UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                                   ----------

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                         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                            (I.R.S. Employer
     incorporation or organization)                       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 registered pursuant to Section 12(g) of the Act:
                         Common stock without par value

      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 12
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 |_|

      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 the 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. |_|

      Check whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). Yes |X| No |_|

      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, 2003 was $91,750,416.16. For purposes of this
calculation, executive officers and directors of the registrant are considered
affiliates.

      There were 5,620,011 shares of the registrant's common stock outstanding
at March 9, 2004.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's Annual Report to Stockholders for the year
ended December 31, 2003 are incorporated by reference into Part II and IV.

      Portions of the proxy statement dated March 11, 2004 for the Annual
Meeting of Stockholders to be held April 13, 2004 are incorporated by reference
in to Part III.


                                       -1-
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                Page
                                                                                                ----
<S>                                                                                               <C>
                                     Part I

Item 1.   Business                                                                                 3

Item 2.   Properties                                                                              18

Item 3.   Legal Proceedings                                                                       19

Item 4.   Submission of Matters to a Vote of Security Holders                                     19

                                     Part II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters                   20

Item 6.   Selected Financial Data                                                                 21

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations   23

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk                              31

Item 8.   Financial Statements and Supplementary Data                                             31

Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure    31

Item 9A.  Controls and Procedures                                                                 31

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant                                      31

Item 11.  Executive Compensation                                                                  32

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related
               Stockholder Matters                                                                32

Item 13.  Certain Relationships and Related Transactions                                          32

Item 14.  Principal Accountant Fees and Services                                                  32

                                     Part IV

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K                        32

Signatures                                                                                        35
</TABLE>


                                       -2-
<PAGE>

                                     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 four wholly owned subsidiaries, Oak Hill Banks ("Oak
Hill"), Action Finance Company ("Action"), Oak Hill Financial Insurance Agency,
Inc. dba McNelly, Patrick & Associates ("MPA") and Oak Hill Capital Trust I (the
"Trust"). 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
92% of the Company's net loan portfolio at December 31, 2003. 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-
<PAGE>

<TABLE>
<CAPTION>
                                                                         At December 31,
                                                                         ---------------
                                     2003                2002                  2001                2000                  1999
                                     ----                ----                  ----                ----                  ----
                               Amount   Percent    Amount    Percent     Amount    Percent    Amount    Percent    Amount    Percent
                               ------   -------    ------    -------     ------    -------    ------    -------    ------    -------
                                                                      (Dollars in thousands)
<S>                          <C>          <C>     <C>          <C>      <C>          <C>     <C>          <C>     <C>         <C>
Type of loan:

   1-4 family residential
     loans                   $ 235,180     29.0%  $ 245,794     35.0%   $ 373,323     37.0%  $ 240,593     40.1%  $ 223,365    44.0%

   Commercial and other
     loans                     513,848     63.4     391,586     55.8      216,611     52.2     275,500     46.0     215,205    42.3

   Consumer loans
                                71,100      8.8      72,012     10.3       62,829     11.8      88,585     14.8      74,045    14.6

   Credit cards                  1,729      0.2       1,694      0.2        1,663      0.3       1,605      0.3       1,486     0.3
                             ---------   ------   ---------   ------    ---------   ------   ---------   ------   ---------  ------

Total loans                    821,857    101.4     711,086    101.3      654,426    101.3     606,283    101.2     514,101   101.2

Less:

   Allowance for loan
     losses                    (10,836)    (1.4)     (9,142)    (1.3)      (8,345)    (1.3)     (7,197)    (1.2)     (6,132)   (1.2)
                             ---------   ------   ---------   ------    ---------   ------   ---------   ------   ---------  ------

Total loans receivable, net  $ 811,021    100.0%  $ 701,944    100.0%   $ 646,081    100.0%  $ 599,086    100.0%  $ 507,969   100.0%
                             =========   ======   =========   ======    =========   ======   =========   ======   =========  ======
</TABLE>

      The following is maturity information with respect to commercial loans at
December 31, 2003.

<TABLE>
<CAPTION>
                                 After one year              After five years
 Less than one year            through five years           through ten years             After ten years
 ------------------            ------------------           -----------------             ---------------
            Weighted                     Weighted                     Weighted                     Weighted
             Average                     Average                      Average                      Average
  Amount      Yield             Amount    Yield              Amount    Yield              Amount    Yield          Total
  ------      -----             ------    -----              ------    -----              ------    -----          -----
                                                 (Dollars in thousands)
<S>            <C>            <C>          <C>             <C>          <C>             <C>          <C>         <C>
$107,803       5.15%          $ 97,832     5.43%           $ 81,442     6.15%           $226,771     6.66%       $513,848
========       ====           ========     ====            ========     ====            ========     ====        ========
</TABLE>

      The following table summarizes commercial loans as of December 31, 2003
which mature in more than one year ..

                    Fixed rate              $183,242
                    Variable rate            222,803
                                            --------
                                            $406,045
                                            ========

      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 60% 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 to
the Federal National Mortgage Association ("FNMA"), 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 $235.2 million at December 31, 2003, and
represented 29.0% of net loans at such date. At such date, loans secured by
residential real estate with outstanding balances of approximately $2.3 million,
or 1.0%, 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 one
year.


                                       -4-
<PAGE>

      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 cross-collateralization and 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 risk is further
mitigated by the number of commercial real estate loans made to the user of the
property.

      The aggregate amount of the Company's commercial loans without real estate
as primary or secondary collateral totaled approximately $140.5 million at
December 31, 2003, and represented 27.4% 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 $1.6 million, or 0.3% of its commercial loan portfolio. The
aggregate amount of the Company's commercial loans with real estate as primary
or secondary collateral was approximately $373.3 million at December 31, 2003,
and at such date, approximately $2.6 million in outstanding balances, or 0.7% of
such loans, were more than 90 days delinquent or nonaccruing.

      Consumer Loans. The Company offers several consumer loan products,
including installment loans, home equity lines of credit and credit cards.

      The Company has developed working relationships with several car
dealerships in its market area, and is able to do some financing of new and used
cars through these relationships. The Company generally finances cars that are
seven years old or newer. These loans generally have fixed rates and maturities
of 36 to 66 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 to 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 through the N.A.D.A. book or another valuation
service. Income must be adequate to cover all monthly payments including the
proposed loan.

      At December 31, 2003, the Company had approximately $72.8 million in its
consumer loan and credit card portfolio, which was 9.0% of the Company's total
net loans. Approximately $1.6 million of these loans were over 90 days
delinquent or nonaccruing on that date, which represented 2.2% of the portfolio.

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

      Underwriting guidelines for all branches and loan types are set by senior
management at an administrative office. Consumer loan processing and
underwriting are decentralized; however, all other loans, including real estate
and commercial loans, are generally processed and underwritten centrally at an
administrative office. Loan applications, as well as credit bureau reports,
appraisals, financial information, verifications of income, and other
documentation concerning the


                                       -5-
<PAGE>

credit-worthiness of the borrower, as applicable to each loan type are reviewed.

      Branch managers may have the authority to approve loans up to $120,000
that meet the underwriting criteria set by management, and area managers have
authority for amounts up to $500,000. Any loan greater than $500,000 must be
approved by senior 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 FNMA, recognizing gains upon the sale
comprised of a cash component as well as mortgage 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 appears (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 and, as of December 31, 2003, only
$8.1 million or 0.99% of the Company's total loan portfolio was over 90 days
delinquent or nonaccruing. As of December 31, 2003, the Company's level of
nonperforming assets to total assets was 0.93%.

      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,
2003, approximately $33,000 in outstanding balances, or 1.9% of credit card
loans were nonperforming.

      At December 31, 2003, the Company had $585,000 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.

      The Company had $4.0 million of impaired loans, as defined under SFAS No.
114, at December 31, 2003. The Company maintained an allowance for credit losses
related to such impaired loans of $982,000 at December 31, 2003. The Company had
no impaired loans, as defined under SFAS No. 114, at December 31, 2002.


                                       -6-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                                  -----------------------
                                                             2003            2002            2001            2000            1999
                                                             ----            ----            ----            ----            ----
                                                                                    (Dollars in thousands)
<S>                                                        <C>             <C>             <C>             <C>             <C>
Allowance for loan losses
     (beginning of period) .........................       $  9,142        $  8,345        $  7,197        $  6,132        $  4,583
Loans charged off:
     1-4 family residential real estate ............            129             215             172             219              80
     Multi-family and commercial real estate .......            226           1,064              50              37               9
     Commercial and industrial loans ...............            442             148             239               2             186
     Consumer loans ................................          1,355           1,136           1,365           1,155             840
                                                           --------        --------        --------        --------        --------
          Total loans charged off ..................          2,152           2,563           1,826           1,413           1,115
                                                           --------        --------        --------        --------        --------
Recoveries of loans previously charged off:
     1-4 family residential real estate ............             27              14              20              20              21
     Multi-family and commercial real estate .......             62             118              28               3              --
     Commercial and industrial loans ...............             14             103               8               1               6
     Consumer loans ................................            396             368             327             191             205
                                                           --------        --------        --------        --------        --------
          Total recoveries .........................            499             603             383             215             232
                                                           --------        --------        --------        --------        --------
Net loans charged off ..............................          1,653           1,960           1,443           1,198             883
Provision for losses on loans ......................          3,347           2,757           2,591           2,263           2,432
                                                           --------        --------        --------        --------        --------
Allowance for loan losses
     (end of period) ...............................       $ 10,836        $  9,142        $  8,345        $  7,197        $  6,132
                                                           ========        ========        ========        ========        ========
Loans outstanding:
     Average, net ..................................       $754,519        $690,545        $623,486        $557,038        $449,873
     End of period .................................       $821,857        $711,086        $654,426        $606,283        $514,101
Ratio of allowance for loan losses to
   loans outstanding at end of period ..............           1.32%           1.29%           1.28%           1.19%           1.19%
Ratio of net charge-offs to average
   loans outstanding ...............................           0.22%           0.28%           0.23%           0.22%           0.20%
</TABLE>

      At December 31, 2003, 2002 and 2001, the Company had nonperforming loans
totaling $8.1 million, $7.3 million, and $5.2 million, respectively. Interest
income that would have been recognized if such loans had performed in accordance
with contractual terms totaled approximately $508,000, $357,000, and $416,000,
for the years ended December 31, 2003, 2002 and 2001, 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, 2003, 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-
<PAGE>

       The following table summarizes nonperforming assets by category.

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                                 -----------------------
                                                         2003             2002             2001             2000             1999
                                                         ----             ----             ----             ----             ----
                                                                                  (Dollars in thousands)
<S>                                                    <C>              <C>              <C>              <C>              <C>
Real estate:
     Nonaccrual ...............................        $  2,235         $  1,105         $    386         $    436         $  1,092
     Past due 90 days or more (1) .............              98              515               40              158              411
Commercial and industrial loans:
     Nonaccrual ...............................           4,153            4,345            2,813              205              444
     Past due 90 days or more (1) .............              21              435              993            1,487              744
Consumer and other:
     Nonaccrual ...............................           1,213              579              492              422              320
     Past due 90 days or more (1) .............             399              317              492              161              176
                                                       --------         --------         --------         --------         --------
          Total nonperforming loans ...........           8,119            7,296            5,216            2,869            3,187

Other real estate owned .......................             585               --            1,587              232              169
                                                       --------         --------         --------         --------         --------
          Total nonperforming assets ..........        $  8,704            7,296            6,803            3,101            3,356
                                                       ========         ========         ========         ========         ========

Loans outstanding .............................        $821,857         $711,086         $654,426         $606,283         $514,101
Allowance for loan losses to
     total loans ..............................            1.32%            1.29%            1.28%            1.19%            1.19%
Nonperforming loans to total loans ............            0.99             1.03             0.80             0.47             0.62
Nonperforming assets to total assets ..........            0.93             0.88             0.87             0.45             0.56
Allowance for loan losses to
     nonperforming loans ......................           133.5%           125.3%           160.0%           250.9%           192.4%
</TABLE>

(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, 2003, loans where the 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 or restructured categories.

      Allocation of Allowance for Loan Losses. The following table presents an
analysis of the allocation of the Company's allowance for loan losses at the
dates indicated:

<TABLE>
<CAPTION>
                                                                             At December 31,
                                                                             ---------------
                                            2003                2002               2001               2000              1999
                                            ----                ----               ----               ----              ----
                                                Percent             Percent           Percent            Percent            Percent
                                               of loans            of loans           of loans           of loans           of loans
                                                in each             in each           in each            in each            in each
                                               category            category           category           category           category
                                               to total            to total           to total           to total           to total
                                       Amount  loans(1)   Amount   loans(1)   Amount  loans(1)   Amount  loans(1)   Amount  loans(1)
                                       ------  --------   ------   --------   ------  --------   ------  --------   ------  --------
                                                                        (Dollars in thousands)
<S>                                    <C>         <C>    <C>         <C>    <C>         <C>    <C>         <C>    <C>         <C>
Balance at end of period
   applicable to:
1-4 family residential real estate ..  $   526     28.6%  $   363     34.6%  $ 2,849     36.5%  $ 2,506     39.7%  $ 2,278     43.4%
Commercial and other loans ..........    8,793     62.5     5,990     55.1     1,715     51.5     1,508     45.4     1,280     41.9
Consumer loans ......................    1,440      8.7       936     10.1     2,164     11.7     1,903     14.6     1,263     14.4
Credit cards ........................       77      0.2        51      0.2        60      0.3        53      0.3        59      0.3
Unallocated .........................       --       --     1,802       --     1,557       --     1,227       --     1,252       --
                                       -------  -------   -------  -------   -------  -------   -------  -------   -------  -------

          Total .....................  $10,836    100.0%  $ 9,142    100.0%  $ 8,345    100.0%  $ 7,197    100.0%  $ 6,132    100.0%
                                       =======  =======   =======  =======   =======  =======   =======  =======   =======  =======
</TABLE>

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


                                       -8-
<PAGE>

      Classified Assets. The FDIC regulations on classification of assets
require commercial banks to classify their own assets and to establish
appropriate general and specific 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 either written off or reserved for by a specific allowance that is not
counted toward capital for purposes of any of the regulatory capital
requirements.

      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.

<TABLE>
<CAPTION>
                                                                                                      At December 31,
                                                                                                      ---------------
                                                                                         2003               2002               2001
                                                                                         ----               ----               ----
                                                                                                   (Dollars in thousands)
<S>                                                                                    <C>                <C>                <C>
Held-to-maturity:

     Trust preferred securities ...........................................            $ 3,659            $ 2,575            $ 3,407

Available-for-sale:

     U.S. Government and agency obligations ...............................             58,490             64,798             57,411

     State and local government obligations ...............................             17,211             16,257             18,003

     Other securities .....................................................                185                159                160
                                                                                       -------            -------            -------

          Total investment securities available-for-sale ..................             75,886             81,214             75,574
                                                                                       -------            -------            -------

          Total investment securities .....................................            $79,545            $83,789            $78,981
                                                                                       =======            =======            =======
</TABLE>

      The following table reflects the maturities of the Company's investment
securities at December 31, 2003.

<TABLE>
<CAPTION>
                                         Due in           Due after one year   Due after five years
                                    one year or less      through five years     through ten years   Due after ten years
                                    ----------------      ------------------     -----------------   -------------------
                                     Amount     Rate       Amount      Rate       Amount      Rate      Amount     Rate      Total
                                     ------     ----       ------      ----       ------      ----      ------     ----      -----
<S>                                 <C>           <C>     <C>           <C>      <C>           <C>     <C>           <C>    <C>
Held-to-maturity:

   Trust preferred securities ...   $    --         --    $    --         --     $    --         --    $ 3,659       8.45%  $ 3,659

Available-for-sale:

   U.S. Government and
     agency obligations .........     3,534       4.77%     4,263       5.02%     10,060       5.26%    40,633       5.77%   58,490

   Municipal obligations ........        --         --        148       6.50%      1,986       4.60%    15,077       5.06%   17,211

   Other securities .............        --         --         --         --          --         --        185         --       185
                                    -------    -------    -------    -------     -------    -------    -------    -------   -------

Total available-for-sale ........     3,534       4.77%     4,411       5.07%     12,046       5.15%    55,895       5.56%   75,886
                                    -------    -------    -------    -------     -------    -------    -------    -------   -------

Total investment securities .....   $ 3,534       4.77%   $ 4,411       5.07%    $12,046       5.15%   $59,554       5.74%  $79,545
                                    =======    =======    =======    =======     =======    =======    =======    =======   =======
</TABLE>


                                       -9-
<PAGE>

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.

<TABLE>
<CAPTION>
                                                                                    At December 31,
                                                                                    ---------------
                                                              2003                        2002                       2001
                                                              ----                        ----                       ----
                                                       Amount       Percent        Amount      Percent       Amount       Percent
                                                       ------       -------        ------      -------       ------       -------
                                                                                 (Dollars in thousands)
<S>                                                   <C>              <C>        <C>            <C>        <C>            <C>
      Demand deposit accounts ..................      $ 66,712           9.3%     $ 61,847         9.3%     $ 60,840
                                                                                                                            10.0%
      Savings accounts .........................        48,224           6.7        44,353         6.7        39,324         6.4

      NOW accounts .............................        62,033           8.6        59,359         9.0        44,711         7.3

      Money market deposit accounts ............         7,644           1.1         7,558         1.1         9,176         1.5

      Premium investment accounts ..............        35,474           4.9        40,604         6.1        60,652         9.9

      Select investment accounts ...............        33,426           4.7        27,896         4.2        13,008         2.1
                                                      --------      --------      --------    --------      --------    --------

      Total transaction accounts ...............       253,513          35.3       241,617        36.4       227,711        37.2

      Certificates of deposit:

           1.00 - 2.99% ........................       286,245          39.9        95,377        14.4        16,758         2.7
           3.00 - 4.99% ........................       162,541          22.6       296,053        44.6       236,106        38.6
           5.00 - 6.99% ........................        15,447           2.2        30,641         4.6       130,574        21.3
           7.00 - 8.00% ........................            75            --           125          --         1,055         0.2
                                                      --------      --------      --------    --------      --------    --------

      Total certificates of deposit ............       464,308          64.7       422,196        63.6       384,493        62.8
                                                      --------      --------      --------    --------      --------    --------

      Total deposits ...........................      $717,821         100.0%     $663,813       100.0%     $612,204       100.0%
                                                      ========      ========      ========    ========      ========    ========
</TABLE>

      The following table presents various interest rate categories and certain
information concerning maturities of the Company's certificates of deposit at
December 31, 2003.

<TABLE>
<CAPTION>
                                                                            One to                 Over
                                                     Within                 three                  three
     Certificates of Deposit Accounts               one year                years                  years                 Total
     --------------------------------               --------                -----                  -----                 -----
                                                                                   (In thousands)
<S>                                                 <C>                    <C>                    <C>                   <C>
3.00% and less ..........................           $116,469               $152,747               $   246               $269,462

3.01% to 4.00% ..........................             57,130                 13,330                27,702                 98,162

4.01% to 5.00% ..........................             34,809                 27,461                21,286                 83,556

5.01% to 6.00% ..........................              5,828                  3,703                 2,392                 11,923

6.01% to 7.00% ..........................                 56                  1,149                    --                  1,205

7.01% to 8.00% ..........................                 --                     --                    --                     --
                                                    --------               --------               -------               --------

Total ...................................           $214,292               $198,390               $51,626               $464,308
                                                    ========               ========               =======               ========
</TABLE>


                                      -10-
<PAGE>

      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, 2003.

                        Maturity Period                          Amount
                        ---------------                          ------
                                                             (In thousands)

                 Three months or less                          $ 21,895

                 Over three months through six months            14,369

                 Over six through 12 months                      28,665

                 Over 12 months                                 124,421
                                                               --------

                      Total                                    $189,350
                                                               ========

      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, 2003, Oak Hill had outstanding FHLB advances totaling
$122.9 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 March 2000, a Delaware trust owned by the Company (the "Trust"), issued
$5.0 million of mandatorily redeemable debt securities. The debt securities
issued by the Trust are included in the Company's regulatory capital,
specifically as a component of Tier I 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.

      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:

<TABLE>
<CAPTION>
                                                                                         Year ended December 31,
                                                                                         -----------------------
                                                                                   2003              2002              2001
                                                                                   ----              ----              ----
                                                                                           (Dollars in thousands)
<S>                                                                              <C>               <C>               <C>
      Maximum amount outstanding:

           FHLB advances                                                         $134,030          $ 99,346          $ 93,942
           Junior subordinated debentures                                           5,000             5,000             5,000
           Other borrowings                                                         8,346             8,303             5,918
                                                                                 --------          --------          --------
                                                                                 $147,376          $112,649          $104,860
                                                                                 ========          ========          ========
           Average amount of FHLB advances and other borrowings
                outstanding                                                      $117,328          $101,818          $ 87,151
                                                                                 ========          ========          ========

           Weighted-average interest rate of total borrowings                        3.63%             4.85%             5.81%
</TABLE>

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

                                                      December 31,
                                                      ------------
                                            2003          2002         2001
                                            ----          ----         ----
                                                    (In thousands)

      FHLB advances                       $122,887      $86,055      $ 93,942

      Junior subordinated debentures         5,000        5,000         5,000

      Other borrowings                       7,465        8,303         5,918
                                          --------      -------      --------

           Total borrowings               $135,352      $99,358      $104,860
                                          ========      =======      ========


                                      -11-
<PAGE>

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

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

      The following table contains 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:

<TABLE>
<CAPTION>
December 31, 2003
                                                                                   Year Ending December 31,
                                                                                   ------------------------
                                                          2004          2005          2006          2007   2008 and after   Total
                                                          ----          ----          ----          ----   --------------   -----
<S>                                                     <C>           <C>           <C>           <C>         <C>         <C>
Interest-rate sensitive assets:
     Federal funds sold                                 $     123     $      --     $      --     $     --    $     --    $    123
     Interest-bearing deposits                              1,162            --            --           --          --       1,162
     Investment securities                                 20,904        11,222        11,813        7,467      28,139      79,545
     Loans receivable                                     355,313        77,896       117,575       97,255     162,982     811,021
     Other interest-earning assets                             --            --            --           --       5,998       5,998
                                                        ---------     ---------     ---------     --------    --------    --------
          Total                                           377,502        89,118       129,388      104,722     197,119     897,849

Interest-rate sensitive liabilities:
    Deposits                                              440,734       127,304        31,345       20,334      31,392     651,109
    Borrowings                                             53,832        13,190         7,059        6,743      54,528     135,352
                                                        ---------     ---------     ---------     --------    --------    --------
          Total                                           494,566       140,494        38,404       27,077      85,920     786,461
                                                        ---------     ---------     ---------     --------    --------    --------

Excess (deficiency) of interest-rate sensitive assets
    over interest-rate sensitive liabilities            $(117,064)    $ (51,376)    $  90,984     $ 77,645    $111,199    $111,388
                                                        ---------     ---------     ---------     --------    --------    --------
Cumulative excess (deficiency) of
interest-rate sensitive assets over interest-rate
sensitive liabilities                                   $(117,064)    $(168,440)    $ (77,456)    $    189    $111,388    $111,388
                                                        =========     =========     =========     ========    ========    ========
Cumulative interest-rate sensitivity gap to
total assets                                               (12.48)%      (17.95)%       (8.26)%        .02%      11.87%      11.87%
                                                        =========     =========     =========     ========    ========    ========

<CAPTION>
December 31, 2002
                                                                                   Year Ending December 31,
                                                                                   ------------------------
                                                              2003         2004        2005        2006   2007 and after   Total
                                                              ----         ----        ----        ----   --------------   -----
<S>                                                        <C>          <C>          <C>         <C>         <C>         <C>
Interest-rate sensitive assets:
     Federal funds sold                                    $   5,540    $      --    $     --    $     --    $     --    $  5,540
     Interest-bearing deposits                                   159           --          --          --          --         159
     Investment securities                                    18,630       22,214      11,941       4,173      26,831      83,789
     Loans receivable                                        274,362       88,218      85,879      69,462     184,023     701,944
     Other interest-earning assets                                --           --          --          --       5,764       5,764
                                                           ---------    ---------    --------    --------    --------    --------
          Total                                              298,691      110,432      97,820      73,635     216,618     797,196

Interest-rate sensitive liabilities:
    Deposits                                                 433,383       92,450      36,536      13,299      26,298     601,966
    Borrowings                                                23,904        3,582       7,403       5,036      59,433      99,358
                                                           ---------    ---------    --------    --------    --------    --------
          Total                                              457,287       96,032      43,939      18,335      85,731     701,324
                                                           ---------    ---------    --------    --------    --------    --------
Excess (deficiency) of interest-rate sensitive
    assets over over interest-rate sensitive liabilities   ($158,596)   $  14,400    $ 53,881    $ 55,300    $130,887    $ 95,872
                                                           =========    =========    ========    ========    ========    ========
Cumulative excess (deficiency) of interest-rate
    sensitive assets sensitive assets over interest-rate
    sensitive liabilities                                  ($158,596)   ($144,196)   ($90,315)   ($35,015)   $ 95,872    $ 95,872
                                                           =========    =========    ========    ========    ========    ========

Cumulative interest-rate sensitivity gap to total
    assets                                                    (19.02)%     (17.30)%    (10.83)%     (4.20)%     11.50%      11.50%
                                                           =========    =========    ========    ========    ========    ========
</TABLE>


                                      -12-
<PAGE>

      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. Under the current interest
rate environment, a decline in interest rates of 200 or more basis points is
unlikely and therefore provides no meaningful information.

      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, 2003, 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.

<TABLE>
<CAPTION>
                                              Rate Shock Analysis
               -------------------------------------------------------------------------------------
                                                ALCO Limit            Parallel         Proportional
                    Twelve-Month               Twelve-Month           Interest           Interest
                Net Interest Income            Net Interest             Rate               Rate
                      Changes                 Income Changes           Shock              Shock
                                             -------------------------------------------------------
<S>                                                <C>                 <C>                <C>
                 +300 basis points                 -30%                -4.281%            18.258%
                 +200 basis points                 -20%                -3.101%            12.452%
                 +100 basis points                 -15%                -2.258%             5.755%
                 -100 basis points                 -15%                  .351%            -7.448%
</TABLE>

      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.


                                      -13-
<PAGE>

Personnel

      At December 31, 2003, the Company and its subsidiaries employed 327
persons on a full-time basis and 35 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 Action Finance Company, a consumer finance company that was
formed in 1998. The Company owns all of the outstanding stock of Oak Hill
Capital Trust I, a Delaware statutory trust that was formed in 2000. The Company
owns all of the outstanding stock of Oak Hill Financial Insurance Agency, Inc.,
which conducts business as McNelly, Patrick & Associates, 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


                                      -14-
<PAGE>

investment and financial advice, leasing (subject to certain conditions) real or
personal property, providing management consulting advice to certain depository
institutions, providing securities brokerage services, arranging commercial real
estate equity financing, underwriting and dealing in government obligations and
money market instruments, providing consumer financial counseling, operating a
collection agency, owning and operating a savings association, operating a
credit bureau and conducting certain real estate investment activities and
acting as insurance agent for certain types of insurance. Certain other
activities, including real estate brokerage and syndication, land development,
and property management not related to credit transactions, are not permissible.

      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:

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

      o     Standards for verifying customer identification at account opening;

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

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

      o     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.


                                      -15-
<PAGE>

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

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

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.

      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 (the "Principal Stockholders") beneficially own in the
aggregate approximately 32.8% of the outstanding shares of Common Stock of the
Company at December 31, 2003. 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


                                      -16-
<PAGE>

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.

      Limited Trading Market; Shares Eligible for Future Sale; Possible
Volatility of Stock Price. The Common Stock is traded on the Nasdaq National
Market under the symbol "OAKF." During the 12 months ending March 9, 2004, the
average weekly trading volume in the Common Stock has been approximately 60,000
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
Operating Officer, David G. Ratz; Vice President, Scott J. Hinsch, Jr.;
Secretary, H. Tim Bichsel; Treasurer and Chief Financial Officer, Ron J. Copher;
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.
The Company does not own "key man" life insurance on the lives of any of its
senior 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.


                                      -17-
<PAGE>

Item 2. Properties.

      As of December 31, 2003 the registrant and its subsidiaries operate from
26 full-service banking offices, 6 full-service consumer finance offices, and 4
loan production offices in Ohio. In addition, the Company operates two executive
offices in Jackson, Ohio and an operations center in Mason, Ohio. The offices
are located in the following counties:

<TABLE>
<CAPTION>
                                                                Subsidiaries
                                            Oak Hill   Oak Hill      Action    McNelly   Oak Hill
                County                     Financial     Banks      Finance    Patrick     Title
                ------                     ---------     -----      -------    -------     -----
<S>                                           <C>         <C>         <C>        <C>        <C>
                Adams                         --          --           1         --         --
                Athens                        --           2           1         --         --
                Butler                        --           3          --         --         --
                Franklin                      --           1          --         --         --
                Gallia                        --           1           1         --         --
                Hamilton                      --           3          --         --         --
                Hocking                       --           1          --         --         --
                Jackson(1)                     1           6           1          1         --
                Montgomery                    --           1          --         --         --
                Lawrence                      --           1          --         --         --
                Pickaway                      --           1           1         --         --
                Ross                          --           3          --         --         --
                Scioto                        --           4           1         --          1
                Vinton                        --           1          --         --         --
                Warren(2)                     --           3          --         --         --
</TABLE>

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

(2)   Includes Western Region operations center of Oak Hill Banks.


                                      -18-
<PAGE>

      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.

<TABLE>
<CAPTION>
                                                                            End of Lease Five Year Renewal Options
                                               Beginning                    --------------------------------------
Property                                  and Length of Term           One                    Two                 Three
--------                                  ------------------           ---                    ---                 -----
<S>                                      <C>          <C>               <C>                     <C>                   <C>
Chillicothe                              11/01/98     5 years           X
Chillicothe K-Mart                       06/28/94     5 years                                   X
West Portsmouth                          02/18/97     8 years           X
Jackson Walmart                          10/28/98     5 years           X
Oak Hill Banks
   Administrative Offices                05/01/02     3 years                                   X
Action Finance Jackson                   02/01/02     5 years                                   X
Action Finance West Union                10/01/99     5 years           X
Action Finance Portsmouth                11/01/99     5 years           X
Action Finance Circleville               11/01/00     5 years           X
Action Finance Gallipolis                02/01/01     3 years           One - three year renewal option
Action Finance Athens                    03/01/03     3 years                                                         X
Columbus loan production                 05/01/01     3 years           Two - three year renewal options
Logan                                    10/01/00     5 years                                                         X
Delhi                                    03/01/00     7 years                                   X
Middletown                               08/19/99     10 years                                  X
Oak Hill Title Agency, LLC               10/01/01     5 years           No renewal options
Fairfield loan production                05/20/02     2 years           Three - one year renewal options
Centerville                              11/03/03     10 years                                  X
Athens loan production                   01/01/03     1 year            One - one year renewal options
Mason                                    12/01/02     15 years                                  X
</TABLE>

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.

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

      No matters were submitted to the shareholders during the fourth quarter of
2003.


                                      -19-
<PAGE>

                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters.

SHAREHOLDER INFORMATION

      The common stock of the Company is traded on the Nasdaq National Market
System under the symbol "OAKF."

      The high and low sales prices for the Company common stock during each
quarter of 2003 and 2002 are as follows:

Quarter
 Ended                       High            Low

12/31/03                    $33.80         $28.40
09/30/03                     30.00          24.90
06/30/03                     25.90          23.52
03/31/03                     24.77          21.23
12/31/02                     22.39          20.15
09/30/02                     22.39          21.00
06/30/02                     22.79          19.59
03/31/02                     21.00          15.60

      At March 9, 2004 the Company had approximately 2,300 stockholders and
5,620,011 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 2003 and 2002:

Quarter                    Dividend
 Ended                     Declared
 -----                     --------

12/31/03                     $0.15
09/30/03                      0.13
06/30/03                      0.13
03/31/03                      0.13
12/31/02                      0.13
09/30/02                      0.12
06/30/02                      0.12
03/31/02                      0.12

      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 13, 2004 at 1:00 p.m. at the Ohio
State University Extension South District Office, 17 Standpipe Road, Jackson,
Ohio.


                                      -20-
<PAGE>

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                                                   At or For the Year Ended December 31,
                                                        2003          2002          2001           2000            1999
                                                      --------      --------      --------      ---------       ---------
                                                                       (In thousands, except share data)
<S>                                                   <C>           <C>           <C>           <C>             <C>
SUMMARY OF FINANCIAL CONDITION (1)

Total assets                                          $938,281      $833,629      $778,332      $ 694,905       $ 600,330
Interest-bearing deposits
   and federal funds sold                                1,285         5,699        11,929            442           4,516
Investment securities                                   79,545        83,789        78,981         61,427          53,485
Loans receivable-- net (2)                             811,021       701,944       646,081        599,086         507,969
Deposits                                               717,821       663,813       612,204        562,414         488,743
Federal Home Loan Bank (FHLB)
   advances and other borrowings                       135,352        99,358       104,860         77,595          60,852
Stockholders' equity                                    79,928        66,881        56,349         50,224          48,025

SUMMARY OF OPERATIONS (1)

Interest income                                       $ 55,170      $ 57,222      $ 59,704      $  54,579       $  45,251
Interest expense                                        20,468        24,724        30,777         29,505          22,416
                                                      --------      --------      --------      ---------       ---------

   Net interest income                                  34,702        32,498        28,927         25,074          22,835
Provision for losses on loans                            3,347         2,757         2,591          2,263           2,432
                                                      --------      --------      --------      ---------       ---------

   Net interest income after
      provision for losses on loans                     31,355        29,741        26,336         22,811          20,403
Gain on sale of loans                                    4,489         2,358         1,385            174             477
Gain on sale of branch                                      --           122           900             --              --
Gain (loss) on sale of assets                              333           331            27           (328)         (2,141)
Insurance commissions                                    2,827         2,457         2,203          2,090           1,720
Other income                                             3,889         2,845         2,676          2,498           2,068
General, administrative and other expense (3)(4)        24,049        22,663        20,672         17,734          16,335
                                                      --------      --------      --------      ---------       ---------

   Earnings before federal income
      taxes                                             18,844        15,191        12,855          9,511           6,192
Federal income taxes                                     6,266         4,851         4,133          3,174           2,098
                                                      --------      --------      --------      ---------       ---------

Net earnings                                          $ 12,578      $ 10,340      $  8,722      $   6,337       $   4,094
                                                      ========      ========      ========      =========       =========

PER SHARE INFORMATION (5)

Basic earnings per share                              $   2.29      $   1.94      $   1.66      $    1.17       $     .75
Book value per share                                  $  14.34      $  12.46      $  10.70      $    9.51       $    8.74
</TABLE>

See the accompanying footnotes on page 22.


                                      -21-
<PAGE>

<TABLE>
<CAPTION>
                                                                At or For the Year Ended December 31,
                                                      2003          2002          2001          2000          1999
<S>                                                  <C>           <C>           <C>           <C>           <C>
OTHER STATISTICAL AND
OPERATING DATA

Return on average assets                               1.45%         1.26%         1.20%         0.99%         0.72%
Return on average equity                              17.08         16.76         16.45         12.98          8.51
Net interest margin (fully-taxable equivalent)         4.19          4.18          4.17          4.06          4.20
Interest rate spread during period                     3.81          3.75          3.56          3.40          3.64
General, administrative and other expense
   to average assets                                   2.77          2.77          2.85          2.76          2.85
Allowance for loan losses
   to nonperforming loans                            133.46        125.29        160.00        250.90        192.40
Allowance for loan losses
   to total loans                                      1.32          1.29          1.28          1.19          1.19
Nonperforming loans to total loans                     0.99          1.03          0.80          0.47          0.62
Nonperforming assets to total assets                   0.93          0.88          0.87          0.45          0.56
Net charge-offs to average loans                       0.22          0.28          0.23          0.22          0.20
Equity to assets at period end                         8.52          8.02          7.24          7.23          8.00
Dividend payout ratio                                 23.67         25.31         26.69         33.68         43.74
</TABLE>

----------
(1)   The Company completed a merger with Innovative Financial Services Agency,
      Inc. ("IFS") on August 31, 2001. IFS was renamed Oak Hill Financial
      Insurance Agency, Inc. and conducts business as McNelly, Patrick and
      Associates ("MPA").The transaction was initiated prior to July 1, 2001 and
      was accounted for as a pooling-of-interests. Accordingly, the consolidated
      financial statements as of and for the years ended December 31, 1999
      through 2000, inclusive, have previously been restated as if the merger
      had occurred on January 1, 1999.

(2)   Includes loans held for sale.

(3)   General, administrative and other expense for 1999 includes $1.1 million
      in pre-tax expenses incurred pursuant to the merger with Towne Financial
      Corporation and its subsidiary, The Blue Ash Building and Loan Company, on
      October 1, 1999.

(4)   General, administrative and other expense for 2001 includes $259,000 in
      pre-tax expenses incurred pursuant to the merger with MPA.

(5)   Per share information gives retroactive effect to the issuance of 172,414
      shares in the MPA transaction.


                                      -22-
<PAGE>

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 have been its ownership of Oak Hill Banks ("Oak
Hill"), Towne Bank ("Towne"), (collectively "Banks"), Action Finance Company
("Action") and McNelly, Patrick and Associates ("MPA"). Accordingly, the
Company's results of operations are primarily dependent upon the results of
operations of its subsidiaries.

      During 2002, the Board of Directors of the Company, Oak Hill and Towne
approved a business plan whereby the Banks merged on November 30, 2002 into a
single bank charter under the name Oak Hill Banks. Hereinafter, the term "Oak
Hill" describes the preexisting individual banks owned by the Company.

      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. Action is a consumer
finance company that originates installment and home equity loans. MPA is an
insurance agency specializing in group health insurance and other employee
benefits.

      Oak Hill's and Action's profitability depend primarily on their 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 non-interest 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.

      On August 31, 2001, the Company combined with Innovative Financial
Services Agency, Inc. ("IFS") in a transaction whereby IFS became a wholly-owned
subsidiary of the Company. IFS is an insurance agency specializing in group
health insurance and other employee benefits in southern and central Ohio. IFS
was renamed Oak Hill Financial Insurance Agency, Inc. and conducts business as
McNelly, Patrick and Associates ("MPA"). The transaction was initiated prior to
July 1, 2001 and was accounted for as a pooling-of-interests. Accordingly, the
consolidated financial statements have previously been restated to reflect the
effects of the business combination as of January 1, 2001. Pursuant to the
merger agreement, the Company issued 172,414 shares of common stock in exchange
for the shares of IFS.

      On September 30, 2001, the Company formed Oak Hill Title Agency, LLC ("Oak
Hill Title"), in conjunction with a law firm, to provide title services for
commercial and residential real estate transactions. Oak Hill Title commenced
operations in January 2002.

      Management's discussion and analysis of earnings and related financial
data 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, 2003 and 2002. 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
financial condition as of December 31, 2003, and the results of operations for
the year ended December 31, 2003, 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.


                                      -23-
<PAGE>

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 judgements in making estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses. The
following critical accounting policies are based upon judgements 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:

      o     Local market areas and national economic developments;

      o     Levels of and trends in delinquencies and impaired loans;

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

      o     Adverse situations that may affect specific borrowers' ability to
            repay;

      o     Effects of any changes in lending policies and procedures;

      o     Credit concentrations;

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

      o     Volume and terms of loans; and

      o     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 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.


                                      -24-
<PAGE>

      Mortgage Servicing Rights: Mortgage servicing rights are accounted for
pursuant to the provisions of SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," which
requires that the Company recognize as separate assets, rights to service
mortgage loans for others, regardless of how those servicing rights are
acquired. An institution that acquires mortgage servicing rights through either
the purchase or origination of mortgage loans and sells those loans with
servicing rights retained must allocate some of the cost of the loans to the
mortgage servicing rights.

      The mortgage servicing rights recorded by the Company, calculated in
accordance with the provisions of SFAS No. 140, were segregated into pools for
valuation purposes, using as pooling criteria the loan term and coupon rate.
Once pooled, each grouping of loans was evaluated on a discounted earnings basis
to determine the present value of future earnings that a purchaser could expect
to realize from each portfolio. Earnings were projected from a variety of
sources including loan servicing fees, interest earned on float, net interest
earned on escrows, miscellaneous income, and costs to service the loans. The
present value of future earnings is the "economic" value of the pool, i.e., the
net realizable present value to an acquirer of the acquired servicing.

      SFAS No. 140 requires that capitalized mortgage servicing rights and
capitalized excess servicing receivables be amortized in proportion to and over
the period of estimated net servicing income and assessed for impairment.
Impairment is measured based on fair value. The valuation of mortgage servicing
rights is influenced by market factors, including servicing volumes and market
prices, as well as management's assumptions regarding mortgage prepayment speeds
and interest rates. Management utilizes periodic third-party valuations by
qualified market professionals to evaluate the fair value of its capitalized
mortgage servicing assets.

FINANCIAL CONDITION

      The Company's total assets amounted to $938.3 million as of December 31,
2003, an increase of $104.7 million, or 12.6%, over the $833.6 million total at
December 31, 2002. The increase was funded primarily through growth in deposits
of $54.0 million, an increase of $36.8 million in FHLB advances and an increase
in stockholders' equity of $13.0 million.

      Cash and due from banks, federal funds sold, and investment securities,
including mortgage-backed securities, decreased by $8.4 million, or 7.7%, to a
total of $100.1 million at December 31, 2003, compared to December 31, 2002.
Investment securities decreased by $4.2 million, as maturities and repayments of
$32.0 million and sales of $7.3 million exceeded purchases of $36.8 million.
Federal funds sold decreased by $5.4 million during 2003.

      Loans receivable totaled $811.0 million at December 31, 2003, an increase
of $109.1 million, or 15.5%, over total loans at December 31, 2002. Loan
disbursements totaled $621.4 million during 2003, which were partially offset by
loan sales of $176.5 million and principal repayments of $330.7 million during
2003. Loan disbursements and sales volume increased by $123.1 million and $67.3
million, respectively, as compared to 2002 volume. The continued low interest
rate environment during 2003 contributed to the overall increases in loan
origination and sales volume, as borrowers refinanced loans to lower interest
rates and Oak Hill generally sold such lower interest rate loans in the
secondary market. Growth in the loan portfolio during 2003 was comprised of a
$122.3 million, or 31.2%, increase in commercial and other loans, which were
partially offset by a $10.6 million, or 4.3%, decrease in real estate mortgage
loans. The Company's allowance for loan losses totaled $10.8 million at December
31, 2003, an increase of $1.7 million, or 18.5%, over the total at December 31,
2002. The allowance for loan losses represented 1.32% and 1.29% of the total
loan portfolio at December 31, 2003 and 2002, respectively. Net charge-offs
totaled $1.7 million and $2.0 million for the years ended December 31, 2003 and
2002, respectively. The Company's allowance represented 133.5% and 125.3% of
nonperforming loans, which totaled $8.1 million and $7.3 million at December 31,
2003 and 2002, respectively. At December 31, 2003, nonperforming loans were
comprised of $1.6 million in installment loans, $4.2 million of loans secured
primarily by commercial real estate and $2.3 million of loans secured by
one-to-four family residential real estate. In management's opinion, all
nonperforming loans were adequately collateralized or reserved for at December
31, 2003.

      Deposits totaled $717.8 million at December 31, 2003, an increase of $54.0
million, or 8.1%, over the $663.8 million total at December 31, 2002. The
increase resulted primarily from new brokered deposits and management's
marketing efforts to attract demand deposits. Brokered deposits continued to be
an integral part of the Company's overall funding strategy due to competitive
rates and lower operational costs compared with retail deposits. Brokered
deposits totaled $93.6 million with a weighted-average cost of 3.04% at December
31, 2003, as compared to the $49.1 million in brokered deposits with a 4.35%
weighted-average cost at December 31, 2002. Proceeds from deposit growth were
used primarily to fund loan originations.


                                      -25-
<PAGE>

      Advances from the Federal Home Loan Bank totaled $122.9 million at
December 31, 2003, an increase of $36.8 million, or 42.8%, over the December 31,
2002 total. In recognition of the continued low interest rate environment during
2003, management obtained generally longer term and lower cost advances in 2003
compared to the maturities and cost of advances obtained from the Federal Home
Loan Bank during 2002. Proceeds from the Federal Home Loan Bank advances were
used primarily to fund loan originations during the period.

      In March 2000, a Delaware statutory business trust owned by the Company
(the "Trust"), issued $5.0 million of mandatorily redeemable debt securities.
The debt securities issued by the Trust are included in the Company's regulatory
capital, specifically as a component of Tier I capital. The proceeds from the
issuance of the subordinated debentures and common securities were used by the
Trust to purchase from the Company $5.0 million of subordinated debentures
maturing on March 8, 2030. The subordinated debentures are the sole asset of the
Trust, and the Company owns all of the common securities of the Trust. Interest
payments on the debt securities are to be made semi-annually at an annual fixed
rate of interest of 10.875% and are reported as a component of interest expense
on borrowings.

      The Company's stockholders' equity amounted to $79.9 million at December
31, 2003, an increase of $13.0 million, or 19.5%, over the balance at December
31, 2002. The increase resulted primarily from net earnings of $12.6 million and
proceeds from options exercised of $2.9 million, which were partially offset by
a decrease in the unrealized gain on securities, net of tax, totaling $291,000
and $3.0 million in dividends declared on common stock.

SUMMARY OF EARNINGS

      The table on page 30 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, 2003, 2002 and 2001. 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.

      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 31
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.

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND
2002

GENERAL. Net earnings for the year ended December 31, 2003 totaled $12.6
million, a $2.2 million, or 21.6%, increase over 2002 net earnings. The increase
in earnings resulted primarily from a $2.2 million increase in net interest
income and a $3.4 million increase in other income, which were partially offset
by a $590,000 increase in the provision for losses on loans, a $1.4 million
increase in general, administrative and other expense, and a $1.4 million
increase in the provision for federal income taxes.

NET INTEREST INCOME. Total interest income for the year ended December 31, 2003,
amounted to $55.2 million, a decrease of $2.1 million, or 3.6%, from the total
recorded for 2002. Interest income on loans totaled $52.0 million, a decrease of
$651,000, or 1.2%, from the 2002 period. This decrease resulted primarily from a
74 basis point decrease in the average fully-taxable equivalent yield, to 6.91%
in 2003 from 7.65% in 2002, which was partially offset by a $64.0 million, or
9.3%, increase in the weighted-average ("average") portfolio balance, to a total
of $754.5 million in 2003. Interest income on investment securities and other
interest-earning assets decreased by $1.4 million, or 30.7%. The decrease
resulted primarily from an 83 basis point decrease in the average fully-taxable
equivalent yield, to 4.13% in 2003, coupled with a $13.8 million, or 16.0%,
decrease in the average portfolio balance, to a total of $86.5 million in 2003.

      Total interest expense amounted to $20.5 million for the year ended
December 31, 2003, a decrease of $4.3 million, or 17.2%, from the total recorded
in 2002. Interest expense on deposits decreased by $4.1 million, or 20.7%, to a
total of $15.6 million in 2003. The decrease resulted primarily from a 77 basis
point decrease in the average cost of deposits, to 2.55% in 2003, which was
partially offset by an $18.5 million, or 3.1%, increase in the average portfolio
balance, to a total of $611.3 million in 2003. Interest expense on borrowings
decreased by $179,000, or 3.5%, during 2003. This decrease was due to an 81
basis point decrease in the average cost of borrowings, to 4.17% in 2003, which
was partially offset by a $15.5 million, or 15.2%, increase in average
borrowings outstanding. The decrease in the level of yields on interest-earning
assets and the cost of interest-bearing liabilities was primarily due to the
overall decrease in interest rates in the economy throughout 2003 and 2002.


                                      -26-
<PAGE>

      As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $2.2 million, or 6.8%, for the year
ended December 31, 2003, as compared to 2002. The interest rate spread increased
by 6 basis points to 3.81% in 2003, compared to 3.75% in 2002. The fully-taxable
equivalent net interest margin increased by 1 basis point from, 4.18% in 2002 to
4.19% in 2003.

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
$3.3 million provision for losses on loans for the year ended December 31, 2003,
an increase of $590,000, or 21.4%, compared to 2002. The provision for losses on
loans in 2003 was predicated upon the $110.8 million of growth in the gross loan
portfolio, net charge-offs in 2003 of $1.7 million and an increase of $823,000
in nonperforming loans from $7.3 million in 2002 to $8.1 million at December 31,
2003.

      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, 2003, 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 $11.5 million for the year ended December 31,
2003, an increase of $3.4 million, or 42.2%, over the 2002 amount. This increase
resulted primarily from a $2.1 million, or 90.4%, increase in gain on sale of
loans, a $1.0 million, or 36.7%, increase in service fees, charges, and other
operating income, and a $370,000, or 15.1%, increase in insurance commissions,
which were partially offset by a $122,000 gain on sale of branches recorded in
2002. The increase in gain on sale of loans resulted from an increase in the
volume of loans sold year-to-year. Management expects the gain on sale of
one-to-four family residential loans to be substantially less next year given
that the low interest rate environment may not continue in 2004. The Company
will continue to aggressively pursue Small Business Administrative ("SBA")
lending opportunities to help offset the anticipated decrease in gains on sale
of one-to-four family residential loans in 2004. The increase in insurance
commissions was due primarily to increased premiums realized on sales of group
health insurance. The increase in service fees, charges and other income was due
primarily to an increase in overdraft fees totaling $1.3 million over the total
recorded in 2002, as a result of a new overdraft protection program implemented
in late March 2003.

GENERAL, ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and other
expense totaled $24.0 million for the year ended December 31, 2003, an increase
of $1.4 million, or 6.1%, over the 2002 total. The increase resulted primarily
from a $1.1 million, or 8.2%, increase in employee compensation and benefits, an
$843,000, or 14.2%, increase in other operating expenses and an increase of
$477,000, or 19.6%, in occupancy and equipment, which were partially offset by a
$640,000 decrease in franchise taxes and a $367,000 decrease in merger-related
expenses. The increase in employee compensation and benefits resulted primarily
from increased staffing levels required in connection with the establishment of
new branch locations, additional management staffing and normal merit increases.
The increase in other operating expense resulted primarily from a $259,000
increase in credit and collection expenses associated with increased lending
volume and delinquency levels, a $188,000 increase in consulting fees, which are
based upon the increase in overdraft fees, an $82,000 increase in expenses
related to minority ownership interests in Oak Hill Title, a $26,000 increase in
insurance commissions paid and a $43,000 increase in computer and PC software
costs. The remaining increase of $245,000, or 4.1%, 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 $153,000, or 26.1%, increase in rent expense, a $110,000, or 26.7%,
increase in maintenance contracts and a $189,000, or 23.7%, increase in
depreciation expense year-to-year. The increases in rent and depreciation
expenses are attributable to new office locations, coupled with increased rents
year-to-year. The decrease in franchise taxes was attributable to a one-time tax
savings for 2003 resulting from the previously mentioned Oak Hill-Towne merger
in 2002. The decrease in merger-related expenses was due to $367,000 incurred in
connection with the Oak Hill-Towne merger.

FEDERAL INCOME TAXES. The provision for federal income taxes amounted to $6.3
million for the year ended December 31, 2003, an increase of $1.4 million, or
29.2%, over the $4.9 million recorded in 2002. The increase resulted primarily
from a $3.7 million, or 24.0%, increase in earnings before taxes and the
increase in tax rates attendant to the Company's level of pre-tax income. The
effective tax rates were 33.3% and 31.9% for the years ended December 31, 2003
and 2002, respectively.


                                      -27-
<PAGE>

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND
2001

GENERAL. Net earnings for the year ended December 31, 2002 totaled $10.3
million, a $1.6 million, or 18.6%, increase over 2001 net earnings. The increase
in earnings resulted primarily from a $3.6 million increase in net interest
income and a $922,000 increase in other income, which were partially offset by a
$166,000 increase in the provision for losses on loans, a $2.0 million increase
in general, administrative and other expense, and a $718,000 increase in the
provision for federal income taxes.

NET INTEREST INCOME. Total interest income for the year ended December 31, 2002,
amounted to $57.2 million, a decrease of $2.5 million, or 4.2%, from the $59.7
million recorded for 2001. Interest income on loans totaled $52.7 million, a
decrease of $2.4 million, or 4.3%, from the 2001 period. This decrease resulted
primarily from a 120 basis point decrease in the average fully-taxable
equivalent yield, to 7.65% in 2002 from 8.85% in 2001, which was partially
offset by a $67.1 million, or 10.8%, increase in the weighted-average
("average") portfolio balance, to a total of $690.5 million in 2002. Interest
income on investment securities and other interest-earning assets decreased by
$127,000, or 2.7%. The decrease resulted primarily from a 115 basis point
decrease in the average fully-taxable equivalent yield, to 4.97% in 2002, which
was partially offset by an $18.7 million, or 22.9%, increase in the average
portfolio balance, to a total of $100.3 million in 2002.

      Total interest expense amounted to $24.7 million for the year ended
December 31, 2002, a decrease of $6.1 million, or 19.7%, from the $30.8 million
recorded in 2001. Interest expense on deposits decreased by $6.1 million, or
23.6%, to a total of $19.7 million in 2002. The decrease resulted primarily from
a 151 basis point decrease in the average cost of deposits, to 3.32% in 2002,
which was partially offset by a $60.6 million, or 11.4%, increase in the average
portfolio balance, to a total of $592.9 million in 2002. Interest expense on
borrowings increased by $9,000, or 0.2%, during 2002. This increase was due to a
$14.7 million, or 16.8%, increase in average borrowings outstanding, which was
partially offset by an 83 basis point decrease in the average cost of
borrowings, to 4.98% in 2002. The decrease in the level of yields on
interest-earning assets and the cost of interest-bearing liabilities was
primarily due to the overall decrease in interest rates in the economy
throughout 2002 and 2001.

      As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $3.6 million, or 12.3%, for the year
ended December 31, 2002, as compared to 2001. The interest rate spread increased
by 19 basis points to 3.75% in 2002, compared to 3.56% in 2001. The
fully-taxable equivalent net interest margin increased by 1 basis point from,
4.17% in 2001 to 4.18% in 2002.

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
$2.8 million provision for losses on loans for the year ended December 31, 2002,
an increase of $166,000, or 6.4%, compared to 2001. The provision for losses on
loans in 2002 was predicated upon the $56.7 million of growth in the gross loan
portfolio and an increase of $2.1 million in nonperforming loans from $5.2
million in 2001 to $7.3 million at December 31, 2002. -27- OTHER INCOME. Other
income totaled $8.1 million for the year ended December 31, 2002, an increase of
$922,000, or 12.8%, over the 2001 amount. This increase resulted primarily from
a $973,000, or 70.3%, increase in gain on sale of loans, a $169,000, or 6.3%,
increase in service fees, charges, and other operating income and a $254,000, or
11.5%, increase in insurance commissions, which were partially offset by a
$778,000 decrease in the gain on sale of branches.

GENERAL, ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and other
expense totaled $22.7 million for the year ended December 31, 2002, an increase
of $2.0 million, or 9.6%, over the 2001 total. The increase resulted primarily
from a $1.4 million, or 11.7%, increase in employee compensation and benefits, a
$140,000, or 2.4%, increase in other operating expenses, an increase of
$344,000, or 16.5%, in occupancy and equipment and a $108,000, or 41.7%,
increase in merger-related expenses.

      The increase in employee compensation and benefits resulted primarily from
increased staffing levels required in connection with the establishment of new
branch locations, additional management staffing and normal merit increases. The
increase in other operating expense resulted primarily from an increase in costs
associated with an EDP upgrade and related training expenditures totaling
$246,000, which was partially offset by a $143,000 decrease in professional fees
unrelated to merger transactions. The remaining increase of $37,000, or 26.4%,
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 $130,000, or 28.3%, increase in rent expense, a
$220,000 increase in maintenance contracts associated with the previously
mentioned EDP upgrade, and a $20,000, or 13.8%, increase in maintenance and
repairs to buildings and equipment, which were partially offset by a $26,000, or
3.2%, decrease in depreciation expense year-to-year. The increase in
merger-related expenses was due to $367,000 incurred in connection with the
previously mentioned Oak Hill-Towne merger in 2002, compared to $259,000
incurred in connection with the MPA merger in 2001.


                                      -28-
<PAGE>

FEDERAL INCOME TAXES. The provision for federal income taxes amounted to $4.9
million for the year ended December 31, 2002, an increase of $718,000, or 17.4%,
over the $4.1 million recorded in 2001. The increase resulted primarily from a
$2.3 million, or 18.2%, increase in earnings before taxes. The effective tax
rates were 31.9% and 32.2% for the years ended December 31, 2002 and 2001,
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, 2003, the Company had $214.3 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 $155.2 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, 2003, the Company had $122.9 million of outstanding
FHLB advances.

      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, 2003, the Company had total off-balance
sheet contractual commitments consisting of $35.9 million in loan commitments,
or loans committed but not closed, $117.6 million in unused lines of credit and
letters of credit totaling $12.0 million. Funding for these amounts is expected
to be provided by the sources described above. Management believes the Company
has adequate resources to meet its normal funding requirements.

      The table below details the amount of loan commitments, unused lines of
credit and letters of credit outstanding at December 31, 2003, by expiration
period:

                           One year      Two to         After
                            or less    three years   three years      Total
                            -------    -----------   -----------      -----

                                            (In thousands)

Loan commitments            $35,920      $    --      $     --      $ 35,920
Unused lines of credit       45,455       12,391        59,765       117,611
Letters of credit             1,648          400        10,000        12,048
                            -------      -------      --------      --------
                            $83,023      $12,791      $ 69,765      $165,579
                            =======      =======      ========      ========


                                      -29-
<PAGE>

                       AVERAGE BALANCES AND INTEREST RATES

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                        -----------------------
                                                  2003                            2002                             2001
                                                  ----                            ----                             ----
                                                Interest                        Interest                         Interest
                                      Average    Income/   Average    Average    Income/    Average     Average   Income/    Average
                                      Balance    Expense    Rate      Balance    Expense     Rate       Balance   Expense     Rate
                                      -------    -------    ----      -------    -------     ----       -------   -------     ----
                                                                             (Dollars in thousands)
<S>                                  <C>        <C>         <C>       <C>        <C>          <C>       <C>        <C>       <C>
Interest-earning assets:
Loans receivable                     $754,519   $ 52,138      6.91%   $690,544   $ 52,797       7.65%   $623,486   $ 55,165    8.85%
Investment securities                  84,277      3,551      4.21      92,580      4,853       5.24      72,687      4,683    6.44
Federal funds sold                        699          7      1.00       7,499        119       1.59       8,472        277    3.27
Interest-earning deposits               1,508         18      1.19         230         10       4.35         476         33    6.93
                                     --------   --------  --------    --------   --------   --------    --------   --------  ------
  Total interest-earning assets       841,003     55,714      6.62     790,853     57,779       7.31     705,121     60,158    8.53
Non-interest-earning assets            27,003                           27,459                            20,524
                                     --------                         --------                          --------

       Total assets                  $868,006                         $818,312                          $725,645
                                     ========                         ========                          ========

Interest-bearing liabilities:
Deposits:
     Savings accounts                $ 47,385        295      0.62    $ 43,588        485       1.11    $ 39,612        774    1.95
     NOW accounts                      61,200        839      1.37      62,003      1,204       1.94      32,315        566    1.75
     Money market deposit accounts      7,993         56      0.70       7,951        108       1.36       9,080        212    2.33
     Premium & select investments      71,848        812      1.13      69,657      1,249       1.79      74,399      2,670    3.59
     Certificates of deposit          422,905     13,575      3.21     409,656     16,608       4.05     376,833     21,494    5.70
Borrowings                            117,328      4,891      4.17     101,818      5,070       4.98      87,151      5,061    5.81
                                     --------   --------    ------    --------   --------     ------    --------    -------  ------
       Total interest-bearing
         liabilities                  728,659     20,468      2.81     694,673     24,724       3.56     619,390     30,777    4.97
                                                --------  --------               --------   --------               --------  ------
Non-interest-bearing liabilities       35,706                           61,962                            53,222

Stockholders' equity                   73,641                           61,677                            53,033
                                     --------                         --------                          --------

       Total liabilities and
         stockholders' equity        $868,006                         $818,312                          $725,645
                                     ========                         ========                          ========

Net interest income and interest
  rate spread                                   $ 35,246      3.81%              $ 33,055       3.75%              $ 29,381    3.56%
                                                ========  ========               ========   ========               ========  ======
Net interest margin (1)                                       4.19%                             4.18%                          4.17%
                                                          ========                          ========                         ======

Average interest-earning assets to average
     interest-bearing liabilities                           115.42%                           113.85%                        113.84%
                                                          ========                          ========                         ======

Adjustment of interest income to a tax
  equivalent basis on tax-exempt:
     Loans and investment securities            $    544                         $    557                          $    454
                                                ========                         ========                          ========
</TABLE>

(1)   The net interest margin is the net interest income divided by the average
      interest-earning assets.


                                      -30-
<PAGE>

                                RATE/VOLUME TABLE

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                            -----------------------
                                                             2003vs. 2002                             2002vs. 2001
                                                             ------------                             ------------
                                                      Increase (decrease) due to               Increase (decrease) due to
                                                  Volume         Rate          Total        Volume         Rate          Total
                                                  ------         ----          -----        ------         ----          -----
                                                                             (Dollars in thousands)
<S>                                               <C>           <C>           <C>           <C>           <C>           <C>
Changes in interest income attributable to:
     Loan receivable                              $ 4,693       $(5,352)      $  (659)      $ 5,563       $(7,931)      $(2,368)
     Investment securities                           (506)         (796)       (1,302)        1,139          (969)          170
     Federal funds sold                               (79)          (33)         (112)          (29)         (129)          271
     Interest-earning deposits with banks               9            (1)            8           (13)          (10)          (23)
                                                  -------       -------       -------       -------       -------       -------
          Total interest income                   $ 4,117       $(6,182)      $(2,065)      $ 6,660       $(9,039)      $(2,379)
                                                  =======       =======       =======       =======       =======       =======

Changes in interest expense attributable to:
     Deposits:                                                                                                          $(6,062)
          Savings accounts                        $    29       $  (219)      $  (190)      $    71       $  (360)      $  (289)
          NOW accounts                                 (2)         (363)         (365)          585            54           638
          Money market deposit accounts                 2           (54)          (52)          (25)          (80)         (104)
          Premium & select investments                 35          (472)         (437)         (158)       (1,263)       (1,421)
          Certificates of deposit                     503        (3,536)       (3,033)        1,748        (6,634)       (4,886)
     Borrowings                                       711          (890)         (179)          788          (779)            9
                                                  -------       -------       -------       -------       -------       -------
          Total interest expense                  $ 1,278       $(5,534)      $(4,256)      $ 3,009       $(9,062)      $(6,053)
                                                  =======       =======       =======       =======       =======       =======

Increase in net interest income                                               $ 2,191                                   $ 3,674
                                                                              =======                                   =======
</TABLE>

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

      This information is presented in "Asset and Liability Management" on pages
12 through 13 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 January 23, 2004, except for Note
Q, as to which the date is February 26, 2004) are set forth on pages 37 through
66 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

      The Company's principal executive officer and principal financial officer,
based on their evaluation as of the end of the period covered by this report,
have concluded that the Company's disclosure controls and procedures (as defined
in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) are
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.

      There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation. There were no significant deficiencies or material
weaknesses, and therefore there were no corrective actions taken.

                                    PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act.

      The information is contained under "Ownership of Common Stock by
Management" and "Election of Directors" in the Company's Proxy Statement dated
March 11, 2004, is incorporated herein by reference in response to this item.


                                      -31-
<PAGE>

      The information contained under "Report of the Audit Committee of the
Board of Directors", specifically concerning Audit Committee financial expert,
in the Company's Proxy Statement dated March 11, 2004, 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 Proxy Statement dated March 11, 2004,
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. The
Code of Ethics is included as Exhibit 14 and is set forth on pages 67 through 70
hereof.

Item 11. Executive Compensation.

      The information appearing under "Executive Compensation" in the Company's
Proxy Statement dated March 11, 2004, is incorporated herein by reference in
response to this item.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholders Matters.

      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 Proxy Statement dated March 11,
2004, is incorporated herein by reference in response to this item.

Item 13. Certain Relationships and Related Transactions.

      The information appearing under "Certain Transactions" in the Company's
Proxy Statement dated March 11, 2004, is incorporated herein by reference in
response to this item.

Item 14. Principal Accountant Fees and Services

      The information appearing under "Principal Accounting Firm Fees" in the
Company's Proxy Statement dated March 11, 2004, 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 Auditors

            Consolidated Statements of Financial Condition as of December 31,
            2003 and 2002

            Consolidated Statements of Earnings for years ended December 31,
            2003, 2002 and 2001

            Consolidated Statements of Comprehensive Income for years ended
            December 31, 2003, 2002 and 2001

            Consolidated Statements of Stockholders' Equity for years ended
            December 31, 2003, 2002 and 2001

            Consolidated Statements of Cash Flows for years ended December 31,
            2003, 2002 and 2001

            Notes to Consolidated Financial Statements for years ended December
            31, 2003, 2002 and 2001

      (2)   Financial Statement Schedules:

                  The information is contained in the Company's Annual Report to
            Stockholders for the year ended December 31, 2003, 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:


                                      -32-
<PAGE>

Exhibit
Number

* 2(a)..................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-4A with the SEC on August 3, 1999).

* 2(b)..................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-4A with the SEC on August 3, 1999).

* 3(a)..................Fourth Amended and Restated Articles of Incorporation
                        (reference is made to Form S-4, Exhibit 3.1,
                        Registration No. 333-81645, filed with the SEC on June
                        25, 1999 and incorporated herein by reference).

* 3(b)..................Restated Code of Regulations (reference is made to Form
                        SB-2, Exhibit 3(ii), File No. 33-96216 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).

*10(a)..................Oak Hill Financial, Inc. Fourth Amended and Restated
                        1995 Stock Option Plan (reference is made to Form S-8,
                        Exhibit 4(a), Registration No. 333-45690, filed with the
                        SEC on September 12, 2000 and incorporated herein by
                        reference).

 13.....................2003 Annual Report (Selected portions)

 14.....................Oak Hill Financial, Inc. & Subsidiaries Code of Ethics

*21.....................Subsidiaries of the Registrant (reference is made to
                        Form SB-2, Exhibit 21, File No. 333-96216 and
                        incorporated herein by reference).

 23.....................Consent of Grant Thornton LLP.

 24.....................Powers of Attorney.

 31.1 ..................Certification by Chief Executive Officer, R. E. Coffman,
                        Jr., dated March 9, 2004, pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002.

 31.2 ..................Certification by Chief Financial Officer, Ron J. Copher,
                        dated March 9, 2004, pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002.

 32.1...................Certification by Chief Executive Officer, R. E. Coffman,
                        Jr., dated March 9, 2004, 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, Ron J. Copher,
                        dated March 9, 2004, pursuant to 18 U.S.C. Section 1350,
                        as adopted pursuant to Section 906 of the Sarbanes-Oxley
                        Act of 2002

*Incorporated by reference as indicated.


                                      -33-
<PAGE>

(b) Form 8-K's Filed:

      1.    Form 8-K, dated October 9, 2003, filed with the SEC on October 14,
            2003 announcing the Company's results of operations and financial
            condition for the three and nine months ended September 30, 2003.

      2.    Form 8-K, dated December 22, 2003, filed with the SEC on December
            22, 2003 announcing the appointment of Ralph E. "Gene" Coffman, Jr.
            as Chief Executive Officer of the Company effective January 1, 2004.

      3.    Form 8-K, dated January 9, 2004, filed with the SEC on January 9,
            2004 announcing the Company's results of operations and financial
            condition for the three and twelve months ended December 31, 2003.

      4.    Form 8-K, dated February 26, 2004, filed with the SEC on February
            27, 2004 announcing that the Company's Board of Directors has
            authorized the repurchase of up to 300,000, or approximately 5.4%,
            of the Company's common stock through open market or privately
            negotiated transactions.


                                      -34-
<PAGE>

                                   SIGNATURES

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

                       OAK HILL FINANCIAL, INC.                        Date


                       By: /s/ R. E. Coffman, Jr.                  March 9, 2004
                           -----------------------------------
                           R. E. Coffman, Jr., President and
                           Chief 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.

<TABLE>
<CAPTION>
        Signature                                       Title                                          Date
<S>                                <C>                                                            <C>
*Evan E. Davis                     Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*John D. Kidd                      Chairman and Director                                   )      March 9, 2004
---------------------------                                                                )
                                                                                           )
/s/ R. E. Coffman, Jr.             President, Chief Executive Officer and Director         )      March 9, 2004
---------------------------        (Principal Executive Officer)                           )
                                                                                           )
*David G. Ratz                     Executive Vice President and Chief Operating Officer    )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Scott J. Hinsch, Jr.              Vice President                                          )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*H. Tim Bichsel                    Secretary                                               )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Ron J. Copher                     Chief Financial Officer and Treasurer                   )      March 9, 2004
---------------------------        (Principal Financial and Accounting Officer)            )
                                                                                           )
*D. Bruce Knox                     Chief Information Officer                               )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Candice R. DeClark-Peace          Director                                                )      March 9, 2004
---------------------------
</TABLE>


                                      -35-
<PAGE>

<TABLE>
<CAPTION>
        Signature                                       Title                                          Date
<S>                                <C>                                                            <C>

*Barry M. Dorsey, Ed.D.            Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Donald R. Seigneur                Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*William S. Siders                 Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*H. Grant Stephenson               Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Neil S. Strawser                  Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
*Donald P. Wood                    Director                                                )      March 9, 2004
---------------------------                                                                )
                                                                                           )
By: /s/ R. E. Coffman, Jr.                                                                 )      March 9, 2004
    ----------------------                                                                 )
    R. E. Coffman, Jr.,                                                                    )
    attorney-in-fact for each of                                                           )
    the persons indicated                                                                  )
</TABLE>


                                      -36-