UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
-------------------------
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
Commission File Number 0-26876
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
OAK HILL FINANCIAL, INC. 401(K) AND PROFIT SHARING PLAN
14621 State Route 93
Jackson, Ohio 44640
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
OAK HILL FINANCIAL, INC.
14621 State Route 93
Jackson, Ohio 44640
FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements and exhibits are filed as part of this annual
report:
Exhibit 23 Consent of Independent Public Accountant
Exhibit 99 Financial Statements and schedule of the Oak Hill
Financial, Inc. 401(k) and Profit Sharing Plan for the years
ended December 31, 2002 and 2001
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934, Oak Hill Financial, Inc., the Plan Sponsor and Named Fiduciary, has duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
OAK HILL FINANCIAL, INC. 401(K)
AND PROFIT SHARING PLAN
By: Oak Hill Financial, Inc.
Date: June 27, 2003 By:/s/ H. Tim Bichsel
------------- ---------------------
H. Tim Bichsel
Secretary
CONTENTS
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS 5
NOTES TO FINANCIAL STATEMENTS 6
SUPPLEMENTAL INFORMATION
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 10
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Trustees
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
We were engaged to audit the financial statements and supplemental schedule of
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan (the Plan) as of
December 31, 2002 and 2001, and for the year ended December 31, 2002, as listed
in the accompanying index. These financial statements and schedule are the
responsibility of the Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note G, which was certified by Principal Financial Group
("Principal"), the Trustee of the Plan, except for comparing such information
with the related information included in the financial statements and
supplemental schedule. We have been informed by the plan administrator that
Principal holds the Plan's investment assets and executes investment
transactions. The plan administrator has obtained a certification from the
Trustee as of December 31, 2002, that the information provided to the plan
administrator by the Trustee is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule, other than that
derived from the information certified by the Trustee, have been audited by us
in accordance with auditing standards generally accepted in the United States of
America and, in our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
We have audited the statement of net assets available for benefits of Oak Hill
Financial, Inc. 401(k) and Profit Sharing Plan as of December 31, 2001, and in
our report dated May 16, 2002, we expressed our opinion that such financial
statement presents fairly, in all material respects, the financial status of Oak
Hill Financial, Inc. 401(k) and Profit Sharing Plan as of December 31, 2001, in
conformity with accounting principles generally accepted in the United States of
America.
/s/GRANT THORNTON LLP
- ---------------------
Cincinnati, Ohio
June 24, 2003
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2002 and 2001
ASSETS 2002 2001
---------- ----------
Participant directed investments:
Equities $3,629,321 $2,165,361
Mutual and closed-end funds 3,103,877 5,647,294
Common/collective funds 2,414,064 202,479
---------- ----------
Total investments 9,147,262 8,015,134
Receivables:
Participant loans 26,814 --
Participant contributions 27,584 24,112
Employer contributions -- 9,435
---------- ----------
Total receivables 54,398 33,547
---------- ----------
Net assets available for benefits $9,201,660 $8,048,681
========== ==========
The accompanying notes are an integral part of these statements.
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2002
Participant
Directed
--------
Additions to net assets attributed to:
Participant contributions $ 685,692
Employer contributions 487,432
Rollovers 80,874
Interest and dividends 140,086
Net gain on sale of assets 18,466
Net depreciation (15,099)
-----------
Total additions 1,397,451
Deductions from net assets attributed to:
Benefits paid to participants 232,248
Administrative fees 12,224
-----------
Total deductions 244,472
-----------
Net increase 1,152,979
Net assets available for benefits:
Beginning of year 8,048,681
-----------
End of year $ 9,201,660
===========
The accompanying notes are an integral part of these statements.
5
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN
The following description of the Oak Hill Financial, Inc. 401(k) and Profit
Sharing Plan ("Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
1. General
-------
The Plan is a defined contribution plan covering all employees of Oak Hill
Financial, Inc. and subsidiaries (the "Company") who have three consecutive
months of service and have attained age 21. It was established for the purpose
of providing retirement and profit sharing benefits to all eligible employees of
the Company. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). All of the Plan's assets are entirely participant
directed.
2. Contributions
-------------
Each year, participants may contribute up to 25 percent of pretax annual
compensation, as defined in the Plan. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined
contribution plans. Participants direct the investment of their contributions
into various investment options offered by the Plan. The Plan currently offers
three mutual funds, seven common/collective trust funds and stock of Oak Hill
Financial, Inc. as investment options for participants. The 401(k) matching
Company contribution is invested as directed by the participants. Additional
profit sharing amounts may be contributed at the option of the Company's
management and are invested in a portfolio of investments as directed by the
participants. Amounts contributed by participants and the Company are subject to
certain limitations.
3. Participant Accounts
--------------------
Each participant's account is credited with the participant's contribution and
allocations of (a) the Company's contribution, (b) Plan earnings and (c)
nonvested forfeitures. Administrative expenses are paid directly by the Company.
Allocations are based on each participant's account at the end of the year. The
benefit to which a participant is entitled is the participant's vested account
balance.
4. Payment of Benefits
-------------------
Upon termination of service due to death, disability or retirement, a
participant may elect to receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account.
5. Vesting
-------
Participants are immediately vested in their own contributions plus actual
earnings thereon. Vesting in the Company's contribution portion of their
accounts is based on years of continuous service. A participant is 100 percent
vested after six years of credited service, with 20% annual incremental vesting
beginning in year two.
6
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN (continued)
6. Forfeitures
-----------
Beginning January 1, 2002, forfeitures of 401(k) employer matching contributions
are used to reduce the employer matching contributions for the Plan year in
which such forfeitures arose or any subsequent Plan year. Forfeitures of profit
sharing contributions are allocated to the remaining participants who are
employed on the last day of the Plan year in which the forfeitures arose. For
the year ended December 31, 2002, forfeited nonvested amounts totaled $18,632,
of which $4,804 was forfeited 401(k) employer matching contributions and $13,828
was forfeitures of employer profit sharing contributions.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
1. Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
2. Investment Valuation and Income Recognition
-------------------------------------------
The Plan's investments are stated at fair value based on quoted market prices.
Shares of mutual funds are valued at the net asset value of shares held by the
Plan at year-end.
Purchases and sales of securities are recorded on the settlement date. Dividends
are recorded when received.
NOTE C - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets at December 31:
Participant Directed Investments: 2002 2001
- --------------------------------- ---- ----
Oak Hill Financial, Inc. $3,629,321 $2,165,361
American Funds - American Balanced R3 Fund $2,366,499 $ -
Principal Partners Large Cap Value Separate Account $ 670,013 $ -
American Balanced Fund $ - $3,663,464
Victory Diversified Stock Fund $ - $1,002,756
Victory Stock Index Fund $ - $ 462,619
During 2002, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$15,099.
7
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2002 and 2001
NOTE D - RELATED PARTY TRANSACTIONS
Participants may invest in stock of Oak Hill Financial, Inc., the Plan sponsor,
and these transactions qualify as party-in-interest transactions.
NOTE E - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their employer contribution
NOTE F - PARTICIPANT LOANS
Beginning January 1, 2002, participants may borrow up to 50% of their 401(k)
contributions and/or rollover contributions or $50,000 (whichever is less). The
minimum loan amount is $1,000 and the maximum loan amount is $50,000.
Participants may have only two outstanding loans at anytime. The interest rate
is the prime rate plus 1% and is determined when the participant applies for the
loan. Principal and interest are paid back directly to the participant's account
through payroll deduction. The loans are secured by the balance of the
participant's account and bear interest rates ranging from 5.75% to 6.25%.
NOTE G - TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated April 4, 2002, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan
Administrator believes that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
NOTE H - SUBSEQUENT EVENTS
Effective January 1, 2003, all participants in the Plan who are eligible to make
elective deferrals and who have attained the age 50 within the Plan year are
able to make additional, i.e., "catch-up" contributions to the Plan up to the
following dollar amounts. The catch-up contributions are eligible for the 401(k)
employer matching contribution.
Catch-Up
Plan Year Contribution
2003 $2,000
2004 $3,000
2005 $4,000
2006 $5,000
2007* $5,000
* For Plan years 2007 and beyond, the catch-up contribution
amount will be indexed for inflation in increments of $500.
8
SUPPLEMENTAL INFORMATION
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
Form 5500 E.I.N. 31-1010517 Plan No. 004
Line 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2002
(a) (b) (c) (d)
Description of investment
including maturity date, rate
Identity of issue, borrower, of interest, collateral, par Current
lessor or similar party or maturity value value
* Equities Shares
------
Oak Hill Financial, Inc. 249,375 $3,629,321
Mutual Funds
American Funds American Balanced R3 Fund 164,340 2,366,499
American Funds Growth Fund R3 Fund 20,708 381,224
American Funds New Perspective R3 Fund 19,808 356,154
----------
3,103,877
Common/Collective Trust Funds
Principal Money Market Separate Account 11,847 455,025
Principal Bond & Mortgage Separate Account 292 170,417
Principal Large-Cap Stock Index Separate Account 12,249 362,387
Principal Partner Large-Cap Value Separate Account 74,241 670,013
Principal Partner Mid-Cap Value Separate Account 9,448 82,766
Principal Partner Mid-Cap Growth Separate Account 38,182 254,302
Principal Partner Small-Cap Value Separate Account 39,839 419,155
----------
2,414,064
Participant loans - interest rates 5.75% to 6.25% 26,814
-----------
Total Investments $9,174,076
===========
* Denotes a party-in-interest
10