================================================================================
                                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, 2005

                         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 Identification Number)
incorporation or organization)

        14621 S.R. 93
         Jackson, OH                                       45640
(Address of principal executive offices)                 (Zip Code)

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

                Securities pursuant to Section 12(b) of the Act:
                                      None

                Securities pursuant to Section 12(g) of the Act:
                         Common stock without par value

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

         Check if the  Registrant  is not required to file  reports  pursuant to
Section 13 or 15(d) of the Act. Yes [_] No [X]

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

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

         Check  whether  the  Registrant  is  a  large  accelerated   filer,  an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer" and "large  accelerated  filer" in Rule 12b-2 of the Exchange Act.
   Large accelerated filer [_] Accelerated filer [X] Non-accelerated filer [_]

         Check  whether the  Registrant  is a shell  company (as defined in Rule
12b-2 of the Act). Yes [_] No [X]

         The aggregate  market value of the voting and non-voting  common equity
held by non-affiliates  of the Registrant  computed by reference to the price at
which the common  equity was last sold,  or the  average  bid and asked price of
such common equity, as of June 30, 2005 was $121.7 million. For purposes of this
calculation,  executive  officers and directors of the Registrant are considered
affiliates.

         There  were  5,562,904   shares  of  the   Registrant's   common  stock
outstanding on March 10, 2006.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Registrant's Annual Report to Stockholders for the year
ended December 31, 2005 are incorporated by reference into Parts II and IV.

         Portion's  of the  2006  Proxy  Statement  for the  Annual  Meeting  of
Stockholders  to be held April 18, 2006 are  incorporated by reference into Part
III.

<PAGE>
<TABLE>
<CAPTION>

                                               OAK HILL FINANCIAL, INC.
                                             2005 FORM 10-K ANNUAL REPORT

                                                  TABLE OF CONTENTS

PART I:                                                                                                          Page
<S>  <C>                                                                                                          <C>
Item 1.       Business                                                                                             3
Item 1A.      Business Risks                                                                                      17
Item 1B.      Unresolved Staff Comments                                                                           18
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                                          32
Item 8.       Financial Statements and Supplementary Data                                                         32
Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                32
Item 9A.      Controls and Procedures                                                                             32
Item 9B.      Other Information                                                                                   34


PART III:

Item 10.      Directors and Executive Officers of the Registrant                                                  34
Item 11.      Executive Compensation                                                                              34
Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters      34
Item 13.      Certain Relationships and Related Transactions                                                      34
Item 14.      Principal Accountant Fees and Services                                                              34


PART IV:

Item 15:      Exhibits, Financial Statement Schedules and Reports on Form 8-K                                     34


Signatures                                                                                                        37

</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 six wholly  owned  subsidiaries,  Oak Hill Banks ("Oak
Hill"), Oak Hill Financial  Insurance Agency, Inc. ("OHFI") and Oak Hill Capital
Trusts 1, 2, 3 and 4 (the "Trusts"). The Company also owns forty-nine percent of
Oak Hill Title Agency  ("Oak Hill  Title")  which  provides  title  services for
commercial  and  residential  real estate  transactions.  The  Company  provides
management and similar services for its subsidiaries.  Since it does not conduct
any  operating  businesses  itself,  the Company  must depend  largely  upon its
subsidiaries  for funds with which to pay the expenses of its operation  and, to
the extent  applicable,  any dividends on its outstanding  shares of stock.  For
further  information,  see  Note  A  of  the  Notes  to  Consolidated  Financial
Statements  appearing in the Company's Annual Report to  Stockholders,  which is
incorporated by reference in response to this item.

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

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

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

Lending Activities
------------------

         General. The Company generally makes loans in southern and central Ohio
where its branches are located.  The Company's  principal lending activities are
the origination of (i) conventional  one-to-four  family  residential loans, and
(ii) commercial  loans,  most of which are secured by real estate located in the
Company's primary market area. These loan categories accounted for approximately
91% of the Company's net loan  portfolio at December 31, 2005.  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,
---------------------------------------------------------------------------------------------------------------------------------
                                      2005                2004                2003               2002                2001
---------------------------------------------------------------------------------------------------------------------------------
                                Amount    Percent   Amount   Percent    Amount   Percent    Amount   Percent    Amount   Percent
---------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Type of loan:

   Real estate mortgage(1)    $  320,674   31.6%  $  270,092   29.6%  $  235,180   29.0%  $  245,794   35.0%  $  373,323   57.8%
   Commercial and other          599,105   59.0      584,201   64.0      513,848   63.3      391,586   55.8      216,611   33.5
   Installment                   106,774   10.5       68,072    7.5       71,100    8.8       72,012   10.3       62,829    9.7
   Credit card                     2,183    0.2        2,020    0.2        1,729    0.2        1,694    0.2        1,663    0.3
---------------------------------------------------------------------------------------------------------------------------------

Gross loans                    1,028,736  101.3      924,385  101.3      821,857  101.3      711,086  101.3      654,426  101.3

Less:
   Allowance for
      loan losses                (13,653)  (1.3)     (11,847)  (1.3)     (10,836)  (1.3)      (9,142)  (1.3)      (8,345)  (1.3)
---------------------------------------------------------------------------------------------------------------------------------
Total loans receivable, net   $1,015,083  100.0%  $  912,538  100.0%  $  811,021  100.0%  $  701,944  100.0%  $  646,081  100.0%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Primarily residential real estate.

         The following is maturity  information  with respect to commercial  and
other loans at December 31, 2005.

<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
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>             <C>              <C>            <C>               <C>            <C>               <C>       <C>
 $138,486      7.10%           $96,684          6.84%          $114,993          6.46%          $248,942          6.91%     $599,105
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

         As of December  31,  2005,  there were $200.3  million  fixed-rate  and
$260.3 million variable-rate commercial loans maturing in more than one year.

         Loans Secured by One- to Four-Family Real Estate. A significant portion
of the Company's  lending activity is the origination of permanent  conventional
loans  secured by one-to  four-family  residences  located  within the Company's
primary market area. The Company  typically makes adjustable rate mortgage loans
and holds the loans in portfolio.  More than 49% 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 $320.7 million at December 31, 2005, and
represented  31.6% of net loans at such  date.  At such date,  loans  secured by
residential real estate with outstanding balances of approximately $6.8 million,
or 2.1%, 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 oneyear, three year or five year U.S. Treasury Index. Such
loans generally have terms of up to 25 years and  loan-to-value  ratios of up to
80%. The Company also makes  commercial  loans secured by collateral  other than
real  estate  and  unsecured  commercial  loans.  Other  secured  and  unsecured
commercial  loans are also typically priced at spreads to prime or the one year,
three year or five year U.S.  Treasury  Index and have  maturities of up to five
years.

                                        4
<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 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 $164.5 million
at December 31, 2005, and represented 27.5% 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  $4.9 million,  or 3.0% of such loans. The aggregate amount of the
Company's  commercial loans with real estate as primary or secondary  collateral
was  approximately  $434.6  million  at  December  31,  2005,  and at such date,
approximately $5.4 million in outstanding  balances, or 1.2% 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 areas, and is able to obtain financing of new and used
cars through these  relationships.  The Company generally finances cars that are
less than seven years old. These loans generally have fixed rates and maturities
of 36 to 72 months.

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

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

         At December 31, 2005, the Company had  approximately  $109.0 million in
its consumer  loan and credit card  portfolio,  which was 10.7% of the Company's
total  net  loans.  Approximately  $568,000  of these  loans  were  over 90 days
delinquent or nonaccruing on that date,  which  represented 0.5% of the consumer
loan portfolio.

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

         Underwriting  guidelines  for all  branches  and loan  types are set by
senior  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 credit-worthiness of the borrower, as applicable to
each loan type are reviewed.

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

                                       5
<PAGE>

         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 is reached  (generally around the
60th day of delinquency) and if repayment cannot be expected within a reasonable
amount of time or a  repayment  agreement  has not been  reached,  Oak Hill will
contact an  attorney  and  request  that the  required  30-day  prior  notice of
foreclosure  or  repossession  proceedings  be  prepared  and  delivered  to the
borrower so that, if necessary, foreclosure proceedings may be initiated shortly
after the loan is 90 days delinquent.  Historically, this procedure has aided in
achieving a low level of  nonperforming  loans.  At  December  31,  2005,  $17.7
million  or  1.7%  of the  Company's  total  loan  portfolio  was  over  90 days
delinquent  or  nonaccruing.  As of December 31, 2005,  the  Company's  level of
nonperforming assets to total assets was 1.45%.

         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,
2005,  approximately  $12,000 in  outstanding  balances,  or 0.6% of credit card
loans were nonperforming.

         At December 31, 2005,  the Company had $376,000 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.

         At December 31, 2005 and 2004,  the Company had $13.1  million and $3.8
million of impaired loans as defined under SFAS No. 114. The Company  maintained
an allowance  for credit losses  related to such impaired  loans of $1.6 million
and $1.3 million at December 31, 2005 and 2004, respectively.

                                       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,
----------------------------------------------------------------------------------------------------------------
                                                  2005         2004          2003          2002         2001
----------------------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>           <C>           <C>           <C>
                                                                   (Dollars in thousands)

Allowance for loan losses                     $   11,847    $   10,836    $    9,142    $    8,345    $    7,197
   beginning of period)

Loans charged-off:
   Real estate mortgage                              587           226           129           215           172
   Multi-family and commercial real estate         3,147         1,214           226         1,064            50
Commercial and other                               2,449           334           442           148           239
   Installment                                     1,564         1,771         1,355         1,136         1,365
----------------------------------------------------------------------------------------------------------------

Total loans charged-off                            7,747         3,545         2,152         2,563         1,826

Recoveries of previously charged-off loans:
   Real estate mortgage                              160            35            27            14            20
   Multi-family and commercial real estate           787           604            62           118            28
   Commercial and other                            1,043            99            14           103             8
   Installment                                       765           553           396           368           327
----------------------------------------------------------------------------------------------------------------
Total recoveries                                   2,755         1,291           499           603           383
----------------------------------------------------------------------------------------------------------------

Net loans charged-off                              4,992         2,254         1,653         1,960         1,443
Provision for losses on loans                      6,341         3,136         3,347         2,757         2,591
Allowance of acquired institution                    457           129            --            --            --
----------------------------------------------------------------------------------------------------------------

Allowance for loan losses
   (end of period)                            $   13,653    $   11,847    $   10,836    $    9,142    $    8,345
----------------------------------------------------------------------------------------------------------------

Loans outstanding:
   Average, net                               $  993,976    $  869,849    $  754,519    $  690,545    $  623,486
   End of period                              $1,028,736    $  924,385    $  821,857    $  711,086    $  654,426
Ratio of allowance for loan losses to
   loans outstanding at end of period               1.33%         1.28%         1.32%         1.29%         1.28%
Ratio of net charge-offs to average
   loans outstanding                                0.50%         0.26%         0.22%         0.28%         0.23%
----------------------------------------------------------------------------------------------------------------
</TABLE>

         At December  31,  2005,  2004 and 2003,  the Company had  nonperforming
loans  totaling  $17.7 million,  $6.3 million,  and $8.1 million,  respectively.
Interest  income that would have been  recognized if such loans had performed in
accordance with contractual terms totaled approximately $1.1 million,  $406,000,
and  $508,000,   for  the  years  ended  December  31,  2005,   2004  and  2003,
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,  2005,  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,
----------------------------------------------------------------------------------------------------------
                                          2005          2004          2003          2002         2001
----------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>           <C>           <C>
                                                                (Dollars in thousands)

Real estate mortgage:
   Nonaccrual                          $    6,096    $    3,144    $    2,235    $    1,105    $      386
   Past due 90 days or more(1)                730           121            98           515            40
Commercial and other:
   Nonaccrual                              10,141         1,858         4,153         4,345         2,813
   Past due 90 days or more(1)                127           606            21           435           993
Installment:
   Nonaccrual                                 459           538         1,213           579           492
   Past due 90 days or more(1)                122            64           399           317           492
----------------------------------------------------------------------------------------------------------

   Total nonperforming loans               17,675         6,331         8,119         7,296         5,216

Other real estate owned                       376         1,614           585            --         1,587
----------------------------------------------------------------------------------------------------------

   Total nonperforming assets          $   18,051    $    7,945    $    8,704    $    7,296    $    6,803
----------------------------------------------------------------------------------------------------------

Loans outstanding                      $1,028,736    $  924,385    $  821,857    $  711,086    $  654,426
Allowance for loan losses to
   total loans                               1.33%         1.28%         1.32%         1.29%         1.28%
Nonperforming loans to total loans           1.72          0.69          0.99          1.03          0.80
Nonperforming assets to total assets         1.45          0.73          0.93          0.88          0.87
Allowance for loan losses to
   nonperforming loans                       77.3%        187.1%        133.5%        125.3%        160.0%
----------------------------------------------------------------------------------------------------------
</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,  2005,  loans  where  borrowers  were  experiencing
potential  credit  problems  that  raised  doubts  as to the  ability  of  those
borrowers to comply with the present loan  repayment  terms were included in the
nonaccrual, past due 90 days or more or restructured categories.

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

<TABLE>
<CAPTION>
                                                                       December 31,
---------------------------------------------------------------------------------------------------------------------------------
                                 2005                 2004                 2003                 2002                 2001
---------------------------------------------------------------------------------------------------------------------------------
                                     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)
---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>      <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>      <C>
                                                               (Dollars in thousands)

Balance at end of period
    applicable to:
Real estate mortgage       $   443      31.2%   $   492      29.2%   $   526      28.6%   $   363      34.6%   $ 2,849      57.0%
Commercial and other        11,820      58.2     10,368      63.2      8,793      62.5      5,990      55.1      1,715      33.1
Installment                  1,322      10.4        925       7.4      1,440       8.7        936      10.1      2,164       9.6
Credit card                     68       0.2         62       0.2         77       0.2         51       0.2         60       0.3
Unallocated                     --        --         --        --         --        --      1,802        --      1,557        --
---------------------------------------------------------------------------------------------------------------------------------
Total                      $13,653     100.0%   $11,847     100.0%   $10,836     100.0%   $ 9,142     100.0%   $ 8,345     100.0%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Percentages are base 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,
-----------------------------------------------------------------------------------
                                                      2005         2004       2003
-----------------------------------------------------------------------------------
<S>                                                    <C>        <C>        <C>
                                                          (Dollars in thousands)

Held to maturity:
   Trust preferred securities                        $  3,619   $  3,640   $  3,659

Available for sale:
   U.S. Government and agency obligations              72,605     61,408     58,490
   Obligations of state and political subdivisions     58,340     26,769     17,211
   Other securities                                       248        206        185
-----------------------------------------------------------------------------------
     Total investment securities
          available for sale                          131,193     88,383     75,886
-----------------------------------------------------------------------------------
     Total investment securities                     $134,812   $ 92,023   $ 79,545
-----------------------------------------------------------------------------------
</TABLE>

         The following table reflects the maturities of the Company's investment
securities at December 31, 2005.

<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   $     --         --    $     --         --    $     --         --    $  3,619       8.45%   $  3,619

Available for sale:
   U.S. Government and
     agency obligations               --         --      12,890       3.89%     11,649       4.27%     48,066       5.44%     72,605
   Obligations of state and
     political subdivisions          371       3.52%      1,806       4.42%     11,713       4.02%     44,450       4.76%     58,340
   Other securities                   --         --          --         --          --         --         248         --         248
------------------------------------------------------------------------------------------------------------------------------------
Total available for sale
     securities                      371       3.52%     14,696       3.96%     23,362       4.14%     92,764       5.10%    131,193
------------------------------------------------------------------------------------------------------------------------------------
Total investment securities          371       3.52%   $ 14,696       3.96%   $ 23,362       4.14%   $ 96,383       5.22%   $134,812
------------------------------------------------------------------------------------------------------------------------------------
</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,
---------------------------------------------------------------------------------------------------
                                         2005                   2004                   2003
---------------------------------------------------------------------------------------------------
                                 Amount       Percent    Amount     Percent     Amount      Percent
---------------------------------------------------------------------------------------------------
<S>                                <C>          <C>       <C>          <C>       <C>          <C>
                                                     (Dollars in thousands)

Demand deposits                 $ 97,575       10.0%   $ 88,712       10.3%   $ 66,712        9.3%
Savings accounts                  64,128        6.6      58,978        6.8      48,224        6.7
NOW accounts                      79,329        8.1      65,395        7.6      62,033        8.6
Money market deposits              8,191        0.8       9,249        1.1       7,644        1.1
Premium investment               131,014       13.4      53,093        6.1      35,474        4.9
Select investment                 19,856        2.0      27,197        3.2      33,426        4.7

---------------------------------------------------------------------------------------------------
   Total transaction accounts    400,093       40.9     302,624       35.1     253,513       35.3

Certificates of deposit:
   1.00 - 2.99%                   93,754        9.6     344,757       40.0     286,245       39.9
   3.00 - 4.99%                  475,987       48.6     203,406       23.6     162,541       22.6
   5.00 - 6.99%                    8,506        0.9      10,909        1.3      15,447        2.2
   7.00 - 10.00%                      56         --         400         --          75         --

---------------------------------------------------------------------------------------------------
   Total certificates of
         deposit                 578,303       59.1     559,472       64.9     464,308       64.7

---------------------------------------------------------------------------------------------------
Total deposits                  $978,396      100.0%   $862,096      100.0%   $717,821      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, 2005.

--------------------------------------------------------------------------------
                                                 One to     Over
                                     Within      three      three
Certificate of deposit accounts     one year     years      years      Total
--------------------------------------------------------------------------------
                                                (In thousands)

3.00% and less                      $ 95,629   $ 66,186   $    112   $161,927
3.01 to 4.00%                        126,919    120,390      6,620    253,929
4.01 to 5.00%                         72,340     71,267     12,203    155,810
5.01 to 6.00%                          2,789        395      2,653      5,837
6.01 to 7.00%                            717         27        744
7.01 to 10.00%                            26         17         13         56

--------------------------------------------------------------------------------
   Total                            $298,420   $258,282   $ 21,601   $578,303
--------------------------------------------------------------------------------

                                       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, 2005.

                ------------------------------------------------
                Maturity period                        Amount
                ------------------------------------------------
                                                   (In thousands)

                Three months or less                  $ 29,064
                Over three months through six months    26,343
                Over six through twelve months          48,104
                Over twelve months                      92,306
                ------------------------------------------------
                         Total                        $195,817
                ------------------------------------------------

         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, 2005, Oak Hill had outstanding FHLB advances  totaling
$123.1  million.  See  Note  F to  the  consolidated  financial  statements  for
additional   information   regarding  FHLB   advances.   The  Company  also  has
arrangements to borrow funds from commercial banks.

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

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

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

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

                                       11
<PAGE>

of Oak Hill during the  current  year.  At  December  31,  2005,  the  Company's
subordinated  debentures  issued to statutory  business trusts and includable as
Tier 1 capital totaled $23.0 million.

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

--------------------------------------------------------------------------------
                                               Year Ended December 31,
--------------------------------------------------------------------------------
                                      2005             2004            2003
--------------------------------------------------------------------------------
                                              (Dollars in thousands)

Maximum amount outstanding:

  FHLB advances                      $123,119         $119,520        $134,030
  Junior subordinated debentures       23,000           18,000           5,000
  Other borrowings                     20,538            9,277           8,346

--------------------------------------------------------------------------------
    Total                            $166,657         $146,797        $147,376

--------------------------------------------------------------------------------
Average amount of FHLB advances
  and other borrowings outstanding   $144,445         $124,514        $117,328

--------------------------------------------------------------------------------
Weighted-average interest rate of
  total borrowings                       4.75%            4.28%           3.63%

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------
                                               Year Ended December 31,
--------------------------------------------------------------------------------
                                       2005              2004             2003
--------------------------------------------------------------------------------
                                                  (In thousands)

FHLB advances                        $123,119          $105,601         $122,887
Junior subordinated debentures         23,000            18,000            5,000
Other borrowings                       18,263             8,059            7,465

--------------------------------------------------------------------------------
    Total borrowings                 $164,382          $131,660         $135,352
--------------------------------------------------------------------------------

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

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

                                       12
<PAGE>

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

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
December 31, 2005                                                       Year Ending December 31,
-----------------------------------------------------------------------------------------------------------------------------
                                             2006          2007           2008           2009       2010 and after    Total
-----------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>             <C>            <C>            <C>        <C>
Interest-rate sensitive assets:
   Federal funds sold                    $    1,614     $       --     $       --     $       --     $       --    $    1,614
   Interest-bearing deposits                  1,008            361                                                      1,369
   Investment securities                     19,300         22,146         20,491         13,877         58,998       134,812
   Loans receivable(1)                      428,419        147,638        162,992         86,872        189,162     1,015,083
   Other interest-earning assets                187             --             --             --         20,574        20,761
Total                                       450,528        170,145        183,483        100,749        268,734     1,173,639

-----------------------------------------------------------------------------------------------------------------------------
Interest-rate sensitive liabilities:
   Deposits                                 682,839        126,451         49,696         12,926          8,909       880,821
   Borrowings                                91,796         17,745          1,061          6,043         47,737       164,382

-----------------------------------------------------------------------------------------------------------------------------
     Total                                  774,635        144,196         50,757         18,969         56,646     1,045,203

-----------------------------------------------------------------------------------------------------------------------------
Excess (deficiency) of interest-rate
   sensitive assets over interest-rate
   sensitive liabilities                 $ (324,107)    $   25,949     $  132,726     $   81,780     $  212,088    $  128,436

-----------------------------------------------------------------------------------------------------------------------------
Cumulative excess (deficiency) of
   interest-rate sensitive assets
   over interest-rate sensitive
   liabilities                           $ (324,107)    $ (298,158)    $ (165,432)    $  (83,652)    $  128,436    $  128,436

-----------------------------------------------------------------------------------------------------------------------------
Cumulative interest-rate sensitivity
   gap to total assets                       (26.12)%       (24.02)%       (13.33)%        (6.74)%        10.35%        10.35%

-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
December 31, 2004                                                         Year Ending December 31,
-----------------------------------------------------------------------------------------------------------------------------
                                            2005            2006           2007          2008       2009 and after   Total
-----------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>             <C>            <C>            <C>        <C>
Interest-rate sensitive assets:
   Federal funds sold                    $      988     $       --     $       --     $       --            --    $      988
   Interest-bearing deposits                  1,374            343          1,717
   Investment securities                     21,358         13,990         15,633         11,692        29,350        92,023
   Loans receivable(1)                      420,620        127,625        139,581         95,184       129,528       912,538
   Other interest-earning assets                187             --             --             --        16,708        16,895

-----------------------------------------------------------------------------------------------------------------------------
Total                                       444,527        141,615        155,557        106,876       175,586     1,024,161

Interest-rate sensitive liabilities:
   Deposits                                 576,654        105,643         30,290         46,896        13,901       773,384
   Borrowings                                63,531          6,544          6,745          1,061        53,779       131,660

-----------------------------------------------------------------------------------------------------------------------------
     Total                                  640,185        112,187         37,035         47,957        67,680       905,044

Excess (deficiency) of interest-rate
   sensitive assets over interest-rate
   sensitive liabilities                 $ (195,658)    $   29,428     $  118,522     $   58,919    $  107,906    $  119,117

-----------------------------------------------------------------------------------------------------------------------------
Cumulative excess (deficiency) of
   interest-rate sensitive assets
   over interest-rate sensitive
   liabilities                           $ (195,658)    $ (166,230)    $  (47,708)    $   11,211    $  119,117    $  119,117

-----------------------------------------------------------------------------------------------------------------------------
Cumulative interest-rate sensitivity
   gap to total assets                       (18.07)%       (15.35)%        (4.41)%         1.04%        10.98%        10.98%

-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes loans held for sale.

         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

                                       13
<PAGE>

interest rates could have on net interest  income over defined  periods of time.
The Company  applies  hypothetical  interest rate shocks of up and down 100, 200
and 300 basis points (100 basis points equals 1%) to its  financial  instruments
based upon assumed cash flows.

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

         The  following  table  reflects,  as of December  31,  2005,  projected
changes in the Company's twelve-month net interest income as a percentage of net
interest income assuming parallel and proportional interest rate shocks.

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

  +300 basis points             -30%              -15.997%             7.489%
  +200 basis points             -20%              -10.145%             5.493%
  +100 basis points             -15%               -4.637%             3.147%
  -100 basis points             -15%                2.289%            -4.195%
  -200 basis points             -20%                1.445%            -9.502%
  -300 basis points             -30%                1.559%           -14.006%

--------------------------------------------------------------------------------

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

                                       14
<PAGE>

Personnel
---------

         At December 31,  2005,  the Company and its  subsidiaries  employed 401
persons on a full-time basis and 21 persons on a part-time basis.

Executive Offices
-----------------

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

Subsidiaries
------------

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

Regulation
----------

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

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

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

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

                                       15
<PAGE>

         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.

         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

                                       16
<PAGE>

a significant  effect on the operating  results of commercial  banks in the past
and are expected to continue to do so in the future. The effect, if any, of such
policies upon the future business and earnings of the Company cannot  accurately
be predicted. The Company makes no attempt to predict the effect on its revenues
and  earnings  of changes in general  economic,  industrial,  and  international
conditions or in legislation and  governmental  regulations.  The Company is not
able to  predict  the  impact of such laws or  governmental  regulations  on its
financial condition or results of operations at this time.

Item 1A. Business Risks

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

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

         Control by Management; Anti-Takeover Provisions. Evan E. Davis, John D.
Kidd and D. Bruce Knox beneficially own in the aggregate  approximately 21.6% of
the  outstanding  shares of Common Stock of the Company at December 31, 2005. In
addition to Ohio and federal laws and regulations  governing  changes in control
of insured depository institutions,  the Company's Articles of Incorporation and
Code of  Regulations  contain  certain  provisions  that may  delay or make more
difficult an acquisition of control of the Company.  For example,  the Company's
Articles of  Incorporation  do not exempt the  Company  from the  provisions  of
Ohio's "control share acquisition" and "merger  moratorium"  statutes.  Assuming
that the principal stockholders continue to retain the number of the outstanding
voting  shares  of the  Company  that  they  presently  own  and the law of Ohio
requires,  as it  presently  does,  at  least  two-thirds  majority  vote of the
outstanding  shares  to  approve  a merger or other  consolidation,  unless  the
articles  of  incorporation  of the  constituent  companies  provide for a lower
approval  percentage for the  transaction,  which the Company's  articles do not
provide,  such  ownership  position  could be expected to deter any  prospective
acquirer  from seeking to acquire  ownership or control of the Company,  and the
principal  stockholders  would be able to defeat any  acquisition  proposal that
requires approval of the Company's  stockholders,  if the principal stockholders
chose to do so. In addition,  the principal stockholders may make a private sale
of shares of common  stock of the Company  that they own,  including to a person
seeking  to  acquire  ownership  or  control of the  Company.  The  Company  has
3,000,000 shares of authorized but unissued preferred stock, par value $ .01 per
share,  which may be issued in the  future  with  such  rights,  privileges  and
preferences  as are  determined  by the Board of Directors  of the  Company.  In
December  1997,  the Board of  Directors  of the Company  approved and adopted a
stockholder  rights plan that  contemplates  the  issuance of rights to purchase
preferred stock of the Company to the Company's common stockholders of record as
of February 17, 1998, as set forth in the Rights Agreement  entered into between
the Company and Fifth Third Bank on January 23, 1998. On December 26, 2000,  the
Company amended the Rights  Agreement to appoint  Registrar and Transfer Company
as successor  Rights Agent under the Rights  Agreement due to the resignation of
Fifth Third Bank as Rights Agent. The Board of Directors of the Company approved
the appointment of Registrar and Transfer Company pursuant to a resolution dated
November  14,  2000.  John D. Kidd and Evan E.  Davis also have  entered  into a
Buy-Sell Agreement dated April 11, 2001 (the "Agreement"),  whereby in the event
of either one's death, the survivor shall have the right to purchase some or all
of the shares of the Company held by the deceased's  estate.  In connection with
the  Agreement,  Mr. Kidd and Mr.  Davis each have  executed a Limited  Power of
Attorney  giving the other sole right,  power and  authority  to vote all of the
shares of the Company that he holds in the event of his incapacity.

         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 10, 2006, the
average weekly trading volume in the Common Stock has been approximately  77,000
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

                                       17
<PAGE>

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 Administrative  Officer,  David G. Ratz; Vice President,  Scott J. Hinsch,
Jr.; Executive Vice President, Chief Financial Officer, Secretary and Treasurer,
Ron J. Copher;  and Executive Vice President and Chief Information  Officer,  D.
Bruce Knox. The loss of their individual  services could have a material adverse
impact on the Company's financial stability and its operations. In addition, the
Company's  future  performance  depends on its ability to attract and retain key
personnel and skilled  employees,  particularly at the senior  management level.
The Company's financial stability and its operations could be adversely affected
if, for any reason,  one or more key executive  officers  ceased to be active in
the Company's management.

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

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

Item 1B. Unresolved Staff Comments.

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

Item 2.  Properties.

         As of December 31, 2005, the registrant  and its  subsidiaries  operate
from 34 full-service  banking offices and 3 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:

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

--------------------------------------------------------------------------------
(1) Includes executive offices of Oak Hill Financial, Inc. and Oak Hill Banks
(2) Includes 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
                                         and Length of Term      One                    Two              Three
---------------------------------------------------------------------------------------------------------------
<S>                                      <C>                    <C>             <C>                       <C>
Chillicothe                              02/01/93  5 years                                                 X
Chillicothe K-Mart                       06/28/94  15 years                     No renewal options
West Portsmouth                          02/18/97  8 years                                                 X
Jackson Wal-mart                         10/28/98  5 years                               X
Oak Hill Banks Administrative Offices    09/15/04  4 years                Three - 3-year renewal options
Columbus loan production                 04/01/04  2 years                      No renewal options
Logan                                    10/1/00   5 years                                                 X
Delhi                                    03/01/97  10 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                 Two - 1-year renewal options
Centerville                              12/19/03  10 years                              X
Athens                                   12/11/01  40 months               Two - 3-year renewal options
Circleville Wal-mart                     5/25/05    5 years                              X
Lancaster                                8/1/05      5 years              Three - 2-year renewal options
OHFI                                     12/01/02  5 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 2005.


                                       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 2005 and 2004 are as follows:

Quarter
 Ended                      High             Low

12/31/05                   $33.59          $28.78
09/30/05                    32.46           28.68
06/30/05                    34.00           25.00
03/31/05                    39.11           33.28
12/31/04                    39.25           34.54
09/30/04                    35.49           31.40
06/30/04                    33.00           30.86
03/31/04                    34.00           30.10

         At March 10, 2006 the Company had approximately  2,300 stockholders and
5,562,904 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 2005 and
2004:

Quarter                      Dividend
 Ended                       Declared

12/31/05                     $0.19
09/30/05                       0.17
06/30/05                       0.17
03/31/05                       0.17
12/31/04                       0.17
09/30/04                       0.15
06/30/04                       0.15
03/31/04                       0.15

         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 18, 2006 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,
--------------------------------------------------------------------------------------------------------------------
                                                  2005            2004          2003          2002           2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>           <C>          <C>
SUMMARY OF FINANCIAL CONDITION(1)(2)                                       (In thousands)

Total assets                                   $ 1,241,058    $ 1,083,040    $   938,281   $   833,629   $   778,332
Interest-bearing deposits and federal
   funds sold                                        2,983          2,705          1,285         5,699        11,929
Investment securities                              134,812         92,023         79,545        83,789        78,981
Loans receivable - net(3)                        1,015,083        912,538        811,021       701,944       646,081
Deposits                                           978,396        862,096        717,821       663,813       612,204
Subordinated debentures                             23,000         18,000          5,000         5,000         5,000
Federal Home Loan Bank (FHLB) advances
   and other borrowings                            141,382        113,660        130,352        94,358        99,860
Stockholders' equity                                94,081         85,043         79,928        66,881        56,349

SUMMARY OF OPERATIONS(1)(2)

Interest income                                $    69,720    $    59,251    $     5,170   $    57,222   $    59,704
Interest expense                                    29,436         20,838         20,468        24,724        30,777
--------------------------------------------------------------------------------------------------------------------
Net interest income                                 40,284         38,413         34,702        32,498        28,927
Provision for losses on loans                        6,341          3,136          3,347         2,757         2,591
--------------------------------------------------------------------------------------------------------------------
Net interest income after provision for
   losses on loans                                  33,943         35,277         31,355        29,741        26,336
Gain on sale of loans                                1,085          1,882          4,489         2,358         1,385
Gain on sale of branch premises                        204            122            900
Gain (loss) on sale of assets                          182            (47)           333           331            27
Insurance commissions                                2,781          3,050          2,827         2,457         2,203
Loss on sale of consumer finance loan
   portfolio                                        (3,585)
Other income                                         7,386          5,370          3,889         2,845         2,676
General, administrative and other expense(4)        31,045         26,944         24,049        22,663        20,672
--------------------------------------------------------------------------------------------------------------------
Earnings before federal income tax                  14,536         15,003         18,844        15,191        12,855
Federal income taxes                                 3,157          4,341          6,266         4,851         4,133
--------------------------------------------------------------------------------------------------------------------
Net earnings                                   $    11,379    $    10,662    $    12,578   $    10,340   $     8,722
====================================================================================================================

PER SHARE INFORMATION

Basic earnings per share                       $      2.01    $      1.92    $      2.29   $      1.94   $      1.66
Book value per share                           $     16.79    $     15.30    $     14.34   $     12.46   $     10.70

</TABLE>

Footnotes on the following page.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                                                        At or For the Year Ended December 31,
---------------------------------------------------------------------------------------------------------------------------------
                                                      2005             2004              2003             2002              2001
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>               <C>              <C>               <C>               <C>
OTHER STATISTICAL AND OPERATING DATA

Return on average assets                              0.96%             1.07%            1.45%             1.26%             1.20%
Return on average equity                             12.39             12.89            17.08             16.76             16.45
Net interest margin (fully-taxable
   equivalent)                                        3.70              4.05             4.19              4.18              4.17
Interest rate spread during period                    3.37              3.74             3.81              3.75              3.56
General, administrative and other
   expense to average assets                          2.62              2.70             2.77              2.77              2.85
Allowance for loan losses to
   nonperforming loans                               77.25            186.83           133.46            125.29            160.00
Allowance for loan losses to total loans              1.33              1.28             1.32              1.29              1.28
Nonperforming loans to total loans                    1.72              0.69             0.99              1.03              0.80
Nonperforming assets to total assets                  1.45              0.73             0.93              0.88              0.87
Net charge-offs to average loans                      0.50              0.26             0.22              0.28              0.23
Equity to assets at period end                        7.58              7.85             8.52              8.02              7.24
Dividend payout ratio                                35.06             32.19            23.67             25.31             26.69
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Oak Hill Financial,  Inc. (the  "Company")  completed an acquisition of
         Lawrence  Financial  Holdings,  Inc.  ("Lawrence  Financial")  and  its
         subsidiary, Lawrence Federal Savings Bank on April 1, 2005, whereby the
         Company and Lawrence  Financial  merged and Oak Hill Banks and Lawrence
         Federal  Savings Bank  merged.  The  acquisition  price  totaled  $15.2
         million,  of which  $7.7  million  was paid in cash.  In  addition  the
         Company  issued  221,501  shares of common stock to Lawrence  Financial
         shareholders.

(2)      The Company completed an acquisition of Ripley National Bank on October
         9, 2004 for $5.3  million  in cash,  whereby  Oak Hill Banks and Ripley
         National Bank merged.

(3)      Includes loans held for sale.

(4)      General, administrative and other expense for 2001 includes $259,000 in
         pre-tax  expenses  incurred  pursuant  to  the  merger  with  Oak  Hill
         Financial  Insurance.  Also  includes  $160,000 and $546,000 in pre-tax
         expenses  incurred  in 2004 and  2005,  respectively,  pursuant  to the
         acquisitions of Ripley National Bank and Lawrence Financial.

                                       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 are the Company's  ownership of Oak Hill
Banks ("Oak Hill") and Oak Hill Financial Insurance ("OHFI").  In addition,  the
Company owns 49% of Oak Hill Title Agency, LLC ("Oak Hill Title"). The Company's
results  of  operations  are  primarily  dependent  upon its  financial  service
subsidiary which is collectively viewed herein as a single operating segment for
financial statement purposes.

         Oak Hill conducts a general  commercial  banking business that consists
of  attracting  deposits  from the  general  public  and  using  those  funds to
originate loans for commercial,  consumer,  and residential  purposes.  Prior to
2005,  the  Company  operated  Action  Finance  ("Action"),  a consumer  finance
company,  the principal  assets of which were sold in 2004. OHFI is an insurance
agency  specializing in group health insurance and other employee benefits.  Oak
Hill Title provides title  services for commercial and  residential  real estate
transactions.

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

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

         In December  2004,  the Company  sold the  consumer  loan  portfolio of
Action. The portfolio, which was comprised of small consumer and second mortgage
loans,  totaled  $8.7  million.  Concurrent  with the sale,  the Company  closed
Action's five retail lending offices in southern Ohio.

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

         Management's Discussion and Analysis of Financial Condition and Results
of Operations  are presented  herein to assist  investors in  understanding  the
consolidated  financial condition and results of operations of the Company as of
and for the years ended December 31, 2005, 2004 and 2003. This discussion should
be read in conjunction  with the Consolidated  Financial  Statements and related
footnotes presented elsewhere in this report.

FORWARD LOOKING STATEMENTS
         In  the  following  pages,  management  presents  an  analysis  of  the
Company's  consolidated  financial  condition as of December  31, 2005,  and the
consolidated  results of  operations  for the year ended  December 31, 2005,  as
compared  to prior  periods.  In addition to this  historical  information,  the
following   discussion   and  other  sections  of  this  Annual  Report  contain
forward-looking  statements  that  involve  risks  and  uncertainties.  Economic
circumstances,  the Company's  operations and the Company's actual results could
differ  significantly  from those discussed in the  forward-looking  statements.
Some of the  factors  that could cause or  contribute  to such  differences  are
discussed  herein but also include  changes in the economy and interest rates in
the  nation  and  the  Company's  general  market  area.  Without  limiting  the
foregoing,   some  of  the  forward-looking   statements  include   management's
establishment of an allowance for loan losses, and its statements  regarding the
adequacy of such  allowance for loan losses,  and  management's  belief that the
allowance for loan losses is adequate.

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

         Allowance  for  Losses on Loans:  The  balance  in this  account  is an
accounting  estimate of  probable  but  unconfirmed  asset  impairment  that has
occurred in the  Company's  loan  portfolio  as of the date of the  consolidated
financial statements before losses have been confirmed resulting in a subsequent
charge-off  or  write-down.  It is the  Company's  policy to  provide  valuation
allowances  for

                                       23
<PAGE>

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

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

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

         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,

                                       24
<PAGE>

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.

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

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

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

FINANCIAL CONDITION
         The Company's  total assets amounted to $1.2 billion as of December 31,
2005, an increase of $158.0  million,  or 14.6%,  over the $1.1 billion total at
December 31, 2004. The asset growth was funded primarily  through the assumption
of $104.2  million of deposits in the Lawrence  Financial  transaction,  a $12.9
million increase in repurchase  agreements,  a $17.5 million increase in Federal
Home Loan Bank advances and a $5.0 million increase in subordinated  debentures,
all of which were partially offset by a $2.7 million decrease in notes payable.

         Cash and due from banks, federal funds sold, and investment securities,
including mortgage-backed securities, increased by $37.2 million, or 30.0%, to a
total of $161.2  million at December  31,  2005,  compared to $124.0  million at
December 31, 2004. Investment securities increased by $42.8 million during 2005,
as purchases of $82.6 million and the acquisition of $15.9 million of securities
in the Lawrence  Financial  merger  exceeded  maturities and repayments of $18.3
million and sales of $34.7  million.  Federal  funds sold  increased by $626,000
during 2005.

         Loans receivable totaled $1.0 billion at December 31, 2005, an increase
of $102.5  million,  or 11.2%,  over total  loans at  December  31,  2004.  Loan
disbursements  totaled $380.4 million during 2005, which together with the $76.5
million acquired in the Lawrence Financial transaction, were partially offset by
loan sales of $35.4 million and principal  repayments of $311.8  million  during
2005. Loan  disbursements  and sales volume decreased by $84.5 million and $22.9
million,  respectively, as compared to 2004. Growth in the loan portfolio during
2005 was comprised of a $38.7 million, or 56.9%,  increase in installment loans,
a $50.6 million,  or 18.7%,  increase in real estate  mortgage loans and a $14.9
million,  or 2.6%,  decrease  in  commercial  and  other  loans.  The  Company's
allowance  for loan losses  totaled  $13.7  million at  December  31,  2005,  an
increase of $1.8  million,  or 15.2%,  over the total at December 31, 2004.  The
allowance  for  loan  losses  represented  1.33%  and  1.28% of the  total  loan
portfolio at December 31, 2005 and 2004,  respectively.  Net charge-offs totaled
$5.0  million and $2.3  million for the years ended  December 31, 2005 and 2004,
respectively.   The  Company's   allowance   represented  77.3%  and  186.8%  of
nonperforming  loans,  which  totaled $17.7 million and $6.3 million at December
31, 2005 and 2004, respectively.  At December 31, 2005, nonperforming loans were
comprised  of $568,000  in  installment  loans,  $5.4  million of loans  secured
primarily by commercial real estate,  $4.9 million of commercial and other loans
and $6.8 million of loans secured by one-to-four family residential real estate.
In response to unexpected deterioration in several large commercial loans in the
second quarter,  the Company performed a comprehensive  review of key components
of its loan portfolio.  Following such review, the Company pursued an aggressive
course of action with respect to the loans reviewed, resulting in increased loan
charge-offs,  increased loan loss provision,  and increased  non-performing loan
classifications  over the remainder of the year. In  management's  opinion,  the
assigned  carrying  value of large  commercial  and  nonresidential  real estate
credits  are   appropriate   and  all   nonperforming   loans  were   adequately
collateralized or reserved for at December 31, 2005.

         Deposits  totaled  $978.4  million at December 31, 2005, an increase of
$116.3  million,  or 13.5%,  over the $862.1 million total at December 31, 2004.
The increase was primarily  attributable  to the assumption of $104.2 million in
deposits in the Lawrence Financial  transaction.  Brokered deposits continued to
be part of the Company's overall funding strategy,  although to a lesser extent,
due to  competitive  rates and lower  operational  costs  compared  with  retail
deposits.  Brokered deposits totaled $80.5 million with a weighted-average  cost
of 3.20% at December  31,  2005,  as compared to the $113.1  million in brokered
deposits with a 2.70%  weighted-average cost at December 31, 2004. Proceeds from
deposit growth during 2005 were used primarily to fund loan originations.

         Advances  from the Federal  Home Loan Bank  totaled  $123.1  million at
December 31, 2005, an increase of $17.5 million, or 16.6%, from the December 31,
2004 total. Securities sold under agreements to repurchase totaled $18.3 million
at December 31, 2005, an increase of $12.9  million,  over the total at December
31,  2004.  The  increase  resulted  primarily  from  $10.0  million  in reverse

                                       25
<PAGE>

repurchase  agreements  incepted in March 2005.  Notes  payable  decreased  $2.7
million as the Company repaid a note to another financial institution.

         During 2005, a Delaware  statutory business trust owned by the Company,
Oak Hill  Capital  Trust 4 ("Trust  4"),  issued  $5.0  million  of  mandatorily
redeemable debt securities. The amount of the debt securities issued by Trust 4,
while not consolidated  herein pursuant to FIN 46, are included in the Company's
regulatory capital,  specifically as a component of Tier 1 capital. The proceeds
from  the  issuance  of the  subordinated  debentures  were  used by  Trust 4 to
purchase from the Company $5.0 million of  subordinated  debentures  maturing on
June 30, 2035. Interest payments on the debt securities are to be made quarterly
at an annual  fixed rate of  interest  of 5.96%  through  June 30, 2015 and at a
floating rate of interest,  reset  quarterly,  equal to 3-month LIBOR plus 1.60%
thereafter. Interest payments are reported as a component of interest expense on
borrowings.  The net proceeds  received by the Company were  contributed  to the
capital of Oak Hill during the current year. At December 31, 2005, the Company's
subordinated  debentures  issued to statutory  business trusts and includable as
Tier 1 capital totaled $23.0 million.

         The  Company's  stockholders'  equity  amounted  to  $94.1  million  at
December 31, 2005,  an increase of $9.0 million,  or 10.6%,  over the balance at
December 31, 2004.  The increase  resulted  primarily from net earnings of $11.4
million,  proceeds  from  options  exercises of $1.7 million and $8.3 million in
stockholders'  equity  through  issuance  of  shares in the  Lawrence  Financial
transaction,  all of which were partially offset by the Company's  repurchase of
269,945  outstanding  shares of its common stock at an  aggregate  price of $7.8
million ($28.97 per share) and $3.9 million in dividends on common stock.

SUMMARY OF EARNINGS
         Changes in net interest  income are  attributable  to either changes in
average  balances  (volume change) or changes in average rates (rate change) for
interest-earning  assets  and  interest-bearing  liabilities.  Volume  change is
calculated  as change  in  volume  times  the old  rate,  while  rate  change is
calculated  as  change  in rate  times  the old  volume.  The  table  on page 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, 2005
AND 2004
         General.  Net  earnings  for the year ended  December  31, 2005 totaled
$11.4  million,  a  $717,000,  or 6.7%,  increase  from 2004 net  earnings.  The
increase in earnings  resulted  primarily  from a $1.9  million  increase in net
interest  income,  a $5.0  million  increase  in total  other  income and a $1.2
million  decrease in the provision for federal  income taxes,  all of which were
partially offset by a $3.2 million increase in the provision for losses on loans
and a $4.1  million  increase in  general,  administrative  and other  operating
expenses.

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

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

         As a result of the  foregoing  changes in interest  income and interest
expense,  net interest income  increased by $1.9 million,  or 4.9%, for the year
ended December 31, 2005, as compared to 2004. The interest rate spread decreased
by  37  basis  points,  to  3.37%  in  2005  compared  to  3.74%  in  2004.  The
fully-taxable  equivalent net interest margin  decreased by 35 basis point from,
4.05% in 2004 to 3.70% in 2005.  Management  believes  that future  increases in
short-term  interest rates in the economy will continue to place pressure on the
Company's net interest margin.

         Provision  for  Losses on Loans.  A  provision  for  losses on loans is
charged to  earnings  to bring the total  allowance  for loan  losses to a level
considered appropriate by management based on historical experience,  the volume
and type of lending  conducted by the Company,  the status of past due principal
and  interest  payments,  general  economic  conditions,  particularly  as  such
conditions  relate to the Company's market area and other factors related to the
collectibility  of the Company's loan  portfolio.  As a result of such analysis,
management  recorded a $6.3 million  provision  for losses on loans for the year
ended  December 31,  2005,  an increase of

                                       26
<PAGE>

$3.2 million  compared to 2004.  The  provision  for losses on loans in 2005 was
predicated  upon an increase of $11.4 million in  nonperforming  loans from $6.3
million in 2004 to $17.7  million at December  31, 2005,  the $102.5  million of
growth in the loan  portfolio,  as well as, net  charge-offs  of $5.0 million in
2005.

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

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

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

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


COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2004
AND 2003
         General.  Net  earnings  for the year ended  December  31, 2004 totaled
$10.7 million, a $1.9 million,  or 15.2%,  decrease from 2003 net earnings.  The
decrease in earnings  resulted  primarily from a $4.9 million  decrease in other
income,  which was partially offset by a $211,000  decrease in the provision for
losses on loans,  a $3.7  million  increase in net interest  income,  and a $1.9
million decrease in the provision for federal income taxes.

         Net Interest Income.  Total interest income for the year ended December
31, 2004,  amounted to $59.3 million, an increase of $4.1 million, or 7.4%, from
the total recorded for 2003.  Interest income on loans totaled $55.5 million, an
increase of $3.5 million,  or 6.8%, from the 2003 period. This increase resulted
primarily from a $115.3  million,  or 15.3%,  increase in the average  portfolio
balance,  to a total of $869.8 million in 2004,  which was partially offset by a
50 basis point decrease in the average fully-taxable  equivalent yield, to 6.41%
in 2004 from 6.91% in 2003.  Interest income on investment  securities and other
interest-earning  assets increased by $550,000,  or 17.4%. The increase resulted
primarily from a 31 basis point increase in the average fully-taxable equivalent
yield, to 4.44% in 2004, coupled with a $7.3 million,  or 8.5%,  increase in the
average portfolio balance, to a total of $93.8 million in 2004.

         Total  interest  expense  amounted to $20.8  million for the year ended
December 31, 2004, a decrease of $370,000,  or 1.8%,  from the total recorded in
2003. Interest expense on deposits increased by $346,000, or 2.2%, to a total of
$15.9 million in 2004. The increase resulted primarily from a $103.6 million, or
16.9%,  increase in the average portfolio balance,  to a total of $714.9 million
in 2004,  which was partially offset by a 32 basis point decrease in the average
cost of deposits,  to 2.23% in 2004. Interest expense on borrowings increased by
$24,000, or 0.5%, during 2004. This increase was due to a $7.2 million, or 6.1%,
increase in average borrowings  outstanding,  which was partially offset by a 22
basis point  decrease in the average cost of  borrowings,  to 3.95% in 2004. 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 2004 and 2003.

                                       27
<PAGE>

         As a result of the  foregoing  changes in interest  income and interest
expense,  net interest income increased by $3.7 million,  or 10.7%, for the year
ended December 31, 2004, as compared to 2003. The interest rate spread decreased
by 7 basis points to 3.74% in 2004, compared to 3.81% in 2003. The fully-taxable
equivalent net interest margin  decreased by 14 basis points from, 4.19% in 2003
to 4.05% in 2004.

         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 $3.1 million  provision  for losses on loans for the year
ended December 31, 2004, a decrease of $211,000,  or 6.3%, compared to 2003. The
provision  for losses on loans in 2004 was  predicated  upon a decrease  of $1.8
million  in  nonperforming  loans from $8.1  million in 2003 to $6.3  million at
December  31,  2004,  offset by the  $102.5  million of growth in the gross loan
portfolio and net charge-offs in 2004 of $2.3 million.

         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, 2004,  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  $6.7 million for the year ended
December 31, 2004, a decrease of $4.9  million,  or 42.2%,  compared to the 2003
amount. This decrease resulted primarily from a $2.6 million, or 58.1%, decrease
in gain on sale of loans and a $3.6  million  loss on the sale of Action's  loan
portfolio and related assets,  which were partially offset by a $1.4 million, or
35.0%,  increase in service  fees,  charges,  and other  operating  income and a
$223,000,  or 7.9%, increase in insurance  commissions.  The decrease in gain on
sale of loans  resulted  from an  expected  decrease in the volume of loans sold
year-to-year,  which was partially offset by an increase of $312,000,  or 57.4%,
in gains on sales of  commercial  loans  originated  under  the  Small  Business
Administration's ("SBA") programs. The increase in commissions was due primarily
to increased premiums realized on sales of group health insurance.  The increase
in service  charges,  fees and other income was due  primarily to an increase in
overdraft fees totaling $452,000,  or 17.7%, over the total recorded in 2003, as
a result of a new overdraft  protection program  implemented in late March 2003,
coupled with a $698,000,  or 54.3%,  decrease in amortization  and impairment of
mortgage servicing rights.

         General,  Administrative and Other Expense. General, administrative and
other expense  totaled  $26.9  million for the year ended  December 31, 2004, an
increase of $2.9 million,  or 12.0%,  over the 2003 total. The increase resulted
primarily  from a  $318,000,  or 2.2%,  increase in  employee  compensation  and
benefits,  a $1.1 million, or 16.9%,  increase in other operating  expenses,  an
increase of  $490,000,  or 16.8%,  in  occupancy  and  equipment  and a $919,000
increase in franchise taxes. The increase in employee  compensation and benefits
resulted  primarily from increased  staffing  levels required in connection with
the establishment of new branch locations,  additional  management  staffing and
normal merit increases. The increase in other operating expenses resulted from a
$194,000  increase in ATM costs  associated  with switching  service  providers,
coupled  with an overall  increase  in ATM  locations,  a $174,000  increase  in
professional  fees,  $160,000 in merger-related  expenses in connection with the
previously mentioned Ripley merger, an $80,000 increase in credit and collection
expense,  a  $72,000  increase  in  amortization  of  intangibles  and a $71,000
increase in  consulting  fees,  which are based upon the  increase in  overdraft
fees. The remaining increase of $388,000, or 5.7%, 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  $109,000,  or 15.3%,  increase  in rent  expense,  a  $146,000,  or 18.8%,
increase  in  maintenance  contracts  and a  $161,000,  or  16.3%,  increase  in
depreciation  expense  year-to-year.  The  increases  in rent  and  depreciation
expenses are primarily  attributable  to new office  locations.  The increase in
franchise taxes was  attributable to an increase in the taxable equity base year
over year, as well as, tax savings  attributable  to the merger of Oak Hill with
Towne.

         Federal  Income Taxes.  The provision for federal income taxes amounted
to $4.3  million  for the year ended  December  31,  2004,  a  decrease  of $1.9
million,  or 30.7%,  compared to the $6.3 million recorded in 2003. The decrease
resulted  primarily from a $3.8 million,  or 20.4%,  decrease in earnings before
taxes,  coupled with $500,000 in New Markets Tax Credits  pursuant to Oak Hill's
qualified investment in Oak Hill Banks Community Development Corp. The effective
tax rates were 28.9% and 33.3% for the years ended  December  31, 2004 and 2003,
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, 2005, the Company had $298.4 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

                                       28
<PAGE>

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 $320.7 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, 2005, the Company had $123.1 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, 2005,  the Company had total  off-balance
sheet contractual  commitments  consisting of $24.6 million in loan commitments,
$112.6  million in unused lines of credit and letters of credit  totaling  $15.0
million.  Funding for these  amounts is expected to be provided by the liquidity
sources described above.  Management believes the Company has adequate resources
to meet its normal funding requirements.

         The table below details the amount of loan commitments, unused lines of
credit and letters of credit  outstanding  at December 31, 2005,  by  expiration
period:

================================================================================
                                    One year      Two to     After
(In thousands)                       or less  three years  three years    Total
--------------------------------------------------------------------------------

Loan commitments                    $ 24,634    $     --    $     --    $ 24,634
Unused lines of credit                60,385       6,791      45,473     112,649
Letters of credit                      4,942      10,075          --      15,017
--------------------------------------------------------------------------------
                                    $ 89,961    $ 16,866    $ 45,473    $152,300
================================================================================

         The  table  below  details  the  amount  of   contractual   obligations
outstanding at December 31, 2005, by expiration period:

<TABLE>
<CAPTION>
=========================================================================================
                                                One year   Two to       After
(In thousands)                                  or less  three years three years   Total
-----------------------------------------------------------------------------------------
<S>                                               <C>        <C>        <C>       <C>
Office premises and equipment                   $    485   $  2,422   $     --   $  2,907
Advances from the Federal Home Loan Bank          39,070     31,501     52,548    123,119
Securities sold under agreement to repurchase      8,263         --     10,000     18,263
Subordinated debenutres                               --         --     23,000     23,000
Lease obligations                                    612        965        568      2,145
-----------------------------------------------------------------------------------------

                                                $ 48,430   $ 34,888   $ 86,116   $169,434
=========================================================================================
</TABLE>

                                       29
<PAGE>

         The table below shows for each category of interest-earning  assets and
interest-bearing  liabilities,  the average  amount  outstanding,  the  interest
earned or paid on such amount, and the average rate earned or paid for the years
ended  December 31, 2005,  2004 and 2003.  The table also shows the average rate
earned  on  all   interest-earning   assets,   the  average  rate  paid  on  all
interest-bearing  liabilities,  the interest  rate spread,  and the net interest
margin for the same periods.

AVERAGE BALANCE AND INTEREST RATES

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                   -------------------------------------------------------------------------------------------------
                                                   2005                            2004                            2003
                                   -------------------------------------------------------------------------------------------------
                                                Interest                         Interest                        Interest
                                     Average     Income/   Average   Average     Income/    Average    Average     Income/   Average
(Dollars in thousands)               Balance     Expense    Rate     Balance     Expense     Rate      Balance     Expense     Rate
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>         <C>          <C>    <C>         <C>           <C>      <C>         <C>          <C>
Interest earnings assets:
     Loans receivable              $  993,976  $  64,535    6.49%  $  869,849  $   55,734    6.41%    $754,519    $ 52,138     6.91%
     Investment securities            126,958      6,364    5.01       90,415       4,119    4.56       84,277       3,551     4.21
     Federal funds sold                   584         20    3.42          929          15    1.61          699           7     1.00
     Interest-earning deposits          1,767         74    4.19        2,472          28    1.13        1,508          18     1.19
-----------------------------------------------------------------------------------------------------------------------------------
        Total interest-
             earnings assets        1,123,285     70,993    6.32      963,665      59,896    6.22      841,003      55,714     6.62
Non-interest earning assets            62,951                          33,361                           27,003
                                   ----------                      ----------                       ----------
        Total assets               $1,186,236                      $  997,026                       $  868,006
                                   ==========                      ==========                       ==========

Interest-bearing liabilities:
Deposits:
     Savings accounts              $   70,651        365    0.52   $   52,292         195    0.37   $   47,385         295     0.62
     NOW accounts                      76,679      1,017    1.33       70,990         804    1.13       61,200         839     1.37
     Money market deposit accounts      8,993         36    0.40        7,930          31    0.39        7,993          56     0.70
     Premium & select investments     111,081      3,392    3.05       74,364         967    1.30       71,848         812     1.13
     Certificates of deposit          585,114     18,134    3.10      509,340      13,926    2.73      422,905      13,575     3.21
Borrowings                            144,445      6,492    4.49      124,514       4,915    3.95      117,328       4,891     4.17

        Total interest-bearing
             liabilities              996,963     29,436    2.95      839,430      20,838    2.48      728,659      20,468     2.81
                                               -----------------               ------------------               -------------------
Non interest-bearing
     liabilities                       97,420                          74,888                           65,706
Stockholders' equity                   91,853                          82,708                           73,641
                                   ----------                      ----------                       ----------
        Total liabilities and
             stockholders' equity  $1,186,236                      $  997,026                       $  868,006
                                   ==========                      ==========                       ==========

Net interest income and
     interest rate spread                      $  41,557    3.37%              $   39,058    3.74%              $   35,246     3.81%
                                               =================               ==================               ===================

Net interest margin (1)                                     3.70%                            4.05%                             4.19%
                    ==                                      ====                             ====                              ====

Average interest-earning
     assets to average
     interest-bearing liabilities                         112.67%                          114.80%                           115.42%
                                                          ======                           ======                            ======

Adjustment of interest
     income to a tax-equivalent
      basis on tax-exempt:
          Loans and investment
               securities                      $   1,273                       $      645                       $      544
                                               =========                       ==========                       ==========
</TABLE>

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

                                       30
<PAGE>

RATE/VOLUME TABLE

<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
                                                     --------------------------------------------------------------------
                                                            2005 vs. 2004                           2004 vs. 2003
                                                     -----------------------------           ----------------------------
                                                     Increase (decrease) due to              Increase (decrease) due to
(In thousands)                                       Volume        Rate    Total             Volume       Rate     Total
-------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>        <C>       <C>               <C>      <C>       <C>
Interest income attributable to: (1)
     Loans receivable                                $  8,115    $   686  $  8,801           $  7,554  $ (3,958)   $3,596
     Investment securities                              1,929        316     2,245                100       468       568
     Federal funds sold                                    (2)         7         5                  3         5         8
     Interest-earning deposits with banks                  (6)        52        46                 11        (1)       10
-------------------------------------------------------------------------------------------------------------------------
           Total interest income                      $10,036     $1,061   $11,097           $  7,688  $ (3,486)   $4,182
=========================================================================================================================

Interest expense attributable to:
     Deposits
       Savings accounts                              $   (114)   $   284   $   170           $     10  $   (110)   $ (100)
       NOW accounts                                        50        163       213                101      (136)      (35)
       Premium and select investment accounts             109      2,316     2,425                 42       113       155
       Money market deposit accounts                        4          1         5                 (2)      (23)      (25)
       Certificates of deposit                          5,194       (986)    4,208              2,235    (1,884)      351
     Borrowings                                         1,534         43     1,577                289      (265)       24
-------------------------------------------------------------------------------------------------------------------------
           Total interest expense                     $ 6,777     $1,821   $ 8,598             $2,675   $(2,305)   $   70
-------------------------------------------------------------------------------------------------------------------------
Increase in net interest income                                            $ 2,499                                 $3,812
=========================================================================================================================
</TABLE>

(1)      Presented on a tax-equivalent basis.


                                       31
<PAGE>

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

         This  information  is presented in "Asset and Liability  Management" on
pages 12 through 14 of this report.

Item 8.  Financial Statements and Supplementary Data

         Consolidated  Financial  Statements  of the Company,  together with the
reports  thereon of Grant  Thornton  LLP (dated  March 9, 2006) are set forth on
pages 38 through 67 hereof (see Item 15 of this Annual Report for Index).

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

         Not Applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures
----------------------------------

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

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

Management's Report on Internal Control Over Financial Reporting
----------------------------------------------------------------

         Management  conducted an  evaluation of the  effectiveness  of internal
control over financial  reporting as of December 31, 2005 based on the framework
in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations  of  the  Treadway   Commission.   The  scope  of  the  evaluation
encompassed all branches of its primary subsidiary Oak Hill Banks.

         Based  on the  evaluation,  management  concluded  that  the  Company's
internal  control over  financial  reporting was effective at December 31, 2005.
Management's  assessment of internal  control over financial  reporting has been
audited by Grant Thornton LLP, an independent registered public accounting firm,
as stated in their report included herein.

Changes in Internal Control
---------------------------

         There have not been any changes in the Company's  internal control over
financial  reporting  during  the  quarter  ended  December  31,  2005 that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's control over financial reporting.


                                       32
<PAGE>

Report of Independent Registered Public Accounting Firm on Effectiveness
of Internal Control Over Financial Reporting

                                                        [LOGO OF GRANT THORNTON]


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

         We have audited management's  assessment,  included in the accompanying
Management  Report on Internal Control over Financial  Reporting,  that Oak Hill
Financial,  Inc. (the  "Company")  maintained  effective  internal  control over
financial  reporting as of December 31, 2005,  based on criteria  established by
the Committee of Sponsoring  Organizations of the Treadway Commission  ("COSO").
Oak Hill Financial,  Inc.'s management is responsible for maintaining  effective
internal  control  over  financial  reporting  and  for  its  assessment  of the
effectiveness of internal control over financial  reporting.  Our responsibility
is to  express  an  opinion  on  management's  assessment  and an opinion on the
effectiveness of the Company's  internal control over financial  reporting based
on our audit.

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

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

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

         In our opinion,  management's assessment that Oak Hill Financial,  Inc.
maintained  effective  internal control over financial  reporting as of December
31,  2005,  is fairly  stated,  in all material  respects,  based on the control
criteria  established in Internal  Control - Integrated  Framework issued by the
                         -----------------------------------------
Committee of Sponsoring  Organizations of the Treadway  Commission.  Also in our
opinion, Oak Hill Financial, Inc. has maintained effective internal control over
financial  reporting  as of  December  31,  2005,  based on  Internal  Control -
                                                             -------------------
Integrated Framework issued by the Committee of Sponsoring  Organizations of the
--------------------
Treadway Commission.

         We have also audited,  in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States),  Oak Hill Financial,  Inc.'s
consolidated statements of financial condition as of December 31, 2005 and 2004,
and the related  statements  of  earnings,  stockholders'  equity  comprehensive
income and cash flows for each of the three years in the period  ended  December
31, 2005, and our report dated March 9, 2006,  expressed an unqualified  opinion
on those financial statements.

GRANT THORNTON LLP

/s/ Grant Thornton LLP

Cincinnati, Ohio
March 9, 2006

                                       33
<PAGE>

Item 9B. Other Information

         None


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 2006 Proxy  Statement,
is incorporated herein by reference in response to this item.

         The  information  contained under "Report of the Audit Committee of the
Board of Directors",  specifically  concerning Audit Committee financial expert,
in the Company's 2006 Proxy  Statement,  is incorporated  herein by reference in
response to this item.

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

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

Item 11. Executive Compensation.

         The  information  appearing  under  "Executive   Compensation"  in  the
Company's 2006 Proxy Statement,  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 2006 Proxy Statement dated, 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
2006 Proxy  Statement,  is incorporated  herein by reference in response to this
item.

Item 14. Principal Accountant Fees and Services

         The  information  appearing  under  "Principal  Independent  Registered
Public  Accounting  Firm  Fees"  in  the  Company's  2006  Proxy  Statement,  is
incorporated herein by reference in response to this item.


PART IV

Item 15.          Exhibits and Reports on Form 8-K.

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

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

                Consolidated  Statements  of Financial  Condition as of December
                31, 2005 and 2004

                Consolidated Statements of Earnings for years ended December 31,
                2005, 2004 and 2003

                Consolidated  Statements of Comprehensive Income for years ended
                December 31, 2005, 2004 and 2003

                Consolidated  Statements of Stockholders' Equity for years ended
                December 31, 2005, 2004 and 2003

                Consolidated  Statements of Cash Flows for years ended  December
                31, 2005, 2004 and 2003

                Notes to  Consolidated  Financial  Statements  for  years  ended
                December 31, 2005, 2004 and 2003

                                       34
<PAGE>

        (2)     Financial Statement Schedules:

                The  information is contained in the Company's  Annual Report to
        Stockholders for the year ended December 31, 2005 is incorporated herein
        by reference in response to this item.

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


         Exhibit
         Number

        *2(a)   Agreement and Plan of Merger,  dated  October 12, 2004,  between
                Oak Hill Financial,  Inc. and Lawrence Financial Holdings,  Inc.
                (reference is made to Exhibit 2 included in Part I as Appendix A
                of the  Prospectus/Proxy  Statement filed by the Company on Form
                S-4/A,  Registration  No.  333-81645,  with the  Securities  and
                Exchange  Commission ("SEC") on January 6, 2005 and incorporated
                herein by reference).

        *2(b)   Agreement and Plan of Merger,  dated July 20, 2004,  between Oak
                Hill  Banks  and  Ripley  National  Bank  (reference  is made to
                Exhibit 2(a) of the Current  Report filed by the Company on Form
                8-K with the SEC on July 21,  2004 and  incorporated  herein  by
                reference).

        *2(c)   Supplemental  Agreement,  dated July 20, 2004,  between Oak Hill
                Financial,  Inc.,  Oak Hill  Banks,  and  Ripley  National  Bank
                (reference  is made to Exhibit 2(b) of the Current  Report filed
                by the  Company  on Form 8-K  with the SEC on July 21,  2004 and
                incorporated herein by reference).

        *2(d)   Agreement and Plan of Merger,  dated March 31, 1999, between Oak
                Hill Financial,  Inc. and Towne Financial Corporation (reference
                is made to Exhibit 2.1 of the  Prospectus/Proxy  Statement filed
                by the Company on Form S-4/A,  Registration No. 333-81645,  with
                the SEC on August 3, 1999 and incorporated herein by reference).

        *2(e)   Supplemental Agreement,  dated as of March 31, 1999, between Oak
                Hill Financial,  Inc. and Towne Financial Corporation (reference
                is made to Exhibit 2.2 of the  Prospectus/Proxy  Statement filed
                by the Company on Form S-4/A,  Registration No. 333-81645,  with
                the SEC on August 3, 1999 and incorporated herein by reference).

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

        *3(b)   Restated Code of Regulations (reference is made to Exhibit 3(ii)
                of the Registration Statement filed by the Company on Form SB-2,
                Registration No. 33-96216,  with the SEC and incorporated herein
                by reference).

        *4(a)   Reference is made to Articles FOURTH,  FIFTH,  SEVENTH,  EIGHTH,
                TENTH AND  ELEVENTH  of the  Registrant's  Restated  Articles of
                Incorporation  (contained in the Registrant's  Restated Articles
                of Incorporation  filed as Exhibit 3(a) hereto) and Articles II,
                III,  IV, VI and VIII of the  Registrant's  Amended and Restated
                Code of Regulations  (contained in the Registrant's  Amended and
                Restated Code of Regulations filed as Exhibit 3(b) hereto).

        *4(b)   Rights Plan, dated January 23, 1998, between Oak Hill Financial,
                Inc. and Fifth Third Bank,  (reference is made to Exhibit 4.1 to
                the  Form  8-A,  filed  with  the SEC on  January  23,  1998 and
                incorporated herein by reference).

        *4(c)   Amended Rights Plan,  dated December 26, 2000,  between Oak Hill
                Financial,  Inc., and Registrar and Transfer Company  (reference
                is made to Exhibit 2 to the Form 8-A12B/A, filed with the SEC on
                February 21, 2001 and incorporated herein by reference).

        *10(a)  Oak Hill Financial, Inc. 2004 Stock Incentive Plan (reference is
                made  to  Appendix  3  to  the  Registrant's   Definitive  Proxy
                Statement for the 2004 Annual  Meeting of  Shareholders  held on
                April  13,  2004,  filed  with  the SEC on  March  11,  2004 and
                incorporated herein by reference).

        *10(b)  Form of Option Award  Agreement  under the Company's  2004 Stock
                Incentive  Plan  (reference  is  made  to  Exhibit  10.1  of the
                Registrant's  Annual  Report  on Form  10-K for the  year  ended
                December  31,  2004,  filed with the SEC on March 25,  2005,  as
                amended July 14, 2005, and incorporated herein by reference).

                                       35
<PAGE>

        *10(c)  Form of  Restricted  Stock Award  Agreement  under the Company's
                2004 Stock  Incentive Plan (reference is made to Exhibit 10.2 of
                the  Registrant's  Annual Report on Form 10-K for the year ended
                December  31,  2004,  filed with the SEC on March 25,  2005,  as
                amended July 14, 2005, and incorporated herein by reference).

        *10(d)  Employment  Agreement,  effective  January 1, 2006,  between Oak
                Hill  Financial,  Inc. and Ralph E. Coffman,  Jr.  (reference is
                made to Exhibit 10.1 of the Registrant's  Current Report on Form
                8-K, dated December 20, 2005, filed with the SEC on December 27,
                2005, and incorporated herein by reference).

        *10(e)  Key Executive Change of Control Plan,  adopted December 20, 2005
                (reference is made to Exhibit 10.2 of the  Registrant's  Current
                Report on Form 8-K, dated December 20, 2005,  filed with the SEC
                on December 27, 2005, and incorporated herein by reference).

        *10(f)  Non-Employee   Director  Deferred   Compensation  Plan,  adopted
                December  20,  2005  (reference  is made to Exhibit  10.3 of the
                Registrant's  Current  Report on Form 8-K,  dated  December  20,
                2005,  filed with the SEC on December 27, 2005, and incorporated
                herein by reference).

        13      2005 Annual Report (Selected portions)

        21      Subsidiaries of the Registrant

        23      Consent of Independent  Registered Public Accounting Firm, Grant
                Thornton LLP.

        24      Powers of Attorney.

        31(a)   Certification by Chief Executive  Officer,  R. E. Coffman,  Jr.,
                dated   March  15,   2006,   pursuant  to  Section  302  of  the
                Sarbanes-Oxley Act of 2002.

        31(b)   Certification by Chief Financial Officer,  Ron J. Copher,  dated
                March 15,  2006,  pursuant to Section 302 of the  Sarbanes-Oxley
                Act of 2002.

        32(a)   Certification by Chief Executive  Officer,  R. E. Coffman,  Jr.,
                dated March 15, 2006,  pursuant to 18 U.S.C.  Section  1350,  as
                adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
                2002

        32(b)   Certification by Chief Financial Officer,  Ron J. Copher,  dated
                March 15, 2006,  pursuant to 18 U.S.C.  Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Incorporated by reference as indicated.

(b) Form 8-K's Filed:

        1.  Form 8-K dated  October 13, 2005 and filed with the  Securities  and
            Exchange  Commission  ("SEC") on October  18,  2005  announcing  the
            Company's  results of  operations  and  financial  condition for the
            three and nine months ended September 30, 2005.

        2.  Form 8-K dated  December 20, 2005 and filed with the SEC on December
            27, 2005  announcing  the  following:  (1) an  employment  agreement
            between the  Company and R. E.  Coffman,  Jr.,  (2) a Key  Executive
            Change  in  Control  Plan,  (3)  a  Non-employee  Director  Deferred
            Compensation  Plan,  and (4) the  termination of a Change in Control
            Agreement  dated  January  1, 2004  between  the  Company  and R. E.
            Coffman, Jr.

        3.  Form 8-K dated  January  12,  2006 and filed with the SEC on January
            20,  2006  announcing  the  Company's   results  of  operations  and
            financial  condition for the three and twelve months ended  December
            31, 2005.  An Executive  Incentive  Plan dated  January 17, 2006 was
            also announced.

        4.  Form 8-K dated  February 21, 2006 and filed with the SEC on February
            22, 2006 announcing a Board of Directors  approved share  repurchase
            plan.

                                       36
<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 15, 2006
                        -----------------------------------
                         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>
*John D. Kidd                               Chairman & Director                                             March 15, 2006
--------------------------------

/s/ R. E. Coffman, Jr.                      President, Chief Executive Officer and Director                 March 15, 2006
--------------------------------            (Principal Executive Officer)

*David G. Ratz                              Executive Vice President and Chief Administrative Officer       March 15, 2006
--------------------------------

*Ron J. Copher                              Executive Vice President, Chief Financial Officer,
--------------------------------            Secretary and Treasurer                                         March 15, 2006
                                            (Principal Financial and Accounting Officer)

*D. Bruce Knox                              Executive Vice President, Chief Information Officer
--------------------------------            and Director                                                    March 15, 2006

*Miles R. Armentrout                        Executive Vice President and Chief Commercial
--------------------------------            Banking Officer                                                 March 15, 2006

*Scott J. Hinsch, Jr.                       Vice President                                                  March 15, 2006
--------------------------------

*Candice R. DeClark-Peace                   Director                                                        March 15, 2006
--------------------------------

*Barry M. Dorsey, Ed.D.                     Director                                                        March 15, 2006
--------------------------------

*Donald R. Seigneur                         Director                                                        March 15, 2006
--------------------------------

*William S. Siders                          Director                                                        March 15, 2006
--------------------------------

*H. Grant Stephenson                        Director                                                        March 15, 2006
--------------------------------

*Neil S. Strawser                           Director                                                        March 15, 2006
--------------------------------

*Donald P. Wood                             Director                                                        March 15, 2006
--------------------------------


By:  /s/ R. E. Coffman, Jr.                                                                                 March 15, 2006
     ---------------------------
     R  E. Coffman, Jr.,
     Attorney-in-fact for each
     Of the persons indicated

</TABLE>

                                       37