GALLIPOLIS, Ohio, Jan. 15 /PRNewswire-FirstCall/ -- Ohio Valley Banc Corp. (Nasdaq: OVBC) (the "Company") reported consolidated net income for the quarter ended December 31, 2008 of $1,547,000, an increase of $544,000, or 54.2 percent, from the $1,003,000 earned for the fourth quarter of 2007. Earnings per share for the fourth quarter of 2008 were $.39, up 62.5 percent from the prior year fourth quarter. For the year ended December 31, 2008, net income was $7,128,000, an increase of $831,000, or 13.2 percent, from the $6,297,000 earned the prior year. Earnings per share were $1.77 for the year of 2008 versus $1.52 for the year of 2007, an increase of $.25, or 16.4 percent. Return on average assets and return on average equity both increased to .91 percent and 11.62 percent, respectively, for the twelve months ended December 31, 2008, as compared to .82 percent and 10.40 percent, respectively, for the same period in the prior year.

Net interest income, the Company's largest revenue source, contributed to the increase in earnings. For the year ended December 31, 2008, net interest income increased $2,178,000, or 7.6 percent, from the same period last year. The fourth quarter 2008 net interest income was up $466,000, or 6.4 percent, from the fourth quarter of 2007. The increase in net interest income was attributable to a higher net interest margin in conjunction with the Company's growth in earning assets for the year. The net interest margin for the year ended December 31, 2008 was 4.23 percent, compared to 3.99 percent for the same period the prior year. The net interest margin improvement was related to the balance sheet being positioned to benefit from the declining interest rate environment, which produced a greater decrease in the cost of funds than in the yield on earning assets. Since September 2007, the Federal Reserve has decreased short-term interest rates 10 times for a total of 500 basis points. The Company's average earning assets for 2008 were up $10,834,000, or 1.5 percent, from the same period in 2007.

Supplementing the increase in revenue from net interest income was the increase in noninterest income. Noninterest income totaled $6,211,000 for the year ended December 31, 2008, as compared to $5,236,000 for the same period last year, an increase of 18.6 percent. For the three months ended December 31, 2008, noninterest income totaled $1,466,000 and was up 59.2 percent from 2007's fourth quarter. The increase in noninterest income was related to the decline in loss on sale of real estate acquired through foreclosure. For 2008, the loss on sale of foreclosed real estate was only $31,000, a decrease of $746,000 from the prior year. The decrease is primarily related to the liquidation of a single piece of commercial real estate during the fourth quarter of 2007, which generated a loss of $686,000. Additional revenue growth was realized from facilitating the clearing of tax refunds for a tax software provider. With continued growth in transaction volume, the associated fee income increased $163,000, or over 148 percent, from 2007. In addition, service charges on deposit accounts increased due to a higher volume of overdrafts occurring in 2008, which increased overdraft fees $163,000 from the prior year. Lastly, interchange fees earned on transactions utilizing the Company's Jeanie(R) Plus debit card increased $106,000.

Noninterest expense totaled $23,343,000 for the year of 2008, an increase of $760,000, or 3.4 percent, when compared to the previous year. Noninterest expense for the fourth quarter of 2008 decreased $195,000, or 3.3 percent, from the fourth quarter in 2007. Salaries and employee benefits, the Company's largest noninterest expense, was up $1,030,000, or 7.9 percent, for the year of 2008, as compared to the year of 2007. Contributing to the increase was annual cost of living adjustments, an increase in incentive compensation due to higher corporate performance, and an increase in health insurance benefits. Also, during 2008, the Company experienced an increase in FDIC insurance premiums of $198,000 over 2007. Contributing to noninterest expense savings from 2007 were lower foreclosure costs of $487,000 and lower data processing expense for the Company's debit card of $159,000. Overall, management was pleased with the cost containment demonstrated during 2008.

The ratio of nonperforming loans to total loans was .84 percent at December 31, 2008 compared to .57 percent at December 31, 2007. For the year ended December 31, 2008, management provided $3,716,000 to the allowance for loan losses, which represented an increase of $1,464,000 over the same period last year. For the three months ended December 31, 2008, management provided $1,406,000 to the allowance for loan losses, an increase of $488,000 from the same period the prior year. The increase in provision expense was related to an increase in nonperforming loans since year end 2007. Although the balance of nonperforming loans was up, the balance of net charge-offs was down. For the year ended December 31, 2008, net charge-offs were down $2,273,000 from the year ended December 31, 2007, primarily due to the significant decrease in commercial loan charge-offs. The ratio of net charge-offs to average loans was .42 percent for 2008, compared to .78 percent for 2007. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at December 31, 2008 was adequate and reflects probable incurred losses in the portfolio. The allowance for loan losses was 1.24 percent of total loans at December 31, 2008, compared to 1.06 percent at December 31, 2007.

"I want to commend our 275 employees for delivering significant improvement in nearly every Ohio Valley Banc Corp. performance category," stated Jeffrey E. Smith, President and CEO. "These results indicate community banking in rural America can still be successful even in a challenged economy. While their significant increases in earnings and earnings per share on both a quarterly and year-to-date basis are noteworthy, their management of asset quality is perhaps their greatest success in 2008. A nonperforming loans to total loans ratio of 84 basis points demonstrates the disciplined approach of our lenders, collectors and lawyers."

"While the above measures are important, perhaps of greatest importance to our nearly 30,000 deposit customers and 2,000 shareholders alike is the fact that Ohio Valley Banc Corp. enjoys the regulatory distinction of being classified a well capitalized institution. At December 31, 2008, the Tier 1 leverage ratio was 9.77 percent, in spite of the fact that Ohio Valley Banc Corp. chose not to participate in the U.S. Treasury TARP Capital Purchase Plan."

Ohio Valley Banc Corp. common stock is traded on the NASDAQ Global Market under the symbol OVBC. The holding company owns three subsidiaries: Ohio Valley Bank, with 16 offices in Ohio and West Virginia; Loan Central, with six consumer finance offices in Ohio; and Ohio Valley Financial Services, an insurance agency based in Jackson, Ohio. Learn more about Ohio Valley Banc Corp. at http://www.ovbc.com .

Forward-Looking Information

Certain statements contained in this earnings release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements. Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including: (i) changes in political, economic or other factors such as inflation rates, recessionary or expansive trends, and taxes; (ii) competitive pressures; (iii) fluctuations in interest rates; (iv) the level of defaults and prepayment on loans made by the Company; (v) unanticipated litigation, claims, or assessments; (vi) fluctuations in the cost of obtaining funds to make loans; and (vii) regulatory changes. Forward- looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. See Item 1.A. "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, for further discussion of the risks affecting the business of the Company and the value of an investment in its shares.



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



      OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)

                                      Three months ended   Twelve months ended
                                         December 31,          December 31,
                                       2008       2007       2008       2007
      PER SHARE DATA
        Earnings per share             $0.39      $0.24      $1.77      $1.52
        Dividends per share            $0.19      $0.18      $0.76      $0.71
        Book value per share          $15.83     $15.10     $15.83     $15.10
        Dividend payout ratio (a)     48.90%     73.28%     42.94%     46.66%
        Weighted average shares
         outstanding               3,982,107  4,079,932  4,018,367  4,131,621

      PERFORMANCE RATIOS
        Return on average equity       9.92%      6.52%     11.62%     10.40%
        Return on average assets       0.80%      0.51%      0.91%      0.82%
        Net interest margin (b)        4.32%      4.00%      4.23%      3.99%
        Efficiency ratio (c)          62.10%     71.91%     62.51%     66.05%
        Average earning assets
        (in 000's)                  $723,246   $733,834   $735,877   $725,043

      (a) Total dividends paid as a percentage of net income.
      (b) Fully tax-equivalent net interest income as a percentage of average
          earning assets.
      (c) Noninterest expense as a percentage of fully tax-equivalent net
          interest income plus noninterest income.



      OHIO VALLEY BANC CORP - Consolidated Statements of Income (Unaudited)

                                     Three months ended   Twelve months ended
      (in $000's)                        December 31,          December 31,
                                        2008       2007       2008       2007
      Interest income:
        Interest and fees on loans   $11,307    $12,794    $47,272    $50,671
        Interest and dividends
         on securities                   982      1,147      4,261      4,276
            Total interest income     12,289     13,941     51,533     54,947
      Interest expense:
        Deposits                       3,566      5,372     16,636     21,315
        Borrowings                       972      1,284      4,192      5,105
             Total interest expense    4,538      6,656     20,828     26,420
      Net interest income              7,751      7,285     30,705     28,527
      Provision for loan losses        1,406        918      3,716      2,252
      Noninterest income:
        Service charges on
         deposit accounts                750        790      3,073      2,982
        Trust fees                        56         58        240        230
        Income from bank owned insurance 199        242        775        757
        Gain on sale of loans             17         20        127        102
        Gain (loss) on sale of
         other real estate owned        ----       (692)       (31)      (777)
        Other                            444        503      2,027      1,942
             Total noninterest income  1,466        921      6,211      5,236
      Noninterest expense:
        Salaries and employee benefits 3,647      3,397     14,075     13,045
        Occupancy                        390        368      1,562      1,467
        Furniture and equipment          296        276      1,048      1,086
        Data processing                   66        218        773        844
        Other                          1,390      1,725      5,885      6,141
             Total noninterest expense 5,789      5,984     23,343     22,583
      Income before income taxes       2,022      1,304      9,857      8,928
      Income taxes                       475        301      2,729      2,631
      NET INCOME                      $1,547     $1,003     $7,128     $6,297



      OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)

      (in $000's, except share data)                 December 31, December 31,
                                                            2008         2007
      ASSETS
      Cash and noninterest-bearing deposits with banks     $16,650    $15,584
      Federal funds sold                                     1,031      1,310
        Total cash and cash equivalents                     17,681     16,894
      Interest-bearing deposits in other
       financial institutions                                  611        633
      Securities available-for-sale                         75,340     78,063
      Securities held-to-maturity (estimated fair value:
       2008 - $17,241; 2007 - $15,764)                      16,986     15,981
      Federal Home Loan Bank stock                           6,281      6,036
      Total loans                                          630,391    637,103
        Less:  Allowance for loan losses                    (7,799)    (6,737)
         Net loans                                         622,592    630,366
      Premises and equipment, net                           10,232      9,871
      Accrued income receivable                              3,172      3,254
      Goodwill                                               1,267      1,267
      Bank owned life insurance                             18,153     16,339
      Other assets                                           8,793      4,714
            Total assets                                  $781,108   $783,418

      LIABILITIES
      Noninterest-bearing deposits                         $85,506    $78,589
      Interest-bearing deposits                            506,855    510,437
         Total deposits                                    592,361    589,026
      Securities sold under agreements to repurchase        24,070     40,390
      Other borrowed funds                                  76,774     67,002
      Subordinated debentures                               13,500     13,500
      Accrued liabilities                                   11,347     11,989
           Total liabilities                               718,052    721,907

      SHAREHOLDERS' EQUITY
      Common stock ($1.00 stated value, 10,000,000 shares
       authorized; 2008 - 4,642,748 shares issued,
       2007 - 4,641,747 shares issued)                       4,643      4,642
      Additional paid-in capital                            32,683     32,664
      Retained earnings                                     40,752     37,763
      Accumulated other comprehensive income (loss)            690       (115)
      Treasury stock at cost (2008 - 659,739 shares,
       2007 - 567,403 shares)                              (15,712)   (13,443)
            Total shareholders' equity                      63,056     61,511
               Total liabilities and shareholders' equity $781,108   $783,418

SOURCE Ohio Valley Banc Corp.