Dow Jones and company reports

JACKSON, Ohio -- Oak Hill Financial Inc. said after the market close Friday its third quarter earnings is expected to be between 23 cents a share and 30 cents a share, and fourth quarter operating earnings between 29 cents a share and 33 cents a share.

The $641 million-asset bank holding company said the turnaround at the company's Towne Bank unit has been slower than expected, but expects improvement in the first and second quarter in 2001. Oak Hill Financial bought Towne Bank's parent company, Towne Financial Corp., on Oct. 1, 1999, and converted its subsidiary, Blue Ash Building and Loan Association, from a thrift to a commercial bank.

``This is a disappointing period for us," said John D. Kidd, president and chief executive officer. "We are experiencing significant compression of the net interest margin, and while our loan demand is strong, loan pricing is very competitive and funding costs have shot up due to the rapid rise in short-term interest rates. We want to keep our momentum going in the lending area, and right now that means higher-cost funding.''

Mr. Kidd said the company plans to restructure its investment portfolio in the fourth quarter by replacing up to $35 million in investment securities with higher-yielding instruments.

The plan would result in pretax charges of up to $1.1 million in the fourth quarter, but that it should realize an increase of up to 125 basis points in the annual yield on the replaced investments.

Shares of Oak Hill were halted for dissemination in after session trading late Friday and closed at $16.13, up 38 cents, or 2.4%, on Nasdaq volume of 24,900 shares during regular trading session. Average daily volume is 4,933.

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