##### Table of Contents



UNITED STATES

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended Dec. 31, 2001
Commission File Number 0-14773

NATIONAL BANCSHARES CORPORATION

|                            |  |                                              
|--------------------------- |  | ---------------------------------------------
|Ohio
State of incorporation |  | 34-1518564
I.R.S. Employer
Identification No.

|                                                                                   
|-----------------------------------------------------------------------------------
|112 West Market Street, Orrville, Ohio 44667
Address of principal executive offices

Registrants telephone number: (330) 682-1010

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

Securities registered pursuant to section 12(g) of the Act:

|                                         
|-----------------------------------------
|Common Stock, No Par Value
Title of Class

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
X.
No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of 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.
X

State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 1, 2002: $33,204,292.

Indicate the number of shares outstanding of each of the registrants classes of
common stock, as of March 1, 2002.

Documents Incorporated by Reference:

     Portions of the registrants Proxy Statement dated March 22, 2002 and
previously filed March 21, 2002, are incorporated by reference into Part III.     Portions of the registrants Annual Report to Shareholders, December 31, 2001
are incorporated by reference in Parts I, II, IV.





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|                                           |                                                 |  |  |  |  |  |  | 
|------------------------------------------ | ----------------------------------------------- |  |  |  |  |  |  | 
|                                           | Item 1  Business:                             
|                                           | Item 2  Properties:                           
|                                           | Item 3  Legal Proceedings                     
|                                           | Item 5  Number of shareholders of common stock
|                                           | Item 7  Liquidity Management                  
|                                           | Item 10  Executive Officers                   
|EX-13 Annual Report to Shareholders       
|EX-23 Consent of Crowe, Chizek and Co. LLP



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##### Table of Contents



|                                                                    |                                                                                                                                    |                                                                                                                    |      |   |        |       
|------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ---- | - | ------ | ------
|Form 10-K Cross Reference Index                                     |                                                                                                                                    |                                                                                                                    | Page
|                                                                   
|Part I                                                              |                                                                                                                                    |                                                                                                                    |      |   |        |       
|                                                                    | Item 1
 Business                                                                                                                  |                                                                                                                    |      |   |       
|                                                                    |                                                                                                                                    | Description of Business                                                                                            |      |   |        | 4     
|                                                                    |                                                                                                                                    | Financial Ratios  Note 1                                                                                          |      |   |        | A23   
|                                                                    |                                                                                                                                    | Daily Average Balance Sheets, Interest and Rates  Note 1                                                          |      |   |        | A22   
|                                                                    |                                                                                                                                    | Volume and Rate Variance Analysis                                                                                  |      |   |        | 6     
|                                                                    |                                                                                                                                    | Investment Portfolio                                                                                               |      |   |        | 7     
|                                                                    |                                                                                                                                    | Loan Portfolio                                                                                                     |      |   |        | 8     
|                                                                    |                                                                                                                                    | Summary of Loan Loss Experience                                                                                    |      |   |        | 9     
|                                                                    |                                                                                                                                    | Deposits                                                                                                           |      |   |        | 10    
|                                                                    | Item 2  Properties                                                                                                                |                                                                                                                    |      |   | 5     
|                                                                    | Item 3  Legal Proceedings                                                                                                         |                                                                                                                    |      |   | 5     
|                                                                    | Item 4  Submission of Matters to a Vote of Security Holders   None                                                               |                                                                                                                    |      |   |       
|Part II                                                             |                                                                                                                                    |                                                                                                                    |      |   |        |       
|                                                                    | Item 5  Market for the Registrants Common Equity
and Related Stockholder Matters  Note 1
Number of shareholders of common stock |                                                                                                                    |      |   | A95   
|                                                                    | Item 6  Selected Financial Data  Note 1                                                                                          |                                                                                                                    |      |   | A23   
|                                                                    | Item 7  Managements Discussion and Analysis of
Financial
Condition and Results of Operation  Note 1
- Liquidity Management      |                                                                                                                    |      |   | A4-85 
|                                                                    | Item 7A  Quantitative and Qualitative Disclosures About
Market Risk (See Asset and Liability Management)  Note 1                 |                                                                                                                    |      |   | A7-8  
|                                                                    | Item 8  Financial Statements  Note 1                                                                                             |                                                                                                                    |      |   | A10-21
|                                                                    | Item 9  Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure  None                               |                                                                                                                    |      |   |       
|Part III                                                            |                                                                                                                                    |                                                                                                                    |      |   |        |       
|                                                                    | Item 10
 Directors of the Registrant  Note 2
Executive Officers of the Registrant                                                |                                                                                                                    |      |   | B3
5-6
|                                                                    | Item 11  Executive Compensation  Note 2                                                                                          |                                                                                                                    |      |   | B6    
|                                                                    | Item 12  Security Ownership of Certain Beneficial
Owners and Management  Note 2                                                  |                                                                                                                    |      |   | B3    
|                                                                    | Item 13  Certain Relationships and Related Transactions  Note 2                                                                  |                                                                                                                    |      |   | B9    
|Part IV                                                             |                                                                                                                                    |                                                                                                                    |      |   |        |       
|                                                                    | Item 14  Exhibits, Financial Statement Schedules and Reports
on Form 8-K                                                          |                                                                                                                    |      |   |       
|                                                                    |                                                                                                                                    | Report of Crowe, Chizek and Company LLP,
Independent Auditors  Note 1                                             |      |   |        | A21   
|                                                                    |                                                                                                                                    | Financial Statements:  Note 1                                                                                     |      |   |        |       
|                                                                    |                                                                                                                                    | Consolidated Balance Sheets as of December 31, 2001 and 2000                                                       |      |   |        | A10   
|                                                                    |                                                                                                                                    | Consolidated Statements of Income for the Years Ended
December 31, 2001, 2000 and 1999                             |      |   |        | A11   
|                                                                    |                                                                                                                                    | Consolidated Statements of Cash Flows for the Years
Ended December 31, 2001, 2000 and    1999                      |      |   |        | A13   
|                                                                    |                                                                                                                                    | Consolidated Statements of Changes in Shareholders Equity
for the Years Ended December 31,    2001, 2000 and 1999 |      |   |        | A12   
|                                                                    |                                                                                                                                    | Notes to Financial Statements  Note 1                                                                             |      |   |        | A14-21
|                                                                    |                                                                                                                                    | Reports on Form 8-K filed in fourth quarter of 2001: None                                                          |      |   |        |       
|                                                                    |                                                                                                                                    | Exhibit Table                                                                                                      |      |   |        | 13    
|Signatures                                                          |                                                                                                                                    |                                                                                                                    |      |   |        | 11-12 
|Appendix A  National Bancshares 2001 Annual Report to
Shareholders |                                                                                                                                    |                                                                                                                    |      | A

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|         |  |                                                                                                                                     
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|Note 1  |  | Incorporated by reference from the registrants Annual Report to
Shareholders for the year ended December 31, 2001  Appendix A     
|        
|Note 2  |  | Incorporated by reference from the registrants proxy statement dated
March 22, 2002 previously filed with the SEC on March 21, 2002



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Item 1 
Business:National Bancshares Corporation (the Company), incorporated in 1985, is a
one-bank holding company for First National Bank, Orrville, Ohio (the Bank).
The formation was approved by shareholders on April 24, 1986 and consummated on
June 2, 1986. The Bank offers a full line of services usually found in any
commercial bank operation, including checking accounts, savings accounts,
certificates of deposit, personal loans, loans to business and industry,
installment loans, safety deposit boxes and credit cards. While the Companys
chief decision-makers monitor the revenue streams of the various products and
services, operations are managed and financial performance is evaluated on a
Company-wide basis. Accordingly, all of the Companys banking operations are
considered by management to be aggregated in one reportable operating segment.
The Bank does not have trust powers and, therefore, does not offer trust
services. The Bank operates ten full service offices and one limited service
office in a market area comprising most of Wayne County, portions of western
Stark County, northeastern Holmes County and southern Medina County. There are
approximately 15 other banking and thrift organizations in the immediate market
area. The Bank also competes with insurance companies, consumer finance
companies, credit unions, mortgage banking companies, and commercial finance and
leasing companies. In addition, money market mutual funds and brokerage houses
provide many of the financial services offered by the Bank. The principal
methods of competition are the rates of interest charged and paid for loans and
deposits, fees charged for services, the quality of services provided and the
convenience of banking hours and branch locations. No major elimination of
services presently offered is anticipated in the immediate future.

Lending policies of the Bank follow the guidelines set forth in the Banks
Credit Policy, which is approved by the Board of Directors on an annual basis.
The Credit Policy designates lending authority for the Chief Executive Officer,
Senior Vice President, Chief Loan Officer and all loan officers. The Credit
Policy also sets forth the maximum aggregate amount that may be loaned to any
one customer. Guidelines are established for credit types, loan mix,
concentration of credit and credit standards. Collateral is generally obtained
on loans and an appraisal is required to determine the value of the collateral.
For real estate loans, guidelines have been established for maximum
loan-to-value ratios. Guidelines are also established for the term of the loan,
which must coincide with the credit purpose and life of the collateral. In
addition to the Credit Policy, the Bank has established a series of control
procedures to monitor the overall credit quality of the loan portfolio. These
controls include checklists, loan diaries, annual loan reviews of all loans over
$75,000 (excluding first mortgage loans), monthly board reports of problem
loans, and a monthly review and determination of the adequacy of the allowance
for loan losses.

Management estimates the allowance for loan loss balance required using past
loss experience, risks in the nature and volume of the portfolio, information
about specific borrower situations and estimated collateral values, economic
conditions, and other factors.

The Bank is a member of the Federal Reserve System and its deposits are insured
by the Federal Deposit Insurance Corporation. It is subject to supervision,
examination and regulation by the Comptroller of the Currency. The Company is
also subject to supervision, examination and regulation by the Federal Reserve
System. Management is not currently aware of any regulatory recommendations
which, if they were to be implemented, would have a material effect on the
registrant.

On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley
Act, which, effective March 11, 2000, permits bank holding companies to become
financial holding companies and thereby affiliate with securities firms and
insurance companies, and engage in other activities that are financial in
nature. A bank holding company may become a financial holding company if each of
its subsidiary banks is well capitalized under regulatory prompt corrective
action provisions, is well managed, and has at least a satisfactory rating under
the Community Reinvestment Act (CRA) by filing a declaration that the bank
holding company wishes to become a financial holding company. No regulatory
approval will be required for a financial holding company to acquire a company,
other than a bank or savings association, engaged in activities that are
financial in nature or incidental to activities that are financial in nature, as
determined by the Federal Reserve Board.

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The Gramm-Leach-Bliley Act defines financial in nature to include securities
underwriting, dealing and market making; sponsoring mutual funds and investment
companies; insurance underwriting and agency; merchant banking activities; and
activities that the Board has determined to be closely related to banking.
Subsidiary banks of a financial holding company must continue to be well
capitalized and well managed in order to continue to engage in activities that
are financial in nature without regulatory actions or restrictions, which could
include divestiture of the financial in nature subsidiary or subsidiaries. In
addition, a financial holding company or a bank may not acquire a company that
is engaged in activities that are financial in nature unless each of the
subsidiary banks of the financial holding company or the bank has a CRA rating
of satisfactory or better. The Company is not a financial holding company.




Item 2 
Properties:The headquarters of the Company and the Bank are located in Orrville, Ohio. The
Bank has a total of eleven banking office buildings which are located in
Orrville, Dalton, Kidron, Smithville, Mt. Eaton, Apple Creek, Lodi, Wooster and
Seville, Ohio. All buildings are owned by the Bank with the exception of the
Seville Office which is a leased facility.




Item 3  Legal ProceedingsThere were no legal proceedings during 2001, other than ordinary routine
litigation which was incidental to business and which was not material.




Item 5  Number of shareholders of common stockThe Company had 987 shareholders of common stock as of March 13, 2002. Price
ranges of the Companys common stock for 2001 and 2000 are reported in the
Annual Report to Shareholders (Appendix A, Page 9). A local broker that deals in
the Companys stock supplied the stock prices.




Item 7  Liquidity
ManagementAdditional information regarding liquidity can be found in the Annual Report to
Shareholders, (Appendix A, Page 6). Effective liquidity management ensures the
cash flow requirements of depositors and borrowers, as well as the operating
cash needs of the Corporation, are met.

Funds are available from a number of sources, including the securities
portfolio, the core deposit base, the ability to acquire large deposits,
short-term funding arrangements with correspondent banks and the Federal Home
Loan Bank, and the capability to package loans for sale. On December 31, 2001,
the Corporation had $2.2 million in advances from the Federal Home Loan Bank. No
borrowings have occurred under the short-term funding arrangements with
correspondent banks.

The Corporations major source of funding to meet its liquidity requirements is
dividends and return of investment from its subsidiary, First National Bank.
Information regarding dividends paid by the Bank to the Corporation and dividend
restrictions is located in the consolidated financial statements and note 11,of
the Annual Report to Shareholders. As discussed in note 17 of the Annual Report
to Shareholders, the Corporation has a pending acquisition, valued at $15.1
million that is expected to close in the second quarter of 2002. To facilitate
the funding of the acquisition, the Corporation has received approval from the
regulators of a special dividend from the Bank to the Corporation.




Item 10  Executive
OfficersThe Executive Officers of the Company are as follows:

|                          |  |     |    |          |  |                                                                              
|------------------------- |  | --- | -- | -------- |  | -----------------------------------------------------------------------------
|Name                      |  | Age |    | Position
|Charles J. Dolezal        |  |     | 48 |          |  | President
President of First National Bank                                   
|                         
|Kenneth R. VanSickle      |  |     | 54 |          |  | Senior V.P., Secretary
Senior V.P., Chief Loan Officer of
First National Bank
|                         
|Lawrence M. Cardinal, Jr. |  |     | 50 |          |  | Vice President, Treasurer
Vice President & Controller of
First National Bank 

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There is no family relationship between any of the above executive officers. Mr.
Dolezal has been an executive officer of the Company since its formation in 1986
and the President of the Bank since 1981. Mr. VanSickle was appointed Senior
V.P., Secretary of the Company on April 24, 1997 and has been a senior loan
officer of the Bank since 1986. Mr. Cardinal was appointed Vice President,
Treasurer of the Company and Vice President & Controller of the Bank on April
24, 1997. Mr. Cardinal previously worked as an audit manager for the CPA firm of
Reinhard, Kopko and Keller from 1995 to 1997.

VOLUME AND RATE VARIANCE ANALYSISThe following table represents a summary analysis of changes in interest income,
interest expense and the resulting net interest income on a tax equivalent basis
for the periods presented. Volume is based on daily average balances. Changes
not associated with either rate or volume are reflected as a rate change.

|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |   |     |   | 
|--------------------------------------------- |  | ---------------- | ---- | ---------------- | -------------------- | ---- | -------------------- | ------ | ---- | ------ | ---- | ---- | ---- | ------ | ---- | - | --- | - | --- | - | - | - | ---- | - | --- | - | 
|                                              |  | 2001 versus 2000 |      | 2000 versus 1999
|                                              |  |                  |      |                  | Increase (Decreases) |      | Increase (Decreases)
|                                              |  |                  |      |                  | Due to Changes In    |      | Due to Changes In   
|                                              |  |                  |      |                  |                      |      |                     
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      | Net  |        |      |   |     |   |     |   |   |   | Net 
|(Dollars in thousands)                        |  |                  |      | Volume           |                      | Rate |                      | Change |      | Volume |      | Rate |      | Change
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |     
|Interest
Income                               |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |   |    
|Investment securities:                        |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |   |    
|Taxable                                       |  |                  |      | $                | (130                 | )    |                      | $      | (128 | )      |      | $    | (258 | )      |      | $ | (37 | ) |     | $ | 7 |   |      | $ | (30 | )
|Nontaxable                                    |  |                  |      |                  | (206                 | )    |                      |        | (40  | )      |      |      | (246 | )      |      |   | (76 | ) |     |   | 5 |   |      |   | (71 | )
|(tax
equivalent basis)*                      
|Federal funds sold                            |  |                  | 187  |                  |                      |      | (181                 | )      |      |        | 6    |      |      |        | (219 | ) |     |   | 79  |   |   |   | (140 | )
|Interest bearing deposits                     |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        | 53   |   |     |   | 1   |   |   |   | 54   |  
|Loans (including
Nonaccrual loans)            |  |                  | 492  |                  |                      |      | (735                 | )      |      |        | (243 | )    |      |        | 631  |   |     |   | 364 |   |   |   | 995  |  
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |  
|Total interest Income
(tax equivalent basis)* |  | $                | 343  |                  |                      | $    | (1,084               | )      |      | $      | (741 | )    |      | $      | 352  |   |     | $ | 456 |   |   | $ | 808  |  
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |  
|Interest
Expense                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |   |    
|Deposits                                     
|Interest bearing checking                     |  | $                | (13  | )                |                      | $    | (90                  | )      |      | $      | (103 | )    |      | $      | (17  | ) |     | $ | (21 | ) |   | $ | (38  | )
|Savings                                       |  |                  |      |                  | 73                   |      |                      |        | (26  | )      |      |      | 47   |        |      |   | (60 | ) |     |   | 2 |   |      |   | (58 | )
|Time, $100,000 and over                       |  |                  | (70  | )                |                      |      | (111                 | )      |      |        | (181 | )    |      |        | (63  | ) |     |   | 218 |   |   |   | 155  |  
|Time, other                                   |  |                  | 73   |                  |                      |      | (57                  | )      |      |        | 16   |      |      |        | 213  |   |     |   | 155 |   |   |   | 368  |  
|Other borrowed funds                          |  |                  | (102 | )                |                      |      | (133                 | )      |      |        | (235 | )    |      |        | 101  |   |     |   | 133 |   |   |   | 234  |  
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |  
|Total interest expense                        |  | $                | (39  | )                |                      | $    | (417                 | )      |      | $      | (456 | )    |      | $      | 174  |   |     | $ | 487 |   |   | $ | 661  |  
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |  
|Changes in net
Interest income (tax          
|equivalent basis)*                            |  | $                | 382  |                  |                      | $    | (667                 | )      |      | $      | (285 | )    |      | $      | 178  |   |     | $ | (31 | ) |   | $ | 147  |  
|                                              |  |                  |      |                  |                      |      |                      |        |      |        |      |      |      |        |      |   |     |   |     |   |   |   |      |  



|* |  | Tax equivalence based on highest statutory tax rates of 34%.
|- |  | ------------------------------------------------------------

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INVESTMENT PORTFOLIO

The carrying amounts and distribution of the Companys securities held at
year-end 2001 and 2000 are summarized in the Annual Report to Shareholders
(Appendix A, Page 16, Note 2). The carrying amount, maturities and approximate
weighted average yields (on a tax equivalent basis) of debt securities at
December 31, 2001 and the carrying amounts and fair values as of December 31,
1999 are as follows:

INVESTMENT PORTFOLIO
December 31, 2001
(Dollars in thousands)

|                                   |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  
|---------------------------------- |  | ------ | ------ | ----------- |  | ------------ | --- | ------------- |  | ------------- | ----- | ----- |  | ------ | --- | ----- |  | ------ | ------ | ----- |  |  | --- | - |  | - | ------ |  |  |  | --- | - |  | - | ----- |  |  |  | --- | -
|                                   |  | Total  |        | 0 to 1 Year |  | 1 to 5 Years |     | 5 to 10 Years |  | Over 10 years
|                                   |  |        |        |             |  |              |     |               |  |              
|                                   |  | Amount |        | Yield       |  | Amount       |     | Yield         |  | Amount        |       | Yield |  | Amount |     | Yield |  | Amount |        | Yield
|                                   |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |      
|Available for Sale:                |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  
|U.S.
Government and federal agency |  | $      | 16,568 |             |  |              | 6.7 | %             |  | $             | 2,020 |       |  |        | 6.2 | %     |  | $      | 4,025  |       |  |  | 6.7 | % |  | $ | 9,296  |  |  |  | 6.7 | % |  | $ | 1,227 |  |  |  | 7.0 | %
|State & political
Subdivisions     |  |        | 2,341  |             |  |              | 7.8 | %             |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   | 2,341 |  |  |  | 7.8 | %
|Other securities                   |  |        | 26,327 |             |  |              | 6.7 | %             |  |               | 2,635 |       |  |        | 6.3 | %     |  |        | 13,718 |       |  |  | 6.7 | % |  |   | 9,169  |  |  |  | 6.9 | % |  |   | 805   |  |  |  | 6.9 | %
|                                   |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  
|Total                              |  | $      | 45,236 |             |  |              | 6.8 | %             |  | $             | 4,655 |       |  |        | 6.3 | %     |  | $      | 17,743 |       |  |  | 6.7 | % |  | $ | 18,465 |  |  |  | 6.8 | % |  | $ | 4,373 |  |  |  | 7.4 | %
|                                   |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  
|Held to Maturity:                  |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  
|State & political
Subdivisions     |  | $      | 13,334 |             |  |              | 8.3 | %             |  | $             | 1,629 |       |  |        | 7.6 | %     |  | $      | 3,971  |       |  |  | 9.2 | % |  | $ | 2,793  |  |  |  | 8.2 | % |  | $ | 4,941 |  |  |  | 7.9 | %
|                                   |  |        |        |             |  |              |     |               |  |               |       |       |  |        |     |       |  |        |        |       |  |  |     |   |  |   |        |  |  |  |     |   |  |   |       |  |  |  |     |  

There was no single issuer of securities where the total book value of such
securities exceeded 10% of shareholders equity except for US government and
agency obligations in any periods presented.

|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |        | 
|---------------------------------- | --------------------- | -------- | ------ | ---------- |  | ---------- | ----------------- | ----- | ----- | - | ---- | ------ | - | - | ------ | ------ | 
|                                   |                       |          |        |            |  |            | December 31, 1999 |       |       |   |     
|                                   |                       |          |        |            |  |            |                   |       |       |   |     
|                                   |                       |          |        |            |  |            | Gross             |       | Gross |   |      |        |  
|(Dollars in thousands)             |                       | Carrying |        | Unrealized |  | Unrealized |                   | Fair 
|                                   |                       | Value    |        | Gains      |  | Losses     |                   | Value
|                                   |                       |          |        |            |  |            |                   |       |      
|Available for Sale:                |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|U.S. Government and federal agency |                       | $        | 6,964  |            |  |            |                   |       |       | $ | (164 | )      |   | $ | 6,800  |       
|State and municipal                |                       |          | 2,805  |            |  | $          | 26                |       |       |   | (105 | )      |   |   | 2,726  |       
|Corporate bond and notes           |                       |          | 8,586  |            |  |            | 1                 |       |       |   | (243 | )      |   |   | 8,344  |       
|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|                                   | Total debt securities |          |        | 18,355     |  |            |                   | 27    |       |   |      | (512   | ) |   |        | 17,870 | 
|Equity securities                  |                       |          | 2,281  |            |  |            | 20                |       |       |   | (633 | )      |   |   | 1,668  |       
|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|                                   | Total                 |          | $      | 20,636     |  |            | $                 | 47    |       |   | $    | (1,145 | ) |   | $      | 19,538 | 
|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|Held to Maturity:                  |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|U.S. Government and federal agency |                       | $        | 19,327 |            |  | $          | 134               |       |       | $ | (579 | )      |   | $ | 18,882 |       
|State and municipal                |                       |          | 17,774 |            |  |            | 392               |       |       |   | (230 | )      |   |   | 17,936 |       
|Mortgage-backed                    |                       |          | 927    |            |  |            | 21                |       |       |   | (4   | )      |   |   | 944    |       
|Corporate bond and notes           |                       |          | 12,648 |            |  |            | 25                |       |       |   | (299 | )      |   |   | 12,374 |       
|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       
|                                   | Total                 |          | $      | 50,676     |  |            | $                 | 572   |       |   | $    | (1,112 | ) |   | $      | 50,136 | 
|                                   |                       |          |        |            |  |            |                   |       |       |   |      |        |   |   |        |       

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LOAN PORTFOLIOThe detail of the loan portfolio balances for year-end 2001 and 2000 is included
in the Annual Report to Shareholders (Appendix A, Page 16, Note 3). The detail
of the loan portfolio balances for year-end 1999, 1998 and 1997 is as follows:

|                                        |              |      |         |        |  |      |        |        |  |   |        |        | 
|--------------------------------------- | ------------ | ---- | ------- | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|(Dollars in thousands)                  |              | 1999 |         | 1998   |  | 1997
|                                        |              |      |         |        |  |     
|Collateralized by real estate:          |              |      |         |        |  |      |        |        |  |   |        |       
|                                        | Commercial   |      | $       | 25,031 |  |      | $      | 25,173 |  |   | $      | 22,935 | 
|                                        | Residential  |      |         | 39,207 |  |      |        | 33,045 |  |   |        | 29,173 | 
|                                        | Home equity  |      |         | 6,334  |  |      |        | 5,284  |  |   |        | 2,537  | 
|                                        | Construction |      |         | 1,225  |  |      |        | 1,212  |  |   |        | 1,918  | 
|                                        |              |      |         |        |  |      |        |        |  |   |        |       
|                                        |              |      | 71,797  |        |  |      | 64,714 |        |  |   | 56,563 |       
|Consumer                                |              |      | 7,847   |        |  |      | 8,843  |        |  |   | 8,642  |       
|Commercial                              |              |      | 17,852  |        |  |      | 16,577 |        |  |   | 11,923 |       
|Credit cards                            |              |      | 1,207   |        |  |      | 1,130  |        |  |   | 1,043  |       
|Other                                   |              |      | 2,453   |        |  |      | 2,402  |        |  |   | 1,728  |       
|                                        |              |      |         |        |  |      |        |        |  |   |        |       
|                                        |              |      | 101,156 |        |  |      | 93,666 |        |  |   | 79,899 |       
|Unearned and deferred income            |              |      | (163    | )      |  |      | (161   | )      |  |   | (196   | )     
|Unamortized discount on purchased loans |              |      | (153    | )      |  |      | (171   | )      |  |   | (213   | )     
|                                        |              |      |         |        |  |      |        |        |  |   |        |       
|                                        |              |      | 100,840 |        |  |      | 93,334 |        |  |   | 79,490 |       
|Allowance for loan losses               |              |      | (1,309  | )      |  |      | (1,297 | )      |  |   | (1,232 | )     
|                                        |              |      |         |        |  |      |        |        |  |   |        |       
|                                        |              | $    | 99,531  |        |  | $    | 92,037 |        |  | $ | 78,258 |       
|                                        |              |      |         |        |  |      |        |        |  |   |        |       

MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATESThe following are approximate maturities and sensitivity to changes in interest
rates of certain loans exclusive of real estate mortgages and consumer loans as
of December 31, 2001.

|                                    |  |             |       |              |  |                  |       |       |  |   |       |  |  |   |        | 
|----------------------------------- |  | ----------- | ----- | ------------ |  | ---------------- | ----- | ----- |  | - | ----- |  |  | - | ------ | 
|Types of Loans                     
|(Dollars in Thousands)              |  | 0 to 1 Year |       | 1 to 5 Years |  | 5 and Over Years |       | Total
|                                    |  |             |       |              |  |                  |       |       |  |  
|Commercial                          |  | $           | 7,024 |              |  | $                | 4,522 |       |  | $ | 6,505 |  |  | $ | 18,051 | 
|Real Estate Construction            |  | $           | 1,099 |              |  | $                | 896   |       |  | $ | 2,774 |  |  | $ | 4,769  | 
|Above loans due beyond 1 year with: |  |             |       |              |  |                  |       |       |  |   |       |  |  |   |        | 
|Predetermined interest rates        |  |             |       |              |  |                  |       |       |  |   |       |  |  | $ | 4,094  | 
|Adjustable interest rates           |  |             |       |              |  |                  |       |       |  |   |       |  |  | $ | 10,603 | 

NONACCRUAL AND PAST DUE LOANSGenerally, recognition of interest income is discontinued where reasonable doubt
exists as to the collectability of the interest. Income from non-accrual loans
is recorded when received. The difference between interest income recognized on
such loans and income that would have been recognized at original contractual
rates is immaterial. The bank generally places loans on a non-accrual status
when a default of principal or interest has existed for 90 days or more. The
bank generally does not renegotiate loans due to deterioration in the financial
position of the borrower. The amounts of renegotiated loans are not considered
material and are not considered impaired.

|                              |  |          |     |          |  |          |     |          |  |          |     |  |  |   |     |  |  |   |     | 
|----------------------------- |  | -------- | --- | -------- |  | -------- | --- | -------- |  | -------- | --- |  |  | - | --- |  |  | - | --- | 
|(Dollars in Thousands)        |  | 12/31/01 |     | 12/31/00 |  | 12/31/99 |     | 12/31/98 |  | 12/31/97
|                              |  |          |     |          |  |          |     |          |  |         
|90 Days Past Due and Accruing |  | $        | 148 |          |  | $        | 112 |          |  | $        | 225 |  |  | $ | 141 |  |  | $ | 126 | 
|Nonaccruing Loans             |  | $        | 259 |          |  | $        | 144 |          |  | $        | 250 |  |  | $ | 168 |  |  | $ | 427 | 

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POTENTIAL PROBLEM LOANSManagement reviews the loan portfolio for potential problem loans on a monthly
basis. The following loans were classified by management, which excludes the
above non-accrual loan totals. The amount shown below is the outstanding loan
balance, which has not been reduced by collateral values. There were no other
assets which management believes should be reported in the table above or the
items below.

|                       |          |   |       | 
|---------------------- | -------- | - | ----- | 
|(Dollars in Thousands) | 12/31/01
|                       |         
|Loss                   |          | $ | 2     | 
|Doubtful               |          |   | 92    | 
|Substandard            |          |   | 3,504 | 
|OAEM                   |          |   | 0     | 
|Watch                  |          |   | 0     | 
|                       |          |   |       | 
|Total                  |          | $ | 3,598 | 
|                       |          |   |       | 

FOREIGN LOANSThere were no foreign loans in any periods presented.

LOAN CONCENTRATIONSDue to the nature of our market area, there are no significant loan
concentrations of 10% of total loans to borrowers engaged in similar activities
other than noted in the loan categories disclosed in the Annual Report to
Shareholders (Appendix A, Page 16, Note 3).

SUMMARY OF LOAN LOSS EXPERIENCEThe determination of the balance of the allowance for loan losses historically
has been based on an overall analysis of the loan portfolio and reflects an
amount, which, in managements judgment, is adequate to provide for probable
loan losses. This analysis considers, among other things, the Companys loan
loss experience, present risks of the loan portfolio and general economic
conditions. In addition, management considers the examinations of the loan
portfolio by federal regulatory agencies and internal reviews and evaluations.
The Companys allocation of the allowance for loan losses by category represents
only an estimate for each category of loans based upon a detailed review of the
loan portfolio by management.

Transactions in the allowance for loan losses are maintained by three major loan
categories and the summary of such transactions for the periods indicated
follows:

|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |     | 
|---------------------------------- | ----------------------- | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | --- |  | - | ----- | --- |  | - | ----- | --- | 
|CHANGES IN ALLOWANCE               |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|FOR LOAN LOSSES                    |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|(Dollars in Thousands)             |                         | 2001 |       | 2000 |  | 1999 |       | 1998 |  | 1997
|                                   |                         |      |       |      |  |      |       |      |  |     
|Balance at the beginning of period |                         | $    | 1,343 |      |  | $    | 1,309 |      |  | $    | 1,297 |     |  | $ | 1,232 |     |  | $ | 1,151 |    
|Loans charged off:                 |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|                                   | Commercial & industrial |      |       | 39   |  |      |       | 9    |  |      |       | 58  |  |   |       | 34  |  |   |       | 34  | 
|                                   | Real estate mortgages   |      |       | 20   |  |      |       |     |  |      |       |    |  |   |       | 11  |  |   |       | 19  | 
|                                   | Consumer                |      |       | 27   |  |      |       | 48   |  |      |       | 88  |  |   |       | 90  |  |   |       | 38  | 
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Total loans charged off            |                         |      | 86    |      |  |      | 57    |      |  |      | 146   |     |  |   | 135   |     |  |   | 91    |    
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Recoveries of loans charged off:   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|                                   | Commercial & industrial |      |       | 1    |  |      |       | 2    |  |      |       | 13  |  |   |       | 7   |  |   |       | 1   | 
|                                   | Real estate mortgages   |      |       | 1    |  |      |       | 1    |  |      |       | 6   |  |   |       | 45  |  |   |       | 30  | 
|                                   | Consumer                |      |       | 22   |  |      |       | 26   |  |      |       | 19  |  |   |       | 28  |  |   |       | 21  | 
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Total recoveries                   |                         |      | 24    |      |  |      | 29    |      |  |      | 38    |     |  |   | 80    |     |  |   | 52    |    
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Net loans charged off              |                         |      | 62    |      |  |      | 28    |      |  |      | 108   |     |  |   | 55    |     |  |   | 39    |    
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Provision charged to               |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|                                   | operating expense       |      |       | 40   |  |      |       | 62   |  |      |       | 120 |  |   |       | 120 |  |   |       | 120 | 
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Balance at end of period           |                         | $    | 1,321 |      |  | $    | 1,343 |      |  | $    | 1,309 |     |  | $ | 1,297 |     |  | $ | 1,232 |    
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    
|Net charge-offs to average loans   |                         |      | 0.06  | %    |  |      | 0.03  | %    |  |      | 0.11  | %   |  |   | .07   | %   |  |   | .05   | %  
|                                   |                         |      |       |      |  |      |       |      |  |      |       |     |  |   |       |     |  |   |       |    

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|                              |  |                   |       |                   |  |                  |     |             |  |        |       |             |  |  |     |   |  |      |       |  |  |  |     |  
|----------------------------- |  | ----------------- | ----- | ----------------- |  | ---------------- | --- | ----------- |  | ------ | ----- | ----------- |  |  | --- | - |  | ---- | ----- |  |  |  | --- | -
|DISTRIBUTION OF ALLOWANCE FOR |  |                   |       |                   |  |                  |     |             |  |        |       |             |  |  |     |   |  |      |       | 
|LOAN LOSSES BY CATEGORY       |  |                   |       |                   |  |                  |     |             |  |        |       |             |  |  |     |   |  |      |       | 
|(Dollars in thousands)        |  | December 31, 2001 |       | December 31, 2000 |  | December 31,1999
|                              |  |                   |      
|                              |  |                   |       |                   |  | % of             |     |             |  |        |       | % of        |  |  |     |   |  | % of
|                              |  | Amount            |       | Total Loans       |  | Amount           |     | Total Loans |  | Amount |       | Total Loans
|                              |  |                   |       |                   |  |                  |     |             |  |        |       |            
|Commercial & industrial       |  | $                 | 963   |                   |  |                  | 17  | %           |  | $      | 409   |             |  |  | 20  | % |  | $    | 305   |  |  |  | 20  | %
|Real estate construction      |  |                   | 7     |                   |  |                  | 4   | %           |  |        | 3     |             |  |  | 1   | % |  |      | 12    |  |  |  | 1   | %
|Real estate mortgages         |  |                   | 220   |                   |  |                  | 73  | %           |  |        | 355   |             |  |  | 71  | % |  |      | 398   |  |  |  | 70  | %
|Consumer loans                |  |                   | 121   |                   |  |                  | 6   | %           |  |        | 258   |             |  |  | 8   | % |  |      | 140   |  |  |  | 9   | %
|Unallocated                   |  |                   | 10    |                   |  |                  | N/A |             |  |        | 318   |             |  |  | N/A |   |  |      | 454   |  |  |  | N/A |  
|                              |  |                   |       |                   |  |                  |     |             |  |        |       |             |  |  |     |   |  |      |       |  |  |  |     |  
|TOTAL                         |  | $                 | 1,321 |                   |  |                  | 100 | %           |  | $      | 1,343 |             |  |  | 100 | % |  | $    | 1,309 |  |  |  | 100 | %
|                              |  |                   |       |                   |  |                  |     |             |  |        |       |             |  |  |     |   |  |      |       |  |  |  |     |  

|                         |  |                   |       |                   |  |        |     |             |  |   |       |      |  |  |     |  
|------------------------ |  | ----------------- | ----- | ----------------- |  | ------ | --- | ----------- |  | - | ----- | ---- |  |  | --- | -
|                         |  | December 31, 1998 |       | December 31, 1997
|                         |  |                   |       |                  
|                         |  |                   |       |                   |  | % of   |     |             |  |   |       | % of
|                         |  | Amount            |       | Total Loans       |  | Amount |     | Total Loans
|                         |  |                   |       |                   |  |        |     |            
|Commercial & industrial  |  | $                 | 345   |                   |  |        | 20  | %           |  | $ | 91    |      |  |  | 16  | %
|Real estate construction |  |                   | 12    |                   |  |        | 1   | %           |  |   | 0     |      |  |  | 2   | %
|Real estate mortgages    |  |                   | 222   |                   |  |        | 68  | %           |  |   | 18    |      |  |  | 70  | %
|Consumer loans           |  |                   | 152   |                   |  |        | 11  | %           |  |   | 11    |      |  |  | 12  | %
|Unallocated              |  |                   | 566   |                   |  |        | N/A |             |  |   | 1,112 |      |  |  | N/A |  
|                         |  |                   |       |                   |  |        |     |             |  |   |       |      |  |  |     |  
|TOTAL                    |  | $                 | 1,297 |                   |  |        | 100 | %           |  | $ | 1,232 |      |  |  | 100 | %
|                         |  |                   |       |                   |  |        |     |             |  |   |       |      |  |  |     |  

DEPOSITS

The classification of average deposits and the average rate paid on such
deposits for periods ending December 31, 2001, 2000 and 1999 is included in
Analysis of Net Interest Earnings included in the Annual Report to Shareholders
(Appendix A, Page 22).

A summary of maturities of time deposits of $100,000 or more is as follows:

|                                |  |          |           | 
|------------------------------- |  | -------- | --------- | 
|                                |  | 12/31/01
|                                |  |         
|Three months or less            |  | $        | 5,805,976 | 
|Over 3 months through 6 months  |  |          | 770,762   | 
|Over 6 months through 12 months |  |          | 1,930,210 | 
|Over 12 months                  |  |          | 944,131   | 
|                                |  |          |           | 
|                                |  | $        | 9,451,079 | 
|                                |  |          |           | 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |         |  |                                                                                                      
|----- |  | ------- |  | -----------------------------------------------------------------------------------------------------
|      |  |         |  | NATIONAL BANCSHARES CORPORATION                                                                      
|     
|DATE: |  | 3-19-02 |  | /s/ Charles J. DolezalCharles J. Dolezal, President                                                  
|     
|DATE: |  | 3-19-02 |  | /s/ Lawrence M. Cardinal, Jr.Lawrence M. Cardinal, Jr., V.P., Treasurer
(Principal Financial Officer)

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

|      |  |         |  |                                                   
|----- |  | ------- |  | --------------------------------------------------
|DATE: |  | 3-19-02 |  | /s/ Charles J. DolezalCharles J. Dolezal, Chairman
|     
|DATE: |  | 3-19-02 |  | /s/ Sara BalzariniSara Balzarini, Director        
|     
|DATE: |  | 3-19-02 |  | /s/ Bobbi DouglasBobbi Douglas, Director          
|     
|DATE: |  | 3-19-02 |  | /s/ John W. KropfJohn W. Kropf, Director          
|     
|DATE: |  |         |  |                                                   
|     
|      |  |         |  | Steve Schmid, Director                            
|     
|DATE: |  | 3-19-02 |  | /s/ John E. SprungerJohn E. Sprunger, Director    

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|      |  |         |  |                                               
|----- |  | ------- |  | ----------------------------------------------
|DATE: |  |         |  |                                               
|      |  |         |  | Howard J. Wenger, Director                    
|     
|DATE: |  | 3-19-02 |  | /s/ James F. WoolleyJames F. Woolley, Director
|     
|DATE: |  |         |  |                                               
|     
|      |  |         |  | Albert Yeagley, Director                      

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EXHIBIT INDEX

|              |  |     |             |                                                                                                                                      |  |                                                           
|------------- |  | --- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------
|Exhibit No.   |  |     |             |                                                                                                                                      |  | If incorporated by Reference,                             
|Under Reg.    |  |     | Form 10-K   |                                                                                                                                      |  | Documents with Which Exhibit                              
|S-K, Item 601 |  |     | Exhibit No. | Description of Exhibits                                                                                                              |  | was Previously Filed with SEC                             
|              |  |     |             |                                                                                                                                     
|(3)(i)        |  |     |             | Amended Articles of Incorporation                                                                                                    |  | Registration Statement S-4 filed
3/31/86 File No. 33-03711
|(3)(ii)       |  |     |             | Code of Regulations                                                                                                                  |  | Registration Statement S-4 filed
3/31/86 File No. 33-03711
|(10.1)        |  |     |             | Directors Defined Benefit Plan Agreement                                                                                             |  | Annual Report 10-K filed
3/29/01 File No. 000-14773       
|(10.2)        |  |     |             | Special Separation Agreement                                                                                                         |  | Annual Report 10-K filed
3/29/01 File No. 000-14773       
|(10.3)        |  |     |             | Agreement and Plan of Merger, dated as
of October 2, 2001, between National
Bancshares Corporation and Peoples
Financial Corporation |  | Form 8-K filed
10/3/01 File No.
000-14773                 
|(11)          |  | A23 |             | Computation of Earnings per Share                                                                                                    |  | Incorporated by reference                                 
|(12)          |  | A23 |             | Computation of Ratios                                                                                                                |  | Incorporated by reference                                 
|(13)          |  | A   |             | 2001 Annual Report to Shareholders                                                                                                   |  | Incorporated by reference                                 
|(21)          |  | A1  |             | Subsidiaries of the registrant                                                                                                       |  | Incorporated by reference                                 
|(23)          |  |     |             | Consent of Crowe, Chizek and Co. LLP                                                                                                 |  |                                                           

No other exhibits are required to be filed herewith pursuant to Item 601 of Regulation S-K.

PAGE 13