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, 2009

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 ¨   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 $29.34 per share on June 30, 2009, the aggregate market value of the issuer’s shares held by non-affiliates on such date was $110,026,379.  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 March 12, 2010 was 3,984,009.

Documents Incorporated By Reference:

(1)   Portions of the 2009 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 and 8.

(2)   Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held May 12, 2010 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”) 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 two wholly-owned subsidiary trusts formed solely to issue trust preferred securities.  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 93.4%, 94.0% and 94.8% of total consolidated revenues for the years ending December 31, 2009, 2008 and 2007, 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, 2009, Ohio Valley’s consolidated assets approximated to $811,988,000, and total shareholders’ equity approximated to $66,521,000.

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.  The Company 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 of which offer 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, 2009.

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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 central and 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.

During 2007, the Bank began offering a platform to its customers for opening deposit accounts online, the fourth in the nation to offer this specific service.  Bank customers may now 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 account 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 six 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 commission receipts 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 two special purpose entities, Ohio Valley Statutory Trust I and Ohio Valley Statutory Trust III.  Together, these Trusts have issued an aggregate $13,500,000 in trust preferred securities.  Ohio Valley has issued a like amount of subordinated debentures to the Trusts 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 Trusts I and III is located in Ohio Valley’s 2009 Annual Report to Shareholders under “Note I – Subordinated Debentures and Trust Preferred Securities,” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2009.

Financial Information

 Financial information regarding the Company as of December 31, 2009 and 2008 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, 2009.

Lending Activities

The Company’s loan portfolio increased $20,965,000 to finish at $651,356,000 in 2009.  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 and consumer loans increased $24,735,000, or 10.2%, and $9,318,000, or 7.3%, respectively, while residential real estate loans decreased $13,932,000, or 5.5%, as compared to 2008.  Consolidated interest and fee revenue from loans accounted for 79.60%, 81.89%, and 84.19% of total consolidated revenues in 2009, 2008 and 2007, 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 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 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.

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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 by the Bank’s loan committee prior to approval.  New commercial loan originations greater than $750,000 are reviewed and approved by the Executive Committee of the Bank’s Board of Directors.

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.

Underwriting Standards

The Company’s underwriting guidelines and standards are updated periodically and are presented to the Board of Directors 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 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

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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 a significant amount of U.S. Treasury, U.S. government sponsored entity and mortgage-backed securities.  Revenues from interest and dividends on securities accounted for 6.30%, 6.87%, and 6.70% of total consolidated revenues in 2009, 2008 and 2007, 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.  Borrowings have also been a significant source of funding.  These include advances from the Federal Home Loan Bank, Federal Reserve Bank Notes and securities sold under agreements to repurchase.  Repurchase agreements are financing arrangements with various customers that have overnight maturity terms.  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.  

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.  As of December 31, 2009, there were 117 bank holding companies operating in the State of Ohio registered with the Federal Reserve, up from 110 bank holding companies at December 31, 2008.  These holding companies control various banks throughout Ohio, which compete for business to expand market areas as well as acquire additional banks.  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 and Franklin Counties of Ohio as well as the Mason and Cabell Counties of West Virginia.  Some additional business originates from the surrounding Ohio counties of Meigs, Vinton, Lawrence, 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.

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Loan Central’s market presence further strengthens Ohio Valley’s ability to compete in the Gallia, Jackson and Pike Counties by serving a consumer base which may not meet the Bank’s credit standards.  Loan Central also operates in the Ohio counties of Lawrence and Scioto, which are outside the Bank’s primary market area.  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.  These branches 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”).  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.

Under Federal Reserve Board policy, a bank holding company is expected to serve as a source of financial strength to each subsidiary bank and to commit resources to support those subsidiary banks.  Under this policy, the Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and

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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.

In November 2009, the Federal Reserve Board adopted its final rule under Regulation E regarding overdraft fees, which becomes effective for new accounts on July 1, 2010, and for existing accounts on August 15, 2010. This rule generally prohibits financial institutions from charging overdraft fees for ATM and one-time debit card transactions that overdraw consumer deposit accounts, unless the consumer “opts in” to having such overdrafts authorized and paid. The change will impact the amount of overdraft fees banks will be able to charge in the future.

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.

The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, 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.

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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 and 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 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.

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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.

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 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.

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.

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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 $100,000 per separately insured depositor and up to a maximum of $250,000 for self-directed retirement accounts.  The FDIC temporarily increased the maximum to $250,000 per separately insured depositor until December 2013.  Insurance premiums for insured institutions are determined based upon the member's capital level and supervisory rating provided to the FDIC 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”).  The assessment rate determined by considering such factors is then applied to the amount of the bank's deposits to determine the bank's insurance premium.  An increase in the assessment rate could have a material adverse effect on the earnings of the Bank.

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.

The Bank is participating in the FDIC’s Transaction Account Guarantee Program which provides, for a fee, full FDIC insurance coverage for non interest-bearing transaction accounts and qualifying NOW accounts, regardless of the dollar amount, and is in addition to the standard FDIC insurance of $250,000 per depositor through December 31, 2013. The Transaction Account Guarantee Program is scheduled to expire on June 30, 2010.

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 will be charged to expense during the periods to which it relates.

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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.

Employees

As of December 31, 2009, Ohio Valley and its subsidiaries had approximately 270 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.

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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 2009 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, 2009, 2008 and 2007 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 2009 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, 2009 and 2008 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 2009 Annual Report to Shareholders.

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)	2009		2008		2007
Securities Available for Sale
U.S. Treasury securities	$	10,557		----		----
U.S. Government sponsored
entity securities		34,122	$	31,866	$	39,447
Agency mortgage-backed securities, residential		39,189		43,474		38,616
Total securities available for sale	$	83,868	$	75,340	$	78,063
Securities Held to Maturity
Obligations of states of the U.S. and
political subdivisions	$	16,553	$	16,946	$	15,933
Agency mortgage-backed securities, residential		36		40		48
Total securities held to maturity	$	16,589	$	16,986	$	15,981

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 2009 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.

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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)	2009		2008		2007		2006		2005
Residential real estate	$	238,761	$	252,693	$	250,483	$	238,549	$	235,008
Commercial estate		209,300		198,559		196,523		193,359		182,031
Commercial and industrial		58,818		44,824		55,090		47,389		54,505
Consumer		136,229		126,911		127,832		139,961		145,815
All other		8,248		7,404		7,175		5,906		173
	$	651,356	$	630,391	$	637,103	$	625,164	$	617,532

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 2009 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 $1,541,000 for the fiscal year ending December 31, 2009.  The amount of interest income that was included in net income recorded on such loans was $1,305,000.  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 2009 Annual Report to Shareholders.

2. Potential Problem Loans - At December 31, 2009, 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 2009 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, 2009, 2008 or 2007.

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4. Loan Concentrations - As of December 31, 2009, 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, 2009, located in Ohio Valley’s 2009 Annual Report to Shareholders which note is incorporated herein by reference.

D. Other Interest-Bearing Assets - As of December 31, 2009, 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)	2009			2008			2007			2006			2005
Balance, beginning of year	$	7,799		$	6,737		$	9,412		$	7,133		$	7,177
Loans charged off:
Residential real estate		1,172			225			422			432			349
Commercial		627			1,164			4,002			3,079			1,295
Consumer		2,532			2,140			1,617			2,120			2,263
Total loans charged off		4,331			3,529			6,041			5,631			3,907
Recoveries of loans:
Residential real estate		41			61			166			204			336
Commercial		730			95			248			946			912
Consumer		747			719			700			1,097			818
Total recoveries of loans		1,518			875			1,114			2,247			2,066
Net loan charge-offs		(2,813	)		(2,654	)		(4,927	)		(3,384	)		(1,841	)
Provision charged to operations		3,212			3,716			2,252			5,663			1,797
Balance, end of year	$	8,198		$	7,799		$	6,737		$	9,412		$	7,133
Ratio of net charge-offs to average loans       outstanding		.44	%		.42	%		.78	%		.54	%		.31	%
Ratio of allowance for loan losses to
non-performing assets		76.98	%		78.25	%		171.77	%		61.54	%		154.36	%

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 2009 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 2009 Annual Report to Shareholders.

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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 2009 Annual Report to Shareholders.

C.&E. Foreign Deposits - There were no foreign deposits outstanding at December 31, 2009, 2008, or 2007.

D. Schedule of Maturities - The following table provides a summary of total time deposits by remaining maturities for the fiscal year ended December 31, 2009:

			Over		Over
	3 months		3 through		6 through		Over
(dollars in thousands)	or less		6 months		12 months		12 months
Certificates of deposit of $100,000 or greater	$	14,313	$	19,154	$	29,940	$	60,823
Other time deposits of $100,000 or greater		930		1,500		5,694		7,816
Total time deposits of $100,000 or greater	$	15,243	$	20,654	$	35,634	$	68,639

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 2009 Annual Report to Shareholders.

VII.           SHORT-TERM BORROWINGS

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

(dollars in thousands)	2009			2008			2007
Balance outstanding at period-end	$	31,641		$	24,070		$	40,390
Weighted average interest rate at period-end		.25	%		.70	%		2.91	%
Average amount outstanding during year	$	27,540		$	28,040		$	27,433
Approximate weighted average interest rate
during the year		.27	%		1.50	%		3.83	%
Maximum amount outstanding as of any
month-end	$	32,718		$	35,309		$	40,390

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.

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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.

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.

Beginning in the latter half of 2007 and continuing into 2010, negative developments in the capital markets 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 have caused some financial institutions to reduce their lending to customers and to each other.  This tightening of credit has led to increased loan delinquencies, lack of customer confidence, increased market volatility and a widespread reduction in general business activity.  Competition among depository institutions for deposits has increased significantly.  It has also become more difficult to assess the creditworthiness of customers and to estimate the losses inherent in our loan portfolio.

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Business activity across a wide range of industries and regions is greatly reduced, and local governments and many companies are in serious difficulty due to the lack of consumer spending and the lack of liquidity in the credit markets.  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 and foreclosures, as well as more restricted access to various sources of funds.

New laws and increased regulatory oversight may significantly affect our financial condition.

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.

Further, legislation has been proposed that would reduce the amount that our customers are required to pay under existing loan contracts or limit our ability to foreclose on collateral.  There can be no assurance that future legislation will not significantly impact our ability to collect on our loans or recover loaned funds by foreclosure on collateral.

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.

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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.

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

The global financial markets have experienced increased volatility and an overall loss of investor confidence for the last two years.  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.

Recent levels of market volatility may adversely affect our ability to access capital.

For more than two years, the capital and credit markets have been experiencing unprecedented levels of volatility. In some cases, share prices and credit availability for certain issuers have declined without regard to those issuers’ underlying financial strength.  If current levels of market disruption and volatility continue or worsen, we may experience a material adverse effect on our ability to access capital and on our business, financial condition and results of operations.

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.

During 2008, there were higher levels of bank failures, which dramatically 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 voted on December 16, 2008 to increase 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, beginning April 1, 2009, were to require riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels.

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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 are now insured up to $250,000 per customer (up from $100,000) and noninterest bearing transactional accounts are fully insured (unlimited coverage). On May 20, 2009, President Obama signed into law the Helping Families Save Their Homes Act of 2009 (the “HFSTHA”) which, among other things, amends the EESA to extend the effectiveness of these temporary programs through December 31, 2013.  On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and certain other retirement accounts, which will remain at $250,000 per depositor.

On May 22, 2009, the FDIC adopted a rule that imposed a special assessment for the second quarter of 2009 of 5 basis points on each insured depository institution’s assets minus its Tier 1 capital as of June 30, 2009, which was collected on September 30, 2009.  We paid $373,000.

On November 12, 2009, the FDIC adopted a rule requiring insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012.  The prepaid assessments for these periods were collected on December 30, 2009, along with the regular quarterly risk-based deposit insurance assessment for the third quarter of 2009.  For the fourth quarter of 2009 and for all of 2010, the prepaid assessment rate was based on each institution’s total base assessment rate in effect on September 30, 2009, modified to assume that the assessment rate in effect for the institution on September 30, 2009, was in effect for the entire third quarter of 2009.  On September 29, 2009, the FDIC increased annual assessment rates uniformly by 3 basis points beginning in 2011.  As a result, an institution’s total base assessment rate for purposes estimating an institution’s assessment for 2011 and 2012 was increased by 3 basis points.  Each institution’s prepaid assessment base was calculated using its third quarter 2009 assessment base, adjusted quarterly for an estimated five percent annual growth rate in the assessment base through the end of 2012.  The three-year prepayment was $3,567,000 for us, which will be expensed over three years.

In January 2010, the FDIC issued an advance notice of proposed rule-making asking for comments on how the FDIC’s risk-based deposit insurance assessment system could be changed to include the risks of certain employee compensation as criteria in the assessment system.

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 FDIC premiums than the recently increased levels.  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.

Concern of customers over deposit insurance may cause a decrease in deposits at the Bank.

With recent increased concerns about bank failures, customers increasingly are concerned about the extent to which their deposits are insured by the FDIC.  Customers may withdraw deposits from the Bank in an effort to ensure that the amount they have on deposit at the Bank is fully insured.  Decreases in deposits may adversely affect our funding costs and net income.

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.

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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 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.  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.

Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged.

The financial services industry is extensively regulated.  We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations.  Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors and the deposit insurance funds, and not to benefit our shareholders.  The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us or our ability to increase the value of our business.  Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses.  Additionally, actions by regulatory agencies or significant litigation against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders.  Proposals to change the laws governing financial institutions are frequently raised in Congress and before bank regulatory authorities.  It is impossible to predict the ultimate form any proposed legislation might take or how it might affect us.  Future changes in the laws or regulations or their interpretation or enforcement could be materially adverse to our business and our shareholders.

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We may cease offering tax refund anticipation loans, which may have a material adverse effect on our net income.

 Through our relationship with a 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 a refund anticipation loan (“RAL”) or an Electronic Refund Check or Electronic Refund Deposit (“ERC/ERD”).  In return, the Bank charges a fee for the service.

RAL fees have been subject to scrutiny by various governmental and consumer groups that have questioned the fairness and legality of RAL fees and the risks to which such business subjects the banks that offer RALs.  The Bank may be required by a regulator to terminate, and is considering terminating, the offering of such loans.  If the Bank terminates offering this service or must reduce the fees it charges, such a requirement may have a material adverse effect on the Company's net income.  For 2009, the Company recognized $397,000 in RAL fees.

The Bank has a separate agreement with the tax software provider for the ERC/ERD services.  The ERC/ERD service does not subject the Bank to the risks related to the RALs and has not been subject to the same scrutiny.  Nevertheless, if the Bank terminates its contract with the tax software provider for the RAL business, the Bank may also lose the ERC/ERD business.  For 2009, the Company recognized $528,000 in ERC/ERD fees.

The total amount of fees recognized by the Company from both services for 2009 was $925,000.

 Moreover, the Bank’s income from offering such products relies on the Bank’s relationship with one tax software provider, whose decision not to renew  our contracts for whatever reason would have an adverse effect on Ohio Valley’s income.

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 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 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.

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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.

The trading volume of common shares can change, which could lead to price volatility.

Prior to Ohio Valley’s common shares being added to the broad-market Russell 3000® Index in June 2009, the volume of trades on any given day had been limited.  Membership in the Russell 3000® remains in place for one year and is subject to review based on changes in the Company’s market capitalization.  Should our common shares no longer be included in the Russell index, our trading volume could return to the historical limited volume of trades.  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 depends upon an active trading market, and thus the price you receive for a thinly-traded stock may not reflect its true value.  In addition, the limited trading market 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, 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.

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

None

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 six 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.), Columbus (Franklin Co.) and South Point (Lawrence Co.) in Ohio and Point Pleasant (Mason Co.), Huntington (Cabell Co.), and Milton (Cabell Co.) in West Virginia.   The Bank also owns and operates twenty-five ATMs, including eleven off-site ATMs.  Furthermore, the Bank owns a facility and leases two facilities in Gallipolis (Gallia Co.), Ohio which are used for additional office space.   The Bank also owns two facilities in Gallipolis (Gallia Co.), Ohio and Point Pleasant (Mason Co.), West Virginia which are leased to third parties.

Loan Central conducts its consumer finance operations through six offices located in Gallipolis (Gallia Co.), Jackson (Jackson Co.), Waverly (Pike Co.), South Point and Ironton (Lawrence Co.), and Wheelersburg (Scioto 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.  Ohio Valley Financial Services also conducts business within Loan Central’s Jackson (Jackson Co.) facility.

Management considers all of these properties to be satisfactory for the Company’s current operations.  The Bank, Loan Central and Ohio Valley Financial Services’ 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 E – Premises and Equipment” of the notes to the Company’s consoldiated financial statements for the fiscal year ended December 31, 2009, located in Ohio Valley’s 2009 Annual Report to Shareholders.

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ITEM 3 - LEGAL PROCEEDINGS

There are no material pending legal proceedings to which Ohio Valley or any of its subsidiaries is a party, other than ordinary, routine litigation incidental to their respective businesses.

ITEM 4 - RESERVED

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 2009 Annual Report to Shareholders and “Note O - Regulatory Matters” of the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2009 located in Ohio Valley’s 2009 Annual Report to Shareholders.

On December 23, 2009, Ohio Valley sold 1,000 of its common shares, without par value, to the Ohio Valley Banc Corp. Employee Stock Ownership Plan (the "ESOP") for an aggregate of $22,000.  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, 2009.

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 2009 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 with respect to Ohio Valley’s interest rate risk 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 2009 Annual Report to Shareholders.

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.

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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 2009 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 2009 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 2009 Annual Report to Shareholders is also incorporated herein by reference.

Consolidated Statements of Condition as of December 31, 2009 and 2008

Consolidated Statements of Income for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007

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

None.

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.

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;

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·   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 2009 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 2009 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, 2009, 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 12, 2010 (the “2010 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 2010 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 executive officer, the principal financial officer and the principal accounting officer of Ohio Valley.  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.

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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” of the 2010 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 2010 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 2010 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 2010 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 2009 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, 2009 and 2008

Consolidated Statements of Income for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007

        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 34 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 16, 2010	By:	/s/  Jeffrey E. Smith
			Jeffrey E. Smith
			Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 16, 2010 by the following persons on behalf of Ohio Valley and in the capacities indicated.

Name	Capacity
/s/Jeffrey E. Smith	Chairman, Chief Executive Officer
Jeffrey E. Smith	and Director (principal executive officer)
/s/Scott W. Shockey	Vice President and Chief Financial
Scott W. Shockey	Officer (principal financial officer and principal accounting officer)
/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/Thomas E. Wiseman	Director
Thomas E. Wiseman
/s/Harold A. Howe	Director
Harold A. Howe
/s/Robert E. Daniel	Director
Robert E. Daniel
/s/Roger D. Williams	Director
Roger D. Williams

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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 byreference to Exhibit 3(b) to Ohio Valley’s current report on Form 8-K (SEC File No. 0-20914) filed November 6, 1992.
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 ending 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.:  Filed herewith.
10.3	The Ohio Valley Bank Company Director Retirement agreement, dated December 28, 2007, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.3 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).
10.4	Schedule A to Exhibit 10.3 identifying other identical Director Retirement agreements between The Ohio Valley Bank Company and directors of Ohio Valley Banc Corp.:  Filed herewith.
10.5	The Ohio Valley Bank Company Salary Continuation agreement, dated December 28, 2007, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.5 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).

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Exhibit Number	Exhibit Description
10.6(a)	The Ohio Valley Bank Company Director Deferred Fee agreement, dated December 28, 2007, between Anna P. Barnitz and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.6(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).
10.6(b)	The Ohio Valley Bank Company Executive Deferred Compensation agreement, dated December 28, 2007, between Jeffrey E. Smith and The Ohio Valley Bank Company:  Incorporated herein by reference to Exhibit 10.6(b) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).
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.:  Incorporated herein by reference to Exhibit 10.7(b) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).
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.
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, 2009:  Filed herewith.  (Not deemed filed except for portions thereof specifically incorporated by reference into this Annual Report on Form 10-K.)
20	Proxy Statement for 2010 Annual Meeting of Shareholders:  Incorporated herein by reference to the registrant’s definitive proxy statement for the 2010 Annual Meeting of Shareholders to be filed.

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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.

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EX-4

EXHIBIT 4

OHIO VALLEY BANC CORP.

420 Third Avenue, PO Box 240

Gallipolis, OH  45631

(740) 446-2631

March 16, 2010

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, 2009

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, 2009 (the “Form 10-K”), as executed on March 16, 2010.

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.  Such long-term debt does not exceed 10% of the total assets of Ohio Valley Banc Corp. and its subsidiaries on a consolidated basis.

Very truly yours,

/s/  Jeffrey E. Smith

Jeffrey E. Smith

Chairman and CEO

Ohio Valley Banc Corp.

EX-13

EXHIBIT 13

2009 Annual Report to Shareholders

A Message from Management

Dear Shareholders, Customers, and Friends,

Your company experienced an eventful year in 2009. There were challenges like increased FDIC premiums and the fallout from the big bank bailouts. There were opportunities such as the introduction of our new OVB Classroom Adventures, which brings local bankers into the classroom for lessons on financial literacy. There was sorrow for the loss of long-time Director and friend Robert H. Eastman. Yet there were triumphs experienced through an increase in dividends and launches of Ohio Valley Bank's new Visa Rewards credit card and Loan Central's new 3-Option Tax Refund Loan program.

In a recent letter to shareholders, we tried to imagine the bank as it was when it first opened its doors on November 1st, 1872. We imagine those days of family and faith; days when honesty and hard work paid dividends beyond monetary reward. Back then, they didn't have to worry about Sarbanes-Oxley or FDIC assessment fees. Their only concern was in serving their friends and neighbors, a commitment we still honor today.

Perhaps that's why Ohio Valley Bank has been around for more than 137 years and why our share performance has remained steady, performing well above our peer group (SNL $500 million - $1 billion Bank Index, chart on page 5). Maybe that's why OVBC's companies brought in a consolidated net income of over $6 million for the year of 2009, even after an increase in FDIC premiums of over a million dollars.

Based on the FDIC's restoration plan, we expect the heightened assessment levels to continue. On December 30, 2009, financial institutions were required to prepay their FDIC premiums through 2012. Ohio Valley Bank's assessment amount was nearly $3.6 million, which will be expensed over the next three years. This action insures our depositors; but, as you can see, it comes at a high price. Unfortunately, it's a cost incurred as a result of a problem that wasn't created by the carefully managed community banks like Ohio Valley Bank.

Careful management is a passion that has been passed from generation to generation in this institution. It is one of many traditions still honored by those that don an OVB name tag as they enter the lobby doors each morning. It is tradition like careful, conservative management and outstanding service that will help us weather threats in today’s U.S. financial industry.

However, as always, we hope to do more than weather the storm. In addition to the efforts by our 250+ employees to hold down expenses; we are actively seeking new sources of revenue and ways to expand on current services. Our marriage of tradition and technology helps us in this endeavor. Wherever our customers lead…wireless, paperless, self serve, hands free…we will support them. We will support them just as our predecessors did when they introduced the county's first free parking, the first drive-thru window, and the first ATM. When applied effectively, technology enhances our life, and in doing so, strengthens our community and our company.

On the pages that follow, we share our commitment to you, our shareholders, and to the communities in which we serve.

Sincerely,

Jeffrey E. Smith

Chairman and CEO

Ohio Valley Banc Corp.

Thomas E. Wiseman

President and COO

Ohio Valley Banc Corp.

A Tradition of Service …
Every bank offers checking accounts. Every bank offers savings and loans. However we’ve found (and I’m sure you have to) that not all banks are equal. It seems that too often, 
traditional community banks are left behind when it comes to offering the technol
ogy we’ve come to expect in today’s world. And the big banks...well, that’s just it. They are 
sometimes too big. They hide behind their technology, using it to completely replace human contact. They’ve forgotten their beginnings and those that got them to where they are now.
Tradition Meets Technology
Our secret? We marry the best of the traditional community bank with the technology of the big banks. We call it “Tradition Meets Technology”. Our focus on aggressively seeking new
 financial technology takes us above and beyond the typical community bank. In 2009 alone, Ohio Valley Bank began projects in debit/credit card rewards and a major expansion of our 
mobile banking offering. Also in 2009, Loan Central debuted its unprecedented 3-Option Tax Refund Loans.  
Technology certainly makes a difference; however, we would be just like those faceless big banks if it were not for the second part...Tradition. OVB’s tradition of service is what keeps us
 grounded. It reminds us where we came from and who we serve. That’s why Ohio Valley Bank bankers teach financial literacy in school and at 4-H camp. OVB continues to support our 
communities including our local business owners; such as Eastman’s Foodland. In 2010, the Eastman family will celebrate the 30th Anniversary of their American company.
The extra care we take to protect the needs of our customers is second nature. It’s been that way since the doors opened in 1872. 
We’ve also found that our unique marriage of Tradition and Technology turns the chore of banking into a fond experience. 
When you ask elementary teacher Beth Covey, why she uses OVB’s iPhone application, she will probably say its because of convenience. The iPhone “app” is easy to use, but the 
convenience that Beth is referring to is that if she has a question, she can call or email OVB’s Inte
rnet Call Center, where a local person (not a machine or a random operator in India) 
answers the phone and assists her.
When traveling software salesman Dave Rusie forgot that his online CD was maturing, he was relieved to see a friendly email in his Inbox. Internet Call Center Representative Jamie
 Stapleton assisted him with the maturing CD. The best part...Dave didn’t have to alter his trav
el plans; he didn’t even have to enter the state.


When carpet store owner Jon Mollohan decided to expand into the cleaning business, he knew that he would need to upgrade his credit card processing. He was amazed by the savings
 and ease-of-use that OVB’s merchant services provided. His new machine takes up less space, needs less attention, and each transaction costs less. Ohio Valley Bank’s Bank Card 
department was in constant contact with him during the switch over.
When Accounting Manager Jean Adkins is reconciling accounts for Holzer Medical Center, she downloads the account statements through eDelivery. She recalls an instance when the 
statement file was too big for her computer to download. She called OVB and within minutes, an OVB manager was at the door with a printed copy.
Ken Holley enjoys eDelivery too. In 2009, h
e was the lucky winner of a Gold Membership for the Columbus Zoo. Perhaps Ken will be able to visit the Asian Elephant that OVB 
“adopted”. In October, for every person who switched to eDelivery paperless bank statements, Ohio Valley Bank made a donation to the Zoo’s Adopt-an-Animal program. Ohio Valley 
Bank won three awards for the ground-breaking “Save a Tree. Feed an Animal.” program.
All this aside, we’re sure that one of the most memorable bank visits of the year was experienced by our Main Office customers in July. One day they were surprised to find that the 
lobby was transformed into a French bistro overnight. The decorations, food, and waitress costumes were part of a “Serving You” event dreamed up by Assistant Vice President 
Brenda Henson. The event added a little fun to the week and was the talk of the town as photos of the lobby hit the newspaper and were traded on Facebook. 
While customers will remember the lobby, OVB employees will always remember 2009 as a farewell to the traditional 2 o’clock cut-off. Since October 1st, transactions made at an OVB 
office before closing have been processed on the same business day. Some traditions die hard as they should. This project required alot of time and strategy to achieve; however, it 
was well worth the trouble. The extension, like all of the stories shared here, enhanced the banking experience for our customers.


PERFORMANCE

TOTAL RETURN PERFORMANCE
Year ended December 31, 2009

This is a comparison  of five-year  cumulative  total  returns among Ohio Valley
Banc Corp.'s common shares, the S & P 500 Index, and SNL $500 Million-$1 Billion
Bank Asset-Size  Index. The SNL Index represents stock  performance of 85 of the
nation's  banks located  throughout  the United States with total assets between
$500 Million and $1 Billion (including Ohio Valley Banc Corp.)  Calculations are
based on an investment of $100 on December 31, 2004 and assumes  reinvestment of
dividends.


                                     Period Ending
                 ----------------------------------------------------------
                 12/31/04  12/31/05  12/31/06  12/31/07  12/31/08  12/31/09
                 --------  --------  --------  --------  --------  --------

OVBC              $100.00   $ 98.48   $101.31   $103.86   $ 80.38   $ 96.97

SNL $500M-$1B     $100.00   $104.29   $118.61   $ 95.04   $ 60.90   $ 58.00

S&P 500           $100.00   $104.91   $121.48   $128.16   $ 80.74   $102.11

Annual Report on Form 10-K
A copy of Ohio Valley Banc Corp.'s annual report on Form 10-K, as filed with the
Securities  and Exchange  Commission,  will be forwarded  without  charge to any
shareholder upon written request to: Ohio Valley Banc Corp., Attention: Larry E.
Miller,  Secretary,  P.O. Box 240,  Gallipolis,  OH 45631. The annual report and
proxy statement are also available on the company's Web site, www.ovbc.com.

Contact Information
Ohio Valley Banc Corp.
420 Third Avenue, P.O. Box 240, Gallipolis, Ohio 45631
740.446.2631 or 800.468.6682
Web: www.ovbc.com
E-mail: investorrelations@ovbc.com
 

OHIO VALLEY BANK
16 locations

Gallipolis, Ohio
Main Office - 420 Third Ave.
Mini Bank - 437 Fourth Ave.
Inside Foodland - 236 Second Ave.
Inside Walmart - 2145 Eastern Ave.
3035 State Route 160
Inside Holzer - 100 Jackson Pike
Loan Office - Walmart Plaza, 2145 Eastern Ave.

Columbus, Ohio
3700 South High St.

Jackson, Ohio
740 East Main St.

Pomeroy, Ohio
Inside Sav-a-Lot - 700 W. Main St.

Rio Grande, Ohio
27 North College Ave.

South Point, Ohio
Inside Walmart - 354 Private Drive

Waverly, Ohio
507 West Emmitt Ave.

Huntington, West Virginia
3331 U.S. Route 60 East

Milton, West Virginia
280 East Main St.

Point Pleasant, West Virginia
328 Viand St.

Web Branch
www.ovbc.com or www.ohiovalleybank.com
        
 
Ohio Valley Bank ATMs can be found at each office and also at these convenient locations....
 
Foodland
State Rt. 160, Bidwell, Ohio
 
Holzer Medical Center Cafeteria
100 Jackson Pike, Gallipolis, Ohio
 
Foodland
409 N. Front Street, Oak Hill, Ohio
 
Tom's Convenient Store
1929 Tennyson Rd., Piketon, Ohio
 
Bob Evans Sausage Shop
State Rt. 588, Rio Grande, Ohio
 
BP
Rt 35 & 5 Mile Creek, Fraziers Bottom, West Virginia
 
One Stop
501 8th Street, Huntington, West Virginia
 
Sunoco Foodmart 
3175 Route 60 E., Huntington, West Virginia
 
Pleasant Valley Hospital
2520 Valley Drive, Point Pleasant, West Virginia
 
LOAN CENTRAL
6 locations

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
 


BUSINESS PROFILE
Ohio Valley Banc Corp.  commenced  operations on October 23, 1992, as a one-bank
holding  company  with The Ohio  Valley  Bank  Company  being  the  wholly-owned
subsidiary.  The  Company's  headquarters  are  located  at 420 Third  Avenue in
Gallipolis,  Ohio.

The Ohio Valley Bank Company was  organized on September  24, 1872.  The Bank is
insured  under the Federal  Deposit  Insurance  Act and is  chartered  under the
banking  laws of the  State of Ohio.

In April 1996, the Banc Corp.  opened a consumer finance company operating under
the name of Loan Central, Inc.

Ohio Valley Financial Services,  an agency  specializing in life insurance,  was
formed as a subsidiary  of the Corp. in June 2000.  The Corp.  also has minority
holdings in ProAlliance.

OVBC OFFICERS
Jeffrey E. Smith, Chairman of the Board and Chief Executive Officer
Thomas E. Wiseman, President and Chief Operating Officer        
        
        
E. Richard Mahan, Senior Vice President & Chief Credit Officer
Larry E. Miller, II, Senior Vice President & Secretary
Katrinka V. Hart, Senior Vice President & Risk Management
Mario P. Liberatore, Vice President
Cherie A. Barr, Vice President
Sandra L. Edwards, 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
Paula W. Clay, Assistant Secretary
Cindy H. Johnston, Assistant Secretary

OVBC DIRECTORS
Jeffrey E. Smith
Chairman & CEO, Ohio Valley Banc Corp. and Ohio Valley Bank

Thomas E. Wiseman
President & COO, 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
President, L. Williamson Pallets, Inc. 
sawmill,  pallet  manufacturing, and wood processing

Steven B. Chapman
Certified Public Accountant, Chapman & Burris CPAs, LLC

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
Robert E. Daniel
Management Coach/Project Manager, Holzer Clinic
multispecialty physician group practice

Roger D. Williams
Former President, Bob Evans Restaurants
restaurant operator and food products

DIRECTORS EMERITUS
W. Lowell Call                    Barney A. Molnar
James L. Dailey                   C. Leon Saunders
Art E. Hartley, Sr.               Wendell B. Thomas
Charles C. Lanham
 
WEST VIRGINIA ADVISORY BOARD
Mario P. Liberatore               Lannes C. Williamson
Anna P. Barnitz                   John C. Musgrave
Richard L. Handley                Stephen L. Johnson
Gregory K. Hartley                E. Allen Bell
Trenton M. Stover                 John A. Myers
 
 

OHIO VALLEY BANK DIRECTORS
Jeffrey E. Smith        Anna P. Barnitz
Thomas E. Wiseman       Brent A. Saunders
David W. Thomas         Robert E. Daniel
Lannes C. Williamson    Roger D. Williams
Harold A. Howe
Steven B. Chapman

OHIO VALLEY BANK OFFICERS
Jeffrey E. Smith        Chairman of the Board & Chief Executive Officer
Thomas E. Wiseman       President and Chief Operating Officer        
        
        
        
E. Richard Mahan        Executive Vice President & Chief Credit Officer
Larry E. Miller, II     Executive Vice President & Secretary
Katrinka V. Hart        Executive Vice President & Risk Management

SENIOR VICE PRESIDENTS
Mario P. Liberatore     West Virginia Bank Group
Sandra L. Edwards       Financial Bank Group
Jennifer L. Osborne     Retail Lending Group
Tom R. Shepherd         Chief Deposit Officer
Scott W. Shockey        Chief Financial Officer
Bryan F. Stepp          Commercial Lending

VICE PRESIDENTS
Patricia L. Davis       Research & Technical Applications
Richard D. Scott        Trust
Bryan W. Martin         Facilities & Technical Services
Patrick H. Tackett      Retail Lending Group
Molly K. Tarbett        Loss Prevention Manager
Marilyn E. Kearns       Director of Human Resources
David K. Nadler         Financial Analyst & Strategic Plan Coordinator
Fred K. Mavis           Business Development Officer
Rick A. Swain           Western Division Branch Administrator
Frank W. Davison        Management Information Systems
 
ASSISTANT VICE PRESIDENTS
Philip E. Miller        Region Manager Franklin County
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
Gregory A. Phillips     Indirect Lending Manager
Pamela D. Edwards       Commercial Loan Operations
Paula W. Clay           Assistant Secretary
Cindy H. Johnston       Assistant Secretary
Christopher L. Preston  Regional Branch Administrator I-64
Angela G. King          Regional Branch Administrator Gallia/Meigs
Bryna S. Butler         Director e-Services and Corporate Communications
Kyla R. Carpenter       Director of Marketing
Toby M. Mannering       Collection Manager
Joe J. Wyant Region     Region Manager Jackson County
Allen W. Elliott        Bank Card Manager
Brenda G. Henson        Manager, Deposit Services
Tamela D. LeMaster      Regional Branch Administrator Gallia/Meigs
D. Jeremy Perkins       Network Systems
Gabriel U. Stewart      Chief Information Security Officer
 
ASSISTANT CASHIERS
Richard P. Speirs       Maintenance Technical Supervisor
Stephanie L. Stover     Retail Lending Operations Manager
Raymond G. Polcyn       Retail Lending Manager Gallia-Meigs SuperBanks
Tyrone J. Thomas        Assistant Manager Franklin County Region
Linda L. Hart           Assistant Manager Waverly Office
Miquel D. McCleese      Assistant Manager Columbus Office
Randall L. Hammond      Security Officer
Lori A. Edwards         Secondary Market Manager
Brandon O. Huff         AS400 Administrator
Lois J. Scherer         Assistant Transit Officer
 
LOAN CENTRAL OFFICERS
Katrinka V. Hart      Chairman of the Board
Cherie A. Barr        President
Timothy R. Brumfield  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


                                           SELECTED FINANCIAL DATA

                                           Years Ended December 31

                                  2009      2008      2007      2006      2005  
-------------------------------------------------------------------------------
(dollars in thousands, except share and per share data)

SUMMARY OF OPERATIONS:

Total interest income          $ 47,623  $ 51,533  $ 54,947  $ 52,421  $ 46,071
Total interest expense           16,932    20,828    26,420    23,931    18,137
Net interest income              30,691    30,705    28,527    28,490    27,934
Provision for loan losses         3,212     3,716     2,252     5,662     1,797
Total other income                7,747     6,193     5,236     5,830     5,522
Total other expenses             26,309    23,325    22,583    21,199    21,359
Income before income taxes        8,917     9,857     8,928     7,459    10,300
Income taxes                      2,272     2,729     2,631     2,061     3,283
Net income                        6,645     7,128     6,297     5,398     7,017

PER SHARE DATA:

Earnings per share               $ 1.67    $ 1.77    $ 1.52    $ 1.27    $ 1.64
Cash dividends declared
 per share                       $  .80    $  .76    $  .71    $  .67    $  .63
Book value per share             $16.70    $15.83    $15.10    $14.38    $13.90
Weighted average number of
 common shares outstanding    3,983,034 4,018,367 4,131,621 4,230,551 4,278,562

AVERAGE BALANCE SUMMARY:

Total loans                   $ 641,878 $ 629,225 $ 628,891 $ 626,418 $ 599,345
Securities (1)                  134,117   101,100    91,724    86,179    84,089
Deposits                        652,453   606,126   595,610   585,301   542,730
Other borrowed funds (2)         62,405    74,178    74,196    81,975    92,520
Shareholders' equity             64,941    61,346    60,549    59,970    57,620
Total assets                    818,952   782,312   769,554   760,932   726,489

PERIOD END BALANCES:

Total loans                   $ 651,356 $ 630,391 $ 637,103 $ 625,164 $ 617,532
Securities (1)                  113,307    99,218   100,713    90,161    84,623
Deposits                        647,644   592,361   589,026   593,786   562,866
Shareholders' equity             66,521    63,056    61,511    60,282    59,271
Total assets                    811,988   781,108   783,418   764,361   749,719

KEY RATIOS:

Return on average assets           .81%      .91%      .82%      .71%      .97%
Return on average equity         10.23%    11.62%    10.40%     9.00%    12.18%
Dividend payout ratio            47.95%    42.94%    46.66%    52.56%    38.55%
Average equity to average assets  7.93%     7.84%     7.87%     7.88%     7.93%

(1) Securities include interest-bearing balances with banks and FHLB stock.
(2) Other borrowed funds include subordinated debentures.

                                       1     
        
        
        

                     CONSOLIDATED STATEMENTS OF CONDITION

                                                           As of December 31

                                                         2008             2007
- -------------------------------------------------------------------------------
(dollars in thousands, except share and per share data)

ASSETS

Cash and noninterest-bearing deposits with banks     $   9,101        $  16,650
Interest-bearing deposits with banks                     6,569              611
Federal funds sold                                         ---            1,031
                                                     ---------        ---------
  Total cash and cash equivalents                       15,670           18,292

Securities available for sale                           83,868           75,340
Securities held to maturity
 (estimated fair value: 2009 - $16,834,
  2008 - $17,241)                                       16,589           16,986
Federal Home Loan Bank stock                             6,281            6,281

Total loans                                            651,356          630,391
 Less: Allowance for loan losses                        (8,198)          (7,799)
                                                     ---------        ---------
  Net loans                                            643,158          622,592

Premises and equipment, net                             10,132           10,232
Accrued income receivable                                2,896            3,172
Goodwill                                                 1,267            1,267
Bank owned life insurance                               18,734           18,153
Prepaid FDIC insurance                                   3,567              ---
Other assets                                             9,826            8,793
                                                     ---------        ---------
  Total assets                                       $ 811,988        $ 781,108
                                                     =========        =========

LIABILITIES

Noninterest-bearing deposits                         $  86,770        $  85,506
Interest-bearing deposits                              560,874          506,855
                                                     ---------        ---------
  Total deposits                                       647,644          592,361

Securities sold under agreements to repurchase          31,641           24,070
Other borrowed funds                                    42,709           76,774
Subordinated debentures                                 13,500           13,500
Accrued liabilities                                      9,973           11,347
                                                     ---------        ---------
  Total liabilities                                    745,467          718,052
                                                     ---------        ---------
COMMITMENTS AND CONTINGENT LIABILITIES (See Note K)        ---              ---

SHAREHOLDERS' EQUITY

Common stock ($1.00 stated value per share, 10,000,000
 shares authorized; 2009 - 4,643,748 shares
 issued; 2008 - 4,642,748 shares issued)                 4,644            4,643
Additional paid-in capital                              32,704           32,683
Retained earnings                                       44,211           40,752
Accumulated other comprehensive income                     674              690
Treasury stock, at cost (2009 and 2008 - 659,739 shares)
                                                       (15,712)         (15,712)
                                                     ---------        ---------
  Total shareholders' equity                            66,521           63,056
                                                     ---------        ---------
  Total liabilities and shareholders' equity         $ 811,988        $ 781,108
                                                     =========        =========

          See accompanying notes to consolidated financial statements

                                       2

                     CONSOLIDATED STATEMENTS OF INCOME

     For the years ended December 31              2009       2008       2007
- ------------------------------------------------------------------------------
(dollars in thousands, except per share data)

Interest and dividend income:
    Loans, including fees                       $ 44,076   $ 47,272   $ 50,671
    Securities:
        Taxable                                    2,748      3,109      3,079
        Tax exempt                                   451        535        555
    Dividends                                        290        323        398
    Other interest                                    58        294        244
                                                --------   --------   --------
                                                  47,623     51,533     54,947
Interest expense:
    Deposits                                      13,683     16,636     21,315
    Securities sold under agreements
      to repurchase                                   75        421      1,051
    Other borrowed funds                           2,085      2,682      2,911
    Subordinated debentures                        1,089      1,089      1,143
                                                --------   --------   --------
                                                  16,932     20,828     26,420
                                                --------   --------   --------

Net interest income                               30,691     30,705     28,527
Provision for loan losses                          3,212      3,716      2,252
    Net interest income after provision         --------   --------   --------
      for loan losses                             27,479     26,989     26,275
                                                --------   --------   --------
Noninterest income:
    Service charges on deposit accounts            2,816      3,073      2,982
    Trust fees                                       227        240        230
    Income from bank owned life insurance          1,460        757        757
    Mortgage banking income                          758        100         74
    Electronic refund check / deposit fees           528        272        110
    Gain(loss) on sale of other real estate owned     38        (31)      (777)
    Other                                          1,920      1,782      1,860
                                                --------   --------   --------
                                                   7,747      6,193      5,236
Noninterest expense:
    Salaries and employee benefits                14,973     14,057     13,045
    Occupancy                                      1,599      1,562      1,467
    Furniture and equipment                        1,204      1,048      1,086
    Corporation franchise tax                        713        606        671
    FDIC insurance                                 1,625        268         70
    Data processing                                  670        773        844
    Other                                          5,525      5,011      5,400
                                                --------   --------   --------
                                                  26,309     23,325     22,583
                                                --------   --------   --------

  Income before income taxes                       8,917      9,857      8,928

Provision for income taxes                         2,272      2,729      2,631
                                                --------   --------   --------
    NET INCOME                                   $ 6,645    $ 7,128    $ 6,297
                                                ========   ========   ========
Earnings per share                               $  1.67    $  1.77    $  1.52
                                                ========   ========   ========

          See accompanying notes to consolidated financial statements

                                       3

                           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the years ended December 31, 2009, 2008 and 2007
(dollars in thousands, except share and per share data)

                                                                            Accumulated
                                                    Additional                 Other                           Total
                                           Common     Paid-In     Retained  Comprehensive   Treasury       Shareholders'
                                           Stock      Capital     Earnings  Income(Loss)      Stock           Equity
- ------------------------------------------------------------------------------------------------------------------------
BALANCES AT JANUARY 1, 2007               $ 4,626     $32,282     $34,404     $  (981)       $(10,049)        $60,282

  Comprehensive income:
    Net income                                ---         ---       6,297         ---             ---           6,297
    Change in unrealized loss on
     available for sale securities            ---         ---         ---       1,313             ---           1,313
    Income tax effect                         ---         ---         ---        (447)            ---            (447)
                                                                                                              -------
        Total comprehensive income            ---         ---         ---         ---             ---           7,163
  Common stock issued to ESOP,
    9,500 shares                               10         238         ---         ---             ---             248
  Common stock issued through
    dividend reinvestment, 5,907 shares         6         144         ---         ---             ---             150
  Cash dividends, $.71 per share              ---         ---      (2,938)        ---             ---          (2,938)
  Shares acquired for treasury, 134,551 shares---         ---         ---         ---          (3,394)         (3,394)
                                          -------     -------     -------     -------         -------         -------
BALANCES AT DECEMBER 31, 2007               4,642      32,664      37,763        (115)        (13,443)         61,511

  Cumulative-effect adjustment in adopting
    EITF No. 06-04                            ---         ---      (1,078)        ---             ---          (1,078)
  Comprehensive income:
    Net income                                ---         ---       7,128         ---             ---           7,128
    Change in unrealized loss on
     available for sale securities            ---         ---         ---       1,220             ---           1,220
    Income tax effect                         ---         ---         ---        (415)            ---            (415)
                                                                                                              -------
        Total comprehensive income            ---         ---         ---         ---             ---           7,933
  Common stock issued to ESOP,
    1,000 shares                                1          19         ---         ---             ---              20
  Common stock issued through
    dividend reinvestment, 1 share            ---         ---         ---         ---             ---             ---
  Cash dividends, $.76 per share              ---         ---      (3,061)        ---             ---          (3,061)
  Shares acquired for treasury, 92,336 shares ---         ---         ---         ---          (2,269)         (2,269)
                                          -------     -------     -------     -------         -------         -------
BALANCES AT DECEMBER 31, 2008               4,643      32,683      40,752         690         (15,712)         63,056

  Comprehensive income:
    Net income                                ---         ---       6,645         ---             ---           6,645
    Change in unrealized gain on
     available for sale securities            ---         ---         ---         (24)            ---             (24)
    Income tax effect                         ---         ---         ---           8             ---               8
                                                                                                              -------
        Total comprehensive income            ---         ---         ---         ---             ---           6,629
  Common stock issued to ESOP,
    1,000 shares                                1          21         ---         ---             ---              22
  Cash dividends, $.80 per share              ---         ---      (3,186)        ---             ---          (3,186)
                                          -------     -------     -------     -------         -------         -------
BALANCES AT DECEMBER 31, 2009             $ 4,644     $32,704     $44,211     $   674        $(15,712)        $66,521
                                          =======     =======     =======     =======        ========         =======

             See accompanying notes to consolidated financial statements

                                       4

                                 CONSOLIDATED STATEMENTS OF CASH FLOWS


     For the years ended December 31                             2009       2008       2007
- ---------------------------------------------------------------------------------------------
(dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                   $ 6,645    $ 7,128    $ 6,297
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation                                                 1,071        939        987
    Net amortization of securities                                 280        101         66
    Proceeds from sale of loans in secondary market             57,815     11,703      4,300
    Loans disbursed for sale in secondary market               (57,057)   (11,603)    (4,226)
    Amortization of mortgage serviging rights                      129         54         25
    Impairment of mortgage servicing rights                         91         27         28
    Gain on sale of loans                                         (978)      (181)      (127)
    Deferred tax (benefit) expense                                  (2)      (102)       908
    Provision for loan losses                                    3,212      3,716      2,252
    Common stock issued to ESOP                                     22         20        248
    Earnings on bank owned life insurance                       (1,460)      (757)      (687)
    Federal Home Loan Bank stock dividend                          ---       (245)       ---
    (Gain)loss on sale of other real estate owned                  (38)        31        777
    Change in accrued income receivable                            276         82        (20)
    Change in accrued liabilities                               (1,374)    (1,720)     1,298
    Change in other assets                                      (3,704)       156       (841)
                                                               -------    -------    -------
      Net cash provided by operating activities                  4,928      9,349     11,285
                                                               -------    -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from maturities of securities
   available for sale                                           41,099     24,643      8,969
  Purchases of securities available for sale                   (49,922)   (20,792)   (15,509)
  Proceeds from maturities of securities
   held to maturity                                              1,858      2,046      1,009
  Purchases of securities held to maturity                      (1,470)    (3,060)    (3,649)
  Net change in loans                                          (25,527)      (991)   (19,498)
  Proceeds from sale of other real estate owned                  1,050        617      4,274
  Purchases of premises and equipment                             (971)    (1,300)    (1,046)
  Proceeds from bank owned life insurance                        1,034        ---         71
  Purchases of bank owned life insurance                          (304)    (1,204)       ---
                                                               -------    -------    -------
      Net cash used in investing activities                    (33,153)       (41)   (25,379)
                                                               -------    -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in deposits                                            55,283      3,335     (4,760)
  Cash dividends                                                (3,186)    (3,061)    (2,938)
  Proceeds from issuance of common stock                           ---        ---        150
  Purchases of treasury stock                                      ---     (2,269)    (3,394)
  Change in securities sold under agreements to repurchase       7,571    (16,320)    17,834
  Proceeds from Federal Home Loan Bank borrowings                6,050     13,000     20,000
  Repayment of Federal Home Loan Bank borrowings               (16,005)   (16,014)   (14,061)
  Change in other short-term borrowings                        (24,110)    12,786     (2,483)
  Proceeds from subordinated debentures                            ---        ---      8,500
  Repayment of subordinated debentures                             ---        ---     (8,500)
                                                               -------    -------    -------
      Net cash provided by (used in) financing activities       25,603     (8,543)    10,348
                                                               -------    -------    -------

CASH AND CASH EQUIVALENTS:
  Change in cash and cash equivalents                           (2,622)       765     (3,746)
  Cash and cash equivalents at beginning of year                18,292     17,527     21,273
                                                               -------    -------    -------
      Cash and cash equivalents at end of year                 $15,670    $18,292    $17,527
                                                               =======    =======    =======

SUPPLEMENTAL DISCLOSURE:
  Cash paid for interest                                       $17,791    $22,637    $25,854
  Cash paid for income taxes                                     2,730      2,827        878
  Non-cash transfers from loans to other real estate owned       1,749      5,049      2,632

           See accompanying notes to consolidated financial statements

                                        5

 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

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 and a  subsidiary  insurance  agency that  facilitates  the
receipts of insurance commissions.

     The Company provides a full range of commercial and retail banking services
from 21 offices  located in  central  and  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, a consumer finance company,  and Ohio Valley Financial Services Agency,
LLC, an insurance  agency.  Ohio Valley and its  subsidiaries  are  collectively
referred  to  as  the  "Company".   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.

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 transaction basis.

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 creditloss. 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 costbasis,  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 notmore  likely than not that the
entity will be required to sell the security  before  recovery of its  amortized
cost basis less any  currentperiodloss,  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  isrecognized  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.

FHLB  Stock:  Federal  Home Loan Bank stock is carried at cost  because its fair
value  is   difficult   to  determine   due  to   restrictions   placed  on  its
transferability.

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.

     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 over 90 days 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 still on accrual 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,  increased by the provision for
loan  losses and  decreased  by  charge-offs  less  recoveries.  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.  The
general component covers  non-classified loans and classified loans that are not
reviewed  for  impairment,  based on  historical  loss  experience  adjusted for
current factors.

     A loan is impaired  when full payment under the loan terms is not expected.
Commercial  and  commercial  real estate loans are  individually  evaluated  for
impairment.  Impaired  loans are carried at the present  value of expected  cash
flows discounted at the loan's  effective  interest rate or at the fair value of
the collateral if the loan is collateral  dependent.  A portion of the allowance
for loan losses is allocated to impaired loans.  Large groups of smaller balance
homogeneous  loans,  such as consumer and  residential  real estate  loans,  are
collectively evaluated for impairment, and accordingly,  they are not separately
identified for impairment disclosures. Troubled debt restructurings are measured
at the present value of estimated  future cash flows using the loan's  effective
rate at inception.

                                       8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 at
December 31:

                                             % of Total Loans
                                             -----------------
                                              2009       2008
                                             ------     ------
Residential real estate loans                36.66%     40.09%
Commercial real estate loans                 32.13%     31.50%
Consumer loans                               20.91%     20.13%
Commercial and industrial loans               9.03%      7.11%
All other loans                               1.27%      1.17%
                                             ------     ------
                                             100.00%    100.00%
                                             ======     ======

Approximately 3.76% 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,  2009,  the Bank's  primary
correspondent  balance  was  $6,186 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.  The  useful  lives  range  from 3 to 8 years  for  equipment,
furniture and fixtures and 7 to 39 years for buildings and improvements.

Other Real Estate:  Real estate acquired through  foreclosure or deed-in-lieu of
foreclosure  is  included  in other  assets.  Such real estate is carried at the
lower of  investment  in the loan or estimated  fair value of the property  less
estimated  selling costs. Any reduction to fair value at the time of acquisition
is accounted for as a loan charge-off. Any subsequent reduction in fair value is
recorded as a loss on other  assets.  Costs  incurred to carry other real estate
are charged to expense.  Other real estate  owned  totaled  $5,392 and $4,693 at
December 31, 2009 and 2008.

Goodwill:  Goodwill results from business acquisitions and represents the excess
of the  purchase  price  over the fair  value of  acquired  tangible  assets and
liabilities and identifiable  intangible  assets.  Goodwill is assessed at least
annually for impairment and any such impairment will be recognized in the period
identified.

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, 2009 and 2008,  the Company's MSR asset
portfolio was $474 and $191, respectively.

                                       9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Repurchase  Agreements:   Substantially  all  repurchase  agreement  liabilities
represent amounts advanced by various customers. Securities are pledged to cover
these liabilities, which are not covered by federal deposit insurance.

Per Share  Amounts:  Earnings  per share is based on net  income  divided by the
following  weighted  average  number of common  shares  outstanding  during  the
periods: 3,983,034 for 2009; 4,018,367 for 2008; 4,131,621 for 2007. 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.  The Company
recognizes interest and/or penalties related to income tax matters in income tax
expense.

     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:  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.

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

Adoption of New Accounting  Standards:  In June 2009,  the Financial  Accounting
Standards Board ("FASB") replaced  Statement of Financial  Accounting  Standards
("SFAS") No. 168, The FASB Accounting  Standards  Codification and the Hierarchy
of Generally Accepted Accounting  Principles,  with Statement 162, The Hierarchy
of  Generally  Accepted  Accounting  Principles,   and  to  establish  the  FASB
Accounting  Standards  Codification  (the "ASC") as the source of  authoritative
accounting  principles  recognized by the FASB to be applied by  nongovernmental
entities in the  preparation  of financial  statements in conformity  with GAAP.
Rules and  interpretive  releases  of the  Securities  and  Exchange  Commission
("SEC")  under  authority  of  federal  securities  laws  are  also  sources  of
authoritative  GAAP for SEC  registrants.  The ASC was  effective  for financial
statements  issued  for  periods  after  September  15,  2009 and did not have a
material impact on the Company's financial position and results of operations.

     In April 2009,  the FASB issued  Staff  Position  ("FSP") No. 115-2 and No.
124-2,  Recognition and Presentation of Other-Than-  Temporary  Impairments (ASC
320-10),  which amended existing guidance for determining  whether impairment is
other-thantemporary  for debt  securities.  The  requires  an  entity  to assess
whether  it  intends  to  sell,  or it is more  likely  than not that it will be
required to sell, a security in an unrealized  loss position  before recovery of
its  amortized  cost  basis.  If either of these  criteria  is met,  the  entire
difference  between  amortized  cost and fair value is  recognized as impairment
through earnings.  For securities that do not meet the aforementioned  criteria,
the  amount  of  impairment  is  split  into  two  components  as  follows:   1)
other-than-temporary  impairment  ("OTTI")  related to other  factors,  which is
recognized  in other  comprehensive  income and 2) OTTI  related to credit loss,
which must be recognized in the income statement.  The credit loss is determined
as the  difference  between the present  value of the cash flows  expected to be
collected  and  the  amortized  cost  basis.  Additionally,   disclosures  about
other-than-temporary  impairments for debt and equity  securities were expanded.
ASC 320-10 was effective for interim and annual  reporting  periods  ending June
15, 2009, with early adoption permitted for periods ending after March 15, 2009.
The Company adopted the provisions of this  pronouncement  for the period ending
June 15, 2009, as required.  The adoption of this  pronouncement  did not have a
material impact on the Company's financial position and results of operations.

                                       10

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     In April 2009, the FASB issued FSP No. 157-4,  Determining  Fair Value When
the Volume and Level of Activity for the Asset and Liability Have  Significantly
Decreased and Identifying  Transactions That Are Not Orderly (ASC 820-10).  This
FSP emphasizes  that the objective of a fair value  measurement  does not change
even  when  market   activity   for  the  asset  or  liability   has   decreased
significantly.  Fair value is the price that would be received for an asset sold
or paid to transfer a liability in an orderly transaction (that is, not a forced
liquidation or distressed  sale) between market  participants at the measurement
date under current market  conditions.  When  observable  transactions or quoted
prices  are not  considered  orderly,  then  little,  if any,  weight  should be
assigned to the indication of the asset or liability's  fair value.  Adjustments
to those  transactions  or prices would be needed to determine  the  appropriate
fair value. The FSP, which was applied prospectively,  was effective for interim
and annual reporting  periods ending after June 15, 2009 with early adoption for
periods ending after March 15, 2009. The Company  adopted the provisions of this
pronouncement for the period ending June 15, 2009, as required.  The adoption of
this  pronouncement  did not have a material  impact on the Company's  financial
position and results of operations.

Effect of Newly Issued But Not Yet Effective Accounting Standards: In June 2009,
the FASB issued SFAS No. 166,  Accounting for Transfers of Financial  Assets, an
Amendment  of  FASB  Statement  No.  140  (ASU  1009-16).   The  new  accounting
requirement  amends  previous  guidance  relating to the  transfers of financial
assets and eliminates the concept of a qualifying  special purpose entity.  This
Statement must be applied as of the beginning of each  reporting  entity's first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual  reporting  period and for interim and annual reporting
periods thereafter.  This Statement must be applied to transfers occurring on or
after the effective  date.  Additionally,  on and after the effective  date, the
concept  of a  qualifying  special-purpose  entity  is no  longer  relevant  for
accounting purposes.  Therefore,  formerly qualifying  special-purpose  entities
should be evaluated  for  consolidation  by reporting  entities on and after the
effective  date  in  accordance  with  the  applicable  consolidation  guidance.
Additionally,  the disclosure provisions of this Statement were also amended and
apply to transfers  that occurred  both before and after the  effective  date of
this Statement. The effect of adopting this new guidance is not expected to have
a material impact on the Company's financial position and results of operations.

     In June 2009, FASB issued SFAS No. 167,  Amendments to FASB  Interpretation
No. 46(R) (ASU 2009-17),  which amended  guidance for  consolidation of variable
interest  entities  by  replacing  the  quantitative-based   risks  and  rewards
calculation  for  determining  which  enterprise,  if  any,  has  a  controlling
financial  interest in a variable  interest  entity with an approach  focused on
identifying  which  enterprise  has the  power to  direct  the  activities  of a
variable  interest entity that most  significantly  impact the entity's economic
performance  and (1) the  obligation  to absorb  losses of the entity or (2) the
right to  receive  benefits  from  the  entity.  This  Statement  also  requires
additional  disclosures  about an enterprise's  involvement in variable interest
entities. This Statement will be effective as of the beginning of each reporting
entity's first annual  reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting  period,  and for interim and
annual reporting periods thereafter. Early adoption is prohibited. The effect of
adopting  this new  guidance is not  expected  to have a material  impact on the
Company's financial position and results of operations.

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 K 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 O 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 $7,897  and  $8,066 was  required  to meet  regulatory
reserve and clearing  requirements  at year-end  2009 and 2008.  The balances at
Fifth Third Bank do not earn interest.

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 N. 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 2008 and 2007 have
been   reclassified   to  conform  with  the   presentation   for  2009.   These
reclassifications had no effect on the net results of operations.

                                       11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SECURITIES

  Securities are summarized as follows:
                                                          Gross        Gross     Estimated
                                            Amortized   Unrealized   Unrealized    Fair
Securities Available for Sale                 Cost        Gains        Losses      Value
                                              ----        -----        ------      -----
  December 31, 2009
  -----------------
  U.S. Treasury securities                   $10,548      $  10       $    (1)    $10,557
  U.S. Government sponsored
    entity securities                         33,561         561          ---      34,122
  Agency mortgage-backed
    securities, residential                   38,737         560         (108)     39,189
                                             -------      ------      --------    -------
     Total securities                        $82,846      $1,131      $  (109)    $83,868
                                             =======      ======      ========    =======

  December 31, 2008
  -----------------
  U.S. Government sponsored
    entity securities                        $30,623      $1,243      $   ---     $31,866
  Agency mortgage-backed
    securities, residential                   43,671          82         (279)     43,474
                                             -------      ------      --------    -------
     Total securities                        $74,294      $1,325      $  (279)    $75,340
                                             =======      ======      ========    =======

                                                          Gross        Gross     Estimated
                                            Amortized   Unrealized   Unrealized    Fair
Securities Held to Maturity                   Cost        Gains        Losses      Value
                                              ----        -----        ------      -----
   December 31, 2009
  -----------------
  Obligations of states and
    political subdivisions                   $16,553      $  287       $ (41)     $16,799
  Agency mortgage-backed
    securities, residential                       36         ---          (1)          35
                                             -------      ------       ------     -------
     Total securities                        $16,589      $  287       $ (42)     $16,834
                                             =======      ======       ======     =======

  December 31, 2008
  -----------------
  Obligations of states and
    political subdivisions                   $16,946      $  327       $ (70)     $17,203
  Agency mortgage-backed
    securities, residential                       40         ---          (2)          38
                                             -------      ------       ------     -------
     Total securities                        $16,986      $  327       $ (72)     $17,241
                                             =======      ======       ======     =======

     At year-end 2009 and 2008,  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.

     Securities with a carrying value of  approximately  $80,671 at December 31,
2009 and $73,539 at December  31, 2008 were pledged to secure  public  deposits,
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, 2009, by contractual maturity, are shown below. Actual maturities may differ
from contractual  maturities  because certain issuers may have the right to call
or prepay the debt obligations prior to their contractual maturities.

                               Available for Sale         Held to Maturity
                             ----------------------    -----------------------
                                          Estimated                  Estimated
                             Amortized      Fair       Amortized       Fair
Debt Securities:               Cost         Value        Cost          Value
                              -------      -------      -------       -------
  Due in one year or less     $33,083      $33,193      $ 2,097       $ 2,151
  Due in one to five years     11,026       11,486        1,775         1,847
  Due in five to ten years        ---          ---        4,259         4,361
  Due after ten years             ---          ---        8,422         8,440
  Agency mortgage-backed
    securities, residential    38,737       39,189           36            35
                              -------      -------      -------       -------
     Total debt securities    $82,846      $83,868      $16,589       $16,834
                              =======      =======      =======       =======

     There  were no sales of debt or equity  securities  during  2009,  2008 and
2007.

                                       12

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

  Securities with unrealized losses not recognized in income are as follows:

                                              Less than 12 Months       12 Months or More            Total
                                              -------------------       -----------------            -----
  December 31, 2009                          Fair       Unrealized     Fair      Unrealized     Fair      Unrealized
                                             Value        Loss         Value       Loss         Value       Loss
                                             -----        -----        -----       -----        -----       -----
  Securities Available for Sale
  -----------------------------
  U.S. Treasury securities                   $ 3,028      $   (1)      $   ---     $   ---      $ 3,028      $    (1)
  Agency mortgage-backed
    securities, residential                    9,054        (108)          ---         ---        9,054         (108)
                                             -------      ------       -------     -------      -------      -------
                                             $12,082      $ (109)      $   ---     $   ---      $12,082      $  (109)
                                             =======      ======       =======     =======      =======      =======
  Securities Held to Maturity
  -----------------------------
  Agency mortgage-backed
    securities, residential                  $   ---      $  ---       $    25     $    (1)     $    25      $    (1)
  Obligations of states and
    political subdivisions                       767         (13)        1,389         (28)       2,156          (41)
                                             -------      ------       -------     -------      -------      -------
                                             $   767      $  (13)      $ 1,414     $   (29)     $ 2,181      $   (42)
                                             =======      ======       =======     =======      =======      =======


                                              Less than 12 Months       12 Months or More            Total
                                              -------------------       -----------------            -----
  December 31, 2008                          Fair       Unrealized     Fair      Unrealized     Fair      Unrealized
                                             Value        Loss         Value       Loss         Value       Loss
                                             -----        -----        -----       -----        -----       -----
  Securities Available for Sale
  -----------------------------
  Agency mortgage-backed
    securities, residential                  $12,759      $ (178)      $18,914     $  (101)     $31,673      $  (279)
                                             -------      ------       -------     -------      -------      -------
                                             $12,759      $ (178)      $18,914     $  (101)     $31,673      $  (279)
                                             =======      ======       =======     =======      =======      =======
  Securities Held to Maturity
  -----------------------------
  Agency mortgage-backed
    securities, residential                  $   ---      $  ---       $    37     $    (2)     $    37      $    (2)
  Obligations of states and
    political subdivisions                       ---         ---         2,879         (70)       2,879          (70)
                                             -------      ------       -------     -------      -------      -------
                                             $   ---      $  ---       $ 2,916     $   (72)     $ 2,916      $   (72)
                                             =======      ======       =======     =======      =======      =======

     Unrealized losses on the Company's debt securities have not been recognized
into  income  because  the  issuers'  securities  are of  high  credit  quality,
management has the intent and ability to hold them for the  foreseeable  future,
and the decline in fair value is largely  due to  increases  in market  interest
rates and other market conditions.  The fair value is expected to recover as the
bonds approach their  maturity date or reset date.  Management  does not believe
any  individual  unrealized  loss at December  31, 2009 and 2008  represents  an
other-than-temporary impairment.

NOTE C - LOANS

     Loans are comprised of the following at December 31:

                                          2009            2008
                                          ----            ----
Residential Real estate                 $238,761        $252,693
Commercial real estate                   209,300         198,559
Commercial and industrial                 58,818          44,824
Consumer                                 136,229         126,911
All other                                  8,248           7,404
                                        --------        --------
  Total Loans                           $651,356        $630,391
                                        ========        ========

The Bank originated  refund  anticipation  loans that  contributed fee income of
$397 in 2009, $265 in 2008 and $94 in 2007.

                                       13

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE D - ALLOWANCE FOR LOAN LOSSES

     Following  is an analysis of changes in the  allowance  for loan losses for
the years ended December 31:

                                          2009           2008           2007
                                          ----           ----           ----
Balance, beginning of year               $7,799         $6,737         $9,412

Loans charged off:
  Commercial (1)                            627          1,164          4,002
  Residential real estate                 1,172            225            422
  Consumer                                2,532          2,140          1,617
                                         ------         ------         ------
    Total loans charged off               4,331          3,529          6,041

Recoveries of loans:
  Commercial (1)                            730             95            248
  Residential real estate                    41             61            166
  Consumer                                  747            719            700
                                         ------         ------         ------
    Total recoveries of loans             1,518            875          1,114

Net loan charge-offs                     (2,813)        (2,654)        (4,927)
Provision charged to operations           3,212          3,716          2,252
                                         ------         ------         ------
Balance, end of year                     $8,198         $7,799         $6,737
                                         ======         ======         ======

Information regarding impaired loans (restated for 2008) is as follows:

                                                          2009           2008
                                                          ----           ----
  Balance of impaired loans                             $27,644        $21,153

  Less portion for which no specific
  allowance is allocated                                 11,575          5,513
                                                        -------        -------
  Portion of impaired loan balance for which
  an allowance for credit losses is allocated           $16,069        $15,640
                                                        =======        =======
  Portion of allowance for loan losses allocated
  to the impaired loan balance                          $ 3,928        $ 3,854
                                                        =======        =======

  Average investment in impaired loans for the year     $27,927        $20,860
                                                        =======        =======

  Past due - 90 days or more and still accruing         $ 1,639        $ 1,878
                                                        =======        =======

  Nonaccrual                                            $ 3,619        $ 3,396
                                                        =======        =======

     Interest  recognized  on impaired  loans was $1,690,  $1,021,  and $674 for
years ending 2009,  2008 and 2007,  respectively.  Accrual  basis income was not
materially different from cash basis income for the periods presented.

     Nonaccrual  loans and loans past due 90 days still on accrual  include both
smaller balance homogeneous loans that are collectively evaluated for impairment
and individually classified impaired loans.     
     
     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.  
(1) Includes commercial and industrial and commercial real estate loans

                                       14
      

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - PREMISES AND EQUIPMENT

Following is a summary of premises and equipment at December 31:

                                                2009           2008
                                                ----           ----

Land                                          $ 1,805        $ 1,570
Buildings                                      10,144         10,220
Leasehold improvements                          2,897          2,822
Furniture and equipment                        13,213         12,489
                                              -------        -------
                                               28,059         27,101
Less accumulated depreciation                  17,927         16,869
                                              -------        -------
     Total premises and equipment             $10,132        $10,232
                                              =======        =======

The following is a summary of the future  minimum lease  payments for facilities
leased by the Company.  Lease expense was $462 in 2009, $448 in 2008 and $405 in
2007.

2010         $  417
2011            382
2012            344
2013            293
2014            186
Thereafter      109
             ------
             $1,731
             ======

NOTE F - DEPOSITS

Following is a summary of interest-bearing deposits at December 31:

                                                   2009           2008
                                                   ----           ----

NOW accounts                                    $ 91,998       $ 80,855
Savings and Money Market                         142,478        118,289
Time:
   In denominations under $100,000               186,228        183,397
   In denominations of $100,000 or more          140,170        124,314
                                                --------       --------
     Total time deposits                         326,398        307,711
                                                --------       --------
     Total interest-bearing deposits            $560,874       $506,855
                                                ========       ========

  Following  is  a  summary  of  total  time  deposits  by remaining maturity at
December 31, 2009:

2010                      $180,318
2011                        90,211
2012                        29,805
2013                        15,639
2014                         9,427
Thereafter                     998
                          --------
     Total                $326,398
                          ========

Brokered  deposits,  included  in time  deposits,  were  $34,741  and $17,906 at
December 31, 2009 and 2008, respectively.

                                       15

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE G - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

     Securities sold under  agreements to repurchase are financing  arrangements
that have overnight maturity terms. At maturity,  the securities  underlying the
agreements are returned to the Company.  Information  concerning securities sold
under agreements to repurchase is summarized as follows at December 31:

                                                  2009           2008
                                                  ----           ----

Balance outstanding at period-end               $31,641        $24,070
                                                -------        -------
Weighted average interest rate at period-end       .25%           .70%
                                                -------        -------
Average amount outstanding during the year      $27,540        $28,040
                                                -------        -------
Approximate weighted average interest rate
 during the year                                   .27%          1.50%
                                                -------        -------
Maximum amount outstanding as of any month-end  $32,718        $35,309
                                                -------        -------
Securities underlying these agreements at
 year-end were as follows:

  Carrying value of securities                  $37,837        $51,690
                                                -------        -------
  Fair Value                                    $38,433        $52,083
                                                -------        -------

NOTE H - OTHER BORROWED FUNDS

  Other  borrowed  funds at   December  31,  2009  and  2008  are  comprised  of
advances from the Federal Home Loan Bank("FHLB") of Cincinnati, promissory notes
and Federal Reserve Bank ("FRB") Notes.

                 FHLB Borrowings   Promissory Notes   FRB Notes      Totals
                 ---------------   ----------------   ---------      -------
    2009             $38,209           $ 4,247         $   253      $ 42,709
    2008             $68,715           $ 5,479         $ 2,580      $ 76,774

     Pursuant to collateral  agreements  with the FHLB,  advances are secured by
$213,975 in qualifying  mortgage  loans and $6,280 in FHLB stock at December 31,
2009.  Fixed rate FHLB advances of $38,209 mature through 2033 and have interest
rates ranging from 2.13% to 6.62%.  There were no variable-rate  FHLB borrowings
at December 31, 2009.
     At December  31,  2009,  the Company had a cash  management  line of credit
enabling it to borrow up to $75,000 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 $75,000 available on this line of credit at December 31,
2009.
     Based on the  Company's  current  FHLB stock  ownership,  total  assets and
pledgeable  residential  first  mortgage  loans,  the Company had the ability to
obtain  borrowings  from the FHLB up to a maximum of $158,500  at  December  31,
2009. Of this maximum  borrowing  capacity of $158,500,  the Company had $95,091
available to use as additional  borrowings,  of which, $75,000 could be used for
short-term, cash management advances as mentioned above.
     Promissory  notes,  issued  primarily by Ohio  Valley,  have fixed rates of
2.00% to 5.00% and are due at various  dates  through a final  maturity  date of
December 8, 2014. A total of $400  represented  promissory notes payable by Ohio
Valley to related  parties.  See Note L for further  discussion of related party
transactions.
     FRB notes consist of the  collection  of tax payments  from Bank  customers
under the Treasury Tax and Loan  program.  These funds have a variable  interest
rate and are callable on demand by the U.S. Treasury.  The interest rate for the
Company's FRB notes was zero percent at December 31, 2009 and December 31, 2008.
Various  investment  securities  from the Bank used to  collateralize  FRB notes
totaled $3,290 at December 31, 2009 and $5,880 at December 31, 2008.
     Letters of credit issued on the Bank's behalf by the FHLB to  collateralize
certain public unit deposits as required by law totaled  $25,200 at December 31,
2009 and $45,850 at December 31, 2008.

                                       16

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - OTHER BORROWED FUNDS (continued)

Scheduled principal payments over the next five years:

                 FHLB Borrowings     Promissory Notes     FRB Notes      Totals
                 ---------------     ----------------     ---------      ------
    2009             $26,065              $2,456           $  253       $28,774
    2010               6,062                 ---              ---         6,062
    2011                  64                 646              ---           710
    2012               2,567                 ---              ---         2,567
    2013               2,569               1,145              ---         3,714
    Thereafter           882                 ---              ---           882
                     -------              ------           ------       -------
                     $38,209              $4,247           $  253       $42,709
                     =======              ======           ======       =======

NOTE I - 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.  The  Company  may  redeem  all or a portion  of these  subordinated
debentures  beginning  September  7, 2010 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 must be redeemed no later than
September 7, 2030. Debt issuance costs of $166 were incurred and capitalized and
will amortize as a yield adjustment through expected maturity.

     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 will be fixed at 6.58%
for five years,  and then  convert 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.

     On March 26, 2007, the proceeds from these new trust  preferred  securities
were used to pay off $8,500 in higher cost trust  preferred  security  debt that
was  issued on March  26,  2002.  This  repayment  of $8,500 in trust  preferred
securities  was the result of an early call  feature that allowed the Company to
redeem the entire amount of these  subordinated  debentures at par value.  These
higher cost subordinated  debentures,  which were floating based on a rate equal
to the  3-month  LIBOR plus  3.60%,  not to exceed  11.00%,  were  redeemed at a
floating rate of 8.97%.  The replacement of this higher cost debt was a strategy
by management to lower interest expense and improve the net interest margin.

     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.

                                       17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE J - INCOME TAXES

The provision for income taxes consists of the following components:

                                                 2009       2008       2007
                                                 ----       ----       ----
Current tax expense                             $2,274     $2,831    $1,723
Deferred tax (benefit)expense                      (2)       (102)      908
                                                ------     ------    ------
   Total income taxes                           $2,272     $2,729    $2,631
                                                ======     ======    ======

The source of deferred tax assets and deferred tax liabilities at December 31:

                                                           2009       2008
                                                           ----       ----
Items giving rise to deferred tax assets:
   Allowance for loan losses                              $2,848     $2,712
   Deferred compensation                                   1,430      1,362
   Deferred loan fees/costs                                  356        294
   Depreciation                                              ---         21
   Other                                                     155        189

Items giving rise to deferred tax liabilities:
   Mortgage servicing rights                                (165)       (66)
   FHLB stock dividends                                   (1,081)    (1,081)
   Unrealized gain on securities available for sale         (348)      (356)
   Depreciation                                              (93)       ---
   Prepaid expenses                                         (150)      (168)
   Intangibles                                              (268)      (232)
   Other                                                      (1)        (2)
                                                          ------     ------
Net deferred tax asset                                    $2,683     $2,673
                                                          ======     ======

     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:

                                                      2009       2008     2007
                                                      ----       ----     ----

Statutory tax                                       $3,032     $3,351    $3,036
Effect of nontaxable interest                         (264)      (282)     (282)
Nondeductible interest expense                          24         34        47
Income from bank owned insurance                      (196)      (192)     (186)
Effect of nontaxable life insurance death proceeds    (189)       ---       (24)
Effect of state income tax                              74          1       114
Tax credits                                           (212)      (193)      (78)
Other items                                              3         10         4
                                                    ------     ------    ------
   Total income taxes                               $2,272     $2,729    $2,631
                                                    ======     ======    ======

     At December 31, 2008 and December 31, 2009, 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 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 2006.  The tax years  2006-2008  remain open to
federal and state examinations.

                                       18

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE K - 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:

                                                2009        2008
                                               ------      ------
        Fixed rate                            $   827     $   577
        Variable rate                          57,564      63,839

        Standby letters of credit              12,012      13,524

     The interest rate on fixed rate  commitments  ranged from 5.50% to 8.63% at
December 31, 2009.

     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  incomeproducing   commercial
properties.

     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 L - RELATED PARTY TRANSACTIONS

   Certain  directors,  executive  officers  and  companies  in  which  they are
affiliated  were loan  customers  during  2009.  A summary of  activity on these
borrower relationships with aggregate debt greater than $120 is as follows:

Total loans at January 1, 2009        $ 8,411
   New loans                              609
   Repayments                            (615)
   Other changes                       (1,071)
                                      -------
Total loans at December 31, 2009      $ 7,334
                                      =======

     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.
In addition, certain directors, executive officers and companies with which they
are affiliated were recipients of  interest-bearing  promissory  notes issued by
Ohio  Valley in the amount of $400 at  December  31, 2009 and $3,521 at December
31, 2008.

                                       19

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE M - 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 $196, $187 and
$172, for 2009, 2008 and 2007.

     Ohio Valley  maintains an Employee  Stock  Ownership  Plan (ESOP)  covering
substantially  all  employees  of the Company.  Ohio Valley makes  discretionary
contributions  to the ESOP,  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  226,480  and  227,177 at
December 31, 2009 and 2008. In addition, the Bank made contributions to its ESOP
Trust as follows:

                                      Years ended December 31
                                  2009         2008         2007
                                  ----         ----         ----

Number of shares issued           1,000        1,000        1,000
                                 ======       ======       ======

Fair value of stock contributed   $  22        $  20        $  26

Cash contributed                    371          340          318
                                  -----        -----        -----

Total expense                     $ 393        $ 360        $ 344
                                  =====        =====        =====

     Life insurance contracts with a cash surrender value of $18,734 at December
31, 2009 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  a
supplemental   retirement  plan  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 plan provides 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  Expenses  related  to the  plans for each of the last  three  years
amounted to $321, $328, and $294. service period of the covered  individuals and
amounted to $4,114 and $3,914 at December 31, 2009 and 2008. In association with
the  split-dollar  life insurance plan, the present value of the  postretirement
benefit totaled $1,303 at December 31, 2009 and $1,125 at December 31, 2008.

                                       20

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

Level  3:  Significant,   unobservable  inputs  that  reflect  a  company's  own
assumptions about the assumptions that market  participants would use in pricing
an asset or liability. The following is a description of the Company's valuation
methodologies  used to measure and  disclose  the fair  values of its  financial
assets and liabilities on a recurring or nonrecurring basis:

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

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

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

Assets and Liabilities Measured on a Recurring Basis
Assets  and  liabilities  measured  at  fair  value  on a  recurring  basis  are
summarized below:

                                        Fair Value Measurements at December 31, 2009, Using
                                    ------------------------------------------------------------
                                      Quoted Prices in          Significant
                                       Active Markets              Other           Significant
                                       for Identical             Observable        Unobservable
                                           Assets                  Inputs             Inputs
                                         (Level 1)                (Level 2)          (Level 3)
                                    -------------------      -----------------    --------------
Assets:
U.S. Treasury securities                    ----                 $ 10,557              ----
U.S. Government sponsored entity
  securities                                ----                   34,122              ----
Agency mortgage-backed securities,
  residential                               ----                   39,189              ----

                                        Fair Value Measurements at December 31, 2008, Using
                                    ------------------------------------------------------------
                                      Quoted Prices in          Significant
                                       Active Markets              Other           Significant
                                       for Identical             Observable        Unobservable
                                           Assets                  Inputs             Inputs
                                         (Level 1)                (Level 2)          (Level 3)
                                    -------------------      -----------------    --------------
Assets:
U.S. Government sponsored entity
  securities                                ----                 $ 31,866              ----
Agency mortgage-backed securities,
  residential                               ----                   43,474              ----

                                       21

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Assets and Liabilities Measured on a Nonrecurring Basis
Assets and liabilities measured at fair value on a nonrecurring basis (restated for 2008) are
summarized below:

                                        Fair Value Measurements at December 31, 2009, Using
                                     ------------------------------------------------------------
                                       Quoted Prices in          Significant
                                        Active Markets              Other           Significant
                                        for Identical             Observable        Unobservable
                                            Assets                  Inputs             Inputs
                                          (Level 1)                (Level 2)          (Level 3)
                                     -------------------      -----------------    --------------
Assets:
Impaired Loans                              ----                     ----             $12,141
Mortgage servicing rights                   ----                     ----                 474

                                        Fair Value Measurements at December 31, 2008, Using
                                     ------------------------------------------------------------
                                       Quoted Prices in          Significant
                                        Active Markets              Other           Significant
                                        for Identical             Observable        Unobservable
                                            Assets                  Inputs             Inputs
                                          (Level 1)                (Level 2)          (Level 3)
                                     -------------------      -----------------    --------------
Assets:
Impaired Loans                              ----                     ----             $11,786
     
     Impaired loans,  which are usually  measured for impairment  using the fair
value of the  collateral,  had a principal  balance of $27,644 at  December  31,
2009.  The portion of this impaired loan balance for which a specific  allowance
for  credit  losses  was  allocated  totaled  $16,069,  resulting  in a specific
valuation allowance of $3,928. This led to an additional provision for loan loss
expense of $74. At December  31,  2008,  impaired  loans had a principal balance
of $21,153.  The portion of this  impaired  loan  balance  for which  a specific
allowance  for credit losses  was  allocated  totaled   $15,640, resulting  in a
specific  valuation allowance  of $3,854.  The specific  valuation allowance for
those loans has increased from $3,854 at December 31, 2008 to $3,928 at December
31, 2009.
     Mortgage  servicing  rights,  which  are  carried  at lower of cost or fair
value,  were  carried  at their  fair  value  of  $474,  which is made up of the
outstanding  balance of $620,  net of a valuation  allowance of $146 at December
31, 2009, resulting in a charge of $91 for the year ending December 31, 2009.


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

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

Interest-bearing Deposits in Other Banks: For these short-term instruments,  the
carrying amount is a reasonable estimate of fair value.

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

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

                                22

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Loans:  The fair value of fixed rate loans is  estimated by  discounting  future
cash flows  using the  current  rates at which  similar  loans  would be made to
borrowers with similar credit ratings and for the same remaining maturities. The
fair value of loan  commitments  and standby letters of credits was not material
at  December  31,  2009 or 2008.  The fair  value  for  variable  rate  loans is
estimated to be equal to carrying  value.  This fair value  represents  an entry
price in  accordance  with ASC 825.  While ASC 820  amended  ASC 825 in  several
respects,  this  approach to fair value  remains an  acceptable  approach  under
generally accepted accounting principles.

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

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

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

     In addition, other assets and liabilities that are not defined as financial
instruments  were not included in the  disclosures  below,  such as premises and
equipment and life insurance contracts.

     The  estimated  fair  values  of the  Company's  financial  instruments  at
December 31, are as follows:

                                              2009                  2008
                                              ----                  ----
                                       Carrying     Fair     Carrying    Fair
                                         Value      Value      Value     Value
                                         -----      -----      -----     -----
Financial assets:
   Cash and cash equivalents          $ 15,670   $ 15,670   $ 18,292   $ 18,292
   Securities                          100,457    100,702     92,326     92,581
   Federal Home Loan Bank stock          6,281        N/A      6,281        N/A
   Loans                               643,158    661,005    622,592    637,422
   Accrued interest receivable           2,896      2,896      3,172      3,172

Financial liabilities:
   Deposits                            647,644    649,530    592,361    591,742
   Securities sold under agreements
     to repurchase                      31,641     31,641     24,070     24,070
   Other borrowed funds                 42,709     43,276     76,774     78,777
   Subordinated debentures              13,500     13,712     13,500     13,718
   Accrued interest payable              4,075      4,075      4,933      4,933

     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.

                                       23

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE O - 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  as of  December  31,  2009,  the Company and Bank meet all
capital adequacy requirements to which it is 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, consolidated actual capital levels and minimum required levels
for the Company and the Bank were:
                                                                                   Minimum Required
                                                                                      To Be Well
                                                               Minimum Required    Capitalized Under
                                                                  For Capital      Prompt Corrective
                                                Actual         Adequacy Purposes   Action Regulations
                                                ------         -----------------   ------------------
                                            Amount   Ratio       Amount  Ratio       Amount   Ratio
                                            ------   -----       ------  -----       ------   -----
2009
Total capital (to risk weighted assets)
   Consolidated                            $85,941   13.6%      $50,588   8.0%      $63,235    N/A
   Bank                                     79,583   12.7        50,059   8.0        62,574   10.0%
Tier 1 capital (to risk weighted assets)
   Consolidated                             78,033   12.3        25,294   4.0        37,941    N/A
   Bank                                     71,760   11.5        25,030   4.0        37,545    6.0
Tier 1 capital (to average assets)
   Consolidated                             78,033    9.6        32,507   4.0        40,633    N/A
   Bank                                     71,760    8.9        32,112   4.0        40,140    5.0

2008
Total capital (to risk weighted assets)
   Consolidated                            $82,205   13.5%      $48,783   8.0%      $60,979    N/A
   Bank                                     76,642   12.7        48,155   8.0        60,194   10.0%
Tier 1 capital (to risk weighted assets)
   Consolidated                             74,581   12.2        24,391   4.0        36,587    N/A
   Bank                                     69,158   11.5        24,078   4.0        36,116    6.0
Tier 1 capital (to average assets)
   Consolidated                             74,581    9.7        30,788   4.0        38,485    N/A
   Bank                                     69,158    9.1        30,355   4.0        37,944    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, 2010,  approximately $4,155 of the subsidiaries' retained earnings
were  available  for  dividends  under  these  guidelines.  In addition to these
restrictions,  as a practical matter, dividend payments cannot reduce regulatory
capital levels below minimum regulatory guidelines

                                       24

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE P - 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:
                                                         2009      2008
Assets                                                   ----      ----
  Cash and cash equivalents                           $ 1,215    $ 1,169
  Investment in subsidiaries                           78,910     75,440
  Notes receivable - subsidiaries                       4,230      5,461
  Other assets                                            302        295
                                                      -------    -------
    Total assets                                      $84,657    $82,365
                                                      =======    =======

Liabilities
  Notes payable                                       $ 4,247    $ 5,479
  Subordinated debentures                              13,500     13,500
  Other liabilities                                       389        330
                                                      -------    -------
    Total liabilities                                  18,136     19,309
                                                      -------    -------
Shareholders' Equity
    Total shareholders' equity                         66,521     63,056
                                                      -------    -------
    Total liabilities and shareholders' equity        $84,657    $82,365
                                                      =======    =======

CONDENSED STATEMENTS OF INCOME

                                                       Years ended December 31:
                                                        2009      2008     2007
                                                        ----      ----     ----
Income:
  Interest on notes                                   $  156    $  259   $  311
  Other operating income                                  56        33       35
  Dividends from subsidiaries                          4,000     6,250    5,000

Expenses:
  Interest on notes                                      157       261      314
  Interest on subordinated debentures                  1,089     1,089    1,143
  Operating expenses                                     230       309      227
                                                      ------    ------   ------
  Income before income taxes and equity in
    undistributed earnings of subsidiaries             2,736     4,883    3,662
  Income tax benefit                                     423       458      450
  Equity in undistributed earnings of subsidiaries     3,486     1,787    2,185
                                                      ------    ------   ------
    Net Income                                        $6,645    $7,128   $6,297
                                                      ======    ======   ======
                                       25

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE P - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)

CONDENSED STATEMENT OF CASH FLOWS
                                                       Years ended December 31:
                                                        2009     2008     2007
                                                        ----     ----     ----
Cash flows from operating activities:
  Net income                                          $6,645    $7,128   $6,297
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Equity in undistributed earnings
        of subsidiaries                               (3,486)   (1,787)  (2,185)
      Change in other assets                              (7)      133      (39)
      Change in other liabilities                         59        (3)     (73)
                                                      ------    ------   ------
    Net cash provided by
      operating activities                             3,211     5,471    4,000
                                                      ------    ------   ------

Cash flows from investing activities:
  Change in notes receivable                           1,231       197     (320)
                                                      ------    ------   ------
    Net cash provided by (used in)
      investing activities                             1,231       197     (320)
                                                      ------    ------   ------

Cash flows from financing activities:
  Change in notes payable                             (1,232)     (244)     329
  Proceeds from subordinated debentures                  ---       ---    8,500
  Repayment of subordinated debentures                   ---       ---   (8,500)
  Cash dividends paid                                 (3,186)   (3,061)  (2,938)
  Proceeds from issuance of common shares                 22        20      398
  Purchases of treasury shares                           ---    (2,269)  (3,394)
                                                      ------    ------   ------
    Net cash used in financing activities             (4,396)   (5,554)  (5,605)
                                                      ------    ------   ------

Cash and cash equivalents:
  Change in cash and cash equivalents                     46       114   (1,925)
  Cash and cash equivalents at beginning of year       1,169     1,055    2,980
                                                      ------    ------   ------
    Cash and cash equivalents at end of year          $1,215    $1,169   $1,055
                                                      ======    ======   ======
                                       26

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE Q - 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  93.4%,  94.0%  and  94.8% of total
consolidated  revenues  for the years ending  December 31, 2009,  2008 and 2007,
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.  Transactions
among reportable segments are made at fair value.

     Segment information for the years ended December 31, is as follows:

                                 Year Ended December 31, 2009
                            -------------------------------------
                                           Consumer        Total
                             Banking       Finance        Company
                            --------      --------       --------
Net interest income         $ 27,817      $  2,874       $ 30,691
Provision expense           $  3,049      $    163       $  3,212
Tax expense                 $  1,843      $    429       $  2,272
Net income                  $  5,810      $    835       $  6,645
Assets                      $797,276      $ 14,712       $811,988

                                 Year Ended December 31, 2008
                            -------------------------------------
                                           Consumer        Total
                             Banking       Finance        Company
                            --------      --------       --------
Net interest income         $ 28,067      $  2,638       $ 30,705
Provision expense           $  3,479      $    237       $  3,716
Tax expense                 $  2,357      $    372       $  2,729
Net income                  $  6,405      $    723       $  7,128
Assets                      $767,485      $ 13,623       $781,108

                                 Year Ended December 31, 2007
                            -------------------------------------
                                           Consumer        Total
                             Banking       Finance        Company
                            --------      --------       --------
Net interest income         $ 26,216      $  2,311       $ 28,527
Provision expense           $  2,125      $    127       $  2,252
Tax expense                 $  2,298      $    333       $  2,631
Net income                  $  5,645      $    652       $  6,297
Assets                      $770,958      $ 12,460       $783,418


                                       27

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE R - CONSOLIDATED QUARTERLY FINANCIAL INFORMATION (unaudited)

                                          Quarters Ended

                              Mar. 31    Jun. 30    Sept. 30    Dec. 31
      2009                    -------    -------    --------    -------

Total interest income         $12,611    $11,710     $11,733    $11,569
Total interest expense          4,331      4,407       4,285      3,909
Net interest income             8,280      7,303       7,448      7,660
Provision for loan losses(1)      848        296         957      1,111
    Net Income                  2,051      1,396       1,700      1,498

Earnings per share            $   .51    $   .35     $   .43    $   .38

      2008

Total interest income         $13,734    $12,853     $12,657    $12,289
Total interest expense          6,059      5,298       4,933      4,538
Net interest income             7,675      7,555       7,724      7,751
Provision for loan losses         701        916         693      1,406
    Net Income                  1,965      1,731       1,885      1,547

Earnings per share            $   .48    $   .43     $   .47    $   .39

      2007

Total interest income         $13,502    $13,720     $13,784    $13,941
Total interest expense          6,431      6,554       6,779      6,656
Net interest income             7,071      7,166       7,005      7,285
Provision for loan losses         386        616         332        918
    Net Income                  1,775      1,686       1,833      1,003

Earnings per share            $   .42    $   .41     $   .45    $   .24


(1)  During the second quarter of 2009,  the Bank  experienced a decrease in its
     provision  expense as a result of a $648 loan  recovery  from a  commercial
     loan relationship.


                                       28

                        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, 2009 and 2008,  and the
related consolidated  statements of income, changes in shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 2009. We
also have audited the Company's internal control over financial  reporting as of
December  31,  2009,  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 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, 2009 and 2008,  and the results of its  operations  and
its cash flows for each of the three  years in the  period  ended  December  31,
2009, 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,  2009,  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

Columbus, Ohio
March 16, 2010

                                       29

                     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, 2009,  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, 2009,  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 16, 2010 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/JEFFREY E. SMITH
   Jeffrey E. Smith
   Chairman, CEO

/s/SCOTT W. SHOCKEY
   Scott W. Shockey
   Vice President, CFO

   March 9, 2010


                                       30

                          SUMMARY OF COMMON STOCK DATA

                             OHIO VALLEY BANC CORP.
                     Years ended December 31, 2009 and 2008

INFORMATION AS TO STOCK PRICES AND DIVIDENDS: On February 9, 1996, Ohio Valley's
common  shares  began to be quoted 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, 2008.

2009               High          Low
- ----              ------        ------
First Quarter     $22.29        $18.00
Second Quarter     32.31         21.30
Third Quarter      30.69         25.34
Fourth Quarter     28.50         20.34

2008               High          Low
- ----              ------        ------
First Quarter     $26.65        $25.00
Second Quarter     26.25         25.00
Third Quarter      25.50         20.00
Fourth Quarter     21.80         17.65

     Shown below is a table which  reflects the dividends  declared per share on
Ohio  Valley's  common  shares.  As of March 12, 2010,  the number of holders of
record of common shares was 2,142, an increase from 2,124  shareholders at March
13, 2009.

Dividends per share      2009        2008
- -------------------      ----        ----
First Quarter            $.20        $.19
Second Quarter            .20         .19
Third Quarter             .20         .19
Fourth Quarter            .20         .19

     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.

     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.



                                       31

                               PERFORMANCE GRAPH

                             OHIO VALLEY BANC CORP.
                          Year ended December 31, 2009

     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, 2004 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 eighty-five (85) 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 85 banks in the SNL Index.

                                 TOTAL RETURN PERFORMANCE

                           OVBC, SNL $500M-$1B Bank Index and S&P 500
                                          2004-2009

                                        Period Ending
                 ----------------------------------------------------------
                 12/31/04  12/31/05  12/31/06  12/31/07  12/31/08  12/31/09
                 --------  --------  --------  --------  --------  --------

OVBC              $100.00   $ 98.48   $101.31   $103.86   $ 80.38   $ 96.97

SNL $500M-$1B     $100.00   $104.29   $118.61   $ 95.04   $ 60.90   $ 58.00

S&P 500           $100.00   $104.91   $121.48   $128.16   $ 80.74   $102.11

                                       32

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                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDIION AND RESULTS OF OPERATIONS

     The purpose of this  discussion  is to provide an analysis of the Company's
financial  condition and results of operations  which 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 Banc Corp.  generated net income of $6,645 for 2009, a decrease
of 6.8% from 2008.  Earnings  per share were $1.67 for 2009,  a decrease of 5.6%
from  2008.  The  decrease  in net income  and  earnings  per share for 2009 was
primarily  due to higher  costs  related to deposit  assessments  by the Federal
Deposit Insurance Corporation  ("FDIC").  Such costs rose to $1,625 in 2009 from
$268 in 2008 and reflected  higher  assessment  rates and a $373 second  quarter
2009 special assessment levied by the FDIC on insured financial  institutions to
rebuild the Deposit  Insurance  Fund.  The higher FDIC costs reduced  2009's net
income  and  earnings  per  share by $896  and  $0.22,  respectively.  Partially
offsetting the  significant  FDIC  insurance  expense  increase was  noninterest
income  improvement of 25.1% during 2009.  The growth in noninterest  income was
largely due to life insurance proceeds collected in the third quarter of 2009 as
well as increased  transaction  volume related to the Company's mortgage banking
activity and seasonal tax clearing  services  performed during the first half of
2009.  During 2008,  Ohio Valley Banc Corp.  generated net income of $7,128,  an
increase of 13.2% from 2007. Earnings per share were $1.77 for 2008, an increase
of 16.4% from 2007.  The  increase in net income and earnings per share for 2008
was  primarily  due to a 7.6% net interest  income  expansion as a result of the
lower  short-term  interest rate  environment  initiated by the Federal  Reserve
Bank.  Growth in income also came from noninterest  income  improvement of 18.6%
over 2007 due to lower losses on the sale of other real estate owned ("OREO").
     Total assets during 2009  increased  $30,880,  or 4.0%,  resulting in total
assets at year-end of $811,988.  The Company's  annualized net income to average
asset ratio,  or return on assets  ("ROA") was .81% for 2009 compared to .91% in
2008 and .82% in 2007. The  annualized  net income to average  equity ratio,  or
return on equity  ("ROE")  was  10.23% for 2009  compared  to 11.62% in 2008 and
10.40% in 2007.  The decrease in both the  Company's  ROA and ROE was due to the
higher  assessments and special  assessment imposed by the FDIC during 2009. The
higher FDIC costs  reduced  2009's ROA and ROE by 11 basis  points and 138 basis
points,  respectively.  Prior to 2009, the Company experienced increasing trends
in both  ROA and ROE  for  2008  and  2007  as a  result  of  improved  earnings
performance due to net interest and noninterest  income activities in 2008 and a
significant decrease in provision expense during 2007.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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,   securities   sold  under   agreements  to  repurchase   ("repurchase
agreements")  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 ending December 31, 2009.  Tables I and II
have been  prepared  to  summarize  the  significant  changes  outlined  in this
analysis.
     Net  interest  income  on an FTE  basis  decreased  $22 in 2009,  or 0.07%,
compared to the $31,068 earned in 2008. The decrease was primarily  attributable
to a  compressing  net  interest  margin  caused  by  a  continued  decrease  in
short-term  interest  rates  initiated  by the  Federal  Reserve  Board in 2007.
Further  impacting the decrease to net interest income was an increase in higher
relative balances being invested in overnight or short-term  earning assets such
as taxable investment securities and interest-bearing balances with banks, which
return lower yields.  Net interest  income on an FTE basis  increased  $2,177 in
2008, an increase of 7.5% compared to the $28,891  earned in 2007.  The increase
was primarily  attributable  to an expanding net interest margin caused by lower
funding costs combined with a higher level of  interest-earning  assets,  mostly
from growth in taxable securities and interest-bearing balances with banks.
     For 2009,  average  earning  assets grew  $40,136,  or 5.5%, as compared to
growth of $10,834,  or 1.5%, in 2008.  Driving this continued  growth in earning
assets for 2009 was average interest-bearing  balances with banks, increasing to
$27,077 at year-end  2009,  up from $5,710 at year-end 2008 and $549 at year-end
2007.  The larger  increase in 2009 was due to the  Company's  excess  liquidity
position,  primarily  resulting from average deposit growth exceeding the growth
in average loans.  As loan growth  continued at a mild pace  throughout  much of
2009, more excess funds from core deposit growth,  on average,  were temporarily
invested  into   interest-bearing   balances  with  banks.   This  caused  these
short-term,  lower  yielding  instruments  to  represent a large  percentage  of
earning assets, finishing at 3.5% of earning assets at year-end 2009 as compared
to 0.8% at year-end  2008.  Excess funds from  average core deposit  growth were
also invested into average taxable securities balances,  which expanded $14,518,
or 17.6%,  for 2009 and  represented  12.5% of earning  assets at year-end 2009.
This compares to average taxable  securities growth of $5,858, or 7.6%, for 2008
representing  11.2% of earning  assets at year-end  2008.  The growth in average
securities was largely comprised of U.S. government sponsored entity securities.
Average  loans,  the  Company's  highest  portion of earning  assets,  increased

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

$12,653,  or 2.0%,  during 2009, while remaining  relatively stable during 2008,
increasing  just $334,  or 0.1%.  The growth in average  loans was largely  from
commercial  loans.  Although  average loan  balances  increased  during 2009, it
represented a smaller portion of earning  assets,  finishing at 82.7% of earning
assets for 2009 as  compared  to 85.5% for 2008,  as most of the  earning  asset
growth in 2009 came from short-term balances with banks and securities.
     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 increased 4.2% between 2009 and 2008
and  increased  0.6%  between  2007 and 2008.  The larger  increase in 2009 came
mostly from time deposits,  which increased $19,942,  or 6.4%.  Interest-bearing
liabilities  in 2009 were  comprised  largely of time deposits and NOW accounts,
which  together  represented  65.2% of total  interest-bearing  liabilities,  as
compared to 64.1% in 2008 and 67.9% in 2007.  Other borrowed  money  represented
7.5% of total interest-bearing  liabilities in 2009, as compared to 9.7% in 2008
and 9.8% in  2007.  The  composition  of  other  borrowed  funds as well as time
deposits and NOW accounts has declined from 2007 to 2009. The primary reason for
this  composition  decrease was from growth in the  Company's  savings and money
market accounts,  primarily its Market Watch product, which together represented
a higher composition of total  interest-bearing  liabilities at 20.9% in 2009 as
compared  to 19.5% in 2008 and 15.7% in 2007.  Introduced  in 2005,  the  Market
Watch product  offers  customers  tiered rates that are  competitive  with other
offerings in the  Company's  market areas.  The increased  demand for the Market
Watch  product  was largely the result of  promotional  pricing  during 2008 and
2009.  The  consumer  preference  for this product has  generated a  significant
amount of funding  dollars  which have helped to support  earning  asset growth,
maturity  runoff of time  deposits  and payoffs on other  borrowed  funds.  This
composition  shift  from  2007 to 2009 with  higher  savings  and  money  market
balances and lower time deposits has served as a cost effective  contribution to
the net interest  margin.  The average cost of savings and money market accounts
was  1.21%,  1.70%  and  2.78%  during  the years  ending  2009,  2008 and 2007,
respectively.  This is compared to the much higher average cost of time deposits
of  3.24%,  4.17%  and  4.88%  during  the  years  ending  2009,  2008 and 2007,
respectively.
     The net  interest  margin  decreased  23 basis points to 4.00% in 2009 from
4.23% in 2008.  Conversely,  this compared to a 24 basis points  increase in the
net interest margin in 2008. During 2009, there was a decrease of 9 basis points
from  the   contributions   of  interest  free  funds  (i.e.   demand  deposits,
shareholders'  equity)  from  0.52% in 2008 to 0.43% in 2009.  The net  interest
margin was further  impacted by a decrease  in the net  interest  rate spread on
interest  sensitive assets and liabilities of 14 basis points,  with the average
cost of  interest-bearing  liabilities  decreasing 73 basis points from 3.34% to
2.61% being completely  offset by the average yield on  interest-earning  assets
decreasing 87 basis points from 7.05% to 6.18%.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     
     Lower  asset  yields  caused  interest  income on an FTE basis to  decrease
$3,918,  or 7.5%,  from 2008.  Lower asset yields in 2009 were partly due to the
growth in earning  asset  composition  being  comprised  mostly of  shorter-term
average  interest-bearing  balances  with banks and  taxable  securities,  which
yielded just 0.21% and 3.13% during 2009, respectively. During most of 2009, the
Company experienced limited loan growth, primarily due to lower residential real
estate loan  balances,  while  experiencing  an increasing  trend of higher core
deposit  growth.  Further  contributing  to lower asset  yields were loan yields
decreasing 64 basis points from 2008 to 2009.  This negative effect reflects the
decrease in short-term  interest rates initiated by the Federal Reserve Board in
2007. The Company's  commercial,  participation  and real estate loan portfolios
have been most sensitive to these  decreases in short-term  interest rates since
2007,  particularly  the prime interest rate. The prime interest rate began 2008
at 7.25% and decreased 200 basis points in the first quarter, 25 basis points in
the second  quarter  and 175 basis  points in the fourth  quarter to end 2008 at
3.25%.  During 2009,  the prime  interest rate  remained at 3.25%,  allowing for
additional asset repricings as a lagging effect. During 2008, lower asset yields
caused interest income on an FTE basis to decrease  $3,415,  or 6.2%, from 2007.
Lower asset  yields were largely the result of loan yields  decreasing  55 basis
points from 2007 to 2008,  attributed to the  decreases in  short-term  interest
rates initiated by the Federal Reserve since 2007.
     Partially offsetting these negative effects to interest income in 2009 were
positive  contributions  from  real  estate  fees.  During  the end of 2008  and
entering 2009, the nation's long-term interest rates that are tied to fixed-rate
mortgages  became  increasingly  affordable.  At March 31, 2009 and December 31,
2008, the 30-year treasury rate was 3.56% and 2.69%,  respectively,  as compared
to 4.31% at September 30, 2008. This was responsible for a significant  increase
in the demand for real estate  refinancings  that would allow  consumers to take
advantage of historical low rates.  This also allowed the Company to originate a
significant  volume of real estate loans that were sold to the secondary market.
Both  the  significant   volume  of  refinancings   and  secondary  market  loan
originations during the early part of 2009 resulted in the Company's real estate
fees  increasing  $342,  or 67.0%,  during  2009 as  compared  to 2008.  Further
contributing  to  interest  income  was  additional  fee income  from  increased
originations of the Company's refund  anticipation  loans ("RAL") in early 2009.
Participating with a third-party tax software provider has given the Company the
opportunity to make RAL loans during the tax refund loan season,  typically from
January  through  March.  RAL  loans  are  short-term  cash  advances  against a
customer's   anticipated  income  tax  refund.  During  2009,  the  Company  had
recognized $397 in RAL fees as compared to $265 during 2008 and $94 during 2007.
     RAL fees have been subject to scrutiny by various governmental and consumer
groups who have questioned the fairness and  legality of RAL fees and the  risks
to which such  business  subjects  the banks  that  offer RALs.  The Bank may be
required  by  a  regulator  to  terminate, and is  considering  terminating, the
offering  of such  loans.  The Bank also has  a separate agreement  with the tax
software provider for the Companys  electronic refund check/deposit (ERC/ERD)
clearing  services.  Through  the ERC/ERD  agreement,  the  Company  serves as a
facilitator  for  the clearing  of tax  refunds.  The ERC/ERD  service  does not
subject the Bank to the risks  related to the RALs  and has not  been subject to
the same scrutiny.  Nevertheless, if  the Bank  terminates its contract with the
tax software  provider  for the RAL business, the Bank may also lose the ERC/ERD
business.
     In  relation  to  lower  earning  asset  yields  for  2009,  the  Company's
interest-bearing  liability  costs  decreased 73 basis points  causing  interest
expense to drop $3,896,  or 18.7%,  from 2008 to 2009 as a result of lower rates
paid on interest-bearing  liabilities.  Since the beginning of 2008, the Federal
Reserve  Board has  reduced the prime and federal  funds  interest  rates by 400
basis  points.  The prime  interest  rate is  currently  at 3.25% and the target
federal  funds rate has  decreased to a range of 0.0% to 0.25%.  The  short-term
rate  decreases  impacted  the  repricings  of various  Bank  deposit  products,
including  public  fund NOW  accounts,  Gold  Club and  Market  Watch  accounts.
Contributing  most to the decrease in funding costs were interest  rates on time
      

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

deposit balances  (CD's),  which continued to reprice at lower rates during 2009
(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 4.88% at year-end 2007 to 4.17% at year-end 2008
and  3.24%  at  year-end  2009.  During  2008,  the  Company's  interest-bearing
liability  costs  decreased 93 basis  points  causing  interest  expense to drop
$5,592,  or 21.2%,  from 2007 to 2008. This was due to the previously  mentioned
Federal Reserve rate  reductions  initiated in 2007 that caused a downward shift
in short-term  interest  causing the repricings of various Bank deposit products
during this time, including time deposits,  public fund NOW accounts,  Gold Club
and Market Watch accounts.
     While the Company  has  finished  2009 with a decrease in the net  interest
margin as compared to 2008,  there has been margin  improvement  throughout  the
second half of 2009. As previously mentioned,  during the first quarter of 2009,
the Company  experienced a significant  volume of mortgage  refinancings and RAL
loan volume which  increased real estate and consumer loan fees and also the net
interest margin, which was 4.42% at the end of 2009's first quarter. It was also
during  this time the  Company  experienced  a  significant  increase  in excess
deposits  which led to temporary  increases in lower  yielding  interest-bearing
deposits with banks and short-term  taxable  securities with maturity terms less
than one year.  Entering the second quarter,  the real estate and RAL fees began
to stabilize  causing a decrease to the  Company's  second  quarter net interest
margin of 3.78%. However, entering the second half of 2009, the Company improved
its net interest  margin to 3.85% in the third  quarter of 2009 and 3.99% in the
fourth quarter of 2009. The Company attributes this margin enhancement effect to
the re-investment of lower yielding interest-bearing deposits with banks earning
0.25% or less to higher yielding assets such as loans and longer-term investment
securities.  Net  interest  margin  will  benefit  as  continued  maturities  of
short-term taxable securities can be re-invested to 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 year has
seen the banking industry under significant  stress due to declining real estate
values and asset  impairments.  The Federal Reserve Board's continued actions of
decreasing  short-tem  interest  rates in 2008 were  necessary  to take steps in
repairing the recessionary problems and promote economic stability.  The Company
believes it is reasonably possible the prime interest rate and the federal funds
rate will  remain at the  historically  low  levels  for the  majority  of 2010.
However,  there can be no assurance to that effect or as to the magnitude of any
change in market  interest  rates  should a change be  prompted  by the  Federal
Reserve Board,  as such changes are dependent upon a variety of factors that are
beyond the Company's  control.  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.

NONINTEREST INCOME
     Total noninterest income increased $1,554, or 25.1%, in 2009 as compared to
2008.  Contributing  most to the increase in  noninterest  income was bank owned
life  insurance  proceeds,  seasonal  tax refund  processing  fees and  mortgage
banking income  partially offset by a decrease in the Bank's service charge fees
on deposit accounts.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     
     Noninterest  income  growth  during  2009 came  mostly  from the  Company's
earnings from  tax-free bank owned life  insurance  ("BOLI")  investments.  BOLI
investments  are maintained by the Company in association  with various  benefit
plans,  including deferred  compensation  plans,  director  retirement plans and
supplemental  retirement  plans.  During the third quarter of 2009,  the Company
received BOLI proceeds  resulting in a gain of $556 which led to a  year-to-date
increase of $703, or 92.9%, in BOLI earnings for 2009.
     Also  contributing  to 2009's  noninterest  income growth was the Company's
mortgage  banking income.  Mortgage banking income includes gains on the sale of
mortgage loans,  mortgage servicing fees and mortgage servicing rights fees, net
of  impairment.  Historic low  interest  rates  related to long-term  fixed-rate
mortgage loans have caused consumers to refinance existing mortgages in order to
reduce their monthly costs.  Despite the low level of home sales,  consumers are
selectively purchasing real estate while locking in low long-term rates. To help
manage this consumer demand for longer-termed, fixed-rate real estate mortgages,
the Company took  advantage of  opportunities  to sell most real estate loans to
the  secondary  market,  mostly in the first half of 2009.  The decision to sell
long-term  fixed-rate  mortgages at lower rates was also effective in minimizing
the interest rate risk exposure to rising rates.  During the year ended December
31, 2009, the Company sold 432 loans totaling $57,815 to the secondary market as
compared to 109 loans totaling  $11,703 during the year ended December 31, 2008.
This volume increase in loan sales  contributed to total mortgage banking income
growth  of $658,  or  658.0%,  during  2009 as  compared  to 2008.  The  Company
anticipates the mortgage banking loan sales to decline in 2010.
     Further  contributing  to  noninterest  income growth was the Company's tax
refund  processing  fees  classified  as  ERC/ERD fees. The  Company  began  its
participation  in a  new tax refund  loan service in 2006 where  it serves  as a
facilitator  for the  clearing of tax refunds for a tax software  provider.  The
Company  is  one of a limited  number of  financial  institutions throughout the
U.S.  that facilitates  tax  refunds through  its  relationship  with  this  tax
software  provider.  During  the year ended  December  31,  2009,  the Company's
ERC/ERD  fees  increased by $256, or 94.1%, as compared  to 2008. As a result of
ERC/ERD activity  being  mostly  seasonal, the  majority of income was  recorded
during the first half of 2009,  with only minimal income recorded thereafter.
     Growth in noninterest income also came from the net gains and losses on the
sales of OREO assets,  classified as other noninterest  income.  This income was
the result of higher OREO losses  experienced  in 2008 combined with higher OREO
gains experienced during 2009. As a result, income from OREO sales increased $69
during 2009 as compared to 2008.  The  year-to-date  increase was  primarily the
result of a $41 loss  incurred  on the sale of one large  real  estate  property
during the first  quarter of 2008 and a $24 gain  recognized  on the sale of one
large real estate property during the second quarter of 2009.
     Further  enhancing  growth  in other  noninterest  income  was  debit  card
interchange  income,  increasing $77, or 11.8%, during 2009 as compared to 2008.
The volume of  transactions  utilizing the Company's  Jeanie(R)  Plus debit card
continue  to  increase  from a year ago.  The  Company's  customers  used  their

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Jeanie(R) Plus debit cards to complete  1,473,913  transactions  during 2009, up
11.7% from the 1,319,191  transactions during 2008, derived mostly from gasoline
and restaurant purchases.
     Partially offsetting noninterest income growth was a decrease in the Bank's
service charge fees on deposit accounts, which declined by $257, or 8.4%, during
2009 as compared to 2008.  The  decrease was in large part due to a lower volume
of  overdraft   balances,   as  customers   presented  few  er  checks   against
non-sufficient funds during 2009 as compared to 2008.
     The total of all  remaining  noninterest  income  categories  increased $48
during  2009 as  compared  to 2008.  The  total  growth  in  noninterest  income
demonstrates  management's  desire to leverage  technology to enhance efficiency
and diversify the Company's revenue sources.
     In 2008, total noninterest  income increased $957, or 18.3%, as compared to
2007. Contributing most to this increase was lower losses on the sale of OREO of
$746, or 96.0%, from year-end 2007. This was largely due to the liquidation of a
large  non-performing asset during the fourth quarter of 2007, creating a pretax
loss of $686 in 2007,  causing a  reverse  effect  in 2008.  Further  increasing
2008's  noninterest  income were  increases to the Company's  Electronic  Refund
Check/Deposit  fees of $162,  or  147.3%,  and  service  charge  fees on deposit
accounts of $91, or 3.1%.

NONINTEREST EXPENSE
     Total noninterest expense increased $2,984, or 12.8%, in 2009 and increased
$742, or 3.3%, in 2008. The growth in  noninterest  expense during 2009 was most
affected by a  significant  increase in the  Company's  FDIC  insurance  premium
expense,  which was up $1,357,  or 506.3%,  during 2009 as compared to 2008. The
increase in deposit insurance expense was due to increases in the fee assessment
rates  during  2009  and a  special  assessment  applied  to  all  FDIC  insured
institutions  as of June 30, 3009. With regard to the increase in fee assessment
rates,  prior to the third quarter of 2008,  the Company had benefited  from its
share of available  credits that were used to offset insurance  assessments that
resulted in minimum quarterly insurance premiums, approximately $17 per quarter.
This  assessment  credit benefit was fully  utilized by June 30, 2008.  With the
elimination of this credit,  the Company  entered the third quarter of 2008 with
its deposits  being  assessed at an annual rate close to 7 basis points of total
deposits.  In December 2008, the FDIC issued a rule increasing deposit insurance
assessment rates uniformly for all financial  institutions for the first quarter
of 2009 by an additional 7 basis points on an annual basis.
     In May 2009, the FDIC issued a final rule which levied a special assessment
applicable to all FDIC insured depository  institutions  totaling 5 basis points
of each institution's  total assets less Tier 1 capital as of June 30, 2009, not
to exceed 10 basis  points of total  deposits.  This special  assessment,  which
totaled  $373 for the  Company,  was part of the FDIC's  efforts to rebuild  the
Deposit Insurance Fund back to an adequate level.
     While these special  assessments  levied on all institutions were proven to
be vital in maintaining  adequate  insurance levels,  the Deposit Insurance Fund
remained  extremely low due to the continued  high rate of bank failures  during
2009.  As a result,  during the fourth  quarter of 2009,  the FDIC  approved  an
alternative to future special  assessments,  which would  negatively  impact the
Company's earnings. The alternative was to have all banks prepay twelve quarters

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

worth of FDIC  assessments on December 30, 2009. The prepayment,  which includes
assumptions  about future deposit and assessment rate growth,  would be based on
third quarter  deposits.  The prepaid  amount would be amortized over the entire
prepayment period. As a result of this ruling, on December 30, 2009, the Company
prepaid its assessment in the amount of $3,567.  While the prepayment  decreased
the  amount  of  investable  assets,  the lost  earnings  on the  amount of this
prepayment  is  significantly  less  than the  impact of an  additional  special
assessment.  Continuing declines in the Deposit Insurance Fund may result in the
FDIC imposing additional assessments in the future, which could adversely affect
the Company's capital levels and earnings.
     Also  contributing  to the  noninterest  expense  increase was salaries and
employee  benefits,  the  Company's  largest  noninterest  expense  item,  which
increased  $916,  or 6.5%,  during 2009 as compared to 2008.  The  increase  was
largely  due to  increased  annual  cost  of  living  salary  increases,  higher
incentive costs and a higher  full-time  equivalent  ("FTE")  employee base. The
Company's  FTE  employees  increased  from 264 employees at December 31, 2008 on
staff to 270  employees at December 31, 2009.  During 2008,  salary and employee
benefits  increased  $1,012, or 7.8%, from 2007. This increase was in large part
due to increased health insurance benefit expenses, annual cost of living salary
increases and higher incentive costs due to higher corporate  performance during
2008 as compared to 2007.  During 2008,  the Company also  experienced  a higher
full-time  equivalent  employee base,  increasing from 256 employees at year-end
2007 to 264 employees at year-end 2008, further increasing salaries and employee
benefit expenses during 2008.
     In 2009,  occupancy and furniture and equipment expenses increased $193, or
7.4%, as compared to 2008.  This was in large part due to the replacement of all
of the Company's  automated  teller  machines  ("ATM") during the second half of
2008.  The  investment  of over $500 was  necessary to upgrade each ATM location
with more current equipment to better service customer needs. All ATM's had been
fully replaced by the end of 2009's first quarter, with depreciation  commencing
on most of these assets beginning January 2009. In 2008, occupancy and furniture
and  equipment  expenses  increased  $57, or 2.2%,  as  compared  to 2007.  This
increase was in large part due to the addition of a new banking facility located
within a hospital in Gallia  County.  The full service  banking center was built
during 2007 at a cost of approximately  $371 and serves as an additional  market
presence to service the banking  needs of the medical  staff and patients  along
the hospital's  campus area. The facility was placed in service and depreciation
commenced  during  the  fourth  quarter  of 2007.  As a  result,  occupancy  and
furniture and equipment expenses for this new facility increased $49 during 2008
as compared to 2007.
     During  2009,  corporation  franchise  tax  increased  $107,  or 17.7%,  as
compared to 2008.  Conversely during 2008,  corporation  franchise tax decreased
$65, or 9.7%, as compared to 2007.  The lower tax expense in 2008 was the result
of a tax credit the  Company  was able to apply for and receive in 2008 based on
the training  programs  that exist and are  utilized  within the Company for the
benefit  of its  employees.  The  one-time  nature  of the tax  credit  that was
utilized in 2008,  created a reverse  effect in 2009 causing most of the expense
increase.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     Increases in the Company's other noninterest  expenses were realized during
2009, increasing $514, or 10.3%, as compared to 2008. Leading the growth in this
area were increases to the Company's  telecommunications  costs, which increased
$213, or 38.7%, during 2009 as compared to 2008. During the second half of 2008,
the Company  improved  the  communication  lines  between all of its branches to
achieve  faster  relay  of  information  and  increase  work  efficiency.   This
investment  upgrade of communication  lines has equated to a $35 per month cost.
Other  noninterest  expense was increased by $119, or 14.4%,  by higher supplies
and postage  costs due to  increased  mailings  and postal  rates over 2008.  In
addition,  other  noninterest  expense  increases  came from the Company's  loan
expense,  which increased $113, or 69.9%, during 2009 as compared to 2008 due to
a larger than normal volume of recovered  foreclosure  costs that were collected
during 2008 that did not re-occur in 2009.
     During 2008, other  noninterest  expenses were down $389, or 7.2%, in large
part due to decreases in the  Company's  foreclosure  expenses,  which were down
$487,  or 90.5%,  during 2008 as compared to 2007.  This decrease was due to the
larger than normal volume of  foreclosure  costs that were incurred  during 2007
associated with higher average nonperforming loan balances during that time.
     The  Company's  efficiency  ratio is  defined as  noninterest  expense as a
percentage  of FTE 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.   However,   the  recent
developments  with  rising  FDIC  insurance   assessment  rates  and  a  special
assessment  resulting in an additional  charge of $373 has contributed to higher
overhead expense levels,  which have outpaced revenue levels and have caused the
year-to-date  efficiency ratio to increase from the prior period. The efficiency
ratio during 2009 increased to 67.8% from the 62.5% experienced during 2008.

FINANCIAL CONDITION:

CASH AND CASH EQUIVALENTS
     The  Company's  cash and cash  equivalents  consist of cash,  interest- and
noninterest-bearing  deposits with banks and federal funds sold.  The amounts of
cash and cash  equivalents  fluctuate on a daily basis due to customer  activity
and  liquidity  needs.  At December  31,  2009,  cash and cash  equivalents  had
decreased  $2,622,  or 14.3%,  to $15,670 as compared to $18,292 at December 31,
2008.  The  decrease  in cash and cash  equivalents  was  partially  affected by
increased  loan  balances  and  investment  security  purchases  during  2009 as
compared to year-end 2008. Within cash and cash  equivalents,  there was a shift
in asset balances from cash and non-interest deposits with banks to more dollars
being invested within  interest-bearing  deposits with banks.  This  composition
shift  was   largely   due  to  the   Company's   preference   to  utilize   its
interest-bearing  Federal  Reserve Bank clearing  account to maintain its excess
funds.  Historically,  the Company has typically  invested its excess funds with
various correspondent banks in the form of federal funds sold, a common strategy
performed by most banks.  Beginning in the fourth  quarter of 2008,  the Company
began  shifting its emphasis of  maintaining  its excess  liquidity from federal
funds sold to its existing clearing account on hand at the Federal Reserve Bank.

                       MANAGEMENT'S DISCUSSION AND ANALYSIS

During this period in 2008,  the Federal  Reserve Board  announced that it would
begin paying  interest on depository  institutions'  required and excess reserve
balances.  The  interest  rate  paid on both the  required  and  excess  reserve
balances  will be 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  remained at 0.25%.  Prior to
this,  the Federal  Reserve Bank balances held by the Company were  non-interest
bearing.  This  interest rate is similar to what the Company would have received
from its investments in federal funds sold,  currently targeting a range of 0.0%
to 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.
Management  believes  that the  current  balance  of cash  and cash  equivalents
remains  at a level  that  will  meet  cash  obligations  and  provide  adequate
liquidity.  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.
     The balance of total securities  increased  $8,131, or 8.8%, as compared to
2008,  with the ratio of securities to total assets also  increasing to 12.4% at
December  31,  2009,  compared  to 11.8% at December  31,  2008.  The  Company's
investment  securities  portfolio  consists of U.S.  Treasury  securities,  U.S.
Government sponsored entity ("GSE") securities,  mortgage-backed  securities and
obligations  of  states  and  political  subdivisions.  U.S.  Treasury  and  GSE
securities  collectively increased $12,813, or 40.2%, as a result of several new
purchases  during  the first  half of 2009.  During  this  period,  the  Company
continued to  experience a  significant  increase in excess funds from growth in
total deposit balances. With the demand for loan balances at a relatively stable
pace for much of 2009, the Company invested the excess funds into new short-term
U.S. Treasury and GSE securities  totaling $29,536 with maturities less than one
year and  interest  rate yields less than 1.0%.  The  Company's  intention is to
re-invest these  shorter-term  securities into future loan growth or longer-term
securities if interest  rates are  increased in the near future.  In addition to
helping achieve diversification within the Company's securities portfolio,  U.S.
Treasury and GSE securities have also been used to satisfy pledging requirements
for  repurchase  agreements.  At December 31,  2009,  the  Company's  repurchase
agreements  increased 31.5%,  increasing the need to secure these balances.  The
increases in U.S. Treasury and GSE securities were partially offset by decreases
in both  mortgage-backed  securities  and  obligations  of states and  political
subdivisions,  which were down $4,289, or 9.9%, and $393, or 2.3%, respectively,
from year-end 2008.  Mortgage-backed  securities continue to make up the largest
portion of the Company's  investment  portfolio,  totaling $39,225,  or 39.0% of
total investments at December 31, 2009. However,  this composition  represents a
decrease from 47.1% at December 31, 2008 due to the increase in short-term  U.S.
Treasury  and  GSE  security  purchases  during  2009.  Typically,  the  primary

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

advantage of 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 interest rate environment, the cash flow that is being
collected  is  being  reinvested  at  lower  rates.  Principal  repayments  from
mortgage-backed securities totaled $17,103 from January 1, 2009 through December
31, 2009.
     With the general  decrease  in  interest  rates  evident  since  2007,  the
reinvestment  rates on debt  securities  continue to show lower  returns  during
2009.  The weighted  average FTE yield on debt  securities  at year-end 2009 was
3.38%,  as compared to 4.34% at year-end 2008 and 4.55% at year-end 2007.  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.  The  Company  will  continue  to focus on
generating interest revenue primarily through loan growth, as loans generate the
highest yields of total earning assets.

LOANS
     In  2009,  the  Company's  primary  category  of  earning  assets  and most
significant source of interest income, total loans,  increased $20,965, or 3.3%,
to finish at $651,356.  Higher loan  balances  were mostly  influenced  by total
commercial  loans,  which were up $24,735,  or 10.2%,  from year-end  2009.  The
Company's  commercial  loans include both  commercial real estate and commercial
and industrial loans.  Management  continues to place emphasis on its commercial
lending,  which  generally  yields a higher  return on investment as compared to
other types of loans. The Company's commercial and industrial loan portfolio, up
$13,994,  or 31.2%, from year-end 2008, 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, and stock. Commercial real estate, the Company's
largest segment of commercial loans, increased $10,741, or 5.4%. This segment of
loans  is  mostly  secured  by  commercial  real  estate  and  rental  property.
Commercial real estate includes loan participations with other banks outside the
Company's  primary market area.  Although the Company is not actively  marketing
participation  loans outside its primary market area, it is taking  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. The
commercial loan portfolio,  including participation loans, consists primarily of
rental  property  loans (22.0% of portfolio),  medical  industry loans (11.2% of
portfolio), hotel and motel loans (7.9% of portfolio) and land development loans
(7.8% of  portfolio).  During 2009,  the primary  market areas for the Company's
commercial loan originations,  excluding loan participations,  were in the areas
of Gallia,  Jackson,  Pike and Franklin  counties of Ohio,  which  accounted for
68.3% of total  originations.  The growing West Virginia  markets also accounted
for 18.9% 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 and normal underwriting considerations. Additionally, the
potential for larger than normal  commercial  loan payoffs may limit loan growth
during 2010.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     Also contributing to the loan portfolio increase were consumer loans, which
were up $9,318,  or 7.3%,  from year-end 2009. The Company's  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 increase in consumer loans came mostly from the Company's
automobile  indirect lending segment,  which increased  $5,733,  or 21.2%,  from
year-end 2008. The automobile  indirect  lending segment  continues to represent
the largest portion of the Company's consumer loan portfolio, representing 24.0%
of total  consumer  loans at December 31,  2009.  Prior to 2009,  the  Company's
indirect  automobile segment was on a declining pace due to the growing economic
factors that had weakened the economy and consumer  spending.  During this time,
the Company's loan  underwriting  process and interest rates offered on indirect
automobile  opportunities  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.  As the economy  continues  to be  challenged,  these banks and captive
finance  companies  that once were  successful  in getting  the  majority of the
indirect automobile  opportunities are now struggling because of the losses they
have had to absorb as well as the overall  decrease in demand for auto loans. As
a result, these businesses have had to tighten their operations and underwriting
processes,  which has allowed the Company to compete better for a larger portion
of the indirect business within its local markets.  Furthermore, the Company has
added  several  new auto  dealer  relationships  that have  contributed  to more
business opportunities in 2009.
     The remaining  consumer loan products not discussed above were collectively
up $3,585,  or 3.6%, which included general increases in loan balances from home
equity  capital  lines.  While the total  consumer  loan  portfolio  was up from
year-end  2008,  management  will  continue to place more emphasis on other loan
portfolios  (i.e.  residential  real estate and  commercial)  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.  Management  believes  that the  volume  of  indirect
automobile  opportunities will continue to stabilize and does not anticipate any
significant growth during 2010.
     Generating  residential  real  estate  loans  remains  a key  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 2009, total residential
real estate loan  balances  decreased  $13,932,  or 5.5%,  from year-end 2008 to
total  $238,761.  During the end of 2008 and first  quarter  of 2009,  long-term
interest  rates  decreased  to historic low levels that  prompted a  significant
surge of demand for these types of long-term  fixed-rate  real estate loans.  At
March 31, 2009 and December 31, 2008,  the 30-year  treasury  rate was 3.56% and
2.69%,  respectively,  as compared to 4.31% at  September  30,  2008.  Consumers
wanted to take  advantage of the low rates and reduce their  monthly  costs.  To
help manage interest rate risk and satisfy demand for longer-termed,  fixed-rate
real estate loans, the Company gained significant  opportunities  during 2009 to
originate and sell fixed-rate  mortgages to the secondary  market.  As a result,
during the year ended  December  31, 2009,  the Company sold 432 loans  totaling
$57,815 to the secondary market as compared to 109 loans totaling $11,703 during

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

the year ended  December 31,  2008.  The  increased  volume of loans sold to the
secondary  market  contributed  to growth in real  estate  origination  fees and
higher gains on sale revenue in 2009 as compared to 2008. The increase in demand
for real estate  refinancings  combined with the  Company's  emphasis on selling
loans to the secondary market to manage interest rate risk has led to a decrease
in the Company's  longer-termed,  fixed-rate real estate loans,  which were down
$11,224,  or 6.1%, from year-end 2008.  Terms of these  fixed-rate loans include
15-, 20- and 30-year periods. These origination and sale trends also contributed
to a lower  balance  of  one-year  adjustable-rate  mortgages,  which  were down
$6,406, or 19.4%, from year-end 2008.
     The  remaining  real  estate  loan  portfolio   balances  increased  $3,698
primarily from the Company's other variable-rate  products. 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.
     Additionally,  the Company  recognized  an increase of $844,  or 11.4%,  in
other loans from  year-end  2008.  Other loans  consist  primarily  of state and
municipal loans and overdrafts.  This increase was largely due to an increase in
state and municipal loan balances of $867.
     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  limited  the lending
opportunities  within the Company's market  locations.  Dramatic declines in the
housing  market  during the past year,  with falling home prices and  increasing
foreclosures and unemployment, have resulted in significant write-downs of asset
values by  financial  institutions.  To combat this ongoing  potential  for loan
loss,  the Company will  continue to remain  consistent in its approach to sound
underwriting  practices  and a focus on asset  quality.  The Company has already
seen the volume of secondary  market loan sales  stabilize  during the third and
fourth  quarters  of 2009 and  anticipate  that trend to  continue  into 2010 as
long-term  interest  rates begin to  increase.  At September 30 and December 31,
2009, the 30-year treasury rate was 4.03% and 4.63%,  respectively,  as compared
to 2.69% at December 31, 2008. The Company anticipates total loan growth in 2010
to be challenged,  with volume to continue at a stable pace  throughout the rest
of the year.

ALLOWANCE FOR LOAN LOSSES AND PROVISION EXPENSE
     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

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

loans  are  considered  in the  determination  of the  overall  adequacy  of the
allowance for loan losses.
     During 2009, the Company realized a decrease in its provision for loan loss
expense by $504, or 13.6%,  as compared to 2008. The lower  provision  charge in
2009 was mostly due to the specific  allocations  recorded by the Company on two
commercial  loans in 2008 totaling  $654. The loans were charged off in 2009 and
did not require a specific  allocation  as these were  already  reflected in the
allowance for loan losses for 2008. The increase in total  charge-offs  for 2009
of $802, or 22.7%, was partially offset by increased loan recoveries of $643, or
73.5%,  due to a large recovery from a previously  charged off  commercial  loan
during June 2009 that totaled $648.  This limited the  Company's net  charge-off
increase to $159, or 6.0%, during 2009 as compared to 2008.
     The Company's allowance for loan losses in 2009 increased $399, or 5.1%, to
finish at $8,198.  The  increase in the  allowance  for loan losses was in large
part due to increases in the Company's specific  allocations on commercial loans
and general allocations associated with growth in loans experienced during 2009.
Specific allocations were also slightly impacted by growth in impaired loans. At
December 31, 2009, there was $27,644 of loans held by the Company  classified as
impaired,  or for which  management  has concerns  regarding  the ability of the
borrowers to meet existing  repayment terms.  This represents an increase to the
impaired  loan balance at December  31, 2008 of $21,153.  These  impaired  loans
reflect the  distinct  possibility  that the Company will not be able to collect
all amounts due according to the contractual  terms of the loan.  Although these
loans have been  identified as potential  problem  loans,  they may never become
delinquent or classified as non-performing.  The evaluation of the impaired loan
balances  created  just a $74 increase to the  specific  allocation  requirement
based on the collateral values associated with these impaired loans during 2009.
     The Company was successful in  maintaining a stable level of  nonperforming
loans from year-end 2008.  Nonperforming  loans consist of nonaccruing loans and
accruing loans past due 90 days or more.  Nonperforming loans finished at $5,258
at year-end 2009 as compared to $5,274 at year-end 2008, requiring little change
to the specific  allocations  made on behalf of the  portfolio  risks and credit
deterioration of these  nonperforming  credits. As a result, the Company's ratio
of nonperforming  loans to total loans decreased from 0.84% at December 31, 2008
to 0.81% at December 31, 2009. The Company  experienced a slight increase in its
nonperforming  assets to total assets ratio,  increasing  from 1.28% at December
31, 2008 to 1.31% at December 31, 2009, due to an increase in OREO properties of
$699.
     As a result of higher net charge-offs,  increased impaired loan allocations
and increased loan growth, the ratio of allowance for loan losses to total loans
increased  slightly  to 1.26%  at  December  31,  2009 as  compared  to 1.24% at
December 31, 2008.  Management  believes  that the  allowance for loan losses at
December 31, 2009 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.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

DEPOSITS
     Deposits are used as part of the Company's liquidity management strategy to
meet  obligations  for depositor  withdrawals,  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 certificates of deposit
("CD") balances,  as an alternative funding source to efficiently manage 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,  2009.  Total  deposits
increased  $55,283,  or 9.3%, to finish at $647,644 at year-end 2009,  resulting
mostly from an increase in the Company's time deposits,  interest-bearing demand
deposits and money market 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  percentage of its deposits  being held in money market
accounts  and NOW  accounts  at year-end  2009,  while a lesser  percentage  has
resulted in retail time deposits at year-end  2009.  Furthermore,  the Company's
core  noninterest-bearing  demand  accounts  have been  maintained at comparable
levels to that of year-end 2008, increasing 1.5%.
     Deposit growth came mostly from money market deposit  balances,  increasing
$18,019,  or 21.0%,  during 2009 as compared to year-end 2008. This increase was
primarily  driven by the Company's  Market Watch money market  account  product.
Introduced in 2005, 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 began marketing a special six-month introductory rate offer of 3.00%
APY  during  the  first  quarter  of 2009  that  would be for new  Market  Watch
accounts.  This  special  offer was well  received by the Bank's  customers  and
contributed  to most of the money market  year-to-date  increase in 2009.  As of
December 31,  2009,  this  program had  gathered  $99,811 in  deposits,  a 21.7%
increase from the balances at year-end 2008.
     Further enhancing deposit growth was interest-bearing NOW account balances,
which  increased  $11,143,  or 13.8%,  during 2009 as compared to year-end 2008.
This growth was largely driven by public fund balances related to local city and
county school construction projects within Gallia County, Ohio.
     Also  contributing  to growth in deposits  were time  deposits,  increasing
$18,687, or 6.1%, from year-end 2008. Time deposits,  particularly CD's, are the
most significant  source of funding for the Company's earning assets,  making up
50.4% of total  deposits.  With loan balances  maintaining  a relatively  stable
growth pace, up just 3.3% from year-end  2008,  there has not been an aggressive

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

need to target  new time  deposits  as a funding  source.  As market  rates have
aggressively  lowered since September 2007, the Company has seen the cost of its
retail CD balances  reprice  downward (as a lagging effect to the actions by the
Federal  Reserve) to reflect  current  deposit  rates.  This lagging  effect has
caused the interest rates on the Company's  retail CD portfolio to stabilize and
become  comparable to the interest  rate  offerings of its  alternative  funding
source, wholesale fund deposits. As market rates have fallen considerably from a
year ago, the Bank's CD customers have been more likely to consider re-investing
their matured CD balances 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 shift within its time deposit
portfolio,  with retail CD balances decreasing $18,203 from year-end 2008, while
utilizing  more  wholesale  funding  deposits  (i.e.,  brokered  and internet CD
issuances),  which increased  $36,890 from year-end 2008. The Bank increased its
use of brokered  deposits mostly during the fourth quarter of 2008 and the first
quarter  of 2009  with  laddered  maturities  into  the  future.  This  trend of
utilizing  brokered  CD's  selectively  based  on  maturity  and  interest  rate
opportunities  not only fits well with  management's  strategy  of  funding  the
balance sheet with  low-costing  wholesale funds, but it also assists to support
the  interest  rate risks  associated  with the  limited  loan  originations  of
longer-term  fixed  rate  mortgages  experienced  during the first half of 2009.
Although  brokered and internet CD's may exhibit more price volatility than core
deposits,  management  is  comfortable  with these sources of funds based on the
maturity  distribution  and overall policy limits  established for these deposit
types.
     The Company's  interest-free  funding  source,  noninterest  bearing demand
deposits,  also increased  $1,264,  or 1.5%, from year-end 2008,  largely due to
growth in business checking account balances.
     The Company will continue to experience increased  competition for deposits
in its market areas,  which should  challenge  its net growth.  The Company will
continue  to  emphasize  growth in its core  deposits  as well as to utilize its
wholesale CD funding  sources,  reflecting  the Company's  efforts to reduce its
reliance on higher cost funding and improving net interest income.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
     Repurchase agreements, which are financing arrangements that have overnight
maturity terms,  were up $7,571, or 31.5%, from year-end 2008. This increase was
mostly due to seasonal fluctuations of two commercial relationships during 2009.

FUNDS BORROWED
     The Company also accesses other funding sources,  including  short-term and
long-term  borrowings,  to fund asset  growth and satisfy  short-term  liquidity
needs.  Other borrowed funds consist  primarily of Federal Home Loan Bank (FHLB)
advances and  promissory  notes.  During 2009,  other  borrowed  funds were down
$34,065,  or 44.4%,  from year-end 2008.  Management  used the growth in deposit
proceeds to repay FHLB borrowings during 2009. While deposits continue to be the
primary source of funding for growth in earning assets, management will continue

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

to utilize various wholesale borrowings to help manage interest rate sensitivity
and liquidity.

OFF-BALANCE SHEET ARRANGEMENTS
     The disclosures  required for off-balance sheet  arrangements are discussed
in Note I and Note K.

CAPITAL RESOURCES
     The Company maintains a capital level that exceeds regulatory  requirements
as a margin of safety for its depositors. Total shareholders' equity at December
31,  2009 of $66,521  was up $3,465,  or 5.5%,  as  compared  to the  balance of
$63,056  on  December  31,  2008.   Contributing   most  to  this  increase  was
year-to-date  net income of $6,645,  partially  offset by cash dividends paid of
$3,186, or $.80 per share, year-to-date. The Company had treasury stock totaling
$15,712 at December 31, 2009, unchanged from year-end 2008.
     Furthermore,  the Company  benefits from a dividend  reinvestment and stock
purchase plan that is administered by an independent  agent of the Company.  The
plan allows  shareholders  to purchase  additional  shares of company  stock.  A
benefit of the plan is to permit the  shareholders to reinvest cash dividends as
well as make  supplemental  purchases  without  the usual  payment of  brokerage
commissions.  During 2009,  shareholders  invested more than $1,194  through the
dividend  reinvestment and stock purchase plan.  These proceeds  resulted in the
acquisition of 51,468 existing shares through open market purchases. At December
31, 2009,  approximately  81% of the shareholders  were enrolled in the dividend
reinvestment plan.

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 flat
interest rate scenario. 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 projected  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.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     The estimated  percentage  change in net interest income due to a change in
interest rates was within the policy guidelines established by the Board. During
2009,  the  interest  rate risk profile  became less exposed to rising  interest
rates due to various balance sheet changes. For example, the duration of earning
assets  shortened with higher relative  balances being invested in variable rate
or short-term  instruments.  In addition,  the balance of  fixed-rate  mortgages
decreased,  as  management  chose to sell the majority of new  originations  and
refinancings  to the  secondary  market.  On the  liability  side of the balance
sheet,  management  emphasized  longer-term  CD  specials  and  selected  longer
maturity  terms  for  brokered  CD  issuances.   Furthermore,   the  balance  of
nonmaturity deposits increased significantly from year end. These balances, such
as savings and NOW accounts,  exhibit a low  correlation  to changes in interest
rates.  Lastly,  the balance of  borrowed  funds  decreased  due to a decline in
short-term  borrowings,  which are  highly  rate  sensitive.  Given the low rate
environment,  the next move in interest rates would most likely be an increasing
trend.  As a result,  management  would consider the current  interest rate risk
profile more desirable than our profile at December 31, 2008.
     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 of $101,635  represented  12.5% of total assets at December
31,  2009.  In  addition,  the FHLB offers  advances  to the Bank which  further
enhances the Bank's ability to meet liquidity demands. At December 31, 2009, the
Bank could borrow an additional  $95,091 from the FHLB, of which,  $75,000 could
be used for short-term,  cash  management  advances.  Furthermore,  the Bank has
established  a borrowing  line with the Federal  Reserve.  At December 31, 2009,
this line  totaled  $81,000.  Lastly,  the Bank also has the ability to purchase
federal funds from a correspondent bank. See the consolidated  statement of cash
flows for further cash flow information.  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.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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  which  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.

Allowance for loan losses:  To arrive at the total dollars necessary to maintain
an allowance  level  sufficient to absorb probable losses incurred at a specific
financial statement date,  management has developed  procedures to establish and
then  evaluate the allowance  once  determined.  The  allowance  consists of the
following  components:  specific  allocations,  general  allocations  and  other
estimated general allocations.
     To arrive at the amount required for the specific allocation component, the
Company  evaluates  loans  for  which a loss may be  incurred  either in part or
whole. To achieve this task, the Company has created a quarterly  report ("Watch
List"),  which lists the loans from each loan portfolio that management deems to
be potential credit risks. A loan will  automatically be added to the Watch List
if the loan  balance is over $200 and the loan is either  delinquent  60 days or
more or nonaccrual. In addition, management may decide to add loans to the Watch
List that do not meet the above-mentioned criteria. These loans are reviewed and
analyzed for potential loss by the Large Loan Review  Committee,  which consists
of the President of the Company and members of senior  management.  The function
of the  Committee  is to review and analyze  large  borrowers  for credit  risk,
scrutinize  the Watch List and evaluate the adequacy of the  allowance  for loan
losses and other credit related issues.  The Committee has established a grading
system to evaluate the credit risk of each  commercial  borrower on a scale of 1

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

(least  risk)  to  10  (greatest  risk).  After  the  Committee  evaluates  each
relationship listed in the report, a specific loss allocation may be assessed.
     Included in the specific  allocation  analysis are  impaired  loans,  which
generally consist of loans with balances of $200 or more on nonaccrual status or
non-performing in nature.  Each loan is individually  analyzed to determine if a
specific  allocation  is  necessary  based on expected  potential  credit  loss.
Collateral  dependent  loans will be  evaluated to determine a fair value of the
collateral  securing the loan.  Any changes in the impaired  allocation  will be
reflected in the total specific allocation.
     The second component (general allowance) is based upon total loan portfolio
balances minus loan balances already reviewed (specific  allocation).  The Large
Loan Review Committee  evaluates credit analysis reports that provide management
with  a  "snapshot"  of  information  on  borrowers  with  larger-balance  loans
(aggregate balances of $1 million or greater), including loan grades, collateral
values,  and other factors. A list is prepared and updated quarterly that allows
management  to monitor this group of  borrowers.  Therefore,  only small balance
commercial loans and homogeneous  loans (consumer and real estate loans) are not
specifically  reviewed to  determine  minor  delinquencies,  current  collateral
values and present  credit  risk.  The Company  utilizes  actual  historic  loss
experience  as a factor to calculate the probable  losses for this  component of
the  allowance  for  loan  losses.   This  risk  factor  reflects  a  three-year
performance  evaluation of credit losses per loan portfolio.  The risk factor is
achieved by taking the average net charge-off per loan portfolio for the last 36
consecutive  months and  dividing it by the average  loan  balance for each loan
portfolio over the same time period.  The Company  believes that by using the 36
month average loss risk factor,  the estimated  allowance  will more  accurately
reflect current probable losses.
     The final component used to evaluate the adequacy of the allowance includes
five additional areas that management  believes can have an impact on collecting
all principal  due.  These areas are: 1)  delinquency  trends,  2) current local
economic conditions,  3) non-performing loan trends, 4) recovery vs. charge-off,
and 5) personnel changes. Each of these areas is given a percentage factor, from
a low of 2% to a high of 8%,  determined  by the degree of impact it may have on
the  allowance.  To calculate  the impact of other  economic  conditions  on the
allowance,  the total  general  allowance is  multiplied  by this factor.  These
dollars  are then  added to the other two  components  to provide  for  economic
conditions in the Company's assessment area. The Company's assessment area takes
in a total of ten counties in Ohio and West Virginia.  Each  assessment area has
its individual economic  conditions;  however, the Company has chosen to average
the risk factors for compiling the economic risk factor.
     The adequacy of the allowance  may be  determined  by certain  specific and
nonspecific  allocations;  however,  the total  allocation  is available for any
credit losses that may impact the loan 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 central and
southeastern  Ohio as well as 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

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

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, and taxes; 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, 2009.  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
                                                                        December 31
                                   ------------------------------------------------------------------------------------
                                              2009                         2008                         2007
(dollars in thousands)             --------------------------   --------------------------   --------------------------
                                   Average    Income/  Yield/   Average    Income/  Yield/   Average    Income/  Yield/
                                   Balance    Expense   Rate    Balance    Expense   Rate    Balance    Expense   Rate
                                   -------    -------   ----    -------    -------   ----    -------    -------   ----
ASSETS
- ------
Interest-earning assets:
  Interest-bearing balances        $ 27,077   $    58   0.21%   $  5,710   $   137   2.39%   $    549  $     23   4.22%
    with banks
  Federal funds sold                     18       ---   0.05       5,552       157   2.83       4,428       221   5.00
  Securities:
    Taxable                          97,124     3,038   3.13      82,606     3,432   4.15      76,748     3,477   4.53
    Tax exempt                        9,916       659   6.64      12,784       768   6.01      14,427       797   5.52
  Loans                             641,878    44,223   6.89     629,225    47,402   7.53     628,891    50,793   8.08
                                   --------   -------  -----    --------   -------  -----    --------   -------  -----
    Total interest-
      earning assets                776,013    47,978   6.18%    735,877    51,896   7.05%    725,043    55,311   7.63%

Noninterest-earning assets:
  Cash and due from banks             8,524                       15,029                       14,137
  Other nonearning assets            42,515                       38,217                       38,094
  Allowance for loan losses          (8,100)                      (6,811)                      (7,720)
                                   --------                     --------                     --------
    Total noninterest-
      earning assets                 42,939                       46,435                       44,511
                                   --------                     --------                     --------
        Total assets               $818,952                     $782,312                     $769,554
                                   ========                     ========                     ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
  NOW accounts                     $ 92,550   $ 1,326   1.43%   $ 88,110   $ 1,599   1.81%   $ 78,636   $ 1,924   2.45%
  Savings and Money Market          135,728     1,636   1.21     121,392     2,061   1.70      97,240     2,705   2.78
  Time deposits                     331,130    10,721   3.24     311,188    12,976   4.17     341,686    16,686   4.88
  Repurchase agreements              27,540        75   0.27      28,040       421   1.50      27,433     1,051   3.83
  Other borrowed money               48,905     2,085   4.26      60,678     2,682   4.42      60,603     2,911   4.80
  Subordinated debentures            13,500     1,089   8.07      13,500     1,089   8.07      13,593     1,143   8.41
                                   --------   -------  -----    --------   -------  -----    --------   -------  -----
    Total interest-
      bearing liabilities           649,353    16,932   2.61%    622,908    20,828   3.34%    619,191    26,420   4.27%

Noninterest-bearing liabilities:
  Demand deposit accounts            93,045                       85,436                       78,048
  Other liabilities                  11,613                       12,622                       11,766
                                   --------                     --------                     --------
    Total noninterest-
      bearing liabilities           104,658                       98,058                       89,814

  Shareholders' equity               64,941                       61,346                       60,549
                                   --------                     --------                     --------
    Total liabilities and
      shareholders' equity         $818,952                     $782,312                     $769,554
                                   ========                     ========                     ========

Net interest earnings                         $31,046                      $31,068                      $28,891
                                              =======                      =======                      =======
Net interest earnings as a percent
  of interest-earning assets                            4.00%                        4.23%                        3.99%
                                                       -----                         -----                        -----
Net interest rate spread                                3.57%                        3.71%                        3.36%
                                                       -----                         -----                        -----
Average interest-bearing liabilities
  to average earning assets                            83.68%                        84.65%                       85.40%
                                                       =====                         =====                        =====
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
                                                  2009                                   2008
                                      -----------------------------          ----------------------------
(dollars in thousands)                     Increase (Decrease)                    Increase (Decrease)
                                        From Previous Year Due to              From Previous Year Due to
                                      -----------------------------          ------------------------------
                                      Volume    Yield/Rate    Total          Volume     Yield/Rate    Total
                                      ------    ----------    -----          ------     ----------    -----
INTEREST INCOME
- ---------------
Interest-bearing balances
  with banks                        $   136      $  (215)   $   (79)        $   128      $   (14)   $   114
Federal funds sold                      (79)         (78)      (157)             47         (111)       (64)
Securities:
  Taxable                               541         (935)      (394)            255         (300)       (45)
  Tax exempt                           (184)          75       (109)            (96)          67        (29)
Loans                                   938       (4,117)    (3,179)             27       (3,418)    (3,391)
                                    -------      -------    -------         -------      -------    -------
    Total interest income             1,352       (5,270)    (3,918)            361       (3,776)    (3,415)

INTEREST EXPENSE
- ----------------
NOW accounts                             77         (350)      (273)            213         (538)      (325)
Savings and Money Market                223         (648)      (425)            570       (1,214)      (644)
Time deposits                           790       (3,045)    (2,255)         (1,407)      (2,303)    (3,710)
Repurchase agreements                    (7)        (339)      (346)             23         (653)      (630)
Other borrowed money                   (505)         (92)      (597)              3         (232)      (229)
Subordinated debentures                 ---          ---        ---              (8)         (46)       (54)
                                    -------      -------    -------         -------      -------    -------
    Total interest expense              578       (4,474)    (3,896)           (606)      (4,986)    (5,592)
                                    -------      -------    -------         -------      -------    -------
Net interest earnings               $   774      $  (796)   $   (22)        $   967      $ 1,210    $ 2,177
                                    =======      =======    =======         =======      =======    =======

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, 2009                Within           After One but       After Five but
(dollars in thousands)                One Year        Within Five Years    Within Ten Years    After Ten Years
                                      --------        -----------------    ----------------    ---------------
                                   Amount    Yield     Amount    Yield      Amount   Yield      Amount   Yield
                                   ------    -----     ------    -----      ------   -----      ------   -----
U.S. Treasury securities          $10,557     .41%    $   ---     ---      $   ---     ---      $  ---     ---
U.S. Government
  sponsored entity securities      22,636    1.67%     11,486    4.40%         ---     ---         ---     ---
Obligations of states and
  political subdivisions            2,097    7.15%      1,775    7.03%       4,259    5.01%       8,422   3.40%
Agency mortgage-backed
  securities, residential          15,019    3.23%     21,090    3.85%       3,116    4.00          ---    ---
                                  -------    ----     -------    ----      -------    ----       ------   ----
    Total debt securiities        $50,309    2.10%    $34,351    4.20%     $ 7,375    4.58%     $ 8,422   3.40%
                                  =======    ====     =======    ====      =======    ====      =======   ====

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  based on estimated  average
lives.  Securities are shown at their  carrying  values which include the market
value adustments for available for sale securities.



ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

Table IV                                       Years Ended December 31
(dollars in thousands)                 2009     2008     2007     2006     2005
- ----------------------                 ----     ----     ----     ----     ----

Commercial loans (1)                 $5,777   $5,898   $5,273   $7,806   $4,704
 Percentage of loans to total loans   42.43%   39.78%   40.63%   39.45%   38.33%

Residential real estate loans           822      806      327      310      623
 Percentage of loans to total loans   36.66%   40.09%   39.31%   38.16%   38.06%

Consumer loans                        1,599    1,095    1,137    1,296    1,806
 Percentage of loans to total loans   20.91%   20.13%   20.06%   22.39%   23.61%

                                     -------  -------  -------  -------  -------
Allowance for Loan Losses            $8,198   $7,799   $6,737   $9,412   $7,133
                                     =======  =======  =======  =======  =======
                                     100.00%  100.00%  100.00%  100.00%  100.00%
                                     =======  =======  =======  =======  =======
Ratio of net charge-offs
 to average loans                       .44%     .42%     .78%     .54%     .31%
                                     =======  =======  =======  =======  =======

     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 commercal and industrial and commercial real estate loans.

SUMMARY OF NONPERFORMING AND PAST DUE LOANS

Table V
(dollars in thousands)                 2009     2008     2007     2006     2005
- ----------------------                 ----     ----     ----     ----     ----
Impaired loans                      $27,644  $21,153  $ 6,871  $17,402   $7,983
Past due 90 days or more and
  still accruing                      1,639    1,878      927    1,375    1,317
Nonaccrual                            3,619    3,396    2,734   12,017    1,240
Accruing loans past due 90
  days or more to total loans           .25%     .30%     .14%     .22%     .21%
Nonaccrual loans as a % of
  total loans                           .56%     .54%     .43%    1.92%     .20%
Impaired loans as a % of total loans   4.24%    3.36%    1.08%    2.78%    1.29%
Allowance for loans losses as a
  % of total loans                     1.26%    1.24%    1.06%    1.51%    1.16%

     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

As of December 31, 2009                             Maturing/Repricing
(dollars in thousands)
                               Within       After One but
                              One Year    Within Five Years   After Five Years     Total
                              --------    -----------------   ----------------     -----
Residential real estate loans $ 35,181         $ 26,025           $177,555        $238,761
Commercial loans (1)           154,856           88,163             33,347         276,366
Consumer loans                  35,121           67,509             33,599         136,229
                              --------         --------           --------        --------
  Total loans                 $225,158         $181,697           $244,501        $651,356
                              ========         ========           ========        ========

Loans maturing or repricing after one year with:
   Variable interest rates    $ 96,603
   Fixed interest rates        329,595
                              --------
   Total                      $426,198
                              ========

(1) Includes commercial and industrial and commercial real estate loans.

DEPOSITS

Table VII                                    as of December 31

(dollars in thousands)
                                     2009           2008           2007
                                     ----           ----           ----
Interest-bearing deposits:
  NOW accounts                     $ 91,998       $ 80,855       $ 65,618
  Money Market                      103,644         85,625         72,276
  Savings accounts                   38,834         32,664         31,436
  IRA accounts                       49,841         46,574         44,050
  Certificates of Deposit           276,557        261,137        297,057
                                   --------       --------       --------
                                    560,874        506,855        510,437
Noninterest-bearing deposits:
  Demand deposits                    86,770         85,506         78,589
                                   --------       --------       --------
    Total deposits                 $647,644       $592,361       $589,026
                                   ========       ========       ========

The  following  table  presents the  Company's  estimated  net  interest  income
sensitivity:

INTEREST RATE SENSITIVITY
     Table VIII

  Change in              December 31, 2009           December 31, 2008
 Interest Rates             % Change in                 % Change in
  Basis Points          Net Interest Income         Net Interest Income
- ---------------         -------------------         -------------------

    +300                       (.26%)                     (5.47%)
    +200                       (.58%)                     (4.12%)
    +100                       (.58%)                     (2.30%)
    -100                        .68%                       2.54%


CONTRACTUAL OBLIGATIONS
Table IX

  The following  table presents, as  of December 31, 2009, significant fixed and
determinable  contractual  obligations to third parties by payment date. Further
discussion of the nature of each  obligation is included in the referenced  note
to the consolidated financial statements.
                                                                            Payments Due In
(dollars in thousands)
                                            Note      One Year      One to        Three to        Over
                                         Reference    or Less     Three Years    Five Years    Five Years      Total
                                         ---------    --------    -----------    ----------    ----------    ----------
Deposits without a stated maturity           F        $321,246       $    ---      $    ---      $    ---      $321,246
Consumer and brokered time deposits          F         180,318        120,016        25,066           998       326,398
Repurchase agreements                        G          31,641            ---           ---           ---        31,641
Other borrowed funds                         H          28,774          6,772         6,281           882        42,709
Subordinated debentures                      I             ---            ---           ---        13,500        13,500

KEY RATIOS
Table X
                               2009     2008     2007     2006     2005
                               ----     ----     ----     ----     ----
Return on average assets        .81%     .91%     .82%     .71%     .97%
Return on average equity      10.23%   11.62%   10.40%    9.00%   12.18%
Dividend payout ratio         47.95%   42.94%   46.66%   52.56%   38.55%
Average equity to
  average assets               7.93%    7.84%    7.87%    7.88%    7.93%   
        
      

EX-10.2

EXHIBIT 10.2

SCHEDULE A TO EXHIBIT 10.1

The following individuals entered into Executive Group Life Split Dollar Plans with The Ohio Valley Bank Company identified below which are identical to the Executive Group Life Split Dollar Plan, dated April 29, 2003, between Jeffrey E. Smith and The Ohio Valley Bank Company filed herewith.

Date of

Name                                                                           Executive Group Life Split Dollar Plan

Katrinka V. Hart                                                           March 21, 2000

E. Richard Mahan                                                         March 23, 2000

Larry E. Miller II                                                           March 22, 2000

Scott W. Shockey                                                         March 19, 2009

EX-10.4

EXHIBIT 10.4

SCHEDULE A TO EXHIBIT 10.3

The following individuals entered into Director Retirement Agreements with The Ohio Valley Bank Company identified below which are identical to the Director Retirement Agreement, dated December 28, 2007, between Jeffrey E. Smith and The Ohio Valley Bank Company incorporated herein by reference to Exhibit 10.3 to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914), except that persons noted with an * will receive payments for only 120 months rather than 240 months based on their having served as directors of the Ohio Valley Bank Company for 10 years or less.

Date of

Name                                                                           Director Retirement Agreement

Anna P. Barnitz                                                             December 28, 2007

Steven B. Chapman                                                       December 28, 2007

Robert E. Daniel*                                                          December 28, 2007

Harold A. Howe                                                            December 28, 2007

Brent A. Saunders                                                         October 16, 2007

David W. Thomas                                                          June 17, 2008

Roger D. Williams                                                          October 16, 2007

Lannes C. Williamson                                                     December 28, 2007

Thomas E. Wiseman                                                       December 28, 2007

EX-10.7A

EXHIBIT 10.7(a)

SCHEDULE A TO EXHIBIT 10.6(a)

The following individuals entered into Director Deferred Fee Agreements with The Ohio Valley Bank Company identified below which are identical to the Director Deferred Fee Agreement, dated December 28, 2007, between Anna P. Barnitz and The Ohio Valley Bank Company incorporated herein by reference to Exhibit 10.6(a) to Ohio Valley’s Annual Report on Form 10-K for fiscal year ending December 31, 2007 (SEC File No. 0-20914).

Date of

Name                                                                           Director Deferred Fee Agreements

Steven B. Chapman                                                      December 28, 2007

Robert E. Daniel                                                           December 28, 2007

Harold A. Howe                                                           December 28, 2007

Brent A. Saunders                                                         October 16, 2007

David W. Thomas                                                         June 17, 2008

Roger D. Williams                                                         December 28, 2007

Lannes C. Williamson                                                    December 28, 2007

Thomas E. Wiseman                                                      December 28, 2007

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.  Employee Directors receive no additional compensation for serving on the Executive Committee.

The Bank maintains a life insurance policy for all directors with a death benefit of two times annual director fees as part 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, 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, 2008 (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	$	219,158
Scott W. Shockey		116,490
Katrinka V. Hart		147,720
E. Richard Mahan		148,121
Larry E. Miller, II		147,720

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 Mr. Smith), as set forth in exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6(a), 10.6(b), 10.7(a), 10.7(b), 10.8 and 10.9 to Ohio Valley's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, 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 2009 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 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 which 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 are eligible to participate in the Bonus Program, including all subsidiaries' 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; (b) each employee's individual performance; and (c) the marketplace range of compensation for employees holding comparable positions.   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 Compensation Committee may establish two sets of targets, one set of which is higher and less likely to be achieved, referred to as the “annual bonus targets”.  A second set, referred to as the “long range bonus targets” is more likely to be achieved.  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 non-performing loans to total loans and non-performing assets to total assets), and efficiency ratio.  It is the objective of the Compensation Committee to establish goals that are “reaching” but “reachable”.  The 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, 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 at the end of the year 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 are determined through a formula that applies each employee's performance evaluation score to a “bonus grid”, reflecting the individual employee's job grade, the market place range of compensation for that job grade, and individual job performance using the Evaluation Criteria referenced above.  Employees are evaluated by their supervisors, except for the executive officers, who are evaluated by the Compensation Committee of the Company’s Board of Directors.  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 December in cash in a single lump sum, subject to payroll taxes and tax withholdings.

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

                                                         STATE OF                                       PERCENTAGE

NAME                                                                     INCORPORATION                            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 I                                                      Connecticut                                             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. 333-162811 on Form S-3 of Ohio Valley Banc Corp of our report dated March 16, 2010 appearing in this Annual Report on Form 10-K of Ohio Valley Banc Corp for the year ended December 31, 2009.

/s/Crowe Horwath LLP

   Crowe Horwath LLP

Columbus, Ohio

March 16, 2010

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Jeffrey E. Smith, certify that:

1.           I have reviewed this Annual Report on Form 10-K of Ohio Valley Banc Corp.;

2.           Based on my knowledge, this annual 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 staements 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 upon 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 fourth 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 16, 2010                                                                           By  /s/ Jeffrey E. Smith                    

Jeffrey E. Smith, Chairman and CEO

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 staements 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 upon 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 fourth 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; and

Date: March 16, 2010                                                                           By /s/ Scott W. Shockey                                           

Scott W. Shockey, Vice President and CFO

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, 2009 (the “Report”), the undersigned Jeffrey E. Smith, Chairman 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/ Jeffrey E. Smith                                                         Jeffrey E. Smith Chairman and Chief Executive Officer	* /s/ Scott W. Shockey Scott W. Shockey Vice President and Chief Financial Officer
Dated:  March 16, 2010	Dated:  March 16, 2010

*              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 as otherwise stated in such filing.