EXHIBIT 99
Financial statements and report of independent registered public
accounting firm
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
December 31, 2003 and 2002
CONTENTS
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 4
STATEMENTS 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 REGISTERED PUBLIC ACCOUNTING FIRM
Trustees
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan (the Plan) as of
December 31, 2003 and 2002, and the related statements of changes in net assets
available for benefits for the years ended December 31, 2003 and 2002. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003 and 2002, and the changes in net assets available for benefits
for the years ended December 31, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for purposes of additional analysis and is
not a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Grant Thornton LLP
Cincinnati, Ohio
June 25, 2004
3
5
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003 and 2002
ASSETS 2003 2002
------------ -----------
Participant directed investments:
Equities $ 5,463,410 $ 3,629,321
Mutual and closed-end funds 3,964,600 3,103,877
Common/collective funds 3,964,255 2,414,064
----------- -----------
Total investments 13,392,265 9,147,262
Receivables:
Participant loans 52,823 26,814
Participant contributions - 27,584
Employer contributions 725 -
----------- -----------
Total receivables 53,548 54,398
----------- -----------
Net assets available for benefits $13,445,813 $ 9,201,660
=========== ===========
The accompanying notes are an integral part of these statements.
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Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the years ended December 31, 2003 and 2002
2003 2002
----------- -----------
Additions to net assets attributed to:
Participant contributions $ 739,890 $ 685,692
Employer contributions 585,494 487,432
Rollovers 123,197 80,874
Interest and dividends 1,588,890 140,086
Net gain on sale of assets - 18,466
Net appreciation (depreciation) on
investment securities (Note C) 1,465,226 (15,099)
----------- -----------
Total additions 4,502,697 1,397,451
Deductions from net assets attributed to:
Benefits paid to participants 209,446 232,248
Administrative fees 49,098 12,224
----------- -----------
Total deductions 258,544 244,472
----------- -----------
Net increase 4,244,153 1,152,979
Net assets available for benefits:
Beginning of year 9,201,660 8,048,681
----------- -----------
End of year $13,445,813 $ 9,201,660
=========== ===========
The accompanying notes are an integral part of these statements.
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Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
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).
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. Contributions 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 benefit that can be provided
from the participant's vested account.
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. Any nonvested amounts are
forfeited and allocated to the remaining participants.
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.
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Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003 and 2002
NOTE A - DESCRIPTION OF PLAN (continued)
6. Participant Loans
-----------------
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 participants account through payroll deduction.
7. Forfeitures
-----------
For the year ended December 31, 2003, forfeited nonvested amounts totaled
approximately $27,400. This amount has been used to reduce the Company's
contributions to the Plan.
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 Equities: 2003 2002
- ------------------------------ ---- ----
Oak Hill Financial, Inc. $5,463,410 $3,629,321
American Funds - American Balanced R3 Fund 3,008,546 2,366,499
Principal Partners Large Cap Value Separate Account 960,091 670,013
Principal Partners Small Cap Value Separate Account 940,621 **
Principal Money Market Separate Account 802,038 **
** Investment represents less than 5% of the Plan's net assets at the date
specified.
During 2003, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$1,465,226.
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Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003 and 2002
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 contributions.
NOTE F - 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). Although the Plan
has been amended since receiving the determination letter, the Plan
administrator believes the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
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SUPPLEMENTAL INFORMATION
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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, 2003
(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. 261,918 $ 5,463,410
Mutual Funds
American Funds American Balanced R3 Fund 174,408 3,008,546
American Funds Growth Fund R3 Fund 16,954 412,650
American Funds New Perspective R3 Fund 22,335 543,404
------------
3,964,600
Common/Collective Trust Funds
Principal Money Market Separate Account 20,829 802,038
Principal Bond & Mortgage Separate Account 366 222,914
Principal Large-Cap Stock Index Separate Account 12,036 453,878
Principal Partner Large-Cap Value Separate Account 83,918 960,091
Principal Partner Mid-Cap Value Separate Account 13,076 154,871
Principal Partner Mid-Cap Growth Separate Account 43,429 429,842
Principal Partner Small-Cap Value Separate Account 65,186 940,621
------------
3,964,255
Total Investments $13,392,265
* Denotes a party-in-interest
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