**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K/A**


**Amendment
      No. 1**





**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 filer o
                Accelerated
                    filer x
                Non-accelerated
                    filer o





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




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.







*Table
            of Contents*





**OAK
      HILL FINANCIAL, INC.**


**2006
      FORM 10-K ANNUAL REPORT**





Oak
      Hill
      Financial, Inc. (the “Company”) was informed by the Securities and Exchange
      Commission (“SEC”) that it did not specifically identify the Chief Executive
      Officer and Chief Financial Officer in Item 9A “Controls and Procedures” of its
      Form 10-K for the year ended December 31, 2006 which was filed with SEC on
      March
      16, 2007.  This amendment includes all items and exhibits originally
      filed on Form 10-K as well as Exhibits 31.1, 31.2, 32.1, 32.2 and 99.1. The
      Company is not making any changes to its financial statements. This amendment
      is
      accurate as of the date of the Company’s originally filed Form 10-K and has not
      been updated to reflect any events that occurred subsequent to March 16, 2007.
      The Company is including currently dated certifications and a response letter
      to
      the SEC concerning their comment on Item 9A, as listed in revised Item
      15.





**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.





**Less
                    than one year**
                
                
                **After
                    one year**
                  **through
                    five years**
                
                
                **After
                    five years**
                  **through
                    ten years**
                
                
                **After
                    ten years****Amount**
                
                
                **Weighted**
                  **Average**
                  **Yield**
                
                
                **Amount**
                
                
                **Weighted**
                  **Average**
                  **Yield**
                
                
                **Amount**
                
                
                **Weighted**
                  **Average**
                  **Yield**
                
                
                **Amount**
                
                
                **Weighted**
                  **Average**
                  **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.





4
 *Table
            of Contents*





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.





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




5
 *Table
            of Contents*




senior lending management.




**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 10th day following
      its
      due date or 15th 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 10th 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 20th 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 60th 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
                
                $
                13,653
                
                
                $
                11,847
                
                
                $
                10,836
                
                
                $
                9,142
                
                
                $
                8,345beginning
                    of period)Loans
                    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




11
 *Table
            of Contents*




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.




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




12
 *Table
            of Contents*




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.




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****Twelve-Month**
                  **Net
                    Interest Income**
                  **Changes**
                **ALCO
                    Limit**
                  **Twelve-Month**
                  **Net
                    Interest**
                  **Income
                    Changes**
                **Parallel**
                  **Interest**
                  **Rate**
                  **Shock**
                **Proportional**
                  **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




15
 *Table
            of Contents*




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.




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




16
 *Table
            of Contents*





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.





**Item
                1A.**
            **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.





**Item
                1B.**
            **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****County**
                **Oak
                    Hill**
                  **Financial,
                    Inc.**
                **Oak
                    Hill**
                  **Banks**
                **Oak
                    Hill Financial**
                  **Insurance**
                **Oak
                    Hill**
                  **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:





Quarter
                  Ended
                
                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
                  Ended
                
                Dividend
                  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 of
                  Shares
                    Purchased
                
                
                Average
                    Price
                  Paid
                    Per Share
                
                
                Total
                    Number of
                  Shares
                    Purchased
                  As
                    Part of Publicly
                  Announce
                    Plans
                  or
                    Programs
                
                
                Maximum
                    Number
                  of
                    Shares that May
                  Yet
                    Be Purchased
                  Under
                    the Plans
                  or
                    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*





**Item
                6.**
            **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*





**Item
                7.**
            **Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations**





OVERVIEW


Oak
      Hill
      Financial, Inc. (the “Company”) is a financial holding company, the 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’ ability to
                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.





SUMMARY
      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 expenses, a $1.2 million increase in franchise taxes, and an increase
      of $80,000, or 2.0%, in occupancy and 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




29
 *Table
            of Contents*




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.




**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
 *Table
            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 expenses, an increase of $667,000, or 19.6%, in occupancy and
      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:





*(In
                    thousands)*
                
                One
                    year
                  or
                    less
                
                
                Two
                    to
                  three
                    years
                
                
                After
                  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:





*(In
                    thousands)*
                
                One
                    year
                  or
                    less
                
                
                Two
                    to
                  three
                    years
                
                
                After
                  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
                
                
                2004*(Dollars
                    in thousands)*
                
                Average
                  Balance
                
                
                Interest
                  Income/
                  Expense
                
                
                Average
                  Rate
                
                
                Average
                  Balance
                
                
                Interest
                  Income/
                  Expense
                
                
                Average
                  Rate
                
                
                Average
                  Balance
                
                
                Interest
                  Income/
                  Expense
                
                
                Average
                  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*





**Item
                7A.**
            **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).





**Item
                9.**
            **Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure**





Not
      Applicable.





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





*Disclosure
      Controls and Procedures*





Management,
      including the Chief Executive Officer and the Chief Financial Officer, 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,
      with the participation of the Company’s Chief Executive Officer and Chief
      Financial Officer, 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, including the Chief Executive Officer and the Chief
      Financial Officer, 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*





**Item
                9B.**
            **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.





**Item
                11.**
            **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.





**Item
                13.**
            **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**





**Item
                15.**
            **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





37
 *Table
            of Contents*




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:




Exhibit
 Number
 
 *
                  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).


38
 *Table
            of Contents*




*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).
 
 *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 Registrant
 
 23
                  Consent
                      of Independent Registered Public Accounting Firm, Grant Thornton
                      LLP.
 
 24
                  Powers
                      of Attorney.
 
 31.1
                  Certification
                      by Chief Executive Officer, R. E. Coffman, Jr., dated July
                      31, 2007,
                      pursuant to Section 302 of the Sarbanes-Oxley Act of
                      2002.
 
 31.2
                  Certification
                      by Chief Financial Officer, Dale B. Shafer, dated July 31,
                      2007, pursuant
                      to Section 302 of the Sarbanes-Oxley Act of
                      2002.
 
 32.1
                  Certification
                      by Chief Executive Officer, R. E. Coffman, Jr., dated July
                      31, 2007,
                      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                      Section 906 of
                      the Sarbanes-Oxley Act of 2002
 
 32.2
                  Certification
                      by Chief Financial Officer, Dale B. Shafer, dated July 31,
                      2007, pursuant
                      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
                      of the
                      Sarbanes-Oxley Act of 2002
 
 99.1
                  Letter
                      to the Securities and Exchange Commission dated July 31,
                      2007


*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.





39
 *Table
            of Contents*




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.





**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.*
                
                July
                    31, 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
                
                July
                    31, 2007*/s/
                    R. E. Coffman, Jr.*
                
                President,
                    Chief Executive Officer and Director
                
                July
                    31, 2007(Principal
                  Executive Officer)*David
                    G. Ratz
                
                Executive
                    Vice President and Chief Administrative Officer
                
                July
                    31, 2007*Dale
                    B. Shafer
                
                Interim
                    Chief Financial Officer, Secretary and Treasurer
                
                July
                    31, 2007(Principal
                  Financial and Accounting Officer)*D.
                    Bruce Knox
                
                Executive
                    Vice President, Chief Information Officer
                
                July
                    31, 2007and
                  Director*Miles
                    R. Armentrout
                
                Executive
                    Vice President and Chief Lending Officer
                
                July
                    31, 2007*Scott
                    J. Hinsch, Jr.
                
                Vice
                    President
                
                July
                    31, 2007*Candice
                    R. DeClark-Peace
                
                Director
                
                July
                    31, 2007*Barry
                    M. Dorsey, Ed.D.
                
                Director
                
                July
                    31, 2007*Donald
                    R. Seigneur
                
                Director
                
                July
                    31, 2007*William
                    S. Siders
                
                Director
                
                July
                    31, 2007*H.
                    Grant Stephenson
                
                Director
                
                July
                    31, 2007*Neil
                    S. Strawser
                
                Director
                
                July
                    31, 2007*Donald
                    P. Wood
                
                Director
                
                July
                    31, 2007





By:
                */s/
                    R. E. Coffman, Jr.*
                
                July
                    31, 2007R  E.
                    Coffman, Jr.,Attorney-in-fact
                    for each Of the persons indicated






40