<PAGE>   1
                                                                      EXHIBIT 13

MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

From time to time, the Corporation may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, new banking and financial service products and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, Corporation notes that a variety of factors could cause its actual
results and experiences to differ materially from the anticipated results or
other expectations expressed in its forward-looking statements. These risks and
uncertainties include, without limitation, changes in interest rates,
developments in the economies served by the Corporation, changes in anticipated
credit quality trends and changes in accounting, tax or regulatory practices or
requirements.

In the following pages, the analysis of the financial condition and results of
operations in 1999 compared to prior years is discussed by Management. The data
presented in this discussion should be read in conjunction with the 1999 audited
financial statements of the report. Management is committed to the improvement
of return on average assets, return on average equity and the efficiency ratio.
1999 brought about many changes which will allow management to continue to
achieve above average ratios for the industry.

RESULTS OF OPERATIONS SUMMARY
Net income in 1999 was $17,018,000. Net income has steadily increased in each of
the previous five (5) years. Net income in 1999 was $17,018,000 compared to net
income in 1998 of $15,620,000 and in 1997 of $14,488,000. Net income for 1999
increased $1,398,000 or nine percent (9%) over 1998. Basic earnings per share
was $1.40 in 1999, $1.29 in 1998, and $1.20 in 1997, whereas diluted earnings
per share was $1.39, $1.28, and $1.19, respectively.

Total assets grew eleven percent (11%) in 1999 to $976,411,000. Security Banc
Corporation continued its record performance with a 1999 return on average
assets of one point seventy-eight percent (1.78%) and a return on average
shareholder equity of fourteen point eighteen percent (14.18%). The Corporation
has continued to increase cash dividends paid to our shareholders. Cash
dividends paid in 1999 were $.55 per share, compared to $.495 per share in 1998.
Market price per share at December 31, 1999 was $28.50. Financial summary (Table
1) recaps these measures.

<PAGE>   2

<TABLE>
Table  1:  Financial Summary
Five Years Ended December 31
<CAPTION>
(000's, except per share and ratio data)                 1999          1998          1997          1996           1995
-----------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>           <C>           <C>           <C>           <C>
     Interest and Fee Income .....................     $ 68,718      $ 64,034      $ 62,778      $ 51,891      $ 49,706
     Interest Expense ............................       27,684        24,195        24,903        19,311        18,003
                                                       --------      --------      --------      --------      --------
     Net Interest Income .........................       41,034        39,839        37,875        32,580        31,703
     Provision for Loan Losses ...................        1,200         1,540         1,300         1,875           950
     Investment Securities Gains .................          170           430           217           362            10
     All Other Operating Income ..................        8,363         8,059         6,887         5,531         5,200
     Operating Expense ...........................       23,548        22,974        22,729        18,021        18,079
                                                       --------      --------      --------      --------      --------

     Income Before Income Taxes ..................       24,819        23,814        20,950        18,577        17,884
     Provision for Income Tax ....................        7,801         8,194         6,462         5,190         5,177
                                                       --------      --------      --------      --------      --------
     Net Income ..................................     $ 17,018      $ 15,620      $ 14,488      $ 13,387      $ 12,707

Per Share
     Basic Earnings ..............................     $   1.40      $   1.29      $   1.20      $   1.11      $   1.06
     Diluted Earnings ............................     $   1.39      $   1.28      $   1.19      $   1.10      $   1.05
     Cash Dividends Declared and Paid ............     $    .55      $  0.495      $  0.445      $  0.405      $  0.365
     Year-end Book Value .........................     $   9.85      $   9.71      $   8.96      $   8.33      $   7.50
     Year-end Market Price .......................     $  28.50      $  46.00      $  27.25      $  19.00      $  14.25
Selected Year-ended Information
     Total Assets ................................     $976,411      $883,500      $839,605      $816,334      $676,106
     Investment Securities .......................      214,303       167,324       149,179       190,983       183,861
     Loans .......................................      653,025       616,942       562,005       540,768       396,570
     Deposits ....................................      696,546       708,853       677,391       667,035       555,844
     Noninterest Bearing Demand Deposits .........      129,127       131,285       119,373       107,913       112,002
     Interest Bearing Demand Deposits ............      134,864       148,462       129,351       122,996        97,422
     Time Deposits ...............................      275,567       274,230       277,548       281,973       219,057
     Savings .....................................      156,988       154,876       151,119       154,153       127,363
     Shareholders' Equity ........................      119,122       118,129       108,736       100,794        90,237
     Cash Dividends Paid .........................        6,690         6,013         5,394         4,545         3,740
     Net Income ..................................     $ 17,018      $ 15,620      $ 14,488      $ 13,387      $ 12,707

     Weighted Average Common Shares
     Outstanding .................................       12,165        12,144        12,118        12,058        12,026

Ratios
     Return on Average Assets ....................         1.78%         1.85%         1.75%         1.92%         1.95%
     Return on Average Equity ....................        14.18%        13.69%        13.92%        14.18%        14.91%
     Efficiency Ratio ............................        46.32%        46.56%        48.86%        46.70%        44.89%
     Total Capital to Total Risk Based Assets ....        18.23%        19.63%        20.04%        19.74%        20.98%
     Net Interest Margin (Tax Equivalent Basis) ..         4.79%         5.18%         5.07%         5.21%         5.46%
</TABLE>

<PAGE>   3
NET INTEREST INCOME
A major share of the Corporation's income results from the spread between income
on interest earning assets, such as loans and securities, and the interest
expense on liabilities (deposits) used to fund those assets. The difference
between interest earned and interest expensed is referred to as net interest
income in the Consolidated Statement of Income. Net interest income is affected
by changes in both interest rates and the amount (volume) of interest earning
assets and interest bearing liabilities outstanding. Net interest margin on
interest earning assets is the amount earned on assets, on a taxable equivalent
basis, divided by the average earning assets outstanding.

Table II, entitled Average Balance Sheets and Analysis of Net Interest Income,
compares the changes in revenue and interest earning assets outstanding, and
interest cost and liabilities outstanding for the years ended December 31, 1999,
1998, and 1997.

The Corporation's net interest income on a taxable equivalent basis was
$41,741,000, $40,241,000 and $38,730,000 in 1999, 1998, and 1997 respectively.
Total average earning assets increased to $870,718,000 in 1999, compared to
$777,336,000 in 1998, and $763,438,000 in 1997. Earning assets are total loans,
total securities, interest bearing deposits with other banks and federal funds
sold. Average total loans increased to $634,502,000 while average securities
increased to $215,517,000. Average federal funds sold and interest bearing
deposits with other banks decreased to $20,699,000.

Total average interest bearing liabilities were $700,388,000 in 1999. Average
total interest bearing deposits were $567,936,000 for 1999 compared to
$567,120,000 for 1998. Average CDs >$100,000 for 1999 increased to $45,257,000
from $44,146,000 while CDs <$100,000 for 1999 decreased to $222,122,000 from
$230,815,000. Average NOW, Money Fund, and Savings increased to $84,951,000,
$58,877,000, $156,729,000 respectively Other borrowed money averages for 1999
increased to $132,452,000 from $37,738,000.

Average earning assets of $870,718,000 in 1999 contributed a tax equivalent
interest income of $69,425,000 with a yield of seven point ninty-seven percent
(7.97%). Average earning assets for 1998 contribute a tax equivalent interest
yield of eight point twenty-nine percent (8.29%). Principally the decreased
yield on average earning assets was attributed to decreased rates in the loan
portfolio, as well as decreasing yields in the federal funds sold.

Average interest bearing liabilities of $700,388,000 in 1999 contributed
interest expense of $27,684,000 with an average rate of 3.95% compared to the
prior year of 4.00%. Rates for average total interest bearing deposits continued
to decrease to an average rate of 3.75% compared to 3.96% for the prior year.

Table III, entitled Analysis of Net Interest Income Changes, translates the
dollar changes in taxable equivalent net interest margin into (1) changes due to
volume or (2) changes due to average yields on interest earning assets and
average rates for sources of funds on which interest expense is incurred. Net
interest income increased on a tax equivalent basis from $40,241,000 to
$41,741,000 or an increase of $1,502,000. The majority of this increase was
largely due to an increase in volume when compared to 1998. The increase in
volume of average earning assets from $777,336,000 to $870,718,000 when coupled
with the decrease in general interest rates from 8.29% to 7.97% increased total
interest income to $69,425,000. Additional volume was required with declining
rates to achieve the increase in interest income.

Rates for interest expense decreased from 4.00% to 3.95% and when coupled with
the increased volume of interest bearing liabilities from $604,858,000 to
$700,388,000, this increased total interest expense for the Corporation to
$27,684,000. Comparing current year volumes and rates with previous year volume
and rates, the Corporation experienced an increase in net interest income of
$1,502,000.

<PAGE>   4
OTHER OPERATING INCOME
Other operating income is comprised of trust income, service charges on deposit
accounts, security gains, and other items of income not directly resulting from
interest earning assets. These items comprise safe deposit box fees, exchange
and collection fees, investor service fees, gain (loss) on the sale of loans and
miscellaneous other income. Total other operating income for the Corporation is
$8,533,000 for 1999 compared to $8,489,000 for 1998.

Trust income increased $175,000 to $2,011,000. Service charges on deposit
accounts increased to $3,215,000 from $3,149,000 while other income increased to
$3,137,000 from $3,074,000.

The Corporation realizes the importance of increasing other operating income
which will compliment the improvement of the overall efficiency ratio.

It's important for the Corporation to continue to work on improving its
efficiency ratio which will lead to the improved ratio for return on average
assets and return on average equity.


(Make these bar graphs, see annual report)

Graph -- Net Income
Thousands
1999              1998            1997          1996         1995
$17,018           $15,620         $14,488       $13,387      $12,707

Graph -- Return on Average Assets

1999              1998            1997          1996          1995
1.78%             1.85%           1.75%         1.92%         1.95%

Graph -- Efficiency Ratio

1999              1998            1997          1996          1995
46.32%            46.56%          48.86%        46.70%        44.89%

<PAGE>   5
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF STATISTICAL INFORMATION
TABLE II: AVERAGE BALANCE SHEETS AND ANALYSIS OF NET INTEREST INCOME FOR THE YEARS
ENDED DECEMBER 31. (TAX EQUIVALENT BASIS)
<CAPTION>

                                                 1999                             1998                             1997
                                     ---------------------------      --------------------------      ----------------------------
        (000's)                      Balance   Interest    Yield      Balance   Interest   Yield      Balance    Interest    Yield
----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>       <C>        <C>       <C>        <C>        <C>        <C>
ASSETS
  Earning Assets
  Loans  (1)
     Commercial 2) ............     $303,639    $26,375     8.69%     $268,687   $24,303    9.05%     $234,195   $21,422     9.15%
     Real Estate 3) ...........      243,541     19,306     7.93%      225,609    19,395    8.60%      214,612    18,329     8.54%
     Consumer 3) ..............       87,322      8,750    10.02%       92,228     9,474   10.27%      101,125    10,533    10.42%
                                    --------    -------    -----      --------   -------   -----      --------   -------    -----
     Total Loans ..............     $634,502    $54,431     8.58%      586,524    53,172    9.07%      549,932    50,284     9.14%

  Investment Securities
     Taxable ..................      188,891     12,060     6.38%      133,188     7,739    5.81%      160,144     9,350     5.84%
     Tax-exempt ...............       26,626      1,858     6.98%       11,313       923    8.16%       19,056     2,109    11.07%
                                    --------    -------    -----      --------   -------   -----      --------   -------    -----
     Total securities .........      215,517     13,918     6.46%      144,501     8,662    5.99%      179,200    11,459     6.39%

     Federal funds sold
       and interest bearing
       deposits with other
       banks ..................       20,699      1,076     5.20%       46,311     2,602    5.62%       34,306     1,890     5.51%
                                    --------    -------    -----      --------   -------   -----      --------   -------    -----
  Total earning assets ........      870,718     69,425     7.97%      777,336    64,436    8.29%      763,438    63,633     8.34%
  Nonearning assets
     Allowance for loan
       losses .................       (6,863)                           (6,887)                         (6,712)
     Cash and due from
       banks...................       40,686                            30,686                          29,297
     Premises, equipment
       and other assets........       50,412                            45,337                          43,282
                                    --------                          --------                        --------
Total assets...................     $954,953                          $846,472                        $829,305
                                    ========                          ========                        ========
LIABILITIES
  Interest bearing
     liabilities
  Deposits
    NOW ......................      $ 84,951    $ 1,505     1.77%     $ 81,793   $ 1,479    1.81%     $ 76,854   $ 1,425     1.85%
    Money Fund................        58,877      2,301     3.91%       56,825     2,336    4.11%       59,874     2,545     4.25%
    Savings...................       156,729      4,070     2.60%      153,541     3,897    2.54%      153,544     3,956     2.58%
  Time Deposits
    CD's greater than 100,000..       45,257      2,310     5.10%       44,146     2,362    5.35%       40,772     2,214     5.43%
    CD's less than 100,000.....      222,122     11,101     5.00%      230,815    12,394    5.37%      235,298    12,763     5.42%
                                    --------    -------    -----      --------   -------   -----      --------   -------    -----
    Total interest
       bearing deposits........      567,936     21,287     3.75%      567,120    22,468    3.96%      566,342    22,903     4.04%

  Other Borrowed Money.........      132,452      6,397     4.83%       37,738     1,727    4.58%       40,290     2,000     4.96%
                                    --------    -------    -----      --------   -------   -----      --------   -------    -----
  Total interest bearing
     liabilities...............      700,388     27,684     3.95%      604,858    24,195    4.00%      606,632    24,903     4.11%
  Noninterest bearing
     demand deposits...........      128,052                           121,441                         111,391
    Other liabilities..........        6,522                             6,085                           7,222
    Shareholders' equity.......      119,991                           114,088                         104,060
                                    --------                          --------                        --------
Total liabilities and
   Shareholders' equity........     $954,953                          $846,472                        $829,305
                                    ========                          ========                        ========

   Net interest income and.....                  41,741                           40,241                          38,730
     Interest rate spread......                             4.02%                           4.29%                            4.23%
                                                           -----                           -----                            -----
   Net interest margin
     (tax equivalent basis)....                             4.79%                           5.18%                            5.07%
                                                           -----                           -----                            -----
</TABLE>

Footnote:

1)   Nonaccrual loans are included in average loan balances and loan fees are
     included in interest income.
2)   Interest income on tax-exempt investments and on certain tax-exempt
     commercial loans has been adjusted to a taxable equivalent basis using a
     marginal federal income tax rate of thirty-five percent (35%).
3)   For Management Discussion and Analysis, home equity loan averages are
     included in the consumer loan portfolio as opposed to the real estate loan
     portfolio.
<PAGE>   6
<TABLE>
TABLE III:  ANALYSIS OF NET INTEREST INCOME CHANGES
(TAX EQUIVALENT BASIS)
<CAPTION>

                                                     1999 Compared to 1998                     1998 Compared to 1997
                                             ------------------------------------       ----------------------------------
                                                        Yield/                                    Yield/
 (000's)                                     Volume      Rate      Mix      Total       Volume     Rate      Mix     Total
--------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>      <C>          <C>       <C>       <C>     <C>
Increase(Decrease) in Interest Income
    Loans
      Commercial .......................... $ 3,161    $  (964)   $(125)   $ 2,072      $ 3,155   $(239)    $(35)   $ 2,881
      Real Estate .........................   1,542     (1,511)    (120)       (89)         939     121        6      1,066
      Consumer ............................    (504)      (232)      12       (724)        (927)   (145)      13     (1,059)
                                            -------    -------    -----    -------      -------   -----     ----    -------
    Total loans ...........................   4,199     (2,707)    (233)     1,259        3,167    (263)     (16)     2,888
    Investment Securities
      Taxable .............................   3,237        765      320      4,322       (1,574)    (45)       8     (1,611)
      Tax-exempt ..........................   1,249       (134)    (181)       934         (857)   (554)     225     (1,186)
                                            -------    -------    -----    -------      -------   -----     ----    -------
    Total securities ......................   4,486        631      139      5,256       (2,431)   (599)     233     (2,797)
    Federal funds sold and securities
      purchased under agreements to
      resell ..............................  (1,439)      (195)     108     (1,526)         661      37       13        711
                                            -------    -------    -----    -------      -------   -----     ----    -------
Total interest income change ..............   7,246     (2,271)      14      4,989        1,397    (825)     230        802

Increase (Decrease) In Interest Expense
    Interest bearing liabilities
     Deposits
      NOW .................................      57        (30)      (1)        26           92     (35)      (2)        55
      Money Fund ..........................      84       (115)      (4)       (35)        (130)    (84)       4       (210)
      Savings .............................      81         90        2        173            0     (59)       0        (59)
      Time Deposits
        CD's greater than 100,000 .........      59       (109)      (3)       (53)         183     (33)      (3)       147
        CD's less than 100,000 ............    (467)      (859)      32     (1,294)        (243)   (128)       2       (369)
                                            -------    -------    -----    -------      -------   -----     ----    -------
Total interest bearing deposits ...........    (186)    (1,023)      26     (1,183)         (98)   (339)       1       (436)

    Other borrowed money ..................   4,334         96      240      4,670         (127)   (156)      10       (273)
                                            -------    -------    -----    -------      -------   -----     ----    -------
Total interest expense change .............   4,148       (927)     266      3,487         (225)   (495)      11       (709)

Increase(Decrease) in net interest
    income on a Taxable Equivalent
        Basis ............................. $ 3,098    $(1,344)   $(252)   $ 1,502      $ 1,622   $(330)    $219    $ 1,511
(Decrease) Increase in Taxable
        Equivalent Basis ..................                                   (307)                                     453
                                                                           -------                                  -------
    Net Interest Income Change ............                                $ 1,195                                  $ 1,964
</TABLE>


OPERATING EXPENSES
The Corporation recognizes the importance of a low efficiency ratio. Low
efficiency ratios indicate the success of the Corporation in controlling
operating expenses; such as salaries, equipment expenses, and other operating
expenses. These expenses are generally measured using the term "Efficiency
Ratio" which is operating expenses divided by the sum of net interest income
plus other operating income. The Corporation's efficiency ratio as of December
31, 1999 was 46% as compared to December 31, 1998 of 47%. This indicates that it
costs the Corporation 46 cents for each dollar of revenue earned before taxes.
The Corporation continues to implement cost saving procedures such as expanding
the use of technology such as networking and on-line teller systems. Efficiency
ratios for peer Banks with asset size distribution from $100 million to $1
billion had an efficiency ratio of 60%, whereas, the efficiency ratio for all
banks located in the Central Region had an efficiency ratio of 58.5%. The
Central Region is defined as Wisconsin, Michigan, Illinois, Indiana, Ohio, and
Kentucky. As the Corporation continues to improve its measure of cost control,
this ratio will continue to decrease. The efficiency ratios for Security
National, Citizens National, and Third Savings and Loan were 46%, 55%, and 47%,
respectively. Overall employment was 323 employees with total salary and
benefits of $12,255,000. Amortization of intangibles was $667,000 as a result of
the Corporation's previous acquisitions. Equipment and occupancy for 24 banking
offices totaled $2,682,000 while other operating expenses were $7,944,000. Other
operating expenses are detailed in the following table:

<PAGE>   7
<TABLE>
OTHER OPERATING EXPENSES
<CAPTION>

000's
-----------------------------------------------------------
                                        1999           1998
                                        ----           ----
<S>                                   <C>            <C>
Marketing                             $  387         $  479
Community Donations                      169            148
Directors' Fees                          212            175
FDIC Insurance                           194            185
Appraisals                               141            284
Loan and Credit Information              179            358
Exam Fees                                296            314
Insurance Premiums                       169            190
Legal Fees                               214            231
State of Ohio Franchise Tax              984          1,163
Computer Services                      1,599          1,325
Forms and Supplies                       621            605
Postage and Delivery                     578            563
Communications                           407            322
Aggregate Other Expense                1,794          2,079
                                       -----          -----
                                      $7,944         $8,421
</TABLE>

<PAGE>   8
LOANS
Total average commercial loans increased thirteen percent (13%) to $303,639,000
in 1999 yielding an average rate of eight point sixty-nine percent (8.69%).
Average real estate loans increased eight percent (8%) to $243,541,000, yielding
an average rate of seven point ninty-three percent (7.93%). Average consumer
loans decreased five point three percent (5.3%) to $87,322,000, yielding an
average rate of ten point zero two percent (10.02%).

Total average loans increased to $634,502,000 from $586,524,000 or 8%. This
increase reflected loan growth primarily in commercial loans and real estate
loans partially offset by the decrease in the consumer portfolio. Loans secured
by real estate represented 39% or $254,854,000 of total loans outstanding,
whereas, commercial loans represented 49% or $321,782,000 as of December 31,
1999.

The Corporation provides, as expense, an amount which reflects expected loan
losses. This provision is based on the growth of the loan portfolio, local
economic conditions, and on recent loan loss experience and is called the
provision for loan losses in the Consolidated Statement of Income. Actual losses
on loans are charged against the reserve built up on the Consolidated Statement
of Condition through the allowance for loan losses. The amount of loans actually
removed as assets from the Consolidated Statement of Condition is referred to as
charge-offs. Netting out recoveries on previously charged-off assets with
current year charge-offs provides net charge-offs.

Net charge-offs in 1999 increased to $1,155,000 from $911,000 in 1998. The
provision for loan losses was $1,200,000 in 1999 and $1,540,000 in 1998. The
allowance for loan losses at December 31, 1999 was equivalent to one point zero
seven percent (1.07%) of loans outstanding.

The following table presents loan loss data for the most recent five (5) year
period.

<TABLE>
RESERVE FOR LOAN LOSSES FIVE YEAR HISTORY
<CAPTION>

 (000's)                            1999           1998           1997           1996           1995
------------------------------------------------------------------------------------------------------
<S>                               <C>            <C>            <C>            <C>            <C>
Balance at Jan. 1 ...........     $  6,883       $  6,254       $  6,827       $  5,336       $  5,101
Acquired allowance ..........            0              0              0          1,285              0
Adjustments .................           36              0              0              0              0
Provision for loan losses ...        1,200          1,540          1,300          1,875            950
Loans charged off ...........       (1,507)        (2,106)        (2,188)        (1,963)        (1,077)
    Recoveries of loans
    previously charged off ..          352          1,195            315            294            362
                                  --------       --------       --------       --------       --------
Balance at Dec. 31 ..........     $  6,964       $  6,883       $  6,254       $  6,827       $  5,336
Loans outstanding
    at Dec. 31 ..............     $653,025       $616,942       $562,005       $540,768       $396,570
Reserve as a
    percent of loans ........         1.07%          1.11%          1.11%          1.26%          1.35%
Net loan losses to
    average loans ...........         0.18%          0.16%          0.34%          0.39%          0.18%
</TABLE>

<PAGE>   9
INTEREST RATE RISK AND LIQUIDITY MANAGEMENT

INTEREST RATE RISK MANAGEMENT
The Company seeks to achieve consistent growth in net interest income and net
income while managing volatility arising from shifts in interest rates. The
Asset and Liability Management Committee (ALCO) oversees financial risk
management, establishing broad policies and specific operating limits that
govern a variety of financial risks inherent in the Company's operations,
including interest rate, liquidity, and market risks. Balance sheet strategies
are reviewed and monitored regularly by ALCO to ensure consistency with approved
risk tolerances.

Interest rate risk management is a dynamic process, encompassing both the
business flows onto the balance sheet and the changing market and business
environment. Interest rate risk by definition is the risk of decreased net
interest income whenever there are movements in market interest rates. Effective
management of interest rate risk begins with investments and funding sources.

Measurement and monitoring of interest rate risk is an ongoing process. A key
element in this process is the Company's estimation of the amount that net
interest income will change over a twelve to twenty-four month period given a
directional shift in interest rates. The income simulation model used by the
Company captures all assets and liabilities, accounting for significant
variables, which are believed to be affected by interest rates. These include
prepayment speeds on real estate mortgages and consumer installment loans,
principal amortization and maturities on other financial instruments. The model
captures embedded options, e.g. interest rate caps/floors or call options, and
accounts for changes in rate relationships, as various rate indices lead or lag
changes in market rates. While these assumptions are inherently uncertain,
management utilizes probabilities and, therefore, believes that the model
provides an accurate estimate of the interest rate risk exposure. Management
reporting of this information is shared with the Board of Directors.

The results of the Company's most recent interest sensitivity analysis indicated
that net interest income would be relatively unchanged by a 100 basis points
increase or decrease in rate (assuming the change occurs evenly over the next
year and that corresponding changes in other market rates occur as forecasted).
Net interest income would be expected to decrease 4.6% if rates were to fall 200
basis points. Net interest income would be expected to increase .91% if rates
were to rise 200 basis points.

LIQUIDITY MANAGEMENT
Liquidity Management is also a significant responsibility of ALCO. The objective
of ALCO in this regard is to maintain an optimum balance of maturities among
assets and liabilities such that sufficient cash, or access to cash, is
available at all times to meet the needs of borrowers, depositors, and
creditors, as well as to fund corporate expansion and other activities without
incurring unacceptable losses.

A chief source of liquidity is derived from the retail deposit base accessible
by its network of branches. While liability sources are many, significant
liquidity is available from the Company's investment portfolio, loan portfolio,
and borrowing lines from the Federal Home Loan Bank. ALCO regularly monitors the
overall liquidity position of the business and ensures that various alternative
strategies exist to cover unanticipated events. At December 31, 1999, sufficient
liquidity was available to meet estimated short-term and long term funding
needs.

<PAGE>   10
MARKET INFORMATION
Security Banc Corporation stock (symbol STYB) is traded in the over-the-counter
market. The following table sets forth the prices for the common stock during
the periods indicated.

<TABLE>
<CAPTION>
                           1999                           1998
                 -------------------------     --------------------------
QUARTER ENDED   HIGH BID   LOW BID   CLOSE     HIGH BID  LOW BID    CLOSE
<S>              <C>       <C>      <C>         <C>      <C>       <C>
March 31         $46.00    $41.50   $41.50      $28.63   $27.25    $28.63
June 30          $41.50    $34.50   $34.50      $30.50   $28.63    $30.50
September 30     $34.50    $26.50   $27.00      $38.50   $30.50    $38.50
December 31      $29.00    $27.50   $28.50      $46.00   $38.50    $46.00
</TABLE>

As of December 31, 1999, the Corporation had 2,108 shareholder accounts of
record. Cash dividends paid per share were $0.55.

<PAGE>   11

<TABLE>
QUARTERLY INFORMATION
<CAPTION>

                                         First      Second      Third      Fourth
(000's) except per share data           Quarter     Quarter    Quarter     Quarter
-----------------------------------------------------------------------------------
1999
----
<S>                                     <C>         <C>         <C>         <C>
     Interest and fee income ......     $16,628     $17,155     $17,345     $17,590
     Interest expense .............       6,496       6,729       7,120       7,339
                                        -------     -------     -------     -------

     Net interest income ..........      10,132      10,426      10,225      10,251
     Provision for loan losses ....         300         300         300         300
     Investment securities gains ..          20          21          73          56
     All other income .............       1,964       2,023       2,110       2,266
     Operating expense ............       5,791       5,698       5,748       6,311
                                        -------     -------     -------     -------

     Income before income taxes ...       6,025       6,472       6,360       5,962
     Provision for income tax .....       1,964       2,119       2,092       1,626
                                        -------     -------     -------     -------

     Net income ...................     $ 4,061     $ 4,353     $ 4,268     $ 4,336
   Per Share
     Basic Earnings Per Share .....        0.33        0.36        0.35        0.36
     Diluted Earnings Per Share ...        0.33        0.36        0.35        0.36
     Cash Dividends Paid ..........        0.13        0.13        0.13        0.16
Market Price ......................       41.50       34.50       27.00       28.50


<CAPTION>
1998
----
     Interest and fee income.......     $15,693     $16,029     $16,172      $16,140
     Interest expense..............       5,982       6,052       6,107        6,054
                                        -------     -------     -------      -------

     Net interest income...........       9,711       9,977      10,065       10,086
     Provision for loan losses.....         200         200         870          270
     Other operating income
     Investment securities gains...          44          42         247           97
     All other income..............       1,830       1,990       1,997        2,242
     Operating expense.............       5,744       5,720       5,770        5,740
                                        -------     -------     -------      -------

     Income before income taxes....       5,641       6,089       5,669        6,415
     Provision for income tax......       1,924       2,086       1,971        2,213
                                        -------     -------     -------      -------
     Net Income....................       3,717       4,003       3,698        4,202
   Per Share
     Basic Earnings Per Share......       0.305        0.33        0.30         0.35
     Diluted Earnings Per Share....       0.305        0.33        0.30         0.34
     Cash Dividends Paid...........       0.105        0.12        0.12         0.15
         Market Price..............       28.63       30.50       38.50        46.00
</TABLE>


TOTAL CAPITAL  (BAR GRAPH)    (See Annual Report)
(Thousands)

<TABLE>
<CAPTION>
1999            1998           1997            1996           1995
<S>             <C>            <C>             <C>            <C>
119,122         $118,129       $108,736        $100,794       $90,237
</TABLE>

<PAGE>   12
IMPACT OF YEAR 2000
In prior years, the Corporation discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Corporation completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Corporation experienced no significant disruptions
in mission critical information technology and non-information technology
systems and believes those systems successfully responded to the Year 2000 date
change. The Corporation is not aware of any material problems resulting from
Year 2000 issues, either with its products, its internal systems, or the
products and services of third parties. The Corporation will continue to monitor
its mission critical computer applications and those of its suppliers and
vendors throughout the year 2000 to ensure that any latent Year 2000 matters
that may arise are addressed promptly.

<PAGE>   13
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------


Board of Directors

Security Banc Corporation


     We have audited the accompanying consolidated statement of condition of
Security Banc Corporation and subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of Security Banc Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Security Banc
Corporation and subsidiaries at December 31, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.


/s/ Ernst & Young LLP

Columbus, Ohio

January 11, 2000

<PAGE>   14
<TABLE>
CONSOLIDATED STATEMENT OF CONDITION

AS OF DECEMBER 31, 1999 AND 1998 (000's)
<CAPTION>
                                                                 1999          1998
                                                                 ----          ----
<S>                                                            <C>           <C>
ASSETS
       Cash and due from banks ...........................     $ 50,216      $ 34,052
       Federal funds sold ................................       10,010        21,350
                                                               --------      --------
                  Total cash and cash equivalents ........       60,226        55,402

       Interest bearing deposits with other banks ........        1,560         2,700
       Investments     (Market value $212,411 in 1999) ...      214,303       167,324
                       (Market value $167,365 in 1998)

       LOANS:
           Commercial and agriculture ....................      321,782       285,958
           Real Estate ...................................      254,854       252,609
           Consumer ......................................       76,389        78,375
                                                               --------      --------

                  Total Loans ............................      653,025       616,942


                  Less allowance for loan losses .........        6,964         6,883
                                                               --------      --------

                         Net Loans .......................      646,061       610,059

       Premises and equipment ............................        9,292         9,224
       Other Assets ......................................       44,969        38,791
                                                               ========      ========

       TOTAL ASSETS ......................................     $976,411      $883,500

LIABILITIES
       Non interest bearing deposits .....................     $129,127      $131,285
       Interest bearing demand deposits ..................      134,864       148,462
       Savings deposits ..................................      156,988       154,876
       Time deposits, $100,000 and over ..................       54,794        44,794
       Other time deposits ...............................      220,773       229,436
                                                               --------      --------

                         Total Deposits ..................      696,546       708,853

       Federal funds purchased and securities
         sold under agreement to repurchase ..............       24,011        28,993
       Federal Home Loan Bank term advances ..............      131,372        22,816
       Other liabilities .................................        5,360         4,709
                                                               --------      --------

       TOTAL LIABILITIES .................................      857,289       765,371

SHAREHOLDERS' EQUITY
       Common Stock ($1.5625 Par Value) ..................       19,800        19,768
         authorized 18,000,000 shares
         issued 12,671,932 shares, 1999
         issued 12,651,812 shares, 1998
       Surplus ...........................................       22,302        22,084
       Retained Earnings .................................       90,084        79,756
       Accumulated Other Comprehensive Income ............       (7,143)         (121)
       Less:  Treasury Stock .............................        5,921         3,358
                                                               --------      --------
         574,932 shares in 1999 and 485,387 shares in 1998
TOTAL SHAREHOLDERS' EQUITY ...............................      119,122       118,129
                                                               --------      --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...............     $976,411      $883,500
                                                               ========      ========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>   15
<TABLE>
CONSOLIDATED STATEMENT OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997 (000's)
<CAPTION>

                                                                       1999           1998            1997
                                                                       ----           ----            ----
<S>                                                                <C>             <C>             <C>
INTEREST AND FEE INCOME
       Loans .................................................     $    54,373     $    53,093     $    50,168
       Interest bearing deposits with other banks ............             142             227             182
       Federal funds sold ....................................             935           2,375           1,707
       Investments-taxable ...................................          12,060           7,739           9,350
       Investments-tax exempt ................................           1,208             600           1,371
                                                                   -----------     -----------     -----------

           Total Interest and Fee Income .....................          68,718          64,034          62,778

INTEREST EXPENSE
       Deposits of $100,000 and over .........................           2,310           2,362           2,214
       Other Deposits ........................................          18,977          20,106          20,689
       Federal funds purchased and securities
         sold under agreement to repurchase ..................             976           1,151           1,124
       Federal Home Loan Bank term advances ..................           5,375             522             820
       Demand notes to U. S. Treasury ........................              46              54              56
                                                                   -----------     -----------     -----------

           Total Interest Expense ............................          27,684          24,195          24,903
                                                                   -----------     -----------     -----------

NET INTEREST INCOME ..........................................          41,034          39,839          37,875
       Provision for loan losses .............................           1,200           1,540           1,300
                                                                   -----------     -----------     -----------

       Net interest income after provision for loan losses ...          39,834          38,299          36,575

OTHER OPERATING INCOME
       Trust income ..........................................           2,011           1,836           1,616
       Service charges on deposit accounts ...................           3,215           3,149           2,958
       Securities gains ......................................             170             430             217
       Other income ..........................................           3,137           3,074           2,313
                                                                   -----------     -----------     -----------

           Total Other Operating Income ......................           8,533           8,489           7,104

OPERATING EXPENSE
       Salaries and employee benefits ........................          12,255          11,224          11,005
       Equipment and occupancy, net ..........................           2,682           2,656           2,785
       Amortization of intangibles ...........................             667             673             752
       Other operating expense ...............................           7,944           8,421           8,187
                                                                   -----------     -----------     -----------
           Total Operating Expense ...........................          23,548          22,974          22,729
                                                                   -----------     -----------     -----------

INCOME BEFORE INCOME TAXES ...................................          24,819          23,814          20,950
       Provision for income tax ..............................           7,801           8,194           6,462
                                                                   -----------     -----------     -----------

           NET INCOME ........................................     $    17,018     $    15,620     $    14,488
                                                                   ===========     ===========     ===========
PER SHARE DATA (WHOLE DOLLARS)
       Basic earnings ........................................     $      1.40     $      1.29     $      1.20
       Diluted earnings ......................................     $      1.39     $      1.28     $      1.19
       Cash dividends ........................................     $     0.550     $     0.495     $     0.445

Weighted average shares outstanding ..........................      12,165,146      12,143,743      12,117,526
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>   16
<TABLE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

For the Years Ended December 31, 1999, 1998, and 1997 (000's)
<CAPTION>

                                                                                             Accumulated
                                                                                                Other
                                                    Common              Retained   Treasury  Comprehensive             Comprehensive
                                                     Stock    Surplus   Earnings     Stock      Income        Total       Income
                                                     -----    -------   --------     -----      ------        -----       ------
<S>                                                 <C>       <C>       <C>        <C>        <C>          <C>
Balance at January 1, 1997 ....................     $19,658   $21,670   $62,557   ($3,193)    $  102      $100,794
   Net income .................................           0         0    14,488         0          0        14,488      $14,488
   Dividend distributions .....................           0         0    (6,896)        0          0        (6,896)
   Exercise of stock options ..................          49       161         0         0          0           210
   Net unrealized gains on securities
    available for sale net
    of income taxes of $75 ....................           0         0         0         0        140           140      $   140
                                                                                                                       --------
         Total comprehensive income ...........                                                                         $14,628
                                                    -------   -------   -------   -------    -------      --------     ========

Balance at December 31, 1997 ..................     $19,707   $21,831   $70,149   ($3,193)    $  242      $108,736
   Net income .................................           0         0    15,620         0          0        15,620      $15,620
   Cash Dividends .............................           0         0    (6,013)        0          0        (6,013)
   Exercise of stock options ..................          61       253         0         0          0           314
   Purchase of treasury stock .................           0         0         0      (165)         0          (165)
   Net unrealized losses on securities
    available for sale net
    of income taxes of $195 ...................           0         0         0         0       (363)         (363)    ($   363)
                                                                                                                       --------
         Total comprehensive income ...........                                                                         $15,257
                                                    -------   -------   -------   -------    -------      --------     ========

Balance at December 31, 1998 ..................     $19,768   $22,084   $79,756   ($3,358)   ($  121)     $118,129
   Net income .................................           0         0    17,018         0          0        17,018      $17,018
   Cash Dividends .............................           0         0    (6,690)        0          0        (6,690)
   Exercise of stock options ..................          32       218         0         0          0           250
   Purchase of treasury stock .................           0         0         0    (2,563)         0        (2,563)
   Net unrealized losses on securities
    available for sale net
    of income taxes of $3,781 .................           0         0         0         0     (7,022)       (7,022)    ($ 7,022)
                                                                                                                       --------
         Total comprehensive income ...........                                                                         $ 9,996
                                                    -------   -------   -------   -------    -------      --------     ========

Balance at December 31, 1999 ..................     $19,800   $22,302   $90,084   ($5,921)   ($7,143)     $119,122
                                                    =======   =======   =======   =======    =======      ========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>   17
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS

For the Years Ended December 31, 1999, 1998, and 1997 (000's)
<CAPTION>

                                                                        1999           1998           1997
                                                                        ----           ----           ----
<S>                                                                   <C>           <C>            <C>
Cash Flows from Operating Activities
       Net Income ...............................................     $ 17,018      $  15,620      $  14,488
       Adjustments to reconcile net income to net cash
           provided by operating activities:
              Depreciation ......................................        1,119          1,091          1,049
              (Gain)/Loss on sale of the following:
                Investment Securities available for sale ........         (170)          (430)          (217)
                Other Assets ....................................           20            (74)          (119)
              Provision for loan losses .........................        1,200          1,540          1,300
              Amortization and accretion, net ...................          (52)          (306)           (97)
              Amortization and core deposit intangible ..........          667            676            752
              Change in other operating assets and
                liabilities, net ................................      (13,367)       (22,948)       (14,918)
                                                                      --------      ---------      ---------
                  Total Adjustments .............................      (10,583)       (20,451)       (12,250)
                                                                      --------      ---------      ---------

     NET CASH PROVIDED (USED IN) BY OPERATING ACTIVITIES ........        6,435         (4,831)         2,238

Cash Flows from Investing Activities:
     Net decrease in interest bearing deposits
          with other banks ......................................        1,140              0          3,902
     Proceeds from maturities and sales of investment
          securities available for sale .........................       22,947        142,045        192,329
     Proceeds from maturities of investments held to
          maturity ..............................................        2,778          9,606         15,414
     Purchase of:
         Investment securities available for sale ...............      (81,882)      (147,681)      (166,286)
         Investment securities held to maturity .................       (1,425)       (22,129)          (722)
         Increase in loans ......................................      (38,556)       (55,374)       (23,611)
         Proceeds from sale of other assets .....................       13,142         21,602          9,614
     Capital expenditures .......................................       (1,182)        (1,654)        (1,163)
     Net cash used in acquisition ...............................            0              0         (1,502)
     Purchase of life insurance policies ........................         (837)        (2,212)        (3,054)
     Proceeds from surrender of life insurance policies .........            0              4            239
                                                                      --------      ---------      ---------

     NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES ........      (83,875)       (55,793)        25,160

Cash Flows from Financing Activities:
     Net (decrease) increase in demand deposits, NOW accounts
       and savings accounts .....................................      (13,644)        34,780         14,784
     Net increase (decrease) in certificates of deposit .........        1,337         (3,318)        (4,468)
     Net increase (decrease) in short-term borrowed funds .......       22,670        (11,753)           582
     Net increase in other borrowed money .......................       80,904         16,483          2,759
     Net purchase and sale of treasury stock ....................       (2,563)          (165)             0
     Dividends paid .............................................       (6,690)        (6,013)        (5,394)
     Proceeds from exercise of stock options ....................          250            314            210
                                                                      --------      ---------      ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES .......................       82,264         30,328          8,473

Net increase (decrease) in cash and cash equivalents ............        4,824        (30,296)        35,871
Cash and cash equivalents at beginning of year ..................       55,402         85,698         49,827
                                                                      --------      ---------      ---------

Cash and Cash Equivalents at End of Year ........................     $ 60,226      $  55,402      $  85,698
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>   18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1999

1.     ORGANIZATION
       Security Banc Corporation ("Security" or "the Company") is a bank holding
       company headquartered in Springfield, Ohio. The Company's principal
       subsidiaries, Security National Bank and Trust Company, Citizens National
       Bank, and Third Savings and Loan Company are located in Central Ohio and
       are engaged in general commercial banking and trust business and are
       operated as one segment.

       SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
       The accounting and reporting policies of Security are based on generally
       accepted accounting principles and conform to general practices within
       the banking industry. The following is a description of the significant
       accounting policies followed by Security.

       CONSOLIDATION
       The consolidated financial statements include the accounts of the Company
       and its subsidiaries. All material intercompany transactions and balances
       have been eliminated.

       USE OF ESTIMATES
       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates and
       assumptions that affect the amounts reported in the consolidated
       financial statements and accompanying notes. Actual results could differ
       from those estimates.

       INVESTMENT SECURITIES
       Securities held to maturity and available for sale: Management determines
       the appropriate classification of debt securities at the time of purchase
       and reevaluates such designation as of each balance sheet date. Debt
       securities are classified as held-to-maturity when Security Banc
       Corporation has the positive intent and ability to hold the securities to
       maturity. Held-to-maturity securities are stated at amortized cost.

       Debt securities not classified as held-to-maturity or trading and
       marketable equity securities not classified as trading are classified as
       available-for-sale. Available-for-sale securities are stated at fair
       value, with the unrealized gains and losses, net of tax, reported in a
       separate component of shareholders' equity.

       The amortized cost of debt securities classified as held-to-maturity or
       available-for-sale is adjusted for amortization of premiums and accretion
       of discounts to maturity, or in the case of mortgage-backed securities,
       over the estimated life of the security. Such amortization is included in
       interest income from investments. Interest and dividends are included in
       interest income from investments. Realized gains and losses, and declines
       in value judged to be other-than-temporary are included in net securities
       gains (losses). The cost of securities sold is based on the specific
       identification method.

<PAGE>   19
       LOANS
       Interest income on loans is accrued using the simple interest method
       based on the principal amounts outstanding. Loan fees received in excess
       of direct costs involved in origination of a loan are amortized over the
       estimated loan term. Accrual of interest is discontinued when
       circumstances indicate that collection of loan principal is questionable
       or when loans meet regulatory non accrual standards.

       The company accounts for impaired loans in accordance with Financial
       Accounting Standards Board Statement No. 114, "Accounting by Creditors
       for Impairment of a Loan". Certain large commercial loans are considered
       impaired loans and are reported at the present value of expected future
       cash flows using the loan's effective interest rate, or as a practical
       expedient, at the loan's observable market price or the fair value of the
       collateral if the loan is collateral dependent.

       ALLOWANCE FOR POSSIBLE LOAN LOSSES
       The allowance for possible loan losses is available for loan charge-offs.
       The adequacy of the allowance is based on Management's continuous
       evaluation of key factors in the loan portfolio with consideration given
       to current economic conditions and past charge-off experience.

       PREMISES AND EQUIPMENT
       Premises and equipment are stated at cost less accumulated depreciation
       and amortization. Depreciation of premises and equipment is determined
       using the straight-line method over the estimated lives of the respective
       assets. Maintenance and repairs are charged to expense as incurred while
       renewals and betterments are capitalized.

       INCOME TAXES
       Certain income and expense items are accounted for in different time
       periods for financial reporting purposes than for income tax purposes.
       Appropriate provisions are made in the financial statements for deferred
       taxes in recognition of these temporary differences.

       CASH FLOWS
       For purposes of reporting cash flows, cash and cash requirements include
       cash on hand, amounts due from banks and federal funds sold. Federal
       funds are purchased for one-day periods.

       Interest paid by Security in 1999, 1998, and 1997 was $27,397,000,
       $24,269,000 and $25,447,000, respectively.

<PAGE>   20
       FAIR VALUES OF FINANCIAL INSTRUMENTS
       The following methods and assumptions were used by the Company in
       estimating its fair value disclosures for financial instruments:

       Cash and cash equivalent and interest bearing deposits with other banks:
       The carrying amounts reported in the balance sheet for cash and short
       term instruments approximate those assets' fair values.

       Investment Securities: Fair values for investment securities are based on
       quoted market prices, where available. If quoted market prices are not
       available, fair values are based on quoted market prices of comparable
       instruments.

       Loans receivable: For variable rate loans that reprice frequently and
       with no significant change in credit risk, fair values are based on
       carrying values. The fair values for mortgage loans are based on quoted
       market prices of similar loans sold in conjunction with securitization
       transactions, adjusted for differences in loan characteristics. The fair
       values for other loans (e.g., commercial, agricultural and consumer) are
       estimated using discounted cash flow analyses, using interest rates
       currently being offered for loans with similar terms to borrowers of
       similar credit quality. The carrying amount of accrued interest
       approximates its fair value.

       Off balance sheet instruments: The carrying amounts reported for Security
       Banc Corporation's off balance sheet (letters of credit and lending
       commitments) approximate those assets' fair value.

       Deposit liabilities: The fair values disclosed for demand deposits (e.g.,
       interest and non-interest checking, passbook savings, and certain types
       of money market accounts) are, by definition, equal to the amount payable
       on demand at the reporting date (i.e., their carrying amounts). The
       carrying amounts for variable-rate and fixed term money market accounts
       approximate their fair values at the reporting date. Fair values for
       fixed rate certificates of deposit are estimated using a discounted cash
       flow calculation that applies interest rates currently being offered on
       certificates to a schedule of aggregated expected monthly maturities on
       time deposits.

       Short term borrowings: The carrying amounts of federal funds purchased
       and securities sold under agreement to repurchase approximate their fair
       values.

       Federal Home Loan Bank term advances: For variable rate and short term
       advances, fair values are based on carrying values. The fair values for
       other advances are estimated using a discounted cash flow calculation
       that applies interest rates currently being offered for advances with
       similar terms.

<PAGE>   21
EARNINGS PER COMMON SHARE
SFAS No. 128 requires dual presentation of basic and diluted earnings per share
on the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic earnings per share computation to the corresponding amounts of the diluted
earnings per share computation. The computation of earnings per Common Share is
as follows:

<TABLE>
Years ended December 31,
<CAPTION>
                                                        1999            1998            1997
                                                        ----            ----            ----
<S>                                                 <C>             <C>             <C>
EARNINGS APPLICABLE TO COMMON SHARE                 $17,018,000     $15,620,000     $14,488,000
-----------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE
Weighted Average Common Shares Outstanding           12,165,146      12,143,743      12,117,526
Earnings Applicable to Common Shares                $17,018,000     $15,620,000     $14,488,000
Basic Earnings per Share                            $      1.40     $      1.29     $      1.20
-----------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE
Weighted Average Common Shares Outstanding           12,165,146      12,143,743      12,117,526
Dilutive Common Stock Options                            53,675          83,549          77,366
                                                    -----------     -----------     -----------
Weighted Average Common Shares and Common Share
  Equivalents Outstanding                            12,218,821      12,227,292      12,194,892
                                                    ===========     ===========     ===========
Earnings Applicable to Common Shares                 17,018,000     $15,620,000     $14,488,000
Diluted Earnings per Share                          $      1.39     $      1.28     $      1.19
</TABLE>

<PAGE>   22
2.     ACQUISITIONS

       JEFFERSONVILLE BRANCH
       On November 6, 1997, Security National Bank and Trust Co. purchased
       certain assets and assumed approximately $11,700,000 in deposit
       liabilities of the Jeffersonville Branch from a Bank competitor.

       This acquisition allowed Security National to expand its services to
       Fayette County. The premium for the above transaction was $944,000 which
       will be amortized over a period of 25 years for the portion allocated to
       goodwill and 10 years for the portion allocated to Core Deposit
       Intangible.

<PAGE>   23
3.     RESERVE BALANCE REQUIREMENTS
       The Company's subsidiaries are required to maintain certain daily cash
       and due from banks reserve balances in accordance with regulatory
       requirements. The balances maintained under such requirements were
       $13,070,000 at December 31, 1999 and $11,585,000 at December 31, 1998.

<PAGE>   24
4.     INVESTMENT SECURITIES
       The following table lists the book value and market value of debt
       securities and other investments as of December 31.

<TABLE>
<CAPTION>
(000's)                                                                 1999
                                                                        ----
                                                                   Gross       Gross
                                                                Unrealized   Unrealized      Market
                                                         Cost      Gains       Losses        Value
                                                         ----      -----       ------        -----
<S>                                                    <C>          <C>      <C>           <C>
Available for Sale Investments
  Debt Securities
     U. S. Treasury ..............................     $  1,999     $  0     $     (8)     $  1,991
     U. S. Government Agencies and Corporations ..       56,050        0       (2,216)       53,834
     Mortgage Backed Securities ..................      131,297        0       (8,823)      122,474
                                                       --------     ----     --------      --------
  Total Debt Securities ..........................      189,346        0      (11,047)      178,299
  Equity Investments .............................          227       88            0           315
                                                       --------     ----     --------      --------
  Total Available for Sale Investments ...........      189,573       88      (11,047)      178,614
                                                       ========     ====     ========      ========

Held to Maturity Investments
  Debt Securities
     State and Political Subdivisions ............       25,930      147       (1,982)     $ 24,095
     Mortgage Backed Securities ..................        1,840        1          (58)        1,783
                                                       --------     ----     --------      --------
  Total Debt Securities ..........................       27,770      148       (2,040)       25,878
     Federal Reserve Stock and Other .............        7,919        0            0         7,919
                                                       --------     ----     --------      --------
  Total Held to Maturity Investments .............     $ 35,689     $148     $ (2,040)     $ 33,797
                                                       ========     ====     ========      ========
</TABLE>

       The market value of the available for sale investments ($178,614,000)
       plus the cost of the held to maturity investments ($35,689,000) is the
       total investments carrying value of $214,303,000.



<TABLE>
<CAPTION>
(000's)                                                                 1998
                                                                        ----
                                                                   Gross       Gross
                                                                Unrealized   Unrealized      Market
                                                         Cost      Gains       Losses        Value
                                                         ----      -----       ------        -----
<S>                                                    <C>          <C>      <C>           <C>
Available for Sale Investments
  Debt Securities
    U. S. Treasury ...............................     $  7,464     $ 43     $  (1)     $  7,506
    U. S. Government Agencies and Corporations ...       59,697       42       (89)       59,650
    Mortgage Backed Securities ...................       67,687       36      (298)       67,425
                                                       --------     ----     -----      --------
  Total Debt Securities ..........................      134,848      121      (388)      134,581
  Equity Securities ..............................          150       79         0           229
                                                       --------     ----     -----      --------
  Total Available for Sale Investments ...........      134,998      200      (388)      134,810
                                                       ========     ====     =====      ========

Held to Maturity Investments
  Debt Securities
    State and Political Subdivisions .............       26,859      307      (257)       26,909
    Mortgage Backed Securities ...................        2,332       14       (23)        2,323
                                                       --------     ----     -----      --------
  Total Debt Securities ..........................       29,191      321      (280)       29,232
    Federal Reserve Stock and Other ..............        3,323        0         0         3,323
                                                       --------     ----     -----      --------
  Total Held to Maturity Investments .............     $ 32,514     $321     $(280)     $ 32,555
                                                       ========     ====     =====      ========
</TABLE>


       The market value of the available for sale investments ($134,810,000)
       plus the cost of the held to maturity investments ($32,514,000) is the
       total investments carrying value of $167,324,000.

<PAGE>   25

       The following tables summarizes the cost and market value of debt
       securities at December 31, 1999 and 1998 by contractual maturity.
       Expected maturities will differ from contractual maturities because
       borrowers may have the right to call or prepay obligations.

<TABLE>
<CAPTION>
(000's)                                                      1999                     1998
                                                             ----                     ----
                                                                   Market                    Market
                                                       Cost         Value        Cost         Value
                                                       ----         -----        ----         -----
<S>                                                  <C>          <C>          <C>          <C>
Available for Sale Investments
  Due in one year or less ......................     $  1,000     $  1,000     $  5,967     $  5,990
  Due after one year and through five years ....       57,049       54,825       40,694       40,716
  Due after five years and through ten years ...            0            0       20,500       20,450
                                                     --------     --------     --------     --------
                                                       58,049       55,825       67,161       67,156
  Mortgage Backed Securities ...................      131,297      122,474       67,687       67,425
                                                     --------     --------     --------     --------
Total available for sale investments ...........     $189,346     $178,299     $134,848     $134,581
                                                     ========     ========     ========     ========

Held to Maturity Investments
  Due in one year or less ......................     $    250     $    253     $  2,295     $  2,303
  Due after one year and through five years ....        2,981        3,102        1,543        1,592
  Due after five years and through ten years ...        3,211        3,028        2,398        2,631
  Due after ten years ..........................       19,488       17,712       20,623       20,383
                                                     --------     --------     --------     --------
                                                       25,930       24,095       26,859       26,909
Mortgage backed securities .....................        1,840        1,783        2,332        2,323
                                                     --------     --------     --------     --------
 Total Held to Maturity Investments ............     $ 27,770     $ 25,878     $ 29,191     $ 29,232
                                                     ========     ========     ========     ========
</TABLE>


       Proceeds from sales of investments available for sale in 1999 were
       $398,000. Gross gains on investments available for sale in 1999 were
       $170,000. Proceeds from sales of investments available for sale in 1998
       were $100,443,000. Gross gains on investments available for sale in 1998
       were $430,000. Proceeds from sales of investments available for sale in
       1997 were $168,732,000. Gross gains on investments available for sale in
       1997 were $243,000. Gross losses recognized on investments available for
       sale in 1997 were $30,000.

       The following table summarizes investment income for the years ended
       December 31.

<TABLE>
<CAPTION>
(000's)                                             1999        1998        1997
                                                    ----        ----        ----
<S>                                               <C>         <C>        <C>
U. S. Treasury Available for sale ...........     $   216     $4,873     $ 7,965
U. S. Government Agencies and Corporations ..      11,365      2,662       1,204
States and Political Subdivisions ...........       1,208        600       1,371
Federal Reserve stock and other .............         479        204         181
                                                  -------     ------     -------
  Total .....................................     $13,268     $8,339     $10,721
                                                  =======     ======     =======
</TABLE>

       Securities with a carrying value of $151,733,000 at December 31, 1999,
       and $112,963,000 at December 31, 1998, were pledged to secure deposits
       and repurchase agreements.

<PAGE>   26
5.     LOANS
       Loans as of December 31, by various categories are as follows:

<TABLE>
<CAPTION>
(000'S)                                                        1999          1998
                                                               ----          ----
<S>                                                         <C>          <C>
Loans secured by real estate:
    Construction and land development .................     $ 20,550     $ 22,128
    Secured by farmland ...............................       10,167        8,760
    Secured by residential properties .................      277,274      268,850
    Secured by nonresidential properties ..............      115,474       86,076
Loans to finance agricultural production ..............       18,940       19,619
Commercial and industrial loans .......................      125,267      122,244
Loans to individuals for household, family and other ..       81,099       85,812
Tax exempt obligations ................................        2,572        1,790
Other loans ...........................................        1,641        1,493
Lease financing .......................................           41          170
                                                            --------     --------
TOTAL LOANS ...........................................     $653,025     $616,942
                                                            ========     ========
</TABLE>

       Nonperforming loans totaled $4,716,000 and $3,525,000 at December 31,
       1999 and 1998 respectively. Nonaccrual loans included in these amounts
       totaled $2,162,000 and $2,154,000 at December 31, 1999 and 1998,
       respectively. Interest income not recorded on these loans was $247,000 in
       1999 and $180,000 in 1998.

       The following table presents the aggregate amount of loans outstanding to
       directors and executive officers (including their related interests) as
       of December 31, 1999 and December 31, 1998, and an analysis of activity
       in such loans during 1999. All such loans were made on substantially the
       same terms, including interest rates and collateral, as those prevailing
       at the same time for comparable transactions with other persons. These
       loans do not involve more than normal risk of collectability or any other
       unfavorable features.

<TABLE>
<CAPTION>
(000's)
<S>                                                                         <C>
Balance, December 31, 1998 ...........................................     $ 8,965
    New loans ........................................................      12,319
    Repayments .......................................................      12,100
    Net increase due to change in director/executive officer status ..           0
                                                                           -------
Balance, December 31, 1999 ...........................................     $ 9,184
                                                                           =======
</TABLE>

<PAGE>   27
6.     ALLOWANCE FOR LOAN LOSSES
       A summary of the activity in the allowance for loan losses is shown in
       the following table.

<TABLE>
<CAPTION>
(000'S)                              1999         1998         1997
                                     ----         ----         ----
<S>                                <C>          <C>          <C>
Balance - beginning of year ..     $ 6,883      $ 6,254      $ 6,827
Adjustments ..................          36            0            0
  Charge-offs ................      (1,507)      (2,106)      (2,188)
  Recoveries .................         352        1,195          315
                                   -------      -------      -------
Net charge-offs ..............      (1,155)        (911)      (1,873)
Provision for loan losses ....       1,200        1,540        1,300
                                   -------      -------      -------
Balance - end of year ........     $ 6,964      $ 6,883      $ 6,254
                                   =======      =======      =======
</TABLE>

<PAGE>   28
7.     PREMISES AND EQUIPMENT
       Premises and Equipment as of December 31, are summarized in the following
       table.

<TABLE>
<CAPTION>
       (000'S)                                   1999        1998
                                                 ----        ----
<S>                                            <C>         <C>
       Land ..............................     $ 1,508     $ 1,508
       Buildings .........................      10,485      10,468
       Equipment .........................      10,106       9,844
       Construction in process ...........         114         150
                                               -------     -------
       Total premises and equipment ......      22,213      21,970
       Less: Accumulated depreciation
       and amortization ..................      12,921      12,746
                                               -------     -------
       Net premises and equipment ........     $ 9,292     $ 9,224
                                               =======     =======
</TABLE>

<PAGE>   29
8.     FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENT TO
       REPURCHASE
       The following table is a summary of short-term borrowings at December 31:

<TABLE>
<CAPTION>
       (000's)                                                1999        1998
                                                              ----        ----
<S>                                                         <C>         <C>
       Federal funds purchased ........................     $    75     $     0
       Securities sold under agreement to repurchase ..      22,575      28,787
       Demand note due U. S. Treasury .................       1,361         206
                                                            -------     -------
                   Total ..............................     $24,011     $28,993
                                                            =======     =======
</TABLE>

       The following table is a summary of securities pledged against the
       securities sold under agreement to repurchase contracts as of December
       31:

<TABLE>
<CAPTION>
       (000's)                                    1999                1998
                                                  ----                ----
                                             Book     Market    Book      Market
<S>                                        <C>       <C>       <C>       <C>
       U. S. Government Securities.......  $34,058   $31,979   $36,713   $36,694
</TABLE>

<PAGE>   30

9.     ADVANCES FROM FHLB
       The Company's affiliates are members of the Federal Home Loan Bank
       ("FHLB").
       Federal Home Loan Bank advances to the affiliates of the Company were
       $131,372,000 as of December 31, 1999 and $22,816,000 as of December 31,
       1998. Advances from the FHLB are used for loan funding and interest rate
       matching purposes. Advances are due on various maturity dates through
       2009 with adjustable and fixed rates ranging from 4.61% to 7.40%. FHLB
       advances are collateralized by each respective affiliate's real estate
       loan portfolio.

<PAGE>   31
10.    COMMITMENTS AND CONTINGENT LIABILITIES
       Security Banc Corporation has various commitments and contingent
       liabilities outstanding, such as letters of credit and loan commitments,
       that are not reflected in the consolidated financial statements. Letters
       of credit commit the Corporation to make payments on behalf of customers
       when certain specified future events occur. Loan commitments are made to
       accommodate the financial needs of Security Banc Corporation's customers.
       These arrangements have credit risk essentially the same as that involved
       in extending loans to customers and are subject to Security Banc
       Corporation's normal credit policies. Collateral is obtained based on
       Management's credit assessment of the customer.

       Unfunded loan commitments and unused lines of credit as of December 31,
       1999 were $143,063,000. The aggregate amount of outstanding letters of
       credit was $2,225,000 at December 31, 1999. No significant losses are
       anticipated as a result of these commitments.

<PAGE>   32
11.    INCOME TAX
       The components of income tax expense are:

<TABLE>
<CAPTION>
       (000S)                                         1999     1998     1997
                                                      ----     ----     ----
<S>                                                  <C>       <C>       <C>
       Federal income taxes currently payable ..     $8,267   $8,557   $6,727
       Deferred tax provision ..................       (466)    (363)    (265)
                                                     ------   ------   ------
       Total income tax expense ................     $7,801   $8,194   $6,462
                                                     ======   ======   ======
</TABLE>

       A reconciliation of income tax expense at the statutory rate to income
       tax expense at the company's effective rate is as follows:

<TABLE>
<CAPTION>
       (000S)                                      1999     1998     1997
                                                   ----     ----     ----
<S>                                               <C>       <C>      <C>
       Computed tax at the statutory rate ...     $8,687   $8,335   $7,332
       Tax effect of tax free income and
         non-deducible interest expense .....       (422)    (288)    (711)
       Other ................................       (464)     147     (159)
                                                  ------   ------   ------
       Income Tax Expense ...................     $7,801   $8,194   $6,462
                                                  ======   ======   ======
</TABLE>

       Income taxes paid were $8,587,000, $8,249,000 and $6,987,000 in 1999,
       1998, and 1997 respectively. Income tax expense associated with security
       gains was $90,000 in 1999, $150,000 in 1998, and $74,000 in 1997.

       Significant components of the Corporation's deferred tax assets and
       liabilities exclusive of securities mark to market adjustments at
       December 1999 and 1998 are as follows:


<TABLE>
<CAPTION>
       DEFERRED ASSETS                                                 1999        1998
                                                                       ----        ----
<S>                                                                   <C>        <C>
                      Allowance for loan losses .................     $2,368     $2,194
                      Deferred Compensation .....................      1,085        685
                      Other .....................................         80         80
                                                                      ------     ------
                      Total deferred assets .....................     $3,533     $2,959

              DEFERRED LIABILITIES
                      Employee benefits .........................     $  231     $  195
                      Depreciation ..............................        420        420
                      Other .....................................        611        539
                                                                      ------     ------
                      Total deferred liabilities ................      1,262      1,154
                                                                      ------     ------
              Net deferred assets ...............................     $2,271     $1,805
                                                                      ======     ======
              Deferred Assets on Available for sale securities ..     $3,814     $   64
</TABLE>

<PAGE>   33
12.    STOCK OPTIONS
       The Corporation sponsors non-qualified and incentive stock option plans.
       Approximately 600,000 shares have been authorized under the plans, 23,520
       shares of which were available at December 31, 1999 for future grants.
       All options granted have a maximum term of 10 years. Options granted vest
       ratably over five years.

       The Corporation has elected to follow Accounting Principles Board Opinion
       No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
       interpretations in accounting for its employee stock options because the
       alternative fair value accounting provided for under FASB Statement No.
       123, "Accounting for Stock-Based Compensation", requires use of option
       valuation models that were not developed for use in valuing employee
       stock options. Under APB 25, because the exercise price of Security
       employee stock options equals the market price of the underlying stock on
       the date of grant, no compensation expense is recognized.

       The Corporation stock option activity and related information for the
       periods ended December 31, 1999, 1998, and 1997 is summarized below:


<TABLE>
<CAPTION>
                                                  1999                      1998                    1997
                                                  ----                      ----                    ----
                                                        Weighted-                Weighted-                Weighted-
                                                        Average                  Average                  Average
                                                        Exercise                 Exercise                 Exercise
                                           Options      Price       Options      Price       Options      Price
                                           -------      -----       -------      -----       -------      -----
<S>                                        <C>          <C>         <C>          <C>         <C>          <C>
       Outstanding at beginning
         of period ..................      226,565      $21.94      162,960      $13.23      193,912      $12.43
       Granted ......................        6,585       34.88      108,485       36.60        7,200       21.25
       Exercised ....................      (20,120)      12.38      (39,440)       7.96      (31,152)       6.74
       Forfeited/Expired ............       (6,380)      37.12       (5,440)      29.88       (7,000)      16.50
                                           -------------------      -------------------      -------------------
       Outstanding at end of
         period .....................      206,650       26.19      226,565       21.94      162,960       13.23
                                           -------------------      -------------------      -------------------
       Exercisable end of period ....       54,880      $15.70       52,360      $13.95       66,880      $ 9.52
</TABLE>

       Exercise prices for options outstanding as of December 31, 1999, ranged
       from $7.62 to $46.00.

       Management estimated the fair value of the options granted using the
       Black-Scholes option pricing model. The following weighted average
       assumptions were used for 1999, 1998, and 1997 respectively; risk free
       interest rates of 4.90% in 1999, 4.90% in 1998, and 5.00% in 1997;
       dividend yields of 1.50% in 1999, 1.50% in 1998, and 1.98% in 1997;
       volatility factors of the expected market price of Security common stock
       of .092 in 1999,.092 in 1998, and .059 in 1997 and a weighted average
       expected option life of seven (7) years. The effect of applying the
       Statement 123 fair value method to stock options results in net income
       and earnings per share that are not materially different from amounts
       reported in the consolidated statements of income, pro forma information
       has not been provided.

<PAGE>   34
13.    RETIREMENT PLANS
       Security Banc Corporation has a non-contributory defined benefit pension
       plan that covers all employees who have reached the age of twenty-one
       (21) and have one thousand (1,000) hours of service during their
       anniversary year. The amount of the benefit is determined pursuant to a
       formula contained in the retirement plan which, among other things, takes
       into account the employee's average earnings in the highest sixty (60)
       consecutive calendar months. Accrued benefits are fully vested after five
       (5) years of service. Security Banc Corporation's funding policy is to
       make annual contributions to the plan which at least equals the minimum
       required contributions. Plan assets consist of U. S. Treasury notes and
       bonds and common stock equities.

       Disclosure of net periodic Pension cost for 1999, 1998, and 1997 is as
       follows:


<TABLE>
<CAPTION>
       (000's)                                    1999       1998       1997
                                                  ----       ----       ----
<S>                                               <C>        <C>        <C>
       Service cost .........................     $ 583      $ 530      $ 511
       Interest cost ........................       619        553        527
       Expected return on plan assets .......      (767)      (653)      (625)
       Amortization of transition amount ....       (43)       (43)       (43)
       Amortization of prior service cost ...        (1)        (1)        (1)
                                                  -----      -----      -----
       Net periodic pension cost ............     $ 391      $ 386      $ 369
                                                  =====      =====      =====
</TABLE>

       The following table sets forth the plan's funded status and amount
       recognized in Security Banc Corporation's consolidated statement of
       condition as of December 31, 1999 and 1998.

<TABLE>
<CAPTION>
       (000's)                                                  1999          1998
                                                                ----          ----
<S>                                                           <C>           <C>
       Change in benefit obligation:
       Benefit Obligation at the beginning of the year ..     $ 7,815      $ 7,176
       Service Cost .....................................         583          530
       Interest Cost ....................................         619          553
       Actuarial loss(gain) .............................         543          305
       Benefits paid during year ........................        (631)        (749)
                                                              -------      -------
       Benefit Obligation at the end of the year ........       8,929        7,815

       Change in plan assets:
       Fair value of plan assets at beginning of year ...       9,711        8,286
       Actual return on assets ..........................         814        1,689
       Employer contributions ...........................         493          485
       Benefits paid ....................................        (631)        (749)
                                                              -------      -------
       Fair value of plan assets at end of year .........      10,387        9,711

       Funded status of the plan ........................       1,458        1,896
       Unrecognized transition amount ...................         (86)        (128)
       Unrecognized prior service cost ..................         (13)         (14)
       Unrecognized net (gain) or loss ..................        (699)      (1,195)
                                                              -------      -------
       Prepaid (accrued) benefit cost ...................     $   660      $   559
                                                              =======      =======
</TABLE>

       Assumptions used in accounting for the Plan were:

<TABLE>
<CAPTION>
       (000's)                                      1999      1998     1997
                                                    ----      ----     ----
<S>                                                 <C>      <C>      <C>
       Discount rate .........................       7.5%     7.5%     7.5%
       Expected return on plan assets ........       8.0%     8.0%     8.0%
       Salary rate of compensation increase ..       4.5%     4.5%     4.5%
</TABLE>

       The Corporation developed an nonqualified Supplemental Retirement Plan
       for certain employees in 1999. All benefits provided under the plan are
       unfunded. At December 31, 1999, $900,000 was included in other
       liabilities for the Plan with the same amount recorded as expense in
       1999.

<PAGE>   35
14.    PROFIT SHARING PLAN
       All employees of Security Banc Corporation and its affiliates become
       eligible participants in the plan when they have completed one (1) year
       of eligibility service; have worked at least five hundred (500) hours and
       are at least age twenty-one (21). Eligible participants may make
       contributions to the plan by deferring up to fifteen percent (15%) of
       their annual earnings.

       The Board of Directors of the Corporation annually determines the bank's
       matching contribution to the plan. For the plan year ended December 31,
       1999 and December 31, 1998, the matching contribution was fifty percent
       (50%) of the employee's contribution up to the first six percent (6%) of
       annual earnings contributed by the participant.

       Employee contributions are one hundred percent (100%) vested immediately.
       The bank's matching contributions are vested at twenty percent (20%) for
       each year of eligibility service, based on five (5) year vesting
       schedule.

       The contribution by the Corporation for 1999, 1998, and 1997 was
       $213,000, $193,000, and $190,000, respectively.

<PAGE>   36
15.    SECURITY BANC CORPORATION (PARENT ONLY) AND REGULATORY RESTRICTIONS
       Dividends paid by the Company's subsidiaries are subject to various legal
       and regulatory restrictions. In 1999, the subsidiaries paid $6,690,000 in
       dividends to the parent company.

       The subsidiaries can initiate dividend payments in 2000 equal to their
       net profits, as defined by statute, up to the date of any such dividend
       declared.

<TABLE>
       SECURITY BANC CORPORATION
       STATEMENT OF CONDITION FOR THE YEARS ENDED DECEMBER 31  (000'S)
<CAPTION>
                                                              1999         1998
                                                              ----         ----
<S>                                                        <C>           <C>
       Assets
                Cash                                       $  1,005      $  1,383
                Investments in Securities                       315             0
                Investments in Subsidiaries                 117,823       116,752
                Other Assets                                    105           158
                                                           --------      --------
       TOTAL ASSETS                                        $119,248      $118,293
                                                           ========      ========

       Liabilities                                         $    126      $    164
                                                           --------      --------
       TOTAL LIABILITIES                                        126           164
                                                           ========      ========

       Stockholders' equity
                Common Stock                                 19,800        19,768
                Surplus                                      22,302        22,084
                Retained Earnings                            90,084        79,756
                Accumulated Other Comprehensive Income       (7,143)         (121)
                Less:  Treasury Stock                        (5,921)       (3,358)
                                                           --------      --------
       TOTAL SHAREHOLDERS' EQUITY                           119,122       118,129
                                                           --------      --------
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $119,248      $118,293
                                                           ========      ========
</TABLE>


<TABLE>
       SECURITY BANC CORPORATION
       STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31       (000'S)
<CAPTION>

                                                            1999        1998        1997
                                                            ----        ----        ----
<S>                                                       <C>         <C>         <C>
                Income from subsidiaries                  $ 8,488     $ 7,812     $ 37,022
                Other Income                                  111           0            0
                                                          -------     -------     --------
       TOTAL INCOME                                       $ 8,599     $ 7,812     $ 37,022
                                                          =======     =======     ========

                Operating Expenses                        $   104     $    48     $    163
                                                          -------     -------     --------
       TOTAL EXPENSES                                         104         248          163
                                                          =======     =======     ========

                Income before taxes and undistributed
                   income                                   8,495       7,564       36,859
                Income taxes                                  627         538            0
                Equity in undistributed income              9,150       8,594      (22,371)
                                                          -------     -------     --------
       TOTAL INCOME                                       $17,018     $15,620     $ 14,488
                                                          =======     =======     ========
</TABLE>

<PAGE>   37
<TABLE>
       SECURITY BANC CORPORATION
       STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31       (000'S)
<CAPTION>
                                                                      1999          1998         1997
                                                                      ----          ----         ----
<S>                                                                  <C>           <C>           <C>
       CASH FLOWS FROM OPERATING ACTIVITIES
        Net Income                                                   $17,018      $15,620      $ 14,488
        Adjustment to reconcile net income to Net Cash
                  (Gain) or loss on sales of assets                     (101)           0             0
                  Equity in undistributed (earnings) losses           (9,150)      (8,594)       22,371
                  Net change in liabilities                              (69)          54           110
                  Net change in other assets                              53           57            37
                  Total adjustments                                   (9,267)      (8,483)       22,518
                                                                     -------      -------      --------
                NET CASH PROVIDED BY OPERATING
                     ACTIVITIES                                        7,751        7,137        37,006
                                                                     -------      -------      --------
       CASH FLOWS FROM INVESTING ACTIVITIES
                  Purchase of securities                                (454)           0             0
                  Sales and maturities of securities available
                     for sale                                            328            0             0
                  Payments for investments in and advances
                     to subsidiaries                                       0            0       (30,210)
                NET CASH (USED) PROVIDED BY INVESTING
                     ACTIVITIES                                         (126)           0       (30,210)
                                                                     -------      -------      --------

       CASH FLOWS FROM FINANCING ACTIVITIES
                  Note payment from subsidiary                         1,000            0             0
                  Proceeds from issuance of common stock                 250          314           210
                  Payment to repurchase common stock                  (2,563)        (165)            0
                  Dividends paid                                      (6,690)      (6,013)       (5,394)
                  Other, net                                               0            0        (1,502)
                                                                     -------      -------      --------
                NET CASH (USED) PROVIDED  BY FINANCING
                     ACTIVITIES                                       (8,003)      (5,864)       (6,686)
                                                                     -------      -------      --------

       CASH AND CASH EQUIVALENTS
                  Net (decrease) increase in cash and cash
                     equivalents                                        (378)       1,273           110
                  Cash and cash equivalents at beginning of year       1,383          110             0
                                                                     -------      -------      --------
       CASH AND CASH EQUIVALENTS AT END OF YEAR                      $ 1,005      $ 1,383      $    110
                                                                     =======      =======      ========
</TABLE>

<PAGE>   38
16.    CAPITAL RATIOS
       The following table reflects various measures of capital at December 31,
       1999 and December 31, 1998.

<TABLE>
<CAPTION>
                                                   1999                    1998
                                                   ----                    ----
       (000's)                               Amount     Ratio        Amount    Ratio
                                             ------     -----        ------    -----
<S>                                         <C>         <C>         <C>        <C>
       Total equity (1) ...............     $119,122    18.23%      $118,129   19.63%
       Tier 1 capital (2) .............     $114,945    17.59%      $106,260   17.66%
       Total risk-based capital (3) ...     $121,909    18.66%      $113,143   18.80%
       Leverage (4) ...................     $114,945    11.79%      $106,260   12.45%
</TABLE>

       (1)    Computed in accordance with generally accepted accounting
              principles, including unrealized market value adjustment of
              securities available-for-sale.

       (2)    Stockholders' equity less certain intangibles and the unrealized
              market value adjustment of securities available-for-sale; computed
              as a ratio to risk-adjusted assets as defined.

       (3)    Tier 1 capital plus qualifying loan loss allowance, computed as a
              ratio to risk-adjusted assets, as defined.

       (4)    Tier 1 capital computed as a ratio to average total assets less
              certain intangibles.

The Corporation's Tier 1, total risk-based capital and leverage ratios are well
above both the required minimum levels of 4.00%, 8.00%, and 4.00%, respectively,
and the well-capitalized levels of 6.00%, 10.00%, and 5.00%, respectively.

At December 31, 1999, all of the Corporation's subsidiary financial institutions
met the well-capitalized levels under the capital definitions prescribed in the
FDIC Improvement Act of 1991.

<PAGE>   39
17.    FAIR VALUES OF FINANCIAL INSTRUMENTS
       FASB Statement No. 107, "Disclosures about Fair Value of Financial
       Instruments", requires disclosure of fair value information about
       financial instruments, whether or not recognized in the statement of
       condition, for which it is practicable to estimate that value. In cases
       where quoted market prices are not available, fair values are based on
       estimates using present value or other valuation techniques. Those
       techniques are significantly affected by the assumptions used, including
       the discount rate and estimates of future cash flows. In that regard, the
       derived fair value estimates cannot be substantiated by comparison to
       independent markets and, in many cases, could not be realized in
       immediate settlement of the instrument. Statement 107 excludes certain
       financial instruments and all nonfinancial instruments from its
       disclosure requirements. Accordingly, the aggregate fair value amounts
       presented do not represent the underlying value of the bank.

       The estimated fair values of the bank's financial instruments not
       disclosed elsewhere are as follows:

<TABLE>
<CAPTION>
       (000S)                             1999                     1998
                                CARRYING       FAIR       CARRYING       FAIR
                                 VALUE         VALUE        VALUE       VALUE
                                ---------------------     ---------------------
<S>                             <C>          <C>          <C>          <C>
       LOANS ..............     $653,025     $651,526     $616,942     $622,824

       DEPOSITS ...........     $696,546     $696,684     $708,853     $710,279

       FHLB ADVANCES ......     $131,372     $107,565     $ 22,816     $ 23,876
</TABLE>