**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K**


**ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**





For
      the
      Fiscal Year Ended December 31, 2006





Commission
      File Number 0-26876





**OAK
      HILL FINANCIAL, INC.**


(Exact
      name of Registrant as specified in its charter)








**Ohio**
            
            **31-1010517**(State
                or jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification Number)**14621
                S.R. 93****Jackson,
                OH**
            
            **45640**(Address
                of principal executive offices)
            
            (Zip
                Code)





Registrant’s
      telephone number, including area code: (740) 286-3283





Securities
      pursuant to Section 12(b) of the Act:


None





Securities
      pursuant to Section 12(g) of the Act:


Common
      stock without par value





Check
      if
      the Registrant is a well-known seasoned issuer (as defined in Rule 405 of the
      Securities Act).  Yes o No x





Check
      if
      the Registrant is not required to file reports pursuant to Section 13 or 15(d)
      of the Act.  Yes o No x





Check
      whether the Registrant (1) filed all reports required to be filed by Section
      13
      or 15(d) of the Securities Exchange Act of 1934 during the past twelve months
      (or for such shorter period that the Registrant was required to file such
      reports), and (2) has been subject to such filing requirements for the past
      90
      days. Yes x No o





Check
      if
      disclosure of delinquent filers in response to Item 405 of Regulation S-K is
      not
      contained in this form, and no disclosure will be contained, to best of the
      Registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K.  o





Check
      whether the Registrant is a large accelerated filer, an accelerated filer,
      or a
      non-accelerated filer. See definition of “accelerated filer” and “large
      accelerated filer” in Rule 12b-2 of the Exchange Act.





Large
                accelerated filero
            
            Accelerated
                filerx
            
            Non-accelerated
                filero





Check
      whether the Registrant is a shell company (as defined in Rule 12b-2 of the
      Act).  Yes o No x





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the Registrant computed by reference to the price at which
      the
      common equity was last sold, or the average bid and asked price of such common
      equity, as of June 30, 2006 was $101.4 million. For purposes of this
      calculation, executive officers and directors of the Registrant are considered
      affiliates.





There
      were 5,339,199 shares of the Registrant’s common stock outstanding on March 14,
      2007.





DOCUMENTS
      INCORPORATED BY REFERENCE





Portions
      of the Registrant’s Annual Report to Stockholders for the year ended December
      31, 2006 are incorporated by reference into Parts II and IV.





Portion’s
      of the 2007 Proxy Statement for the Annual Meeting of Stockholders to be held
      April 17, 2007 are incorporated by reference into Part III.







1





**OAK
      HILLFINANCIAL, INC.**


**2006
      FORM 10-K ANNUAL REPORT**





**TABLE
      OF CONTENTS**





PagePART
                I:Item
                1.
            
            Business
            
            3Item
                1A.
            
            Business
                Risks
            
            17Item
                1B.
            
            Unresolved
                Staff Comments
            
            19Item
                2.
            
            Properties
            
            20Item
                3.
            
            Legal
                Proceedings
            
            20Item
                4.
            
            Submission
                of Matters to a Vote of Security
                Holders
            
            21PART
                II:Item
                5.
            
            Market
                for Registrant’s Common Equity, Related Stockholder
                Matters and Issuer Purchases of equity Securities
            
            21Item
                6.
            
            Selected
                Financial Data
            
            24Item
                7.
            
            Management’s
                Discussion and Analysis of Financial Condition and
                Results of Operations
            
            26Item
                7A.
            
            Quantitative
                and Qualitative Disclosures About Market
                Risk
            
            35Item
                8.
            
            Financial
                Statements and Supplementary Data
            
            35Item
                9.
            
            Changes
                in and Disagreements with Accountants on Accounting and
                Financial Disclosure
            
            35Item
                9A.
            
            Controls
                and Procedures
            
            35Item
                9B.
            
            Other
                Information
            
            37PART
                III:Item
                10.
            
            Directors,
                Executive Officers and Corporate
                Governance
            
            37Item
                11.
            
            Executive
                Compensation
            
            37Item
                12.
            
            Security
                Ownership of Certain Beneficial Owners and
                Management
            
            37Item
                13.
            
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            37Item
                14.
            
            Principal
                Accountant Fees and Services
            
            37PART
                IV:Item
                15:
            
            Exhibits,
                Financial Statement Schedules and Reports on Form
                8-K
            
            37Signatures
            
            
            
            40




2
 *Table
            of Contents*





**PART
      I**





**Item
      1.**  **Business**





Oak
      Hill Financial, Inc.





Oak
      Hill
      Financial, Inc., an Ohio corporation (the “Company”) formed in 1981, is a
      financial holding company registered under the Bank Holding Company Act of
      1956,
      as amended (the “Act”), and is subject to regulation by the Federal Reserve
      Board. The Company engages indirectly in the business of commercial banking
      and
      other permissible activities closely related to banking and consumer finance
      lending through six wholly owned subsidiaries, Oak Hill Banks (“Oak Hill”), Oak
      Hill Financial Insurance Agency, Inc. (“OHFI”) and Oak Hill Capital Trusts 1, 2,
      3 and 4 (the “Trusts”). The Company also owns forty-nine percent of Oak Hill
      Title Agency (“Oak Hill Title”) which provides title services for commercial and
      residential real estate transactions. The Company provides management and
      similar services for its subsidiaries. Since it does not conduct any operating
      businesses itself, the Company must depend largely upon its subsidiaries for
      funds with which to pay the expenses of its operation and, to the extent
      applicable, any dividends on its outstanding shares of stock. For further
      information, see Note A of the Notes to Consolidated Financial Statements
      appearing in the Company’s Annual Report to Stockholders, which is incorporated
      by reference in response to this item.





The
      Company faces strong competition from both banking and non-banking institutions.
      Its banking competitors include local and regional banks and bank holding
      companies, as well as some of the largest banking organizations in the United
      States. In addition, other types of financial institutions, such as savings
      and
      loan associations and credit unions, offer a wide range of loan and deposit
      services that are directly competitive with those offered by Oak Hill. The
      consumer is also served by brokerage firms and mutual funds that provide
      checking services, credit cards, and other services similar to those offered
      by
      Oak Hill. Major stores compete for loans by offering credit cards and retail
      installment contracts. It is anticipated that competition from non-bank and
      non-savings and loan organizations will continue to grow.





The
      range
      of services provided by the Company’s subsidiaries to their customers includes
      commercial lending, real estate lending, consumer credit, credit card, other
      personal loan financing, deposits, group health insurance and other employee
      benefits, and title services for commercial and residential real estate
      transactions. Each of the subsidiaries operates under the direction of a Board
      of Directors and officers.





The
      Company’s internet site www.oakf.com contains
      a hyperlink to the Securities and Exchange Commission’s (“SEC”) website, where
      the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
      current reports on Form 8-K, and all amendments, if any, to these reports filed
      pursuant to Sections 13a or 15d of the Securities Exchange Act of 1934 can
      be
      obtained free of charge on EDGAR as soon as reasonably practicable after the
      Company has filed the report with the SEC.





Lending
      Activities





**General.** The
      Company generally makes loans in southern and central Ohio where its branches
      are located. The Company’s principal lending activities are the origination of
      (i) conventional one-to-four family residential loans, and (ii) commercial
      loans, most of which are secured by real estate located in the Company’s primary
      market area. These loan categories accounted for approximately 91% of the
      Company’s net loan portfolio at December 31, 2006. The Company also makes
      consumer loans, including installment loans, home equity lines of credit and
      second mortgages, and offers credit cards.





**Loan
      Portfolio Composition and Activity** .
      The
      following table sets forth the composition of the Company’s loan portfolio in
      dollar amounts and in percentages for each of the last five years, along with
      a
      reconciliation to loans receivable, net of the allowance for loan
      losses.





3
 *Table
            of Contents*




**At
                December 31,****2006**
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002****Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent****(Dollars
                in thousands)**Type
                of loan:Real
                estate mortgage(1)
            
            $
            308,922
            
            
            30.3
            %
            $
            320,674
            
            
            31.6
            %
            $
            270,092
            
            
            29.6
            %
            $
            235,180
            
            
            29.0
            %
            $
            245,794
            
            
            35.0
            %Commercial
                and other
            
            
            615,248
            
            
            60.2
            
            
            599,105
            
            
            59.0
            
            
            584,201
            
            
            64.0
            
            
            513,848
            
            
            63.3
            
            
            391,586
            
            
            55.8Installment
            
            
            107,765
            
            
            10.6
            
            
            106,774
            
            
            10.5
            
            
            68,072
            
            
            7.5
            
            
            71,100
            
            
            8.8
            
            
            72,012
            
            
            10.3Credit
                card
            
            
            2,350
            
            
            0.2
            
            
            2,183
            
            
            0.2
            
            
            2,020
            
            
            0.2
            
            
            1,729
            
            
            0.2
            
            
            1,694
            
            
            0.2Gross
                loans
            
            
            1,034,285
            
            
            101.3
            
            
            1,028,736
            
            
            101.3
            
            
            924,385
            
            
            101.3
            
            
            821,857
            
            
            101.3
            
            
            711,086
            
            
            101.3Less:Allowance
                for loan losses
            
            
            (12,924
            )
            
            (1.3
            )
            
            (13,653
            )
            
            (1.3
            )
            
            (11,847
            )
            
            (1.3
            )
            
            (10,836
            )
            
            (1.3
            )
            
            (9,142
            )
            
            (1.3
            )Total
                loans receivable, net
            
            $
            1,021,361
            
            
            100.0
            %
            $
            1,015,083
            
            
            100.0
            %
            $
            912,538
            
            
            100.0
            %
            $
            811,021
            
            
            100.0
            %
            $
            701,944
            
            
            100.0
            %


(1) Primarily
      residential real estate.




The
      following is maturity information with respect to commercial and other loans
      at
      December 31, 2006.


**After
                one year**
            
            **After
                five years****Less
              than one year**
            
            **through
                five years**
            
            **through
                ten years**
            
            **After
                ten years****Weighted**
            
            
            
            **Weighted**
            
            
            
            **Weighted**
            
            
            
            **Weighted****Average**
            
            
            
            **Average**
            
            
            
            **Average**
            
            
            
            **Average****Amount**
            
            **Yield**
            
            **Amount**
            
            **Yield**
            
            **Amount**
            
            **Yield**
            
            **Amount**
            
            **Yield**
            
            **Total**$
            126,712
            
            
            7.72
            %
            $
            107,034
            
            
            7.81
            %
            $
            115,125
            
            
            6.98
            %
            $
            266,377
            
            
            6.93
            %
            $
            615,248





As
      of
      December 31, 2006, there were $105.9 million fixed-rate and $382.6 million
      variable-rate commercial loans maturing in more than one year.





**Loans
      Secured by One- to Four-Family Real Estate** .
      A
      significant portion of the Company’s lending activity is the origination of
      permanent conventional loans secured by one-to four-family residences located
      within the Company’s primary market area. The Company typically makes adjustable
      rate mortgage loans and holds the loans in portfolio. More than 63% of the
      Company’s portfolio of permanent conventional mortgage loans secured by one-to
      four-family residences are adjustable rate. The Company also underwrites
      fixed-rate residential mortgage loans, and may sell those loans on a
      servicing-retained basis in the secondary market to the Federal Home Loan
      Mortgage Corporation (“FHLMC”) or on a servicing-released basis to another
      financial institution.





The
      Company makes fixed-rate loans on one- to four-family residences up to 100%
      of
      the value of the real estate and improvements (the “loan-to-value” or “LTV”)
      substantially all of which are sold in the secondary market. Residential real
      estate loans are offered by the Company for terms of up to 30 years. The Company
      requires private mortgage insurance on secondary market loans for the amount
      of
      such loans in excess of 80% of the value of the real estate securing such loans.





The
      aggregate amount of the Company’s one-to four-family residential real estate
      loans totaled approximately $308.9 million at December 31, 2006, and represented
      30.3% of net loans at such date. At such date, loans secured by residential
      real
      estate with outstanding balances of approximately $2.3 million, or 0.8%, of
      its
      total one-to four-family residential real estate loan balance, were more than
      90
      days delinquent or nonaccruing.





**Commercial
      Loans.** The
      Company is also active in commercial lending, primarily to smaller businesses
      in
      the Company’s primary market area. These loans are typically secured by
      commercial real estate and priced in relation to the prime rate or the one
      year,
      three year or five year U.S. Treasury Index. Such loans generally have terms
      of
      up to 25 years and loan-to-value ratios of up to 80%. The Company also makes
      commercial loans secured by collateral other than real estate and unsecured
      commercial loans. Other secured and unsecured commercial loans are also
      typically priced at spreads to prime or the one year, three year or five year
      U.S. Treasury Index and have maturities of up to five years.





Loan
      officers review the borrower’s financial statements, appraisals of the
      collateral, and other related documents before recommending funding of a
      commercial loan. The loan officer and the approving officer or committee then
      determines that there is sufficient income to cover this and other loan
      payments, that the collateral is of adequate liquidation value, that the
      applicant has a good payment history, and is capable of performing the
      requirements of the loan. Other reviews and analysis are done as appropriate,
      depending upon the complexity of the credit request.





4
 *Table
            of Contents*





Although
      a risk of nonpayment exists with respect to all loans, certain specific types
      of
      risks are associated with different types of loans. The primary risks associated
      with commercial loans are the quality of the borrower’s management and the
      impact of national and regional economic factors. The Company mitigates these
      risks by maintaining a close working relationship with its borrowers, by
      obtaining personal guarantees of its loans and by diversification within its
      loan portfolio.





Real
      estate is frequently a material component of the collateral for the Company’s
      loans. The expected source of repayment of these loans is generally the
      operations of the borrower’s business, but the real estate provides an
      additional measure of security, particularly when the property is
      owner-occupied. For this reason, real estate is considered additional collateral
      on many of the Company’s commercial loans.





Risks
      associated with real estate loans include fluctuating land values, changes
      in
      tax policies, and concentration of loans within the Company’s market area. The
      Company mitigates these risks by generally providing loans to experienced
      commercial real estate owners and developers.





The
      aggregate amount of the Company’s commercial loans without real estate as
      primary or secondary collateral totaled approximately $156.0 million at December
      31, 2006, and represented 25.3% of commercial loans at that date. At such date,
      commercial loans without real estate as primary or secondary collateral that
      were more than 90 days delinquent or nonaccruing totaled approximately $1.4
      million, or 0.9% of such loans. The aggregate amount of the Company’s commercial
      loans with real estate as primary or secondary collateral was approximately
      $459.2 million at December 31, 2006, and at such date, approximately $9.3
      million in outstanding balances, or 2.0% of such loans, were more than 90 days
      delinquent or nonaccruing.





**Consumer
      Loans** .
      The
      Company offers several consumer loan products, including installment loans
      and
      credit cards.





The
      Company has developed working relationships with several car dealerships in
      its
      market areas, and is able to obtain financing of new and used cars through
      these
      relationships. The Company generally finances cars that are less than seven
      years old. These loans generally have fixed rates and maturities of 36 to 72
      months.





To
      a
      lesser degree, the Company makes small unsecured loans to creditworthy
      individuals. These loans are typically between $2,000 and $5,000, at fixed
      rates, with maturities of less than five years. The Company also offers a home
      equity loan product and a credit card product to its customers. Both products
      are underwritten using the same standards as any of the Company’s other consumer
      loan products.





Loan
      officers underwrite installment loan and other consumer loan requests in such
      a
      manner to assure compliance with the various regulations and the Company’s
      underwriting standards. The payment history of applicants is very important
      on
      these smaller loans, and is checked through in-house records as well as credit
      bureaus. Normally, collateral, such as an automobile, is taken as security
      and
      the value is checked using the N.A.D.A. book or other valuation services. Income
      must be adequate to cover all monthly payments including the proposed
      loan.





At
      December 31, 2006, the Company had approximately $110.1 million in its consumer
      loan and credit card portfolio, which was 10.8% of the Company’s total net
      loans. Approximately $571,000 of these loans were over 90 days delinquent or
      nonaccruing on that date, which represented 0.5% of the consumer loan
      portfolio.





**Loan
      Solicitation and Processing.** Loan
      originations are developed from a number of sources, including continuing
      business with depositors and other borrowers, solicitations by the Company’s
      lending staff, and walk-in customers.





Underwriting
      guidelines for all branches and loan types are set by senior lending management.
      Consumer loan processing and underwriting are decentralized; however, all other
      loans, including real estate and commercial loans, are generally processed
      at an
      administrative office. While real estate loans are also underwritten at an
      administrative office, commercial loans are underwritten by lending officers
      with appropriate authority or the Company’s loan committee. Loan applications,
      as well as credit bureau reports, appraisals, financial information,
      verifications of income, and other documentation concerning the
      credit-worthiness of the borrower, as applicable to each loan type are
      reviewed.





Branch
      managers may have the authority to approve loans up to $100,000 that meet the
      underwriting criteria set by management, and regional managers have authority
      for amounts up to $500,000. Any loan greater than $500,000 must be approved
      by
      senior lending management.





5
 *Table
            of Contents*





**Income
      from Lending Activities** .
      The
      Company earns interest and fee income from its lending activities. The Company
      earns fees for originating loans and for making commitments to originate loans
      and loan participations. Certain fees, net of origination costs, are deferred
      and amortized over the life of the loan. The Company also receives fees related
      to existing loans, such as late charges. Income from loan origination and
      commitment fees and discounts varies with the volume and type of loans and
      commitments made and with competitive and economic conditions. Note A-4 to
      the
      Consolidated Financial Statements contains a discussion of the manner in which
      origination fees are recognized for financial reporting purposes. In addition,
      the Company conducts mortgage banking activities whereby the Company sells
      certain fixed-rate residential loans in the secondary market to the FHLMC and
      other financial institutions, recognizing gains upon the sale comprised of
      a
      cash component as well as mortgage servicing rights when servicing is retained.
      The Company also conducts commercial banking activities whereby the Company
      sells certain Small Business Administration (“SBA”) guaranteed portions of
      SBA-backed commercial loans in the secondary market, recognizing gains on sales
      comprised of a cash component as well as a servicing rights.





Nonperforming
      Loans





**General** .
      Late
      charges on residential mortgages are assessed by the Company if a payment is
      not
      received either by the 10 th day
      following its due date or 15 th day if
      the loan has been sold in the secondary market and is being serviced by the
      Company. Late charges on installment loans and commercial loans are assessed
      by
      the Company if a payment is not received by the 10 th day
      following its due date. Any borrower whose payment was not received by this
      time
      is mailed a past due notice. If the loan is still delinquent after a second
      past
      due notice is mailed (generally around the 20 th day of
      delinquency), a branch employee will attempt to contact the customer to resolve
      any problem that might exist.





When
      an
      advanced stage of delinquency is reached (generally around the 60 th day of
      delinquency) and if repayment cannot be expected within a reasonable amount
      of
      time or a repayment agreement has not been reached, Oak Hill will contact an
      attorney and request that the required 30-day prior notice of foreclosure or
      repossession proceedings be prepared and delivered to the borrower so that,
      if
      necessary, foreclosure proceedings may be initiated shortly after the loan
      is 90
      days delinquent. Historically, this procedure has aided in achieving a low
      level
      of nonperforming loans. At December 31, 2006, $13.6 million or 1.3% of the
      Company’s total loan portfolio was over 90 days delinquent or nonaccruing. As of
      December 31, 2006, the Company’s level of nonperforming assets to total assets
      was 1.48%.





If
      a
      credit card account becomes 10 days delinquent, a notice is sent to the account
      holder demanding that the payment be made to bring the account current. Another
      notice is sent to the cardholder if the account becomes 20 days delinquent.
      If
      payment is not received within 30 days, authorization requests are denied,
      a
      message about the delinquency appears on the cardholder’s account statement, and
      a follow-up telephone call is made. These telephone collection efforts and
      account statement messages continue until the account is deemed uncollectible.
      Legal action is considered during this time. As of December 31, 2006,
      approximately $30,000 in outstanding balances, or 1.3% of credit card loans
      were
      nonperforming.





At
      December 31, 2006, the Company had $5.3 million in real estate or other
      repossessed collateral acquired as a result of foreclosure, voluntary deed,
      or
      other means. Such real estate is classified as “other real estate owned” until
      it is sold and is recorded at the lower of cost (the unpaid principal balance
      at
      the date of acquisition plus foreclosure and other related costs) or fair value
      less estimated selling expenses. Any subsequent write-down is charged to
      expense. Generally, unless the property is a one-to-four family residential
      dwelling and well-collateralized, interest accrual ceases in 90 days, but no
      later than the date of acquisition. From that date, all costs incurred in
      maintaining the property are expensed. “Other real estate owned” is appraised
      during the foreclosure process, prior to the time of acquisition, and losses
      are
      recognized for the amount by which the book value of the related mortgage loan
      exceeds the estimated net realizable value of the property.





At
      December 31, 2006 and 2005, the Company had $10.2 million and $13.1 million
      of
      impaired loans as defined under SFAS No. 114. The Company maintained an
      allowance for credit losses related to such impaired loans of $1.0 million
      and
      $1.6 million at December 31, 2006 and 2005, respectively.





6
 *Table
            of Contents*




The
      following is a summary of the Company’s loan loss experience and selected ratios
      for the periods presented.


**Year
                Ended December 31,****2006**
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002****(Dollars
                in thousands)**Allowance
                for loan losses(beginning
                of period)
            
            $
            13,653
            
            $
            11,847
            
            $
            10,836
            
            $
            9,142
            
            $
            8,345Loans
                charged-off:Real
                estate mortgage
            
            
            1,114
            
            
            587
            
            
            226
            
            
            129
            
            
            215Multi-family
                and commercial real estate
            
            
            5,529
            
            
            3,147
            
            
            1,214
            
            
            226
            
            
            1,064Commercial
                and other
            
            
            728
            
            
            2,449
            
            
            334
            
            
            442
            
            
            148Installment
            
            
            1,349
            
            
            1,564
            
            
            1,771
            
            
            1,355
            
            
            1,136Total
                loans charged-off
            
            
            8,720
            
            
            7,747
            
            
            3,545
            
            
            2,152
            
            
            2,563Recoveries
                of previously charged-off loans:Real
                estate mortgage
            
            
            365
            
            
            160
            
            
            35
            
            
            27
            
            
            14Multi-family
                and commercial real estate
            
            
            933
            
            
            787
            
            
            604
            
            
            62
            
            
            118Commercial
                and other
            
            
            427
            
            
            1,043
            
            
            99
            
            
            14
            
            
            103Installment
            
            
            575
            
            
            765
            
            
            553
            
            
            396
            
            
            368Total
                recoveries
            
            
            2,300
            
            
            2,755
            
            
            1,291
            
            
            499
            
            
            603Net
                loans charged-off
            
            
            6,420
            
            
            4,992
            
            
            2,254
            
            
            1,653
            
            
            1,960Provision
                for losses on loans
            
            
            5,691
            
            
            6,341
            
            
            3,136
            
            
            3,347
            
            
            2,757Allowance
                of acquired institution
            
            
            –
            
            
            457
            
            
            129
            
            
            –
            
            
            –Allowance
                for loan losses(end
                of period)
            
            $
            12,924
            
            $
            13,653
            
            $
            11,847
            
            $
            10,836
            
            $
            9,142Loans
                outstanding:Average,
                net
            
            $
            1,032,104
            
            $
            993,976
            
            $
            869,849
            
            $
            754,519
            
            $
            690,545End
                of period
            
            $
            1,034,285
            
            $
            1,028,736
            
            $
            924,385
            
            $
            821,857
            
            $
            711,086Ratio
                of allowance for loan losses to loans outstanding at end of
                period
            
            
            1.25
            %
            
            1.33
            %
            
            1.28
            %
            
            1.32
            %
            
            1.29
            %Ratio
                of net charge-offs to average loans outstanding
            
            
            0.62
            %
            
            0.50
            %
            
            0.26
            %
            
            0.22
            %
            
            0.28
            %





At
      December 31, 2006, 2005 and 2004, the Company had nonperforming loans totaling
      $13.6 million, $17.7 million, and $6.3 million, respectively. Interest income
      that would have been recognized if such loans had performed in accordance with
      contractual terms totaled approximately $543,000, $1.1 million, and $406,000,
      for the years ended December 31, 2006, 2005 and 2004, respectively. There was
      no
      interest income recognized on such loans during any of the periods.





**Allowance
      for Loan Losses** .
      The
      amount of the allowance for loan losses is based on management’s analysis of
      risks inherent in the various segments of the loan portfolio, management’s
      assessment of known or potential problem credits which have come to management’s
      attention during the ongoing analysis of credit quality, historical loss
      experience, current economic conditions and other factors. If actual
      circumstances and losses differ substantially from management’s assumptions and
      estimates, such allowance for loan losses may not be sufficient to absorb all
      future losses, and net earnings could be adversely affected. Loan loss estimates
      are reviewed periodically, and adjustments, if any, are reported in earnings
      in
      the period in which they become known. In addition, the Company maintains a
      portion of the allowance to cover potential losses inherent in the portfolio
      that have not been specifically identified.





Although
      management believes that it uses the best information available to make such
      determinations and that the allowance for loan losses is adequate at December
      31, 2006, future adjustments to the allowance may be necessary, and net earnings
      could be affected, if circumstances and/or economic conditions differ
      substantially from the assumptions used in making the initial determinations.
      A
      downturn in the southern and central Ohio economy and employment levels could
      result in the Company experiencing increased levels of nonperforming assets
      and
      charge-offs, increased provisions for loan losses and reductions in income.
      Additionally, various regulatory agencies, as an integral part of their
      examination process, periodically review the Company’s allowance for loan
      losses. Such agencies may require the recognition of additions to the allowance
      based on their judgment of information available to them at the time of their
      examination.





7
 *Table
            of Contents*





The
      following table summarizes nonperforming assets by category.


**Year
                Ended December 31,****2006**
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002****(Dollars
                in thousands)**Real
                estate mortgage:Nonaccrual
            
            $
            2,342
            
            $
            6,096
            
            $
            3,144
            
            $
            2,235
            
            $
            1,105Past
                due 90 days or more(1)
            
            
            –
            
            
            730
            
            
            121
            
            
            98
            
            
            515Commercial
                and other:Nonaccrual
            
            
            10,591
            
            
            10,141
            
            
            1,858
            
            
            4,153
            
            
            4,345Past
                due 90 days or more(1)
            
            
            77
            
            
            127
            
            
            606
            
            
            21
            
            
            435Installment:Nonaccrual
            
            
            481
            
            
            459
            
            
            538
            
            
            1,213
            
            
            579Past
                due 90 days or more(1)
            
            
            90
            
            
            122
            
            
            64
            
            
            399
            
            
            317Total
                nonperforming loans
            
            
            13,581
            
            
            17,675
            
            
            6,331
            
            
            8,119
            
            
            7,296Other
                real estate owned
            
            
            5,258
            
            
            376
            
            
            1,614
            
            
            585
            
            
            –Total
                nonperforming assets
            
            $
            18,839
            
            $
            18,051
            
            $
            7,945
            
            $
            8,704
            
            $
            7,296Loans
                outstanding
            
            $
            1,034,285
            
            $
            1,028,736
            
            $
            924,385
            
            $
            821,857
            
            $
            711,086Allowance
                for loan losses to total loans
            
            
            1.25
            %
            
            1.33
            %
            
            1.28
            %
            
            1.32
            %
            
            1.29
            %Nonperforming
                loans to total loans
            
            
            1.31
            
            
            1.72
            
            
            0.69
            
            
            0.99
            
            
            1.03Nonperforming
                assets to total assets
            
            
            1.48
            
            
            1.45
            
            
            0.73
            
            
            0.93
            
            
            0.88Allowance
                for loan losses to nonperforming loans
            
            
            95.2
            %
            
            77.3
            %
            
            187.1
            %
            
            133.5
            %
            
            125.3
            %





(1)
            Represents
                accruing loans 90 days or more delinquent that are considered by
                management to be well secured and in the process of
                collection.





As
      of
      December 31, 2006, loans where borrowers were experiencing potential credit
      problems that raised doubts as to the ability of those borrowers to comply
      with
      the present loan repayment terms were included in the nonaccrual, past due
      90
      days or more categories. As a practical expedient, the Company accounts for
      collateral dependent impaired loans at the lower of the loan balance or fair
      value of the collateral.





**Allocation
      of Allowance for Losses on Loans.** The
      table
      below presents an analysis of the allocation of the Company’s allowance for loan
      losses at the dates indicated.


**December
                31,****2006**
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002****Amount**
            
            **Percent****of
                loans****in
                each****category****to
                total****loans****(1)**
            
            **Amount**
            
            **Percent****of
                loans****in
                each****category****to
                total****loans****(1)**
            
            **Amount**
            
            **Percent****of
                loans****in
                each****category****to
                total****loans****(1)**
            
            **Amount**
            
            **Percent****of
                loans****in
                each****category****to
                total****loans****(1)**
            
            **Amount**
            
            **Percent****of
                loans****in
                each****category****to
                total****loans****(1)****(Dollars
                in thousands)**Balance
                at end of period applicable to:Real
                estate mortgage
            
            $
            302
            
            
            29.9
            %
            $
            443
            
            
            31.2
            %
            $
            492
            
            
            29.2
            %
            $
            526
            
            
            28.6
            %
            $
            363
            
            
            34.6
            %Commercial
                and other
            
            
            11,983
            
            
            59.5
            
            
            11,820
            
            
            58.2
            
            
            10,368
            
            
            63.2
            
            
            8,793
            
            
            62.5
            
            
            5,990
            
            
            55.1Installment
            
            
            587
            
            
            10.4
            
            
            1,322
            
            
            10.4
            
            
            925
            
            
            7.4
            
            
            1,440
            
            
            8.7
            
            
            936
            
            
            10.1Credit
                card
            
            
            52
            
            
            0.2
            
            
            68
            
            
            0.2
            
            
            62
            
            
            0.2
            
            
            77
            
            
            0.2
            
            
            51
            
            
            0.2Unallocated
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            1,802
            
            
            –Total
            
            $
            12,924
            
            
            100.0
            %
            $
            13,653
            
            
            100.0
            %
            $
            11,847
            
            
            100.0
            %
            $
            10,836
            
            
            100.0
            %
            $
            9,142
            
            
            100.0
            %


(1) Percentages
      are based upon loans gross of the allowance for loan losses.





8
 *Table
            of Contents*





**Classified
      Assets** .
      The
      FDIC regulations on classification of assets require commercial banks to
      classify their own assets and to establish appropriate general allowances for
      losses, subject to FDIC review. These regulations are designed to encourage
      management to evaluate assets on a case-by-case basis and to discourage
      automatic classifications. Assets classified as substandard or doubtful must
      be
      evaluated by management to determine a reasonable general loss reserve to be
      included in total capital for purposes of the Oak Hill’s risk-based capital
      requirement, but excluded from core capital or tangible capital or in capital
      under accounting principles generally accepted in the United States of America.
      Assets classified as loss must be written off.





**Investments.** Investment securities primarily satisfy the Company’s liquidity needs and
      provide a return on residual funds after lending activities. Pursuant to the
      Company’s written investment policy, investments may be in interest-bearing
      deposits, U.S. Government and agency obligations, trust preferred securities,
      state and local government obligations and government-guaranteed mortgage-backed
      securities. The Company does not invest in securities that are rated less than
      investment grade by a nationally recognized statistical rating organization.
      A
      goal of the Company’s investment policy is to limit interest rate
      risk.





All
      securities-related activity is reported to the Board of Directors of the
      Company. General changes in investment strategy must be reviewed and approved
      by
      the Company’s Board of Directors. The Company’s senior management can purchase
      and sell securities on behalf of the Company in accordance with the Company’s
      stated investment policy.





The
      following table sets forth the carrying value of the Company’s investment
      portfolio as indicated and includes both investments designated as available
      for
      sale and those designated as held to maturity.


**At
                December 31,****2006**
            
            **2005**
            
            **2004******
            
            (Dollars
                in thousands)Held
                to maturity:Trust
                preferred securities
            
            $
            2,559
            
            $
            3,619
            
            $
            3,640Available
                for sale:U.S.
                Government and agency obligations
            
            
            97,343
            
            
            72,605
            
            
            61,408Obligations
                of state and political subdivisions
            
            
            55,420
            
            
            58,340
            
            
            26,769Other
                securities
            
            
            247
            
            
            248
            
            
            206Total
                investment securities available for sale
            
            
            153,010
            
            
            131,193
            
            
            88,383Total
                investment securities
            
            $
            155,569
            
            $
            134,812
            
            $
            92,023





The
      following table reflects the maturities of the Company’s investment securities
      at December 31, 2006.


**Due
                in**
              **one
                year or less**
            
            **Due
                after one year**
              **through
                five years**
            
            **Due
                after five years**
              **through
                ten years**
            
            **Due
                after ten years****Amount**
            
            **Rate**
            
            **Amount**
            
            **Rate**
            
            **Amount**
            
            **Rate**
            
            **Amount**
            
            **Rate**
            
            **Total**Held
                to maturity:Trust
                preferred securities
            
            $
            –
            
            
            –
            
            $
            –
            
            
            –
            
            
            –
            
            $
            –
            
            $
            2,559
            
            
            8.78
            %
            $
            2,559Available
                for sale:U.S.
                Government and agency obligations
            
            
            13,542
            
            
            4.06
            %
            
            11,722
            
            
            4.82
            %
            
            16,602
            
            
            4.60
            %
            
            55,477
            
            
            5.69
            %
            
            97,343Obligations
                of state and political subdivisions
            
            
            402
            
            
            3.98
            %
            
            2,493
            
            
            4.23
            %
            
            14,635
            
            
            4.35
            %
            
            37,890
            
            
            4.69
            %
            
            55,420Other
                securities
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            247
            
            
            –
            
            
            247Total
                available for sale Securities
            
            
            13,944
            
            
            4.05
            %
            
            14,215
            
            
            4.72
            %
            
            31,237
            
            
            4.48
            %
            
            93,614
            
            
            5.27
            %
            
            153,010Total
                investment securities
            
            $
            13,944
            
            
            4.05
            %
            $
            14,215
            
            
            4.72
            %
            $
            31,237
            
            
            4.48
            %
            $
            96,173
            
            
            5.37
            %
            $
            155,569




9
 *Table
            of Contents*





Source
      of Funds





**Deposit
      Accounts** .
      Deposits are a major source of the Company’s funds. The Company offers a number
      of alternatives for depositors designed to attract both commercial and regular
      consumer checking and savings including regular and money market savings
      accounts, NOW accounts, and a variety of fixed-maturity, fixed-rate certificates
      with maturities ranging from 3 to 60 months. The Company has also utilized
      brokered deposits as a supplement to its local deposits when such funds are
      attractively priced in relation to the local market.





The
      distribution of the Company’s deposit accounts by type and rate is set forth in
      the following table.


**At
                December 31,****2006**
            
            **2005**
            
            **2004****Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent****(Dollars
                in thousands)**Demand
                deposits
            
            $
            94,256
            
            
            10.0
            %
            $
            97,575
            
            
            10.0
            %
            $
            88,712
            
            
            10.3
            %Savings
                accounts
            
            
            48,858
            
            
            5.2
            
            
            64,128
            
            
            6.6
            
            
            58,978
            
            
            6.8NOW
                accounts
            
            
            70,369
            
            
            7.5
            
            
            79,329
            
            
            8.1
            
            
            65,395
            
            
            7.6Money
                market deposits
            
            
            3,689
            
            
            0.4
            
            
            8,191
            
            
            0.8
            
            
            9,249
            
            
            1.1Premium
                investment
            
            
            189,281
            
            
            20.1
            
            
            131,014
            
            
            13.4
            
            
            53,093
            
            
            6.1Select
                investment
            
            
            20,372
            
            
            2.1
            
            
            19,856
            
            
            2.0
            
            
            27,197
            
            
            3.2Total
                transaction accounts
            
            
            426,825
            
            
            45.3
            
            
            400,093
            
            
            40.9
            
            
            302,624
            
            
            35.1Certificates
                of deposit:1.00
                - 2.99%
            
            
            7,495
            
            
            0.8
            
            
            93,754
            
            
            9.6
            
            
            344,757
            
            
            40.03.00
                - 4.99%
            
            
            381,892
            
            
            40.5
            
            
            475,987
            
            
            48.6
            
            
            203,406
            
            
            23.65.00
                - 6.99%
            
            
            126,707
            
            
            13.4
            
            
            8,506
            
            
            0.9
            
            
            10,909
            
            
            1.37.00
                - 10.00%
            
            
            41
            
            
            –
            
            
            56
            
            
            –
            
            
            400
            
            
            –Total
                certificates of deposit
            
            
            516,135
            
            
            54.7
            
            
            578,303
            
            
            59.1
            
            
            559,472
            
            
            64.9Total
                deposits
            
            $
            942,960
            
            
            100.0
            %
            $
            978,396
            
            
            100.0
            %
            $
            862,096
            
            
            100.0
            %





The
      following table presents various interest rate categories and certain
      information concerning maturities of the Company’s certificates of deposit at
      December 31, 2006.


**Certificate
                of deposit accounts**
            
            **Within****one
                year**
            
            **One
                to****three****years**
            
            **Over****three****years**
            
            **Total****(In
                thousands)**3.00%
                and less
            
            $
            7,780
            
            $
            461
            
            $
            –
            
            $
            8,2413.01
                to 4.00%
            
            
            86,959
            
            
            55,586
            
            
            1,719
            
            
            144,2644.01
                to 5.00%
            
            
            211,727
            
            
            42,892
            
            
            6,449
            
            
            261,0685.01
                to 6.00%
            
            
            29,573
            
            
            68,948
            
            
            3,973
            
            
            102,4946.01
                to 7.00%
            
            
            1
            
            
            26
            
            
            –
            
            
            277.01
                to 10.00%
            
            
            27
            
            
            14
            
            
            –
            
            
            41Total
            
            $
            336,067
            
            $
            167,927
            
            $
            12,141
            
            $
            516,135




10
 *Table
            of Contents*





The
      following table sets forth the amount of the Company’s certificates of deposit
      that are $100,000 or greater, by time remaining until maturity, as of December
      31, 2006.


**Maturity
                period**
            
            **Amount****(In
                thousands)**Three
                months or less
            
            $
            32,612Over
                three months through six months
            
            
            21,101Over
                six through twelve months
            
            
            26,948Over
                twelve months
            
            
            56,947Total
            
            $
            137,608




**Borrowings** .
      In
      addition to deposits and repayment of loan principal, the Company obtains funds
      necessary for its lending activities and other general business purposes through
      loans (advances) from the Federal Home Loan Bank (“FHLB”) of Cincinnati.
      Advances from the FHLB may be on a secured or unsecured basis depending upon
      a
      number of factors, including the purpose for which the funds are being borrowed
      and the total of outstanding advances. The Company typically utilizes FHLB
      advances to fund loans and to meet short-term liquidity needs. As of December
      31, 2006, Oak Hill had outstanding FHLB advances totaling $157.6 million. See
      Note F to the consolidated financial statements for additional information
      regarding FHLB advances. The Company also has arrangements to borrow funds
      from
      commercial banks.





In
      2000,
      a Delaware statutory business trust owned by the Company, Oak Hill Capital
      Trust
      1 (“Trust 1”), issued $5.0 million of mandatorily redeemable debt securities.
      The amount of the debt securities issued by the Trust, while not consolidated
      herein pursuant to the provisions of Financial Interpretation No. 46R (“FIN
      46R”), are included in the Company’s regulatory capital, specifically as a
      component of Tier 1 capital. The subordinated debentures are the sole assets
      of
      the Trust, and the Company owns all of the common securities of the Trust.
      Interest payments on the debt securities are made semi-annually at an annual
      fixed interest rate of 10.875% and are reported as a component of interest
      expense on borrowings.





During
      2004, a Delaware statutory business trust owned by the Company, Oak Hill Capital
      Trust 2 (“Trust 2”), issued $5.0 million of mandatorily redeemable debt
      securities. The amount of the debt securities issued by Trust 2, while not
      consolidated herein, are included in the Company’s regulatory capital,
      specifically as a component of Tier 1 capital. The proceeds from the issuance
      of
      the subordinated debentures and common securities were used by Trust 2 to
      purchase from the Company $5.0 million of subordinated debentures maturing
      on
      October 18, 2034. The subordinated debentures are the sole asset of Trust 2,
      and
      the Company owns all of the common securities of Trust 2. Interest payments
      on
      the debt securities are to be made quarterly at an annual fixed rate of interest
      of 6.24% through October 18, 2009 and at a floating rate of interest, reset
      quarterly, equal to 3-month LIBOR plus 2.40% thereafter. Interest payments
      are
      reported as a component of interest expense on borrowings. The net proceeds
      received by the Company were contributed to the capital of Oak Hill during
      2004.





Also
      during 2004, a Delaware statutory business trust owned by the Company, Oak
      Hill
      Capital Trust 3 (“Trust 3”), issued $8.0 million of mandatorily redeemable debt
      securities. The amount of the debt securities issued by Trust 3, while not
      consolidated herein, are included in the Company’s regulatory capital,
      specifically as a component of Tier 1 capital. The proceeds from the issuance
      of
      the subordinated debentures and common securities were used by Trust 3 to
      purchase from the Company $8.0 million of subordinated debentures maturing
      on
      October 18, 2034. The subordinated debentures are the sole asset of Trust 3,
      and
      the Company owns all of the common securities of Trust 3. Interest payments
      on
      the debt securities are to be made quarterly at a floating rate of interest,
      reset quarterly, equal to 3-month LIBOR plus 2.30%. Interest payments are
      reported as a component of interest expense on borrowings. The net proceeds
      received by the Company were used for merger activity and general corporate
      activity.





During
      2005, a Delaware statutory business trust owned by the Company, Oak Hill Capital
      Trust 4 (“Trust 4”), issued $5.0 million of mandatorily redeemable debt
      securities. The amount of the debt securities issued by Trust 4, while not
      consolidated herein, are included in the Company’s regulatory capital,
      specifically as a component of Tier 1 capital. The proceeds from the issuance
      of
      the subordinated debentures were used by Trust 4 to purchase from the Company
      $5.0 million of subordinated debentures maturing on June 30, 2035. Interest
      payments on the debt securities are to be made quarterly at an annual fixed
      rate
      of interest of 5.96% through June 30, 2015 and at a floating rate of interest,
      reset quarterly, equal to 3-month LIBOR plus 1.60% thereafter. Interest payments
      are reported as a component of interest expense on borrowings. The net proceeds
      received by the Company were contributed to the capital of Oak Hill during
      the
      current year. At December 31, 2006, the Company’s subordinated debentures issued
      to statutory business trusts and includable as Tier 1 capital totaled $23.0
      million.





11
 *Table
            of Contents*





The
      following table sets forth the maximum amount of the Company’s FHLB advances and
      other borrowings outstanding at any month end during the periods shown and
      the
      average aggregate balances of FHLB advances and other borrowings for such
      periods:


**Year
                Ended December 31,****2006**
            
            **2005**
            
            **2004****(Dollars
                in thousands)**Maximum
                amount outstanding:FHLB
                advances
            
            $
            157,584
            
            $
            123,119
            
            $
            119,520Subordinated
                debentures
            
            
            23,000
            
            
            23,000
            
            
            18,000Other
                borrowings
            
            
            56,341
            
            
            20,538
            
            
            9,277Total
            
            $
            236,925
            
            $
            166,657
            
            $
            146,797Average
                amount of FHLB advances and other borrowings outstanding
            
            $
            187,757
            
            $
            144,445
            
            $
            124,514Weighted-average
                interest rate of total borrowings
            
            
            5.03
            %
            
            4.75
            %
            
            4.28
            %








The
      following table sets forth certain information as to the Company’s FHLB advances
      and other borrowings at the dates indicated.


**December
                31,****2006**
            
            **2005**
            
            **2004****(In
                thousands)**FHLB
                advances
            
            $
            157,584
            
            $
            123,119
            
            $
            105,601Subordinated
                debentures
            
            
            23,000
            
            
            23,000
            
            
            18,000Other
                borrowings
            
            
            56,341
            
            
            18,263
            
            
            8,059Total
                borrowings
            
            $
            236,925
            
            $
            164,382
            
            $
            131,660




**Asset
      and Liability Management.** ** The
      Company manages its exposure to interest rate risk through its Asset/Liability
      Management Committees (ALCO) at both the Company and Oak Hill levels. Given
      the
      potential types and characteristics of interest rate risk, the Company maintains
      an appropriate process and set of measurement tools to enable it to identify
      and
      quantify its primary sources of interest rate risk. The Company also recognizes
      that effective management of interest rate risk includes understanding when
      and
      how potential changes in interest rates will flow through the earnings
      statement. Accordingly, the Company manages its position so that it monitors
      both its short-term and long-term interest rate risk exposure. Tools
      used by management include an interest rate sensitivity gap analysis and an
      interest rate simulation model whereby changes in net interest income are
      measured based upon selected hypothetical changes in market interest rates.





Net
      interest income, the difference between the yield on interest-earning assets
      and
      the cost of interest-bearing liabilities, is the principal component of the
      Company’s net earnings. The ability to maximize net interest income is largely
      dependent upon the achievement of a positive interest rate spread that can
      be
      sustained during fluctuations in prevailing interest rate levels. Due to the
      maturity, repricing and timing differences between interest-earning assets
      and
      interest-bearing liabilities, the Company’s earnings would be affected
      differently under various interest rate scenarios. Interest rate sensitivity
      is
      a measure of the difference between amounts of interest-earning assets and
      interest-bearing liabilities which reprice within a given period of time. The
      difference, or the interest rate repricing “gap”, provides an indication of the
      extent to which an interest rate spread will be affected by changes in interest
      rates. A gap is considered positive when the amount of interest-rate sensitive
      assets exceeds the amount of interest-rate sensitive liabilities and is
      considered negative when the amount of interest-rate sensitive liabilities
      exceeds the amount of interest-rate sensitive assets. Generally, during a period
      of rising interest-rates, a negative gap within shorter maturities would
      adversely affect net interest income, while a positive gap within shorter
      maturities would result in an increase in net interest income. Conversely,
      during a period of falling interest rates, a negative gap within shorter
      maturities would result in an increase in net interest income, while a positive
      gap within shorter maturities would have the opposite effect.





12
 *Table
            of Contents*





The
      following tables contain information regarding the amounts of various categories
      of assets and liabilities contractually repricing within the periods indicated
      without consideration of loan prepayment assumptions or deposit decay
      assumptions:


**December
                31, 2006**
            
            **Year
                Ending December 31,****2007**
            
            **2008**
            
            **2009**
            
            **2010**
            
            **2011
                and after**
            
            **Total**Interest-rate
                sensitive assets:Federal
                funds sold
            
            $
            818
            
            $
            –
            
            $
            –
            
            $
            –
            
            $
            –
            
            $
            818Interest-bearing
                deposits
            
            
            1,474
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            1,474Investment
                securities
            
            
            45,521
            
            
            29,801
            
            
            17,476
            
            
            11,508
            
            
            51,263
            
            
            155,569Loans
                receivable(1)
            
            
            421,111
            
            
            169,996
            
            
            150,372
            
            
            99,577
            
            
            180,305
            
            
            1,021,361Other
                interest-earning assets
            
            
            187
            
            
            –
            
            
            –
            
            
            –
            
            
            21,784
            
            
            21,971Total
            
            
            469,111
            
            
            199,797
            
            
            167,848
            
            
            111,085
            
            
            253,352
            
            
            1,201,193Interest-rate
                sensitive liabilities:Deposits
            
            
            670,820
            
            
            122,968
            
            
            42,909
            
            
            6,446
            
            
            5,561
            
            
            848,704Borrowings
            
            
            111,882
            
            
            56,056
            
            
            22,537
            
            
            14,278
            
            
            32,172
            
            
            236,925Total
            
            
            782,702
            
            
            179,024
            
            
            65,446
            
            
            20,724
            
            
            37,733
            
            
            1,085,629Excess
                (deficiency) of interest-rate sensitive assets over interest-rate
                sensitive liabilities
            
            $
            (313,591
            )
            $
            20,773
            
            $
            102,402
            
            $
            90,361
            
            $
            215,619
            
            $
            115,564Cumulative
                excess (deficiency) of interest-rate sensitive assets over interest-rate
                sensitive liabilities
            
            $
            (313,591
            )
            $
            (292,818
            )
            $
            (190,416
            )
            $
            (100,055
            )
            $
            115,564
            
            $
            115,564Cumulative
                interest-rate sensitivity gap to total assets
            
            
            (24.58
            )%
            
            (22.95
            )%
            
            (14.92
            )%
            
            (7.84
            )%
            
            9.06
            %
            
            9.06
            %




**December
                31, 2005**
            
            **Year
                Ending December 31,****2006**
            
            **2007**
            
            **2008**
            
            **2009**
            
            **2010
                and after**
            
            **Total**Interest-rate
                sensitive assets:Federal
                funds sold
            
            $
            1,614
            
            $
            –
            
            $
            –
            
            $
            –
            
            $
            –
            
            $
            1,614Interest-bearing
                deposits
            
            
            1,008
            
            
            361
            
            
            –
            
            
            –
            
            
            –
            
            
            1,369Investment
                securities
            
            
            19,300
            
            
            22,146
            
            
            20,491
            
            
            13,877
            
            
            58,998
            
            
            134,812Loans
                receivable(1)
            
            
            428,419
            
            
            147,638
            
            
            162,992
            
            
            86,872
            
            
            189,162
            
            
            1,015,083Other
                interest-earning assets
            
            
            187
            
            
            –
            
            
            –
            
            
            –
            
            
            20,574
            
            
            20,761Total
            
            
            450,528
            
            
            170,145
            
            
            183,483
            
            
            100,749
            
            
            268,734
            
            
            1,173,639Interest-rate
                sensitive liabilities:Deposits
            
            
            682,839
            
            
            126,451
            
            
            49,696
            
            
            12,926
            
            
            8,909
            
            
            880,821Borrowings
            
            
            91,796
            
            
            17,745
            
            
            1,061
            
            
            6,043
            
            
            47,737
            
            
            164,382Total
            
            
            774,635
            
            
            144,196
            
            
            50,757
            
            
            18,969
            
            
            56,646
            
            
            1,045,203Excess
                (deficiency) of interest-rate sensitive assets over interest-rate
                sensitive liabilities
            
            $
            (324,107
            )
            $
            25,949
            
            $
            132,726
            
            $
            81,780
            
            $
            212,088
            
            $
            128,436Cumulative
                excess (deficiency) of interest-rate sensitive assets over interest-rate
                sensitive liabilities
            
            $
            (324,107
            )
            $
            (298,158
            )
            $
            (165,432
            )
            $
            (83,652
            )
            $
            128,436
            
            $
            128,436Cumulative
                interest-rate sensitivity gap to total assets
            
            
            (26.12
            )%
            
            (24.02
            )%
            
            (13.33
            )%
            
            (6.74
            )%
            
            10.35
            %
            
            10.35
            %


(1) Includes
      loans held for sale.




13
 *Table
            of Contents*





Due
      to
      the shortcomings associated with gap analysis, the Company’s primary tool in
      managing interest rate risk is net interest income simulations, which measure
      the potential effect on earnings that instantaneous parallel and proportional
      changes in interest rates could have on net interest income over defined periods
      of time. The Company applies hypothetical interest rate shocks of up and down
      100, 200 and 300 basis points (100 basis points equals 1%) to its financial
      instruments based upon assumed cash flows.





The
      parallel approach to interest rate shocks assumes that all interest rates will
      simultaneously move up or down by like amounts. This approach is very simplistic
      and could be viewed as a “worst case” scenario. The proportional approach to
      interest rate shocks assumes that the interest rates for financial instruments
      change in proportion to a single driver rate. The Company has selected the
      national Prime rate as its driver rate. In the proportional approach, the driver
      rate shock is multiplied by the proportional rate factors for each financial
      instrument to obtain the new interest rates used to calculate projected net
      interest income changes.





The
      following table reflects, as of December 31, 2006, projected changes in the
      Company’s twelve-month net interest income as a percentage of net interest
      income assuming parallel and proportional interest rate shocks.


**Rate
                  Shock Analysis****ALCO
                  Limit**
                **Twelve-Month**
                **Net
                  Interest Income**
                **Changes**
              
              **Parallel**
                **Twelve-Month**
                **Net
                  Interest**
                **Income
                  Changes**
              
              **Proportional**
                **Interest**
                **Rate**
                **Shock**
              
              **Interest**
                **Rate**
                **shock**+300
                  basis points
              
              
              -30
              %
              
              -12.552
              %
              
              -3.780
              %+200
                  basis points
              
              
              -20
              %
              
              - 
                7.697
              %
              
              -1.860
              %+100
                  basis points
              
              
              -15
              %
              
              - 
                  3.188
              %
              
              -0.342
              %-100
                  basis points
              
              
              -15
              %
              
              1.959
              %
              
              -0.647
              %-
                  200 basis points
              
              
              -20
              %
              
              2.353
              %
              
              -2.483
              %-
                  300 basis points
              
              
              -30
              %
              
              2.953
              %
              
              -4.011
              %


As
      with
      any method of measuring interest rate risk, certain shortcomings are inherent
      in
      the analysis. For example, although certain assets and liabilities may have
      similar maturities or periods of repricing, they may react differently to
      changes in market interest rates. Also, the interest rates on certain types
      of
      assets and liabilities may fluctuate in advance of changes in market interest
      rates, while interest rates on other types of assets and liabilities may lag
      behind changes in market interest rates. In the event of a change in market
      interest rates, expected rates of prepayment on loans and mortgage-backed
      securities, and early withdrawal levels from certificates of deposit, would
      likely deviate from those assumed in making the interest rate risk calculations.
      Moreover, the analysis does not contemplate all actions the Company may take
      in
      response to changes in interest rates and should not be relied upon as being
      indicative of actual results.




14
 *Table
            of Contents*





Personnel





At
      December 31, 2006, the Company and its subsidiaries employed 421 persons on
      a
      full-time basis and 38 persons on a part-time basis.





Executive
      Offices





The
      Company’s executive office is located at 14621 State Route 93, Jackson, Ohio
      45640 and its telephone number is (740) 286-3283.





Subsidiaries





The
      Company owns all of the outstanding stock of Oak Hill Banks, an Ohio
      state-chartered bank, which was founded in 1902. The Company owns all of the
      outstanding stock of Oak Hill Capital Trust 1, a Delaware statutory trust that
      was formed in 2000. The Company owns all of the outstanding stock of Oak Hill
      Capital Trust 2 and Oak Hill Capital Trust 3, Delaware statutory trusts that
      were formed in 2004. The Company owns all of the outstanding stock of Oak Hill
      Capital Trust 4, a Delaware statutory trust that was formed in 2005. The Company
      owns all of the outstanding stock of Oak Hill Financial Insurance Agency, Inc.,
      which conducts business as Oak Hill Financial Insurance, a group health
      insurance and employee benefits agency acquired in August 2001. In addition,
      the
      Company has a 49% ownership interest in Oak Hill Title Agency, LLC, a limited
      liability company that was formed in 2001 and commenced operations in January
      2002 to provide title services for commercial and residential real estate
      transactions.





Regulation





Oak
      Hill,
      as an Ohio state-chartered bank, is subject to supervision and regular
      examination by the Superintendent of Financial Institutions of the State of
      Ohio. Oak Hill is insured by the Federal Deposit Insurance Corporation and
      is
      subject to the provisions of the Federal Deposit Insurance Act. To the extent
      that the information below consists of summaries of certain statutes or
      regulations, it is qualified in its entirety by reference to the statutory
      or
      regulatory provisions described.





The
      Company is subject to the provisions of the Bank Holding Company Act of 1956,
      as
      amended (the “Act”), which requires a bank holding company to register under the
      Act and to be subject to supervision and examination by the Board of Governors
      of the Federal Reserve System. A bank holding company is required to file with
      the Board of Governors an annual report and such additional information as
      the
      Board of Governors may require pursuant to the Act. The Act requires prior
      approval by the Board of Governors of the acquisition by a bank holding company,
      or any subsidiary thereof, of 5% or more of the voting stock or substantially
      all the assets of any bank within the United States.





A
      bank
      holding company located in the State of Ohio is not permitted to acquire a
      bank
      or other financial institution located in another state unless such acquisition
      is specifically authorized by the statutes of such state. The Act further
      provides that the Board of Governors shall not approve any such acquisition
      that
      would result in a monopoly or would be in furtherance of any combination or
      conspiracy to monopolize or attempt to monopolize the business of banking in
      any
      part of the United States, or the effect of which may be to substantially lessen
      competition or to create a monopoly in any section of the country, or that
      in
      any other manner would be in restraint of trade, unless the anti-competitive
      effects of the proposed transaction are clearly outweighed in the public
      interest by the probable effect of the transaction in meeting the convenience
      and needs of the community to be served.





The
      Act
      also prohibits a bank holding company, with certain exceptions, from acquiring
      5% or more of the voting stock of any company that is not a bank and from
      engaging in any business other than banking or performing services for its
      banking subsidiary without the approval of the Board of Governors. In addition,
      the acquisition of a thrift institution must be approved by the Office of Thrift
      Supervision pursuant to the savings and loan holding company provisions of
      the
      Home Owners’ Loan Act of 1933. On March 13, 2000, the Financial Services Act of
      1999, also known as the Gramm-Leach-Bliley Act, became effective. This
      legislation repealed certain cross-industry affiliation prohibitions and made
      certain other changes to the Act. It authorized a new form of holding company,
      a
      financial holding company, which with certain exceptions is authorized to
      undertake activities which are “financial in nature” and which include banking,
      insurance and securities activities. Generally, the scope of activities
      permitted to a financial holding company are broader than those previously
      permitted to a bank holding company. A bank holding company may elect to become
      a financial holding company. The Company made this election and was notified
      on
      July 11, 2001 by the Federal Reserve Bank that its election had been approved.
      Under the Act, as amended by the Gramm-Leach-Bliley Act, the Company is
      permitted to engage in certain activities, including mortgage banking, operating
      small loan companies, factoring, furnishing certain data processing operations,
      holding or operating properties used by banking subsidiaries or acquired for
      such future use, providing certain investment and financial advice, leasing
      (subject to certain conditions) real or personal property, providing management
      consulting advice to certain depository institutions, providing securities
      brokerage services, arranging commercial real estate equity financing,
      underwriting and dealing in government obligations and money market instruments,
      providing consumer financial counseling, operating a collection agency, owning
      and operating a savings association, operating a credit bureau and conducting
      certain real estate investment activities and acting as insurance agent for
      certain types of insurance. Certain other activities, including real estate
      brokerage and syndication, land development, and property management not related
      to credit transactions, are not permissible.





15
 *Table
            of Contents*





The
      Act
      and the regulations of the Board of Governors prohibit a financial holding
      company and its subsidiaries from engaging in certain tie-in arrangements in
      connection with any extension of credit, lease or sale of property, or
      furnishing of services.





The
      Act
      also imposes certain restrictions upon dealing by affiliated banks with the
      holding company and among themselves including restrictions on interbank
      borrowing and upon dealings in respect to the securities or obligations of
      the
      holding company or other affiliates.





On
      October 26, 2001 President Bush signed the USA Patriot Act of 2001 (the “Patriot
      Act”). Enacted in response to the September 11, 2001 terrorist attacks, the
      Patriot Act is intended to strengthen the ability of various agencies of the
      United States to work cohesively to combat terrorism on a variety of fronts.
      The
      potential impact of the Patriot Act on financial institutions of all kinds
      is
      significant and wide ranging. The Patriot Act contains sweeping anti-money
      laundering and financial transparency laws and requires various regulations,
      including:





·
            Due
                diligence requirements for financial institutions that administer,
                maintain, or manage private bank accounts or correspondent accounts
                for
                non-U.S. persons;





·
            Standards
                for verifying customer identification at account
                opening;





·
            Rules
                to promote cooperation among financial institutions, regulators,
                and law
                enforcement entities in identifying parties that may be involved
                in
                terrorism or money laundering;





·
            Reports
                by non-financial trades and businesses filed with the Treasury
                Department’s Financial Crimes Enforcement Network for transactions
                exceeding $10,000 and;





·
            Filing
                of suspicious activities reports for securities transactions by brokers
                and dealers if they believe a customer may be violating U.S. laws
                and
                regulations.





On
      July
      30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the
      "Sarbanes-Oxley Act"). The stated goals of the Sarbanes-Oxley Act are to
      increase corporate responsibility, to provide for enhanced penalties for
      accounting and auditing improprieties at publicly traded companies and to
      protect investors by improving the accuracy and reliability of corporate
      disclosures made pursuant to the securities laws. The changes are intended
      to
      allow shareholders to monitor the performance of companies and directors more
      easily and efficiently. The Sarbanes-Oxley Act generally applies to all
      companies, both U.S. and non-U.S., that file or are required to file periodic
      reports with the SEC under the Exchange Act.





The
      Sarbanes-Oxley Act addresses, among other matters: audit committees; auditor
      independence; analysts’ conflicts of interest; certification of financial
      statements by the chief executive officer and the chief financial officer;
      the
      forfeiture of bonuses and profits made by directors and senior officers in
      the
      twelve month period covered by restated financial statements; a prohibition
      on
      insider trading during pension plan black-out periods; disclosure of off-balance
      sheet transactions; a prohibition on personal loans to directors and officers
      (excluding Federally insured financial institutions); expedited filing
      requirements for stock transaction reports by officers and directors; the
      formation of a public accounting oversight board; and various increased criminal
      penalties for violations of securities laws.





In
      2002
      and 2003, the SEC adopted a host of new regulations implementing the provisions
      of the Sarbanes-Oxley Act. These new regulations may change the manner in which
      the Company is required to report its financial condition and results of
      operations in the future. The Company believes that it has been at all times
      in
      material compliance with these regulations; however, there can be no assurance
      that future regulations, implementing the Sarbanes-Oxley Act, will not have
      an
      adverse effect on the Company’s reported financial condition and results of
      operations as compared with prior reporting periods.





Management
      has instituted a series of actions to strengthen and improve the Company’s
      already strong corporate governance practices. Included in those actions was
      the
      formation of a Disclosure Controls and Procedures Committee for financial
      reporting (the "Disclosure Committee"), to evaluate and monitor the continued
      effectiveness of the design and operation of disclosure controls for financial
      reporting. The Disclosure Committee complements the Company’s existing committee
      structure and process and is designed to capture critical management information
      and disclosures from the Company and each of its affiliates. The Company
      believes that the addition of the Disclosure Committee enhances its already
      effective disclosure processes.





The
      earnings of banks and consumer finance companies, and therefore the earnings
      of
      the Company (and its subsidiaries), are affected by the policies of regulatory
      authorities, including the Board of Governors of the Federal Reserve System.
      An
      important function of the Federal Reserve Board is to regulate the national
      supply of bank credit in an effort to prevent recession and to restrain
      inflation. Among the procedures used to implement these objectives are open
      market operations in U.S. Government securities, changes in the discount rate
      on
      member bank borrowings, and changes in reserve requirements against member
      bank
      deposits. These procedures are used in varying combinations to influence overall
      growth and distribution of bank loans, investments and deposits, and their
      use
      also may affect interest rates charged on loans or paid for deposits. Monetary
      policies of the Federal Reserve Board have had a significant effect on the
      operating results of commercial banks in the past and are expected to continue
      to do so in the future. The effect, if any, of such policies upon the future
      business and earnings of the Company cannot accurately be predicted. The Company
      makes no attempt to predict the effect on its revenues and earnings of changes
      in general economic, industrial, and international conditions or in legislation
      and governmental regulations. The Company is not able to predict the impact
      of
      such laws or governmental regulations on its financial condition or results
      of
      operations at this time.





16
 *Table
            of Contents*





**Item1A.**
            **Business
                Risks**





Except
      for the historical information contained herein, the matters discussed in this
      Form 10-K include certain forward-looking statements within the meaning of
      Section 27A of the Securities Act and Section 21E of the Securities Exchange
      Act
      of 1934, as amended (the “Exchange Act”), which are intended to be covered by
      the safe harbors created thereby. Those statements include, but may not be
      limited to, all statements regarding the intent, belief and expectations of
      the
      Company and its management, such as statements concerning the Company’s future
      profitability. Investors are cautioned that all forward-looking statements
      involve risks and uncertainties including, without limitation, factors detailed
      from time to time in the Company’s filings with the SEC. Although the Company
      believes that the assumptions underlying the forward-looking statements
      contained herein are reasonable, any of the assumptions could be inaccurate.
      Therefore, there can be no assurance that the forward-looking statements
      included in this Form 10-K will prove to be accurate, and in light of the
      significant uncertainties inherent in the forward-looking statements included
      herein, the inclusion of such information should not be regarded as a
      presentation by the Company or any other person that the objectives and plans
      of
      the Company will be achieved. The Company encounters a number of risks in the
      conduct of its business. A discussion of such risks follows.





**Interest
      Rate Risk.** The
      Company’s earnings and cash flows are largely dependent upon its net interest
      income. Net interest income is the difference between interest income earned
      on
      interest-earning assets such as loans and securities and interest expense paid
      on interest-bearing liabilities such as deposits and borrowed funds. Interest
      rates are highly sensitive to many factors that are beyond the Company’s
      control, including general economic conditions and policies of various
      governmental and regulatory agencies and, in particular, the Board of Governors
      of the Federal Reserve System. Changes in monetary policy, including changes
      in
      interest rates, could influence not only the interest the Company receives
      on
      loans and securities and the amount of interest it pays on deposits and
      borrowings, but such changes could also affect (i) the Company’s ability to
      originate loans and obtain deposits, (ii) the fair value of the Company’s
      financial assets and liabilities, and (iii) the average duration of the
      Company’s mortgage-backed securities portfolio. If the interest rates paid on
      deposits and other borrowings increase at a faster rate than the interest rates
      received on loans and other investments, the Company’s net interest income, and
      therefore earnings, could be adversely affected. Earnings could also be
      adversely affected if the interest rates received on loans and other investments
      fall more quickly than the interest rates paid on deposits and other borrowings.




Although
      management believes it has implemented effective asset and liability management
      strategies to reduce the potential effects of changes in interest rates on
      the
      Company’s results of operations, any substantial, unexpected, prolonged change
      in market interest rates could have a material adverse effect on the Company’s
      financial condition and results of operations.





**Lending
      Risk.** There
      are inherent risks associated with the Company’s lending activities. These risks
      include, among other things, the impact of changes in interest rates and changes
      in the economic conditions in the markets where the Company operates as well
      as
      those across Ohio and the United States. Increases in interest rates and/or
      weakening economic conditions could adversely impact the ability of borrowers
      to
      repay outstanding loans or the value of the collateral securing these loans.
      The
      Company is also subject to various laws and regulations that affect its lending
      activities. Failure to comply with applicable laws and regulations could subject
      the Company to regulatory enforcement action that could result in the assessment
      of significant civil money penalties against the Company.




As
      of December 31, 2006, approximately 59% of the Company’s loan portfolio
      consisted of commercial and industrial, construction and commercial real estate
      mortgage loans. These types of loans are generally viewed as having more risk
      of
      default than residential real estate loans or consumer loans. These types of
      loans are also typically larger than residential real estate loans and consumer
      loans. Because the Company’s loan portfolio contains a significant number of
      commercial and industrial, construction and commercial real estate loans with
      relatively large balances, the deterioration of one or a few of these loans
      could cause a significant increase in non-performing loans. An increase in
      non-performing loans could result in a net loss of earnings from these loans,
      an
      increase in the provision for possible loan losses and an increase in loan
      charge-offs, all of which could have a material adverse effect on the Company’s
      financial condition and results of operations.





17
 *Table
            of Contents*





**Allowance
      For Possible Loan Losses May Be Insufficient.** The
      Company maintains an allowance for possible loan losses, which is a reserve
      established through a provision for possible loan losses charged to expense,
      that represents management’s best estimate of probable losses that have been
      incurred within the existing portfolio of loans. The allowance, in the judgment
      of management, is necessary to reserve for estimated loan losses and risks
      inherent in the loan portfolio. The level of the allowance reflects management’s
      continuing evaluation of industry concentrations; specific credit risks; loan
      loss experience; current loan portfolio quality; present economic, political
      and
      regulatory conditions and unidentified losses inherent in the current loan
      portfolio. The determination of the appropriate level of the allowance for
      possible loan losses inherently involves a high degree of subjectivity and
      requires the Company to make significant estimates of current credit risks
      and
      future trends, all of which may undergo material changes. Changes in economic
      conditions affecting borrowers, new information regarding existing loans,
      identification of additional problem loans and other factors, both within and
      outside of the Company’s control, may require an increase in the allowance for
      possible loan losses. In addition, bank regulatory agencies periodically review
      the Company’s allowance for loan losses and may require an increase in the
      provision for possible loan losses or the recognition of further loan
      charge-offs, based on judgments different than those of management. In addition,
      if charge-offs in future periods exceed the allowance for possible loan losses,
      the Company will need additional provisions to increase the allowance for
      possible loan losses. Any increases in the allowance for possible loan losses
      will result in a decrease in net income and, possibly, capital, and may have
      a
      material adverse effect on the Company’s financial condition and results of
      operations.





**The
      Company Relies On Dividends From Its Subsidiaries For Most Of Its Revenue.** The
      Company is a separate and distinct legal entity from its subsidiaries. It
      receives substantially all of its revenue from dividends from its subsidiaries.
      These dividends are the principal source of funds to pay dividends on the
      Company’s common stock and interest and principal on its debt. Various federal
      and/or state laws and regulations limit the amount of dividends that Oak Hill
      Banks and certain non-bank subsidiaries may pay to the Company. Also, the
      Company’s right to participate in a distribution of assets upon a subsidiary’s
      liquidation or reorganization is subject to the prior claims of the subsidiary’s
      creditors. In the event Oak Hill Banks is unable to pay dividends to the
      Company, the Company may not be able to service debt, pay obligations or pay
      dividends on its common stock. The inability to receive dividends from Oak
      Hill
      Banks could have a material adverse effect on the Company’s business, financial
      condition and results of operations.





**Growth
      Strategy.** The
      Company has pursued and continues to pursue a strategy of growth. The success
      of
      the Company’s growth strategy will depend largely upon its ability to manage its
      credit risk and control its costs while providing competitive products and
      services. This growth strategy may present special risks, such as the risk
      that
      the Company will not efficiently handle growth with its present operations,
      the
      risk of dilution of book value and earnings per share as a result of an
      acquisition, the risk that earnings will be adversely affected by the start-up
      costs associated with establishing new products and services, the risk that
      the
      Company will not be able to attract and retain qualified personnel needed for
      expanded operations, and the risk that its internal monitoring and control
      systems may prove inadequate.




**Control
      by Management; Anti-Takeover Provisions.** Evan
      E.
      Davis, John D. Kidd and D. Bruce Knox beneficially own in the aggregate
      approximately 22.4% of the outstanding shares of Common Stock of the Company
      at
      December 31, 2006. In addition to Ohio and federal laws and regulations
      governing changes in control of insured depository institutions, the Company’s
      Articles of Incorporation and Code of Regulations contain certain provisions
      that may delay or make more difficult an acquisition of control of the Company.
      For example, the Company’s Articles of Incorporation do not exempt the Company
      from the provisions of Ohio’s “control share acquisition” and “merger
      moratorium” statutes. Assuming that the principal stockholders continue to
      retain the number of the outstanding voting shares of the Company that they
      presently own and the law of Ohio requires, as it presently does, at least
      two-thirds majority vote of the outstanding shares to approve a merger or other
      consolidation, unless the articles of incorporation of the constituent companies
      provide for a lower approval percentage for the transaction, which the Company’s
      articles do not provide, such ownership position could be expected to deter
      any
      prospective acquirer from seeking to acquire ownership or control of the
      Company, and the principal stockholders would be able to defeat any acquisition
      proposal that requires approval of the Company’s stockholders, if the principal
      stockholders chose to do so. In addition, the principal stockholders may make
      a
      private sale of shares of common stock of the Company that they own, including
      to a person seeking to acquire ownership or control of the Company. The Company
      has 3,000,000 shares of authorized but unissued preferred stock, par value
      $ .01
      per share, which may be issued in the future with such rights, privileges and
      preferences as are determined by the Board of Directors of the Company. In
      December 1997, the Board of Directors of the Company approved and adopted a
      stockholder rights plan that contemplates the issuance of rights to purchase
      preferred stock of the Company to the Company’s common stockholders of record as
      of February 17, 1998, as set forth in the Rights Agreement entered into between
      the Company and Fifth Third Bank on January 23, 1998. On December 26, 2000,
      the
      Company amended the Rights Agreement to appoint Registrar and Transfer Company
      as successor Rights Agent under the Rights Agreement due to the resignation
      of
      Fifth Third Bank as Rights Agent. The Board of Directors of the Company approved
      the appointment of Registrar and Transfer Company pursuant to a resolution
      dated
      November 14, 2000. John D. Kidd and Evan E. Davis also have entered into a
      Buy-Sell Agreement dated April 11, 2001 (the “Agreement”), whereby in the event
      of either one’s death, the survivor shall have the right to purchase some or all
      of the shares of the Company held by the deceased’s estate. In connection with
      the Agreement, Mr. Kidd and Mr. Davis each have executed a Limited Power of
      Attorney giving the other sole right, power and authority to vote all of the
      shares of the Company that he holds in the event of his incapacity.


18
 *Table
            of Contents*




**Limited
      Trading Market; Shares Eligible for Future Sale; Possible Volatility of Stock
      Price.** The
      Common Stock is traded on the Nasdaq Global Select Market under the symbol
      “OAKF.” During the 12 months ending March 8, 2007, the average weekly trading
      volume in the Common Stock has been approximately 58,000 shares per week. There
      can be no assurance given as to the liquidity of the market for the Common
      Stock
      or the price at which any sales may occur, which price will depend upon, among
      other things, the number of holders thereof, the interest of securities dealers
      in maintaining a market in the Common Stock and other factors beyond the control
      of the Company. The market price of the Common Stock could be adversely affected
      by the sale of additional shares of Common Stock owned by the Company’s current
      shareholders. The principal shareholders are permitted to sell certain limited
      amounts of Common Stock without registration, pursuant to Rule 144 under the
      Securities Act. The market price for the Common Stock could be subject to
      significant fluctuations in response to variations in quarterly and yearly
      operating results, general trends in the banking industry and other factors.
      In
      addition, the stock market can experience price and volume fluctuations that
      may
      be unrelated or disproportionate to the operating performance of affected
      companies. These broad fluctuations may adversely affect the market price of
      the
      Common Stock.





**Dependence
      on Management** *.* The
      Company’s success depends to a great extent on its senior management, including
      its Chairman, John D. Kidd; President and Chief Executive Officer, R. E.
      Coffman, Jr.; Executive Vice President and Chief Lending Officer Miles R.
      Armentrout; Executive Vice President and Chief Administrative Officer, David
      G.
      Ratz; Vice President, Scott J. Hinsch, Jr.; Chief Financial Officer, Dale B.
      Shafer, and Executive Vice President and Chief Information Officer, D. Bruce
      Knox. The loss of their individual services could have a material adverse impact
      on the Company’s financial stability and its operations. In addition, the
      Company’s future performance depends on its ability to attract and retain key
      personnel and skilled employees, particularly at the senior management level.
      The Company’s financial stability and its operations could be adversely affected
      if, for any reason, one or more key executive officers ceased to be active in
      the Company’s management.





**Competition.** Banking
      institutions operate in a highly competitive environment. The Company competes
      with other commercial banks, credit unions, savings institutions, finance
      companies, mortgage companies, mutual funds, and other financial institutions,
      many of which have substantially greater financial resources than the Company.
      Certain of these competitors offer products and services that are not offered
      by
      the Company and certain competitors are not subject to the same extensive laws
      and regulations as the Company. Additionally, consolidation of the financial
      services industry in Ohio and in the Midwest in recent years has increased
      the
      level of competition. Recent and proposed regulatory changes may further
      intensify competition in the Company’s market area.





**Holding
      Company Structure; Government Regulations and Policies.** The
      Company is a financial holding company, which is substantially dependent on
      the
      profitability of its subsidiaries and the upstream payment of dividends from
      Oak
      Hill to the Company. Under state and federal banking law, the payment of
      dividends by the Company and Oak Hill are subject to capital adequacy
      requirements. The inability of Oak Hill to generate profits and pay such
      dividends to the Company, or regulator restrictions on the payment of such
      dividends to the Company even if earned, would have an adverse effect on the
      financial condition and results of operations of the Company and the Company’s
      ability to pay dividends to the shareholders.





**Item1B.**
            **Unresolved
                Staff Comments**





Oak
      Hill
      Financial, Inc. does not have any unresolved comments with the Securities and
      Exchange Commission.





19
 *Table
            of Contents*





**Item
                2.**
            **Properties**





As
      of
      December 31, 2006, the registrant and its subsidiaries operate from 37
      full-service banking offices and one loan production office in Ohio. In
      addition, the Company operates administrative offices in Jackson, Ohio and
      Mason, Ohio. The offices are located in the following counties:


**Subsidiaries****Oak
                Hill**
            
            **Oak
                Hill**
            
            **Oak
                Hill Financial**
            
            **Oak
                Hill****County**
            
            **Financial,
                Inc.**
            
            **Banks**
            
            **Insurance**
            
            **Title
                Agency, LLC**Athens
            
            —
            
            2
            
            —
            
            —Brown
            
            —
            
            3
            
            —
            
            —Butler
            
            —
            
            2
            
            —
            
            —Fairfield
            
            —
            
            1
            
            —
            
            —Franklin
            
            —
            
            2
            
            —
            
            —Gallia
            
            —
            
            1
            
            —
            
            —Hamilton
            
            —
            
            3
            
            —
            
            —Hocking
            
            —
            
            1
            
            —
            
            —Jackson(1)
            
            1
            
            6
            
            1
            
            —Montgomery
            
            —
            
            2
            
            —
            
            —Lawrence
            
            —
            
            4
            
            —
            
            —Pickaway
            
            —
            
            2
            
            —
            
            —Ross
            
            —
            
            4
            
            —
            
            —Scioto
            
            —
            
            3
            
            —
            
            1Vinton
            
            —
            
            1
            
            —
            
            —Warren(2)
            
            —
            
            3
            
            —
            
            —





(1) Includes
      administrative offices of Oak Hill Financial, Inc. and Oak Hill
      Banks.


(2) Includes
      an administrative office of Oak Hill Banks.





The
      following table indicates which properties the Company leases, the term of
      the
      lease and end of lease options. All leases are comparable to other leases in
      the
      respective market areas and do not contain provisions detrimental to the Company
      or its subsidiaries.


**End
                of Lease Five Year Renewal Options****Beginning**
              **and****Length
                of Term**
            
            **One**
            
            **Two**
            
            **Three**Chillicothe
            
            11/01/06
                12 years
            
            
            
            One
                - 10-year renewal optionChillicothe
                Mulberry Street
            
            02/01/06
                2 years
            
            
            
            Three
                - 2-year renewal optionsChillicothe
                K-Mart
            
            06/28/94
                15 years
            
            
            
            No
                renewal optionsWest
                Portsmouth
            
            11/18/05
                5 years
            
            
            
            XJackson
                Wal-mart
            
            10/28/03
                5 years
            
            XOak
                Hill Banks Administrative Offices
            
            09/15/04
                4 years
            
            
            
            Three
                - 3-year renewal optionsColumbus
                loan production
            
            10/01/06
                6 months
            
            
            
            No
                renewal optionsLogan
            
            10/1/00  
                5 years
            
            
            
            
            
            XDelhi
            
            03/01/97
                10 years
            
            
            
            XMiddletown
            
            08/19/99
                10 years
            
            
            
            XOak
                Hill Title Agency, LLC
            
            10/01/06
                Month-to-month
            
            
            
            No
                renewal optionsCenterville
            
            12/19/03
                10 years
            
            
            
            XAthens
            
            03/01/06
                5 years
            
            
            
            XCircleville
                Wal-mart
            
            5/25/05  
                5 years
            
            
            
            XLancaster
            
            8/1/05    
                5 years
            
            
            
            Three
                - 2-year renewal optionsOHFI
            
            12/01/02
                5 years
            
            
            
            X





**Item
                3.**
            **Legal
                Proceedings**





Except
      for routine litigation incident to their business, the registrant and its
      subsidiaries are not a party to any material pending legal proceedings and
      none
      of their property is the subject of any such proceedings.





20
 *Table
            of Contents*





**Item
                4.**
            **Submission
                of Matters to a Vote of Security
                Holders**





No
      matters were submitted to the shareholders during the fourth quarter of
      2006.





**PART
      II**





**Item
                5.**
            **Market
                for the Registrant’s Common Equity, Related Shareholder Matters and Issuer
                Purchases of Equity
                Securities**





SHAREHOLDER
      INFORMATION





The
      common stock of the Company is traded on the Nasdaq Global Select Market under
      the symbol “OAKF.”





The
      high
      and low sales prices for the Company common stock during each quarter of 2006
      and 2005 are as follows:





QuarterEnded
            
            High
            
            Low12/31/06
            
            $
            30.05
            
            $
            24.5009/30/06
            
            
            25.90
            
            
            24.2306/30/06
            
            
            30.97
            
            
            25.0003/31/06
            
            
            33.25
            
            
            30.2312/31/05
            
            
            33.59
            
            
            28.7809/30/05
            
            
            32.46
            
            
            28.6806/30/05
            
            
            34.00
            
            
            25.0003/31/05
            
            
            39.11
            
            
            33.28





At
      March
      14, 2007 the Company had approximately 2,300 stockholders and 5,339,199 shares
      of common stock outstanding.





**Dividends.** The
      ability of the Company to pay cash dividends to stockholders is limited by
      its
      ability to receive dividends from its subsidiary. The State of Ohio places
      certain limitations on the payment of dividends by Ohio state-chartered
      banks.





The
      Company declared the following dividends per share in 2006 and
      2005:





Quarter
            
            DividendEnded
            
            Declared12/31/06
            
            $
            0.2109/30/06
            
            
            0.1906/30/06
            
            
            0.1903/31/06
            
            
            0.1912/31/05
            
            
            0.1909/30/05
            
            
            0.1706/30/05
            
            
            0.1703/31/05
            
            
            0.17





Future
      cash and stock dividends will be subject to determination and declaration by
      the
      Board of Directors of the Company, taking into consideration, among other
      factors, the Company’s financial condition and results of operations, investment
      opportunities, capital requirements, and regulatory limitations.





**Stock
      Transfer Agent.** Inquiries regarding stock transfer, registration, lost certificates, or changes
      in name and address should be directed in writing to the Company’s stock
      transfer agent:





The
      Registrar and Transfer Company


10
      Commerce Drive


Cranford,
      NJ 07016-3572


(800)
      456-0596





**Annual
      Meeting of Shareholders.** The
      Annual Meeting of Shareholders of Oak Hill Financial, Inc. will be held on
      April
      17, 2007 at 1:00 p.m. at the Ohio State University Extension South District
      Office, 17 Standpipe Road, Jackson, Ohio.





21
 *Table
            of Contents*





**Issuer
      Purchase of Equity Securities.** The
      following table details the Company’s repurchases of its common shares during
      the three months ended December 31, 2006:





Total
                Number ofShares
                Purchased
            
            Average
                PricePaid
                Per Share
            
            Total
                Number ofShares
                PurchasedAs
                Part of PubliclyAnnounce
                Plansor
                Programs
            
            Maximum
                Numberof
                Shares that MayYet
                Be PurchasedUnder
                the Plansor
                Programs(1)October
                1, 2006 -October
                31, 2006
            
            
            10,800
            
            $
            26.85
            
            
            10,800
            
            
            52,900November
                1, 2006 -November
                30, 2006
            
            
            46,900
            
            $
            27.32
            
            
            46,900
            
            
            6,000December
                1, 2006 -December
                31, 2006
            
            
            6,000
            
            $
            28.75
            
            
            6,000
            
            
            –





(1)
            During
                January 2006, the Company completed the share repurchase plan announced
                on
                May 26, 2005. On February 21, 2006, the Company announced that its
                Board
                of Directors had authorized management to repurchase up to 278,000
                shares
                of the Company’s common stock through open market or privately negotiated
                transactions. The repurchase plan was completed in December
                2006





22
 *Table
            of Contents*




*The
      following Performance Graph and related information shall not be deemed
“soliciting material” or to be “filed” with the Securities and Exchange
      Commission, nor shall such information be deemed to be incorporated by reference
      into any future filing under the Securities Act of 1933 or Securities Exchange
      Act of 1934, each as amended, except to the extent that the Company specifically
      incorporates it by reference into such filing.*




**Performance
      Graph.** The
      following Performance Graph compares the performance of the Company with that
      of
      the NASDAQ Composite Index and the SNL $1B-$5B Bank Asset-Size Index, each
      of
      which is a published industry index. The comparison of the cumulative total
      return to shareholders for each of the periods assumes that $100 was invested
      on
      December 31, 2001 in the common stock of the Company and in the NASDAQ Composite
      Index and the SNL $1B-$5B Bank Asset-Size Index and that all dividends were
      reinvested.











***Period
                Ending******Index***
            
            **12/31/01**
            
            **12/31/02**
            
            **12/31/03**
            
            **12/31/04**
            
            **12/30/05**
            
            **12/31/06**Oak
                Hill Financial, Inc.
            
            
            100.00
            
            
            138.76
            
            
            199.42
            
            
            261.54
            
            
            229.02
            
            
            198.82NASDAQ
                Composite
            
            
            100.00
            
            
            68.76
            
            
            103.67
            
            
            113.16
            
            
            115.57
            
            
            127.58SNL
                $1B-$5B Bank Index
            
            
            100.00
            
            
            115.44
            
            
            156.98
            
            
            193.74
            
            
            190.43
            
            
            220.36




23
 *Table
            of Contents*





**Item6.**
            **Selected
                Financial Data**





At
                or For the Year Ended December 31,2006
            
            2005
            
            2004
            
            2003
            
            2002SUMMARY
                OF FINANCIAL CONDITION
            
            (In
                thousands)Total
                assets
            
            $
            1,275,635
            
            $
            1,241,058
            
            $
            1,083,040
            
            $
            938,281
            
            $
            833,629Interest-bearing
                deposits and federal funds sold
            
            
            2,292
            
            
            2,983
            
            
            2,705
            
            
            1,285
            
            
            5,699Investment
                securities
            
            
            155,569
            
            
            134,812
            
            
            92,023
            
            
            79,545
            
            
            83,789Loans
                receivable - net(1)
            
            
            1,021,361
            
            
            1,015,083
            
            
            912,538
            
            
            811,021
            
            
            701,944Deposits
            
            
            942,960
            
            
            978,396
            
            
            862,096
            
            
            717,821
            
            
            663,813Subordinated
                debentures
            
            
            23,000
            
            
            23,000
            
            
            18,000
            
            
            5,000
            
            
            5,000Federal
                Home Loan Bank (FHLB) advances and other borrowings
            
            
            213,925
            
            
            141,382
            
            
            113,660
            
            
            130,352
            
            
            94,358Stockholders’
                equity - net
            
            
            90,757
            
            
            94,081
            
            
            85,043
            
            
            79,928
            
            
            66,881SUMMARY
                OF OPERATIONSInterest
                income
            
            $
            79,743
            
            $
            69,720
            
            $
            59,251
            
            $
            55,170
            
            $
            57,222Interest
                expense
            
            
            41,411
            
            
            29,436
            
            
            20,838
            
            
            20,468
            
            
            24,724Net
                interest income
            
            
            38,332
            
            
            40,284
            
            
            38,413
            
            
            34,702
            
            
            32,498Provision
                for losses on loans
            
            
            5,691
            
            
            6,341
            
            
            3,136
            
            
            3,347
            
            
            2,757Net
                interest income after provision for losses on loans
            
            
            32,641
            
            
            33,943
            
            
            35,277
            
            
            31,355
            
            
            29,741Gain
                on sale of loans
            
            
            849
            
            
            1,085
            
            
            1,882
            
            
            4,489
            
            
            2,358Gain
                on sale of branch premises
            
            
            (40
            )
            
            204
            
            
            –
            
            
            –
            
            
            122Gain
                (loss) on sale of assets
            
            
            22
            
            
            182
            
            
            (47
            )
            
            333
            
            
            331Commission
                income
            
            
            3,331
            
            
            2,781
            
            
            3,050
            
            
            2,827
            
            
            2,457Loss
                on sale of consumer finance loan portfolio
            
            
            –
            
            
            –
            
            
            (3,585
            )
            
            –
            
            
            –Other
                income
            
            
            8,969
            
            
            7,386
            
            
            5,370
            
            
            3,889
            
            
            2,845General,
                administrative and other expense
            
            
            34,206
            
            
            31,045
            
            
            26,944
            
            
            24,049
            
            
            22,663Earnings
                before federal income tax
            
            
            11,566
            
            
            14,536
            
            
            15,003
            
            
            18,844
            
            
            15,191Federal
                income taxes
            
            
            1,984
            
            
            3,157
            
            
            4,341
            
            
            6,266
            
            
            4,851Net
                earnings
            
            $
            9,582
            
            $
            11,379
            
            $
            10,662
            
            $
            12,578
            
            $
            10,340PER
                SHARE INFORMATIONBasic
                earnings per share
            
            $
            1.76
            
            $
            2.01
            
            $
            1.92
            
            $
            2.29
            
            $
            1.94Book
                value per share
            
            $
            17.16
            
            $
            16.79
            
            $
            15.30
            
            $
            14.34
            
            $
            12.46




*Footnotes
      on the following page.*





24
 *Table
            of Contents*





At
                or For the Year Ended December 31,2006
            
            2005
            
            2004
            
            2003
            
            2002OTHER
                STATISTICAL AND OPERATING DATAReturn
                on average assets
            
            
            0.76
            %
            
            0.96
            %
            
            1.07
            %
            
            1.45
            %
            
            1.26
            %Return
                on average equity
            
            
            10.28
            
            
            12.39
            
            
            12.89
            
            
            17.08
            
            
            16.76Net
                interest margin (fully-taxable equivalent)
            
            
            3.36
            
            
            3.70
            
            
            4.05
            
            
            4.19
            
            
            4.18Interest
                rate spread during period
            
            
            2.96
            
            
            3.37
            
            
            3.74
            
            
            3.81
            
            
            3.75General,
                administrative and other expense to average assets
            
            
            2.73
            
            
            2.62
            
            
            2.70
            
            
            2.77
            
            
            2.77Allowance
                for loan losses to nonperforming loans
            
            
            95.16
            
            
            77.25
            
            
            186.83
            
            
            133.46
            
            
            125.29Allowance
                for loan losses to total loans
            
            
            1.25
            
            
            1.33
            
            
            1.28
            
            
            1.32
            
            
            1.29Nonperforming
                loans to total loans
            
            
            1.31
            
            
            1.72
            
            
            0.69
            
            
            0.99
            
            
            1.03Nonperforming
                assets to total assets
            
            
            1.48
            
            
            1.45
            
            
            0.73
            
            
            0.93
            
            
            0.88Net
                charge-offs to average loans
            
            
            0.62
            
            
            0.50
            
            
            0.26
            
            
            0.22
            
            
            0.28Equity
                to assets at period end
            
            
            7.11
            
            
            7.58
            
            
            7.85
            
            
            8.52
            
            
            8.02Dividend
                payout ratio
            
            
            44.97
            
            
            35.06
            
            
            32.19
            
            
            23.67
            
            
            25.31


(1)
            Includes
                loans held for sale.





25
 *Table
            of Contents*





**Item7.**
            **Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations**





OVERVIEW


Oak
      Hill
      Financial, Inc. (the “Company”) is a financial holding company, t he
      principal assets of which are the Company’s ownership of Oak Hill Banks (“Oak
      Hill”) and Oak Hill Financial Insurance (“OHFI”). In addition, the Company owns
      49% of Oak Hill Title Agency, LLC (“Oak Hill Title”). The Company’s results of
      operations are primarily dependent upon its financial service subsidiary which
      is collectively viewed herein as a single operating segment for financial
      statement purposes.




Oak
      Hill
      conducts a general commercial banking business that consists of attracting
      deposits from the general public and using those funds to originate loans for
      commercial, consumer, and residential purposes. OHFI is an insurance agency
      specializing in group health insurance and other employee benefits. Oak Hill
      Title provides
      title services for commercial and residential real estate
      transactions.





Oak
      Hill’s profitability depends primarily on its net interest income, which is the
      difference between interest income generated from interest-earning assets (i.e.,
      loans and investments) less the interest expense incurred on interest-bearing
      liabilities (i.e., deposits and borrowed funds). Net interest income is affected
      by the relative amounts of interest-earning assets and interest-bearing
      liabilities, and the interest rates paid on these balances. Additionally, and
      to
      a lesser extent, profitability is affected by such factors as the level of
      noninterest income and expenses, the provision for losses on loans, and the
      effective tax rate. Other income consists primarily of service charges and
      other
      fees and income from the sale of loans. General, administrative and other
      expenses consist of compensation and benefits, occupancy-related expenses,
      franchise taxes, and other operating expenses.





In
      2005,
      the Company acquired Lawrence Financial Holdings, Inc. (“Lawrence Financial”)
      and its subsidiary Lawrence Federal Savings Bank (“Lawrence”) headquartered in
      Ironton, Ohio for $15.2 million, of which $7.7 million was paid in cash. In
      addition, the Company issued 221,051 shares of common stock to Lawrence
      Financial shareholders. As part of the transaction, the Company acquired a
      net
      three full-service offices in southern Ohio, involving total loans of $76.5
      million, $104.2 million in deposits and $116.9 million in assets.





In 2004,
      the
      Company acquired Ripley National Bank (“Ripley”) for $5.3 million in cash. As
      part of the transaction, the Company acquired full-service offices in Ripley
      and
      Georgetown, Ohio, involving total loans of $39.1 million, $51.6 million in
      deposits and $58.6 million in total assets.




Management’s
      Discussion and Analysis of Financial Condition and Results of Operations are
      presented herein to assist investors in understanding the consolidated financial
      condition and results of operations of the Company as of and for the years
      ended
      December 31, 2006, 2005 and 2004. This discussion should be read in conjunction
      with the Consolidated Financial Statements and related footnotes presented
      elsewhere in this report.





FORWARD
      LOOKING STATEMENTS


In
      the
      following pages, management presents an analysis of the Company’s consolidated
      financial condition as of December 31, 2006, and the consolidated results of
      operations for the year ended December 31, 2006 as compared to prior periods.
      In
      addition to this historical information, the following discussion and other
      sections of this Annual Report contain forward-looking statements that involve
      risks and uncertainties.
      Economic circumstances, the Company’s operations and the Company’s actual results could differ significantly from
      those discussed in the forward-looking statements. Some of the factors that
      could cause or contribute to such differences are discussed herein but also
      include changes in the economy and interest rates in the nation and the
      Company’s general market area. Without limiting the foregoing, some of the
      forward-looking statements include management’s establishment of an allowance
      for loan losses, and its statements regarding the adequacy of such allowance
      for
      loan losses, and management’s
      belief that the allowance for loan losses is adequate.





CRITICAL
      ACCOUNTING POLICIES


The
      preparation of consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to use judgments in making estimates and assumptions that affect
      the
      reported amounts of assets, liabilities, revenues and expenses. The following
      critical accounting policies are based upon judgments and assumptions by
      management that include inherent risks and uncertainties.




*Allowance
      for Losses on Loans:* The
      balance in this account is an accounting estimate of probable but unconfirmed
      asset impairment that has occurred in the Company’s loan portfolio as of the
      date of the consolidated financial statements before losses have been confirmed
      resulting in a subsequent charge-off or write-down. It
      is the Company’s policy to provide valuation allowances for estimated losses on
      loans based upon past loss experience, adjusted for changes in trends and
      conditions of the certain items, including:





·
            Local
                market areas and national economic
                developments;





26
 *Table
            of Contents*





·
            Levels
                of and trends in delinquencies and impaired
                loans;





·
            Levels
                of and trends in recoveries of prior
                charge-offs;





·
            Adverse
                situations that may affect specific borrowers’abilityto
                repay;





·
            Effects
                of any changes in lending policies and
                procedures;





·
            Credit
                concentrations;





·
            Experience,
                ability, and depth of lending management and credit administration
                staff;





·
            Volume
                and terms of loans; and





·
            Current
                collateral values, where
                appropriate.





When
      the
      collection of a loan becomes doubtful, or otherwise troubled, the Company
      records a loan loss provision equal to the difference between the fair value
      of
      the property securing the loan and the loan’s carrying value. Major loans and
      major lending areas are reviewed periodically to determine potential problems
      at
      an early date. The allowance for loan losses is increased by charges to earnings
      and decreased by charge-offs (net of recoveries).





The
      Company accounts for its allowance for losses on loans in accordance with
      Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for
      Contingencies,” and SFAS No. 114, “Accounting by Creditors for Impairment of a
      Loan.” Both Statements require the Company to evaluate the collectibility of
      both contractual interest and principal loan payments. SFAS No. 5 requires
      the
      accrual of a loss when it is probable that a loan has been impaired and the
      amount of the loss can be reasonably estimated. SFAS No. 114 requires that
      impaired loans be measured based upon the present value of expected future
      cash
      flows discounted at the loan’s effective interest rate or, as an alternative, at
      the loans’ observable market price or fair value of the collateral.





A
      loan is
      defined under SFAS No. 114 as impaired when, based on current information and
      events, it is probable that a creditor will be unable to collect all amounts
      due
      according to the contractual terms of the loan agreement. In applying the
      provisions of SFAS No. 114, the Company considers its investment in one-to-four
      family residential loans, consumer installment loans and credit card loans
      to be
      homogeneous and therefore excluded from separate identification for evaluation
      of impairment. These
      homogeneous loan groups are evaluated for impairment in accordance with SFAS
      No.
      5. With respect to the Company’s investment in commercial and other loans, and
      its evaluation of impairment thereof, management believes such loans are
      adequately collateralized and as a result impaired loans are carried as a
      practical expedient at the lower of cost or fair value.





It
      is the
      Company’s policy to charge off unsecured credits that are more than ninety days
      delinquent. Similarly, collateral dependent loans which are more than ninety
      days delinquent are considered to constitute more than a minimum delay in
      repayment and are evaluated for impairment under SFAS No. 114 at that
      time.





*Goodwill
      and Other Intangible Assets.* The
      Company has recorded goodwill and core deposit intangibles as a result of merger
      and acquisition activity.





Goodwill
      represents the excess purchase price paid over the net book value of the assets
      acquired in a merger or acquisition. Pursuant to SFAS No. 142, “Goodwill and
      Intangible Assets,” goodwill is not amortized, but is tested for impairment at
      the reporting unit annually or whenever an impairment indicator arises. The
      evaluation involves assigning assets and liabilities to reporting units and
      comparing the fair value of each reporting unit to its carrying value including
      goodwill. If the fair value of a reporting unit exceeds its carrying amount,
      goodwill is not considered impaired. However, if the carrying amount of the
      reporting unit exceeds the fair value, goodwill is considered impaired. The
      impairment loss equals the excess of carrying value over fair
      value.





Core
      deposit intangibles represent the value of long-term deposit relationships
      and
      are amortized over their estimated useful lives. The Company annually evaluates
      these estimated useful lives. If the Company determines that events or
      circumstances warrant a change in these estimated useful lives, the Company
      will
      adjust the amortization of the core deposit intangibles, which could affect
      future amortization expense.




27
 *Table
            of Contents*





FINANCIAL
      CONDITION


The
      Company’s total assets amounted to $1.3 billion as of December 31, 2006, an
      increase of $34.6 million, or 2.8%, over the $1.2 billion total at December
      31,
      2005. The asset growth was funded primarily through an increase of $34.5 million
      in Federal Home Loan Bank advances and a $38.1 million increase in repurchase
      agreements, which were partially offset by a $35.4 million reduction in
      deposits.





Cash
      and
      due from banks, federal funds sold, and investment
      securities, including mortgage-backed securities, increased by $17.6 million,
      or 10.9%,
      to a total of $178.8 million at December 31, 2006, compared to $161.2 million
      at
      December 31, 2005. Investment securities increased by $20.8 million during
      2006,
      as purchases of $67.6 million exceeded maturities and repayments of $20.1
      million and sales of $26.8 million. Federal funds sold decreased by $796,000
      during 2006.





Loans
      receivable, including loans held for sale, totaled $1.0 billion at December
      31,
      2006, an increase of $6.3 million, or 0.6%, over total loans at December 31,
      2005. Loan disbursements and purchases totaled $363.3 million during 2006,
      which
      were partially offset by loan sales of $26.6 million and principal repayments
      of
      $318.0 million during 2006. Loan disbursements and purchases decreased by $17.1
      million when compared to the same period in 2005. Growth in the loan portfolio
      during 2006 was comprised of a $12.1 million, or 1.7%, increase in commercial
      and residential real estate loans, a $990,000 or 0.9%, increase in installment
      loans, a $881,000, or 1.7% increase in construction and land development loans
      and a $167,000, or 7.7%, increase in credit card loans, which were partially
      offset by a $8.6 million, or 5.2%, decrease in commercial and other loans over
      the total at December 31, 2005. The allowance for loan losses represented 1.25%
      and 1.33% of the total loan portfolio at December 31, 2006 and 2005,
      respectively. The year over year reduction in the percentage of the allowance
      to
      total loans is reflective of the Board and management’s perceived reduction in
      portfolio risk during the year. The Company’s allowance represented 95.2% and
      77.3% of the $13.6 million and $17.7 million of nonperforming loans at December
      31, 2006 and 2005, respectively. The $3.6 million reduction in nonperforming
      loans resulted from aggressive collection and sale activity with respect to
      such
      loans and resulted in an increase in charge-offs from $5.0 million in 2005
      to
      $6.4 million in 2006. At December 31, 2006, nonperforming loans were comprised
      of $9.3 million of loans secured primarily by commercial real estate, $1.4
      million in commercial and other loans, $2.3 million secured by one-to-four
      family residential real estate, and $571,000 in installment and credit card
      loans. In management’s opinion, all nonperforming loans were adequately
      collateralized or reserved for at December 31, 2006. In addition, the Company
      acquired two parcels of commercial real estate that accounted for $4.5 million
      of the $4.9 million increase in real estate acquired through foreclosure.
      Approximately $3.0 million of this amount was sold subsequent to December 31,
      2006 without additional material loss.





Deposits
      totaled $943.0 million at December 31, 2006, a decrease of $35.4 million, or
      3.6%, from the $978.4 million total at December 31, 2005. Brokered deposits
      were
      a lessening part of the Company’s overall funding strategy during 2006. Brokered
      deposits totaled $39.5 million with a weighted-average cost of 3.87% at December
      31, 2006, as compared to the $80.5 million in brokered deposits with a 3.20%
      weighted-average cost at December 31, 2005.





Advances
      from the Federal Home Loan Bank totaled $157.6 million at December 31, 2006,
      an
      increase of $34.5 million, or 28.0%, from the December 31, 2005 total.
      Securities sold under agreements to repurchase totaled $56.3 million at December
      31, 2006, an increase of $38.1 million, over the total at December 31, 2005.
      The
      increase resulted primarily from $42.0 million in reverse repurchase agreements
      incepted in 2006, which were partially offset by the repayment of $10.0 million
      in reverse repurchase agreements originally incepted in 2005.




The
      Company’s stockholders’ equity amounted to $90.8 million at December 31, 2006, a
      decrease of $3.3 million, or 3.5%, from the balance at December 31, 2005. The
      decrease resulted primarily from $4.2 million in dividends paid to shareholders
      and the Company’s repurchase of 330,055 outstanding shares of common stock at an
      aggregate price of $9.4 million ($28.59 per share) during 2006, which were
      partially offset by net earnings of $9.6 million, proceeds from stock options
      exercised totaling $678,000 and a $41,000 increase in unrealized gain on
      securities available for sale, net of tax.





S UMMARY
      OF
      EARNINGS


Changes
      in net interest income are attributable to either
      changes in average balances (volume change) or changes
      in average rates (rate change) for interest-earning assets and interest-bearing
      liabilities. Volume change is calculated as change in volume times the old
      rate,
      while rate change is calculated as change in rate times the old volume. The
      table on page 34 indicates the dollar amount of the
      change attributable to each factor. The rate/volume change,
      the change in rate times the change in volume, is allocated between the volume
      change and the rate change at the ratio each component bears to the absolute
      value of their total.




28
 *Table
            of Contents*





COMPARISON
      OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006 AND
      2005


**General.**  Net
      earnings for the year ended December 31, 2006 totaled $9.6 million, a $1.8
      million, or 15.8%, decrease from 2005 net earnings. The decrease in earnings
      resulted primarily from a $2.0 million decrease in net interest income and
      a
      $3.2 million increase in general, administrative and other operating expenses,
      which were partially offset by a $1.5 million increase in other income, a
      $650,000 decrease in the provision for losses on loans and a $1.2 million
      decrease in the provision for federal income taxes.





**Net
      Interest Income.** Total
      interest income for the year ended December 31, 2006, amounted to $79.7 million,
      an increase of $10.0 million, or 14.4%, over the total recorded for 2005.
      Interest income on loans totaled $72.7 million, an increase of $8.4 million,
      or
      13.0%, over 2005. This increase resulted primarily from a $38.1
      million, or 3.8%, increase in the weighted-average
      (“average”) portfolio balance, to a total of $1.0 billion in 2006, coupled with
      a 58 basis point increase in the average fully-taxable equivalent yield, to
      7.07% in 2006 from 6.49% in 2005. Interest income on investment securities
      and
      other interest-earning assets increased by $1.6 million, or 30.3%. The increase
      resulted primarily from a 36 basis point increase in the average fully-taxable
      equivalent yield, to 5.35% in 2006, coupled with a $24.8 million, or 19.2%,
      increase in the average portfolio balance, to a total of $154.1 million in
      2006.





Total
      interest expense amounted to $41.4 million for the year ended December 31,
      2006,
      an increase of $12.0 million ,
      or
      40.7%, over the total recorded in 2005.
      Interest expense on deposits increased by $8.8 million, or 38.5%, to a total
      of
      $31.8 million in 2006. The increase resulted primarily from a $24.6 million,
      or
      2.9%, increase in the average portfolio balance, to a total of $877.1 million
      in
      2006, coupled with a 93 basis point increase in the average cost of deposits,
      to
      3.62% in 2006. Interest expense on borrowings increased by $3.1 million, or
      48.5%, during 2006. This increase was due to a
      $43.3
      million, or 30.0%, increase in average borrowings outstanding, coupled with
      a 64
      basis point increase in the average cost of borrowings, to 5.13% in
      2006.





As
      a
      result of the foregoing changes in interest income and interest expense, net
      interest income decreased by $2.0 million, or 4.8%, for the year ended December
      31, 2006, as compared to 2005. The interest rate spread decreased by 41 basis
      points, to 2.96% in 2006 compared to 3.37% in 2005. The fully-taxable equivalent
      net interest margin decreased by 34 basis points from, 3.70% in 2005 to 3.36%
      in
      2006. Management believes that future movements in short-term interest rates
      in
      the economy will continue to place pressure on the Company’s net interest
      margin.





**Provision
      for Losses on Loans.** A
      provision for losses on loans is charged to earnings to bring the total
      allowance for loan losses to a level considered appropriate by management based
      on historical experience, the volume and type of lending conducted by the
      Company, the status of past due principal and interest payments, general
      economic conditions, particularly as such conditions relate to the Company’s
      market area and other factors related to the collectibility of the Company’s
      loan portfolio. As a result of such analysis, management recorded a $5.7 million
      provision for losses on loans for
      the
      year ended December 31, 2006, a decrease of $650,000, compared to 2005. The provision for losses on loans recorded in 2006
      was primarily predicated upon the $6.3 million of growth in the net loan
      portfolio, integrated with net charge-offs of $6.4 million and a $3.6 million
      reduction in non-performing loans in 2006.





Although
      management believes that it uses the best information available in providing
      for
      possible loan losses and believes that the allowance is adequate at December
      31, 2006, future adjustments to the allowance could be
      necessary and net earnings could be affected if circumstances
      and/or economic conditions differ substantially from
      the
      assumptions used in making the initial determinations.





**Other
      Income.** Other
      income totaled $13.1 million for the year ended December 31, 2006, an increase
      of $1.5 million, or 12.8%, compared to the 2005 amount. This increase resulted
      primarily from a $1.5 million increase in service fees, charges and other
      operating income, a $70,000 increase in the cash surrender value of bank owned
      life insurance and a $550,000, or 19.8%, increase in commissions income, which
      were partially offset by a $236,000, or 21.8%, decrease in gain on sale of
      loans, a $93,000 increase in the loss on sale of assets and other real estate
      owned, and a $311,000, or 62.4% decrease in gain on sale of investment
      securities. The increase in service fees, charges and other income resulted
      from
      an increase in service charges on deposits totaling $884,000 and an increase
      in
      ATM fees of $286,000 in 2006. The gain on sale of loans decrease is generally
      attributable to a reduction in secondary market volume year over year.




**General,
      Administrative and Other Expense** **.** General,
      administrative and other expense totaled $34.2 million for the year ended
      December 31, 2006, an increase of $3.2 million, or 10.2%, over the 2005 total.
      The increase resulted primarily from a $1.4 million, or 8.8%, increase in
      employee compensation and benefits, a $988,000, or 10.9%, increase in other
      operating ex penses,
      a
      $1.2 million increase in franchise taxes, and an increase of $80,000, or 2.0%,
      in occupancy a nd
      equipment. The increase in employee compensation and benefits resulted primarily
      from increased staffing levels required in connection with the establishment
      of
      new branch locations, the acquisition of Lawrence Financial, additional
      management staffing and normal merit increases. The increase in other operating
      expense resulted primarily from a $463,000 increase in credit and collection
      expense, a $104,000 increase in ATM expense, and a $109,000 increase in
      professional fees. The remaining increase was due to pro-rata increases in
      other
      operating expenses attendant to the Company’s overall growth year-to-year. The
      increase in occupancy and equipment expense was due primarily to a $150,000,
      or
      9.9%, increase in depreciation expense and a $163,000, or 27.7% increase in
      utilities, property taxes and insurance expenses year-to-year, which was
      partially offset by a $129,000, or 19.1% decrease in maintenance contracts
      and
      repairs, coupled with decreases in other expenses year-to-year. The increase
      in
      depreciation expense is primarily attributable to new office locations and
      the
      administrative office addition completed in 2006. The increase in franchise
      tax
      is attributable to the absence of a tax savings in 2005 resulting from the
      Oak
      Hill-Ripley merger.





29
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            of Contents*





**Federal
      Income Taxes.** The
      provision for federal income taxes amounted to $2.0 million for the year ended
      December 31, 2006, a decrease of $1.2 million, or 37.2%, compared to the $3.2
      million recorded in 2005. The decrease resulted primarily from a $3.0 million,
      or 20.4% decrease in earnings before taxes, coupled with a decrease in the
      effective tax rate from 21.7% for the year ended December 31, 2005 to 17.2%
      for
      the year ended December 31, 2006. The difference between the 34% statutory
      rate
      and the Company’s effective tax rate in 2006 and 2005 is attributable to the New
      Markets Tax Credit.





COMPARISON
      OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2005 AND
      2004


**General.**  Net
      earnings for the year ended December 31, 2005 totaled $11.4 million, a $717,000,
      or 6.7%, increase from 2004 net earnings. The increase in earnings resulted
      primarily from a $1.9 million increase in net interest income, a $5.0 million
      increase in total other income and a $1.2 million decrease in the provision
      for
      federal income taxes, all of which were partially offset by a $3.2 million
      increase in the provision for losses on loans and a $4.1 million increase in
      general, administrative and other operating expenses.





**Net
      Interest Income.** Total
      interest income for the year ended December 31, 2005, amounted to $69.7 million,
      an increase of $10.5 million, or 17.7%, from the total recorded for 2004.
      Interest income on loans totaled $64.3 million, an increase of $8.8 million,
      or
      15.8%, from the 2004 period. This increase resulted primarily from a $124.1
      million, or 14.3%, increase in the weighted-average
      (“average”) portfolio balance, to a total of $994.0 million in 2005, coupled
      with an 8 basis point increase in the average fully-taxable equivalent yield,
      to
      6.49% in 2005 from 6.41% in 2004. As stated previously, the growth in the loan
      portfolio was heavily influenced by the Lawrence Financial purchase. Interest
      income on investment securities and other interest-earning assets increased
      by
      $1.7 million, or 45.3%. The increase resulted primarily from a 55 basis point
      increase in the average fully-taxable equivalent yield, to 4.99% in 2005,
      coupled with a $35.5 million, or 37.8%, increase in the average portfolio
      balance, to a total of $129.3 million in 2005. The increase in average yield
      is
      generally reflective of eight rate increases by the Federal Reserve Board during
      the year.





Total
      interest expense amounted to $29.4 million for the year ended December 31,
      2005,
      an increase of $8.6 million ,
      or
      41.3%, from the total recorded in 2004.
      Interest expense on deposits increased by $7.0 million, or 44.1%, to a total
      of
      $22.9 million in 2005. The increase resulted primarily from a $137.6 million,
      or
      19.2%, increase in the average portfolio balance, to a total of $852.5 million
      in 2005, coupled with a 46 basis point increase in the average cost of deposits,
      to 2.69% in 2005. Interest expense on borrowings increased by $1.6 million,
      or
      32.1%, during 2005. This increase was due to a
      $19.9
      million, or 16.0%, increase in average borrowings outstanding, coupled with
      a 54
      basis point increase in the average cost of borrowings, to 4.49% in 2005. The
      increased cost of interest-bearing liabilities was also primarily due to the
      overall increase in interest rates in the economy throughout 2005.





As
      a
      result of the foregoing changes in interest income and interest expense, net
      interest income increased by $1.9 million, or 4.9%, for the year ended December
      31, 2005, as compared to 2004. The interest rate spread decreased by 37 basis
      points, to 3.37% in 2005 compared to 3.74% in 2004. The fully-taxable equivalent
      net interest margin decreased by 35 basis point from, 4.05% in 2004 to 3.70%
      in
      2005.





**Provision
      for Losses on Loans.** A
      provision for losses on loans is charged to earnings to bring the total
      allowance for loan losses to a level considered appropriate by management based
      on historical experience, the volume and type of lending conducted by the
      Company, the status of past due principal and interest payments, general
      economic conditions, particularly as such conditions relate to the Company’s
      market area and other factors related to the collectibility of the Company’s
      loan portfolio. As a result of such analysis, management recorded a $6.3 million
      provision for losses on loans for
      the
      year ended December 31, 2005, an increase of $3.2
      million compared to 2004. The provision for losses on loans in 2005 was
      primarily influenced by an increase of $11.4 million in nonperforming loans
      from
      $6.3 million in 2004 to $17.7 million at December 31, 2005, and growth of $102.5
      million in the loan portfolio during the year.





Although
      management believes that it uses the best information available in providing
      for
      possible loan losses and believes that the allowance is adequate at December
      31, 2005, future adjustments to the allowance could be
      necessary and net earnings could be affected if circumstances
      and/or economic conditions differ substantially from
      the
      assumptions used in making the initial determinations.





30
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            of Contents*





**Other
      Income.** Other
      income totaled $11.6 million for the year ended December 31, 2005, an increase
      of $5.0 million, or 74.5%, compared to the 2004 amount. This increase resulted
      primarily from a $1.7 million increase in service fees, charges and other
      operating income, a $318,000 increase in the cash surrender value of bank owned
      life insurance, and the absence of the $3.6 million loss on the sale of the
      Action loan portfolio, which were partially offset by a $797,000, or 42.3%,
      decrease in gain on sale of loans and a $269,000, or 8.8%, decrease in insurance
      commissions. The increase in service fees, charges and other income resulted
      from an increase in service charges on deposits totaling $946,000 and an
      increase in ATM fees of $434,000 in 2005. The gain on sale of loans decrease
      is
      generally attributable to a reduction in secondary market volume year over
      year.




**General,
      Administrative and Other Expense** **.** General,
      administrative and other expense totaled $31.0 million for the year ended
      December 31, 2005, an increase of $4.1 million, or 15.2%, over the 2004 total.
      The increase resulted primarily from a $1.6 million, or 10.9%, increase in
      employee compensation and benefits, a $2.7 million, or 33.6%, increase in other
      operating ex penses,
      an increase of $667,000, or 19.6%, in occupancy a nd
      equipment, which were partially offset by a $799,000 decrease in franchise
      taxes. The increase in employee compensation and benefits resulted primarily
      from increased staffing levels required in connection with the establishment
      of
      new branch locations, the acquisition of Lawrence Financial, additional
      management staffing and normal merit increases. The increase in other operating
      expenses resulted from a $478,000 increase in professional fees, $386,000 in
      merger-related expenses in connection with the previously mentioned Lawrence
      merger, an $881,000 increase in amortization of intangibles and a $316,000
      increase in marketing fees. The remaining increase was due to pro-rata increases
      in other operating expenses attendant to the Company’s overall growth
      year-to-year. The increase in occupancy and equipment expense was due primarily
      to a $339,000, or 36.8%, increase in maintenance contracts and a $376,000,
      or
      32.8%, increase in depreciation expense year-to-year. The increases in
      depreciation expense is primarily attributable to new office locations. The
      decrease in franchise taxes was attributable to a tax savings for 2005 resulting
      from the previously mentioned Oak Hill-Ripley merger in 2004.





**Federal
      Income Taxes.** The
      provision for federal income taxes amounted to $3.2 million for the year ended
      December 31, 2005, a decrease of $1.2 million, or 27.3%, compared to the $4.3
      million recorded in 2004. The decrease resulted primarily from a $467,000,
      or
      3.1%, decrease in earnings before taxes, coupled with $1.0 million in New
      Markets Tax Credits pursuant to Oak Hill’s qualified investment in Oak Hill
      Banks Community Development Corp. The effective tax rates were 21.7% and 28.9%
      for the years ended December 31, 2005 and 2004, respectively.





LIQUIDITY
      AND CAPITAL RESOURCES


Like
      other financial institutions, the Company must ensure that sufficient funds
      are
      available to meet deposit withdrawals, loan commitments, and expenses. Control
      of the Company’s cash flow requires the anticipation of deposit flows and loan
      payments. The Company’s primary sources of funds are deposits, borrowings and
      principal and interest payments on loans. The Company uses funds from deposit
      inflows, proceeds from borrowings and principal and interest payments on loans
      primarily to originate loans, and to purchase short-term investment securities
      and interest-bearing deposits.





At
      December 31, 2006, the Company had $336.1 million of certificates of deposit
      maturing within one year. It has been the Company’s historic experience that
      such certificates of deposit will be renewed with Oak Hill at market rates
      of interest.
      It is management’s belief that maturing certificates of deposit over the next
      year will similarly be renewed with the Oak Hill at market rates of interest
      without a material adverse effect on the results of operations.





In
      the
      event that certificates of deposit cannot be renewed at prevalent market rates,
      the Company can obtain up to $266.5 million in advances from the Federal Home
      Loan Bank of Cincinnati (FHLB). Also, as an operational philosophy, the Company
      seeks to obtain advances to help with asset/liability management and liquidity.
      At December 31, 2006, the Company had $157.6 million of outstanding FHLB
      advances with a weighted-average interest rate of 4.96%.





The
      Company engages in off-balance sheet credit-related activities that could
      require the Company to make cash payments in the event that specified future
      events occur. The contractual amounts of these activities represent the maximum
      exposure to the Company. However, certain off-balance sheet commitments are
      expected to expire or be only partially used; therefore, the total amount of
      commitments does not necessarily represent future cash requirements. These
      off-balance sheet activities are necessary to meet the financing needs of the
      Company’s customers. At December 31, 2006, the Company had total off-balance
      sheet contractual commitments totaling $34.1 million to originate residential,
      commercial loans, and other consumer loans, $137.8 million in unused lines
      of
      credit and letters of credit totaling $13.3 million. Funding for these amounts
      is expected to be provided by the liquidity sources described above. Management
      believes the Company has adequate resources to meet its normal funding
      requirements.





31
 *Table
            of Contents*





The
      table
      below details the amount of loan commitments, unused lines of credit and letters
      of credit outstanding at December 31, 2006, by expiration period:


One
                year
            
            Two
                to
            
            After*(In
                thousands)*
            
            or
                less
            
            three
                years
            
            three
                years
            
            TotalLoan
                commitments
            
            $
            34,125
            
            $
            –
            
            $
            –
            
            $
            34,125Unused
                lines of credit
            
            
            53,808
            
            
            38,184
            
            
            45,858
            
            
            137,850Letters
                of credit
            
            
            3,040
            
            
            10,277
            
            
            –
            
            
            13,317$
            90,973
            
            $
            48,461
            
            $
            45,858
            
            $
            185,292





The
      table
      below details the amount of contractual obligations outstanding at December
      31,
      2006, by expiration period:


One
                year
            
            Two
                to
            
            After*(In
                thousands)*
            
            or
                less
            
            three
                years
            
            three
                years
            
            TotalAdvances
                from the Federal Home Loan Bank
            
            $
            58,301
            
            $
            49,736
            
            $
            49,547
            
            $
            157,584Securities
                sold under agreement to repurchase
            
            
            14,341
            
            
            –
            
            
            42,000
            
            
            56,341Subordinated
                debentures
            
            
            –
            
            
            –
            
            
            23,000
            
            
            23,000Lease
                obligations
            
            
            610
            
            
            708
            
            
            755
            
            
            2,073$
            73,252
            
            $
            50,444
            
            $
            115,302
            
            $
            238,998




32
 *Table
            of Contents*





The
      table
      below shows for each category
      of interest-earning assets and interest-bearing liabilities, the average amount outstanding, the interest earned
      or
      paid on such amount, and the average rate earned or paid for the years ended
      December 31, 2006, 2005 and 2004. The table also shows the average
      rate earned
      on all interest-earning assets, the average rate paid on all interest-bearing
      liabilities, the interest rate spread, and the net interest margin for the
      same
      periods.





AVERAGE
      BALANCE AND INTEREST RATES




Year
                Ended December 31,2006
            
            2005
            
            2004Interest
            
            
            
            
            
            Interest
            
            
            
            
            
            InterestAverage
            
            Income/
            
            Average
            
            Average
            
            Income/
            
            Average
            
            Average
            
            Income/
            
            Average*(Dollars
                in thousands)*
            
            Balance
            
            Expense
            
            Rate
            
            Balance
            
            Expense
            
            Rate
            
            Balance
            
            Expense
            
            RateInterest
                earnings assets:Loans
                receivable(1)
            
            $
            1,032,104
            
            
            72,982
            
            
            7.07
            %
            $
            993,976
            
            $
            64,535
            
            
            6.49
            %
            $
            869,849
            
            $
            55,734
            
            
            6.41
            %Investment
                securities(1)
            
            
            150,662
            
            
            8,066
            
            
            5.35
            
            
            126,958
            
            
            6,364
            
            
            5.01
            
            
            90,415
            
            
            4,119
            
            
            4.56Federal
                funds sold
            
            
            1,426
            
            
            80
            
            
            5.61
            
            
            584
            
            
            20
            
            
            3.42
            
            
            929
            
            
            15
            
            
            1.61Interest-earning
                deposits
            
            
            2,028
            
            
            95
            
            
            4.68
            
            
            1,767
            
            
            74
            
            
            4.19
            
            
            2,472
            
            
            28
            
            
            1.13Total
                interest- earnings assets
            
            
            1,186,220
            
            
            81,223
            
            
            6.85
            
            
            1,123,285
            
            
            70,993
            
            
            6.32
            
            
            963,665
            
            
            59,896
            
            
            6.22Non-interest
                earning assets
            
            
            68,370
            
            
            
            
            
            
            
            
            62,951
            
            
            
            
            
            
            
            
            33,361Total
                assets
            
            $
            1,254,590
            
            
            
            
            
            
            
            $
            1,186,236
            
            
            
            
            
            
            
            $
            997,026Interest-bearing
                liabilities:Deposits:Savings
                accounts
            
            $
            55,959
            
            
            286
            
            
            0.51
            
            $
            70,651
            
            
            365
            
            
            0.52
            
            $
            52,292
            
            
            195
            
            
            0.37NOW
                accounts
            
            
            76,309
            
            
            1,310
            
            
            1.72
            
            
            76,679
            
            
            1,017
            
            
            1.33
            
            
            70,990
            
            
            804
            
            
            1.13Money
                market deposit accounts
            
            
            5,740
            
            
            24
            
            
            0.42
            
            
            8,993
            
            
            36
            
            
            0.40
            
            
            7,930
            
            
            31
            
            
            0.39Premium
                & select investments
            
            
            189,032
            
            
            8,403
            
            
            4.45
            
            
            111,081
            
            
            3,392
            
            
            3.05
            
            
            74,364
            
            
            967
            
            
            1.30Certificates
                of deposit
            
            
            550,096
            
            
            21,750
            
            
            3.95
            
            
            585,114
            
            
            18,134
            
            
            3.10
            
            
            509,340
            
            
            13,926
            
            
            2.73Borrowings
            
            
            187,757
            
            
            9,638
            
            
            5.13
            
            
            144,445
            
            
            6,492
            
            
            4.49
            
            
            124,514
            
            
            4,915
            
            
            3.95Total
                interest-bearing liabilities
            
            
            1,064,893
            
            
            41,411
            
            
            3.89
            
            
            996,963
            
            
            29,436
            
            
            2.95
            
            
            839,430
            
            
            20,838
            
            
            2.48Non
                interest-bearing liabilities
            
            
            96,462
            
            
            
            
            
            
            
            
            97,420
            
            
            
            
            
            
            
            
            74,888Stockholders’
                equity
            
            
            93,235
            
            
            
            
            
            
            
            
            91,853
            
            
            
            
            
            
            
            
            82,708Total
                liabilities and stockholders' equity
            
            $
            1,254,590
            
            
            
            
            
            
            
            $
            1,186,236
            
            
            
            
            
            
            
            $
            997,026Net
                interest income and interest rate spread
            
            
            
            
            $
            39,812
            
            
            2.96
            %
            
            
            
            $
            41,557
            
            
            3.37
            %
            
            
            
            $
            39,058
            
            
            3.74
            %Net
                interest margin(2)
            
            
            
            
            
            
            
            
            3.36
            %
            
            
            
            
            
            
            
            3.70
            %
            
            
            
            
            
            
            
            4.05
            %Average
                interest-earning assets to average interest-bearing
                liabilities
            
            
            
            
            
            
            
            
            111.39
            %
            
            
            
            
            
            
            
            112.67
            %
            
            
            
            
            
            
            
            114.80
            %Adjustment
                of interest income to a tax-equivalent basis on
                tax-exempt:Loans
                and investment securities
            
            
            
            
            $
            1,480
            
            
            
            
            
            
            
            $
            1,273
            
            
            
            
            
            
            
            $
            645





*(1)*
            *Presented
                on a tax-equivalent basis.*


*(2)*
            *The
                net interest margin is net interest income divided by average
                interest-earning assets.*




33
 *Table
          of Contents*





RATE/VOLUME
      TABLE





Year
                Ended December 31,2006
                vs. 2005
            
            2005
                vs. 2004Increase
                (decrease) due to
            
            Increase
                (decrease) due to*(In
                thousands)*
            
            Volume
            
            Rate
            
            Total
            
            Volume
            
            Rate
            
            TotalInterest
                income attributable to:(1)Loans
                receivable
            
            $
            2,294
            
            $
            6,153
            
            $
            8,447
            
            $
            8,115
            
            $
            686
            
            $
            8,801Investment
                securities
            
            
            1,316
            
            
            386
            
            
            1,702
            
            
            1,929
            
            
            316
            
            
            2,245Federal
                funds sold
            
            
            42
            
            
            18
            
            
            60
            
            
            (2
            )
            
            7
            
            
            5Interest-earning
                deposits with banks
            
            
            12
            
            
            9
            
            
            21
            
            
            (6
            )
            
            52
            
            
            46Total
                interest income
            
            $
            3,664
            
            $
            6,566
            
            $
            10,230
            
            $
            10,036
            
            $
            1,061
            
            $
            11,097Interest
                expense attributable to:DepositsSavings
                accounts
            
            $
            (72
            )
            $
            (7
            )
            $
            (79
            )
            $
            (114
            )
            $
            284
            
            $
            170NOW
                accounts
            
            
            (5
            )
            
            298
            
            
            293
            
            
            50
            
            
            163
            
            
            213Money
                market deposit accounts
            
            
            (14
            )
            
            2
            
            
            (12
            )
            
            4
            
            
            1
            
            
            5Premium
                and select investment accounts
            
            
            5,520
            
            
            (509
            )
            
            5,011
            
            
            109
            
            
            2,316
            
            
            2,425Certificates
                of deposit
            
            
            (1,113
            )
            
            4,729
            
            
            3,616
            
            
            5,194
            
            
            (986
            )
            
            4,208Borrowings
            
            
            2,473
            
            
            673
            
            
            3,146
            
            
            1,534
            
            
            43
            
            
            1,577Total
                interest expense
            
            $
            6,789
            
            $
            5,186
            
            $
            11,975
            
            $
            6,777
            
            $
            1,821
            
            $
            8,598Increase
                in net interest income
            
            
            
            
            
            
            
            $
            (1,745
            )
            
            
            
            
            
            
            $
            2,499


*(1)*
            *Presented
                on a tax-equivalent basis.*




34
 *Table
            of Contents*





**Item7A.**
            **Quantitative
                and Qualitative Disclosure About Market
                Risk**





This
      information is presented in “Asset and Liability Management” on pages 13 through
      14 of this report.





**Item
                8.**
            **Financial
                Statements and Supplementary
                Data**





Consolidated
      Financial Statements of the Company, together with the reports thereon of Grant
      Thornton LLP (dated February 27, 2007) are set forth on pages 39 through 44
      hereof (see Item 15 of this Annual Report for Index).





**Item9.**
            **Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure**





Not
      Applicable.





**Item
                9A.**
            **Controls
                and Procedures**





*Disclosure
      Controls and Procedures*





Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f)
      under the Securities Exchange Act of 1934 (the “Exchange Act”). The Company’s
      disclosure controls and procedures are designed to provide reasonable assurance
      that information required to be disclosed in the Company’s reports under the
      Exchange Act is recorded, processed, summarized and reported within the time
      periods specified in the Securities and Exchange Commission’s rules and forms,
      and that such information is accumulated and communicated to management,
      including the Company’s Chief Executive Officer and Chief Financial Officer as
      appropriate, to allow timely decisions regarding required
      disclosure.





Internal
      control over financial reporting may not prevent or detect misstatements due
      to
      its inherent limitations. Projections of any evaluation effectiveness to future
      periods are subject to the risk that controls may become inadequate because
      of
      changes in conditions, or that the degree of compliance with the policies or
      procedures may deteriorate.





*Management’s
      Report on Internal Control Over Financial Reporting*





Management
      conducted an evaluation of the effectiveness of internal control over financial
      reporting as of December 31, 2006 based on the framework in *Internal
      Control - Integrated Framework* ** issued
      by
      the Committee of Sponsoring Organizations of the Treadway Commission. The scope
      of the evaluation encompassed all branches of its primary subsidiary Oak Hill
      Banks.





Based
      on
      the evaluation, management concluded that the Company’s internal control over
      financial reporting was effective at December 31, 2006. Management’s assessment
      of internal control over financial reporting has been audited by Grant Thornton
      LLP, an independent registered public accounting firm, as stated in their report
      included herein.





*Changes
      in Internal Control*





There
      have not been any changes in the Company’s internal control over financial
      reporting during the quarter ended December 31, 2006 that have materially
      affected, or are reasonably likely to materially affect, the Company’s control
      over financial reporting.




35
 *Table
            of Contents*





Report
      of
      Independent Registered Public Accounting Firm










Board
      of
      Directors and Shareholders of Oak Hill Financial, Inc.





We
      have
      audited management’s assessment, included in the accompanying Management Report
      on Internal Control over Financial Reporting, that Oak Hill Financial, Inc.
      (the
“Company”) maintained effective internal control over financial reporting as of
      December 31, 2006, based on criteria established by the Committee of Sponsoring
      Organizations of the Treadway Commission (“COSO”). Oak Hill Financial, Inc.’s
      management is responsible for maintaining effective internal control over
      financial reporting and for its assessment of the effectiveness of internal
      control over financial reporting. Our responsibility is to express an opinion
      on
      management’s assessment and an opinion on the effectiveness of the Company’s
      internal control over financial reporting based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether effective
      internal control over financial reporting was maintained in all material
      respects. Our audit included obtaining an understanding of internal control
      over
      financial reporting, evaluating management’s assessment, testing and evaluating
      the design and operating effectiveness of internal control, and performing
      such
      other procedures as we considered necessary in the circumstances. We believe
      that our audit provides a reasonable basis for our opinion.





A
      company’s internal control over financial reporting is a process designed to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of consolidated financial statements for external purposes
      in accordance with generally accepted
      accounting principles. A company’s internal control over financial reporting
      includes those policies and procedures that (1) pertain to the maintenance
      of
      records that, in reasonable detail, accurately and fairly reflect the
      transactions and
      dispositions of assets of the company; (2) provide reasonable assurance that
      transactions are recorded as necessary to permit preparation of consolidated
      financial statements in accordance with generally accepted accounting
      principles, and that receipts and expenditures of the company are being made
      only in accordance with authorizations of management and directors of the
      company; and (3) provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use, or disposition of the company’s
      assets that could have a material effect on the financial
      statements.





Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies and procedures may deteriorate.





In
      our
      opinion, management’s assessment that Oak Hill Financial, Inc. maintained
      effective internal control over financial reporting as of December 31, 2006
      is
      fairly stated, in all material respects, based on the control criteria
      established in *Internal
      Control - Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway Commission. Also
      in
      our opinion, Oak Hill Financial, Inc. maintained, in all material respects,
      effective internal control over financial reporting as of December 31, 2006,
      based on *Internal
      Control - Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway
      Commission.





We
      have
      also audited, in accordance with the standards of the Public Company Accounting
      Oversight Board (United States), Oak Hill Financial, Inc.’s consolidated
      statements of financial condition as of December 31, 2006 and 2005, and the
      related statements of earnings, stockholders’ equity, comprehensive income and
      cash flows for each of the three years in the period ended December 31, 2006,
      and our report dated March 15, 2007, expressed an unqualified opinion on those
      financial statements.





GRANT
      THORNTON LLP





*/s/
      Grant Thornton LLP*





Cincinnati,
      Ohio


March
      15,
      2007




36
 *Table
            of Contents*





**Item9B.**
            **Other
                Information**





None





**PART
      III**





**Item
                10.**
            **Directors,
                Executive Officers and Corporate
                Governance**





The
      information is contained under "Ownership of Common Stock by Management",
“Election of Directors” and “Executive Officers” in the Company's 2007 Proxy
      Statement, is incorporated herein by reference in response to this
      item.





The
      information contained under “Meetings of the Board of Directors and Committees
      of the Board”, specifically concerning Audit Committee financial expert, in the
      Company’s 2007 Proxy Statement, is incorporated herein by reference in response
      to this item.





The
      information contained under "Compliance With Section 16(a) of the Securities
      Exchange Act" in the Company's 2007 Proxy Statement, 2006, is incorporated
      herein by reference in response to this item.





The
      Company has adopted a Code of Ethics that applies to the Company’s directors,
      officers and employees including the Company’s principal executive officer,
      principal financial officer, principal accounting officer, controller and other
      persons performing similar functions. The Code of Ethics may only be amended
      or
      modified by the Board of Directors of the Company. Waivers of the Code of Ethics
      may only be granted by the Board of Directors of the Company and along with
      reasons for the waiver will be promptly disclosed as required by the Securities
      Exchange Act of 1934 and the rules thereof and the applicable rules of The
      Nasdaq Stock Market, Inc. In addition, amendments and modifications to the
      Code
      of Ethics will be promptly disclosed to the Company’s shareholders. A copy of
      the Code of Ethics will be provided at no charge upon written request to Oak
      Hill Financial, Inc., Attention: David G. Ratz, Chief Administrative Officer,
      P.O. Box 688, 14621 S.R. 93, Jackson, Ohio 45640.





**Item11.**
            **Executive
                Compensation**





The
      information appearing under "Executive Compensation" in the Company's 2007
      Proxy
      Statement, is incorporated herein by reference in response to this
      item.




**Item
                12.**
            **Security
                Ownership of Certain Beneficial Owners and
                Management**





The
      information appearing under "Ownership of Common Stock by Principal
      Shareholders", "Ownership of Common Stock By Management" and “Equity
      Compensation Plan Information” in the Company's 2007 Proxy Statement, is
      incorporated herein by reference in response to this item.





**Item13.**
            **Certain
                Relationships and Related Transactions, and Director
                Independence**





The
      information appearing under "Certain Relationships and Related Party
      Transactions" in the Company's 2007 Proxy Statement, is incorporated herein
      by
      reference in response to this item.





The
      information appearing under “Meetings of the Board of Directors and Committees
      of the Board”, specifically concerning director independence, in the Company’s
      2007 Proxy Statement, is incorporated by reference in response to this
      item.





**Item
                14.**
            **Principal
                Accountant Fees and
                Services**





The
      information appearing under "Principal Independent Registered Public Accounting
      Firm Fees" in the Company's 2007 Proxy Statement, is incorporated herein by
      reference in response to this item.




**PART
      IV**




**Item15.**
            **Exhibits
                and Reports on Form 8-K**





(a)
            Documents
                filed as a part of the Report:





(1)
            Report
                of Grant Thornton LLP, Independent Registered Public Accounting
                Firm





Consolidated
      Statements of Financial Condition as of December 31, 2006 and 2005





Consolidated
      Statements of Earnings for years ended December 31, 2006, 2005 and
      2004





Consolidated
      Statements of Comprehensive Income for years ended December 31, 2006, 2005
      and
      2004





Consolidated
      Statements of Stockholders’ Equity for years ended December 31, 2006, 2005 and
      2004





Consolidated
      Statements of Cash Flows for years ended December 31, 2006, 2005 and
      2004





Notes
      to
      Consolidated Financial Statements for years ended December 31, 2006, 2005 and
      2004





(2)
            Financial
                Statement Schedules:





The
      information is contained in the Company’s Annual Report to Stockholders for the
      year ended December 31, 2006 is incorporated herein by reference in response
      to
      this item.




(3)
            The
                following are filed as exhibits to this Annual Report on Form
                10-K:








37
 *Table
          of Contents*


ExhibitNumber*
                2(a)
            
            Agreement
                and Plan of Merger, dated October 12, 2004, between Oak Hill Financial,
                Inc. and Lawrence Financial Holdings, Inc. (reference is made to
                Exhibit 2
                included in Part I as Appendix A of the Prospectus/Proxy Statement
                filed
                by the Company on Form S-4/A, Registration No. 333-81645, with the
                Securities and Exchange Commission (“SEC”) on January 6, 2005 and
                incorporated herein by reference).*
                2(b)
            
            Agreement
                and Plan of Merger, dated July 20, 2004, between Oak Hill Banks and
                Ripley
                National Bank (reference is made to Exhibit 2(a) of the Current Report
                filed by the Company on Form 8-K with the SEC on July 21, 2004 and
                incorporated herein by reference).*
                2(c)
            
            Supplemental
                Agreement, dated July 20, 2004, between Oak Hill Financial, Inc.,
                Oak Hill
                Banks, and Ripley National Bank (reference is made to Exhibit 2(b)
                of the
                Current Report filed by the Company on Form 8-K with the SEC on July
                21,
                2004 and incorporated herein by reference).*
                2(d)
            
            Agreement
                and Plan of Merger, dated March 31, 1999, between Oak Hill Financial,
                Inc.
                and Towne Financial Corporation (reference is made to Exhibit 2.1
                of the
                Prospectus/Proxy Statement filed by the Company on Form S-4/A,
                Registration No. 333-81645, with the SEC on August 3, 1999 and
                incorporated herein by reference).*
                2(e)
            
            Supplemental
                Agreement, dated as of March 31, 1999, between Oak Hill Financial,
                Inc.
                and Towne Financial Corporation (reference is made to Exhibit 2.2
                of the
                Prospectus/Proxy Statement filed by the Company on Form S-4/A,
                Registration No. 333-81645, with the SEC on August 3, 1999 and
                incorporated herein by reference).*
                3(a)
            
            Fourth
                Amended and Restated Articles of Incorporation (reference is made
                to
                Exhibit 3.1 of the Proxy Statement/Prospectus filed by the Company
                on Form
                S-4, Registration No. 333-81645, with the SEC on June 25, 1999 and
                incorporated herein by reference).*
                3(b)
            
            Restated
                Code of Regulations (reference is made to Exhibit 3(ii) of the
                Registration Statement filed by the Company on Form SB-2, Registration
                No.
                33-96216, with the SEC and incorporated herein by
                reference).*4(a)
            
            Reference
                is made to Articles FOURTH, FIFTH, SEVENTH, EIGHTH, TENTH AND ELEVENTH
                of
                the Registrant's Restated Articles of Incorporation (contained in
                the
                Registrant's Restated Articles of Incorporation filed as Exhibit
                3(a)
                hereto) and Articles II, III, IV, VI and VIII of the Registrant's
                Amended
                and Restated Code of Regulations (contained in the Registrant's Amended
                and Restated Code of Regulations filed as Exhibit 3(b)
                hereto).*4(b)
            
            Rights
                Plan, dated January 23, 1998, between Oak Hill Financial, Inc. and
                Fifth
                Third Bank, (reference is made to Exhibit 4.1 to the Form 8-A, filed
                with
                the SEC on January 23, 1998 and incorporated herein by
                reference).*4(c)
            
            Amended
                Rights Plan, dated December 26, 2000, between Oak Hill Financial,
                Inc.,
                and Registrar and Transfer Company (reference is made to Exhibit
                2 to the
                Form 8-A12B/A, filed with the SEC on February 21, 2001 and incorporated
                herein by reference).*4(d)
            
            .Amended
                Rights Plan, dated September 19, 2006, between Oak Hill Financial,
                Inc.
                and Registrar and Transfer Company (reference is made to Exhibit
                4.3 to
                the Form 8-A12G/A Amendment No. 2, filed with the SEC on September
                22,
                2006 and incorporated herein by
                reference).





38
 *Table
            of Contents*





*10(a)
            
            Oak
                Hill Financial, Inc. 2004 Stock Incentive Plan (reference is made
                to
                Appendix 3 to the Registrant’s Definitive Proxy Statement for the 2004
                Annual Meeting of Shareholders held on April 13, 2004, filed with
                the SEC
                on March 11, 2004 and incorporated herein by
                reference).*10(b)
            
            Form
                of Option Award Agreement under the Company’s 2004 Stock Incentive Plan
                (reference is made to Exhibit 10.1 of the Registrant’s Annual Report on
                Form 10-K for the year ended December 31, 2004, filed with the SEC
                on
                March 25, 2005, as amended July 14, 2005, and incorporated herein
                by
                reference).*10(c)
            
            Form
                of Restricted Stock Award Agreement under the Company’s 2004 Stock
                Incentive Plan (reference is made to Exhibit 10.2 of the Registrant’s
                Annual Report on Form 10-K for the year ended December 31, 2004,
                filed
                with the SEC on March 25, 2005, as amended July 14, 2005, and incorporated
                herein by reference).*10(d)
            
            Employment
                Agreement, effective January 1, 2006, between Oak Hill Financial,
                Inc. and
                Ralph E. Coffman, Jr. (reference is made to Exhibit 10.1 of the
                Registrant’s Current Report on Form 8-K, dated December 20, 2005, filed
                with the SEC on December 27, 2005, and incorporated herein by
                reference).*10(e)
            
            Key
                Executive Change of Control Plan, adopted December 20, 2005 (reference
                is
                made to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, dated
                December 20, 2005, filed with the SEC on December 27, 2005, and
                incorporated herein by reference).*10(f)
            
            Non-Employee
                Director Deferred Compensation Plan, adopted December 20, 2005 (reference
                is made to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K,
                dated December 20, 2005, filed with the SEC on December 27, 2005,
                and
                incorporated herein by reference).13
            
            2006
                Annual Report (Selected portions)21
            
            Subsidiaries
                of the Registrant23
            
            Consent
                of Independent Registered Public Accounting Firm, Grant Thornton
                LLP.24
            
            Powers
                of Attorney.31(a)
            
            Certification
                by Chief Executive Officer, R. E. Coffman, Jr., dated March 15, 2007,
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31(b)
            
            Certification
                by Chief Financial Officer, Dale B. Shafer, dated March 15, 2007,
                pursuant
                to Section 302 of the Sarbanes-Oxley Act of 2002.32(a)
            
            Certification
                by Chief Executive Officer, R. E. Coffman, Jr., dated March 15, 2007,
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232(b)
            
            Certification
                by Chief Financial Officer, Dale B. Shafer, dated March 15, 2007,
                pursuant
                to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                the
                Sarbanes-Oxley Act of 2002





*Incorporated
      by reference as indicated.





(b)
            Form
                8-K's Filed:





1.
            Form
                8-K dated October 12, 2006 and filed with the Securities and Exchange
                Commission (“SEC”) on October 16, 2006 announcing the Company’s results of
                operations and financial condition for the three and nine months
                ended
                September 30, 2006.





2.
            Form
                8-K dated November 21, 2006 and filed with the SEC on November 22,
                2006
                announcing the resignation of Chief Financial Officer Ron J.
                Copher.





3.
            Form
                8-K dated December 21, 2006 and filed with the SEC on December 22,
                2006
                announcing the Company’s anticipated provision for loan loss expense for
                the fourth quarter.





4.
            Form
                8-K dated January 11, 2007 and filed with the SEC on January 19,
                2007
                announcing the Company’s results of operations and financial condition for
                the three and twelve months ended December 31, 2006.




39
 *Table
            of Contents*





**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this registration statement to be signed
      on
      its behalf by the undersigned, thereunto duly authorized.





**OAK
                HILL FINANCIAL, INC.**
            
            **Date**By:
            */s/
                R. E. Coffman, Jr.*
            
            March
                15, 2007R.
                E. Coffman, Jr., President andChief
                Executive Officer





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the report has
      been
      signed below by the following persons on behalf of the registrant and in the
      capacities and on the dates indicated.




Signature
            
            **Title**
            
            **Date***John
                D. Kidd
            
            Chairman
                & Director
            
            March
                15, 2007*/s/
                R. E. Coffman, Jr.*
            
            President,
                Chief Executive Officer and Director
            
            March
                15, 2007(Principal
                Executive Officer)*David
                G. Ratz
            
            Executive
                Vice President and Chief Administrative Officer
            
            March
                15, 2007*Dale
                B. Shafer
            
            Interim
                Chief Financial Officer,  Secretary and Treasurer
            
            March
                15, 2007(Principal
                Financial and Accounting Officer)*D.
                Bruce Knox
            
            Executive
                Vice President, Chief Information Officerand
                Director
            
            March
                15, 2007*Miles
                R. Armentrout
            
            Executive
                Vice President and Chief Lending Officer
            
            March
                15, 2007*Scott
                J. Hinsch, Jr.
            
            Vice
                President
            
            March
                15, 2007*Candice
                R. DeClark-Peace
            
            Director
            
            March
                15, 2007*Barry
                M. Dorsey, Ed.D.
            
            Director
            
            March
                15, 2007*Donald
                R. Seigneur
            
            Director
            
            March
                15, 2007*William
                S. Siders
            
            Director
            
            March
                15, 2007*H.
                Grant Stephenson
            
            Director
            
            March
                15, 2007*Neil
                S. Strawser
            
            Director
            
            March
                15, 2007*Donald
                P. Wood
            
            Director
            
            March
                15, 2007




By:
            */s/
                R. E. Coffman, Jr.*
            
            March
                15, 2007R
                E. Coffman, Jr.,Attorney-in-fact
                for eachOf
                the persons indicated






40