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

                                     FORM 10-KSB

   (Mark One)

     [ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
              For the fiscal year ended December 31, 2002

                                          OR

     [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
              For the transition period from              to


                               Commission file number:

                            COMMUNITY NATIONAL CORPORATION
                -----------------------------------------------------
               (Exact name of registrant as specified in its charter)

                   OHIO                                 31-1724230
                ----------                          ----------------
      (State or other jurisdiction of                 (I.R.S. Employer
       incorporation or organization)               Identification Number)




           1400 EAST SECOND STREET, FRANKLIN, OHIO                   45005
    -------------------------------------------------------------------------
           (Address of principal executive offices)                (Zip Code)

                    Registrant's telephone number: (937) 746-1520
                    ---------------------------------------------


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

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

                           Common Shares, without par value
                           --------------------------------
                                   (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                  Page 1
<PAGE>


          Yes   X     No
               ---
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained herein, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [XX]


The issuer's revenues for its most recent fiscal year were $8,163,000.


The issuer's common shares are quoted on the Over The Counter Bulletin Board
Service maintained by NASDAQ under the symbol CMNC. Management is aware of a
sale of the issuer's shares for $20.50 per share on January 23, 2003.  Based
upon such price, the aggregate market value of the issuer's shares held by
non-affiliates was $9,390,353.


As of January 31, 2003, 627,805 common shares were issued and outstanding.



                       DOCUMENTS INCORPORATED BY REFERENCE

The following sections of the definitive Proxy Statement for the 2003 Annual
Meeting of Shareholders of Community National Corporation, Inc. (the "Proxy
Statement"), are incorporated by reference into Part III of this Form 10-KSB:

     1.  Section 16(a) Beneficial Ownership Reporting Compliance;
     2.  Compensation of Executive Officers and Directors;
     3.  Voting Securities and Ownership of Certain Beneficial Owners and
          Management; and
     4.  Certain Relationships and Related Transactions.




                                  Page 2

<PAGE>
                           Community National Corporation.
                         For the Year Ended December 31, 2002
                                  Table of Contents


                                        PART I
                                        ------
                                                                         Page
                                                                         ----
Item 1:    Description of Business .......................................  4
Item 2:    Properties .................................................... 19
Item 3:    Legal Proceedings ............................................. 19
Item 4:    Submission of Matters to a Vote of Security Holders ........... 19


                                        PART II
                                        -------
Item 5:    Market for Registrant's Common Equity and Related
              Stockholder Matters ........................................ 19
Item 6:    Management's Discussion and Analysis of Financial
              Condition and Results of Operations ........................ 21
Item 7:    Financial Statements and Supplementary Data ................... 24
Item 8:    Changes in and Disagreements With Accountants
              on Accounting and Financial Disclosure ..................... 42


                                       PART III
                                       --------
Item 9:    Directors and Executive Officers of the Registrant ............ 43
Item 10:   Executive Compensation ........................................ 44
Item 11:   Security Ownership of Certain Beneficial Owners
              and Management ............................................. 44
Item 12:   Certain Relationships and Related Transactions ................ 44


                                        PART IV
                                        -------
Item 13:   Exhibits, Financial Statement Schedules, and
              Reports on Form 8-K ........................................ 45
Item 14:   Controls and Procedures ....................................... 45


Signatures
Exhibit Index


                                  Page 3

<PAGE>
                                  PART I

ITEM 1.  DESCRIPTION OF BUSINESS

                                 GENERAL

Community National Corporation (the "Company" or "CNC"), an Ohio corporation,
is a bank holding company which owns all of the issued and outstanding common
shares of The Community National Bank (the "Bank"), chartered under the laws
of the United States.  The Bank was incorporated in 1983 as a local
independent bank to serve the people and businesses of the Franklin/
Springboro/Carlisle area.  CNC was incorporated in 2000 and organized in
2001.  Community National Bank was reorganized into a bank holding company
structure in 2001.  The reorganization was effected through the merger of
Community National Bank with and into CNB Interim National Bank, a wholly
owned subsidiary of CNC.  Concurrent with the merger, CNB Interim National
Bank changed its name to "The Community National Bank" and is now operated as
the wholly owned bank subsidiary of CNC.  The consideration for the merger
was two shares of CNC common stock for each share of Bank common stock held
by the shareholders.  Following the merger, all shareholders of the Bank
maintained the same stock ownership percentage in the holding company as they
had in the Bank.  Following the merger, the Bank's business continued
unchanged with the same management and employees.

The Bank is engaged in the commercial banking business in southwestern Ohio,
providing a variety of consumer and commercial financial services.  The
primary business of the Bank consists of providing such customary banking
services as checking and savings accounts, various types of time deposits,
safe deposit facilities, money transfers, and individual retirement accounts.
The Company also finances consumer and commercial transactions, makes secured
and unsecured loans, and provides other financial services to its customers
through the Bank.

Because of its ownership of all the outstanding stock of the Bank, Community
National Corporation is subject to regulation, examination and oversight by
the Board of Governors of the Federal Reserve System (the "FRB") under the
Bank Holding Company Act of 1956, as amended (the "BHCA").  The Bank, as a
national bank, is subject to regulation, examination and oversight by the
Office of the Comptroller of the Currency (the "OCC") and special examination
by the FRB. The Bank is a member of the Federal Reserve Bank of Cleveland.
In addition, since its deposits are insured by the Federal Deposit Insurance
Corporation (the "FDIC"), the Bank is also subject to regulation, oversight
and special examination by the FDIC.  CNC and the Bank must file periodic
financial reports with the FDIC, the OCC and the Federal Reserve Bank of
Cleveland.  Examinations are conducted periodically by these federal
regulators to determine whether the Company and Bank are in compliance with
various regulatory requirements and are operating in a safe and sound manner.

Since its incorporation, Community National Corporation's activities have
been limited primarily to holding the common shares of the Bank.
Consequently, the following discussion focuses primarily on the business of
the Bank.


                                  Page 4

<PAGE>

The Bank functions in a highly competitive environment.  In addition to other
commercial banks, savings and loans, and savings banks, the Bank must also
contend with other providers of financial services including finance
companies, credit unions and insurance companies.  Despite having access to
less resources and smaller lending limits, the Bank remains competitive in
its service area with respect to interest rates and fees charged on loans,
interest rates paid on time and savings deposits, and service charges on
deposit accounts.  The deposit base of the Bank is relatively stable whereby
seasonal fluctuations in the amount of deposits have not been experienced.
All of the Bank's deposits emanate from inside the United States.


                         FORWARD-LOOKING STATEMENTS

In addition to the historic financial information contained herein with
respect to CNC, the following discussion contains forward-looking statements
that involve risks and uncertainties.  Economic circumstances, operations and
actual results could differ significantly from those discussed in the
forward-looking statements.  Some of the factors that could cause or
contribute to such differences are discussed herein but also include changes
in the economy and interest rates in the nation and CNC's general market
area.  The forward-looking statements contained herein include those with
respect to the following matters:

1.  Management's expectation that it will continue to expand its commercial
     and consumer lending activities;
2.  Management's determination of the adequacy of the loan loss allowance;
3.  The effect of changes in interest rates;
4.  Growth in the real estate and commercial loan portfolio; and
5.  Management's belief that a substantial percentage of the certificates of
     deposit maturing within one year will renew with the Bank at maturity.


                                  LENDING ACTIVITIES

GENERAL
The Bank's income consists primarily of interest income generated by lending
activities, including the origination of loans secured by residential and
nonresidential real estate, commercial, and consumer loans.


                                  PAGE 5

<PAGE>
<TABLE>
The following table sets forth the composition of the Bank's loan portfolio
by type of loan at the dates indicated:
<CAPTION>
                                             At December 31,
                                   ----------------------------------
                                         2002               2001
                                   ---------------    ---------------
                                              % of               % of
                                   Amount    Total    Amount    Total
                                   ------    -----    ------    -----

                               <c>        <c>     <c>        <c>
Commercial and industrial         $ 3,117      3.9%    4,112      5.6%
Real estate - construction          2,138      2.7%    3,439      4.7%
Real estate - mortgage             70,126     87.8%   61,550     83.6%
Installment loans to individuals    4,473      5.6%    4,452      6.1%
Lease financing                         -      0.0%        -      0.0%
                                   ------    -----    ------    -----
    Total loans                   $79,854    100.0%  $73,553    100.0%
                                             =====              =====

Deferred net origination costs         (3)                (3)
Allowance for loan losses            (804)              (952)
                                   ------             ------
    Net loans                     $79,047            $72,598
                                   ======             ======
</TABLE>

The Bank's lending policy requires the application and satisfaction of
certain underwriting standards prior to funding any loan, among which are
documentation requirements to include credit and collateral value analysis.
Credit qualification entails evaluation of business cash flows or consumer
income available to service debt payments.  Secondary sources of repayment,
including collateral and guarantees, may be requested as well.  Lending
opportunities typically are restricted to the market areas the Bank's
branches serve.

The Bank's lending strategy has historically focused on the origination of
a mixture in its portfolio of commercial loans, one-to-four family mortgage
loans and, to a lesser extent, working capital loans in the form of credit
lines and term notes, personal loans, and home equity loans.  Commercial real
estate loans are granted for the acquisition or improvement of real property.
Generally, commercial real estate loans do not exceed 75% of the appraised
value of the property pledged to secure the transaction.  With repayment
typically contingent upon successful operation of the subject real estate,
this is carefully scrutinized prior to approval.

Real estate construction loans are granted for the purpose of construction
improvements to real property, both commercial and residential.  Real estate
loans secured by one-to-four family residential housing properties are
granted subject to statutory limits regarding the maximum percentage of
appraised value of the mortgaged property.  Residential loan terms are
normally established based upon factors such as interest rates in general,
the supply of money available to the Bank and the demand for such loans.

                                  Page 6
<PAGE>

Consumer loans represent the extension of financing to customers for personal
expenditures or household purposes.  Creditworthiness is evaluated on the
basis of projected repayment capacity as well as credit history.  Such loans
are granted in the form of installment or revolving transactions.

LOAN MATURITY SCHEDULE
<TABLE>
The following table sets forth certain information at December 31, 2002,
regarding the net dollar amount of commercial and industrial and real estate
construction loans maturing in the Bank's portfolio, based on contractual
terms to maturity.  Loans having no stated schedule of repayment and no
stated maturity and overdrafts are reported as due in one year or less:
<CAPTION>
                           Due 0-1 Year  Due 1-5 Years  Due 5 + Years   Total
                           ------------  -------------  -------------   -----
                                                 (In thousands)

                          <c>           <c>             <c>         <c>
Commercial and industrial    $ 1,209         1,358          550         3,117
Real estate - construction     2,107             -           31         2,138
                              ------         -----          ---         -----
    Total                    $ 3,316         1,358          581         5,255
                              ======         =====          ===         =====
</TABLE>

<TABLE>
The following table sets forth the dollar amount of certain loans, due after
one year from December 31, 2002, which have predetermined interest rates and
floating or adjustable interest rates:
<CAPTION>
                             Predetermined        Floating or
                                 rates          adjustable rates     Total
                             -------------      ----------------    -------
                                                 (In thousands)

                             <c>                <c>              <c>
Commercial and industrial       $ 740               1,168            1,908
Real estate - construction         31                   -               31
                                 ----               -----            -----
    Total                       $ 771               1,168            1,939
                                 ====               =====            =====
</TABLE>

LOAN PROCESSING
Loan officers are authorized by the Board of Directors to approve loans up
to specified limits.  Loans exceeding the loan officers' approval authority
are referred to the Bank's Loan Committee.  Any loans made by the Bank in
excess of the limits established for the Loan Committee must be approved by
the Board of Directors.  All loans in excess of $10,000 are reported to the
Board on a monthly basis.

LOAN ORIGINATIONS, PURCHASES AND SALES
Fixed-rate and adjustable rate residential real estate loans are also
originated for sale in the secondary market.


                                  Page 7
<PAGE>

DELINQUENT LOANS, NON-PERFORMING ASSETS AND CLASSIFIED ASSETS
The Bank attempts to minimize loan delinquencies through aggressive
collection efforts.  When a borrower fails to make a required payment on
a loan, the Bank attempts to cause the deficiency to be cured by contacting
the borrower.  In most cases, deficiencies are cured promptly.

Generally, when a real estate loan becomes delinquent more than 90 days, an
evaluation of the collateral is performed.  When deemed appropriate by
management, the Bank institutes action to foreclose on the real estate or to
acquire the real estate by deed in lieu of foreclosure.  A decision as to
whether and when to initiate foreclosure proceedings is based on such factors
as the amount of the outstanding loan in relation to the original
indebtedness, the extent of the delinquency and the borrower's ability and
willingness to cooperate in curing delinquencies.  If a foreclosure occurs,
the real estate is sold at public sale and may be purchased by the Bank.
Installment loans are generally charged off if four payments have been
missed.  Generally, all other loans are placed on non-accrual status if they
are 90 days or more delinquent.  A loan may remain on accrual status after it
is 90 days delinquent if it is reasonably certain the account will be settled
in its entirety or brought current within a 30-day period.  Cash payments
received on non-accrual loans are applied against principal until the balance
is repaid.  Any remaining payments are credited to earnings.  Non-performing
loans include non-accrual loans and ninety days or more past due loans.

<TABLE>
The following table sets forth certain information regarding the past due,
non-accrual and renegotiated loans of the Bank at the dates indicated:
<CAPTION>
                                                      At December 31,
                                                --------------------------
                                                      2002      2001
                                                      (In thousands)
                                                     ------    ------

                                                  <c>       <c>
Loans accounted for on non-accrual basis             $1,023       637
Accruing loans which are past due 90 days or more       594       745
Renegotiated loans                                        -         -
                                                      -----     -----
    Total                                            $1,617     1,382
                                                      =====     =====
</TABLE>

If interest on non-accrual loans had been recognized during 2002, such income
would have been $96,000.  Interest income recognized was $41,000 in 2002.

Real estate acquired, or deemed acquired, by the Bank as a result of
foreclosure proceedings is classified as other real estate owned ("OREO")
until it is sold.  Interest accrual, if any, ceases no later than the date
of acquisition of the real estate, and all costs incurred from such date in
maintaining the property are expensed.  Costs relating to the development and
improvement of the property are capitalized.  OREO is recorded by the Bank at
the lower of cost or fair value less estimated costs of disposal, and any
write-down resulting there from is charged to the allowance for loan losses.

                                  Page 8
<PAGE>

ALLOWANCE FOR LOAN LOSSES
Federal regulations require that the Bank establish prudent general
allowances for loan losses.  Management, with oversight responsibility
provided by the Board of Directors, reviews on a monthly basis the allowance
for loan losses as it relates to a number of relevant factors, including but
not limited to, historical charge off trends, the volume and quality of the
loan portfolio, review of specific problem loans, and current economic
conditions that may affect the borrower's ability to pay.   At December 31,
2002, the Bank's allowance for loan losses totaled $804,000.

<TABLE>
The following table sets forth an analysis of the Bank's allowance for losses
on loans for the periods indicated:
<CAPTION>
                                                   December 31,
                                        --------------------------------
                                                 2002      2001
                                              (Dollars in thousands)

                                           <c>         <c>
Balance at beginning of period                $   952        897

Charge-offs:
   Commercial and industrial                       77         77
   Commercial real estate                           -          -
   Agricultural                                     -          -
   Residential real estate                        222          9
   Installment                                     76         90
   Credit card                                      -          -
   Other                                            -          -
                                               ------     ------
     Total charge-offs                            375        176
                                               ------     ------
Recoveries:
   Commercial and industrial                        4          4
   Commercial real estate                           -          -
   Agricultural                                     -          -
   Residential real estate                          -          -
   Installment                                     23         17
   Credit card                                      -          -
   Other                                            -          -
                                               ------     ------
     Total recoveries                              27         21
                                               ------     ------
Net charge-offs                                   348        155
Provision for possible loan losses                200        210
                                               ------     ------
     Balance at end of period                 $   804        952
                                               ======     ======
Ratio of net charge-offs to average loans
  outstanding during the period                   0.4%       0.2%
                                               ======     ======
Average loans outstanding                     $77,744     73,836
                                               ======     ======
</TABLE>
                                  Page 9
<PAGE>

Because the loan loss allowance is based on estimates, it is monitored
regularly and adjusted as necessary to provide an adequate allowance.


                          INVESTMENT ACTIVITIES
<TABLE>
The following table sets forth the composition of the Bank's securities portfolio, based on amortized cost, at the dates indicated:
<CAPTION>
                                                    At December 31,
                                              --------------------------
                                                   2002        2001
                                                   ----        ----
                                                     (In thousands)

                                              <c>          <c>
Securities held to maturity:
  U.S. Treasury securities                       $23,877       25,540
                                                  ------       ------
       Total debt securities                      23,877       25,540

  Federal Reserve Bank                                53           53
  Federal Home Loan Bank                             338            -
                                                  ------       ------
Total securities held to maturity                 24,268       25,593
                                                  ------       ------
Total securities                                 $24,268       25,593
                                                  ======       ======
</TABLE>

<TABLE>
The following table sets forth the amortized cost of the Bank's securities
portfolio at December 31, 2002.  Securities are categorized based on
contractual maturity.  Yields do not include the effects of income taxes.
<CAPTION>
                    Less than 1 year      1 to 5 years            Total
                   ------------------  ------------------  ------------
                     Weighted            Weighted            Weighted
                    Amortized  average  Amortized  average  Amortized average
                       cost     yield      cost     yield      cost    yield
                       ----     -----      ----     -----      ----    -----
                                      (Dollars in thousands)

                    <c>      <c>      <c>        <c>      <c>       <c>
Securities held
 to maturity:
  U.S. Treas.
   Securities          $14,235   4.1%     9,642      3.8%     23,877    4.0%
                        ------            -----              ------
Total debit securities
  held to maturity      14,235   4.1%     9,642      3.8%     23,877    4.0%
                        ------            -----              ------
Total debit securities $14,235   4.1%     9,642      3.8%     23,877    4.0%
                        ======            =====              ======
</TABLE>

                                  Page 10
<PAGE>
                               DEPOSITS AND BORROWINGS

GENERAL.  Deposits have traditionally been the primary source of the Bank's
funds for use in lending and other investment activities.  In addition to
deposits, the Bank derives funds from interest payments and principal
repayments on loans and income on earning assets.  Loan payments are a
relatively stable source of funds, while deposit inflows and outflows
fluctuate more in response to general interest rates and money market
conditions.

DEPOSITS.  Community National Bank offers a full range of interest-bearing
and non-interest-bearing accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest-bearing statement savings accounts and certificates of deposit with
fixed and variable rates and a range of maturity date options.  The sources
of deposits are residents, businesses, and employees of businesses within
the Bank's market area, obtained through the personal solicitation of its
officers and directors, direct mail solicitation, and advertisements
published in the local media.  The Bank pays competitive interest rates on
time and savings deposits up to the maximum permitted by law or regulation.
In addition, the Bank has implemented a service charge fee schedule
competitive with other financial institutions in the market area, covering
such matters as maintenance fees on checking accounts, per item processing
fees on checking accounts, returned check charges and the like.

<TABLE>
The following table sets forth the dollar amount of deposits in the various
types of products offered by the Bank as of December 31:
<CAPTION>
                                     Percent               Percent
                              2002   of Total       2001   of Total
                              ----   --------       ----   --------
                                      (Dollars in thousands)

                        <c>        <c>         <c>       <c>
Demand                     $ 11,584    11.2%       11,353    11.5%
NOW                          21,807    21.2%       17,815    18.0%
Savings                      15,918    15.4%       14,256    14.4%
Money market deposit            778     0.8%          887     0.9%
CDs less than $100,000       30,180    29.3%       30,190    30.5%
CDs greater than $100,000    22,847    22.1%       24,393    24.7%
Other                             -     0.0%            -     0.0%
                            -------   -----        ------    ----
 Total deposits            $103,114   100.0%       98,894   100.0%
                            =======   =====        ======   =====
</TABLE>


                                  Page 11

<PAGE>

<TABLE>
The following table sets forth the dollar amount of time deposits greater
than $100,000 maturing in the periods indicated:
<CAPTION>

            Maturity                     At December 31, 2002
            --------                     --------------------
                                           (In thousands)
       
                                     <c>
        Three months or less                   $ 7,536
        Over 3 months to 6 months                4,708
        Over 6 months to 12 months               6,676
        Over twelve months                       3,927
                                                ------
          Total                                $22,847
                                                ======
</TABLE>

                     ASSET AND LIABILITY MANAGEMENT

The Bank manages its assets and liabilities to provide an optimum and stable
net interest margin, a profitable after-tax return on assets and return on
equity, and adequate liquidity.  These management functions are conducted
within the framework of written loan and investment policies adopted by the
Bank.  The Bank attempts to maintain a balanced position between rate
sensitive assets and rate sensitive liabilities.  Specifically, it charts
assets and liabilities on a matrix by maturity, effective duration, and
interest adjustment period, and endeavors to manage any gaps in maturity
ranges.


                         AVERAGE BALANCE SHEETS

<TABLE>
The following table presents, for the years indicated, the total dollar
amounts of interest from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing
liabilities, expressed both in dollars and rates.  The table does not
reflect any effect of income taxes and includes non-performing loans in
the calculations.
<CAPTION>


                                  Page 12

<PAGE>
                                    Year ended December 31
                                    (Dollars in thousands)
                  -----------------------------------------------------------
                               2002                          2001
                  ----------------------------- -----------------------------
                    Average   Average  Interest   Average   Average  Interest
                  Outstanding  Yield/   Earned/ Outstanding  Yield/   Earned/
                    Balance     Rate     Paid     Balance     Rate     Paid
                  ----------------------------- -----------------------------

                   <c>      <c>       <c>       <c>      <c>       <c>
Loans                 $ 77,744  7.83%    $6,086    $ 73,836  8.69%    $6,420
Federal funds sold       4,071  1.62%        66       6,237  3.91%       244
Deposits in banks          100  3.00%         3         138  5.80%         8
Federal Reserve
 Bank stock                 53  5.66%         3          53  5.66%         3
Federal Home Loan
 Bank stock                 70  0.00%         -           -  0.00%         -
Investment
 securities:
  Taxable               24,020  4.58%     1,100      22,095  5.50%     1,216
                       -------            -----     -------            -----
    Total earning
     assets            106,058  6.84%     7,258     102,359  7.71%     7,891

Non-earning assets       8,992                        8,344
Allowance for loan
 losses                   (898)                        (959)
                       -------                      -------
Total assets          $114,152                     $109,744
                       =======                      =======

Savings deposits      $ 14,895  1.28%       190    $ 13,541  2.37%       321
NOW and money fund      21,673  2.11%       457      15,281  2.87%       438
IRA and time
 certificates           54,890  4.01%     2,203      58,945  5.83%     3,434
Short-term borrowings       85  2.35%         2           -  0.00%         -
                       -------            -----     -------            -----
    Total interest-
     bearing
     liabilities        91,543  3.12%     2,852      87,767  4.78%     4,193

Demand deposits         11,626                       11,381
                       -------                      -------
    Total deposits     103,169                       99,148

Other liabilities          843                        1,335
Capital                 10,140                        9,261
                       -------                      -------
   Total liabilities
     and capital      $114,152                     $109,744
                       =======                      =======



                                  Page 13

<PAGE>
                                ----      -----              ----      -----
Net interest rate
 spread                         3.72%    $4,406              2.93%    $3,698
                                ====      =====              ====      =====

Net interest margin
 on a tax equivalent
 basis                          4.15%                        3.61%

Ratio of interest-
 earning assets to
 interest-bearing
 liabilities                  115.86%                      116.63%

</TABLE>

<TABLE>
The following table describes the extent to which the changes in interest
rates and changes in volume of interest-related assets and liabilities have
affected the Bank's interest income and expense during the periods indicated.
For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (i) changes
in volume (the difference between the average volume for the periods
compared, multiplied by the prior year's yield or rate paid), (ii) changes
in rate (the difference between the weighted average yield or rate paid for
the periods compared, multiplied by the prior year's average volume) and
(iii) changes not solely attributable to either volume or rate.
<CAPTION>
                                           Years ended December 31,
                                     -----------------------------------
                                                2002 vs. 2001
                                     -----------------------------------
                                          Increase (decrease) due to
                                     -----------------------------------
                                                         Rate/
                                     Volume     Rate    Volume     Total
                                     ------     ----    -------    -----
                                                 (In thousands)

                                    <c>     <c>      <c>       <c>
Interest income attributable to:
  Loans                                $340     (640)     (34)      (334)
  Securities held to maturity           106     (204)     (18)      (116)
  Deposits in banks                      (2)      (4)       1         (5)
  Federal funds sold                    (85)    (143)      50       (178)
                                        ---    -----      ---      -----
    Total interest-earning assets       359     (991)      (1)      (633)
                                        ---    -----      ---      -----
Interest expense attributable to:
  Savings deposits                       32       94        9        135
  NOW and MMDA                          183     (304)    (127)      (248)
  Time deposits                        (236)  (1,067)      73     (1,230)
  Short-term borrowings                   -        -        2          2
  Long-term debt                          -        -        -          -
                                        ---    -----      ---      -----
    Total interest-bearing liabilities  (21)  (1,277)     (43)    (1,341)
                                        ---    -----      ---      -----
    Net interest income                $380      286       42        708
                                        ===    =====      ===      =====
</TABLE>
                                  PAGE 14
<PAGE>

                              COMPETITION

The Bank functions in a highly competitive environment.  In addition to
other commercial banks, savings and loans, and savings banks, the Bank must
also contend with other providers of financial services including finance
companies, credit unions and insurance companies.  Despite having access to
less resources and smaller lending limits, the Bank remains competitive in
its service area with respect to interest rates and fees charged on loans,
interest rates paid on time and savings deposits, and service charges on
deposit accounts.  The deposit base of the Bank is relatively stable whereby
seasonal fluctuations in the amount of deposits have not been experienced.
All of the Bank's deposits emanate from inside the United States.


                                EMPLOYEES

At December 31, 2002, the Company employed 37 full-time employees and 4 part-
time employees.  The Company considers its relationship with its employees to
be good.


                               REGULATION

GENERAL

Because of its ownership of all the outstanding stock of the Bank, CNC is
subject to regulation, examination and oversight by the FRB as a bank holding
company under the BHCA.  The Bank, as a national bank, is subject to
regulation, examination and oversight by the OCC and special examination by
the FRB.  The Bank is a member of the Federal Reserve Bank of Cleveland.  In
addition, since its deposits are insured by the FDIC, the Bank is also
subject to some regulation, oversight and special examination by the FDIC.
The Bank must file periodic financial reports with the FDIC, the OCC and the
Federal Reserve Bank of Cleveland.

BANK HOLDING COMPANY REGULATION

As a bank holding company, CNC may be subject to restrictions on share
repurchases.

The FRB has also adopted capital adequacy guidelines for bank holding
companies, pursuant to which, on a consolidated basis, Community National
Bank must maintain total capital of at least 8% of risk-weighted assets.
Risk-weighted assets consist of all assets, plus credit equivalent amounts
of certain off-balance sheet items, which are weighted at percentage levels
ranging from 0% to 100%, based on the  relative credit risk of the asset.
At least half of the total capital to meet this risk-based requirement must
consist of core or "Tier 1" capital, which includes common stockholders'
equity, qualifying perpetual preferred stock (up to 25% of Tier 1 capital)
and minority interests in the equity accounts of consolidated subsidiaries,
less goodwill.  The remainder of total capital may consist of supplementary
or "Tier 2" capital.  In addition to this risk-based capital requirement, the


                                  Page 15
<PAGE>

FRB requires bank holding companies to meet a leverage ratio of a minimum
level of Tier 1 capital to average total consolidated assets of 3%, if they
have the highest regulatory examination rating, well-diversified risk and
minimal anticipated growth or expansion.  All other bank holding companies
are expected to maintain a leverage ratio of at least 4% of average total
consolidated assets.  Community National Bank was in compliance with these
capital requirements at December 31, 2002.  For Community National Bank's
capital ratios, see Note 12 to the Consolidated Financial Statements in Item
7.

The BHCA restricts CNC's ownership or control of the outstanding shares of
any class of voting stock of any company engaged in a non-banking business,
other than companies engaged in certain activities determined by the FRB to
be closely related to banking.  In addition, the FRB has the authority to
require a bank holding company to terminate any activity or relinquish
control of any non-bank subsidiary (other than a non-bank subsidiary of a
bank) upon the determination by the FRB that such activity or control
constitutes a serious risk to the financial soundness and stability of any
bank subsidiary of the bank holding company.  CNC currently does not have any
non-bank subsidiaries, except subsidiaries of the Bank.  The ownership of
subsidiaries of the Bank is regulated by the OCC, rather than the FRB.

On November 12, 1999, President Clinton signed into law the Gramm-Leach-
Bliley Act (also known as the Financial Services Modernization Act of 1999).
The Financial Services Modernization Act permits, effective March 11, 2000,
bank holding companies to become financial holding companies and thereby
affiliate with securities firms and insurance companies and engage in other
activities that are financial in nature.  A bank holding company may become
a financial holding company if each of its subsidiary banks is well-
capitalized under the Federal Deposit Insurance Corporation Act of 1991,
prompt corrective action provisions are well managed, and the company has
at least a satisfactory rating under the Community Reinvestment Act.  The
company must file a declaration that the bank holding company wishes to
become a financial holding company.  No regulatory approval will be required
for a financial holding company to acquire a company, other than a bank or
savings association, engaged in activities that are financial in nature or
incidental to activities that are financial in nature, as determined by the
Federal Reserve Board.

The Financial Services Modernization Act defines "financial in nature" to
include:

     -  securities underwriting, dealing and market making;
     -  sponsoring mutual funds and investment companies;
     -  insurance underwriting and agency;
     -  merchant banking; and
     -  activities that the Federal Reserve Board has determined to be
         closely related to banking.

A national bank also may engage, subject to limitations on investment, in
activities that are financial in nature, other than insurance underwriting,
insurance company portfolio investment, real estate development and real


                                  Page 16
<PAGE>

estate investment, through a financial subsidiary of the bank, if the bank
is well-capitalized, well-managed and has at least a satisfactory Community
Reinvestment Act rating.  Subsidiary banks of a financial holding company or
national banks with financial subsidiaries must continue to be well-
capitalized and well-managed in order to continue to engage in activities
that are financial in nature without regulatory actions or restrictions,
which could include divestiture of the financial in nature subsidiary or
subsidiaries.  In addition, a financial holding company or a bank may not
acquire a company that is engaged in activities that are financial in nature
unless each of the subsidiary banks of the financial holding company or the
bank has a Community Reinvestment Act rating of satisfactory or better.

CNC has not elected to become a financial holding company nor has the Bank
elected to form a financial subsidiary.

Transactions between CNC and the Bank are subject to statutory limits in
Sections 23A and 23B of the Federal Reserve Act (the "FRA").  See National
Bank Regulation -- "Office of the Comptroller of the Currency."

The FRB must approve the application of a bank holding company to acquire
any bank or savings association.


NATIONAL BANK REGULATION

OFFICE OF THE COMPTROLLER OF THE CURRENCY.  The OCC is an office in the
Department of the Treasury and is subject to the general oversight of the
Secretary of the Treasury.  The OCC is responsible for the regulation and
supervision of all national banks, including the Bank.  The OCC issues
regulations governing the operation of national banks and, in accordance
with federal law, prescribes the permissible investments and activities of
national banks.  National banks are subject to regulatory oversight under
various consumer protection and fair lending laws.  These laws govern, among
other things, truth-in-lending disclosure, equal credit opportunity, fair
credit reporting and community reinvestment.

The Bank is required to meet certain minimum capital requirements set by the
OCC.  These requirements consist of risk-based capital guidelines and a
leverage ratio, which are substantially the same as the capital requirements
imposed on the Company.  The Bank was in compliance with those capital
requirements at December 31, 2002.  For the Bank capital ratios, see Note 12
to the Consolidated Financial Statements in Item 7.  The OCC may adjust the
risk-based capital requirement of a national bank on an individualized basis
to take into account risks due to concentrations of credit or nontraditional
activities.

The OCC has adopted regulations governing prompt corrective action to resolve
the problems of capital deficient and otherwise troubled national banks.  At
each successively lower defined capital category, a national bank is subject
to more restrictive and numerous mandatory or discretionary regulatory
actions or limits, and the OCC has less flexibility in determining how to
resolve the problems of the institution.  In addition, the OCC generally can


                                  Page 17
<PAGE>

downgrade a national bank's capital category, notwithstanding its capital
level, if, after notice and opportunity for hearing, the national bank is
deemed to be engaging in an unsafe or unsound practice, because it has not
corrected deficiencies that resulted in it receiving a less than satisfactory
examination rating on matters other than capital or it is deemed to be in an
unsafe or unsound condition.  The Bank's capital at December 31, 2002, met
the standards for the highest capital category, a well-capitalized bank.

A national bank is subject to restrictions on the payment of dividends,
including dividends to a holding company.  A dividend may not be paid if it
would cause the bank not to meet its capital requirements.  In addition, the
dividends that a Bank subsidiary can pay to its holding company without prior
approval of regulatory agencies is limited to net income plus its retained
net income for the preceding two years.  Based on the current financial
condition of the Bank, these provisions are not expected to affect the
current ability of the Bank to pay dividends to CNC in an amount customary
for the Bank.

OCC regulations generally limit the aggregate amount that a national bank can
lend to one borrower or aggregated groups of related borrowers to an amount
equal to 15% of the bank's unimpaired capital and surplus.  A national bank
may loan to one borrower an additional amount not to exceed 10% of the
association's unimpaired capital and surplus, if the additional amount is
fully secured by certain forms of "readily marketable collateral."  Loans to
executive officers, directors and principal shareholders and their related
interests must conform to the OCC lending limits.  All transactions between
national banks and their affiliates, including Community National Bank, must
comply with Sections 23A and 23B of the FRA, which limit the amounts of such
transactions and require that the terms of the transactions be at least as
favorable to the Bank as the terms would be of a similar transaction between
the Bank and an unrelated party.  The Bank was in compliance with these
requirements and restrictions at December 31, 2002.

FEDERAL DEPOSIT INSURANCE CORPORATION.  The FDIC is an independent federal
agency that insures the deposits, up to prescribed statutory limits, of
federally insured banks and thrifts and safeguards the safety and soundness
of the banking and thrift industries.  The FDIC administers two separate
insurance funds, the BIF for commercial banks and state savings banks and the
SAIF for savings associations and for banks that have acquired SAIF deposits.
The FDIC is required to maintain designated levels of reserves in each fund.

The FDIC is authorized to establish separate annual assessment rates for
deposit insurance for members of each of the BIF and the SAIF.  The FDIC may
increase assessment rates for either fund if necessary to restore the fund's
ratio of reserves to insured deposits to its target level within a reasonable
time and may decrease such rates if such target level has been met.  The FDIC
has established a risk-based assessment system for both SAIF and BIF members.
Under this system, assessments vary based on the risk the institution poses
to its deposit insurance fund.  The risk level is determined based on the
institution's capital level and the FDIC's level of supervisory concern about
the institution.  Insurance of deposits may be terminated by the FDIC if it
finds that the institution has engaged in unsafe or unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order or condition enacted or imposed by
the institution's regulatory agency.


                                  Page 18

<PAGE>

FEDERAL RESERVE BOARD.  The FRA requires national banks to maintain reserves
against their net transaction accounts (primarily checking and NOW accounts).
The amounts are subject to adjustment by the FRB.  At December 31, 2002, the
Bank was in compliance with its reserve requirements.


ITEM 2.  PROPERTIES

The Company conducts its banking operations at four banking centers in
southwestern Ohio.  The executive offices of the Company and the Bank are
onsite at the main banking center at 1400 East Second Street, Franklin, Ohio.
The other banking center locations are:  500 Central Avenue in Carlisle,
Ohio; 95 Edgebrook Avenue in Springboro, Ohio; and 50 West Spring Valley Road
in Centerville, Ohio.  The Bank owns all properties except for the Carlisle
office, which is a store-mart operation under a lease agreement.  The 3-year
lease agreement commenced in 1998 with options for 3-year renewals; current
option expires in 2004.

The Company believes these facilities are adequate for its current
operations.  Management asserts that for insurance purposes all facilities
and equipment are subject to periodic appraisal and all properties are
adequately insured.


ITEM 3.  LEGAL PROCEEDINGS

The Bank has been named as a defendant in a suit, filed September 27, 2002,
in the Court of Common Pleas, Montgomery County, Ohio demanding payment for
storage of equipment owned by a Bank borrower.  The Bank has a lien against
the equipment as security for its loan.  The plaintiff, Sanlin Properties,
has compensatory damages of $70,000 and punitive damages of $1,000,000.
Management cannot estimate the outcome of this litigation but feels the suit
is without merit and intends to vigorously defend itself against this action.

The Bank is party to various other claims and proceedings arising in the
normal course of business which, in the opinion of management, will not
result in a material liability to the Bank.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.


                                        PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
          MATTERS

The Company's common shares are quoted on the Over The Counter Bulletin Board
Service maintained by NASDAQ under the symbol CMNC.  The active trading
market for the Company's shares has been light.  There were 620,898 shares of
the Company outstanding on December 31, 2002 held of record by approximately
212 shareholders.
                                  Page 19
<PAGE>

<TABLE>
The following table identifies the range of high and low bid information for
the Company's common stock in each quarter in the past two fiscal years.
The quotations reflect inter-dealer prices, without retail mark-up, mark-
down or commission and may not represent actual transactions.
<CAPTION>

          2002					High			Low
         -----                           ------            -----
     
                                 <c>              <c>
      First Quarter                       16.00            15.30
      Second Quarter                      16.00            16.00
      Third Quarter                       19.50            18.00
      Fourth Quarter                      20.98            19.25

          2001					High			Low
         -----                           ------            -----
      First Quarter*                      18.50            17.00
      Second Quarter*                     19.31            17.065
      Third Quarter                       19.20            17.00
      Fourth Quarter                      20.50            15.25
</TABLE>

High and low amounts adjusted to reflect the two for one stock affected
in the reorganization of the Bank into a holding company structure
effective July 2, 2001.

The declaration and payment of dividends by the Company are subject to the
discretion of the Board of Directors and to the earnings and financial
condition of the Company and applicable laws and regulations.  Annual dividends
per share declared were $0.38 in 2002 and $0.365 in 2001.  The dividend payout
ratio (dividends per share divided by earnings by share) was 20.9% and 24.8%
for 2002 and 2001, respectively.  Average equity to average assets was 8.9%
and 8.4% for 2002 and 2001, respectively.

The Community National Corporation serves as transfer agent and dividend
disbursing agent for the Company's shares.  Communication regarding change of
address, transfer of shares, lost certificates and dividends should be sent
to:

     Community National Corporation
     President
     P.O. Box 577
     Franklin, Ohio 45005

A copy of the Company's Annual Report on Form 10-KSB, as filed with the
Securities and Exchange Commission, will be available at no charge to
shareholders upon request to:

     Community National Corporation
     President
     P.O. Box 577
     Franklin, Ohio 45005

                                  Page 20
<PAGE>

The annual meeting of the shareholders of Community National Corporation
will be held on Tuesday, April 15, 2003, at the Community National Bank,
Springboro Office, Second Floor, 95 Edgebrook Drive, Springboro, Ohio at
1:00 PM.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

                          RESULTS OF OPERATIONS

NET INCOME
CNC earned $1,128,500, or $1.82 per share, in 2002 compared to $899,900, or
$1.47 per share, in 2001.  Performance ratios for 2002 included a return on
average assets of 1.00% and a return on average equity of 11.10% compared to
return on average assets of 0.82% and a return on average equity of 9.72% for
2001.  The growth in earnings was primarily attributed to an increase in net
interest income and the positive effect on the lending activity due to the
low market interest rates.

NET INTEREST INCOME
Total interest income, excluding loan fees, amounted to $7.3 million for
year 2002, a decrease of $633,000 (excluding fees), or 8%, from 2001.  The
decrease resulted primarily from the yield on average earning assets
decreasing by 87 basis points (bps).  The decline in the yield on interest-
earning assets was due to the decreasing market rates.  The effect on the net
interest spread was partially offset by the increase in the average balance
of interest-earning assets, which increased $3.7 million, or 3.6%.  The
increase was primarily attributable to growth in the average balances for
loans and investments.

Interest expense on deposits totaled $2.9 million for 2002, a decrease of
$1.3 million, or 32%, from 2001.  The decrease resulted primarily from a
decrease in the cost of interest-bearing liabilities from 4.78% in 2001 to
3.12% in 2002.  The decrease in the cost of interest-bearing liabilities was
due to the decreasing market rates.  Average interest-bearing liabilities
increased $3.8 million, or 4.3%, during 2002.  The increase was attributable
to an increase in NOW accounts, money fund accounts and savings accounts,
while time deposits experienced a decrease.  The average balance for
NOW/money fund accounts increased $6.4 million; savings accounts increased
$1.4 million, and time certificates decreased $4.1 million in 2002 as
compared to 2001.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased $759,000, or 20.1%, from 2001 to 2002.  The
interest rate spread increased by 80 basis points, from 2.93% for 2001, to
3.73% for 2002.  The net interest margin amounted to 4.15% in 2002, compared
to 3.61% in 2001.

OTHER INCOME
Total other operating income decreased $43,000, or 5%, to $783,000 in 2002
from $826,000 in 2001, primarily due to total service charges and fees
decreasing $46,000, or 8.2%.

                                  Page 21
<PAGE>

OTHER EXPENSE
Total other expense increased $389,000 or 12.9%, in 2002 compared to 2001.
The additional expense was primarily due to an increase in salaries and
employee benefits for regular salary increases and incentive programs.
Additionally, other expense increased due to expenses for disposing of other
real estate owned.

INCOME TAXES
The effective tax rate was 34% in 2002 and 2001.  The Company did not have
tax-exempt income in 2002 or 2001.


                           FINANCIAL CONDITION

TOTAL ASSETS
Total assets increased $4.7 million, or 4.3%, from December 31, 2001 to
December 31, 2002.  The most significant changes were a $6.4 million, or
8.9%, increase in loans and a $1.3 million, or 5.2%, decrease in investment
securities.

INVESTMENT SECURITIES
Investment securities decreased to $24,268,000 at December 31, 2002, as
the Company reinvested funds from maturing treasury securities into higher
yielding loans.  The Bank became a member of the Federal Home Loan Bank in
2002, requiring the purchase of FHLB stock that are equity interests carried
at cost.  It can only be sold at cost, or par value, to the issuer or to
another member institution.

LOANS
Loan demand was strong as interest rates declined throughout the year.  Net
loans increased $6.4 million, or 8.9%, from $72.6 million at December 31,
2001 to $79.0 million at December 31, 2002.  The individual loan categories
were also relatively consistent with prior year totals.

ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is $804,000 or 1.01% of total loans at December
31, 2002, compared to $952,000 or 1.29% of total loans at December 31, 2001.
The Company experienced $375,000 in loan losses in 2002 as compared to
$176,000 in 2001.  The incurred losses were a result of loans made in prior
years to borrowers in the normal course of business.  Loans on non-accrual
status amounted to $1,023,000 and $637,000 at December 31, 2002 and 2001,
respectively.  Loans 90 days or more past due and still accruing interest
were $594,000 and $745,000 as of December 31, 2002 and 2001 respectively.
The Company had property acquired through foreclosure at December 31, 2002
and 2001 of $504,000 and $360,000 respectively.

In addition to historic charge-off percentages, to determine an adequate
allowance for loan losses at December 31, 2002, the Company took into
consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans, and
current economic conditions that may affect the borrowers' ability to pay.


                                  Page 22

<PAGE>

Five borrowers make up the non-accrual amount at December 31, 2002.  All
loans are in foreclosure with no significant losses expected.  All loans have
been considered in the loan loss analysis and are considered to be adequately
reserved.  The Company also considered loans past due 90 days or more at
December 31, 2002, compared to a year ago.  Of  $1,617,000 past due greater
than 90 days, the Company is in process of foreclosure on a borrower with a
balance of $501,000.  The Company does not anticipate a loss on this loan.

DEPOSITS
Deposits increased $4.2 million, or 4.3%, to $103.1 million at December 31,
2002, from $98.9 million at December 31, 2001.  Interest-bearing demand
deposits increased $4 million, or 22%.  Time deposits decreased $1.6 million,
or 2.9%.  The Company's strategy is to competitively price deposit products
in the markets served with an emphasis on growing its lower-priced core
deposit products.

LIQUIDITY
Liquidity is the ability to have funds available at all times to meet the
commitments of the Company.  Asset liquidity is provided by cash and assets
which are readily marketable, pledgeable or which will mature in the near
future.  Liquid assets include cash and deposits in banks, and federal funds
sold.  Liquidity is also provided by access to core funding sources that are
primarily core depositors in the Company's trade area.  The Company does not
actively solicit brokered deposits as a funding source.  Total brokered
deposits as of December 31, 2002 were $8.3 million.  The liquidity of the
Company is enhanced by the fact that 61.9% of total deposits at December 31,
2002 were "core" deposits.  Core deposits, for this purpose, are defined as
total deposits less public funds and certificates of deposit greater than
$100,000.

At December 31, 2002, the Company's liquid assets were $5.7 million or 4.9%
of total assets, as compared to $5.9 million, or 5.4%, at December 31, 2001.
Secondary sources of liquidity include the Company's ability to sell loan
participations, purchase federal funds, and maintain lines of credit with
the Federal Home Loan Bank of Cincinnati, Federal Reserve Bank of Cleveland,
and a regional bank for short-term funding needs.  The lines of credit are
$10 million, $1.9 million and $2 million, respectively.  Management closely
monitors the level of liquid assets available to meet ongoing funding needs.
It is management's intent to maintain adequate liquidity so that sufficient
funds are readily available at a reasonable cost. Loans to deposits increased
from 74.3%, at December 31, 2001 to 77.4% December 31, 2002.  The Company has
not experienced liquidity or operational problems as a result of the current
liquidity levels.

CAPITAL RESOURCES
As of December 31, 2002, commitments to extend credit amounted to $7.1
million and are more fully described in Note 10 to the Financial Statements.
Since many of the commitments to extend credit may expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements.  Scheduled repayments of existing loans and maturities of
investment securities are expected to provide the necessary funds for loan
commitments.  Commitments for capital expenditures were minimal.


                                  Page 23
<PAGE>

The Company is required by banking regulators to meet certain minimum
levels of capital adequacy.  These are expressed in the form of certain
ratios.  Capital is separated into Tier I capital (essentially shareholders'
equity less goodwill and other intangibles) and Tier II capital (essentially
the allowance for loan losses limited to 1.25% of risk-weighted assets).
The first two ratios, which are based on the degrees of credit risk in the
Company's assets, provide for weighting assets based on assigned risk factors
and include off-balance sheet items such as loan commitments and stand-by
letters of credit.  The ratio of Tier I capital to risk-weighted assets must
be at least 4.0% and the ratio of Total capital (Tier 1 capital plus Tier 2
capital) to risk-weighted assets must be at least 8.0%.  The capital leverage
ratio supplements the risk-based capital guidelines. Banks are required to
maintain a minimum ratio of Tier 1 capital to adjusted quarterly average
total assets of 4.0%.  To be considered at the well-capitalized level the
ratios must be at least 6%, 10% and 5%, respectively.  As of December 31,
2002, the Company was considered well-capitalized with total risk-based
capital of 16.1%, Tier 1 risk-based of 14.9%, and leverage capital of 8.9%.
These ratios as of December 31, 2001 were 15.6%, 14.4% and 8.6%,
respectively.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                     - I N D E X -


                                                                      PAGE
                                                                      ----
INDEPENDENT AUDITORS' REPORT                                           25

FINANCIAL STATEMENTS

     Consolidated Balance Sheets                                       26

     Consolidated Statements of Income                                 27

     Consolidated Statements of Comprehensive
       Income and Changes in Shareholders' Equity                      28

     Consolidated Statements of Cash Flows                             29

     Notes to Consolidated Financial Statements                      30 - 42



                                  Page 24

<PAGE>

                        INDEPENDENT AUDITORS' REPORT


To the Shareholders and Board of Directors
Community National Corporation and Subsidiary
Franklin, Ohio


We have audited the accompanying consolidated balance sheets of Community
National Corporation and Subsidiary as of December 31, 2002 and 2001, and
the related consolidated statements of income, shareholders' equity and cash
flows for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with U.S. generally accepted auditing
standards.  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 December 31, 2002 and 2001 consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of Community National Corporation and Subsidiary as of
December 31, 2002 and 2001,and the results of its operations and its cash
flows for the years then ended in conformity with U.S. generally accepted
accounting principles.



                                            /s/ J.D. Cloud & Co., L.L.P.
                                           --------------------------------
                                           J.D. Cloud & Co., L.L.P.
                                           Certified Public Accountants

Cincinnati, Ohio
January 14, 2003




                                  Page 25

<PAGE>
<TABLE>
<CAPTION>
                        COMMUNITY NATIONAL CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                                At December 31,
                                    ($000's)

                                                       2002        2001
                                                       ----        ----
 
                                               <c>         <c>
  ASSETS:
     Cash and due from banks                       $  2,405       3,053
     Federal funds sold                              3,250       2,850
                                                    -------     -------
                                                      5,655       5,903
     Interest-bearing deposits in banks                 100         100
     U.S Treasury securities, held-to-maturity       23,877      25,540
     Other securities                                   391          53
     Loans - net                                     79,047      72,598
     Premises and equipment - net                     4,315       4,404
     Other real estate owned                            504         360
     Other assets                                       781         993
                                                    -------      -------
          TOTAL ASSETS                             $114,670     109,951
                                                    =======     =======
   LIABILITIES:
     Deposits -
       Demand                                      $ 11,584      11,353
       NOW accounts, interest-bearing                21,807      17,815
       Savings                                       16,696      15,143
       Certificates - $100,000 and over              22,847      24,393
       Other time certificates                       30,180      30,190
                                                    -------     -------
          Total deposits                            103,114      98,894

     Accrued interest and other liabilities             889       1,405
                                                    -------     -------
          TOTAL LIABILITIES                         104,003     100,299

  SHAREHOLDERS' EQUITY:
     Common stock, no par value; authorized
      1,500,000 shares; issued and outstanding
      2002 - 620,898 shares; 2001 - 613,072 shares      776         766
     Surplus                                          1,109         996
     Retained earnings                                8,782       7,890
                                                    -------     -------
          TOTAL SHAREHOLDERS' EQUITY                 10,667       9,652
                                                    -------     -------
          TOTAL LIABILITIES AND
           SHAREHOLDERS' EQUITY                    $114,670     109,951
                                                    =======     =======
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.

                                  Page 26
<PAGE>
<TABLE>
<CAPTION>
                        COMMUNITY NATIONAL CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME
                        For the years ended December 31,
                       ($000's, except for share amounts)

                                                       2002        2001
                                                       ----        ----
 
                                                <c>           <c>
  INTEREST INCOME:
    Interest and fees on loans                      $ 6,208        6,491
    Interest on federal funds sold                       66          244
    Interest on investment securities                 1,106        1,227
                                                      -----        -----
         TOTAL INTEREST INCOME                        7,380        7,962
                                                      -----        -----
  INTEREST EXPENSE:
    Interest on deposits -
    Savings and NOW accounts                           646           759
    Time deposits                                    2,204         3,434
    Interest on federal funds purchased                  2             -
                                                     -----         -----
         TOTAL INTEREST EXPENSE                      2,852         4,193
                                                     -----         -----
         NET INTEREST INCOME                         4,528         3,769

  PROVISION FOR LOAN LOSSES                            200           210
                                                     -----         -----
         NET INTEREST INCOME AFTER
          PROVISION FOR LOAN LOSSES                  4,328         3,559
                                                     -----         -----
  OTHER OPERATING INCOME:
    Service charges and fees                           516           562
    Loan brokerage fees                                245           239
    Other operating income                              22            25
                                                     -----         -----
         TOTAL OTHER OPERATING INCOME                  783           826
                                                     -----         -----
  OPERATING EXPENSES:
    Salaries, wages and employee benefits            1,916         1,653
    Equipment and occupancy expense                    396           434
    State franchise tax                                124           115
    Other operating expenses                           966           811
                                                     -----         -----
         TOTAL OPERATING EXPENSES                    3,402         3,013
                                                     -----         -----
         INCOME BEFORE TAXES                         1,709         1,372

  PROVISION FOR INCOME TAXES                           581           472
                                                     -----         -----
         NET INCOME                                $ 1,128           900
                                                     =====         =====
  Dividends declared per common share              $  0.38         0.365
                                                     =====         =====
Net income per common share                        $  1.82          1.47
                                                     =====         =====
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.
                                  Page 27
<PAGE>
<TABLE>
<CAPTION>
                        COMMUNITY NATIONAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        For the years ended December 31,
                                   ($000's)

                                     COMMON               RETAINED
                                     STOCK     SURPLUS    EARNINGS     TOTAL
                                     ------    -------    --------     -----

                                  <c>       <c>         <c>       <c>

BALANCE - January 1, 2001           $  758       885       7,214     8,857
Add - Net income                                             900       900
Stock dividend                           8       111                   119
Deduct - Dividend declared
         $0.365 per share                                   (224)     (224)
                                      -----     ------      ------    ------
BALANCE - December 31, 2001            766       996       7,890     9,652

Add - Net income                                           1,128     1,128
Stock dividend                          10       113                   123
Deduct - Dividend declared
         $0.38  per share                                   (236)     (236)
                                      -----     ------      ------    ------
BALANCE - December 31, 2002         $  776     1,109       8,782    10,667
                                      =====     ======      ======    ======
</TABLE>


The accompanying notes to consolidated financial statements are an integral
part of these statements.


                                  Page 28

<PAGE>
<TABLE>
<CAPTION>
                        COMMUNITY NATIONAL CORPORATION
                           STATEMENTS OF CASH FLOWS
                        For the years ended December 31,
                                   ($000's)
                                                            2002        2001
                                                           ------      ------

                                                      <c>          <c>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Interest received                                     $ 7,560       7,997
  Fees and commissions received                             783         826
  Interest paid                                          (3,401)     (4,531)
  Cash paid to employees and for other
   operating expenses                                    (2,927)     (2,792)
  Income taxes paid                                        (538)       (410)
                                                         ------      ------
      NET CASH FLOWS FROM OPERATING ACTIVITIES            1,477       1,090
                                                         ------      ------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from maturing investment securities           14,076       9,392
  Purchase of investment securities                     (12,840)    (14,100)
  Net (increase) decrease in loans                       (7,348)        293
  Proceeds from sale of other real estate owned             449           -
  Capital expenditures                                     (181)     (1,094)
                                                         ------      ------
      NET CASH FLOWS FROM INVESTING ACTIVITIES           (5,844)     (5,509)
                                                         ------      ------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits                                4,220       3,400
  Cash dividends paid                                      (101)        (97)
                                                         ------      ------
      NET CASH FLOWS FROM FINANCING ACTIVITIES            4,119       3,303
                                                         ------      ------
      NET (DECREASE) IN CASH AND CASH
        EQUIVALENTS                                        (248)     (1,116)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR            5,903       7,019
                                                         ------      ------
CASH AND CASH EQUIVALENTS AT END OF YEAR                $ 5,655       5,903
                                                         ======      ======
RECONCILIATION OF NET INCOME TO NET CASH
  PROVIDED BY OPERATING ACTIVITIES:
    Net income                                          $ 1,128         900
                                                         ------      ------
    Adjustments to reconcile net income to
     net cash operating activities:
      Depreciation                                          270         225
      Loss on disposal of other real estate owned           107          35
      Amortization of discounts                              81          48
      Provision for loan losses                             200         210
      Provision for deferred taxes                          112           4
      (Increase) decrease in interest receivable             99         (13)
      (Increase) decrease in prepaid expense                 18          19
      (Decrease) in interest payable                       (551)       (338)

      Increase (decrease) in income taxes
       payable and refundable                               (68)         59
      Increase (decrease) in other accrued expenses          81         (59)
                                                         ------      ------
         TOTAL ADJUSTMENTS                                  349         190
                                                         ------      ------
           NET CASH PROVIDED BY OPERATING ACTIVITIES    $ 1,477       1,090
                                                         ======      ======
</TABLE>


The accompanying notes to consolidated financial statements are an integral
part of these statements.


                                  Page 29


<PAGE>


NOTE  1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Community National Corporation (CNC) is a bank holding company, whose
principal activity is the ownership and management of its wholly-owned
subsidiary Community National Bank (the Bank).  CNC was formed July 2, 2001.
The Bank was formed February 7, 1983.  During the third quarter of 2001, each
shareholder of Community National Bank received two shares of CNC in exchange
for each share of the Bank.

The Bank generates mortgage, commercial and consumer loans and receives
deposits from customers within its market areas which are generally Franklin,
Springboro, Centerville and Carlisle, Ohio, and adjacent communities.

The accounting and reporting policies of the Bank conform with U.S. generally
accepted accounting principles (GAAP) and with general practices within the
banking industry.  Following is a summary of the significant accounting
policies:

ACCOUNTING ESTIMATES-
The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

CONSOLIDATION-
The accompanying consolidated financial statements consist of the accounts
of Community National Corporation and its wholly-owned subsidiary, Community
National Bank.  All inter-company transactions are eliminated in
consolidation.

INVESTMENT SECURITIES-
Securities that the Bank has the ability and intent to hold to maturity are
classified as held to maturity and are reported at amortized cost.
Amortization of premiums and accretion of discounts are recognized in
interest income using methods approximating the interest method over the
period to maturity.  Gains or losses from the sale of securities are computed
using the specific identification method.  Federal Reserve Bank (FRB) stock
and Federal Home Loan Bank (FHLB) stock are equity interests that are carried
at cost.  They can only be sold at its cost, or par value, to the issuer or
to another member institution.  The Bank is required to maintain a percentage
of its capital and surplus in FRB stock.  An investment in FHLB stock is
required in order to have a line of credit or borrow funds from FHLB.

LOANS AND ALLOWANCE FOR LOAN LOSSES-
Loans are stated at the principal amount outstanding, net of unearned income,
including deferred loan fees and an allowance for loan losses.  Interest on
other loans is calculated by using the simple interest method on daily
balances of the principal amount outstanding.  The accrual of interest is
discontinued when there is clear indication that the borrower's cash flow may
not be sufficient to meet payments as they become due.  Loan origination
fees, net of loan origination costs, are deferred and recognized as income
over the life of the loan.

                                  Page 30

<PAGE>

The allowance for loan losses is established through a provision for loan
losses charged to expense.  Loans are charged against the allowance for loan
losses when management believes that the collectibility of the principal is
unlikely.  Loans are considered impaired when management believes, based on
current information and events, it is probable that the Bank will be unable
to collect all amounts due according to the contractual terms of the loan
agreement.  Impaired loans are measured based on the present value of
expected future cash flows discounted at the loans' effective interest rate
or the fair value of the underlying collateral.

The allowance for loan losses is evaluated on a regular basis by management
and is based upon management's periodic review of the collectibility of
loans, and prior loan loss in light of historical experience, the nature and
volume of the loan portfolio, adverse situations that may affect the
borrower's ability to repay, estimated value of any underlying collateral and
prevailing economic conditions. This evaluation is inherently subjective as
it requires estimates that are susceptible to significant revision as more
information becomes available.

PREMISES AND EQUIPMENT-
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed on the straight-line method over the estimated
useful lives of the assets.  Costs incurred for maintenance and repairs
are expensed currently.

OTHER REAL ESTATE OWNED-
Assets acquired through, or in lieu of, loan foreclosure are held for sale
and are initially recorded at the lower of the Bank's carrying amount or fair
value less estimated selling cost at the date of foreclosure.  Any write-
downs based on the asset's fair value at the date of acquisition are charged
to the allowance for loan losses.  Costs related to holding property are
expensed.  After foreclosure, valuations are periodically performed by
management and the assets are carried at the lower of the carrying amount or
fair value less the cost to sell.  Any reductions in the carrying value are
expensed.

ADVERTISING COSTS-
Advertising costs, of approximately $83,000 and $71,000 for the respective
years ended 2002 and 2001, are expensed as incurred.

INCOME TAXES-
Deferred income tax assets and liabilities are determined using the liability
method of accounting.  Under this method, the net deferred tax asset or
liability is determined based on the tax effects of the temporary differences
between book and tax bases of the various balance sheet assets and
liabilities and gives current recognition to changes in tax rates and laws.
CNC files consolidated income tax returns with its subsidiary.

STATEMENTS OF CASH FLOWS-
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand, amounts due from banks with maturities of three months or less and
federal funds sold.


                                  Page 31
<PAGE>

EARNINGS PER SHARE-
Basic earnings per share is calculated by dividing net income by the weighted
average number of common shares outstanding during the period.  The Company's
capital structure includes no potential for dilution.  There are no warrants,
options or other arrangements that would increase the number of shares
outstanding.  In connection with the conversion to a bank holding company,
the holding company issued 2 shares of no par common stock for every share of
$2.50 par stock.

RECENT ACCOUNTING PRONOUNCEMENTS-
The Financial Accounting Standards Board has issued Statement No. 145,
Rescission of FASB Statements 4, 44 and 64, Amendment of FASB Statement No.
13, and Technical Corrections, effective May 15, 2002;  Statement No. 146,
Accounting for Costs Associated with Exit or Disposed Activities, effective
January 1, 2003; Statement No. 147, Acquisitions of Certain Financial
Institutions - an amendment of FASB Statements 72 and 144 and FASB
Interpretation No. 9, effective October 1, 2002; Statement No. 148,
Accounting for Stock-Based Compensation - Transition and Disclosure - an
amendment of FASB Statement No. 123, effective January 1, 2004.  These
standards will not have a significant impact on the Company's financial
condition or results of operations.


NOTE  2 - INVESTMENT SECURITIES

<TABLE>
Carrying amounts and approximate market values of investment securities
at December 31 are summarized as follows ($100's):
<CAPTION>
                                        2002                  2001
                                      --------              --------
                               Carrying     Fair        Carrying    Fair
                                Amount      Value        Amount     Value
                                -------    -------       -------   -------

                             <c>        <c>          <c>        <c>
U.S. Treasury Securities:
   Due within 1 year or less    $14,235     14,374       11,992     12,168
   Due from 1 to 5 years          9,642      9,948       13,548     14,053
                                 ------     ------       ------     ------
       Subtotal                  23,877     24,322       25,540     26,221

Federal Reserve Bank, at cost        53         53           53         53
Federal Home Loan Bank, at cost     338        338            -          -
                                 ------     ------       ------     ------
       Total                    $24,268     24,713       25,593     26,274
                                 ======     ======       ======     ======
</TABLE>

The Bank believes it has the ability and intends to hold all of its
securities until maturity.  Gross unrealized gains on investment securities
were $462,000 and $681,000 at December 31, 2002 and 2001, respectively.
Investment securities with a par value of $23,460,000 and $22,460,000 at
December 31, 2002 and 2001, respectively, were pledged to secure public
deposits.
                                  Page 32
<PAGE>

NOTE  3 - LOANS
<TABLE>
Major classifications of loans at December 31 are as follows ($000's):
<CAPTION>
                                                 2002       2001
                                                 ----       ----
         
                                   <c>        <c>
          Mortgage loans on real estate:
            Residential 1 - 4 family           $33,824     30,355
            Commercial                          33,323     28,771
            Construction                         2,138      3,439
            Second mortgages                       494        160
            Equity lines of credit               2,485      2,264
                                                ------     ------
                Total                           72,264     64,989

            Commercial loans                     3,117      4,112
            Installment loans                    4,473      4,452
                                                ------     ------
                                                79,854     73,553
          Unearned loan origination fees            (3)        (3)
                                                ------     ------
                                                79,851     73,550
          Allowance for loan losses               (804)      (952)
                                                ------     ------
               Loans - net                     $79,047     72,598
                                                ======     ======
</TABLE>

<TABLE>
The following is a summary of information related to impaired loans:
<CAPTION>
                                                  2002           2001
		                                    --------      --------
 
                                           <c>            <c>
 Impaired loans with a valuation allowance     $1,023,000      637,000
 Valuation allowance related to impaired loans    176,000       61,000
 Average investment in impaired loans           1,278,000      504,000
 Interest income recognized on impaired loans      41,000            -
 Interest income received on cash basis
  on impaired loans                                11,000            -

</TABLE>

Loans on which the accrual of interest has been discontinued or reduced
amounted to $1,023,000 and $637,000 at December 31, 2002 and 2001,
respectively.  Loans past due greater than 90 days and accruing interest
were $594,000.  Interest on non-accrual loans is recognized as received.
No additional funds are committed to be advanced in connection with impaired
loans.


                                  Page 33



<PAGE>
<TABLE>
Changes in the allowance for loan losses for the years ended December 31
were as follows ($000's):
<CAPTION>
                                           2002          2001
                                         --------      --------
    
                                    <c>           <c>
     Balance - January 1,                  $952           897
     Provision charged to operations        200           210
     Loans charged off                     (375)         (176)
     Recoveries                              27            21
                                            ---           ---
     Balance - December 31,                $804           952
                                            ===           ===
</TABLE>

The Bank has entered into related-party transactions with various directors
and officers.  Such transactions originate in the normal course of the Bank's
operations as a depository and lending institution.  At December 31, 2002 and
2001, certain officers, directors and companies of which they have a direct
or indirect interest, were indebted to the Bank directly or as guarantors in
the aggregate amount of $1,659,000 and $2,109,000, respectively.  New loans
to related parties were $1,061,000 and repayments were $886,000 during 2002.

Losses on disposals of Other Real Estate Owned of approximately $107,000 and
$35,000 for the respective years ended December 31, 2002 and 2001 are
included in other operating expenses.


NOTE  4 - PREMISES AND EQUIPMENT

<TABLE>
Premises and equipment at December 31 are summarized as follows ($000's):
<CAPTION>
                                           2002          2001
                                         --------      --------
    
                                   <c>           <c>
     Land                                 $  870           870
     Buildings                             2,764         2,730
     Equipment                             2,016         1,871
     Leasehold improvements                   16            16
                                           -----         -----
         Total                             5,666         5,487
     Less - Accumulated depreciation       1,351         1,083
                                           -----         -----
         Premises and Equipment - Net     $4,315         4,404
                                           =====         =====
</TABLE>

Depreciation charged to income was $270,000 in 2002 and $225,000 in 2001.


                                  Page 34



<PAGE>

NOTE  5 - CERTIFICATES OF DEPOSIT

<TABLE>
Certificates of deposit and their remaining maturities are as follows
($000's):
<CAPTION>
                               Over      Less than
                            $100,000      $100,000      Total
                            --------     ---------     -------

                          <c>           <c>         <c>
Year ending December 31,
          2003               $18,920        24,021      42,941
          2004                 2,314         4,529       6,843
          2005                 1,059         1,175       2,234
          2006                   201           338         539
          2007                   353            94         447
          Thereafter              -             23          23
                              ------        ------      ------
                             $22,847        30,180      53,027
                              ======        ======      ======
</TABLE>


NOTE  6 - LINE OF CREDIT

The Bank has a line of credit with the Federal Home Loan Bank of Cincinnati
for borrowings up to $10,000,000.  The line of credit is collateralized by
a blanket lien on residential mortgages.  The Bank has a line of credit with
Federal Reserve Bank of Cleveland for borrowings up to $1,900,000.  The line
of credit is collateralized by certain residential real estate loans with an
outstanding balance of approximately $2,148,000.  The Bank also has an
unsecured line of credit of up to $2,000,000 with a regional bank for
liquidity purposes.  There were no borrowings at December 31, 2002 and 2001.


NOTE  7 - INCOME TAX

<TABLE>
The provision for federal income tax consists of ($000's):
<CAPTION>
                                           2002          2001
                                           ----          ----

                                       <c>            <c>
Income tax currently payable              $ 470           468
Deferred income tax                         111             4
                                            ---           ---
Provision for income taxes                $ 581           472
                                            ===           ===
</TABLE>


                                  Page 35

<PAGE>
<TABLE>
The following is a reconciliation of the provision for federal income tax
to the amount computed at the statutory rate of 34% ($000's):
<CAPTION

                                           2002          2001
                                           ----          ----
   
                                     <c>           <c>
    Tax at statutory rate on income
     before income tax                    $ 582           467
    Miscellaneous                           (1)            5
                                           ---           ---
    Federal income tax applicable
     to income before income tax         $ 581           472
                                           ===           ===
</TABLE>

<TABLE>
The Bank expects to realize all deferred tax assets and has not provided
a valuation allowance related to the deferred tax assets.  Deferred taxes,
included in other assets, consisted of the following at December 31 ($000's):
<CAPTION>
                                           2002          2001
                                           ----          ----
   
                                     <c>           <c>
    Deferred tax assets:
     Allowance for loan losses            $ 224           288
     Loan origination fees                    -             1
     Organization expense                     7             -
                                            ---           ---
        Total deferred tax assets           231           289

Deferred tax liabilities:
  Depreciation                             (240)         (187)
                                            ---           ---
      Net deferred tax asset(liability)   $  (9)          102
                                            ===           ===
</TABLE>


NOTE  8 - EMPLOYEE BENEFIT PLANS

The Bank maintains a savings and investment plan under Section 401(k) of the
Internal Revenue Code.  The plan covers substantially all employees who meet
certain eligibility requirements.  Employees may contribute to the plan up to
20% of annual compensation.  For every dollar an employee contributes (up to
4% of compensation), the Bank will contribute an amount equal to 50% of the
employee's contribution.  The plan also includes a profit-sharing feature.
Annually, the Bank determines the amount of its contribution.  The Bank made
total contributions of $44,000 and $22,000 to the plan for the years ended
December 31, 2002 and 2001, respectively.


                                  Page 36
<PAGE>

NOTE  9 - LEASES

<TABLE>
The Bank occupies a building under an operating lease agreement which expires
in 2004. Estimated future minimum lease payments, including payments under
one of the renewal options, are as follows:
<CAPTION>
          
                <c>
           2003              $14,000
           2004               12,000
</TABLE>

Total rent expense for all operating leases was $14,000 and $17,000 in the
respective years ended in 2002 and 2001.

<TABLE>
The Bank leases a portion of the Springboro building under an operating lease
agreement expiring in 2007.  Future minimum rentals to be received under the
agreement are as follows:
<CAPTION>
          
                <c>
           2003              $68,000
           2004               70,000
           2005               73,000
           2006               75,000
           Thereafter         25,000
                            --------
                            $311,000
                            ========
</TABLE>


NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES

The Bank is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit.  They
involve, to varying degrees, elements of credit and interest rate risk in
excess of the amount recognized in the statement of financial position.

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses.  Management evaluates each customer's credit worthiness on a case-
by-case basis.  The amount of collateral obtained, if deemed necessary by
management, upon extension of credit is based on management's credit
evaluation of the counter party.  Collateral held varies, but may include
accounts receivable, inventory, property, plant and equipment, and income-
producing properties.

The Bank has commitments to extend credit and letters of credit aggregating
$7,100,000 at December 31, 2002.  The Bank uses the same credit policies in
making commitments and conditional obligations as it does for on-balance-
sheet instruments.  No significant losses are anticipated as a result of
these commitments.

                                  Page 37

<PAGE>

Cash and cash equivalents at December 31, 2002, included cash and federal
funds sold in excess of federally insured amounts at several financial
institutions.

The Company has been named as a defendant in a suit, filed September 27,
2002, in the Court of Common Pleas, Montgomery County, Ohio demanding payment
for storage of equipment owned by a Community National Bank borrower.
Community National Bank has a lien against the equipment as security for its
loan.  The plaintiff, Sanlin Properties, has demanded compensatory damages of
$70,000 and punitive damages of $1,000,000.  Management cannot estimate the
outcome of this litigation but believes the suit is without merit and intends
to vigorously defend itself against this action.

The Bank is party to various other claims and proceedings arising in the
normal course of business which, in the opinion of management, will not
result in a material liability to the Bank.


NOTE 11 - RETAINED EARNINGS

The Company may generally pay dividends in amounts determined by the Board
of Directors.  Banking regulations limit the amount of dividends that may be
paid by the Bank to its parent Corporation without prior approval of the
Bank's regulatory agency.  Retained earnings against which dividends may be
charged are $1,568,075 plus current retained income after December 31, 2002.
A dividend of $236,000 was declared in 2002 and is payable in 2003.  The
dividend is payable in shares of the Corporation's stock, or cash, at the
shareholder's option.

A dividend of $224,000 was declared in 2001 and paid in 2002.  Of the
$224,000, $101,000 was paid in cash and $123,000 was paid in stock.  The
value of the stock was based on the fair market value at the dividend payable
date or $15.63 per share.  As a result of the dividend, 7,826 new shares of
stock were issued.


NOTE 12 - REGULATORY MATTERS

Banks and holding companies are subject to various regulatory capital
requirements administered by the federal banking agencies.  Failure to meet
minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by regulators that, if undertaken, could
have a direct material effect on the financial statements.  Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain off-
balance-sheet items as calculated under regulatory accounting practices.  The
capital amounts and classification are also subject to qualitative judgments
by the regulators about components, risk weightings, and other factors.


                                  Page 38

<PAGE>

Quantitative measures established by regulation to ensure capital adequacy
require the Bank maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to risk-
weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined).  The capital ratios of the consolidated Company are not
materially different from those of the Bank.  Management believes, as of
December 31, 2002, that the Bank meets all capital adequacy requirements to
which it is subject.  In addition, minimum cash reserves of approximately
$966,000 at December 31, 2002, and an average of approximately $882,000
during 2002 were required to be maintained.

As of December 31, 2002, the most recent notification from the Office of the
Comptroller of the Currency categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action.  To be categorized as
adequately capitalized, minimum total risk-based, Tier I risk-based, and Tier
I leverage ratios as set forth in the following table must be maintained.
There are no conditions or events since that notification that management
believes have changed the institution's classification.

<TABLE>
The actual capital amounts ($000's) and ratios are also presented in the
table.
<CAPTION>
                                                               To Be Well
                                                            Capitalized Under
                                            For Capital     Prompt Corrective
                            Actual      Adequacy Purpose:  Action Provisions:
                       ---------------  -----------------  ------------------
                        Amount    Ratio   Amount   Ratio      Amount   Ratio
                        ------   ------   ------   -----      ------   -----

                    <c>      <c>      <c>       <c>       <c>       <c>
As of December 31, 2002:
  Total Capital (to
   Risk Weighted
   Assets)             $11,334   16.05%  >$5,648   >8.0%     >$7,060   >10.0%

  Tier I Capital (to
   Risk Weighted
   Assets)             $10,530   14.91%  >$2,824   >4.0%     >$4,236   > 6.0%

  Tier I Capital (to
   Average Assets)     $10,530    8.89%  >$4,740   >4.0%     >$5,925   > 5.0%

As of December 31, 2001:
  Total Capital (to
   Risk Weighted
   Assets)             $10,437   15.64%  >$5,346   >8.0%     >$6,683   >10.0%

  Tier I Capital (to
   Risk Weighted
   Assets)             $ 9,602   14.39%  >$2,673   >4.0%     >$4,010   > 6.0%

  Tier I Capital (to
    Average Assets)    $ 9,602    8.60%  >$4,449   >4.0%     >$5,561   > 5.0%
</TABLE>
                                  Page 39
<PAGE>

NOTE 13 -	FAIR MARKET DISCLOSURES OF FINANCIAL INSTRUMENTS

<TABLE>
Carrying amounts and estimated fair values for financial instruments as of
December 31 were as follows ($000's):
<CAPTION>
                                       2002                       2001
                                     --------                   --------
                               Carrying     Fair          Carrying     Fair
                                Amount      Value          Amount      Value
                                -------    -------         -------    -------

                             <c>        <c>             <c>        <c>
Financial Assets:
   Cash and due from banks      $ 2,405      2,405           3,053      3,053
   Federal funds sold             3,250      3,250           2,850      2,850
   Interest bearing deposits
       in banks                     100        100             100        100
   Securities held to maturity   24,268     24,713          25,593     26,274
   Loans, net                    79,047     81,965          72,598     75,356

Financial Liabilities:
   Time deposits                 53,027     53,467          54,583     55,210
   Other deposits                50,087     50,087          44,311     44,311
</TABLE>

The fair value of off-balance sheet financial instruments at December 31,
2002 and 2001, was not material.

Fair values of financial instruments are based on various assumptions,
including the discount rate and estimates of future cash flows.  Therefore,
the fair values presented may not represent amounts that could be realized in
actual transactions.  In addition, because the required disclosures exclude
certain financial instruments and all non-financial instruments, any
aggregation of the fair value amounts presented would not represent the
underlying value of the Bank.  The following methods and assumptions were
used to estimate the fair value of certain financial instruments:

Cash and cash equivalents.
The carrying amounts presented are deemed to approximate fair value.

Interest-bearing deposits in banks.
Fair value is estimated for these certificates of deposit by discounting the
future cash flows at current rates.

Investment Securities.
Fair values are based on quoted market prices, if available.  If a quoted
market price is not available, fair value is estimated using quoted market
prices for similar securities.

Loans.
Fair value is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.

                                  Page 40
<PAGE>

Deposits.
The fair value of demand deposits, savings accounts, and certain money market
deposits is the amount payable on demand at the reporting date.  The fair
value of fixed-maturity certificates of deposit is estimated using the rates
currently offered for deposits of similar remaining maturities.


NOTE 14 -	PARENT COMPANY FINANCIAL INFORMATION

<TABLE>
Condensed financial information for Community National Corporation (parent
company only) for the year ended December 31, 2002 and 2001 follows
(thousands):
<CAPTION>

                                                 2002        2001
                                               -------      ------
      
                                      <c>          <c
     CONDENSED BALANCE SHEET
       Assets:
        Cash due from banks                    $   373           -
        Investment in subsidiary                10,530       9,603
        Other assets                                 -         273
                                                ------       -----
           Total Assets                        $10,903       9,876
                                                ======       =====

       Liabilities:
        Other liabilities                      $   236         224

       Shareholders' equity                     10,667       9,652
                                                ------       -----
           Total Liabilities and
            Shareholders Equity                $10,903       9,876
                                                ======       =====

    CONDENSED STATEMENT OF INCOME
       Dividends from subsidiary               $   236         344
       Legal and professional fees                 (35)        (71)
                                                ------       -----
       Income before equity in
        undistributed income of subsidiary         201         273
       Equity in undistributed income
        of subsidiary                              927         627
                                                ------       -----
           Net Income                          $ 1,128         900
                                                ======       =====


                                  Page 41

<PAGE>

    CONDENSED STATEMENT OF CASH FLOWS
       Cash flows from operating activities:
        Net income                             $ 1,128         900
        Equity in undistributed income
         of subsidiary                            (927)       (627)
        (Increase) decrease in other assets        273        (273)
                                                ------      ------
           Net cash provided by operating
            activities                             474           -
                                                ------      ------
       Cash flows from financing activities:
        Cash dividends paid                       (101)          -
                                                ------      ------
       Net cash provided by financing
        activities                                (101)          -
                                                ------      ------
       Net change in cash:                         373           -
        Cash at beginning of year                    -           -
                                                ------      ------
           Cash at end of year                 $   373           -
                                                ======      ======
</TABLE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

None.


                                  Page 42

<PAGE>
                            PART III


ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

THE BOARD OF DIRECTORS

<TABLE>
The following table sets forth for each director of the Company as of
February 28, 2003, (a) the person's name, (b) age at December 31, 2002, (c)
the year first elected as a director of the Company or Bank and (d) positions
with the Company and the Bank, other than as a director, and principal
occupation and business experience for the past five years.
<CAPTION>
                                DIRECTOR    POSITION WITH COMPANY; PRINCIPAL
NAME                     AGE     SINCE      OCCUPATION; BUSINESS EXPERIENCE
----                     ---    --------    --------------------------------

                      
    
        

Donald G. Burns           72     1983       Chairman and Director; Retired
                                             Physician

Robert L. Campbell        70     1983       Retired (Henderson Turf Farm)

W. Leslie Earnhart        82     1983       Retired (Sand and gravel
                                             industry)

T.C. Garland              70     1983       Physician

James L. Gross            55     1997       Secretary; President, Gross
                                             Lumber Co.

Stanley E. Kolb           71     1983       Attorney

Paul J. Scheuermann       44     1994       President and Chief Executive
                                             Officer of the Company and the
                                             Bank
</TABLE>

EXECUTIVE OFFICERS

<TABLE>
The following table sets forth for each executive officer of the Company and
the Bank as of February 28, 2003, (a) the person's name, (b) age at December
31, 2002, (c) the year first elected as an executive officer of the Company
or Bank and (d) positions with the Company and the Bank.
<CAPTION>
                               YEAR FIRST   POSITION WITH COMPANY; PRINCIPAL
NAME                     AGE    ELECTED     OCCUPATION; BUSINESS EXPERIENCE
----                     ---   ----------   --------------------------------

                      
     
       

Paul J. Scheuermann       44      1986      President and Chief Executive
                                             Officer of the Company and the
                                             Bank since 1994


                                  Page 43
<PAGE>

Jay A. Lees               60      1989      Treasurer of the Company; Senior
                                             Vice President and Senior Loan
                                             Officer of the Bank

Gregory G. Eagan          43      2001      Vice President and Chief
                                             Financial Officer of the Bank

Stephen R. Harding        32      2000      Vice President, Branch Management
                                             and Technology

Nicholas Motto            54      1997      Vice President, Business
                                             Development Officer of the Bank
</TABLE>


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on a review of Forms 3, 4 and 5 furnished to Community National
in the fiscal year ended December 31, 2002, Community National is not aware
of the failure of any reporting person to timely file the above forms.


ITEM 10.  EXECUTIVE COMPENSATION

The information contained in the Company's definitive Proxy Statement on
Schedule 14A under the captions "COMPENSATION OF EXECUTIVE OFFICERS" and
"BOARD OF DIRECTORS - MEETINGS AND COMMITTEES" is incorporated herein by
reference.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained in the Company's definitive Proxy Statement on
Schedule 14A under the caption "VOTING SECURITIES AND PRINCIPAL HOLDERS
THEREOF" and "CERTAIN BENEFICIAL OWNERS" is incorporated herein by reference.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained in the Company's definitive Proxy Statement on
Schedule 14A under the caption "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS" is incorporated herein by reference.


                                  Page 44

<PAGE>

                                 PART IV


ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(3.1)    Articles of Incorporation of Community National Corporation are
         Incorporated herein by reference to the registrant's Registration
         Statement on Form S-4 filed with the Securities and Exchange
         Commission on March 6, 2001.

(3.2)    Regulations of the registrant are incorporated by reference to the
         registrant's Registration Statement on Form S-4 filed with the
         Securities and Exchange Commission on March 6, 2001.

(21)     Subsidiary of the registrant incorporated herein by reference to the
         registrant's Registration Statement on Form S-4 filed with the
         Securities and Exchange Commission on March 6, 2001.

(99.1) Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K:  None


ITEM 14.  CONTROLS AND PROCEDURES

The Chief Executive Officer and the principal financial officer have
reviewed, as of a date within 90 days of this filing, the disclosure controls
and procedures that ensure that information relating to the Company required
to be disclosed by the Company in the reports that it files or submits under
the Securities and Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported in a timely and proper manner.  Based upon this
review, the Company believes that there are adequate controls and procedures
in place.  There are no significant changes in the internal controls or other
factors that could affect these controls after the date of the evaluation.


                                  Page 45

<PAGE>
                              SIGNATURES

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

                                          COMMUNITY NATIONAL CORPORATION

                                           /s/ Paul J. Scheuermann
                                   By:    -------------------------------
                                          Paul J. Scheuermann
                                          President and Chief Executive Officer

                                   Date:  March 18, 2003
                                          ---------------------

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

NAME                               TITLE                       DATE
---------------------------      ---------             ------------------

/s/ Donald G. Burns              Director              March 18, 2003
---------------------------                            ------------------
Donald G. Burns


/s/ Robert L. Campbell           Director              March 18, 2003
---------------------------                            ------------------
Robert L. Campbell


/s/ W. Leslie Earnhart           Director              March 18, 2003
---------------------------                            ------------------
W. Leslie Earnhart


/s/ T.C. Garland                 Director              March 18, 2003
---------------------------                            ------------------
T.C. Garland


/s/ James L. Gross               Director              March 18, 2003
---------------------------                            ------------------
James L. Gross


/s/ Stanley E. Kolb              Director              March 18, 2003
---------------------------                            ------------------
Stanley E. Kolb


                                  Page 46

<PAGE>


/s/ Paul J. Scheuermann          President, Chief      March 18, 2003
---------------------------        Executive Officer   ------------------
Paul J. Scheuermann                and Director


/s/ Jay A. Lees                  Treasurer             March 18, 2003
---------------------------                            ------------------
Jay A. Lees


/s/ Gregory G. Eagan             Vice President,       March 18, 2003
---------------------------        Chief Financial     ------------------
Gregory G. Eagan                   Officer, Community
                                   National Bank
                                   (principal financial officer
                                   of Community National Corporation)



                                  Page 47

<PAGE>
                              CERTIFICATIONS

In connection with the Annual Report of Community National Corporation (CNC)
on Form 10-KSB for the period ending December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Paul J. Scheuermann, President of CNC, certify, that:

     (1)  I have reviewed this annual report on Form 10-KSB of CNC;

     (2)  Based on my knowledge, this annual report does not contain any
          untrue statement of a material fact or omit to state a material
          fact necessary to make the statements made, in light of the
          circumstances under which such statements were made, not
          misleading with respect to the period covered by this annual
          report;

(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations, and cash flows of the registrant as of, and for, the
periods presented in this annual report;

     (4)  The registrant's other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures, as
          defined in Exchange Act Rules 13a-14 and 15d-14, for the registrant
          and have:

           a. Designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which the
              annual report is being prepared;

           b. Evaluated the effectiveness of the registrant's disclosure
              control and procedures as of a date within 90 days prior to the
              filing date of this annual report (the Evaluation Date); and

           c. Presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based
              on our evaluation as of the Evaluation Date.

     (5)  The registrant's other certifying officer and I have disclosed,
          based on our most recent evaluation, to the registrant's auditors
          and the audit committee of registrant's board of directors (or
          persons performing the equivalent functions):

           a. All significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize, and report financial
              data and have identified for the registrant's auditors any
              material weaknesses in internal controls; and

           b. Any fraud, whether or not material, that involves management
              or other employees who have a significant role in the
              registrant's internal controls.


                                  Page 48

<PAGE>

     (6)  The registrant's other certifying officer and I have indicated in
          this annual report whether or not there were significant changes
          in internal controls or in other factors that could significantly
          affect internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.




/s/ Paul J. Scheuermann
-------------------------------------
Paul J. Scheuermann
President
March 18, 2003



                                  Page 49

<PAGE>

                            CERTIFICATIONS

In connection with the Annual Report of Community National Corporation (CNC)
on Form 10-KSB for the period ending December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Gregory G. Eagan, Chief Financial Officer of Community National Bank and
principal financial officer of CNC, certify, that:

     (1)  I have reviewed this annual report on Form 10-KSB of CNC;

     (2)  Based on my knowledge, this annual report does not contain any
          untrue statement of a material fact or omit to state a material
          fact necessary to make the statements made, in light of the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by this annual report;

(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations, and cash flows of the registrant as of, and for, the
periods presented in this annual report;

     (4)  The registrant's other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures, as
          defined in Exchange Act Rules 13a-14 and 15d-14, for the registrant
          and have:

           a. Designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which the
              annual report is being prepared;

           b. Evaluated the effectiveness of the registrant's disclosure
              control and procedures as of a date within 90 days prior to the
              filing date of this annual report (the Evaluation Date); and

           c. Presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based
              on our evaluation as of the Evaluation Date.

     (5)  The registrant's other certifying officer and I have disclosed,
          based on our most recent evaluation, to the registrant's auditors
          and the audit committee of registrant's board of directors (or
          persons performing the equivalent functions):

           a. All significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize, and report financial
              data and have identified for the registrant's auditors any
              material weaknesses in internal controls; and

           b. Any fraud, whether or not material, that involves management
              or other employees who have a significant role in the
              registrant's internal controls.


                                  Page 50
<PAGE>

     (6)  The registrant's other certifying officer and I have indicated in
          this annual report whether or not there were significant changes
          in internal controls or in other factors that could significantly
          affect internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.




/s/ Gregory G. Eagan
-------------------------------------
Gregory G. Eagan
Chief Financial Officer
March 18, 2003


                                  Page 51

<PAGE>


                             EXHIBIT INDEX


(a) Exhibits filed herewith or incorporated by reference are set forth in the
    following table prepared in accordance with item 601 of Regulation S-B.

    (3.1)    Articles of Incorporation of Community National Corporation are
             Incorporated herein by reference to the registrant's
             Registration Statement on Form S-4 filed with the Securities and
             Exchange Commission on March 6, 2001.

    (3.2)    By-laws of the registrant are incorporated by reference to the
             registrant's Registration Statement on Form S-4 filed with the
             Securities and Exchange Commission on March 6, 2001.

(21) Subsidiary of the registrant incorporated herein by reference to
         the registrant's Registration Statement on Form S-4 filed with
         the Securities and Exchange Commission on March 6, 2001.

(99.1) Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



                                  Page 52