EXHIBIT 99
Financial statements and report of independent registered public accounting firm
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
December 31, 2004 and 2003
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, 2004 and 2003, and the related statements of changes in net assets
available for benefits for the years ended December 31, 2004 and 2003. 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. The Plan is not required to have,
nor were we engaged to perform an audit of internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes 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, 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, 2004 and 2003, and the changes in net assets available for benefits
for the years ended December 31, 2004 and 2003, 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.
Cincinnati, Ohio
June 7, 2005
3
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2004 and 2003
ASSETS 2004 2003
----------- -----------
Participant directed investments:
Equities $ 7,198,668 $ 5,463,410
Mutual and closed-end funds 2,709,484 3,964,600
Common/collective funds 4,065,696 3,964,255
Participant loans 106,534 52,823
----------- -----------
Total investments 14,080,382 13,445,088
Receivables:
Participant contributions 4,511 --
Employer contributions -- 725
----------- -----------
Total receivables 4,511 725
----------- -----------
Net assets available for benefits $14,084,893 $13,445,813
=========== ===========
The accompanying notes are an integral part of these statements.
4
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, 2004 and 2003
2004 2003
----------- -----------
Additions to net assets attributed to:
Participant contributions $ 898,269 $ 739,890
Employer contributions 532,774 585,494
Rollovers 29,313 123,197
Interest and dividends 1,524,211 1,588,890
Net appreciation (depreciation) on investment securities (Note C) 783,067 1,465,226
----------- -----------
Total additions 3,767,634 4,502,697
Deductions from net assets attributed to:
Benefits paid to participants 3,067,397 209,446
Administrative fees 61,157 49,098
----------- -----------
Total deductions 3,128,554 258,544
----------- -----------
Net increase 639,080 4,244,153
Net assets available for benefits:
Beginning of year 13,445,813 9,201,660
----------- -----------
End of year $14,084,893 $13,445,813
=========== ===========
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, 2004 and 2003
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 in the
Company's common stock. 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. If not paid by the Company, administrative expenses become
the liability of the Plan. 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.
6
Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2004 and 2003
NOTE A - DESCRIPTION OF PLAN (continued)
6. Forfeitures
-----------
In the event a participant terminates prior to 100% vesting, the portion
of employer contributions which is not vested is forfeited at that time.
The forfeited amounts are used to first reinstate previously forfeited
account balances of re-employed participants, then allocated to the
employer contribution account of all eligible participants.
For the year ended December 31, 2004, forfeited nonvested amounts totaled
approximately $34,400. The amounts were allocated to the remaining
participants.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
1. Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the accrual method
of accounting.
2. 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 net assets available for plan benefits as of the date of the
financial statements and the reported amounts of changes in net assets
available for plan benefits during the reporting period. Actual results
could differ from those estimates.
3. 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. Participant loans are valued at their
outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on the settlement date.
Dividends are recorded when received.
4. Payment of Benefits
-------------------
Benefits are recorded when paid.
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: 2004 2003
Oak Hill Financial, Inc. $7,198,668 $5,463,410
American Funds AM Balance R3 Fund 1,542,460 3,008,546
Prin PTR Lg-Cap Value Sep Account 715,654 960,091
Prin PTR Sm-Cap Value Sep Account 1,115,138 940,621
Prin Money Mkt Sep Account 735,092 802,038
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Oak Hill Financial, Inc. 401(k) and Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2004 and 2003
NOTE C - INVESTMENTS (continued)
During 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $783,067.
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 - 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.
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 - RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities
are exposed to various risks such as interest rate, market, and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits.
8
SUPPLEMENTAL INFORMATION
9
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, 2004
(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
Participant Directed
--------------------
Equities Shares
------
* Oak Hill Financial, Inc. 271,359 $ 7,198,668
Mutual Funds
American Funds American Balanced R3 Fund 85,931 1,542,460
American Funds Growth Fund R3 Fund 18,160 492,129
American Funds New Perspective R3 Fund 24,560 674,895
-----------
2,709,484
Common/Collective Trust Funds
* Principal Money Market Separate Account 19,029 735,092
* Principal Bond & Mortgage Separate Account 631 401,336
* Principal Large-Cap Stock Index Separate Account 11,611 481,003
* Principal Partner Large-Cap Value Separate Account 55,589 715,654
* Principal Partner Mid-Cap Value Separate Account 16,027 231,112
* Principal Partner Mid-Cap Growth Separate Account 35,242 386,361
* Principal Partner Small-Cap Value Separate Account 65,991 1,115,138
-----------
4,065,696
* Participant loans Interest rate 5.50% - 10% 106,534
-----------
Total Investments $14,080,382
===========
* Denotes a party-in-interest
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