<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended       September 30, 1996
                                  ........................

                                       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   0-13161

First-Knox Banc Corp.
 ............................................
(Exact name of registrant as specified in its charter)


Ohio                                                        31-1121049
 ...................                                       (IR.S Employer
(State or other jurisdiction of incorporation             Identification No.)
or organization)

                 One South Main Street, Mount Vernon, Ohio 43050
         ..............................................................
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (614) 399-5500
                        ................................
              (Registrant's telephone number including area code)

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

           Yes   X            No
               .....             .....

Number of shares of Common Stock, Par Value $3.125 per share at November 6, 1996

                       Authorized                  6,000,000
                       Issued                      3,755,618
                       Outstanding                 3,755,618

                                  Page 1 of 21
                            Exhibit Index at Page 19


<PAGE>   2



                              FIRST-KNOX BANC CORP.

                                    FORM 10-Q

                        QUARTER ENDED September 30, 1996

                        Part I - Financial Information


Interim Financial Information required by Rule 10-01 of Regulation S-X and Item

303 of Regulation S-K is included in this Form 10-Q as referenced below:


<TABLE>
<CAPTION>
                                                                                     Page
                                                                                   Number
                                                                                   ------

<S>                                                                                   <C>
Item 1.           Unaudited Financial Statements:

                      Consolidated Balance Sheet . . . . . . . . . . . . . . . . .     3

                      Consolidated Statement of Income . . . . . . . . . . . . . .     4

                      Condensed Consolidated Statement
                        of Changes in Shareholders' Equity . . . . . . . . . . . .     5

                      Condensed Consolidated Statement of Cash Flows . . . . . . .     6

                      Notes to the Consolidated Financial Statements . . . . . . .     7

Item 2.           Management's Discussion and Analysis
                      of Financial Condition and Results of Operations . . . . . .    13


                                      Part II - Other Information


Item 1.           Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .   N/A

Item 2.           Changes in Securities . . . . . . . . . . . . . . . . . . . . .   N/A

Item 3.           Defaults Upon Senior Securities . . . . . . . . . . . . . . . .   N/A

Item 4.           Submission of Matters to Vote of Security Holders . . . . . . .   N/A

Item 5.           Other Information . . . . . . . . . . . . . . . . . . . . . . .   N/A

Item 6.           Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . .    19

                  Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .    21
</TABLE>


                                     Page 2
<PAGE>   3
                              FIRST-KNOX BANC CORP
                           Consolidated Balance Sheet
                 ($ Amounts in thousands except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          September 30,    December 31,
                                                             1996              1995
                                                          ------------     ------------
<S>                                                        <C>              <C>      
ASSETS
Cash and non-interest bearing deposits with banks          $  16,038        $  17,012
Federal funds sold                                              --              3,400
                                                           ---------        ---------
    Total cash and cash equivalents                           16,038           20,412
Investment securities available for sale,
  at fair value (Note 2)                                     121,713           94,694
Mortgage-backed securities available for sale,             
  at fair value (Note 2)                                      55,830           37,294
                                                           ---------        ---------
      Total securities                                       177,543          131,988
Loans & lease financing (Note 3)                             352,071          330,641
Allowance for loans and lease losses (Note 4)                 (4,438)          (4,166)
                                                           ---------        ---------
   Net loans and leases                                      347,633          326,475
Premises and equipment, net                                   10,712           10,993
Accrued interest receivable and other assets                   8,737            7,031
                                                           ---------        ---------


     TOTAL ASSETS                                          $ 560,663        $ 496,899
                                                           =========        =========
LIABILITIES
Deposits
  Non-interest bearing demand                              $  51,804        $  54,706
  Interest-bearing demand                                     44,623           39,882
  Savings                                                     96,967           99,133
  Time                                                       232,764          210,346
                                                           ---------        ---------
     Total deposits                                          426,158          404,067
Short-term borrowings                                         19,848            7,986
Long-term debt (Note 5)                                       62,643           33,415
Accrued interest payable and other liabilities                 3,975            4,772
                                                           ---------        ---------
     TOTAL LIABILITIES                                       512,624          450,240
                                                           ---------        ---------

SHAREHOLDERS' EQUITY (Note 1)
   Common Stock, par value $3.125 per share;
      6,000,000 shares authorized;  3,747,713 issued
      and outstanding in 1996 and 3,650,225 shares
      issued in 1995                                          11,712           11,407
   Paid-in-capital                                            25,849           24,042
   Retained earnings                                          10,411           11,187
   Net unrealized holding gains on securities
      available for sale                                          67            1,912
   Common stock in treasury
      (89,965 shares in 1995)                                   --             (1,889)
                                                           ---------        ---------
     TOTAL SHAREHOLDERS' EQUITY                               48,039           46,659
                                                           ---------        ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $ 560,663        $ 496,899
                                                           =========        =========
</TABLE>


     The accompanying notes are an integral part of the financial statements

                                     Page 3

<PAGE>   4
                              FIRST-KNOX BANC CORP.
                  Consolidated Statement of Income (Unaudited)
                 ($ Amounts in thousands except per share data)
<TABLE>
<CAPTION>
                                                         Three Months Ending                   Nine Months Ending
                                                           September 30,                          September 30,
                                                      1996               1995                1996              1995
                                                   -----------        -----------        -----------        -----------
<S>                                                <C>                <C>                <C>                <C>        
Interest income:
   Loans and leases, including fees ........       $     7,795        $     7,364        $    22,856        $    21,240
   Investment and mortgage-backed securities
      Taxable ..............................             1,809              1,337              4,452              3,864
      Non-taxable ..........................               731                698              2,158              2,098
   Federal funds sold ......................               104                 66                304                153
                                                   -----------        -----------        -----------        -----------
      TOTAL INTEREST INCOME ................            10,439              9,465             29,770             27,355
                                                   -----------        -----------        -----------        -----------
Interest expense:
   Deposits ................................             4,166              3,954             12,172             11,087
   Short-term borrowings ...................                93                 94                271                294
   Long-term debt ..........................               931                493              1,894              1,493
                                                   -----------        -----------        -----------        -----------
      TOTAL INTEREST EXPENSE ...............             5,190              4,541             14,337             12,874
                                                   -----------        -----------        -----------        -----------
      NET INTEREST INCOME ..................             5,249              4,924             15,433             14,481
Provision for loan &
   lease losses (Note 4) ...................               211                166                543                402
                                                   -----------        -----------        -----------        -----------
      NET INTEREST INCOME AFTER
         PROVISION FOR LOAN AND LEASE LOSSES             5,038              4,758             14,890             14,079
                                                   -----------        -----------        -----------        -----------
Other income:
   Income from fiduciary activities ........               195                174                570                498
   Service charges, commissions and fees ...               598                548              1,787              1,742
   Loan sale gains, net ....................              --                   27               --                   27         
   Securities gains (losses), net ..........               (11)              --                  (11)               (20)
   Other ...................................                15                 27                 40                 76
                                                   -----------        -----------        -----------        -----------
      TOTAL OTHER INCOME ...................               797                776              2,386              2,323
                                                   -----------        -----------        -----------        -----------
Other expense:
   Salaries & employee benefits ............             1,822              1,882              5,190              5,379
   Occupancy and equipment .................               585                530              1,796              1,572
   FDIC Insurance ..........................                 1                (12)                 3                414
   Other ...................................             1,357              1,223              4,156              3,794
                                                   -----------        -----------        -----------        -----------
      TOTAL OTHER EXPENSE ..................             3,765              3,623             11,145             11,159
                                                   -----------        -----------        -----------        -----------
Income before federal income taxes .........             2,070              1,911              6,131              5,243
Federal income tax expense .................               466                423              1,415              1,097
                                                   -----------        -----------        -----------        -----------
NET INCOME .................................       $     1,604        $     1,488        $     4,716        $     4,146
                                                   ===========        ===========        ===========        ===========
Earnings per common share (Note 1):
                              Primary ......       $      0.42        $      0.39        $      1.24        $      1.08
                              Fully diluted        $      0.42        $      0.39        $      1.24        $      1.08
                                                   ===========        ===========        ===========        ===========
Weighted average common shares
   outstanding (Note 1):      Primary ......         3,797,557          3,775,761          3,794,909          3,827,272
                              Fully diluted          3,798,265          3,783,744          3,795,591          3,831,324
</TABLE>

The accompanying notes are an integral part of the financial statements

 
 
 
                                     Page 4
<PAGE>   5

                              FIRST-KNOX BANC CORP.
 Condensed Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
                 ($ Amounts in thousands except per share data)
<TABLE>
<CAPTION>


                                                                                       Three Months Ending       Nine Months Ending
                                                                                           September 30,            September 30,
                                                                                         1996        1995        1996        1995
                                                                                       -------     -------     -------     -------

<S>                                                                                    <C>           <C>        <C>         <C>    
Balance, beginning of period ....................................................      $46,520     $42,821     $46,659     $40,832

Net income ......................................................................        1,604       1,488       4,716       4,146

Issuance of 2863 and 9,047 shares in 1996 and 5,348 and 8,588 shares in 1995
    for stock options exercised .................................................           59          60         144          95

Treasury stock purchased - 96,322 common shares .................................                                           (1,926)

Cash dividends, declared at a per share rate of $.17 and $.436 in 1996 and 
    $.114 and $.324  in 1995 ....................................................         (638)       (426)     (1,635)     (1,217)

Change in net unrealized holding gain (loss) on securities
   available for sale ...........................................................          494         (21)     (1,845)      1,992
                                                                                       -------     -------     -------     -------

Balance, end of period ..........................................................      $48,039     $43,922     $48,039     $43,922
                                                                                       -------     -------     -------     -------
</TABLE>


     The accompanying notes are an integral part of the financial statements


                                     Page 5

<PAGE>   6


                              FIRST-KNOX BANC CORP.
           Condensed Consolidated Statement of Cash Flows (Unaudited)
                            ($ Amounts in thousands)
<TABLE>
<CAPTION>

                                                                         Nine  Months Ending
                                                                            September 30,
                                                                          1996           1995
                                                                        --------       --------
<S>                                                                     <C>            <C>     
Net cash provided by operating activities ........................      $  4,346       $  4,222

Cash Flows from Investing Activities:
    Purchases of investment  securities
      held to maturity ...........................................                       (1,279)
    Proceeds from calls, payments and maturities of investment
      securities held to maturity ................................                        1,533
    Purchases of investment and mortgage-backed securities
      available for sale .........................................       (72,290)       (24,724)
    Proceeds from calls, payments and maturities of investment and
      mortgage-backed securities available for sale ..............        13,970         10,304
    Proceeds from sales of investment and mortgage-backed
      securities available for sale ..............................        10,032         13,462
    Net increase in loans and leases .............................       (21,701)       (21,964)
    Proceeds from sale of loans ..................................                        1,578
    Expenditures for premises and equipment ......................          (525)        (1,520)
                                                                        --------       --------
    Net cash provided by (applied to) investing activities ......        (70,514)       (22,610)
                                                                        --------       --------

Cash Flows from Financing Activities:
    Net increase in deposit accounts .............................        22,091         24,178
    Net increase in short-term borrowings ........................        11,862         (4,656)
    Proceeds from long-term debt .................................        30,000
    Payments on long-term debt ...................................          (772)        (1,294)
    Cash dividends paid ..........................................        (1,531)        (1,246)
    Issuance of common stock .....................................           144             95
    Purchase of treasury shares ..................................                       (1,926)
                                                                        --------       --------
         Net cash provided by financing activities ...............        61,794         15,151
                                                                        --------       --------

Net increase (decrease) in cash and cash equivalents .............        (4,374)        (3,237)
    Cash and cash equivalents at beginning of period .............        20,412         18,110
                                                                        --------       --------
Cash and cash equivalents at end of period .......................        16,038         14,873
                                                                        ========       ========
Supplemental cash flow information:
    Interest paid ................................................      $ 14,543       $ 12,317
                                                                        ========       ========
    Income taxes paid ............................................      $  1,460       $  1,052
                                                                        ========       ========


</TABLE>


     The accompanying notes are an integral part of the financial statements

                                     Page 6
<PAGE>   7
                              FIRST-KNOX BANC CORP.

                 Notes to the Consolidated Financial Statements
                                   (Unaudited)

Note 1 - SUMMARY OF ACCOUNTING POLICIES:

                  The consolidated financial statements include the accounts of
                  the First-Knox Banc Corp. (the Corporation), and its
                  wholly-owned subsidiaries; The First-Knox National Bank
                  (First-Knox), and The Farmers and Savings Bank (Farmers). All
                  significant intercompany transactions have been eliminated.

                  These interim financial statements are prepared without audit
                  and reflect all adjustments of a normal and recurring nature
                  which, in the opinion of management, are necessary to present
                  fairly the consolidated financial position of First-Knox Banc
                  Corp. at September 30, 1996 and its results of operations and
                  cash flows for the periods presented. The accompanying
                  consolidated financial statements do not purport to contain
                  all the necessary financial disclosures required by generally
                  accepted accounting principles that might otherwise be
                  necessary in the circumstances. Accordingly, these financial
                  statements should be read in conjunction with the 1995
                  consolidated financial statements and notes thereto of
                  First-Knox Banc Corp. included in its Annual Report on Form
                  10-K for the year ended December 31, 1995.

                  The provision for income taxes is based upon the effective tax
                  rate expected to be applicable for the entire year.

                  Primary earnings per share is computed based on the weighted
                  average shares outstanding during the year plus common
                  equivalent shares arising from dilutive stock options, using
                  the treasury stock method. Fully diluted earnings per share
                  reflects additional dilution related to stock options due to
                  the use of market price at the end of the period when higher
                  than average price for the period. All share and per share
                  data has been adjusted for a 5% stock dividend distributed in
                  September 1996.

                  During the first nine months of 1996, options on 35,550 shares
                  were granted. During the first nine months of 1996 options for
                  9,441 common shares and 1,048 stock appreciation rights were
                  exercised. There was no material compensation recognized
                  during the first nine months of 1996 or the first nine months
                  of 1995 related to stock appreciation rights. At September 30,
                  1996, exercisable options and stock appreciation rights were
                  124,252 and 19,613, respectively. At September 30, 1996,
                  there were outstanding options for 209,327 common shares and
                  44,807 outstanding stock appreciation rights.

                  The Corporation, through its subsidiary banks, grants
                  residential, consumer, and commercial loans to customers in
                  the central Ohio counties of Knox, Morrow, Holmes, Ashland and
                  Richland. In addition the Corporation is in the business of
                  commercial and consumer leasing. Commercial loans, residential
                  real estate loans, consumer loans and leases were 30.8%,
                  47.3%, 21.3%, and 0.6% of total loans and leases respectively,
                  at September 30, 1996.


                                     Page 7

<PAGE>   8




Note 1 - SUMMARY OF ACCOUNTING POLICIES (Continued):

                  On January 1, 1996, the Corporation adopted SFAS 122
                  "Accounting for Mortgage Servicing Rights." This pronouncement
                  requires companies to recognize, as separate assets, rights to
                  service mortgage loans for others, however those loans are
                  acquired. A company that acquires mortgage servicing rights
                  through either the purchase or origination of mortgage loans
                  and sells or securitizes those loans with servicing rights
                  retained should allocate the total cost of the mortgage loans
                  to mortgage servicing rights and to loans (without the
                  mortgage servicing rights) based on their relative fair
                  values. Mortgage servicing rights recorded as a separate asset
                  will be amortized in proportion to, and over the period, of
                  estimated net servicing income. The impact of adopting this
                  pronouncement in 1996 was not material.

                  On January 1, 1996, the Corporation adopted SFAS 123
                  "Accounting for Stock-Based Compensation." SFAS encourages but
                  does not require entities to use a fair value based method to
                  account for stock-based compensation plans such as the
                  Corporation's stock options plans. If the fair value
                  accounting encouraged by SFAS No. 123 is not adopted, entities
                  must disclose the pro forma effect on net income and earnings
                  per share had the accounting been adopted. Fair value of a
                  stock option is to be estimated using an option-pricing model
                  that considers exercise price, expected life of the option,
                  current price of the stock, expected price volatility,
                  expected dividends on the stock, and the risk-free interest
                  rate. The Corporation elected not to expense the fair value of
                  options granted and will disclose the pro forma effect on net
                  income and earnings per share in the annual financial
                  statements. The impact of adopting this pronouncement in 1996
                  was not material.

                  The Corporation in its normal course of business, makes
                  commitments to extend credit which are not reflected in the
                  financial statements. At September 30, 1996, unused credit
                  lines amounted to approximately $51,886,000 and commitments
                  under outstanding letters of credit amounted to approximately
                  $498,000. Since many commitments to make loans expire without
                  being used, the amount does not necessarily represent future
                  cash commitments. Collateral obtained related to the
                  commitments is determined using management's credit evaluation
                  of the borrower and may include real estate, vehicles,
                  business assets, deposits, and other items. In management's
                  opinion these commitments represent normal banking
                  transactions, and no material losses are expected to result
                  therefrom.

                  Residential real estate loans originated and intended for sale
                  in the secondary market are carried at the lower of cost or
                  estimated market in the aggregate. Net unrealized losses are
                  recognized in a valuation allowance by charges to income.

                  Certain items in the 1995 financial statements have been
                  reclassified to correspond with the 1996 presentation.



                                     Page 8


<PAGE>   9


Note 2 - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES:

                  The amortized costs and estimated fair values are as follows
                  at September 30, 1996 and December 31, 1995:

<TABLE>
<CAPTION>
                                                                                           September 30,  1996

                  INVESTMENT SECURITIES AVAILABLE FOR SALE                 GROSS                   GROSS      ESTIMATED
                   ($ amounts in thousands):                             AMORTIZED  UNREALIZED   UNREALIZED     FAIR
                                                                            COST      GAINS        LOSSES       VALUE
                                                                         ---------  ----------   ----------   ---------

<S>                                                                      <C>           <C>         <C>         <C>    
                  U.S. Treasury securities                               $30,612       $108        ($171)      $30,549
                  Obligations of states and
                     political subdivisions                               57,009      1,050         (809)      $57,250
                  Obligations of U.S. government
                      corporations and agencies                           26,610                     (35)       26,575
                  Other securities                                         7,012        327                      7,339
                                                                        --------     ------      -------      --------
                  Total investment securities                            121,243      1,485       (1,015)      121,713
                  Mortgage-backed securities                              56,198        231         (599)       55,830
                                                                        --------     ------      -------      --------
                        TOTAL                                           $177,441     $1,716      ($1,614)     $177,543
                                                                        ========     ======      =======      ========

                                                                                            December 31, 1995


                  INVESTMENT SECURITIES AVAILABLE FOR SALE
                   ($ amounts in thousands):                               GROSS                   GROSS      ESTIMATED
                                                                         AMORTIZED  UNREALIZED   UNREALIZED     FAIR
                  U.S. Treasury securities                                  COST      GAINS        LOSSES       VALUE
                  Obligations of U.S. government                         ---------  ----------   ----------   ---------
                      corporations and agencies
                  U.S. Treasury securities                               $27,955       $312         ($51)      $28,216
                  Obligations of states and
                     political subdivisions                               53,407      1,867          (77)       55,197
                  Obligations of U.S. government
                      corporations and agencies                            6,932         59                      6,991
                  Other securities                                         4,041        249                      4,290
                                                                        --------     ------        -----      --------
                  Total investment securities                             92,335      2,487         (128)       94,694
                  Mortgage-backed securities                              36,756        636          (98)       37,294
                                                                        --------     ------        -----      --------
                        TOTAL                                           $129,091     $3,123        ($226)     $131,988
                                                                        ========     ======        =====      ========
</TABLE>

                  Proceeds from the sales of investment and mortgage-backed
                  securities for the nine months ending September 30, 1996 were
                  $13,970,000 resulting in gross gains of $11,000 and gross
                  losses of $22,000. Proceeds from the sales of investment and
                  mortgage-backed securities for the nine months ending
                  September 30, 1995 were $13,462,000 resulting in gross gains
                  of $67,000 and gross losses of $87,000.


                  At September 30, 1996, the percentages of the portfolio
                  maturing in various time frames had not changed significantly
                  from December 31, 1995.


                                     Page 9


<PAGE>   10
Note 3 - LOANS AND LEASE FINANCING:

                  Loans and leases are comprised of the following ($ amounts
                  in thousands):

<TABLE>
<CAPTION>
                                                                 September 30, 1996     December 31, 1995
                                                                 ------------------     -----------------
<S>                                                                      <C>                  <C>
                  Residential real estate loans held for sale......                           $  5,020
                  Residential real estate loans....................     $165,323               147,927
                  Commercial real estate loans.....................       12,317                 9,548
                  Commercial and industrial loans..................       92,283                88,632
                  Consumer and credit card loans...................       75,498                73,137
                  Obligations of states and
                    political subdivisions.........................        4,364                 4,678
                  Lease financing, net.............................        2,286                 1,699
                                                                        --------              --------
                                                                        $352,071              $330,641
                                                                        ========              ========
</TABLE>

Note 4 - ALLOWANCE FOR LOAN AND LEASE LOSSES:

                  Activity in the allowance for possible loan and lease losses  
                  is summarized as follows for the nine months ended 
                  September 30. ($ amounts in thousands):
<TABLE>
<CAPTION>
                                                                          1996                  1995
                                                                        --------             ---------
<S>                                                                      <C>                 <C>
                  Balance, beginning of period.....................      $4,166                 $3,876
                  Provision for loan and lease losses..............         543                    402
                  Losses charged to the allowance..................        (408)                  (428)
                  Recoveries.......................................         137                    198
                                                                        --------              --------
                  Balance, end of period......................           $4,438                 $4,048
                                                                        ========              ========
</TABLE>

                  Loans and leases over 90 days past due and still accruing 
                  interest approximated $1,636,000 at September 30, 1996 
                  and $862,000 at December 31, 1995. Loans on non-accrual
                  status were $377,000 at September 30, 1996 and $197,000 at
                  December 31, 1995. Impaired loans were not material
                  at any date or during any period presented.

                                               Page 10

<PAGE>   11
Note 5 - LONG-TERM DEBT:
<TABLE>
<CAPTION>

          ($ amounts in thousands):
                                                                               September 30,   December 31,
                                                                 
         Description                                                               1996           1995
         -----------                                                             --------       -------

          <S>                                                                       <C>            <C>    
          Fixed rate Federal Home Loan Bank
          advances with monthly principal and
          interest payments:
               5.60% Advance due August 1, 2003 ............................        $2,246        $2,442
               6.35% Advance due August 1, 2013 ............................         2,746         2,812
               5.95% Advance due March 1, 2004 .............................           602           649
               5.70% Advance due May 1, 2004 ...............................         4,889         5,262
               5.85% Advance due January 1, 2016 ...........................         4,910         5,000
          Fixed rate Federal Home Loan Bank
          advances with monthly interest payments:
               5.35% Advance due February 1, 1999 ..........................         5,000         5,000
               5.60% Advance due April 1, 1999 .............................         5,000         5,000
               5.70% Advance due June 1, 1999 ..............................         7,000         7,000
               6.35% Advance due March 1, 2004 .............................           250           250
               6.15% Advance due July 21, 1997........................              10,000
               6.60% Advance due July 21, 1999........................              10,000
               6.90% Advance due July 21, 2001........................              10,000
                                                                                   -------        -------
                                                                                   $62,643        $33,415
                                                                                   =======        =======

</TABLE>


              At September 30, 1996, Federal Home Loan Bank (FHLB) advances are
              collateralized by all shares of FHLB stock owned by the
              Corporation (totaling $6,285,200) and by 100% of the Corporation's
              qualified real estate-backed investments and mortgage loan
              portfolio (totaling approximately $217,338,000). Based on the
              carrying amount of FHLB stock owned by the Corporation, total FHLB
              advances are limited to approximately $73,170,000 at September 30,
              1996. Future advances to be received by the Corporation, above
              this limit, require additional purchases of FHLB stock.

              The aggregate minimum future principal payments on long-term debt
              are $269,000 in 1996, $11,587,000 in 1997, $1,576,000 in 1998,
              $28,576,000 in 1999, $1,587,000 in 2000 and $19,048,000
              thereafter.


                                                              PAGE 11


<PAGE>   12
Note 6 - SUBSEQUENT EVENT:

          On October 28, 1996, the Corporation entered into an Agreement and
          Plan of Merger ("Agreement") with Park National Corporation ("Park
          National"), a bank holding company headquartered in Newark, Ohio,
          whereby First-Knox Banc Corp. will be merged with and into Park
          National. Under the terms of the Agreement, Park National will
          exchange 0.5914 shares of Park National common stock for each
          outstanding share of First-Knox Banc Corp. common stock in a tax free
          exchange. Park National expects to issue an aggregate of 2,345,000
          shares of common stock to complete the merger which will be accounted
          for as a pooling-of-interests. The exact exchange ratio will be
          determined pursuant to a formula that is based upon, among other
          things, the market price of Park National common stock and the number
          of shares of First-Knox Banc Corp. common stock oustanding or subject
          to options prior to closing. The transaction is valued at
          approximately $29.00 per share of First-Knox Banc Corp. common stock,
          or approximately $114.3 million based on the $48.75 closing price of
          Park National common stock on October 25, 1996. Closing of the
          transaction is subject to certain conditions including regulatory
          approval and the approval of the shareholders of First-Knox Banc Corp.
          and Park National.


                                    Page 12
<PAGE>   13
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           -----------------------------------------------------------
                            AND RESULTS OF OPERATIONS
                            -------------------------

The following discussion focuses on the consolidated financial condition of
First-Knox Banc Corp. at September 30, 1996, compared to December 31, 1995, and
the results of operations for the three and nine months periods ended September
30, 1996, compared to the same period in 1995. The purpose of this discussion is
to provide a better understanding of the consolidated financial statements. This
discussion should be read in conjunction with the financial statements, notes
and tables included elsewhere in this report and the First-Knox Banc Corp. 1995
Annual Report on Form 10-K. The Registrant cautions that any forward looking
statements contained in this report, in a report incorporated by reference to
this report or made by management of the company involve risks and uncertainties
and are subject to change based on various important factors. The forward
looking statements could cause actual results to differ materially from those
expressed or implied. The Registrant is not aware of any market or institutional
trends, events or uncertainties that will have or are reasonably likely to have
a material effect on liquidity, capital resources or operations except as
discussed herein. Other than as discussed herein, the Registrant is not aware of
any current recommendations by regulatory authorities which would have such
effect if implemented.

Financial Condition
-------------------

Liquidity
---------

Liquidity relates to the Corporation's ability to meet cash demands of its
customers and their credit needs. Liquidity is provided by the Corporation's
ability to readily convert assets to cash and raise funds in the market place.
Traditional asset liquidity is provided by cash and readily marketable,
short-term assets such as federal funds sold and deposits in other banks.

Cash, amounts due from banks and federal funds sold totaled $16.04 million at
September 30, 1996. Investment and mortgage-backed securities available for sale
were $177.54 million at September 30, 1996. This amount increased by $45.56
million from December 31, 1995 balances. These assets, as well as anticipated
deposit growth and scheduled loan payments and maturing investment securities,
provide the Corporation with an adequate source of funds for expected future
demand for loans and for fluctuations in deposit volume. They also provide
management with the flexibility to change the composition of interest earning
assets as market conditions change in the future.

Liability liquidity relates to the Corporation's ability to retain existing
deposits, obtain new deposits and borrow in the marketplace. Total deposits
increased $22.09 million for the nine months ended September 30, 1996. Demand
deposits experienced a $1.84 million or 1.94% increase, savings and time
deposits increased $20.25 million or

                                     Page 13
<PAGE>   14

6.54% during the first nine months of 1996. Management anticipates core deposits
to experience moderate growth or remain stable during the rest of the year.

Access to advances from the Federal Home Loan Bank (FHLB) described in Note 5 is
a supplemental source of cash to meet liquidity needs. The FHLB allows these
borrowings to be utilized for any purpose.

Capital Resources
-----------------

Shareholders' equity totaled $48.04 million at September 30, 1996, compared to
$46.66 million at December 31, 1995. This increase was due primarily to earnings
retention which more than offset a decrease in the net unrealized holding gain
on securities available for sale. The ratio of shareholders' equity to assets
was 8.57% at September 30, 1996 and 9.39% at December 31, 1995.

Cash dividends declared during the nine months ended September 30, 1996 were
$1,635,000 or $.436 per share representing 34.67% of net income and an increase
of 34.35% over the first nine months of 1995.

Regulatory Capital Requirements
-------------------------------

The Corporation complies with the capital requirements established by the
Federal Reserve System, which are summarized as follows:
<TABLE>
<CAPTION>
                                                 Capital Position
                                                     as of
                        Regulatory
                          Minimum     September 30, 1996    December 31, 1995
-----------------------------------------------------------------------------
<S>                      <C>                <C>                  <C>   
Tier I risk-based
   capital.......        4.00%              14.55%               14.29%

Total risk-based
   capital.......        8.00%              15.71%               15.45%

Tier I leverage       3.00% - 5.00%          8.41%                8.84%
</TABLE>



Under "Prompt Corrective Action" regulations adopted in September 1992, the FDIC
has defined five categories of capitalization (well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized, and critically
undercapitalized). The Corporation meets the "well capitalized" definition,
which requires a total risk-based capital ratio of at least 10%, a leverage
ratio of at least 5%, and the absence of any written agreement, order, or
directive from a regulatory agency. "Well capitalized" status affords the
Corporation the ability to operate with the greatest flexibility under the
current laws and regulations. Under a current regulatory proposal, interest rate
risk would become an additional element in measuring risk-based capital. This
proposed change is not expected to significantly impact the Corporation's
compliance with capital guidelines.

                                Page 14
<PAGE>   15

Changes in Financial Condition
------------------------------

Consolidated total assets were $560.66 million at the end of the current period
after recording growth of $63.76 million or 12.83% during the first nine months
of 1996. This growth was funded primarily by FHLB advances which increased by
$39.23 million and deposits which increased $22.09 million. These new FHLB
advances were used to purchase investment and mortgage-backed securities during
the third quarter of 1996. Loans and leases increased by $21.43 million, and
investments and mortgage-backed securities increased by $45.56 million during
the first nine months of 1996. The residential real estate loan portfolio
increased by $12.38 million or 8.09%, while commercial and other loans increased
$6.11 million or 5.94%. Consumer and credit card loans increased by $2.36
million or 3.23%, while lease financing balances increased by $.59 million or
34.55%. Short-term borrowings increased by $11.86 million or 148.53% during the
first nine months of 1996, primarily from the addition of a $10 million
short-term FHLB advance.

The allowance for loan and lease losses as a percentage of loans and leases was
1.26% at the end of the current period and 1.26% at the end of 1995. Net loan
and lease charge-offs were $271,000 for the first nine months of 1996,
representing an annualized rate of .11% of the average loan and lease balances.
This represented an increase of $41,000 in net charge-offs compared to the first
nine months of 1995. Commercial loans had net charge offs of $51,000 compared to
net charge-offs of $124,000 during the first nine months of 1995. Net
charge-offs for consumer and credit card loans were $103,000 higher than 1995.
Loans past due more than 90 days plus loans placed in non-accrual status were
$2.01 million or .58% of outstanding balances at September 30, 1996 compared to
$1.06 million or .32% of outstanding balances at the end of 1995.

The interest rate sensitivity of the Corporation has not changed significantly
from that of December 31, 1995 as disclosed in the Corporation's 1995 annual
report on Form 10-K.

Results of Operations-Third Quarter 1996 vs. Third Quarter 1995
---------------------------------------------------------------

Consolidated net income of $1,604,000 for the third quarter of 1996 was 7.80%
over the $1,488,000 recorded for the third quarter of 1995. Expressed as
annualized returns on average assets and average shareholders' equity, net
income for 1996 was 1.16% and 13.37% compared to 1.22% and 13.62% for 1995.
Fully diluted earnings per share increased $.03 to $.42 per share for the third
quarter 1996 compared to the same period in 1995. These per share amounts were
restated to reflect the 5% stock dividend distributed in September 1996.

The increased level of net income for the third quarter of 1996 compared to the
third quarter of 1995, resulted primarily from higher net interest income.

Increased net interest income resulted from a $56.75 million or 12.44% increase
in average earning assets. The annualized net interest margin rate (net interest
income adjusted for tax-exempt income restated to a pre-tax equivalent based on
the statutory federal tax rate [FTE] divided by average earning assets) was
4.43% in the third quarter of 1996 and 4.64% for the same period in 1995.

                                     Page 15
<PAGE>   16

The net interest spread percentage (the FTE average earning assets yield minus
the average cost of funds) declined by 16 basis points to 3.83% for the third
quarter 1996 compared to the same period of a year ago. Management expects the
net interest margin rate for 1996 to finish at lower levels than those
experienced in 1995.

The provision for loan and lease losses increased by $45,000 or 27.11% during
the third quarter of 1996 compared to the same period last year. Net loan and
lease charge-offs were up $41,000 or 17.83% compared to the same period a year
ago. Net loan and lease charge-offs for the third quarter of 1996 and 1995 were
at an annualized rate of .09% and .04%, respectively. Management anticipates
higher loan and lease charge-offs and a higher provision for loan and lease
losses in 1996 compared to the full year levels experienced in 1995.

Non-interest income of $797,000 during the third quarter of 1996 represented an
annualized .59% of average assets compared to $776,000 or .64% of average assets
for the same period in 1995. There were no loan sales in both the third quarter
of 1996 or third quarter of 1995. Approximately $4.9 million of mortgage loans
held for sale were moved into a long-term investment position during the third
quarter of 1996. This action was in concert with management's intent to fully
utilize the leverage of shareholder's equity.

Non-interest expenses increased $142,000 or 3.92% over the third quarter 1995.
Employee salaries and benefits decreased by $60,000 or 3.19% over the same
period in 1995. This decline was largely due primarily to lowered employee group
health insurance costs. All other non-interest expenses including occupancy
expense, advertising, and franchise taxes were higher by $202,000 or 11.60% over
1995.

As a percentage of income before federal income taxes, federal income tax
expense was 22.51% in 1996 and 22.14% in 1995. These effective tax rates are
lower than the statutory tax rate of 34% due primarily to tax exempt income from
obligations of states and political subdivisions and non-taxable loans.

Results of Operations-Nine Months 1996 vs. Nine Months 1995
-----------------------------------------------------------

Consolidated net income of $4,716,000 for the first nine months of 1996 was
13.75% over the $4,146,000 recorded for the same period in 1995. Expressed as
annualized returns on average assets and average shareholders' equity, net
income for 1996 was 1.22% and 13.39% compared to 1.17% and 13.02% for 1995.
Fully diluted earnings per share increased $.16 to $1.24 per share for the nine
months of 1996 compared to the same period in 1995. These per share amounts were
restated to reflect the 5% stock dividend distributed in September, 1996.

The increased level of net income for the nine months of 1996 compared to the
first nine months of 1995, resulted primarily from higher net interest income,
reduced FDIC insurance expense, and lower personnel expense. These items are
discussed more fully below.

                                     Page 16
<PAGE>   17

Increased net interest income resulted from a $38.80 million or 8.69% increase
in average earning assets. The annualized net interest margin rate (net interest
income adjusted for tax-exempt income restated to a pre-tax equivalent based on
the statutory federal tax rate [FTE] divided by average earning assets) was
4.59% in 1996 and 4.70% during the same period in 1995.

The net interest spread percentage (the FTE average earning assets yield minus
the average cost of funds) declined by 10 basis points to 3.95% for the first
nine months of 1996 compared to the same period of a year ago. Management
expects the net interest margin rate for 1996 to remain at lower levels than
those experienced in 1995.

The provision for loan and lease losses increased by $141,000 or 35.08% during
the first nine months of 1996 compared to the same period last year. Net loan
and lease charge-offs were up $41,000 or 17.83% compared to the same period a
year ago. Net loan and lease charge-offs for the first nine months of 1996 and
1995 were at an annualized rate of .11% and .10%, respectively. Management
anticipates both loan and lease charge-offs and the provision for loan and lease
losses for 1996 to be higher than the full year levels experienced in 1995.

Non-interest income of $2,386,000 during the first nine months of 1996
represented an annualized .62% of average assets compared to $2,323,000 or .66%
of average assets for the same period in 1995. Fiduciary income essentially kept
pace with trust asset growth. There were no loan sales in both 1996 and 1995
periods.

Non-interest expenses decreased $14,000 or .13% over the same period in 1995. A
reduction in FDIC insurance expense of $411,000 was a significant contributor to
this decrease. Employee salaries and benefits decreased by $189,000 or 3.51%
over the same period in 1995. This decline was largely due to a one time
adjustment which significantly lowered employee group health insurance costs.
All other non-interest expenses including occupancy expense, advertising, and
franchise taxes were higher by $586,000 or 10.92% over 1995.

As a percentage of income before federal income taxes, federal income tax
expense was 23.08% in 1996 and 20.92% in 1995. These effective tax rates are
lower than the statutory tax rate of 34% due primarily to tax exempt income from
obligations of states and political subdivisions and non-taxable loans.

Pending Merger
--------------

As discussed earlier, on October 28, 1996, the Corporation entered into an
Agreement and Plan of Merger ("Agreement") with Park National Corporation ("Park
National"), a bank holding company headquartered in Newark, Ohio, whereby
First-Knox Banc Corp. will be merged with and into Park National. Under the
terms of the agreement, Park National will exchange 0.5914 shares of Park
National common stock for each outstanding share of First-Knox Banc Corp. common
stock in a tax free exchange. Park National expects to issue an aggregate of
2,345,000 shares of common stock to complete the merger which will be accounted
for as a pooling-of-interests. The exact exchange ratio will be determined
pursuant to a formula that is based upon, among other things, the market price
of Park National common stock and the number of shares of First-Knox Banc Corp.
common stock outstanding or subject to options prior to closing. The transaction
is valued at approximately $29.00 per share of

                                     Page 17
<PAGE>   18

First-Knox Banc Corp. common stock, or approximately $114.3 million based on the
$48.75 closing price of Park National common stock on October 25, 1996. Closing
of the transaction is subject to certain conditions including regulatory
approval and the approval of the shareholders of First-Knox Banc Corp. and Park
National.

                                     Page 18
<PAGE>   19

                          PART II - OTHER INFORMATION
               (Items which are not applicable have been omitted)

Item 6 - Exhibits and Reports on Form 8-K

(a) Exhibits

<TABLE>
                Description                                            Location
           -----------------------------                       -------------------------- 
    <S>                                                        <C>
     4(b)  First-Knox Banc Corp. Divided                       Incorporated herein
           Reinvestment Plan                                   by reference to the
                                                               Corporation's Registration
                                                               Statement on Form S-3
                                                               (Registration No. 33-52590)

     4(b)1 Amendment to the First-Knox Banc Corp.              Incorporated herein
           Dividend Reinvestment Plan                          by reference to exhibit
                                                               4(b)1 to the March 31, 1995
                                                               Form 10-Q

    10(a)  Summary of Incentive Compensation Plan              Incorporated herein
           dated December 9, 1983                              by reference to exhibit
                                                               10(a) to the 1992 Form 10-K

    10(b)  Employees Retirement Plan dated January 1, 1984     Incorporated herein
                                                               by reference to exhibit
                                                               10(a) to the 1986 Form 10-K

    10(c)  Supplemental Retirement Agreement dated             Incorporated herein
           August 11, 1987                                     by reference to exhibit
                                                               10(c) to the 1992 Form 10-K
</TABLE>


                                    Page 19
<PAGE>   20

<TABLE>
    <S>                                                        <C>
    10(d)  Non-qualified Stock Option and                      Incorporated herein
           Stock Appreciation Rights Plan                      by reference to exhibit 23
                                                               to the 1989 Form 10-K

    10(e)  First-Knox Banc Corp. Savings Retirement            Incorporated herein
           Plan                                                by reference to exhibit 10(e)
                                                               to the 1993 Form 10-K

    10(f)  Project Services Agreement between First-Knox       Incorporated herein
           National Bank and Sverdrup Building Corporation     by reference to exhibit 10(f)
                                                               to the 1993 Form 10-K

    10(g)  First-Knox Banc Corp. Stock Option and              Incorporated herein
           Stock Appreciation Rights Plan                      by reference to exhibit
                                                               10(g) to the March 31, 1995 
                                                               Form 10-Q

    11     Statement regarding computation of                  Page 7 - Note 1 to consolidated
           per share earnings                                  financial statements

    23     Consent of Independent Accountants                  Incorporated herein
                                                               by reference to exhibit 23
                                                               to the 1995 Form 10-K
</TABLE>

(b) No reports on Form 8-K were filed during the fiscal quarter covered by this
    report.

                                    Page 20
<PAGE>   21
                                   SIGNATURES
                                   ----------


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


                                          First-Knox Banc Corp.
                                          (Registrant)



Date November 13, 1996                    /S/ Carlos E. Watkins
     -----------------                    -------------------------------
                                      By  Carlos E. Watkins
                                          President and Chief Executive Officer


Date November 13, 1996                    /S/ Gordon E. Yance
     -----------------                    -------------------------------
                                      By  Gordon E. Yance
                                          Vice President & Treasurer









                                    Page 21