| 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) |

| Large accelerated filer | o |   | Accelerated filer         | x |
|-------------------------|---|--------|---------------------------|---|
| Non-accelerated filer   | o |   | Smaller reporting company | o |

----

|          |                                                                                        | Page Number |
|---------------|---------------------------------------------------------------------------------------------|-------------|
| PART I.       | FINANCIAL INFORMATION                                                                       |        |
|          |                                                                                        |        |
| Item 1.       | Financial Statements (Unaudited)                                                            |        |
|          | Consolidated Balance Sheets                                                                 | 3           |
|          | Consolidated Statements of Income and Comprehensive Income                                  | 4           |
|          | Condensed Consolidated Statements of Changes in Shareholders’ Equity                  | 5           |
|          | Condensed Consolidated Statements of Cash Flows                                             | 6           |
|          | Notes to the Consolidated Financial Statements                                              | 7           |
| Item 2.       | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  24    |
| Item 3.       | Quantitative and Qualitative Disclosure About Market Risk                                   | 40          |
| Item 4.       | Controls and Procedures                                                                     | 41          |
|          |                                                                                        |        |
| PART II.      | OTHER INFORMATION                                                                           |        |
|          |                                                                                        |        |
| Item 1.       | Legal Proceedings                                                                           | 42          |
| Item 1A.      | Risk Factors                                                                                | 42          |
| Item 2.       | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 43          |
| Item 3.       | Defaults Upon Securities                                                                    | 43          |
| Item 4.       | Mine Safety Disclosures                                                                     | 43          |
| Item 5.       | Other Information                                                                           | 43          |
| Item 6.       | Exhibits                                                                                    | 43          |
|          |                                                                                        |        |
| Signatures    |                                                                                        | 44          |
|          |                                                                                        |        |
| Exhibit Index |                                                                                        | 45          |

----

| OHIO VALLEY BANC CORP.CONSOLIDATED BALANCE SHEETS(dollars in thousands, except share data) |
|--------------------------------------------------------------------------------------------|

|                                                                                                                                                       |   | June 30,2012 |    |   | December 31,2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------------|--------|
|                                                                                                                                                       |   | UNAUDITED    |    |   |             |   |
| ASSETS                                                                                                                                                     |   |         |    |   |             |   |
| Cash and noninterest-bearing deposits with banks                                                                                                           |   | $            | 9,807   |   |             | $      | 8,914 |   |
| Interest-bearing deposits with banks                                                                                                                       |   |         | 63,916  |   |             |   | 42,716 |   |
| Total cash and cash equivalents                                                                                                                            |   |         | 73,723  |   |             |   | 51,630 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| Securities available for sale                                                                                                                              |   |         | 93,758  |   |             |   | 85,670 |   |
| Securities held to maturity(estimated fair value: 2012 - $24,815; 2011 - $22,847)                                                                          |   |         | 24,269  |   |             |   | 22,848 |   |
| Federal Home Loan Bank stock                                                                                                                               |   |         | 6,281   |   |             |   | 6,281 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| Total loans                                                                                                                                                |   |         | 564,074 |   |             |   | 598,308 |   |
|     Less: Allowance for loan losses                                                                                                    |   |         | (7,527  | )      |             |   | (7,344 | ) |
| Net loans                                                                                                                                                  |   |         | 556,547 |   |             |   | 590,964 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| Premises and equipment, net                                                                                                                                |   |         | 8,919   |   |             |   | 9,216 |   |
| Other real estate owned                                                                                                                                    |   |         | 3,292   |   |             |   | 4,256 |   |
| Accrued income receivable                                                                                                                                  |   |         | 2,371   |   |             |   | 2,872 |   |
| Goodwill                                                                                                                                                   |   |         | 1,267   |   |             |   | 1,267 |   |
| Bank owned life insurance and annuity assets                                                                                                               |   |         | 24,762  |   |             |   | 23,097 |   |
| Prepaid FDIC insurance                                                                                                                                     |   |         | 1,079   |   |             |   | 1,609 |   |
| Other assets                                                                                                                                               |   |         | 5,104   |   |             |   | 4,467 |   |
| Total assets                                                                                                                                               |   | $            | 801,372 |   |             | $      | 804,177 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| LIABILITIES                                                                                                                                                |   |         |    |   |             |   |   |   |
| Noninterest-bearing deposits                                                                                                                               |   | $            | 141,620 |   |             | $      | 138,143 |   |
| Interest-bearing deposits                                                                                                                                  |   |         | 541,559 |   |             |   | 549,743 |   |
| Total deposits                                                                                                                                             |   |         | 683,179 |   |             |   | 687,886 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| Other borrowed funds                                                                                                                                       |   |         | 20,089  |   |             |   | 20,296 |   |
| Subordinated debentures                                                                                                                                    |   |         | 13,500  |   |             |   | 13,500 |   |
| Accrued liabilities                                                                                                                                        |   |         | 9,793   |   |             |   | 10,652 |   |
| Total liabilities                                                                                                                                          |   |         | 726,561 |   |             |   | 732,334 |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| COMMITMENTS AND CONTINGENT LIABILITIES (See Note 5)                                                                                                        |   |         | ----    |   |             |   | ---- |   |
|                                                                                                                                                       |   |         |    |   |             |   |   |   |
| SHAREHOLDERS’ EQUITY                                                                                                                                 |   |         |    |   |             |   |   |   |
| Common stock ($1.00 stated value per share, 10,000,000 shares authorized;  2012 – 4,689,178 shares issued; 2011 - 4,686,295 shares issued) |   |         | 4,689   |   |             |   | 4,686 |   |
| Additional paid-in capital                                                                                                                                 |   |         | 33,525  |   |             |   | 33,473 |   |
| Retained earnings                                                                                                                                          |   |         | 50,923  |   |             |   | 48,435 |   |
| Accumulated other comprehensive income                                                                                                                     |   |         | 1,386   |   |             |   | 961 |   |
| Treasury stock, at cost (659,739 shares)                                                                                                                   |   |         | (15,712 | )      |             |   | (15,712 | ) |
| Total shareholders’ equity                                                                                                                           |   |         | 74,811  |   |             |   | 71,843 |   |
| Total liabilities and shareholders’ equity                                                                                                           |   | $            | 801,372 |   |             | $      | 804,177 |   |

----

| OHIO VALLEY BANC CORP.CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)(dollars in thousands, except per share data) |
|-------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                 |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|--------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|--------------------------|--------|
|                                                                                 |   | 2012                       |   |   | 2011                     |   |   | 2012 |   |   | 2011 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |
| Interest and dividend income:                                                        |   |                       |   |   |                     |   |   |   |   |   |   |   |
| Loans, including fees                                                                |   | $                          | 8,933  |   |                     | $      | 10,090 |   |   | $ | 18,897 |   |   | $ | 21,389 |   |
| Securities                                                                           |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                              |   |                       | 446    |   |                     |   | 473 |   |   |   | 872 |   |   |   | 918 |   |
| Tax exempt                                                                           |   |                       | 148    |   |                     |   | 137 |   |   |   | 293 |   |   |   | 280 |   |
| Dividends                                                                            |   |                       | 67     |   |                     |   | 70 |   |   |   | 138 |   |   |   | 141 |   |
| Other Interest                                                                       |   |                       | 63     |   |                     |   | 47 |   |   |   | 122 |   |   |   | 114 |   |
|                                                                                 |   |                       | 9,657  |   |                     |   | 10,817 |   |   |   | 20,322 |   |   |   | 22,842 |   |
| Interest expense:                                                                    |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                             |   |                       | 1,302  |   |                     |   | 2,227 |   |   |   | 2,676 |   |   |   | 4,583 |   |
| Other borrowed funds                                                                 |   |                       | 123    |   |                     |   | 164 |   |   |   | 248 |   |   |   | 358 |   |
| Subordinated debentures                                                              |   |                       | 179    |   |                     |   | 272 |   |   |   | 433 |   |   |   | 544 |   |
|                                                                                 |   |                       | 1,604  |   |                     |   | 2,663 |   |   |   | 3,357 |   |   |   | 5,485 |   |
| Net interest income                                                                  |   |                       | 8,053  |   |                     |   | 8,154 |   |   |   | 16,965 |   |   |   | 17,357 |   |
| Provision for loan losses                                                            |   |                       | 524    |   |                     |   | 759 |   |   |   | 1,840 |   |   |   | 3,703 |   |
| Net interest income after provision for loan losses                                  |   |                       | 7,529  |   |                     |   | 7,395 |   |   |   | 15,125 |   |   |   | 13,654 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income:                                                                  |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                                  |   |                       | 460    |   |                     |   | 553 |   |   |   | 910 |   |   |   | 1,093 |   |
| Trust fees                                                                           |   |                       | 51     |   |                     |   | 56 |   |   |   | 100 |   |   |   | 115 |   |
| Income from bank owned life insurance and annuity assets                             |   |                       | 200    |   |                     |   | 182 |   |   |   | 394 |   |   |   | 361 |   |
| Mortgage banking income                                                              |   |                       | 135    |   |                     |   | 60 |   |   |   | 232 |   |   |   | 137 |   |
| Electronic refund check / deposit fees                                               |   |                       | 226    |   |                     |   | 265 |   |   |   | 2,264 |   |   |   | 2,533 |   |
| Debit / credit card interchange income                                               |   |                       | 421    |   |                     |   | 344 |   |   |   | 816 |   |   |   | 644 |   |
| Gain on sale of other real estate owned                                              |   |                       | 143    |   |                     |   | 5 |   |   |   | 151 |   |   |   | 10 |   |
| Other                                                                                |   |                       | 338    |   |                     |   | 222 |   |   |   | 586 |   |   |   | 453 |   |
|                                                                                 |   |                       | 1,974  |   |                     |   | 1,687 |   |   |   | 5,453 |   |   |   | 5,346 |   |
| Noninterest expense:                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                       |   |                       | 4,185  |   |                     |   | 4,084 |   |   |   | 8,453 |   |   |   | 8,107 |   |
| Occupancy                                                                            |   |                       | 383    |   |                     |   | 378 |   |   |   | 785 |   |   |   | 804 |   |
| Furniture and equipment                                                              |   |                       | 235    |   |                     |   | 282 |   |   |   | 472 |   |   |   | 562 |   |
| FDIC insurance                                                                       |   |                       | 275    |   |                     |   | 285 |   |   |   | 566 |   |   |   | 612 |   |
| Data processing                                                                      |   |                       | 229    |   |                     |   | 215 |   |   |   | 508 |   |   |   | 451 |   |
| Foreclosed assets, net                                                               |   |                       | 65     |   |                     |   | 31 |   |   |   | 175 |   |   |   | 57 |   |
| Other                                                                                |   |                       | 1,790  |   |                     |   | 1,706 |   |   |   | 3,535 |   |   |   | 3,486 |   |
|                                                                                 |   |                       | 7,162  |   |                     |   | 6,981 |   |   |   | 14,494 |   |   |   | 14,079 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                                                           |   |                       | 2,341  |   |                     |   | 2,101 |   |   |   | 6,084 |   |   |   | 4,921 |   |
| Provision for income taxes                                                           |   |                       | 622    |   |                     |   | 546 |   |   |   | 1,743 |   |   |   | 1,333 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                                                           |   | $                          | 1,719  |   |                     | $      | 1,555 |   |   | $ | 4,341 |   |   | $ | 3,588 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income:                                                          |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
|     Change in unrealized gain/losses on securities, net of taxes |   |                       | 321    |   |                     |   | 657 |   |   |   | 425 |   |   |   | 769 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                 |   | $                          | 2,040  |   |                     | $      | 2,212 |   |   | $ | 4,766 |   |   | $ | 4,357 |   |
|                                                                                 |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                                                                   |   | $                          | .43    |   |                     | $      | .39 |   |   | $ | 1.08 |   |   | $ | .90 |   |

----

| OHIO VALLEY BANC CORP.CONDENSED CONSOLIDATED STATEMENTS OF CHANGESIN SHAREHOLDERS’ EQUITY (UNAUDITED)(dollars in thousands, except share and per share data) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                               |   |
|                                                                                                                                                               |   | Three months endedJune 30, |   |   | Six months ended June 30, |   |
|                                                                                                                                                               |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                                                                                                                                     |   | $ | 73,779 |   |   | $ | 69,433 |   |   | $ | 71,843 |   |   | $ | 68,128 |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net income                                                                                                                                       |   |   | 1,719 |   |   |   | 1,555 |   |   |   | 4,341 |   |   |   | 3,588 |   |
|    Change in unrealized gain on available for sale securities                                                                                       |   |   | 486 |   |   |   | 995 |   |   |   | 644 |   |   |   | 1,166 |   |
|    Income tax effect                                                                                                                                |   |   | (165 | ) |   |   | (338 | ) |   |   | (219 | )  |   |   | (397 | )  |
|           Total comprehensive income                                                                             |   |   | 2,040 |   |   |   | 2,212 |   |   |   | 4,766 |   |   |   | 4,357 |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from issuance of common stock through dividend                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment plan                                                                                                                                                  |   |   | ---- |   |   |   | ---- |   |   |   | 55 |   |   |   | ---- |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends                                                                                                                                                     |   |   | (1,008 | ) |   |   | (840 | ) |   |   | (1,853 | ) |   |   | (1,680 | ) |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period                                                                                                                                           |   | $ | 74,811 |   |   | $ | 70,805 |   |   | $ | 74,811 |   |   | $ | 70,805 |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends per share                                                                                                                                           |   | $ | 0.25 |   |   | $ | 0.21 |   |   | $ | 0.46 |   |   | $ | 0.42 |   |

----

| OHIO VALLEY BANC CORP.CONDENSED CONSOLIDATED STATEMENTS OFCASH FLOWS (UNAUDITED)(dollars in thousands) |   |
|--------------------------------------------------------------------------------------------------------|--------|
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   | Six months endedJune 30, |   |
|                                                                                                   |   | 2012 |   |   | 2011 |   |
|                                                                                                   |   |   |   |   |   |   |
| Net cash provided by operating activities:                                                             |   | $ | 6,116 |   |   | $ | 9,907 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Investing activities:                                                                                  |   |   |   |   |   |   |   |   |
| Proceeds from maturities of securities available for sale                                              |   |   | 17,755 |   |   |   | 13,306 |   |
| Purchases of securities available for sale                                                             |   |   | (25,814 | ) |   |   | (27,534 | ) |
| Proceeds from maturities of securities held to maturity                                                |   |   | 989 |   |   |   | 816 |   |
| Purchases of securities held to maturity                                                               |   |   | (2,435 | ) |   |   | ---- |   |
| Net change in loans                                                                                    |   |   | 32,242 |   |   |   | 11,115 |   |
| Proceeds from sale of other real estate owned                                                          |   |   | 1,450 |   |   |   | 313 |   |
| Purchases of premises and equipment                                                                    |   |   | (227 | ) |   |   | (343 | ) |
| Purchases of bank owned life insurance                                                                 |   |   | (1,271 | ) |   |   | ---- |   |
| Net cash provided by (used in) investing activities                                                    |   |   | 22,689 |   |   |   | (2,327 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Financing activities:                                                                                  |   |   |   |   |   |   |   |   |
| Change in deposits                                                                                     |   |   | (4,707 | ) |   |   | (13,227 | ) |
| Proceeds from common stock through dividend reinvestment plan                                          |   |   | 55 |   |   |   | ---- |   |
| Cash dividends                                                                                         |   |   | (1,853 | ) |   |   | (1,680 | ) |
| Change in securities sold under agreements to repurchase                                               |   |   | ---- |   |   |   | (1,427 | ) |
| Proceeds from Federal Home Loan Bank borrowings                                                        |   |   | 500 |   |   |   | ---- |   |
| Repayment of Federal Home Loan Bank borrowings                                                         |   |   | (407 | ) |   |   | (3,403 | ) |
| Change in other short-term borrowings                                                                  |   |   | (300 | ) |   |   | 372 |   |
| Net cash (used in) financing activities                                                           |   |   | (6,712 | )  |   |   | (19,365 | )  |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Change in cash and cash equivalents                                                                    |   |   | 22,093 |   |   |   | (11,785 | ) |
| Cash and cash equivalents at beginning of period                                                       |   |   | 51,630 |   |   |   | 59,751 |   |
| Cash and cash equivalents at end of period                                                             |   | $ | 73,723 |   |   | $ | 47,966 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Supplemental disclosure:                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                 |   | $ | 3,530 |   |   | $ | 5,592 |   |
| Cash paid for income taxes                                                                             |   |   | 2,790 |   |   |   | 330 |   |
| Non-cash transfers from loans to other real estate owned                                               |   |   | 335 |   |   |   | 227 |   |
| Other real estate owned sales financed by the Bank                                                     |   |   | 930 |   |   |   | 209 |   |

----

----

----

|                                           |   | Fair Value Measurements at June 30, 2012, Using               |   |
|------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                           |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets:                                        |   |                                                          |   |   |   |   |   |   |   |
| U.S. Treasury securities                       |   |                                                          | ----   |   |   | $ | 1,501 |   |   |   | ---- |   |
| U.S. Government sponsored entity securities    |   |                                                          | ----   |   |   |   | 1,005 |   |   |   | ---- |   |
| Agency mortgage-backed securities, residential |   |                                                          | ----   |   |   |   | 91,253 |   |   |   | ---- |   |

|                                           |   | Fair Value Measurements at December 31, 2011, Using           |   |
|------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                           |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets:                                        |   |                                                          |   |   |   |   |   |   |   |
| U.S. Treasury securities                       |   |                                                          | ----   |   |   | $ | 5,513 |   |   |   | ---- |   |
| U.S. Government sponsored entity securities    |   |                                                          | ----   |   |   |   | 2,559 |   |   |   | ---- |   |
| Agency mortgage-backed securities, residential |   |                                                          | ----   |   |   |   | 77,598 |   |   |   | ---- |   |

|                                            |   | Fair Value Measurements at June 30, 2012, Using               |   |
|-------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                            |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other ObservableInputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets:                                         |   |                                                          |   |   |   |   |   |   |   |
| Impaired Loans:                                 |   |                                                          |   |   |   |   |   |   |   |
|   Commercial real estate:             |   |                                                          |   |   |   |   |   |   |   |
|      Owner-occupied    |   |                                                          | ----   |   |   |   | ---- |   |   | $ | 2,407 |   |
|      Nonowner-occupied |   |                                                          | ----   |   |   |   | ---- |   |   |   | 409 |   |
|                                            |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Mortgage servicing rights                       |   |                                                          | ----   |   |   |   | ---- |   |   |   | 417 |   |

----

|                                            |   | Fair Value Measurements at December 31, 2011, Using           |   |
|-------------------------------------------------|--------|---------------------------------------------------------------|--------|
|    Assets:                       |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other ObservableInputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Impaired Loans:                                 |   |                                                          |   |   |   |   |   |   |   |
|   Commercial real estate:             |   |                                                          |   |   |   |   |   |   |   |
|      Owner-occupied    |   |                                                          | ----   |   |   |   | ---- |   |   | $ | 290 |   |
|      Nonowner-occupied |   |                                                          | ----   |   |   |   | ---- |   |   |   | 1,959 |   |
|      Construction      |   |                                                          | ----   |   |   |   | ---- |   |   |   | 587 |   |
|                                            |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Mortgage servicing rights                       |   |                                                          | ----   |   |   |   | ---- |   |   |   | 430 |   |
|                                            |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned:                        |   |                                                          |   |   |   |   |   |   |   |   |   |   |
|   Commercial real estate:             |   |                                                          |   |   |   |   |   |   |   |   |   |   |
|      Construction      |   |                                                          | ----   |   |   |   | ---- |   |   |   | 1,814 |   |
|   Commercial and industrial           |   |                                                          | ----   |   |   |   | ---- |   |   |   | 1,134 |   |

|                                            |   |  Fair Value |   |  Valuation Technique(s) |  Unobservable Input(s) |                                                    |  Range |                                      |   | (Weighted Average) |   |
|-------------------------------------------------|--------|------------------|--------|------------------------------|-----------------------------|---------------------------------------------------------|-------------|-------------------------------------------|--------|--------------------|--------|
| Impaired Loans:                                 |   |             |   |                         |                        |                                                    |        |                                      |   |               |   |
|   Commercial real estate:             |   |             |   |                         |                        |                                                    |        |                                      |   |               |   |
|      Owner-occupied    |   | $                | 2,152  |                         | Income approach             | Adjustment for differences between the comparable sales |        | from -10% to     -20% |   |               |   | -18% |   |
|                                            |   |             |   |                         | Income approach             | Capitalization rate                                     |        | from 7%to    10%           |   |               |   |   |   |
|      Owner-occupied    |   |             | 255    |                         | Income approach             | Capitalization rate                                     |        |                                      | 10%    |               |   |   |   |   |
|      Nonowner-occupied |   |             | 409    |                         | Income approach             | Capitalization rate                                     |        |                                      | 10%    |               |   |   |   |   |

----

| Fair Value Measurements at June 30, 2012 Using: |
|-------------------------------------------------|

|                          |   | CarryingValue |    |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |   | Total  |    |
|-------------------------------|--------|---------------|---------|--------|---------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|
| Financial Assets:             |   |          |    |   |    |   |    |    |   |   |    |   |   |   |    |
| Cash and cash equivalents     |   | $             | 73,723  |   |    | $      | 73,723  |    |   | $      | ----    |   |   | $      | ----    |   |   | $ | 73,723 |   |
| Securities available for sale |   |          | 93,758  |   |    |   | ----    |    |   |   | 93,758  |   |   |   | ----    |   |   |   | 93,758 |   |
| Securities held to maturity   |   |          | 24,269  |   |    |   | ----    |    |   |   | 11,917  |   |   |   | 12,898  |   |   |   | 24,815 |   |
| Federal Home Loan Bank stock  |   |          | 6,281   |   |    |   | N/A     |    |   |   | N/A     |   |   |   | N/A     |   |   |   | N/A |   |
| Loans                         |   |          | 564,074 |   |    |   | ----    |    |   |   | ----    |   |   |   | 581,056 |   |   |   | 581,056 |   |
| Accrued interest receivable   |   |          | 2,371   |   |    |   | ----    |    |   |   | 554     |   |   |   | 1,817   |   |   |   | 2,371 |   |
|                          |   |          |    |   |    |   |    |    |   |   |    |   |   |   |    |   |   |   |   |   |
| Financial liabilities:        |   |          |    |   |    |   |    |    |   |   |    |   |   |   |    |   |   |   |   |   |
| Deposits                      |   |          | 683,179 |   |    |   | 142,421 |    |   |   | 543,059 |   |   |   | ----    |   |   |   | 685,480 |   |
| Other borrowed funds          |   |          | 20,089  |   |    |   | ----    |    |   |   | 20,574  |   |   |   | ----    |   |   |   | 20,574 |   |
| Subordinated debentures       |   |          | 13,500  |   |    |   | ----    |    |   |   | 10,304  |   |   |   | ----    |   |   |   | 10,304 |   |
| Accrued interest payable      |   |          | 1,721   |   |    |   | ----    |    |   |   | 1,721   |   |   |   | ----    |   |   |   | 1,721 |   |

|                          |   | December 31, 2011 |    |
|-------------------------------|--------|-------------------|---------|
|                          |   | CarryingValue     |    |   | FairValue |   |
| Financial Assets:             |   |              |    |   |   |   |
| Cash and cash equivalents     |   | $                 | 51,630  |   |   | $ | 51,630 |   |
| Securities available for sale |   |              | 85,670  |   |   |   | 85,670 |   |
| Securities held to maturity   |   |              | 22,848  |   |   |   | 22,847 |   |
| Federal Home Loan Bank stock  |   |              | 6,281   |   |   |   | N/A |   |
| Loans                         |   |              | 590,964 |   |   |   | 599,782 |   |
| Accrued interest receivable   |   |              | 2,872   |   |   |   | 2,872 |   |
|                          |   |              |    |   |   |   |   |   |
| Financial liabilities:        |   |              |    |   |   |   |   |   |
| Deposits                      |   |              | 687,886 |   |   |   | 690,607 |   |
| Other borrowed funds          |   |              | 20,296  |   |   |   | 20,565 |   |
| Subordinated debentures       |   |              | 13,500  |   |   |   | 11,085 |   |
| Accrued interest payable      |   |              | 1,894   |   |   |   | 1,894 |   |

----

|  Securities Available for Sale                        |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | GrossUnrealizedLosses |   |   | EstimatedFair Value |   |
|------------------------------------------------------------|--------|----------------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
| June 30, 2012                                              |   |           |   |   |                   |   |   |                  |   |   |                |   |
|   U.S. Treasury securities                       |   | $              | 1,501  |   |                   | $      | ----   |                  |   | $      | ----                |   |   | $ | 1,501 |   |
|   U.S. Government sponsored entity securities    |   |           | 1,011  |   |                   |   | ----   |                  |   |   | (6                  | )      |   |   | 1,005 |   |
|   Agency mortgage-backed securities, residential |   |           | 89,146 |   |                   |   | 2,127  |                  |   |   | (21                 | )      |   |   | 91,252 |   |
|       Total securities       |   | $              | 91,658 |   |                   | $      | 2,127  |                  |   | $      | (27                 | )      |   | $ | 93,758 |   |
|                                                       |   |           |   |   |                   |   |   |                  |   |   |                |   |   |   |   |   |
| December 31, 2011                                          |   |           |   |   |                   |   |   |                  |   |   |                |   |   |   |   |   |
|   U.S. Treasury securities                       |   | $              | 5,510  |   |                   | $      | 3      |                  |   | $      | ----                |   |   | $ | 5,513 |   |
|   U.S. Government sponsored entity securities    |   |           | 2,501  |   |                   |   | 58     |                  |   |   | ----                |   |   |   | 2,559 |   |
|   Agency mortgage-backed securities, residential |   |           | 76,203 |   |                   |   | 1,407  |                  |   |   | (12                 | )      |   |   | 77,598 |   |
|       Total securities       |   | $              | 84,214 |   |                   | $      | 1,468  |                  |   | $      | (12                 | )      |   | $ | 85,670 |   |

----

|  Securities Held to Maturity                            |   | Amortized Cost |   |   | Gross Unrecognized Gains |   |   | Gross Unrecognized Losses |   |   | EstimatedFair Value |   |
|--------------------------------------------------------------|--------|----------------|--------|--------|--------------------------|--------|--------|---------------------------|--------|--------|---------------------|--------|
| June 30, 2012                                                |   |           |   |   |                     |   |   |                      |   |   |                |   |
|   Obligations of states and political subdivisions |   | $              | 24,249 |   |                     | $      | 616    |                      |   | $      | (70                 | )      |   | $ | 24,795 |   |
|   Agency mortgage-backed securities, residential   |   |           | 20     |   |                     |   | ----   |                      |   |   | ----                |   |   |   | 20 |   |
|       Total securities         |   | $              | 24,269 |   |                     | $      | 616    |                      |   | $      | (70                 | )      |   | $ | 24,815 |   |
|                                                         |   |           |   |   |                     |   |   |                      |   |   |                |   |   |   |   |   |
| December 31, 2011                                            |   |           |   |   |                     |   |   |                      |   |   |                |   |   |   |   |   |
|   Obligations of states and political subdivisions |   | $              | 22,825 |   |                     | $      | 558    |                      |   | $      | (559                | )      |   | $ | 22,824 |   |
|   Agency mortgage-backed securities, residential   |   |           | 23     |   |                     |   | ----   |                      |   |   | ----                |   |   |   | 23 |   |
|       Total securities         |   | $              | 22,848 |   |                     | $      | 558    |                      |   | $      | (559                | )      |   | $ | 22,847 |   |

|                                                       |   | Available for Sale |   |   | Held to Maturity    |   |
|------------------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|
|  Debt Securities:                                     |   | Amortized Cost     |   |   | EstimatedFair Value |   |   | Amortized Cost |   |   | EstimatedFair Value |   |
|                                                       |   |               |   |   |                |   |   |   |   |   |   |   |
|   Due in one year or less                        |   | $                  | 1,501  |   |                | $      | 1,501 |   |   | $ | 421 |   |   | $ | 427 |   |
|   Due in over one to five years                  |   |               | 1,011  |   |                |   | 1,005 |   |   |   | 3,663 |   |   |   | 3,733 |   |
|   Due in over five to ten years                  |   |               | ----   |   |                |   | ---- |   |   |   | 10,778 |   |   |   | 10,982 |   |
|   Due after ten years                            |   |               | ----   |   |                |   | ---- |   |   |   | 9,387 |   |   |   | 9,653 |   |
|   Agency mortgage-backed securities, residential |   |               | 89,146 |   |                |   | 91,252 |   |   |   | 20 |   |   |   | 20 |   |
|       Total debt securities  |   | $                  | 91,658 |   |                | $      | 93,758 |   |   | $ | 24,269 |   |   | $ | 24,815 |   |

| Less Than 12 Months |   | 12 Months or More |   | Total |
|---------------------|--------|-------------------|--------|-------|

| June 30, 2012                               |   | FairValue |   |   | Unrealized Loss |   |   | FairValue |   |   | Unrealized Loss |   |   | FairValue |   |   | Unrealized Loss |   |
|--------------------------------------------------|--------|-----------|--------|--------|-----------------|--------|--------|-----------|--------|--------|-----------------|--------|--------|-----------|--------|--------|----------------------|--------|
| Securities Available for Sale                    |   |      |   |   |            |   |   |      |   |   |            |   |   |      |   |   |                 |   |
| U.S. Government sponsored                        |   |      |   |   |            |   |   |      |   |   |            |   |   |      |   |   |                 |   |
|   entity securities                    |   | $         | 1,005  |   |            | $      | (6     | )         |   | $      | ----            |   |   | $         | ----   |   |                 | $      | 1,005 |   |   | $ | (6 | ) |
| Agency mortgage-backed                           |   |      |   |   |            |   |   |      |   |   |            |   |   |      |   |   |                 |   |   |   |   |   |   |   |
|   securities, residential              |   |      | 12,387 |   |            |   | (21    | )         |   |   | ----            |   |   |      | ----   |   |                 |   | 12,387 |   |   |   | (21 | ) |
|     Total available for sale |   | $         | 13,392 |   |            | $      | (27    | )         |   | $      | ----            |   |   | $         | ----   |   |                 | $      | 13,392 |   |   | $ | (27 | ) |

|                                           |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total     |   |
|------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|                                           |   | FairValue           |   |   | Unrecognized Loss |   |   | FairValue |   |   | Unrecognized Loss |   |   | FairValue |   |   | Unrecognized Loss |   |
| Securities Held to Maturity                    |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and                      |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
|   political subdivisions             |   | $                   | 2,927  |   |              | $      | (37    | )         |   | $ | 1,595 |   |   | $ | (33 | ) |   | $ | 4,522 |   |   | $ | (70 | ) |
|     Total held to maturity |   | $                   | 2,927  |   |              | $      | (37    | )         |   | $ | 1,595 |   |   | $ | (33 | ) |   | $ | 4,522 |   |   | $ | (70 | ) |

----

| Less Than 12 Months |   | 12 Months or More |   | Total |   |
|---------------------|--------|-------------------|--------|-------|--------|

| December 31, 2011                           |   | FairValue |   |   | Unrealized Loss |   |   | FairValue |   |   | Unrealized Loss |   |   | FairValue |   |   | Unrealized Loss |   |
|--------------------------------------------------|--------|-----------|--------|--------|-----------------|--------|--------|-----------|--------|--------|-----------------|--------|--------|-----------|--------|--------|----------------------|--------|
| Securities Available for Sale                    |   |      |   |   |            |   |   |      |   |   |            |   |   |      |   |   |                 |   |
| Agency mortgage-backed                           |   |      |   |   |            |   |   |      |   |   |            |   |   |      |   |   |                 |   |
|   securities, residential              |   | $         | 7,621  |   |            | $      | (12    | )         |   | $      | ----            |   |   | $         | ----   |   |                 | $      | 7,621 |   |   | $ | (12 | ) |
|     Total available for sale |   | $         | 7,621  |   |            | $      | (12    | )         |   | $      | ----            |   |   | $         | ----   |   |                 | $      | 7,621 |   |   | $ | (12 | ) |

|                                           | Less Than 12 Months |      |   | 12 Months or More |              |   | Total  |      |
|------------------------------------------------|---------------------|-----------|--------|-------------------|-------------------|--------|--------|-----------|
|                                           |                | FairValue |   |              | Unrecognized Loss |   |   | FairValue |   |   | Unrecognized Loss |   |   | FairValue |   |   | Unrecognized Loss |   |
| Securities Held to Maturity                    |                |      |   |              |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and                      |                |      |   |              |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
|   political subdivisions             |                | $         | 664    |              |              | $      | (21    | )         |   | $ | 3,557 |   |   | $ | (538 | ) |   | $ | 4,221 |   |   | $ | (559 | ) |
|     Total held to maturity |                | $         | 664    |              |              | $      | (21    | )         |   | $ | 3,557 |   |   | $ | (538 | ) |   | $ | 4,221 |   |   | $ | (559 | ) |

| Loans are comprised of the following:      |   | June 30, |    |   | December 31, |   |
|--------------------------------------------|--------|----------|---------|--------|--------------|--------|
|                                       |   | 2012     |    |   | 2011         |   |
| Residential real estate                    |   | $        | 233,130 |   |         | $      | 238,490 |   |
| Commercial real estate:                    |   |     |    |   |         |   |   |   |
|     Owner-occupied     |   |     | 110,271 |   |         |   | 132,303 |   |
|     Nonowner-occupied  |   |     | 49,898  |   |         |   | 53,681 |   |
|     Construction       |   |     | 23,740  |   |         |   | 21,471 |   |
| Commercial and industrial                  |   |     | 45,982  |   |         |   | 45,200 |   |
| Consumer:                                  |   |     |    |   |         |   |   |   |
|     Automobile         |   |     | 42,284  |   |         |   | 45,702 |   |
|     Home equity        |   |     | 19,164  |   |         |   | 20,507 |   |
|     Other              |   |     | 39,605  |   |         |   | 40,954 |   |
|                                       |   |     | 564,074 |   |         |   | 598,308 |   |
| Less:  Allowance for loan losses |   |     | 7,527   |   |         |   | 7,344 |   |
|                                       |   |     |    |   |         |   |   |   |
| Loans, net                                 |   | $        | 556,547 |   |         | $      | 590,964 |   |

| June 30, 2012                                     |   | ResidentialReal Estate |   |   | CommercialReal Estate |   |   | Commercialand Industrial |   |   | Consumer |   |   | Total  |   |
|--------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------------------------|--------|--------|----------|--------|--------|--------|--------|
| Allowance for loan losses:                             |   |                   |   |   |                  |   |   |                     |   |   |     |   |   |   |   |
|     Beginning balance              |   | $                      | 1,491  |   |                  | $      | 3,423  |                     |   | $      | 623      |   |   | $      | 1,310  |   |   | $ | 6,847 |   |
|     Provision for loan losses      |   |                   | 18     |   |                  |   | 1,004  |                     |   |   | (319     | )      |   |   | (179   | ) |   |   | 524 |   |
|     Loans charged off              |   |                   | (85    | )      |                  |   | (62    | )                        |   |   | ----     |   |   |   | (298   | ) |   |   | (445 | ) |
|     Recoveries                     |   |                   | 19     |   |                  |   | 4      |                     |   |   | 349      |   |   |   | 229    |   |   |   | 601 |   |
|     Total ending allowance balance |   | $                      | 1,443  |   |                  | $      | 4,369  |                     |   | $      | 653      |   |   | $      | 1,062  |   |   | $ | 7,527 |   |

| June 30, 2011                                     |   | ResidentialReal Estate |   |   | CommercialReal Estate |   |   | Commercialand Industrial |   |   | Consumer |   |   | Total  |   |
|--------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------------------------|--------|--------|----------|--------|--------|--------|--------|
| Allowance for loan losses:                             |   |                   |   |   |                  |   |   |                     |   |   |     |   |   |   |   |
|     Beginning balance              |   | $                      | 1,337  |   |                  | $      | 4,251  |                     |   | $      | 1,140    |   |   | $      | 1,324  |   |   | $ | 8,052 |   |
|     Provision for loan losses      |   |                   | 489    |   |                  |   | (116   | )                        |   |   | 421      |   |   |   | (35    | ) |   |   | 759 |   |
|     Loans charged off              |   |                   | (722   | )      |                  |   | (1,547 | )                        |   |   | (862     | )      |   |   | (330   | ) |   |   | (3,461 | ) |
|     Recoveries                     |   |                   | 29     |   |                  |   | 804    |                     |   |   | 71       |   |   |   | 225    |   |   |   | 1,129 |   |
|     Total ending allowance balance |   | $                      | 1,133  |   |                  | $      | 3,392  |                     |   | $      | 770      |   |   | $      | 1,184  |   |   | $ | 6,479 |   |

----

| June 30, 2012                                     |   | ResidentialReal Estate |   |   | CommercialReal Estate |   |   | Commercialand Industrial |   |   | Consumer |   |   | Total  |   |
|--------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------------------------|--------|--------|----------|--------|--------|--------|--------|
| Allowance for loan losses:                             |   |                   |   |   |                  |   |   |                     |   |   |     |   |   |   |   |
|     Beginning balance              |   | $                      | 1,730  |   |                  | $      | 3,623  |                     |   | $      | 636      |   |   | $      | 1,355  |   |   | $ | 7,344 |   |
|     Provision for loan losses      |   |                   | 295    |   |                  |   | 1,896  |                     |   |   | (407     | )      |   |   | 56     |   |   |   | 1,840 |   |
|     Loans charged off              |   |                   | (678   | )      |                  |   | (1,158 | )                        |   |   | (70      | )      |   |   | (817   | ) |   |   | (2,723 | ) |
|     Recoveries                     |   |                   | 96     |   |                  |   | 8      |                     |   |   | 494      |   |   |   | 468    |   |   |   | 1,066 |   |
|     Total ending allowance balance |   | $                      | 1,443  |   |                  | $      | 4,369  |                     |   | $      | 653      |   |   | $      | 1,062  |   |   | $ | 7,527 |   |

| June 30, 2011                                     |   | ResidentialReal Estate |   |   | CommercialReal Estate |   |   | Commercialand Industrial |   |   | Consumer |   |   | Total  |   |
|--------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------------------------|--------|--------|----------|--------|--------|--------|--------|
| Allowance for loan losses:                             |   |                   |   |   |                  |   |   |                     |   |   |     |   |   |   |   |
|     Beginning balance              |   | $                      | 1,051  |   |                  | $      | 3,083  |                     |   | $      | 3,795    |   |   | $      | 1,457  |   |   | $ | 9,386 |   |
|     Provision for loan losses      |   |                   | 1,014  |   |                  |   | 985    |                     |   |   | 1,605    |   |   |   | 99     |   |   |   | 3,703 |   |
|     Loans charged off              |   |                   | (969   | )      |                  |   | (1,587 | )                        |   |   | (4,701   | )      |   |   | (747   | ) |   |   | (8,004 | ) |
|     Recoveries                     |   |                   | 37     |   |                  |   | 911    |                     |   |   | 71       |   |   |   | 375    |   |   |   | 1,394 |   |
|     Total ending allowance balance |   | $                      | 1,133  |   |                  | $      | 3,392  |                     |   | $      | 770      |   |   | $      | 1,184  |   |   | $ | 6,479 |   |

| June 30, 2012                                                                                     |   | ResidentialReal Estate |    |   | CommercialReal Estate |   |    | Commercialand Industrial |   |   | Consumer |   |   | Total  |    |
|--------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|---------|--------------------------|--------|--------|----------|--------|--------|--------|---------|
| Allowance for loan losses:                                                                             |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |
|     Ending allowance balance attributable to loans:                                |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |
|         Individually evaluated for impairment                  |   | $                      | 128     |   |                  | $      | 1,845   |                     |   | $      | ----     |   |   | $      | ----    |   |   | $ | 1,973 |   |
|         Collectively evaluated for impairment                  |   |                   | 1,315   |   |                  |   | 2,524   |                     |   |   | 653      |   |   |   | 1,062   |   |   |   | 5,554 |   |
|             Total ending allowance balance |   | $                      | 1,443   |   |                  | $      | 4,369   |                     |   | $      | 653      |   |   | $      | 1,062   |   |   | $ | 7,527 |   |
|                                                                                                   |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |   |   |   |   |   |
| Loans:                                                                                                 |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |   |   |   |   |   |
|         Loans individually evaluated for impairment            |   | $                      | 1,454   |   |                  | $      | 13,104  |                     |   | $      | ----     |   |   | $      | 242     |   |   | $ | 14,800 |   |
|         Loans collectively evaluated for impairment            |   |                   | 231,676 |   |                  |   | 170,805 |                     |   |   | 45,982   |   |   |   | 100,811 |   |   |   | 549,274 |   |
|             Total ending loans balance     |   | $                      | 233,130 |   |                  | $      | 183,909 |                     |   | $      | 45,982   |   |   | $      | 101,053 |   |   | $ | 564,074 |   |

| December 31, 2011                                                                                 |   | ResidentialReal Estate |    |   | CommercialReal Estate |   |    | Commercialand Industrial |   |   | Consumer |   |   | Total  |    |
|--------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|---------|--------------------------|--------|--------|----------|--------|--------|--------|---------|
| Allowance for loan losses:                                                                             |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |
|     Ending allowance balance attributable to loans:                                |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |
|         Individually evaluated for impairment                  |   | $                      | 130     |   |                  | $      | 525     |                     |   | $      | ----     |   |   | $      | ----    |   |   | $ | 655 |   |
|         Collectively evaluated for impairment                  |   |                   | 1,730   |   |                  |   | 2,968   |                     |   |   | 636      |   |   |   | 1,355   |   |   |   | 6,689 |   |
|             Total ending allowance balance |   | $                      | 1,860   |   |                  | $      | 3,493   |                     |   | $      | 636      |   |   | $      | 1,355   |   |   | $ | 7,344 |   |
|                                                                                                   |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |   |   |   |   |   |
| Loans:                                                                                                 |   |                   |    |   |                  |   |    |                     |   |   |     |   |   |   |    |   |   |   |   |   |
|         Loans individually evaluated for impairment            |   | $                      | 1,505   |   |                  | $      | 9,733   |                     |   | $      | 334      |   |   | $      | ----    |   |   | $ | 11,572 |   |
|         Loans collectively evaluated for impairment            |   |                   | 225,404 |   |                  |   | 209,303 |                     |   |   | 44,866   |   |   |   | 107,163 |   |   |   | 586,736 |   |
|             Total ending loans balance     |   | $                      | 226,909 |   |                  | $      | 219,036 |                     |   | $      | 45,200   |   |   | $      | 107,163 |   |   | $ | 598,308 |   |

----

| Six months ended June 30, 2012                                           |   | Unpaid Principal Balance |   |   | RecordedInvestment |   |   | Allowance for Loan Losses Allocated |   |   | Average Impaired Loans |   |   | Interest Income Recognized |   |   | Cash Basis Interest Recognized |   |
|-------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------|--------|--------|-------------------------------------|--------|--------|------------------------|--------|--------|----------------------------|--------|--------|--------------------------------|--------|
| With no related allowance recorded:                                           |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |
|     Residential real estate                               |   | $                        | 1,174  |   |               | $      | 1,034  |                                |   | $      | ----                   |   |   | $                          | 886    |   |                           | $      | 18 |   |   | $ | 13 |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Owner-occupied                |   |                     | 7,410  |   |               |   | 7,159  |                                |   |   | ----                   |   |   |                       | 5,631  |   |                           |   | 264 |   |   |   | 244 |   |
|         Nonowner-occupied             |   |                     | 1,790  |   |               |   | 889    |                                |   |   | ----                   |   |   |                       | 934    |   |                           |   | 24 |   |   |   | 23 |   |
|         Construction                  |   |                     | 675    |   |               |   | 395    |                                |   |   | ----                   |   |   |                       | 488    |   |                           |   | 6 |   |   |   | 6 |   |
|     Consumer:                                             |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Automobile                    |   |                     | 22     |   |               |   | 22     |                                |   |   | ----                   |   |   |                       | 15     |   |                           |   | 1 |   |   |   | 1 |   |
|         Home equity                   |   |                     | 220    |   |               |   | 220    |                                |   |   | ----                   |   |   |                       | 147    |   |                           |   | 5 |   |   |   | 5 |   |
| With an allowance recorded:                                                   |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|     Residential real estate                               |   |                     | 420    |   |               |   | 420    |                                |   |   | 128                    |   |   |                       | 420    |   |                           |   | 17 |   |   |   | 13 |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Owner-occupied                |   |                     | 3,614  |   |               |   | 3,614  |                                |   |   | 1,207                  |   |   |                       | 3,529  |   |                           |   | 77 |   |   |   | 69 |   |
|         Nonowner-occupied             |   |                     | 1,298  |   |               |   | 1,047  |                                |   |   | 638                    |   |   |                       | 1,198  |   |                           |   | 18 |   |   |   | 17 |   |
|             Total |   | $                        | 16,623 |   |               | $      | 14,800 |                                |   | $      | 1,973                  |   |   | $                          | 13,248 |   |                           | $      | 430 |   |   | $ | 391 |   |

| Six months ended June 30, 2011                                           |   | Unpaid Principal Balance |   |   | RecordedInvestment |   |   | Allowance for Loan Losses Allocated |   |   | Average Impaired Loans |   |   | Interest Income Recognized |   |   | Cash Basis Interest Recognized |   |
|-------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------|--------|--------|-------------------------------------|--------|--------|------------------------|--------|--------|----------------------------|--------|--------|--------------------------------|--------|
| With no related allowance recorded:                                           |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |
|     Residential real estate                               |   | $                        | 1,161  |   |               | $      | 968    |                                |   | $      | ----                   |   |   | $                          | 1,065  |   |                           | $      | 26 |   |   | $ | 17 |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Owner-occupied                |   |                     | 7,713  |   |               |   | 7,008  |                                |   |   | ----                   |   |   |                       | 7,309  |   |                           |   | 239 |   |   |   | 232 |   |
|         Nonowner-occupied             |   |                     | 1,361  |   |               |   | 1,361  |                                |   |   | ----                   |   |   |                       | 1,361  |   |                           |   | 22 |   |   |   | 22 |   |
|         Construction                  |   |                     | 679    |   |               |   | 679    |                                |   |   | ----                   |   |   |                       | 679    |   |                           |   | 19 |   |   |   | 17 |   |
|     Commercial and industrial                             |   |                     | 7,257  |   |               |   | 3,139  |                                |   |   | ----                   |   |   |                       | 4,986  |   |                           |   | 192 |   |   |   | 159 |   |
| With an allowance recorded:                                                   |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Nonowner-occupied             |   |                     | 2,423  |   |               |   | 2,423  |                                |   |   | 424                    |   |   |                       | 2,423  |   |                           |   | 70 |   |   |   | 60 |   |
|             Total |   | $                        | 20,594 |   |               | $      | 15,578 |                                |   | $      | 424                    |   |   | $                          | 17,823 |   |                           | $      | 568 |   |   | $ | 507 |   |

| Year ended December  31, 2011                                  |   | Unpaid Principal Balance |   |   | RecordedInvestment |   |   | Allowance for Loan Losses Allocated |   |   | Average Impaired Loans |   |   | Interest Income Recognized |   |   | Cash Basis Interest Recognized |   |
|-------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------|--------|--------|-------------------------------------|--------|--------|------------------------|--------|--------|----------------------------|--------|--------|--------------------------------|--------|
| With no related allowance recorded:                                           |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |
|     Residential real estate                               |   | $                        | 1,136  |   |               | $      | 1,085  |                                |   | $      | ----                   |   |   | $                          | 748    |   |                           | $      | 36 |   |   | $ | 31 |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Owner-occupied                |   |                     | 5,713  |   |               |   | 5,470  |                                |   |   | ----                   |   |   |                       | 5,510  |   |                           |   | 325 |   |   |   | 317 |   |
|         Nonowner-occupied             |   |                     | 1,192  |   |               |   | 1,192  |                                |   |   | ----                   |   |   |                       | 1,247  |   |                           |   | 56 |   |   |   | 49 |   |
|     Commercial and industrial                             |   |                     | 614    |   |               |   | 334    |                                |   |   | ----                   |   |   |                       | 483    |   |                           |   | 40 |   |   |   | 40 |   |
| With an allowance recorded:                                                   |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|     Residential real estate                               |   |                     | 420    |   |               |   | 420    |                                |   |   | 130                    |   |   |                       | 84     |   |                           |   | 27 |   |   |   | 22 |   |
|     Commercial real estate:                               |   |                     |   |   |               |   |   |                                |   |   |                   |   |   |                       |   |   |                           |   |   |   |   |   |   |   |
|         Nonowner-occupied             |   |                     | 2,396  |   |               |   | 2,396  |                                |   |   | 437                    |   |   |                       | 2,414  |   |                           |   | 128 |   |   |   | 118 |   |
|         Construction                  |   |                     | 675    |   |               |   | 675    |                                |   |   | 88                     |   |   |                       | 677    |   |                           |   | 35 |   |   |   | 31 |   |
|             Total |   | $                        | 12,146 |   |               | $      | 11,572 |                                |   | $      | 655                    |   |   | $                          | 11,163 |   |                           | $      | 647 |   |   | $ | 608 |   |

----

| June 30, 2012                                         |   | Loans Past Due90 Days AndStill Accruing |   |   |  Nonaccrual |   |
|-------------------------------------------------------|--------|-----------------------------------------|--------|--------|------------------|--------|
|                                                  |   |                                    |   |   |             |   |
| Residential real estate                               |   | $                                       | 187    |   |             | $      | 2,494 |   |
| Commercial real estate:                               |   |                                    |   |   |             |   |   |   |
|     Owner-occupied                |   |                                    | ----   |   |             |   | 38 |   |
|     Nonowner-occupied             |   |                                    | ----   |   |             |   | 959 |   |
|     Construction                  |   |                                    | ----   |   |             |   | 1,574 |   |
| Consumer:                                             |   |                                    |   |   |             |   |   |   |
|     Automobile                    |   |                                    | 22     |   |             |   | 11 |   |
|     Home equity                   |   |                                    | ----   |   |             |   | 5 |   |
|     Other                         |   |                                    | 56     |   |             |   | 2 |   |
|         Total |   | $                                       | 265    |   |             | $      | 5,083 |   |

| December 31, 2011                                     |   | Loans Past Due90 Days AndStill Accruing |   |   |  Nonaccrual |   |
|-------------------------------------------------------|--------|-----------------------------------------|--------|--------|------------------|--------|
|                                                  |   |                                    |   |   |             |   |
| Residential real estate                               |   | $                                       | 439    |   |             | $      | 2,536 |   |
| Commercial real estate:                               |   |                                    |   |   |             |   |   |   |
|     Owner-occupied                |   |                                    | ----   |   |             |   | 125 |   |
|     Nonowner-occupied             |   |                                    | ----   |   |             |   | ---- |   |
| Consumer:                                             |   |                                    |   |   |             |   |   |   |
|     Automobile                    |   |                                    | 13     |   |             |   | 12 |   |
|     Home equity                   |   |                                    | ----   |   |             |   | 5 |   |
|     Other                         |   |                                    | 7      |   |             |   | ---- |   |
|         Total |   | $                                       | 459    |   |             | $      | 2,678 |   |

| June 30, 2012                                         |   | 30-59DaysPast Due |   |   | 60-89DaysPast Due |   |   | 90 DaysOr MorePast Due |   |   | TotalPast Due |   |   | Loans NotPast Due |   |   |  Total |   |
|-------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|------------------------|--------|--------|---------------|--------|--------|-------------------|--------|--------|-------------|--------|
|                                                  |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |
| Residential real estate                               |   | $                 | 1,981  |   |              | $      | 1,382  |                   |   | $      | 2,681         |   |   | $                 | 6,044  |   |        | $      | 227,086 |   |   | $ | 233,130 |   |
| Commercial real estate:                               |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |   |   |   |   |   |   |
|     Owner-occupied                |   |              | 1,717  |   |              |   | ----   |                   |   |   | 38            |   |   |              | 1,755  |   |        |   | 108,516 |   |   |   | 110,271 |   |
|     Nonowner-occupied             |   |              | ----   |   |              |   | 472    |                   |   |   | 487           |   |   |              | 959    |   |        |   | 48,939 |   |   |   | 49,898 |   |
|     Construction                  |   |              | ----   |   |              |   | ----   |                   |   |   | 1,574         |   |   |              | 1,574  |   |        |   | 22,166 |   |   |   | 23,740 |   |
| Commercial and industrial                             |   |              | 114    |   |              |   | ----   |                   |   |   | ----          |   |   |              | 114    |   |        |   | 45,868 |   |   |   | 45,982 |   |
| Consumer:                                             |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |   |   |   |   |   |   |
|     Automobile                    |   |              | 516    |   |              |   | 278    |                   |   |   | 32            |   |   |              | 826    |   |        |   | 41,458 |   |   |   | 42,284 |   |
|     Home equity                   |   |              | 165    |   |              |   | ----   |                   |   |   | 5             |   |   |              | 170    |   |        |   | 18,994 |   |   |   | 19,164 |   |
|     Other                         |   |              | 307    |   |              |   | 102    |                   |   |   | 56            |   |   |              | 465    |   |        |   | 39,140 |   |   |   | 39,605 |   |
|         Total |   | $                 | 4,800  |   |              | $      | 2,234  |                   |   | $      | 4,873         |   |   | $                 | 11,907 |   |        | $      | 552,167 |   |   | $ | 564,074 |   |

----

| December 31, 2011                                     |   | 30-59DaysPast Due |   |   | 60-89DaysPast Due |   |   | 90 DaysOr MorePast Due |   |   | TotalPast Due |   |   | Loans NotPast Due |   |   |  Total |   |
|-------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|------------------------|--------|--------|---------------|--------|--------|-------------------|--------|--------|-------------|--------|
|                                                  |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |
| Residential real estate                               |   | $                 | 3,731  |   |              | $      | 1,144  |                   |   | $      | 2,975         |   |   | $                 | 7,850  |   |        | $      | 230,640 |   |   | $ | 238,490 |   |
| Commercial real estate:                               |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |   |   |   |   |   |   |
|     Owner-occupied                |   |              | 182    |   |              |   | ----   |                   |   |   | 125           |   |   |              | 307    |   |        |   | 131,996 |   |   |   | 132,303 |   |
|     Nonowner-occupied             |   |              | ----   |   |              |   | 232    |                   |   |   | ----          |   |   |              | 232    |   |        |   | 53,449 |   |   |   | 53,681 |   |
|     Construction                  |   |              | 204    |   |              |   | ----   |                   |   |   | ----          |   |   |              | 204    |   |        |   | 21,267 |   |   |   | 21,471 |   |
| Commercial and industrial                             |   |              | 171    |   |              |   | 14     |                   |   |   | ----          |   |   |              | 185    |   |        |   | 45,015 |   |   |   | 45,200 |   |
| Consumer:                                             |   |              |   |   |              |   |   |                   |   |   |          |   |   |              |   |   |        |   |   |   |   |   |   |   |
|     Automobile                    |   |              | 864    |   |              |   | 110    |                   |   |   | 13            |   |   |              | 987    |   |        |   | 44,715 |   |   |   | 45,702 |   |
|     Home equity                   |   |              | 75     |   |              |   | 76     |                   |   |   | 5             |   |   |              | 156    |   |        |   | 20,351 |   |   |   | 20,507 |   |
|     Other                         |   |              | 506    |   |              |   | 162    |                   |   |   | 7             |   |   |              | 675    |   |        |   | 40,279 |   |   |   | 40,954 |   |
|         Total |   | $                 | 5,733  |   |              | $      | 1,738  |                   |   | $      | 3,125         |   |   | $                 | 10,596 |   |        | $      | 587,712 |   |   | $ | 598,308 |   |

|                                                                                                                                                                |   | TDR’sPerforming to Modified Terms |   |   | TDR’s NotPerforming to Modified Terms |   |   |  Total TDR’s |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|---------------------------------------------|--------|--------|------------------------------|--------|
| June 30, 2012                                                                                                                                                       |   |                                    |   |   |                                        |   |   |                         |   |
| Residential real estate                                                                                                                                             |   |                                    |   |   |                                        |   |   |                         |   |
|         Interest only payments                                                                                              |   | $                                       | ----   |   |                                        | $      | 252    |                         |   | $ | 252 |   |
|         Rate reduction                                                                                                      |   |                                    | 420    |   |                                        |   | ----   |                         |   |   | 420 |   |
| Commercial real estate:                                                                                                                                             |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|     Owner-occupied                                                                                                                              |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 2,939  |   |                                        |   | 674    |                         |   |   | 3,613 |   |
|         Rate reduction                                                                                                      |   |                                    | 442    |   |                                        |   | ----   |                         |   |   | 442 |   |
|         Maturity extension at lower stated rate          than market rate |   |                                    | 206    |   |                                        |   | ----   |                         |   |   | 206 |   |
|         Reduction of principal and interest payments                                                                        |   |                                    | 4,266  |   |                                        |   | ----   |                         |   |   | 4,266 |   |
|     Nonowner-occupied                                                                                                                           |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 961    |   |                                        |   | 959    |                         |   |   | 1,920 |   |
|     Construction                                                                                                                                |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | ----   |   |                                        |   | 395    |                         |   |   | 395 |   |
|             Total TDR’s                                                                           |   | $                                       | 9,234  |   |                                        | $      | 2,280  |                         |   | $ | 11,514 |   |

----

|                                                                                                                                                                |   | TDR’sPerforming to Modified Terms |   |   | TDR’s NotPerforming to Modified Terms |   |   |  Total TDR’s |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|---------------------------------------------|--------|--------|------------------------------|--------|
| December 31, 2011                                                                                                                                                   |   |                                    |   |   |                                        |   |   |                         |   |
| Residential real estate                                                                                                                                             |   |                                    |   |   |                                        |   |   |                         |   |
|         Interest only payments                                                                                              |   | $                                       | ----   |   |                                        | $      | 283    |                         |   | $ | 283 |   |
|         Rate reduction                                                                                                      |   |                                    | 420    |   |                                        |   | ----   |                         |   |   | 420 |   |
| Commercial real estate:                                                                                                                                             |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|     Owner-occupied                                                                                                                              |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 3,619  |   |                                        |   | ----   |                         |   |   | 3,619 |   |
|         Rate reduction                                                                                                      |   |                                    | 449    |   |                                        |   | ----   |                         |   |   | 449 |   |
|         Maturity extension at lower stated rate          than market rate |   |                                    | 219    |   |                                        |   | ----   |                         |   |   | 219 |   |
|     Nonowner-occupied                                                                                                                           |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 3,357  |   |                                        |   | ----   |                         |   |   | 3,357 |   |
|     Construction                                                                                                                                |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 674    |   |                                        |   | ----   |                         |   |   | 674 |   |
| Commercial and industrial                                                                                                                                           |   |                                    |   |   |                                        |   |   |                         |   |   |   |   |
|         Interest only payments                                                                                              |   |                                    | 334    |   |                                        |   | ----   |                         |   |   | 334 |   |
|             Total TDR’s                                                                           |   | $                                       | 9,072  |   |                                        | $      | 283    |                         |   | $ | 9,355 |   |

|                                                                                         |   | TDR’sPerforming to Modified Terms |   |   | TDR’s NotPerforming to Modified Terms |   |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|---------------------------------------------|--------|
|    Six months ended June 30, 2012                                             |   | Pre-Modification Recorded Investment    |   |   | Post-ModificationRecordedInvestment         |   |   | Pre-Modification Recorded Investment |   |   | Post-ModificationRecordedInvestment |   |
|                                                                                         |   |                                    |   |   |                                        |   |   |   |   |   |   |   |
| Commercial real estate:                                                                      |   |                                    |   |   |                                        |   |   |   |   |   |   |   |
|     Owner-occupied                                                       |   |                                    |   |   |                                        |   |   |   |   |   |   |   |
|         Reduction of principal and interest payments |   | $                                       | 4,308  |   |                                        | $      | 4,266 |   |   | $ | ---- |   |   | $ | ---- |   |
|             Total TDR’s    |   | $                                       | 4,308  |   |                                        | $      | 4,266 |   |   | $ | ---- |   |   | $ | ---- |   |

----

| Special Mention (Loan Grade 8). Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency. These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification. These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies. These loans are considered bankable assets with no apparent loss of principal or interest envisioned. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Substandard (Loan Grade 9). Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Doubtful (Loan Grade 10). Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| June 30, 2012                                         |   | Pass   |    |   | Criticized |   |   | Classified |   |   | Total  |   |
|-------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|------------|--------|--------|--------|--------|
| Commercial real estate:                               |   |   |    |   |       |   |   |       |   |   |   |   |
|     Owner-occupied                |   | $      | 85,829  |   |       | $      | 13,152 |       |   | $      | 11,290 |   |   | $ | 110,271 |   |
|     Nonowner-occupied             |   |   | 33,931  |   |       |   | 8,448  |       |   |   | 7,519  |   |   |   | 49,898 |   |
|     Construction                  |   |   | 22,166  |   |       |   | ----   |       |   |   | 1,574  |   |   |   | 23,740 |   |
| Commercial and industrial                             |   |   | 38,809  |   |       |   | 75     |       |   |   | 7,098  |   |   |   | 45,982 |   |
|         Total |   | $      | 180,735 |   |       | $      | 21,675 |       |   | $      | 27,481 |   |   | $ | 229,891 |   |

| December 31, 2011                                     |   | Pass   |    |   | Criticized |   |   | Classified |   |   | Total  |   |
|-------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|------------|--------|--------|--------|--------|
| Commercial real estate:                               |   |   |    |   |       |   |   |       |   |   |   |   |
|     Owner-occupied                |   | $      | 103,743 |   |       | $      | 15,030 |       |   | $      | 13,530 |   |   | $ | 132,303 |   |
|     Nonowner-occupied             |   |   | 30,375  |   |       |   | 12,815 |       |   |   | 10,491 |   |   |   | 53,681 |   |
|     Construction                  |   |   | 19,519  |   |       |   | ----   |       |   |   | 1,952  |   |   |   | 21,471 |   |
| Commercial and industrial                             |   |   | 36,633  |   |       |   | 3,250  |       |   |   | 5,317  |   |   |   | 45,200 |   |
|         Total |   | $      | 190,270 |   |       | $      | 31,095 |       |   | $      | 31,290 |   |   | $ | 252,655 |   |

|                          |   | Consumer   |   |   |        |   |   |   |   |
|-------------------------------|--------|------------|--------|--------|-------------|--------|--------|--------|--------|
|   June 30, 2012          |   | Automobile |   |   | Home Equity |   |   | Other  |   |   | ResidentialReal Estate |   |   | Total |   |
|                          |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Performing                    |   | $          | 42,251 |   |        | $      | 19,159 |   |   | $ | 39,547 |   |   | $ | 230,449 |   |   | $ | 331,406 |   |
| Nonperforming                 |   |       | 33     |   |        |   | 5      |   |   |   | 58 |   |   |   | 2,681 |   |   |   | 2,777 |   |
|     Total |   | $          | 42,284 |   |        | $      | 19,164 |   |   | $ | 39,605 |   |   | $ | 233,130 |   |   | $ | 334,183 |   |

|                          |   | Consumer   |   |   |        |   |   |   |   |
|-------------------------------|--------|------------|--------|--------|-------------|--------|--------|--------|--------|
|   December 31, 2011      |   | Automobile |   |   | Home Equity |   |   | Other  |   |   | ResidentialReal Estate |   |   | Total |   |
|                          |   |       |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Performing                    |   | $          | 45,677 |   |        | $      | 20,502 |   |   | $ | 40,947 |   |   | $ | 235,515 |   |   | $ | 342,641 |   |
| Nonperforming                 |   |       | 25     |   |        |   | 5      |   |   |   | 7 |   |   |   | 2,975 |   |   |   | 3,012 |   |
|     Total |   | $          | 45,702 |   |        | $      | 20,507 |   |   | $ | 40,954 |   |   | $ | 238,490 |   |   | $ | 345,653 |   |

----

|              |   | FHLB Borrowings |   |   | Promissory Notes |   |   | FRB Notes |   |   | Totals |   |
|-------------------|--------|-----------------|--------|--------|------------------|--------|--------|-----------|--------|--------|--------|--------|
|              |   |            |   |   |             |   |   |      |   |   |   |   |
| June 30, 2012     |   | $               | 16,641 |   |             | $      | 3,448  |      |   | $      | ----   |   |   | $ | 20,089 |   |
| December 31, 2011 |   | $               | 16,548 |   |             | $      | 3,748  |      |   | $      | ----   |   |   | $ | 20,296 |   |

|       |   | FHLBBorrowings |   |   | PromissoryNotes |   |   | FRBNotes |   |   | Totals |   |
|------------|--------|----------------|--------|--------|-----------------|--------|--------|----------|--------|--------|--------|--------|
|       |   |           |   |   |            |   |   |     |   |   |   |   |
| 2012       |   | $              | 1,110  |   |            | $      | 1,887  |     |   | $      | ----   |   |   | $ | 2,997 |   |
| 2013       |   |           | 3,833  |   |            |   | 166    |     |   |   | ----   |   |   |   | 3,999 |   |
| 2014       |   |           | 3,724  |   |            |   | 1,395  |     |   |   | ----   |   |   |   | 5,119 |   |
| 2015       |   |           | 1,129  |   |            |   | ----   |     |   |   | ----   |   |   |   | 1,129 |   |
| 2016       |   |           | 1,047  |   |            |   | ----   |     |   |   | ----   |   |   |   | 1,047 |   |
| Thereafter |   |           | 5,798  |   |            |   | ----   |     |   |   | ----   |   |   |   | 5,798 |   |
|       |   | $              | 16,641 |   |            | $      | 3,448  |     |   | $      | ----   |   |   | $ | 20,089 |   |

----

|                |   | Three Months Ended June 30, 2012 |    |
|---------------------|--------|----------------------------------|---------|
|                |   |                             |    |   |   |   |   |   |   |
|                |   | Banking                          |    |   | ConsumerFinance |   |   | Total Company |   |
|                |   |                             |    |   |   |   |   |   |   |
| Net interest income |   | $                                | 7,426   |   |   | $ | 627 |   |   | $ | 8,053 |   |
| Provision expense   |   | $                                | 576     |   |   | $ | (52 | )  |   | $ | 524 |   |
| Noninterest income  |   | $                                | 1,823   |   |   | $ | 151 |   |   | $ | 1,974 |   |
| Noninterest expense |   | $                                | 6,588   |   |   | $ | 574 |   |   | $ | 7,162 |   |
| Tax expense         |   | $                                | 536     |   |   | $ | 86 |   |   | $ | 622 |   |
| Net income          |   | $                                | 1,549   |   |   | $ | 170 |   |   | $ | 1,719 |   |
| Assets              |   | $                                | 787,885 |   |   | $ | 13,487 |   |   | $ | 801,372 |   |

|                |   | Three Months Ended June 30, 2011 |    |
|---------------------|--------|----------------------------------|---------|
|                |   |                             |    |   |   |   |   |   |   |
|                |   | Banking                          |    |   | ConsumerFinance |   |   | Total Company |   |
|                |   |                             |    |   |   |   |   |   |   |
| Net interest income |   | $                                | 7,549   |   |   | $ | 605 |   |   | $ | 8,154 |   |
| Provision expense   |   | $                                | 822     |   |   | $ | (63 | )  |   | $ | 759 |   |
| Noninterest income  |   | $                                | 1,540   |   |   | $ | 147 |   |   | $ | 1,687 |   |
| Noninterest expense |   | $                                | 6,424   |   |   | $ | 557 |   |   | $ | 6,981 |   |
| Tax expense         |   | $                                | 459     |   |   | $ | 87 |   |   | $ | 546 |   |
| Net income          |   | $                                | 1,384   |   |   | $ | 171 |   |   | $ | 1,555 |   |
| Assets              |   | $                                | 825,051 |   |   | $ | 13,239 |   |   | $ | 838,290 |   |

|                |   | Six Months Ended June 30, 2012 |    |
|---------------------|--------|--------------------------------|---------|
|                |   |                           |    |   |   |   |   |   |   |
|                |   | Banking                        |    |   | ConsumerFinance |   |   | Total Company |   |
|                |   |                           |    |   |   |   |   |   |   |
| Net interest income |   | $                              | 15,083  |   |   | $ | 1,882 |   |   | $ | 16,965 |   |
| Provision expense   |   | $                              | 1,787   |   |   | $ | 53 |   |   | $ | 1,840 |   |
| Noninterest income  |   | $                              | 4,888   |   |   | $ | 565 |   |   | $ | 5,453 |   |
| Noninterest expense |   | $                              | 13,315  |   |   | $ | 1,179 |   |   | $ | 14,494 |   |
| Tax expense         |   | $                              | 1,332   |   |   | $ | 411 |   |   | $ | 1,743 |   |
| Net income          |   | $                              | 3,537   |   |   | $ | 804 |   |   | $ | 4,341 |   |
| Assets              |   | $                              | 787,885 |   |   | $ | 13,487 |   |   | $ | 801,372 |   |

----

|                |   | Six Months Ended June 30, 2011 |    |
|---------------------|--------|--------------------------------|---------|
|                |   |                           |    |   |   |   |   |   |   |
|                |   | Banking                        |    |   | ConsumerFinance |   |   | Total Company |   |
|                |   |                           |    |   |   |   |   |   |   |
| Net interest income |   | $                              | 15,551  |   |   | $ | 1,806 |   |   | $ | 17,357 |   |
| Provision expense   |   | $                              | 6,645   |   |   | $ | 58 |   |   | $ | 3,703 |   |
| Noninterest income  |   | $                              | 4,613   |   |   | $ | 733 |   |   | $ | 5,346 |   |
| Noninterest expense |   | $                              | 12,976  |   |   | $ | 1,103 |   |   | $ | 14,079 |   |
| Tax expense         |   | $                              | 867     |   |   | $ | 466 |   |   | $ | 1,333 |   |
| Net income          |   | $                              | 2,676   |   |   | $ | 912 |   |   | $ | 3,588 |   |
| Assets              |   | $                              | 825,051 |   |   | $ | 13,239 |   |   | $ | 838,290 |   |

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

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

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|                           |   | Company Ratios |   |   |     |   |
|--------------------------------|--------|----------------|--------|--------|----------|--------|
|                           |   | 6/30/12        |   |   | 12/31/11 |   |   | RegulatoryMinimum |   |
| Tier 1 risk-based capital      |   |           | 15.9%  |   |     |   | 14.4% |   |   |   | 4.00% |   |
| Total risk-based capital ratio |   |           | 17.2%  |   |     |   | 15.6% |   |   |   | 8.00% |   |
| Leverage ratio                 |   |           | 10.4%  |   |     |   | 10.3% |   |   |   | 4.00% |   |

----

----

----

|  Change in Interest Rates        in Basis Points        | June 30, 2012Percentage Change in  Net Interest Income   | December 31, 2011Percentage Change in  Net Interest Income   |
|-----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|----------------------------------------------------------------------------------|
| +300                                                                                                                                    | (1.55%)                                                                      |   (2.89%)                                                              |
| +200                                                                                                                                    | (.80%)                                                                       | (1.75%)                                                                          |
| +100                                                                                                                                    | (.26%)                                                                       | (.76%)                                                                           |
| -100                                                                                                                                    | (2.15%)                                                                      | (2.36%)                                                                          |

----

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|   |                       |   | OHIO VALLEY BANC CORP.                                                    |
|--------|----------------------------|--------|--------------------------------------------------------------------------------|
| Date:  |   August 9, 2012 | By:    | /s/Thomas E. Wiseman                                                      |
|   |                       |   |       Thomas E. Wiseman                          |
|   |                       |   |       President and Chief Executive Officer      |
|   |                       |   |                                                                           |
| Date:  |   August 9, 2012 | By:    | /s/Scott W. Shockey                                                       |
|   |                       |   |       Scott W. Shockey                           |
|   |                       |   |       Vice President and Chief Financial Officer |

----

| 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 (as amended by the shareholders on May 12, 2010): Incorporated herein by reference to Exhibit 3(b) to Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010 (SEC File No. 0-20914).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4              |   | Agreement to furnish instruments and agreements defining rights of holders of long-term debt: 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 101*           |   | The following financial statements from Ohio Valley’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed on August 9, 2012, formatted in XBRL:  (i) Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011; (ii) Consolidated Statements of Income and Comprehensive Income for the three months and six months ended June 30, 2012 and 2011 (unaudited); (iii) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months and six months ended June 30, 2012 and 2011 (unaudited); (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (unaudited); and (v) Notes to Consolidated Financial Statements (to be filed no later than 30 days after the date this report is filed). * |