	10,693	$	10,505
Total interest expense		2,822		2,663		2,509		2,175
Net interest income		9,203		8,154		8,184		8,330
Provision for loan losses(2)		2,944		759		1,152		41
Noninterest income		3,659		1,687		1,058		818
Noninterest expense		7,098		6,981		7,001		7,219
Net income		2,033		1,555		886		1,361
Earnings per share	$	0.51	$	0.39	$	0.22	$	0.34
2010
Total interest income	$	12,228	$	11,599	$	11,438	$	11,249
Total interest expense		3,619		3,421		3,328		3,179
Net interest income		8,609		8,178		8,110		8,070
Provision for loan losses(3)		921		721		2,225		2,004
Noninterest income		1,865		1,524		1,382		1,383
Noninterest expense		6,881		6,976		6,863		5,923
Net income		1,906		1,471		421		1,298
Earnings per share	$	0.48	$	0.37	$	.10	$	0.33

(1) During the fourth quarter of 2012, the Company experienced a large recovery of $1,250 on a previously charged-off commercial loan which lowered net charge-offs. The large decrease in net charge-offs contributed to a lower historical loan loss factor that created a lower level of general allocations within the allowance for loan losses.

(2) During the first quarter of 2011, the Company began taking partial charge-offs more quickly on collateral dependent impaired loans 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.  The increases in partial charge-offs contributed to a higher historical loan loss factor, which required additional general allocations within the allowance for loan losses.

(3) During the third and fourth quarters of 2010, the Bank experienced an increase in its provision expense as a result of continued credit quality issues with three commercial relationships that resulted in additional impairment charges and partial charge-offs.

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Note 6 - Interest Rate Swaps (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Derivatives, Determination of Fair Value	$223	$2
Commercial Loans - Interest Rate Swap (Member)
Derivatives, Determination of Fair Value	$13,276	$1,021

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net income	$ 7,052	$ 5,835	$ 5,096
Depreciation	973	971	1,067
Net amortization of securities	1,483	1,059	666
Proceeds from sale of loans in secondary market	29,573	13,637	16,825
Loans disbursed for sale in secondary market	(28,947)	(13,251)	(16,463)
Amortization of mortgage servicing rights	179	121	122
(Recovery) impairment of mortgage servicing rights	(21)	(33)	30
Gain on sale of loans	(784)	(474)	(514)
Deferred tax (benefit) expense	(206)	340	(462)
Provision for loan losses	1,583	4,896	5,871
Common stock issued to ESOP	617	496	315
Earnings on bank owned life insurance and annuity assets	(782)	(725)	(741)
(Gain) loss on other real estate owned	(181)	(42)	177
Write-down of other real estate owned	331	1,266
Change in accrued interest receivable	815	(168)	192
Change in accrued liabilities	(98)	1,397	(718)
Change in other assets	(756)	857	866
Net cash provided by operating activities	10,831	16,182	12,329
Cash flows from investing activities:
Proceeds from maturities of securities available for sale	33,696	43,193	65,698
Purchases of securities available for sale	(43,436)	(43,007)	(69,014)
Proceeds from maturities of securities held to maturity	2,213	1,449	3,523
Purchases of securities held to maturity	(2,935)	(2,068)	(9,126)
Net change in loans	36,731	34,243	4,829
Proceeds from sale of other real estate owned	1,706	756	1,511
Purchases of premises and equipment	(437)	(449)	(673)
Purchases of bank owned life insurance and annuity assets	(1,177)	(2,611)	(286)
Net cash provided by (used in) investing activities	26,361	31,506	(3,538)
Cash flows from financing activities:
Change in deposits	(32,822)	(6,895)	47,137
Proceeds from common stock through dividend reinvestment	55
Cash dividends	(4,393)	(3,360)	(3,347)
Change in securities sold under agreements to repurchase		(38,107)	6,466
Proceeds from Federal Home Loan Bank borrowings	2,000	703	11,475
Repayment of Federal Home Loan Bank borrowings	(7,789)	(7,562)	(26,278)
Change in other short-term borrowings	(222)	(588)	(163)
Net cash provided by (used in) financing activities	(43,171)	(55,809)	35,290
Cash and cash equivalents:
Change in cash and cash equivalents	(5,979)	(8,121)	44,081
Cash and cash equivalents at beginning of year	51,630	59,751	15,670
Cash and cash equivalents at end of year	45,651	51,630	59,751
Supplemental disclosure:
Cash paid for interest	6,863	10,875	15,022
Cash paid for income taxes	4,033	445	2,016
Transfers from loans to other real estate owned	1,267	1,833	522
Other real estate owned sales financed by the Bank	$ 1,133	$ 344	$ 159

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Consolidated Statements of Condition (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Securities held to maturity, fair value (in Dollars)	$ 24,624	$ 22,847
Common stock par value (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,721,943	4,686,295
Treasury stock, shares	659,739	659,739

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Note 10 - Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Text Block]

Note J - Commitments and Contingent Liabilities

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 Bank uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet.

Following is a summary of such commitments at December 31:

	2012		2011
Fixed rate	$	678	$	1,456
Variable rate		50,488		54,860
Standby letters of credit		5,959		5,486

The interest rate on fixed-rate commitments ranged from 3.38%  to 6.50%  at December 31, 2012.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Bank evaluates each customer’s credit worthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

The Company participates as a facilitator of tax refunds pursuant to a clearing agreement with a third-party tax software provider. The clearing agreement is effective through December 31, 2015 and is renewable in 5-year increments. The agreement requires the Bank to process electronic refund checks (“ERC’s”) and electronic refund deposits (“ERD’s”) presented for payment on behalf of taxpayers containing taxpayer refunds. The Bank will, in turn, receive a fee paid by the third-party tax software provider for each transaction that is processed. The agreement is subject to termination if the Bank fails to perform the required clearing services and/or the Bank’s regulators would require the Bank to cease offering the product presented within the agreement.

There are various contingent liabilities that are not reflected in the financial statements, including claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on financial condition or results of operations.

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Note 15 - Parent Company Only Condensed Financial Information (Detail) - Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net Income	$ 7,052	$ 5,835	$ 5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Common stock issued to ESOP	(617)	(496)	(315)
Change in other assets	(756)	857	866
Net cash provided by operating activities	10,831	16,182	12,329
Cash flows from investing activities:
Net cash provided by investing activities	26,361	31,506	(3,538)
Cash flows from financing activities:
Proceeds from common stock through dividend reinvestment	55
Cash dividends paid	(4,393)	(3,360)	(3,347)
Net cash used in financing activities	(43,171)	(55,809)	35,290
Cash and cash equivalents:
Change in cash and cash equivalents	(5,979)	(8,121)	44,081
Cash and cash equivalents	45,651	51,630	59,751
Parent Company [Member] | Beginning Balance [Member]
Cash and cash equivalents:
Cash and cash equivalents	1,462	1,687	1,215
Parent Company [Member] | Ending Balance [Member]
Cash and cash equivalents:
Cash and cash equivalents	1,700	1,462	1,687
Parent Company [Member]
Net Income	7,052	5,835	5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries	(3,266)	(3,207)	(1,634)
Common stock issued to ESOP	617	496	315
Change in other assets	96	(92)	(12)
Change in other liabilities	(21)	105	64
Net cash provided by operating activities	4,478	3,137	3,829
Cash flows from investing activities:
Change in notes receivable	320	85	402
Net cash provided by investing activities	320	85	402
Cash flows from financing activities:
Change in notes payable	(222)	(87)	(412)
Proceeds from common stock through dividend reinvestment	55
Cash dividends paid	(4,393)	(3,360)	(3,347)
Net cash used in financing activities	(4,560)	(3,447)	(3,759)
Cash and cash equivalents:
Change in cash and cash equivalents	238	(225)	472
Cash and cash equivalents	$ 1,700	$ 1,462

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Note 15 - Parent Company Only Condensed Financial Information (Detail) - Condensed Statements of Condition (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash and cash equivalents	$ 45,651	$ 51,630	$ 59,751	$ 15,670
Other assets	6,705	6,076
Total assets	769,223	804,177	851,514
Liabilities
Subordinated debentures	13,500	13,500
Other liabilities	14,285
Total liabilities	693,403	732,334
Shareholders’ Equity
Total shareholders’ equity	75,820	71,843	68,128	66,521
Total liabilities and shareholders’ equity	769,223	804,177
Parent Company [Member]
Cash and cash equivalents	1,700	1,462
Investment in subsidiaries	87,950	84,038
Notes receivable - subsidiaries	3,423	3,743
Other assets	310	406
Total assets	93,383	89,649
Liabilities
Notes payable	3,526	3,748
Subordinated debentures	13,500	13,500
Other liabilities	537	558
Total liabilities	17,563	17,806
Shareholders’ Equity
Total shareholders’ equity	75,820	71,843
Total liabilities and shareholders’ equity	$ 93,383	$ 89,649

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	OHIO VALLEY BANC CORP
Document Type	10-K
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	4,029,439
Entity Public Float	$ 0
Amendment Flag	false
Entity Central Index Key	0000894671
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Note 11 - Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions Disclosure [Text Block]

Note K - Related Party Transactions

Certain directors, executive officers and companies with which they are affiliated were loan customers during 2012. A summary of activity on these borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2012	$	5,088
New loans		1,427
Repayments		(797	)
Other changes		-
Total loans at December 31, 2012	$	5,718

Other changes include adjustments for loans applicable to one reporting period that are excludable from the other reporting period, such as changes in persons classified as directors, executive officers and companies’ affiliates.

Deposits from principal officers, directors, and their affiliates at year-end 2012 and 2011 were $17,616 and $15,807.

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Note 11 - Related Party Transactions (Detail) - Related Party Loans (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Total loans at January 1, 2012	$ 5,088
Total loans at December 31, 2012	5,718
New loans	1,427
Repayments	$ (797)

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Note 14 - Regulatory Matters (Detail) - Capital Requirements (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Consolidated Entities [Member]
Total capital (to risk weighted assets)
Actual capital	$ 93,158	$ 90,288
Actual capital to risk weighted assets	17.20%	15.60%
Minimum capital required for capital adequacy purposes	43,234	46,174
Minimum capital to risk weighted assets required for capital adequacy purposes	8.00%	8.00%
Minimum capital required to be well capitalized under prompt corrective action regulations	54,043	57,718
Tier 1 capital (to risk weighted assets)
Actual Tier 1 capital	86,401	83,072
Actual Tier 1 capital to risk weighted assets	16.00%	14.40%
Minimum Tier 1 capital required for capital adequacy purposes	21,617	23,087
Minimum Tier 1 capital to risk weighted assets required for capital adequacy purposes	4.00%	4.00%
Minimum Tier 1 capital required to be well capitalized under prompt corrective action regulations	32,426	34,631
Tier 1 capital (to average assets)
Actual Tier 1 capital	86,401	83,072
Actual Tier 1 capital to average assets	10.90%	10.30%
Minimum Tier 1 capital required for capital adequacy purposes	31,571	32,414
Minimum Tier 1 capital to average assets required for capital adequacy purposes	4.00%	4.00%
Minimum Tier 1 capital required to be well capitalized under prompt corrective action regulations	39,464	40,517
Bank [Member]
Total capital (to risk weighted assets)
Actual capital	84,267	81,991
Actual capital to risk weighted assets	15.90%	14.40%
Minimum capital required for capital adequacy purposes	42,506	45,544
Minimum capital to risk weighted assets required for capital adequacy purposes	8.00%	8.00%
Minimum capital required to be well capitalized under prompt corrective action regulations	53,132	56,930
Minimum capital to risk weighted assets required to be well capitalized under prompt corrective action regulations	10.00%	10.00%
Tier 1 capital (to risk weighted assets)
Actual Tier 1 capital	77,690	74,975
Actual Tier 1 capital to risk weighted assets	14.60%	13.20%
Minimum Tier 1 capital required for capital adequacy purposes	21,253	22,772
Minimum Tier 1 capital to risk weighted assets required for capital adequacy purposes	4.00%	4.00%
Minimum Tier 1 capital required to be well capitalized under prompt corrective action regulations	31,879	34,158
Minimum Tier 1 capital to risk weighted assets required to be well capitalized under prompt corrective action regulations	6.00%	6.00%
Tier 1 capital (to average assets)
Actual Tier 1 capital	77,690	74,975
Actual Tier 1 capital to average assets	10.00%	9.40%
Minimum Tier 1 capital required for capital adequacy purposes	31,010	31,969
Minimum Tier 1 capital to average assets required for capital adequacy purposes	4.00%	4.00%
Minimum Tier 1 capital required to be well capitalized under prompt corrective action regulations	$ 38,763	$ 39,962
Minimum Tier 1 capital to average assets required to be well capitalized under prompt corrective action regulations	5.00%	5.00%

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Consolidated Statements of Income and Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Interest and dividend income:
Loans, including fees	$ 36,329	$ 41,263	$ 43,462
Taxable	1,608	1,776	2,187
Tax exempt	590	571	497
Dividends	279	267	275
Other interest	195	163	93
	39,001	44,040	46,514
Interest expense:
Deposits	5,064	8,436	11,053
Other borrowed funds	493	644	1,405
Subordinated debentures	789	1,089	1,089
	6,346	10,169	13,547
Net interest income	32,655	33,871	32,967
Provision for loan losses	1,583	4,896	5,871
Net interest income after provision for loan losses	31,072	28,975	27,096
Noninterest income:
Service charges on deposit accounts	1,831	2,218	2,202
Trust fees	199	215	233
Income from bank owned life insurance and annuity assets	782	725	741
Mortgage banking income	626	386	362
Electronic refund check / deposit fees	2,289	2,559	780
Debit/credit card interchange income	1,700	1,387	998
Net loss on other real estate owned	(331)	(1,266)
Other	1,206	956	1,015
	8,483	7,222	6,154
Noninterest expense:
Salaries and employee benefits	17,418	16,650	15,647
Occupancy	1,565	1,585	1,609
Furniture and equipment	954	1,143	1,214
Corporation franchise tax	780	744	745
FDIC insurance	755	1,029	1,061
Data processing	1,021	891	685
Foreclosed assets	446	650	67
Other	6,802	5,607	5,615
	29,741	28,299	26,643
Income before income taxes	9,814	7,898	6,607
Provision for income taxes	2,762	2,063	1,511
NET INCOME	7,052	5,835	5,096
Change in unrealized gains/losses on securities	979	1,127	(693)
Income tax effect	(333)	(383)	236
Net of tax	646	744	(457)
Comprehensive income	7,698	6,579	4,639
Earnings per share (in Dollars per share)	$ 1.75	$ 1.46	$ 1.28
Other Real Estate Owned [Member]
Noninterest income:
Net loss on other real estate owned	$ (150)	$ (1,224)	$ (177)

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Note 5 - Deposits

12 Months Ended

Dec. 31, 2012

Deposit Liabilities Disclosures [Text Block]

Note E - Deposits

Following is a summary of interest-bearing deposits at December 31:

	2012		2011
NOW accounts	$	106,581	$	101,907
Savings and Money Market		197,062		200,072
Time:
In denominations under $100,000		110,002		126,705
In denominations of $100,000 or more		101,893		121,059
Total time deposits		211,895		247,764
Total interest-bearing deposits	$	515,538	$	549,743

Following is a summary of total time deposits by remaining maturity at December 31, 2012:

2013	$	119,568
2014		66,277
2015		15,767
2016		5,502
2017		3,983
Thereafter		798
Total	$	211,895

Brokered deposits, included in time deposits, were $23,839 and $31,271 at December 31, 2012 and 2011, respectively.

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Note 4 - Premises and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment Disclosure [Text Block]

Note D - Premises and Equipment

Following is a summary of premises and equipment at December 31:

	2012		2011
Land	$	1,802	$	1,890
Buildings		10,235		10,334
Leasehold improvements		2,872		2,855
Furniture and equipment		14,281		13,961
		29,190		29,040
Less accumulated depreciation		20,510		19,824
Total premises and equipment	$	8,680	$	9,216

The following is a summary of the future minimum lease payments for facilities leased by the Company. Lease expense was $492 in 2012, $492 in 2011, and $490 in 2010.

2013	$	452
2014		319
2015		187
2016		160
2017		122
Thereafter		-
	$	1,240

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Note 16 - Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting Disclosure [Text Block]

Note P - 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 91.2%, 91.8% and 92.9%  of total consolidated revenues for the years ended December 31, 2012, 2011 and 2010, respectively.

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

Segment information for the years ended December 31, is as follows:

	Year Ended December 31, 2012
	Banking		Consumer Finance		Total Company
Net interest income	$	29,445	$	3,210	$	32,655
Provision expense	$	1,527	$	56	$	1,583
Noninterest income	$	7,734	$	749	$	8,483
Noninterest expense	$	27,384	$	2,357	$	29,741
Tax expense	$	2,240	$	522	$	2,762
Net income	$	6,028	$	1,024	$	7,052
Assets	$	754,490	$	14,733	$	769,223

	Year Ended December 31, 2011
	Banking		Consumer Finance		Total Company
Net interest income	$	30,792	$	3,079	$	33,871
Provision expense	$	4,809	$	87	$	4,896
Noninterest income	$	6,327	$	895	$	7,222
Noninterest expense	$	26,130	$	2,169	$	28,299
Tax expense	$	1,483	$	580	$	2,063
Net income	$	4,697	$	1,138	$	5,835
Assets	$	789,744	$	14,433	$	804,177

	Year Ended December 31, 2010
	Banking		Consumer Finance		Total Company
Net interest income	$	30,074	$	2,893	$	32,967
Provision expense	$	5,717	$	154	$	5,871
Noninterest income	$	5,578	$	576	$	6,154
Noninterest expense	$	24,756	$	1,887	$	26,643
Tax expense	$	1,029	$	482	$	1,511
Net income	$	4,149	$	947	$	5,096
Assets	$	837,359	$	14,155	$	851,514

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Note 12 - Employee Benefits

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note L - Employee Benefits

The Bank has a profit-sharing plan for the benefit of its employees and their beneficiaries. Contributions to the plan are determined by the Board of Directors of Ohio Valley. Contributions charged to expense were $222, $218, and $210 for 2012, 2011 and 2010.

Ohio Valley maintains an Employee Stock Ownership Plan (ESOP) covering substantially all employees of the Company. Ohio Valley issues shares to the ESOP, purchased by the ESOP with subsidiary cash contributions, which are allocated to ESOP participants based on relative compensation. The total number of shares held by the ESOP, all of which have been allocated to participant accounts, were 280,028 and 255,381 at December 31, 2012 and 2011.  In addition, the subsidiaries made contributions to its ESOP Trust as follows:

	Years ended December 31
	2012		2011		2010
Number of shares issued		32,765		26,500		16,047
Fair value of stock contributed	$	617	$	497	$	315
Cash contributed		82		65		105
Total expense	$	699	$	562	$	420

Life insurance contracts with a cash surrender value of $23,134 and annuity assets of $1,922 at December 31, 2012 have been purchased by the Company, the owner of the policies.  The purpose of these contracts was to replace a current group life insurance program for executive officers, implement a deferred compensation plan for directors and executive officers, implement a director retirement plan and implement supplemental retirement plans for certain officers.  Under the deferred compensation plan, Ohio Valley pays each participant the amount of fees deferred plus interest over the participant’s desired term, upon termination of service.  Under the director retirement plan, participants are eligible to receive ongoing compensation payments upon retirement subject to length of service.  The supplemental retirement plans provide payments to select executive officers upon retirement based upon a compensation formula determined by Ohio Valley’s Board of Directors.  The present value of payments expected to be provided are accrued during the service period of the covered individuals and amounted to $4,919 and $4,480 at December 31, 2012 and 2011. Expenses related to the plans for each of the last three years amounted to $536, $318, and $317. In association with the split-dollar life insurance plan, the present value of the postretirement benefit totaled $2,041 at December 31, 2012 and $1,580 at December 31, 2011.

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Note 13 - Fair Value of Financial Instruments (Detail) - Assets and Liabilities Measured at Fair Value on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
US Government-sponsored Enterprises Debt Securities [Member]
Assets Measured on Recurring Basis	$ 1,012	$ 2,559
Agency Mortgage-Backed Securitites, Residential (Member)
Assets Measured on Recurring Basis	93,953	77,598
US Treasury Securities [Member]
Assets Measured on Recurring Basis		$ 5,513

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Note 8 - Subordinated Debentures and Trust Preferred Securities

12 Months Ended

Dec. 31, 2012

Subordinated Borrowings Disclosure [Text Block]

Note H - Subordinated Debentures and Trust Preferred Securities

On September 7, 2000, a trust formed by Ohio Valley issued $5,000 of 10.6% fixed-rate trust preferred securities as part of a pooled offering of such securities. The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering, which debentures represent the sole asset of the trust. Beginning September 7, 2010, the Company’s subordinated debentures were callable upon demand at a premium of 105.30% with the call price declining .53% per year until reaching a call price of par at year twenty through maturity.  The subordinated debentures are required to be redeemed no later than September 7, 2030. Given the current capital levels and interest cost savings, the Company redeemed the full amount of the subordinated debentures on March 7, 2013, at a redemption price of 104.24%. The redemption was funded by a capital distribution from the Bank.

On March 22, 2007, a trust formed by Ohio Valley issued $8,500 of adjustable-rate trust preferred securities as part of a pooled offering of such securities.  The rate on these trust preferred securities were fixed at 6.58% for five years, and then converted to a floating-rate term on March 15, 2012, based on a rate equal to the 3-month LIBOR plus 1.68%.  There were no debt issuance costs incurred with these trust preferred securities.  The Company issued subordinated debentures to the trust in exchange for the proceeds of the offering.  The subordinated debentures must be redeemed no later than June 15, 2037.

Under the provisions of the related indenture agreements, the interest payable on the trust preferred securities is deferrable for up to five years and any such deferral is not considered a default. During any period of deferral, the Company would be precluded from declaring or paying dividends to shareholders or repurchasing any of the Company’s common stock.  Under  generally accepted accounting principles, the trusts are not consolidated  with  the  Company.  Accordingly, the Company does not report the  securities  issued by the trust as liabilities, and instead reports as liabilities  the  subordinated debentures issued by the Company and held by the  trust.  Since  the  Company’s  equity interest in the trusts cannot be received  until  the subordinated debentures are repaid, these amounts have been netted.

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Risk category of commercial loans by class of loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Commercial real estate:
Commercial Loans	$ 232,249	$ 252,655
Pass [Member] | Owner Occupied [Member]
Commercial real estate:
Commercial Loans	87,614	103,743
Pass [Member] | Nonowner Occupied [Member]
Commercial real estate:
Commercial Loans	39,627	30,375
Pass [Member] | Construction [Member]
Commercial real estate:
Commercial Loans	16,276	19,519
Pass [Member] | Commercial and Industrial [Member]
Commercial real estate:
Commercial Loans	47,226	36,633
Pass [Member]
Commercial real estate:
Commercial Loans	190,743	190,270
Criticized [Member] | Owner Occupied [Member]
Commercial real estate:
Commercial Loans	14,057	15,030
Criticized [Member] | Nonowner Occupied [Member]
Commercial real estate:
Commercial Loans	2,171	12,815
Criticized [Member] | Commercial and Industrial [Member]
Commercial real estate:
Commercial Loans	4,793	3,250
Criticized [Member]
Commercial real estate:
Commercial Loans	21,021	31,095
Classified [Member] | Owner Occupied [Member]
Commercial real estate:
Commercial Loans	3,171	10,591
Classified [Member] | Nonowner Occupied [Member]
Commercial real estate:
Commercial Loans	10,994	13,430
Classified [Member] | Construction [Member]
Commercial real estate:
Commercial Loans	1,100	1,952
Classified [Member] | Commercial and Industrial [Member]
Commercial real estate:
Commercial Loans	5,220	5,317
Classified [Member]
Commercial real estate:
Commercial Loans	20,485	31,290
Owner Occupied [Member]
Commercial real estate:
Commercial Loans	104,842	129,364
Nonowner Occupied [Member]
Commercial real estate:
Commercial Loans	52,792	56,620
Construction [Member]
Commercial real estate:
Commercial Loans	17,376	21,471
Commercial and Industrial [Member]
Commercial real estate:
Commercial Loans	$ 57,239	$ 45,200

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Note 6 - Interest Rate Swaps

12 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note F —Interest Rate Swaps

The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities.  The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position.  As part of this strategy, the Company provides its customer with a fixed-rate loan while creating a variable-rate asset for the Company by the customer entering into an interest rate swap with the Company on terms that match the loan.  The Company offsets its risk exposure by entering into an offsetting interest rate swap with an unaffiliated institution.  These interest rate swaps do not qualify as designated hedges; therefore, each swap is accounted for as a standalone derivative.  At December 31, 2012, the Company had interest rate swaps associated with commercial loans with a notional value of $13,276 and a fair value of $223.  This is compared to interest rate swaps with a notional value of $1,021 and a fair value of $2 at December 31, 2011.  The notional amount of the interest rate swaps does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreement.

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Note 7 - Other Borrowed Funds

12 Months Ended

Dec. 31, 2012

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note G - Other Borrowed Funds

Other borrowed funds at December 31, 2012 and 2011 are comprised of advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati and promissory notes.

	FHLB Borrowings		Promissory Notes		Totals
2012	$	10,759	$	3,526	$	14,285
2011	$	16,548	$	3,748	$	20,296

Pursuant to collateral agreements with the FHLB, advances are secured by $251,487 in qualifying mortgage loans, $96,434 in commercial loans and $6,281 in FHLB stock at December 31, 2012. Fixed-rate FHLB advances of $10,759 mature through 2042 and have interest rates ranging from 1.79% to 3.42% and a year-to-date weighted average cost of 2.31%. There were no variable-rate FHLB borrowings at December 31, 2012.

At December 31, 2012, 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 December 31, 2012.

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 $186,286 at December 31, 2012. Of this maximum borrowing capacity of $186,286, the Company had $161,237 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 1.15% to 5.00% (weighted average rate of 2.45%) and are due at various dates through a final maturity date of December 8, 2014. At December 31, 2012, there were no promissory notes payable by Ohio Valley to related parties. See Note K for further discussion of related party transactions.

Letters of credit issued on the Bank’s behalf by the FHLB to collateralize certain public unit deposits as required by law totaled $14,200 at December 31, 2012 and $27,000 at December 31, 2011.

Scheduled principal payments over the next five years:

	FHLB Borrowings		Promissory Notes		Totals
2013	$	1,329	$	1,909	$	3,238
2014		1,156		1,617		2,773
2015		1,058				1,058
2016		974		-		974
2017		901		-		901
Thereafter		5,341		-		5,341
	$	10,759	$	3,526	$	14,285

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Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

Note I - Income Taxes

The provision for income taxes consists of the following components:

	2012			2011		2010
Current tax expense	$	2,968		$	1,723	$	1,973
Deferred tax (benefit) expense		(206	)		340		(462	)
Total income taxes	$	2,762		$	2,063	$	1,511

The source of deferred tax assets and deferred tax liabilities at December 31:

	2012			2011
Items giving rise to deferred tax assets:
Allowance for loan losses	$	2,394		$	2,551
Deferred compensation		1,709			1,558
Deferred loan fees/costs		322			376
Other real estate owned		554			440
Other		199			179
Items giving rise to deferred tax liabilities:
Mortgage servicing rights		(156	)		(149	)
FHLB stock dividends		(1,081	)		(1,081	)
Unrealized gain on securities available for sale		(828	)		(495	)
Depreciation		(146	)		(250	)
Prepaid expenses		(73	)		(140	)
Intangibles		(363	)		(330	)
Other		-			(1	)
Net deferred tax asset	$	2,531		$	2,658

The Company determined that it was not required to establish a valuation allowance for deferred tax assets since management believes that the deferred tax assets are likely to be realized through a carry back to taxable income in prior years or the future reversals of existing taxable temporary differences.

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 34% to income before taxes is as follows:

	2012			2011			2010
Statutory tax	$	3,337		$	2,685		$	2,246
Effect of nontaxable interest		(314	)		(299	)		(279	)
Nondeductible interest expense		12			16			20
Income from bank owned insurance, net		(100	)		(169	)		(236	)
Effect of state income tax		53			56			46
Tax credits		(250	)		(245	)		(224	)
Other items		24			19			(62	)
Total income taxes	$	2,762		$	2,063		$	1,511

At December 31, 2012 and December 31, 2011, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months. The Internal Revenue Service has proposed that Loan Central, as a tax return preparer, be assessed a penalty for allegedly negotiating or endorsing checks issued by the U.S. Treasury to taxpayers.  The penalty, if formally assessed in the amount proposed, would amount to approximately $1.2 million.  Based on consultation with legal counsel, management feels that it is highly unlikely that the penalty recommendation will be sustained or an assessment issued.  Therefore, the Company did not recognize any interest and/or penalties related to income tax matters for the periods presented.

The Company is subject to U.S. federal income tax as well as West Virginia state income tax.  The Company is no longer subject to federal or state examination for years prior to 2009.  The tax years 2009-2011 remain open to federal  and state examinations.

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Note 4 - Premises and Equipment (Detail) - Future Minimum Lease Payments (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 452
2014	319
2015	187
2016	160
2017	122
	$ 1,240

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Note 13 - Fair Value of Financial Instruments (Detail) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Construction Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member]
Assets and Liabilities Measured on a Nonrecurring Basis	$ 1,562	$ 1,814
Construction Other Real Estate Owned [Member]
Assets and Liabilities Measured on a Nonrecurring Basis	1,562
Commercial and Industrial [Member] | Fair Value, Inputs, Level 3 [Member]
Assets and Liabilities Measured on a Nonrecurring Basis	1,055	1,134
Owner Occupied [Member] | Fair Value, Inputs, Level 3 [Member]
Assets and Liabilities Measured on a Nonrecurring Basis		290
Nonowner Occupied [Member] | Fair Value, Inputs, Level 3 [Member]
Assets and Liabilities Measured on a Nonrecurring Basis		1,959
Construction [Member] | Fair Value, Inputs, Level 3 [Member]
Assets and Liabilities Measured on a Nonrecurring Basis		$ 587

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Note 5 - Deposits (Detail) - Interest-Bearing Deposits (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
NOW accounts	$ 106,581	$ 101,907
Savings and Money Market	197,062	200,072
Time:
In denominations under $100,000	110,002	126,705
In denominations of $100,000 or more	101,893	121,059
Total time deposits	211,895	247,764
Total interest-bearing deposits	$ 515,538	$ 549,743

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Note 4 - Premises and Equipment (Detail) - Premises and Equipment (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Land	$ 1,802	$ 1,890
Buildings	10,235	10,334
Leasehold improvements	2,872	2,855
Furniture and equipment	14,281	13,961
	29,190	29,040
Less accumulated depreciation	20,510	19,824
Total premises and equipment	$ 8,680	$ 9,216

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Note 15 - Parent Company Only Condensed Financial Information (Detail) - Condensed Statements of Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Expenses:
Interest on subordinated debentures	$ 789	$ 1,089	$ 1,089
Income tax benefit	2,762	2,063	1,511
Net Income	7,052	5,835	5,096
Parent Company [Member]
Interest on notes	114	134	158
Other operating income	84	65	68
Dividends from subsidiaries	4,500	3,500	4,500
Expenses:
Interest on notes	114	134	159
Interest on subordinated debentures	789	1,089	1,089
Operating expenses	364	287	538
Income before income taxes and equity in undistributed earnings of subsidiaries	3,431	2,189	2,940
Income tax benefit	355	439	522
Equity in undistributed earnings of subsidiaries	3,266	3,207	1,634
Net Income	$ 7,052	$ 5,835	$ 5,096

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Note 11 - Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Related Party Transactions [Table Text Block]

Total loans at January 1, 2012	$	5,088
New loans		1,427
Repayments		(797	)
Other changes		-
Total loans at December 31, 2012	$	5,718

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Note 3 - Loans and Allowance for Loan Losses (Detail) - Allowance for Loan Losses Activity, by Portfolio Segment (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Allowance for loan losses:
Balance			$ 8,198
Provision for Loan Losses	1,583	4,896
Loans Charged Off	(5,136)	(10,422)	5,879
Recoveries	3,114	3,484	1,196
Residential Portfolio Segment [Member] | Beginning Balance [Member]
Allowance for loan losses:
Balance		1,860	1,051
Residential Portfolio Segment [Member] | Ending Balance [Member]
Allowance for loan losses:
Balance	1,329	1,860
Residential Portfolio Segment [Member]
Allowance for loan losses:
Provision for Loan Losses	395	2,642
Loans Charged Off	(1,066)	(2,034)
Recoveries	140	201
Commercial Real Estate Portfolio Segment [Member] | Beginning Balance [Member]
Allowance for loan losses:
Balance		3,493	3,083
Commercial Real Estate Portfolio Segment [Member] | Ending Balance [Member]
Allowance for loan losses:
Balance	3,946	3,493
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses:
Provision for Loan Losses	2,367	932
Loans Charged Off	(1,949)	(1,913)
Recoveries	35	1,391
Commercial and Industrial [Member] | Beginning Balance [Member]
Allowance for loan losses:
Balance		636	3,795
Commercial and Industrial [Member] | Ending Balance [Member]
Allowance for loan losses:
Balance	783	636
Commercial and Industrial [Member]
Allowance for loan losses:
Provision for Loan Losses	(1,381)	439
Loans Charged Off	(499)	(4,725)
Recoveries	2,027	1,127
Consumer Portfolio Segment [Member] | Beginning Balance [Member]
Allowance for loan losses:
Balance		1,355	1,457
Consumer Portfolio Segment [Member] | Ending Balance [Member]
Allowance for loan losses:
Balance	847	1,355
Consumer Portfolio Segment [Member]
Allowance for loan losses:
Provision for Loan Losses	202	883
Loans Charged Off	(1,622)	(1,750)
Recoveries	912	765
Beginning Balance [Member]
Allowance for loan losses:
Balance		7,344	9,386
Ending Balance [Member]
Allowance for loan losses:
Balance	$ 6,905	$ 7,344	$ 9,386

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Note 14 - Regulatory Matters

12 Months Ended

Dec. 31, 2012

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note N - Regulatory Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  Management believes that as of December 31, 2012, the Company and the Bank met all capital adequacy requirements to which they were subject.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. At year-end 2012 and 2011,  the Bank’s capital met the requirements for the Bank to be deemed well capitalized under the regulatory framework for prompt corrective action.

At year-end, consolidated actual capital levels and minimum required levels for the Company and the Bank were:

	Actual					Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2012
Total capital (to risk weighted assets)
Consolidated	$	93,158		17.2	%	$	43,234		8.0	%	$	54,043		N/A
Bank		84,267		15.9			42,506		8.0			53,132		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		86,401		16.0			21,617		4.0			32,426		N/A
Bank		77,690		14.6			21,253		4.0			31,879		6.0
Tier 1 capital (to average assets)
Consolidated		86,401		10.9			31,571		4.0			39,464		N/A
Bank		77,690		10.0			31,010		4.0			38,763		5.0
2011
Total capital (to risk weighted assets)
Consolidated	$	90,288		15.6	%	$	46,174		8.0	%	$	57,718		N/A
Bank		81,991		14.4			45,544		8.0			56,930		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		83,072		14.4			23,087		4.0			34,631		N/A
Bank		74,975		13.2			22,772		4.0			34,158		6.0
Tier 1 capital (to average assets)
Consolidated		83,072		10.3			32,414		4.0			40,517		N/A
Bank		74,975		9.4			31,969		4.0			39,962		5.0

Dividends paid by the subsidiaries are the primary source of funds available to Ohio Valley for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the subsidiaries to Ohio Valley is subject to restrictions by regulatory authorities. These restrictions generally limit dividends to the current and prior two years retained earnings. At January 1, 2013 approximately $6,427 of the subsidiaries’ retained earnings were available for dividends under these guidelines. In addition to these restrictions, dividend payments cannot reduce regulatory capital levels below minimum regulatory guidelines. The Board of Governors of the Federal Reserve System also has a policy requiring Ohio Valley to provide notice to the FRB in advance of the payment of a dividend to Ohio Valley’s shareholders under certain circumstances, and the FRB may disapprove of such dividend payment if the FRB determines the payment would be an unsafe or unsound practice.

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Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Composition of Loan Portfolio [Table Text Block]

	% of Total Loans
	2012			2011
Residential real estate loans		40.49	%		39.86	%
Commercial real estate loans		31.35	%		34.67	%
Consumer loans		17.91	%		17.92	%
Commercial and industrial loans		10.25	%		7.55	%
		100.00	%		100.00	%

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Note 16 - Segment Information (Detail) - Segment Reporting (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net interest income	$ 32,655	$ 33,871	$ 32,967
Provision expense	1,583	4,896	5,871
Noninterest income	8,483	7,222	6,154
Noninterest expense	29,741	28,299	26,643
Tax expense	2,762	2,063	1,511
Net income	7,052	5,835	5,096
Assets	769,223	804,177	851,514
Banking [Member]
Net interest income	29,445	30,792	30,074
Provision expense	1,527	4,809	5,717
Noninterest income	7,734	6,327	5,578
Noninterest expense	27,384	26,130	24,756
Tax expense	2,240	1,483	1,029
Net income	6,028	4,697	4,149
Assets	754,490	789,744	837,359
Consumer Finance [Member]
Net interest income	3,210	3,079	2,893
Provision expense	56	87	154
Noninterest income	749	895	576
Noninterest expense	2,357	2,169	1,887
Tax expense	522	580	482
Net income	1,024	1,138	947
Assets	$ 14,733	$ 14,433	$ 14,155

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Note 3 - Loans and Allowance for Loan Losses (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Mar. 30, 2012
Allowance for Loan and Lease Losses, Period Increase (Decrease)	$ 2,169,000	$ 544,000
Allowance for Loan and Lease Losses, Write-offs		271,000
Change in Troubled Debt Restructurings	81.20%
Financing Receivable, Modifications, Number of Contracts				1
Financing Receivable, Allowance for Credit Losses, Write-downs	(5,136,000)	(10,422,000)	5,879,000
Financing Receivable, Modifications, Recorded Investment	16,954,000	9,355,000
Percentage of Loan Portfolio	100.00%	100.00%
Impaired Financing Receivable, Related Allowance	1,979	655
Loans and Leases Receivable, Impaired, Commitment to Lend	109,000
Minimum Loan Balance for Loans Evaluated by Risk Categories		500,000
Troubled Debt Restructurings [Member]
Allowance for Loan and Lease Losses, Period Increase (Decrease)		33,000
Allowance for Loan and Lease Losses, Write-offs	536,000
Loans and Leases Receivable, Impaired, Commitment to Lend		81,000
Modifications (Member)
Allowance for Loan and Lease Losses, Write-offs		414,000
Troubled Debt Restructurings Performing According to Modified Terms [Member]
Percentage of Loan Portfolio	93.00%	97.00%
Troubled Debt Restructurings [Member]
Increase (Decrease) in Other Loans	7,599,000
Financing Receivable, Allowance for Credit Losses, Write-downs		10,206,000
Impaired Financing Receivable, Related Allowance	2,107,000	655,000
Commercial and Industrial [Member]
Financing Receivable, Modifications, Number of Contracts		2
Percentage of Loan Portfolio	10.25%	7.55%
Commercial Real Estate Loans [Member]
Financing Receivable, Modifications, Recorded Investment	5,984,000			4,222,000
Percentage of Loan Portfolio	31.35%	34.67%
Troubled Debt Restructurings Modified in Current Period [Member]
Impaired Financing Receivable, Related Allowance		$ 130,000
Unsecured [Member]
Percentage of Loan Portfolio	4.87%	3.98%

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Note 1 - Summary of Significant Accounting Policies (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Minimum Loan Balance for Loans Evaluated by Risk Categories (in Dollars)		$ 500
Percentage of Loan Portfolio	100.00%	100.00%
Deposits with Other Federal Home Loan Banks (in Dollars)	34,383
Repossessed Assets (in Dollars)	3,667	4,256
Servicing Asset (in Dollars)	450	430
Weighted Average Number of Shares Outstanding, Basic (in Shares)	4,030,322	4,001,435	3,984,229
Restricted Cash and Cash Equivalents (in Dollars)	37,964	44,018
Impaired Loans [Member]
Minimum Loan Balance for Loans Evaluated by Risk Categories (in Dollars)	$ 200
Unsecured [Member]
Percentage of Loan Portfolio	4.87%
Equipment Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment, Estimated Useful Lives	3
Equipment Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment, Estimated Useful Lives	8
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Estimated Useful Lives	7
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Estimated Useful Lives	39

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Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balances at Dec. 31, 2009	$ 4,644	$ 32,704	$ 44,211	$ 674	$ (15,712)	$ 66,521
Net income			5,096			5,096
Other comprehensive income (loss), net				(457)		(457)
Common stock issued to ESOP	16	299				315
Cash dividends			(3,347)			(3,347)
Balances at Dec. 31, 2010	4,660	33,003	45,960	217	(15,712)	68,128
Net income			5,835			5,835
Other comprehensive income (loss), net				744		744
Common stock issued to ESOP	26	470				496
Cash dividends			(3,360)			(3,360)
Balances at Dec. 31, 2011	4,686	33,473	48,435	961	(15,712)	71,843
Net income			7,052			7,052
Other comprehensive income (loss), net				646		646
Common stock issued to ESOP	33	584				617
Common stock issued through dividend reinvestment, 2,883 shares	3	52				55
Cash dividends			(4,393)			(4,393)
Balances at Dec. 31, 2012	$ 4,722	$ 34,109	$ 51,094	$ 1,607	$ (15,712)	$ 75,820

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Note 13 - Fair Value of Financial Instruments (Detail) - Fair Value and Carrying Value of Financial Assets and Liabilities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Financial assets:
Cash and cash equivalents	$ 45,651	$ 51,630	$ 59,751	$ 15,670
Cash and cash equivalents	45,651	51,630
Securities available for sale	94,965	85,670
Securities available for sale	94,965	85,670
Securities held to maturity	23,511	22,848
Securities held to maturity		22,847
Federal Home Loan Bank stock	6,281	6,281
Loans, net	551,383	590,964
Loans, net	564,059	599,782
Accrued interest receivable	2,057	2,872
Accrued interest receivable		2,872
Financial liabilities:
Deposits	655,064	687,886
Deposits	657,206	690,607
Other borrowed funds	14,285	20,296
Other borrowed funds	14,536	20,565
Subordinated debentures	13,500	13,500
Subordinated debentures	10,146	11,085
Accrued interest payable	1,377	1,894
Accrued interest payable	$ 1,377	$ 1,894

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Note 3 - Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note C - Loans and Allowance for Loan Losses

Loans are comprised of the following at December 31:

	2012		2011
Residential real estate	$	226,022	$	238,490
Commercial real estate:
Owner-occupied		104,842		129,364
Nonowner-occupied		52,792		56,620
Construction		17,376		21,471
Commercial and industrial		57,239		45,200
Consumer:
Automobile		41,168		45,702
Home equity		18,332		20,507
Other		40,517		40,954
		558,288		598,308
Less: Allowance for loan losses		6,905		7,344
Loans, net	$	551,383	$	590,964

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2012 and 2011:

December 31, 2012	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344
Provision for loan losses		395			2,367			(1,381	)		202			1,583
Loans charged off		(1,066	)		(1,949	)		(499	)		(1,622	)		(5,136	)
Recoveries		140			35			2,027			912			3,114
Total ending allowance balance	$	1,329		$	3,946		$	783		$	847		$	6,905

December 31, 2011	Residential Real Estate			Commercial Real Estate			Commercial & Industrial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,051		$	3,083		$	3,795		$	1,457		$	9,386
Provision for loan losses		2,642			932			439			883			4,896
Loans charged off		(2,034	)		(1,913	)		(4,725	)		(1,750	)		(10,422	)
Recoveries		201			1,391			1,127			765			3,484
Total ending allowance balance	$	1,860		$	3,493		$	636		$	1,355		$	7,344

Activity in the allowance for loan losses was as follows:

	2010
Allowance for loan losses:
Beginning balance	$	8,198
Provision for loan losses		5,871
Loans charged off		(5,879	)
Recoveries		1,196
Total ending allowance balance	$	9,386

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 December 31, 2012 and 2011:

December 31, 2012	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	128	$	1,979	$	-	$	-	$	2,107
Collectively evaluated for impairment		1,201		1,967		783		847		4,798
Total ending allowance balance	$	1,329	$	3,946	$	783	$	847	$	6,905
Loans:
Loans individually evaluated for impairment	$	827	$	16,354	$	-	$	220	$	17,401
Loans collectively evaluated for impairment		225,195		158,656		57,239		99,797		540,887
Total ending loans balance	$	226,022	$	175,010	$	57,239	$	100,017	$	558,288

December 31, 2011	Residential Real Estate		Commercial Real Estate		Commercial & Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	130	$	525	$	-	$	-	$	655
Collectively evaluated for impairment		1,730		2,968		636		1,355		6,689
Total ending allowance balance	$	1,860	$	3,493	$	636	$	1,355	$	7,344
Loans:
Loans individually evaluated for impairment	$	1,505	$	9,733	$	334	$	-	$	11,572
Loans collectively evaluated for impairment		236,985		197,722		44,866		107,163		586,736
Total ending loans balance	$	238,490	$	207,455	$	45,200	$	107,163	$	598,308

The following table presents information related to loans individually evaluated for impairment by class of loans as of the year ended December 31, 2012 and December 31, 2011:

December 31, 2012	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	$	619	$	407	$	-	$	493	$	-	$	-
Commercial real estate:
Owner-occupied		5,528		5,528		-		4,729		338		338
Nonowner-occupied		10,085		8,847		-		4,767		456		456
Commercial and industrial		426		-		-		-		-		-
Consumer:
Home equity		220		220		-		176		9		9
With an allowance recorded:
Residential real estate		420		420		128		420		23		23
Commercial real estate:
Nonowner-occupied		1,979		1,979		1,979		1,132		38		38
Total	$	19,277	$	17,401	$	2,107	$	11,717	$	864	$	864

December 31, 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	$	1,136	$	1,085	$	-	$	748	$	36	$	31
Commercial real estate:
Owner-occupied		2,774		2,531		-		2,418		207		309
Nonowner-occupied		4,131		4,131		-		4,339		174		57
Commercial and industrial		614		334		-		483		40		40
With an allowance recorded:
Residential real estate		420		420		130		84		27		22
Commercial real estate:
Nonowner-occupied		2,396		2,396		437		2,414		128		118
Construction		675		675		88		677		35		31
Total	$	12,146	$	11,572	$	655	$	11,163	$	647	$	608

The recorded investment of a loan is its carrying value excluding accrued interest and deferred loan fees.

The following table presents information for impaired loans as of December 31:

	2010
Average of individually impaired loans during year	$	24,589
Interest income recognized during impairment	$	1,158
Cash basis interest income recognized	$	1,083

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 as of December 31, 2012 and 2011:

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2012
Residential real estate	$	341	$	2,533
Commercial real estate:
Owner-occupied		-		675
Nonowner-occupied		-		352
Consumer:
Automobile		11		4
Home equity		-		62
Other		7		-
Total	$	359	$	3,626

	Loans Past Due 90 Days And Still Accruing		Nonaccrual
December 31, 2011
Residential real estate	$	439	$	2,536
Commercial real estate:
Owner-occupied		-		125
Consumer:
Automobile		13		12
Home equity		-		5
Other		7		-
Total	$	459	$	2,678

The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2012 and 2011:

December 31, 2012	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	$	5,525	$	1,033	$	2,797	$	9,355	$	216,667	$	226,022
Commercial real estate:
Owner-occupied		753		111		675		1,539		103,303		104,842
Nonowner-occupied		–		–		352		352		52,440		52,792
Construction		–		–		–		–		17,376		17,376
Commercial and industrial		202		–		–		202		57,037		57,239
Consumer:
Automobile		905		138		13		1,056		40,112		41,168
Home equity		112		37		62		211		18,121		18,332
Other		1,066		162		7		1,235		39,282		40,517
Total	$	8,563	$	1,481	$	3,906	$	13,950	$	544,338	$	558,288

December 31, 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	$	3,731	$	1,144	$	2,975	$	7,850	$	230,640	$	238,490
Commercial real estate:
Owner-occupied		182		-		125		307		129,057		129,364
Nonowner-occupied		-		232		-		232		56,388		56,620
Construction		204		-		-		204		21,267		21,471
Commercial and industrial		171		14		-		185		45,015		45,200
Consumer:
Automobile		864		110		13		987		44,715		45,702
Home equity		75		76		5		156		20,351		20,507
Other		506		162		7		675		40,279		40,954
Total	$	5,733	$	1,738	$	3,125	$	10,596	$	587,712	$	598,308

Troubled Debt Restructurings:

A troubled debt restructuring (“TDR”) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  All TDR’s are considered to be impaired.   The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms.

The Company has allocated reserves for a portion of its TDR’s to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer.

The following table presents the types of TDR loan modifications by class of loans as of December 31, 2012 and December 31, 2011:

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2012
Residential real estate
Interest only payments	$	-	$	180	$	180
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		-		675		675
Rate reduction		440		-		440
Maturity extension at lower stated rate than market rate		191		-		191
Reduction of principal and interest payments		4,222		-		4,222
Nonowner-occupied
Interest only payments		9,856		300		10,156
Reduction of principal and interest payments		670		-		670
Total TDR’s	$	15,799	$	1,155	$	16,954

	TDR’s Performing to Modified Terms		TDR’s Not Performing to Modified Terms		Total TDR’s
December 31, 2011
Residential real estate
Interest only payments	$	-	$	283	$	283
Rate reduction		420		-		420
Commercial real estate:
Owner-occupied
Interest only payments		680		-		680
Rate reduction		449		-		449
Maturity extension at lower stated rate than market rate		219		-		219
Nonowner-occupied
Interest only payments		6,296		-		6,296
Construction
Interest only payments		674		-		674
Commercial and industrial
Interest only payments		334		-		334
Total TDR’s	$	9,072	$	283	$	9,355

The troubled debt restructurings described above increased the allowance for loan losses by $2,169 and $33, resulted in charge-offs of $536 and $271 during the years ended December 31, 2012 and 2011.

At December 31, 2012, the balance in TDR loans increased $7,599, or 81.2%, from year-end 2011. This was largely impacted by the modification of two commercial real estate loans totaling $10,206. During the first quarter of 2012, the contractual terms of one commercial real estate loan totaling $4,222 were adjusted, reducing principal and interest payments that created a concession to the borrower. During the fourth quarter of 2012, the contractual terms of one commercial real estate loan totaling $5,984 were adjusted to permit short-term, interest-only payments that created a concession to the borrower. At December 31, 2012 and December 31, 2011, 93% and 97% of the Company’s TDR’s were performing according to their modified terms, respectively. The Company allocated $2,107 and $655 in reserves to customers whose loan terms have been modified in TDR’s as of December 31, 2012 and December 31, 2011, respectively. At December 31, 2012, the Company had $109 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDR’s, as compared to $81 at December 31, 2011.

The following table presents the pre- and post-modification balances of TDR loan modifications by class of loans that occurred during the year ended December 31, 2012 and 2011:

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2012
Commercial real estate:
Owner-occupied
Reduction of principal and interest payments	$	4,266	$	4,222		-		-
Nonowner-occupied
Interest only payments		5,984		5,984		-		-
Reduction of principal and interest payments		686		671		-		-
Total TDR’s	$	10,936	$	10,877		-		-

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms
	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
December 31, 2011
Commercial real estate:
Owner-occupied
Rate reduction	$	959	$	868		-		-
Maturity extension at lower stated rate than market rate		226		219		-		-
Nonowner-occupied
Interest only payments		400		400		-		-
Total TDR’s	$	1,585	$	1,487		-		-

All of the Company’s TDR’s that occurred during the years ended December 31, 2012 and 2011 were performing in accordance with their modified term. Furthermore, there were no TDR’s described above at December 31, 2012 and 2011 that experienced any payment defaults within twelve months following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The TDR’s described above during the year ended December 31, 2012 had no impact on the allowance for losses or charge-offs. The TDR’s described above during the year ended December 31, 2011 increased the allowance for loan losses by $544 and resulted in charge-offs of $414. The Company had no specific allocations reserved to customers whose loan terms have been modified during the year ended December 31, 2012. The Company had allocated $130 of reserves to customers whose loan terms have been modified during the year ended December 31, 2011.

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 categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 10. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $500.

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

Special Mention (Loan Grade 8). Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.  Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring.

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 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.

Criticized and 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 criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date. As of December 31, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

December 31, 2012	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	87,614	$	14,057	$	3,171	$	104,842
Nonowner-occupied		39,627		2,171		10,994		52,792
Construction		16,276		-		1,100		17,376
Commercial and industrial		47,226		4,793		5,220		57,239
Total	$	190,743	$	21,021	$	20,485	$	232,249

December 31, 2011	Pass		Criticized		Classified		Total
Commercial real estate:
Owner-occupied	$	103,743	$	15,030	$	10,591	$	129,364
Nonowner-occupied		30,375		12,815		13,430		56,620
Construction		19,519		-		1,952		21,471
Commercial and industrial		36,633		3,250		5,317		45,200
Total	$	190,270	$	31,095	$	31,290	$	252,655

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau) but 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.

For residential and consumer loan classes, the Company 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 December 31, 2012 and December 31, 2011:

	Consumer
December 31, 2012	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	41,153	$	18,270	$	40,510	$	223,148	$	323,081
Nonperforming		15		62		7		2,874		2,958
Total	$	41,168	$	18,332	$	40,517	$	226,022	$	326,039

	Consumer
December 31, 2011	Automobile		Home Equity		Other		Residential Real Estate		Total
Performing	$	45,677	$	20,502	$	40,947	$	235,515	$	342,641
Nonperforming		25		5		7		2,975		3,012
Total	$	45,702	$	20,507	$	40,954	$	238,490	$	345,653

The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the  southeastern area of Ohio as well as the western counties of West Virginia.  Approximately 4.87% of total loans were unsecured at December 31, 2012, up from 3.98% at December 31, 2011.

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Note 3 - Loans and Allowance for Loan Losses (Detail) - TDR Loan Modifications (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Residential real estate
Troubled Debt Restructuring	$ 16,954	$ 9,355
Performing to Modified Terms [Member] | Interest Only Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring		680
Performing to Modified Terms [Member] | Interest Only Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	9,856	6,296
Performing to Modified Terms [Member] | Interest Only Payments [Member] | Construction [Member]
Residential real estate
Troubled Debt Restructuring		674
Performing to Modified Terms [Member] | Interest Only Payments [Member] | Commercial and Industrial [Member]
Residential real estate
Troubled Debt Restructuring		334
Performing to Modified Terms [Member] | Rate Reduction [Member] | Residential Real Estate Loans [Member]
Residential real estate
Troubled Debt Restructuring	420	420
Performing to Modified Terms [Member] | Rate Reduction [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	440	449
Performing to Modified Terms [Member] | Maturity Extension at Lower Stated Rate Than Market Rate [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	191	219
Performing to Modified Terms [Member] | Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	4,222
Performing to Modified Terms [Member] | Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	670
Performing to Modified Terms [Member]
Residential real estate
Troubled Debt Restructuring	15,799	9,072
Nonperforming to Modified Terms (Member) | Interest Only Payments [Member] | Residential Real Estate Loans [Member]
Residential real estate
Troubled Debt Restructuring	180	283
Nonperforming to Modified Terms (Member) | Interest Only Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	675
Nonperforming to Modified Terms (Member) | Interest Only Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	300
Nonperforming to Modified Terms (Member)
Residential real estate
Troubled Debt Restructuring	1,155	283
Interest Only Payments [Member] | Residential Real Estate Loans [Member]
Residential real estate
Troubled Debt Restructuring	180	283
Interest Only Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	675	680
Interest Only Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	10,156	6,296
Interest Only Payments [Member] | Construction [Member]
Residential real estate
Troubled Debt Restructuring		674
Interest Only Payments [Member] | Commercial and Industrial [Member]
Residential real estate
Troubled Debt Restructuring		334
Rate Reduction [Member] | Residential Real Estate Loans [Member]
Residential real estate
Troubled Debt Restructuring	420	420
Rate Reduction [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	440	449
Maturity Extension at Lower Stated Rate Than Market Rate [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	191	219
Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Owner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	4,222
Reduction of Principal and Interest Payments [Member] | Commercial Real Estate Nonowner Occupied [Member]
Residential real estate
Troubled Debt Restructuring	$ 670

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Note 12 - Employee Benefits (Detail) - Employee Stock Ownership Plan (ESOP) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Number of shares issued (in Shares)	32,765	26,500	16,047
Fair value of stock contributed	$ 617	$ 496	$ 315
Cash contributed	82	65	105
Total expense	699	562	420
Employee Stock Ownership Plan (Member)
Fair value of stock contributed	$ 617	$ 497	$ 315

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Note 7 - Other Borrowed Funds (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Federal Home Loan Bank, Advances, Maturities Summary, Fixed Rate	$ 10,759
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range from	1.79%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range to	3.42%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Weighted Average Interest Rate	2.31%
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	186,286
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	161,237
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum	1.15%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum	5.00%
Debt, Weighted Average Interest Rate	2.45%
Letters of Credit Outstanding, Amount	5,959	5,486
Residential Mortgage [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	251,487
Commercial Loan [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	96,434
FHLB Stock [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	6,281
FHLB Line of Credit [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	95,000
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	95,000
Letters of Credit Outstanding, Amount	$ 14,200	$ 27,000

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Note 2 - Securities (Tables)

12 Months Ended

Dec. 31, 2012

Available-for-sale Securities [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Securities Available for Sale
December 31, 2012
U.S. Government sponsored entity securities	$	1,009	$	3		-		$	1,012
Agency mortgage-backed securities, residential		91,521		2,432		-			93,953
Total securities	$	92,530	$	2,435		-		$	94,965
December 31, 2011
U.S. Treasury securities	$	5,510	$	3	$	-		$	5,513
U.S. Government sponsored entity securities		2,501		58		-			2,559
Agency mortgage-backed securities, residential		76,203		1,407		(12	)		77,598
Total securities	$	84,214	$	1,468	$	(12	)	$	85,670

Held-to-maturity Securities [Table Text Block]

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value
Securities Held to Maturity
December 31, 2012
Obligations of states and political subdivisions	$	23,494	$	1,178	$	(65	)	$	24,607
Agency mortgage-backed securities, residential		17		-		-			17
Total securities	$	23,511	$	1,178	$	(65	)	$	24,624
December 31, 2011
Obligations of states and political subdivisions	$	22,825	$	558	$	(559	)	$	22,824
Agency mortgage-backed securities, residential		23		-		-			23
Total securities	$	22,848	$	558	$	(559	)	$	22,847

Investments Classified by Contractual Maturity Date [Table Text Block]

	Available for Sale				Held to Maturity
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less		-		-		-		-
Due in one to five years	$	1,009	$	1,012	$	4,529	$	4,684
Due in five to ten years		-		-		10,959		11,579
Due after ten years		-		-		8,006		8,344
Agency mortgage-backed securities, residential		91,521		93,953		17		17
Total debt securities	$	92,530	$	94,965	$	23,511	$	24,624

Schedule of Unrealized Loss on Investments [Table Text Block]

December 31, 2011	Less than 12 Months					12 Months or More				Total
Securities Available for Sale	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss
Agency mortgage-backed securities, residential	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)
Total available for sale	$	7,621	$	(12	)	$	-	$	-	$	7,621	$	(12	)

Held-to-maturity Securities [Member]

Schedule of Unrealized Loss on Investments [Table Text Block]

December 31, 2012	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)
Total held to maturity	$	2,018	$	(63	)	$	260	$	(2	)	$	2,278	$	(65	)

	Less than 12 Months					12 Months or More					Total
Securities Held to Maturity	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
Obligations of states and political subdivisions	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)
Total held to maturity	$	664	$	(21	)	$	3,557	$	(538	)	$	4,221	$	(559	)

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Note 9 - Income Taxes (Detail) - Provision for Income Taxes (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Current tax expense	$ 2,968	$ 1,723	$ 1,973
Deferred tax (benefit) expense	(206)	340	(462)
Total income taxes	$ 2,762	$ 2,063	$ 1,511

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Note 15 - Parent Company Only Condensed Financial Information (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Condensed Balance Sheet [Table Text Block]

	Years ended December 31:
Assets	2012		2011
Cash and cash equivalents	$	1,700	$	1,462
Investment in subsidiaries		87,950		84,038
Notes receivable - subsidiaries		3,423		3,743
Other assets		310		406
Total assets	$	93,383	$	89,649
Liabilities
Notes payable	$	3,526	$	3,748
Subordinated debentures		13,500		13,500
Other liabilities		537		558
Total liabilities	$	17,563	$	17,806
Shareholders’ Equity
Total shareholders’ equity		75,820		71,843
Total liabilities and shareholders’ equity	$	93,383	$	89,649

Schedule of Condensed Income Statement [Table Text Block]

	Years ended December 31:
Income:	2012		2011		2010
Interest on notes	$	114	$	134	$	158
Other operating income		84		65		68
Dividends from subsidiaries		4,500		3,500		4,500
Expenses:
Interest on notes		114		134		159
Interest on subordinated debentures		789		1,089		1,089
Operating expenses		364		287		538
Income before income taxes and equity in undistributed earnings of subsidiaries		3,431		2,189		2,940
Income tax benefit		355		439		522
Equity in undistributed earnings of subsidiaries		3,266		3,207		1,634
Net Income	$	7,052	$	5,835	$	5,096

Schedule of Condensed Cash Flow Statement [Table Text Block]

	Years ended December 31:
Cash flows from operating activities:	2012			2011			2010
Net Income	$	7,052		$	5,835		$	5,096
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(3,266	)		(3,207	)		(1,634	)
Common stock issued to ESOP		617			496			315
Change in other assets		96			(92	)		(12	)
Change in other liabilities		(21	)		105			64
Net cash provided by operating activities		4,478			3,137			3,829
Cash flows from investing activities:
Change in notes receivable		320			85			402
Net cash provided by investing activities		320			85			402
Cash flows from financing activities:
Change in notes payable		(222	)		(87	)		(412	)
Proceeds from common stock through dividend reinvestment		55			-			-
Cash dividends paid		(4,393	)		(3,360	)		(3,347	)
Net cash used in financing activities		(4,560	)		(3,447	)		(3,759	)
Cash and cash equivalents:
Change in cash and cash equivalents		238			(225	)		472
Cash and cash equivalents at beginning of year		1,462			1,687			1,215
Cash and cash equivalents at end of year	$	1,700		$	1,462		$	1,687

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Note 13 - Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Text Block]

Note M - Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

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, or 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:  The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans:  At the time a loan is considered impaired, it is valued at the lower of cost or fair value.  Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses.  For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.  Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.  Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned:  Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.  Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with management’s own assumptions of fair value based on factors that include recent market data or industry-wide statistics.  On an as-needed basis, the Company reviews the fair value of collateral, taking into consideration current market data, as well as all selling costs that are typically in the range of 10%.

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 December 31, 2012, 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. Government sponsored entity securities		-	$	1,012		-
Agency mortgage-backed securities, residential		-		93,953		-

	Fair Value Measurements at December 31, 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		-	$	5,513		-
U.S. Government sponsored entity securities		-		2,559		-
Agency mortgage-backed securities, residential		-		77,598		-

There were no transfers between Level 1 and Level 2 during 2012 or 2011.

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 December 31, 2012, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other real estate owned:
Commercial real estate:
Construction		-		-	$	1,562
Commercial and industrial		-		-		1,055

	Fair Value Measurements at December 31, 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 real estate:
Owner-occupied		-		-	$	290
Nonowner-occupied		-		-		1,959
Construction		-		-		587
Other real estate owned:
Commercial real estate:
Construction		-		-		1,814
Commercial and industrial		-		-		1,134

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a recorded investment of $1,979 with a valuation allowance of $1,979 at December 31, 2012.  At December 31, 2011, impaired loans had a recorded investment of $3,491 with a valuation allowance of $655.  Changes in fair value recognized for partial charge-offs of loans and impairment reserves on loans was a net increase of $2,479 and $218 during the years ended December 31, 2012 and 2011, respectively.

Other real estate owned that was measured at fair value less costs to sell at December 31, 2012 had a net carrying amount of $2,617, which is made up of the outstanding balance of $4,214, net of a valuation allowance of $1,597 at December 31, 2012, which resulted in a corresponding write-down of $331 for the year ended December 31, 2012. Other real estate owned that was measured at fair value less costs to sell at December 31, 2011 had a net carrying amount of $2,948, which is made up of the outstanding balance of $4,214, net of a valuation allowance of $1,266 at December 31, 2011, which resulted in a corresponding write-down of $1,266 for the year ended December 31, 2011.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range			(Weighted Average)
Other real estate owned:
Commercial real estate:
Construction	$	1,562	Sales approach	Adjustment to comparables		15	%		15	%
Commercial		1,055	Sales approach	Adjustment to comparables		15	%		15	%

The carrying amounts and estimated fair values of financial instruments at December 31, 2012 and December 31, 2011 are as follows:

			Fair Value Measurements at December 31, 2012 Using:
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	45,651	$	45,651	$	-	$	-	$	45,651
Securities available for sale		94,965		-		94,965		-		94,965
Securities held to maturity		23,511		-		11,569		13,055		24,624
Federal Home Loan Bank stock		6,281		N/A		N/A		N/A		N/A
Loans, net		551,383		-		-		564,059		564,059
Accrued interest receivable		2,057		-		283		1,774		2,057
Financial Liabilities:
Deposits		655,064		139,526		517,680		-		657,206
Other borrowed funds		14,285		-		14,536		-		14,536
Subordinated debentures		13,500		-		10,146		-		10,146
Accrued interest payable		1,377		2		1,375		-		1,377

	2011
	Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	51,630	$	51,630
Securities available for sale		85,670		85,670
Securities held to maturity		22,848		22,847
Federal Home Loan Bank stock		6,281		N/A
Loans, net		590,964		599,782
Accrued interest receivable		2,872		2,872
Financial liabilities:
Deposits		687,886		690,607
Other borrowed funds		20,296		20,565
Subordinated debentures		13,500		11,085
Accrued interest payable		1,894		1,894

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Securities Held to Maturity:  The fair values for securities held to maturity are determined in the same manner as securities held for sale and discussed earlier in this note.  Level 3 securities consist of nonrated municipal bonds and tax credit (“QZAB”) bonds.

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: Fair values of loans are estimated as follows:  The fair value of fixed rate loans is estimated by discounting future cash flows using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.  For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification.  Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Deposit Liabilities: The fair values disclosed for noninterest-bearing deposits are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Other Borrowed Funds: The carrying values of the Company’s short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification. The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Subordinated Debentures: The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable and Payable: The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification.

Off-balance Sheet Instruments:  Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

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.