##### Table of Contents

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 June 30, 2003





Commission File No. 1-14473



Sky Financial Group, Inc.

(Exact Name of Registrant as Specified in its Charter)



|Ohio                                                           |  | 34-1372535                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification Number)



|221 South Church Street, Bowling Green, Ohio |  | 43402     
|-------------------------------------------- |  | ----------
|(Address of Principal Executive Offices)     |  | (Zip Code)



(419) 327-6300

(Registrants Telephone Number)





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



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes  x No ̈



The number of shares outstanding of the Registrants
common stock, without par value, was 90,311,634 at July 30, 2003.



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SKY FINANCIAL GROUP, INC.



INDEX



|                                 |  |                                                                                                                        |  | Page Number
|-------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | -----------
|                                 | 
|PART I.    FINANCIAL INFORMATION |  |                                                                                                                       
|                                 |  |                                                                                                                       
|Item 1.                          |  | Financial Statements (Unaudited)                                                                                       |  |            
|                                 |  |                                                                                                                       
|                                 |  | Condensed Consolidated Balance Sheets June 30, 2003 and December 31, 2002                                              |  | 3          
|                                 |  |                                                                                                                       
|                                 |  | Condensed Consolidated Statements of Income Three and six months ended June 30, 2003 and 2002                          |  | 4          
|                                 |  |                                                                                                                       
|                                 |  | Condensed Consolidated Statements of Changes in Shareholders Equity Three and six months ended June 30, 2003 and 2002 |  | 5          
|                                 |  |                                                                                                                       
|                                 |  | Condensed Consolidated Statements of Cash Flows six months ended June 30, 2003 and 2002                                |  | 6          
|                                 |  |                                                                                                                       
|                                 |  | Notes to Condensed Consolidated Financial Information                                                                  |  | 7          
|                                 |  |                                                                                                                       
|Item 2.                          |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                  |  | 20         
|                                 |  |                                                                                                                       
|Item 3.                          |  | Quantitative and Qualitative Disclosures About Market Risk                                                             |  | 31         
|                                 |  |                                                                                                                       
|Item 4.                          |  | Controls and Procedures                                                                                                |  | 32         
|                                 | 
|PART II.    OTHER INFORMATION    |  |                                                                                                                       
|                                 |  |                                                                                                                       
|Item 1.                          |  | Legal Proceedings                                                                                                      |  | 32         
|                                 |  |                                                                                                                       
|Item 2.                          |  | Changes in Securities and Use of Proceeds                                                                              |  | 34         
|                                 |  |                                                                                                                       
|Item 3.                          |  | Defaults Upon Senior Securities                                                                                        |  | 34         
|                                 |  |                                                                                                                       
|Item 4.                          |  | Submission of Matters to a Vote of Security Holders                                                                    |  | 34         
|                                 |  |                                                                                                                       
|Item 5.                          |  | Other Information                                                                                                      |  | 34         
|                                 |  |                                                                                                                       
|Item 6.                          |  | Exhibits and Reports on Form 8-K                                                                                       |  | 34         
|                                 | 
|SIGNATURES                       |  | 35                                                                                                                    
|                                 | 
|EXHIBIT INDEX                    |  | 36                                                                                                                    



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PART I.    FINANCIAL INFORMATION

Item 1.    Condensed Financial Statements



SKY FINANCIAL GROUP, INC.



Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except share data)



|                                                                                                                    |  | June 30, 2003 |            |   | December 31,2002 |  
|------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---------------- | -
|ASSETS                                                                                                              |  |               |            |   |                  |  
|Cash and due from banks                                                                                             |  | $             | 293,205    |   |                  | $
|Interest-earning deposits with financial institutions                                                               |  |               | 69,889     |   |                  |  
|Federal funds sold                                                                                                  |  |               |           |   |                  |  
|Loans held for sale                                                                                                 |  |               | 110,326    |   |                  |  
|Securities available for sale                                                                                       |  |               | 2,551,690  |   |                  |  
|                                                                                                                    |  |              
|Total loans                                                                                                         |  |               | 9,062,864  |   |                  |  
|Less allowance for credit losses                                                                                    |  |               | (140,965   | ) |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|Net loans                                                                                                           |  |               | 8,921,899  |   |                  |  
|                                                                                                                    |  |              
|Premises and equipment                                                                                              |  |               | 154,117    |   |                  |  
|Goodwill                                                                                                            |  |               | 161,598    |   |                  |  
|Core deposits and other intangibles                                                                                 |  |               | 52,622     |   |                  |  
|Accrued interest receivable and other assets                                                                        |  |               | 411,715    |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|TOTAL ASSETS                                                                                                        |  | $             | 12,727,061 |   |                  | $
|                                                                                                                    |  |               |            |   |                  |  
|                                                                                                                    |  |              
|LIABILITIES                                                                                                         |  |               |            |   |                  |  
|Deposits                                                                                                            |  |               |            |   |                  |  
|Non-interest bearing deposits                                                                                       |  | $             | 1,207,755  |   |                  | $
|Interest-bearing deposits                                                                                           |  |               | 7,500,580  |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|Total deposits                                                                                                      |  |               | 8,708,335  |   |                  |  
|Securities under repurchase agreements and federal funds purchased                                                  |  |               | 949,401    |   |                  |  
|Debt and Federal Home Loan Bank advances                                                                            |  |               | 1,788,463  |   |                  |  
|Obligated mandatorily redeemable capitalsecurities of subsidiary trusts                                             |  |               | 164,494    |   |                  |  
|Accrued interest payable and other liabilities                                                                      |  |               | 201,358    |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|TOTAL LIABILITIES                                                                                                   |  |               | 11,812,051 |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|                                                                                                                    |  |              
|SHAREHOLDERS EQUITY                                                                                                |  |               |            |   |                  |  
|Serial preferred stock, $10.00 par value; 10,000,000 shares authorized, none issued                                 |  |               |           |   |                  |  
|Common stock, no par value; 150,000,000 shares authorized; 90,069,968 and 87,276,888 shares issued in 2003 and
2002 |  |               | 716,113    |   |                  |  
|Retained earnings                                                                                                   |  |               | 187,172    |   |                  |  
|Treasury stock; 220,781 and 222,450 shares in 2003 and 2002                                                         |  |               | (3,965     | ) |                  |  
|Accumulated other comprehensive income                                                                              |  |               | 15,690     |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|TOTAL SHAREHOLDERS EQUITY                                                                                          |  |               | 915,010    |   |                  |  
|                                                                                                                    |  |               |            |   |                  |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                          |  | $             | 12,727,061 |   |                  | $
|                                                                                                                    |  |               |            |   |                  |  



The accompanying notes
are an integral part of the financial statements.



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SKY FINANCIAL GROUP, INC.



Condensed Consolidated Statements of Income (Unaudited)

|(Dollars in thousands, except per share data)         |  | Three Months Ended June 30, |         | Six Months Ended June 30,
|----------------------------------------------------- |  | --------------------------- | ------- | -------------------------
|                                                      |  | 2003                        |         | 2002                     
|Interest Income                                       |  |                             |         |                          
|Loans, including fees                                 |  | $                           | 142,736 |                          
|Securities                                            |  |                             |         |                          
|Taxable                                               |  |                             | 23,987  |                          
|Nontaxable                                            |  |                             | 314     |                          
|Federal funds sold and other                          |  |                             | 198     |                          
|                                                      |  |                             |         |                          
|Total interest income                                 |  |                             | 167,235 |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Interest Expense                                      |  |                             |         |                          
|Deposits                                              |  |                             | 37,517  |                          
|Borrowed funds                                        |  |                             | 25,280  |                          
|                                                      |  |                             |         |                          
|Total interest expense                                |  |                             | 62,797  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Net Interest Income                                   |  |                             | 104,438 |                          
|Provision for Credit Losses                           |  |                             | 10,573  |                          
|                                                      |  |                             |         |                          
|Net interest income after provision for credit losses |  |                             | 93,865  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Non-interest Income                                   |  |                             |         |                          
|Trust services income                                 |  |                             | 3,652   |                          
|Service charges and fees on deposit accounts          |  |                             | 9,489   |                          
|Mortgage banking income                               |  |                             | 13,884  |                          
|Brokerage and insurance commissions                   |  |                             | 10,815  |                          
|Net securities gains                                  |  |                             | 83      |                          
|Other income                                          |  |                             | 9,659   |                          
|                                                      |  |                             |         |                          
|Total non-interest income                             |  |                             | 47,582  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Non-interest Expense                                  |  |                             |         |                          
|Salaries and employee benefits                        |  |                             | 43,225  |                          
|Occupancy and equipment expense                       |  |                             | 12,254  |                          
|Merger, integration and restructuring expense         |  |                             | 3,486   |                          
|Amortization expense                                  |  |                             | 1,704   |                          
|Other operating expense                               |  |                             | 24,033  |                          
|                                                      |  |                             |         |                          
|Total non-interest expense                            |  |                             | 84,702  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Income Before Income Taxes                            |  |                             | 56,745  |                          
|Income Taxes                                          |  |                             | 19,236  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Net Income                                            |  | $                           | 37,509  |                          
|                                                      |  |                             |         |                          
|                                                      |  |                             |         |                          
|Earnings per Common Share                             |  |                             |         |                          
|Basic                                                 |  | $                           | .42     |                          
|Diluted                                               |  |                             | .42     |                          



The accompanying notes
are an integral part of the financial statements.



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SKY FINANCIAL GROUP, INC.



Condensed Consolidated Statements of Changes in Shareholders Equity

(Unaudited)



|                                                            |  | Three Months Ended June 30, |         |   | Six Months Ended June 30, |  
|----------------------------------------------------------- |  | --------------------------- | ------- | - | ------------------------- | -
|(Dollars in thousands, except per share data)               |  | 2003                        |         |   | 2002                      |  
|Balance at beginning of period                              |  | $                           | 842,302 |   |                           | $
|Comprehensive income                                        |  |                             |         |   |                           |  
|Net income                                                  |  |                             | 37,509  |   |                           |  
|Other comprehensive income (loss)                           |  |                             | (3,813  | ) |                           |  
|                                                            |  |                             |         |   |                           |  
|Total comprehensive income                                  |  |                             | 33,696  |   |                           |  
|                                                            |  |                             |         |   |                           |  
|Common cash dividends                                       |  |                             | (18,012 | ) |                           |  
|Treasury shares acquired                                    |  |                             |         |   |                           |  
|Treasury shares issued for stock option exercise            |  |                             | 1,705   |   |                           |  
|Common shares issued to acquire Metropolitan Financial Corp |  |                             | 55,294  |   |                           |  
|Common shares issued to acquire Celaris Group, Inc.         |  |                             |         |   |                           |  
|Fractional shares and other items                           |  |                             | 25      |   |                           |  
|                                                            |  |                             |         |   |                           |  
|Balance at end of period                                    |  | $                           | 915,010 |   |                           | $
|                                                            |  |                             |         |   |                           |  
|Common cash dividend per share                              |  | $                           | .20     |   |                           | $
|                                                            |  |                             |         |   |                           |  



The accompanying notes are an integral
part of the financial statements.



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SKY FINANCIAL GROUP, INC.



Condensed Consolidated Statement of Cash Flows

(Unaudited)



|                                                                 |  | Six Months Ended June 30, |           
|---------------------------------------------------------------- |  | ------------------------- | ----------
|(Dollars in thousands, except share data)                        |  | 2003                      |           
|Net Cash From Operating Activities                               |  | $                         | 54,976    
|                                                                 |  |                           |           
|Investing Activities                                             |  |                           |           
|Net decrease in interest bearing deposits in other banks         |  |                           | 644       
|Net change in federal funds sold                                 |  |                           | 11,100    
|                                                                 |  |                          
|Securities available for sale:                                   |  |                           |           
|Proceeds from maturities and payments                            |  |                           | 910,102   
|Proceeds from sales                                              |  |                           | 92,006    
|Purchases                                                        |  |                           | (1,144,073
|Proceeds from sales of non-mortgage loans                        |  |                           | 447,499   
|Net increase in loans                                            |  |                           | (675,112  
|Purchases of premises and equipment                              |  |                           | (5,667    
|Proceeds from sales of premises and equipment                    |  |                           | 380       
|Proceeds from sales of other real estate                         |  |                           | 3,920     
|Cash acquired from Metropolitan Financial Corp, net of cash paid |  |                           | 48,394    
|Cash paid to acquire Celaris Group, Inc.                         |  |                           |           
|Other                                                            |  |                           | (154      
|                                                                 |  |                           |           
|Net cash used for investing activities                           |  |                           | (310,961  
|                                                                 |  |                           |           
|                                                                 |  |                          
|Financing Activities                                             |  |                           |           
|Net increase in deposit accounts                                 |  |                           | 143,190   
|Net increase in federal funds and repurchase agreements          |  |                           | 104,685   
|Net increase in borrowings under bank lines of credit            |  |                           | 105,674   
|Net increase (decrease) in short-term FHLB advances              |  |                           | 30,000    
|Proceeds from issuance of debt and long-term FHLB advances       |  |                           | 50,580    
|Repayment of debt and long-term FHLB advances                    |  |                           | (104,213  
|Cash dividends and fractional shares paid                        |  |                           | (35,949   
|Proceeds from issuance of common stock                           |  |                           | 2,051     
|Treasury stock purchases                                         |  |                           |          
|                                                                 |  |                           |           
|Net cash from financing activities                               |  |                           | 296,018   
|                                                                 |  |                           |           
|                                                                 |  |                          
|Net increase (decrease) in cash and due from banks               |  |                           | 40,033    
|Cash and due from banks at beginning of period                   |  |                           | 253,172   
|                                                                 |  |                           |           
|Cash and due from banks at end of period                         |  | $                         | 293,205   
|                                                                 |  |                           |           
|                                                                 |  |                          
|Supplemental Disclosures                                         |  |                           |           
|Interest paid                                                    |  | $                         | 122,859   
|Income taxes paid                                                |  |                           | 46,752    
|Non-cash transactions                                            |  |                           |           
|Common shares issued to acquire Metropolitan Financial Corp.     |  |                           | 55,294    
|Common shares issued to acquire Celaris Group, Inc.              |  |                           |           



The accompanying notes are an integral
part of the financial statements.



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SKY FINANCIAL GROUP, INC.



Notes to Condensed Consolidated Financial Information (Unaudited)



(Dollars in thousands, except per share data)



1.    Accounting Policies



Sky Financial Group, Inc. (Sky Financial) is a financial holding company headquartered in Bowling Green, Ohio, that owns and operates Sky Bank which is primarily engaged in the commercial and consumer banking business in Ohio, southern
Michigan, western Pennsylvania, northern West Virginia and eastern Indiana. Sky Financial also operates businesses relating to commercial finance lending, insurance, trust and other related financial services.



The accounting and reporting policies followed by Sky Financial conform in
all material respects to accounting principles generally accepted in the United States of America (US GAAP) and to general practices within the financial services industry. The preparation of financial statements in conformity with US 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. Actual results could differ from those estimates.
The allowance for credit losses and fair values of financial instruments, such as mortgage servicing rights, are particularly subject to change.



These condensed consolidated unaudited interim financial statements are prepared without audit and reflect all adjustments of a normal recurring nature
which, in the opinion of management, are necessary to present fairly the consolidated financial position of Sky Financial at June 30, 2003, and its results of operations and cash flows for the periods presented. In accordance with US GAAP for
interim financial information, these statements do not include certain information and footnote disclosures required for complete annual financial statements. Sky Financials Annual Report for the year ended December 31, 2002, contains
consolidated financial statements and related notes which should be read in conjunction with the accompanying consolidated financial statements. The results of operations for the interim periods disclosed herein are not necessarily indicative of the
results that may be expected for a full year.



New Accounting
Pronouncements



In May 2003, the Financial Accounting
Standards Board (FASB) issued SFAS 150 Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity which establishes standards for how an issuer classifies and measures certain freestanding financial
instruments that have characteristics of both liabilities and equity. It requires that items such as mandatorily redeemable financial instruments, obligations to repurchase equity shares by transferring assets, and certain obligations to issue a
variable number of shares as liabilities be classified as liabilities. The adoption of SFAS 150 on July 1, 2003 did not have a material impact on Sky Financial.



In April 2003, the FASB issued SFAS No. 149 Amendment of Statement 133 on Derivative Instruments and Hedging Activities which amends SFAS
No. 133 Accounting for Derivative Instruments and Hedging Activities for decisions made by the Deriviatives Implementation Group, other FASB projects dealing with financial instruments, and in connection with the application of the
definition of a derivative. The adoption of this statement on June 30, 2003 did not have a material impact on Sky Financial.



In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 Consolidation of Variable Interest Entities
which requires the consolidation of certain special purposes entities (SPEs) by a company if it is determined to be the primary beneficiary of the SPEs operating activities. The adoption of this interpretation on January 31, 2003 did not
have a material impact on Sky Financial.



In December 2002,
FASB issued Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 requires a guarantor to make additional disclosures in
its interim and annual financial statements regarding the guarantors obligations. In addition, FIN 45 requires, under certain circumstances, that a guarantor recognize, at the inception of the guarantee,



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a liability for the fair value of the obligation undertaken when issuing the guarantee. Sky Financial adopted the
disclosure requirements for the fiscal year ended December 31, 2002. The adoption of this interpretation did not have a material impact on Sky Financial.



During the third quarter of 2002, Sky Financial adopted Statement of Financial Accounting Standards (SFAS) No. 147, Acquisitions of Certain
Financial Institutions. Statement 147 provides for the reclassification of intangible assets associated with certain branch acquisitions to goodwill. In adopting the statement, $16.6 million of intangibles were reclassified to goodwill as of
January 1, 2002. Reported earnings for the first six months of 2002 were restated to reflect the non-amortization of the goodwill of approximately $116 per month. Pre-tax net income increased $348 ($226 after-tax) during both the first and second
quarter of 2002 as a result of implementing SFAS No. 147.



In
June 2002, the FASB issued SFAS No. 146 Accounting for Costs Associated with Exit or Disposal Activities. This statement addresses the timing of recognition of a liability for exit and disposal costs at the time a liability is incurred,
rather than at a plan commitment date, as previously required by US GAAP. Exit or disposal costs will be measured at the fair value and will be subsequently adjusted for changes in estimated cash flows. This statement, which was adopted on January
1, 2003, did not have a material effect on Sky Financial.



2.    Stock Based Compensation



Sky Financial applies Accounting Principles Board Opinion No. 25 in accounting for stock options and discloses the fair value of options granted as permitted by SFAS No. 123. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had an exercise price equal to the market value of the common stock at date of grant.



The following table summarizes the pro forma effects assuming compensation cost for such awards had been recorded based upon the estimated fair value (in
thousands, except per share data):



|                                                                                                                                            |  | Three months endedJune 30, |        | Six months endedJune 30,
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------
|                                                                                                                                            |  | 2003                       |        | 2002                    
|Net income, as reported                                                                                                                     |  | $                          | 37,509 |                         
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related
tax effects |  |                            | 581    |                         
|                                                                                                                                            |  |                            |        |                         
|Pro-forma net income                                                                                                                        |  | $                          | 36,928 |                         
|                                                                                                                                            |  |                            |        |                         
|Earnings per share:                                                                                                                         |  |                            |        |                         
|Basicas reported                                                                                                                           |  | $                          | .42    |                         
|                                                                                                                                            |  |                            |        |                         
|Basicpro-forma                                                                                                                             |  | $                          | .42    |                         
|                                                                                                                                            |  |                            |        |                         
|Dilutedas reported                                                                                                                         |  | $                          | .42    |                         
|                                                                                                                                            |  |                            |        |                         
|Dilutedpro-forma                                                                                                                           |  | $                          | .42    |                         
|                                                                                                                                            |  |                            |        |                         



3.    Critical
Accounting Policies



The accounting and reporting policies
of Sky Financial are in accordance with accounting principles generally accepted within the United States of America and conform to general practices within the financial services industry. Accounting and reporting policies for the allowance for
credit losses and mortgage servicing rights are deemed critical since they involve the use of estimates and require significant management judgments. Application of assumptions different than those used by management could result in material changes
in Sky Financials financial position or results of operations. Footnote one (Summary of Significant Accounting Policies), footnote four (Loans



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and Allowance for Credit Losses) and footnote 20 (Mortgage Banking Activity), of the 2002 Annual Report and Form 10-K,
provide detail with regard to the Corporations accounting for the allowance for loan losses and for mortgage servicing rights. There have been no significant changes in the application of accounting policies since December 31, 2002.



4.    Mergers, Acquisitions and Divestitures



On July 15, 2003, Sky Financial announced a definitive
agreement to acquire GLB Bancorp, Inc., Mentor, Ohio, and its wholly-owned subsidiary Great Lakes Bank. Great Lakes Bank has $206 million in assets and operates 13 full-service branches in the Cleveland, Ohio market. The merger is expected to close
in the fourth quarter of 2003 and, upon completion, the combined companies will have approximately $12.9 billion in total assets and $8.9 billion in total deposits.



On July 8, 2003, Sky Financial acquired Insurance Buyers Service Agency, Inc., a professional liability, personal and
commercial insurance agency headquartered in Boardman, Ohio, for 164,000 shares of Sky Financial common stock.



On April 30, 2003, Sky Financial acquired the outstanding capital stock of Metropolitan Financial Corp. (Metropolitan), a $1.5 billion savings and loan
holding company headquartered in Highland Hills, Ohio, and its wholly-owned subsidiary, Metropolitan Bank and Trust Company by obtaining the outstanding capital stock of Metropolitan for a purchase price of $88,401, including direct acquisition
costs of $7,779. Metropolitan shareholders received approximately 2.9 million shares of Sky Financial common stock and $25,328 in cash. The value of the common shares issued was determined based on the market price of Sky Financials common
stock on the date that the final terms of the acquisition were agreed to and announced. The acquisition complements Sky Financials operations in eastern Ohio by enhancing its presence in the Cleveland metropolitan area.



Sky Financial accounted for the acquisition as a purchase and included the
results of Metropolitan in the accompanying fiscal 2003 consolidated financial statements from the effective date of the acquisition. The purchase price, including fees and other direct acquisition costs, was allocated based on a preliminary
determination of estimated fair values at the date of the acquisition as follows:



|Cash                                     |  | $ | 73,722   
|---------------------------------------- |  | - | ---------
|Loans                                    |  |   | 963,648  
|Securities available for sale            |  |   | 190,730  
|Premises and equipment                   |  |   | 45,338   
|Core deposit intangibles                 |  |   | 11,807   
|Goodwill                                 |  |   | 52,642   
|Other assets                             |  |   | 53,296   
|                                         |  |   |          
|Total assets acquired                    |  |   | 1,391,183
|                                         |  |   |          
|Deposits                                 |  |   | 949,725  
|Debt and Federal Home Loan Bank advances |  |   | 314,892  
|Other liabilities                        |  |   | 38,165   
|                                         |  |   |          
|Total liabilities acquired               |  |   | 1,302,782
|                                         |  |   |          
|Net assets acquired                      |  | $ | 88,401   
|                                         |  |   |          



On January 28, 2003,
Sky Financial acquired a 51% interest in Access Partners LLP for $373 in cash.



On October 1, 2002, Sky Financial acquired Three Rivers Bancorp, a $1 billion bank holding company located in Monroeville, Pennsylvania and its wholly-owned subsidiary, Three Rivers Bank and Trust Company
(collectively known as Three Rivers). Three Rivers shareholders received approximately 4.9 million shares of Sky Financial common stock and cash of $38,987 in the tax-free exchange.



In April 2002, Sky Financial acquired Value Added Benefits, Ltd., a wholesale insurance agency headquartered in Cleveland,
Ohio, for $1.9 million in cash.



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In January 2002, Sky Financial completed the acquisition of Celaris Group, Inc., a full service insurance
agency headquartered in Bowling Green, Ohio. In connection with the acquisition, Sky Financial paid $1 million in cash and issued .75 million shares of Sky Financial common stock. During the third quarter 2002, Value Added Benefits, Ltd. was merged
into Celaris Group, Inc. In December 2002, Celaris Group, Inc. merged with Picton Cavanaugh, Inc., another wholly-owned insurance agency, to form Sky Insurance.



All of the purchases completed in 2002 were recorded under the purchase method of accounting and the results of operations of the acquired businesses
are included in Sky Financials operations from the effective dates of the acquisitions.



The following (unaudited) pro-forma consolidated results of operations have been prepared as if the acquisitions of Metropolitan and Three Rivers occurred at the beginning of the periods presented. The pro forma
results of operations for all other acquisitions are not significant and, accordingly, are not presented.



|                             |  | Three months endedJune 30, |         | Six months ended June 30,
|---------------------------- |  | -------------------------- | ------- | -------------------------
|                             |  | 2003                       |         | 2002                     
|Net interest income          |  | $                          | 108,100 |                          
|Net income                   |  |                            | 32,869  |                          
|Net income per shareBasic   |  |                            | .37     |                          
|Net income per shareDiluted |  |                            | .36     |                          



The pro forma
information includes impairment charges related to Metropolitans fixed assets of $8.8 million ($6.1 million after-tax) and mortgage servicing rights of $4.9 million ($3.4 million after-tax) recognized in the second quarter of 2002.



This pro forma information is not necessarily indicative of the results
that actually would have been obtained if the operations had been combined as of the beginning of the periods presented and is not intended to be a projection of future results



5.    Securities Available for Sale



The unrealized gains and losses and estimated fair values at June 30, 2003 and December 31, 2002 are as follows:



|June 30, 2003                                   |  | Estimated Fair Value |           | Gross Unrealized Gains |   | Gross Unrealized Losses | 
|----------------------------------------------- |  | -------------------- | --------- | ---------------------- | - | ----------------------- | 
|U.S. Treasury and U.S. Government agencies      |  | $                    | 430,193   |                        | $ | 9,097                   | 
|Obligations of state and political subdivisions |  |                      | 24,615    |                        |   | 276                     | 
|Corporate and other securities                  |  |                      | 102,341   |                        |   | 4,111                   | 
|Mortgage-backed securities                      |  |                      | 1,867,448 |                        |   | 27,677                  | 
|                                                |  |                      |           |                        |   |                         | 
|Total debt securities available for sale        |  |                      | 2,424,597 |                        |   | 41,161                  | 
|Marketable equity securities                    |  |                      | 127,093   |                        |   | 5,457                   | 
|                                                |  |                      |           |                        |   |                         | 
|Total securities available for sale             |  | $                    | 2,551,690 |                        | $ | 46,618                  | 
|                                                |  |                      |           |                        |   |                         | 



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|December 31, 2002                               |  | Estimated Fair Value |           | Gross Unrealized Gains |   | Gross Unrealized Losses | 
|----------------------------------------------- |  | -------------------- | --------- | ---------------------- | - | ----------------------- | 
|U.S. Treasury and U.S. Government agencies      |  | $                    | 466,564   |                        | $ | 9,735                   | 
|Obligations of state and political subdivisions |  |                      | 15,242    |                        |   | 205                     | 
|Corporate and other securities                  |  |                      | 71,896    |                        |   | 1,754                   | 
|Mortgage-backed securities                      |  |                      | 1,584,861 |                        |   | 37,956                  | 
|                                                |  |                      |           |                        |   |                         | 
|Total debt securities available for sale        |  |                      | 2,138,563 |                        |   | 49,650                  | 
|Marketable equity securities                    |  |                      | 108,618   |                        |   | 4,884                   | 
|                                                |  |                      |           |                        |   |                         | 
|Total securities available for sale             |  | $                    | 2,247,181 |                        | $ | 54,534                  | 
|                                                |  |                      |           |                        |   |                         | 



6.    Loans



The loan portfolios are as follows:



|                                       |  | June 30, 2003 |           | December 31, 2002
|-------------------------------------- |  | ------------- | --------- | -----------------
|Real estate loans:                     |  |               |           |                  
|Construction                           |  | $             | 432,688   |                  
|Residential mortgage                   |  |               | 1,799,887 |                  
|Non-residential mortgage               |  |               | 2,863,740 |                  
|Commercial, financial and agricultural |  |               | 3,151,839 |                  
|Installment and credit card loans      |  |               | 814,710   |                  
|                                       |  |               |           |                  
|Total loans                            |  | $             | 9,062,864 |                  
|                                       |  |               |           |                  



The following table
presents the aggregate amounts of non-performing loans on the dates indicated:



|                           |  | June 30, 2003 |        | December 31, 2002
|-------------------------- |  | ------------- | ------ | -----------------
|Non-accrual loans          |  | $             | 86,793 |                  
|Restructured loans         |  |               | 1,266  |                  
|                           |  |               |        |                  
|Total non-performing loans |  | $             | 88,059 |                  
|                           |  |               |        |                  



Non-accrual loans
include $26.6 million of loans that are secured by pools of commercial leases for which payment is over 90 days past due. See Note 15 Commitments and Contingencies for additional discussion.



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7.    Borrowings



Sky Financials debt, Federal Home Loan Bank (FHLB) advances and obligated mandatorily redeemable capital securities of
subsidiary trusts are comprised of the following:

|                                                                          |  | June 30, 2003 |           | December 31, 2002
|------------------------------------------------------------------------- |  | ------------- | --------- | -----------------
|Borrowings under bank lines of credit                                     |  | $             | 164,823   |                  
|Asset backed notes:                                                       |  |               |           |                  
|2001-A Class A-1, due December 2011 at 6.425%                             |  |               | 21,693    |                  
|2001-A Class A-2, due December 2011 at 9.95%                              |  |               | 45,000    |                  
|2001-B Class A-1, due July 2012 at 5.55%                                  |  |               | 36,624    |                  
|2001-B Class A-2, due July 2012 at 6.39%                                  |  |               | 49,760    |                  
|2001-C Class A-1, due January 2013 at 4.555%                              |  |               | 24,909    |                  
|2001-C Class A-2, due January 2013 at 5.925%                              |  |               | 72,000    |                  
|2002-A Class A-1, due July 2018 at 5.398%                                 |  |               | 57,214    |                  
|2002-A Class A-2, due July 2018 at 6.705%                                 |  |               | 90,000    |                  
|2002-B Class A-1, due November 2012 at 2.682% (variable)                  |  |               | 119,497   |                  
|Borrowings under FHLB lines of credit                                     |  |               | 939,649   |                  
|Subordinated note, 5.35%, due April 2013                                  |  |               | 50,000    |                  
|Subordinated note, 6.125%, due October 2012                               |  |               | 65,000    |                  
|Subordinated note, 7.08%, due January 2008                                |  |               | 50,000    |                  
|Obligated mandatorily redeemable capital securities of subsidiary trusts: |  |               |           |                  
|Due February 2027 at 9.875%                                               |  |               | 28,403    |                  
|Due June 2027 at 10.20%                                                   |  |               | 25,179    |                  
|Due May 2030 at 9.34%                                                     |  |               | 67,162    |                  
|Due June 2028 at 8.60%                                                    |  |               | 27,750    |                  
|Due June 2029 at 9.50%                                                    |  |               | 16,000    |                  
|Capital lease obligation                                                  |  |               | 1,477     |                  
|Other items                                                               |  |               | 817       |                  
|                                                                          |  |               |           |                  
|Total borrowings                                                          |  | $             | 1,952,957 |                  
|                                                                          |  |               |           |                  



Sky Financial
Solutions (SFS) warehouse line of credit is included under bank lines of credit. At June 30, 2003, $89,823 was outstanding under the warehouse line of credit. No such amounts were outstanding at December 31, 2002. On July 13, 2003, SFS issued
$135,000 of fixed rate-interest-rate collateralized notes in a private placement to provide term funding for commercial loans.



In conjunction with the acquisition of Metropolitan, Sky Financial assumed two issues of obligated redeemable capital securities with principal balances
of $27,750 and $16,000.



During March 2003, Sky Financial sold
$50,000 in subordinated note arrangements in a private transaction pursuant to an applicable exemption from registration under the Securities Act of 1933. Sky Financial used these proceeds to pay Metropolitans shareholders who elected to
receive cash as merger consideration in exchange for their common shares (see Note 4). The remaining proceeds were used to pay down $13,960 of Metropolitan subordinated debt.



During September 2002, Sky Bank sold $65,000 in subordinated note arrangements in a private transaction pursuant to an
applicable exemption from registration under the Securities Act of 1933. Sky Bank used the proceeds to pay down certain subordinated indebtedness owed to Sky Financial. Sky Financial used some of the proceeds received from Sky Bank to fund the cash
payment due Three Rivers Bancorp, Inc. shareholders (see Note 4) and for general working capital purposes.



The expected final payment dates for the asset-backed notes listed above are included in the following table:



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|                  |  | ContractualMaturity Date |  | Expected FinalPayment Date
|----------------- |  | ------------------------ |  | --------------------------
|2001-A, Class A-1 |  | December 2011            |  | October 2005              
|2001-A, Class A2  |  | December 2011            |  | July 2009                 
|2001-B, Class A1  |  | July 2012                |  | July 2005                 
|2001-B, Class A2  |  | July 2012                |  | April 2007                
|2001-C, Class A1  |  | January 2013             |  | October 2005              
|2001-C, Class A2  |  | January 2013             |  | August 2010               
|2002-A, Class A1  |  | July 2018                |  | October 2007              
|2002-A, Class A2  |  | July 2018                |  | July 2012                 
|2002-B, Class A1  |  | November 2012            |  | November 2012             



The amount of
obligated mandatorily redeemable capital securities of subsidiary trusts represent the par value adjusted for any unamortized discount or other basis adjustments related to hedging the debt with derivative instruments. These hedging relationships
exchange the fixed interest rate on the borrowing to variable rate based on LIBOR plus a spread, resulting in a lower effective rate paid on the borrowings. See note 13 for further discussion of derivative instruments.



8.    Other Comprehensive Income (loss)



Other comprehensive income (loss) consisted of the following:



|                                                           |  | Three Months Ended June 30, |        |   | Six Months Ended June 30, |  
|---------------------------------------------------------- |  | --------------------------- | ------ | - | ------------------------- | -
|                                                           |  | 2003                        |        |   | 2002                      |  
|Securities available for sale:                             |  |                             |        |   |                           |  
|Unrealized securities gains (losses) arising during period |  | $                           | 2,149  |   |                           | $
|Reclassification adjustment for gains included in income   |  |                             | (83    | ) |                           |  
|                                                           |  |                             |        |   |                           |  
|                                                           |  |                             | 2,066  |   |                           |  
|                                                           |  |                             |        |   |                           |  
|Cash flow hedge derivatives                                |  |                             |        |   |                           |  
|Change in fair value of cash flow hedge derivative         |  |                             | (8,709 | ) |                           |  
|Amounts reclassified to interest expense                   |  |                             | 777    |   |                           |  
|                                                           |  |                             |        |   |                           |  
|                                                           |  |                             | (7,932 | ) |                           |  
|                                                           |  |                             |        |   |                           |  
|Net unrealized gain (loss)                                 |  |                             | (5,866 | ) |                           |  
|Tax effect                                                 |  |                             | 2,053  |   |                           |  
|                                                           |  |                             |        |   |                           |  
|Total other comprehensive income (loss)                    |  | $                           | (3,813 | ) |                           | $
|                                                           |  |                             |        |   |                           |  



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9.    Earnings Per Share



Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the
period. Diluted earnings per share is computed using the weighted average number of shares determined for the basic computation plus the dilutive effect of potential common shares issuable under stock options. For the three months ended June 30,
2003 and 2002, 2,260,000 and 876,000 weighted average shares, respectively, under option were excluded from the diluted earnings per share calculation as they were anti-dilutive. For the six months ended June 30, 2003 and 2002, 2,653,000 and
1,430,000 weighted average shares, respectively, under option were excluded from the diluted earnings per share calculation as they were anti-dilutive.



The weighted average number of common shares outstanding for basic and diluted earnings per share computations were as follows:



|                                                     |  | Three Months Ended June 30, |            | Six Months Ended June 30,
|---------------------------------------------------- |  | --------------------------- | ---------- | -------------------------
|                                                     |  | 2003                        |            | 2002                     
|Numerator:                                           |  |                             |            |                          
|                                                     |  |                             |            |                          
|Net income                                           |  | $                           | 37,509     |                          
|                                                     |  |                             |            |                          
|Denominator:                                         |  |                             |            |                          
|                                                     |  |                             |            |                          
|Weighted-average common shares outstanding (basic)   |  |                             | 89,041,000 |                          
|Effect of stock options                              |  |                             | 602,000    |                          
|                                                     |  |                             |            |                          
|Weighted-average common shares outstanding (diluted) |  |                             | 89,643,000 |                          
|                                                     |  |                             |            |                          
|Earnings per share:                                  |  |                             |            |                          
|                                                     |  |                             |            |                          
|Basic                                                |  | $                           | .42        |                          
|Diluted                                              |  |                             | .42        |                          



10.    Capital
Resources



The Federal Reserve Board (FRB) has established
risk-based capital guidelines that must be observed by financial holding companies and banks. Failure to meet specified minimum capital requirements can result in certain mandatory actions by primary regulators of Sky Financial and its bank
subsidiary that could have a material effect on Sky Financials financial condition or results of operations. Under capital adequacy guidelines, Sky Financial and its bank subsidiary must meet specific quantitative measures of their assets,
liabilities and certain off balance sheet items as determined under regulatory accounting practices. Sky Financials and its banks capital amounts and classification are also subject to qualitative judgments by the regulators about
components, risk weightings and other factors. Management believes, as of June 30, 2003, that Sky Financial and its bank meet all capital adequacy requirements to which they are subject.



Sky Financial and its bank have been notified by their respective regulators that, as of the most recent regulatory
examinations, each is regarded as well capitalized under the regulatory framework for prompt corrective action. Such determinations have been made evaluating Sky Financial and its bank under Tier I, total capital, and leverage ratios. There are no
conditions or events since these notifications that management believes have changed any of the well capitalized categorizations of Sky Financial and its bank subsidiary. Sky Financials capital ratios are presented in the following table:



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|                                       |  | Actual |           |       | MinimumRequired ForCapital AdequacyPurposes |   |        | Required to beWell CapitalizedUnder PromptCorrective ActionRegulations |        
|-------------------------------------- |  | ------ | --------- | ----- | ------------------------------------------- | - | ------ | ---------------------------------------------------------------------- | -------
|June 30, 2003                          |  | Amount |           | Ratio |                                             |   | Amount |                                                                        | Ratio  
|                                       |  |        |           |       |                                             |  
|Total capital to risk-weighted assets  |  |        |           |       |                                             |   |        |                                                                        |        
|                                       |  |        |           |       |                                             |  
|Sky Financial                          |  | $      | 1,120,157 |       | 11.2                                        | % |        | $                                                                      | 798,126
|Sky Bank                               |  |        | 965,715   |       | 10.7                                        |   |        |                                                                        | 720,634
|                                       |  |        |           |       |                                             |  
|Tier I capital to risk-weighted assets |  |        |           |       |                                             |   |        |                                                                        |        
|                                       |  |        |           |       |                                             |  
|Sky Financial                          |  | $      | 831,078   |       | 8.3                                         | % |        | $                                                                      | 399,063
|Sky Bank                               |  |        | 775,492   |       | 8.6                                         |   |        |                                                                        | 360,317
|                                       |  |        |           |       |                                             |  
|Tier I capital to average assets       |  |        |           |       |                                             |   |        |                                                                        |        
|                                       |  |        |           |       |                                             |  
|Sky Financial                          |  | $      | 831,078   |       | 7.0                                         | % |        | $                                                                      | 476,978
|Sky Bank                               |  |        | 775,492   |       | 7.0                                         |   |        |                                                                        | 442,613



|                                       |  | Actual |         |       | MinimumRequired ForCapital AdequacyPurposes |   |        | Required to beWell CapitalizedUnder PromptCorrective ActionRegulations |        
|-------------------------------------- |  | ------ | ------- | ----- | ------------------------------------------- | - | ------ | ---------------------------------------------------------------------- | -------
|December 31, 2002                      |  | Amount |         | Ratio |                                             |   | Amount |                                                                        | Ratio  
|                                       |  |        |         |       |                                             |  
|Total capital to risk-weighted assets  |  |        |         |       |                                             |   |        |                                                                        |        
|                                       |  |        |         |       |                                             |  
|Sky Financial                          |  | $      | 990,098 |       | 11.0                                        | % |        | $                                                                      | 718,887
|Sky Bank                               |  |        | 841,128 |       | 10.6                                        |   |        |                                                                        | 633,468
|                                       |  |        |         |       |                                             |  
|Tier I capital to risk-weighted assets |  |        |         |       |                                             |   |        |                                                                        |        
|                                       |  |        |         |       |                                             |  
|Sky Financial                          |  | $      | 754,371 |       | 8.4                                         | % |        | $                                                                      | 359,444
|Sky Bank                               |  |        | 665,374 |       | 8.4                                         |   |        |                                                                        | 316,734
|                                       |  |        |         |       |                                             |  
|Tier I capital to average assets       |  |        |         |       |                                             |   |        |                                                                        |        
|                                       |  |        |         |       |                                             |  
|Sky Financial                          |  | $      | 754,371 |       | 7.0                                         | % |        | $                                                                      | 432,217
|Sky Bank                               |  |        | 665,374 |       | 6.6                                         |   |        |                                                                        | 403,404



In September, 2002,
the Board of Directors of Sky Financial reauthorized management to undertake purchases of up to 1 million shares of Sky Financials outstanding common stock over a twelve month period in the open market or in privately negotiated transactions.
There have been no such purchases under the current authorization.



11.    Goodwill and Intangible Assets



Goodwill at June 30, 2003 and December 31, 2002 was $161,598 and $108,776 respectively. During the second quarter of 2003, Sky Financial recorded $52,642 in goodwill as a result of the Metropolitan acquisition.
Management is still reviewing the valuations of certain Metropolitan assets and liabilities and may adjust goodwill once these assessments are completed. Goodwill is reviewed annually for impairment. Sky Financial completed this review during the
second quarter of 2003 and determined that goodwill was not impaired.



Net other intangible assets at June 30, 2003 and December 31, 2002 were $52,622 and $43,903, respectively. These assets consist primarily of core deposits intangibles and are continuing to be amortized in accordance with the Sky
Financials policy. For the years ended December 31, 2004 through 2008, estimated future amortization expense is estimated to be approximately $6,182 per year.



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12.    Line of Business Reporting



Sky Financial manages and operates three major lines of business: community
banking, financial services and commercial finance lending through Sky Financial Solutions. Community banking includes lending and related services to businesses and consumers, mortgage banking and deposit-gathering. Commercial finance lending
includes specialized lending to health care professionals, primarily dentists. Other financial services consists of non-banking companies engaged in trust and wealth management, insurance and other financial-related services.



The reported line of business results reflect the underlying core operating
performance within the business units. Parent and Other is comprised of the parent company and several smaller business units. It includes the net funding cost of the parent company and intercompany eliminations. Expenses for centrally provided
services and support are fully allocated based principally upon estimated usage of services. All merger, integration and restructuring charges company-wide are included in Parent and Other. Substantially all of Sky Financials assets are part
of the community banking line of business.



Selected segment
information for the three months ended June 30, 2003 and 2002 is included in the following tables:



|Three months ended June 30, 2003    |  | CommunityBanking |            | FinancialServicesAffiliates |   |        | Sky Financial Solutions |  | Parent And Other |         |  | Total
|----------------------------------- |  | ---------------- | ---------- | --------------------------- | - | ------ | ----------------------- |  | ---------------- | ------- |  | -----
|                                    |  |                  |            |                             |  
|Net interest income                 |  | $                | 97,904     |                             | $ | 90     |                         |  | $                | 7,416   |  | $    
|Provision for credit Losses         |  |                  | 8,100      |                             |   | 225    |                         |  |                  | 2,248   |  |      
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|Net interest income after provision |  |                  | 89,804     |                             |   | (135   | )                       |  |                  | 5,168   |  |      
|Other income                        |  |                  | 32,552     |                             |   | 13,622 |                         |  |                  | 937     |  |      
|Other expense                       |  |                  | 62,405     |                             |   | 10,949 |                         |  |                  | 5,019   |  |      
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|Income (loss) before income taxes   |  |                  | 59,951     |                             |   | 2,538  |                         |  |                  | 1,086   |  |      
|Income taxes                        |  |                  | 20,273     |                             |   | 911    |                         |  |                  | 399     |  |      
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|Net income (loss)                   |  | $                | 39,678     |                             | $ | 1,627  |                         |  | $                | 687     |  | $    
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|                                    |  |                  |            |                             |  
|Goodwill at April 1, 2003           |  | $                | 79,051     |                             | $ | 29,905 |                         |  | $                |        |  | $    
|Net activity                        |  |                  | 52,642     |                             |   |       |                         |  |                  |        |  |      
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|Goodwill at June 30, 2003           |  | $                | 131,693    |                             | $ | 29,905 |                         |  | $                |        |  | $    
|                                    |  |                  |            |                             |   |        |                         |  |                  |         |  |      
|                                    |  |                  |            |                             |  
|Average assets                      |  | $                | 11,257,865 |                             | $ | 72,793 |                         |  | $                | 694,027 |  | $    
|Depreciation and amortization       |  |                  | 5,074      |                             |   | 234    |                         |  |                  | 105     |  |      



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|Three months ended June 30, 2002    |  | CommunityBanking |           | FinancialServicesAffiliates |   | SkyFinancialSolutions |  |   | Parentand Other |   |  | Total
|----------------------------------- |  | ---------------- | --------- | --------------------------- | - | --------------------- |  | - | --------------- | - |  | -----
|Net interest income                 |  | $                | 83,824    |                             | $ | 226                   |  | $ | 4,384           |   |  | $    
|Provision for credit losses         |  |                  | 7,574     |                             |   | 180                   |  |   | 1,690           |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Net interest income after provision |  |                  | 76,250    |                             |   | 46                    |  |   | 2,694           |   |  |      
|Other income                        |  |                  | 23,567    |                             |   | 12,615                |  |   | 793             |   |  |      
|Other expense                       |  |                  | 50,962    |                             |   | 10,119                |  |   | 6,070           |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Income (loss) before income taxes   |  |                  | 48,855    |                             |   | 2,542                 |  |   | (2,583          | ) |  |      
|Income taxes                        |  |                  | 16,322    |                             |   | 963                   |  |   | (944            | ) |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Net income (loss)                   |  | $                | 32,533    |                             | $ | 1,579                 |  | $ | (1,639          | ) |  | $    
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|                                    |  |                  |           |                             |  
|Goodwill at April 1, 2002           |  | $                | 23,134    |                             | $ | 28,886                |  | $ |                |   |  | $    
|Net activity                        |  |                  |          |                             |   | 799                   |  |   |                |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Goodwill at June 30, 2002           |  | $                | 23,134    |                             | $ | 29,685                |  | $ |                |   |  | $    
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|                                    |  |                  |           |                             |  
|Average assets                      |  | $                | 8,894,636 |                             | $ | 81,398                |  | $ | 477,264         |   |  | $    
|Depreciation and amortization       |  |                  | 2,932     |                             |   | 177                   |  |   | 116             |   |  |      



Selected segment
information for the six months ended June 30, 2003 and 2002 is included in the following tables:



|Six months ended June 30, 2003      |  | CommunityBanking |            | FinancialServicesAffiliates |   |        | SkyFinancialSolutions |  | ParentAnd Other |         |  | Total
|----------------------------------- |  | ---------------- | ---------- | --------------------------- | - | ------ | --------------------- |  | --------------- | ------- |  | -----
|Net interest income                 |  | $                | 187,846    |                             | $ | 221    |                       |  | $               | 14,599  |  | $    
|Provision for credit Losses         |  |                  | 15,375     |                             |   | 450    |                       |  |                 | 4,933   |  |      
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|Net interest income after provision |  |                  | 172,471    |                             |   | (229   | )                     |  |                 | 9,666   |  |      
|Other income                        |  |                  | 58,545     |                             |   | 26,709 |                       |  |                 | 1,872   |  |      
|Other expense                       |  |                  | 119,240    |                             |   | 21,499 |                       |  |                 | 10,043  |  |      
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|Income (loss) before income taxes   |  |                  | 111,776    |                             |   | 4,981  |                       |  |                 | 1,495   |  |      
|Income taxes                        |  |                  | 37,600     |                             |   | 1,997  |                       |  |                 | 571     |  |      
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|Net income (loss)                   |  | $                | 74,176     |                             | $ | 2,984  |                       |  | $               | 924     |  | $    
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|                                    |  |                  |            |                             |  
|Goodwill at January 1, 2003         |  | $                | 79,119     |                             | $ | 29,657 |                       |  | $               |        |  | $    
|Net activity                        |  |                  | 52,574     |                             |   | 248    |                       |  |                 |        |  |      
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|Goodwill at June 30, 2003           |  | $                | 131,693    |                             | $ | 29,905 |                       |  | $               |        |  | $    
|                                    |  |                  |            |                             |   |        |                       |  |                 |         |  |      
|                                    |  |                  |            |                             |  
|Average assets                      |  | $                | 10,711,348 |                             | $ | 73,709 |                       |  | $               | 674,735 |  | $    
|Depreciation and amortization       |  |                  | 9,743      |                             |   | 465    |                       |  |                 | 211     |  |      



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##### Table of Contents

|Six months ended June 30, 2002      |  | CommunityBanking |           | FinancialServicesAffiliates |   | SkyFinancialSolutions |  |   | Parentand Other |   |  | Total
|----------------------------------- |  | ---------------- | --------- | --------------------------- | - | --------------------- |  | - | --------------- | - |  | -----
|Net interest income                 |  | $                | 165,472   |                             | $ | 502                   |  | $ | 8,012           |   |  | $    
|Provision for credit Losses         |  |                  | 15,578    |                             |   | 360                   |  |   | 2,827           |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Net interest income after provision |  |                  | 149,894   |                             |   | 142                   |  |   | 5,185           |   |  |      
|Other income                        |  |                  | 43,666    |                             |   | 24,966                |  |   | 1,515           |   |  |      
|Other expense                       |  |                  | 98,799    |                             |   | 20,281                |  |   | 11,411          |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Income (loss) before income taxes   |  |                  | 94,761    |                             |   | 4,827                 |  |   | (4,711          | ) |  |      
|Income taxes                        |  |                  | 31,511    |                             |   | 1,833                 |  |   | (1,687          | ) |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Net income (loss)                   |  | $                | 63,250    |                             | $ | 2,994                 |  | $ | (3,024          | ) |  | $    
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|                                    |  |                  |           |                             |  
|Goodwill at January 1, 2002         |  | $                | 23,134    |                             | $ | 10,778                |  | $ |                |   |  | $    
|Net activity                        |  |                  |          |                             |   | 18,907                |  |   |                |   |  |      
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|Goodwill at June 30, 2002           |  | $                | 23,134    |                             | $ | 29,685                |  | $ |                |   |  | $    
|                                    |  |                  |           |                             |   |                       |  |   |                 |   |  |      
|                                    |  |                  |           |                             |  
|Average assets                      |  | $                | 8,814,768 |                             | $ | 71,897                |  | $ | 437,522         |   |  | $    
|Depreciation and amortization       |  |                  | 5,018     |                             |   | 347                   |  |   | 233             |   |  |      



13.    Derivative Instruments and Hedging Activities



Sky Financials hedging policies permit the use of interest rate swaps, caps and floors to manage interest rate risk or to hedge specified assets and liabilities.



Fair Value Hedges



Sky Financial uses interest rate swap agreements to hedge a portion of its
fixed rate borrowings. The interest rate swaps effectively convert the fixed rate of interest on $108.6 million of the mandatorily redeemable trust preferred securities to variable rate based on LIBOR plus a spread as defined in the agreements. The
interest rate swaps involve no exchange of principal either at inception or maturity and have maturities and call options identical to the trust preferred security agreements. The arrangements have been designated as fair value hedges and both the
change in the fair value of the hedges and the hedged transactions are reflected in earnings. As the terms of the interest rate swaps match the hedge trust preferred securities, the Company assumes no ineffectiveness in the hedging relationships.



Cash Flow Hedges



Sky Financial has entered into amortizing interest rate swaps to fix the rate
on the borrowings of the warehouse line that is used to fund the loan originations at SFS as well as $40 million of variable rate advances with the Federal Home Loan Bank of Cincinnati. Under the terms of the arrangements, Sky Financial pays a fixed
rate of interest and receives a variable rate based on LIBOR. The swaps are considered to be highly effective. Accordingly, any change in the swaps fair value is recorded in other comprehensive income, net of tax.



Sky Financial uses interest rate cap arrangements to hedge its exposure to
increasing interest rates on $48.6 million of its variable rate federal funds purchased. Changes in the fair value of the interest rate caps, excluding time value, are designed to offset changes in the expected future cash flows of the hedged
variable rate borrowings. As Sky Financial assumes no ineffectiveness in the hedging relationships, such changes in the fair value of the derivative instruments are recorded in other comprehensive income. No derivative gains or losses accumulated in
other comprehensive income are expected to be reclassified into earnings due to ineffectiveness within 12 months of June 30, 2003.



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##### Table of Contents

The following table presents the contract/notional and fair value amounts of all derivative transactions
at June 30, 2003 and December 31, 2002:



|                       |  | June 30, 2003         |         |           | December 31, 2002
|---------------------- |  | --------------------- | ------- | --------- | -----------------
|                       |  | Contractual/ Notional |         | FairValue |                  
|Interest rate swaps    |  |                       |         |           |                  
|Fair value hedges      |  | $                     | 108,600 |           | $                
|Cash flow hedges       |  |                       | 252,598 |           |                  
|Interest rate caps     |  |                       | 48,600  |           |                  
|                       |  |                       |         |           |                  
|Derivative instruments |  | $                     | 409,798 |           | $                
|                       |  |                       |         |           |                  



14.    Merger,
Integration and Restructuring Expense



Sky Financial
recorded $3,486 ($2,266 after tax) of merger, integration and restructuring charges related to the acquisition of Metropolitan during the second quarter of 2003.



Sky Financial recorded $10,437 ($6,784 after tax) of merger, integration and restructuring charges related to the
implementation of a new technology platform and from the completed acquisition of Three Rivers during the second and fourth quarters of 2002, respectively. The following is a summary of activity in the merger, integration and restructuring liability
for the six months ended June 30, 2003:



|Beginning balance |  | $ | 5781   |  
|----------------- |  | - | ------ | -
|                  |  |   |        |  
|Accruals          |  |   | 3,486  |  
|Cash payments     |  |   | (5,777 | )
|                  |  |   |        |  
|Ending balance    |  | $ | 3,490  |  
|                  |  |   |        |  

15.    Commitments and Contingencies



Sky Financial is involved in litigation with three insurance companies who
issued surety bonds on insurance policies as security for four related loans aggregating $26.6 million. The subject loans are secured by pools of commercial leases, the payments under which are guaranteed by the surety bonds. Sky Financial is
engaged in litigation with these insurance companies to enforce the payment obligations, as are a number of other banks nationwide. After consultation with legal counsel, management believes that the credits are well secured and the prospects for
recovery of all principal and interest are good. The entire portfolio has been placed on non-accrual status pending outcome of the litigation.



A schedule of significant commitments at June 30, 2003 follows:



|                             |  | June 30,2003
|---------------------------- |  | ------------
|Commitments to extend credit |  | $           
|Standby letters of credit    |  |             
|Letters of credit            |  |             



Sky Financial also has
recourse obligations on $206,137 of sold loans and leases originated by SFS prior to June 30, 2000. At June 30, 2003, Sky Financial has recorded a recourse obligation related to these loans and leases of $4,381.



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##### Table of Contents

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



(Dollars in thousands, except per share data)



Three Months Ended June 30, 2003 and 2002



Results of Operations



Diluted earnings per common share for the second quarter of 2003 was $.42 ($.42 basic), as compared to $.35 ($.35 basic) for the same period in 2002. Net
income for the second quarter of 2003 was $37,509, an increase of $8,386 over the second quarter of 2002 net income of $29,123. Sky Financials net income during the second quarter of 2003 includes the results of Metropolitan, which was
acquired in April 2003, and Three Rivers, which was acquired in October 2002. Additionally, Sky Financial recognized merger, integration and restructuring charges of $3,486 during the second quarter of 2003 related to the acquisition of
Metropolitan. Sky Financial recognized $5,652 related to its technology implementation during the second quarter of 2002. Based on net income, return on average equity (ROE) and return on average assets (ROA) were 16.78% and 1.24%, respectively, for
the second quarter of 2003, compared to 16.90% and 1.22%, respectively, in 2002.



Business Line Results



Sky Financials
three major lines of business include community banking, financial services and commercial finance lending through Sky Financial Solutions. Community banking includes lending and related services to businesses and consumers, mortgage banking and
deposit-gathering. Commercial finance lending includes specialized lending to health care professionals, primarily dentists. Financial services consists of non-banking companies engaged in trust and wealth management, insurance and other
financial-related services. Sky Financials business line results for the first quarter ended June 30, 2003 and 2002 are summarized in the table below.



|                              |  | Net Income (Loss) |       
|----------------------------- |  | ----------------- | ------
|Quarter Ended June 30,        |  | 2003              |       
|Community Banking             |  | $                 | 39,678
|Financial Services Affiliates |  |                   | 1,627 
|Sky Financial Solutions, Inc. |  |                   | 687   
|Parent and Other              |  |                   | (4,483
|                              |  |                   |       
|Consolidated Total            |  | $                 | 37,509
|                              |  |                   |       



The higher community
banking net income in the first quarter of 2003 as compared to the same period of the previous year is due to higher net interest income, service charges and fees on deposits and mortgage banking income. These increases were partially offset by a
higher provision for loan losses and an increase in other expenses. The efficiency ratio for the community banking segment was 50.41% for the second quarter of 2003 compared to 47.60% in the first quarter of 2002. The 2003 community banking results
reflect a ROE of 17.58% and a ROA of 1.34% compared to 19.52% and 1.45%, respectively, in the first quarter of 2002.



Sky Financial Solutions reported net income during the first quarter of 2003 as compared to a net loss for the same period in the previous year as net
interest income continues to increase as a result of the continued growth in its retained loan portfolio.



The financial service affiliates net income increased as compared to 2002 from growth in brokerage and insurance commissions.



Parent and other includes the net funding costs of the parent company and
merger, integration and restructuring charges.



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##### Table of Contents

Net Interest Income



Net interest income for the second quarter of 2003 was $104,438, an increase of $17,085 or 19.6% from $87,353 in the second quarter of 2002. Net interest
income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of Sky Financials earnings. Net interest income is affected by
changes in the volumes, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 26.3% from the second quarter last year, with strong growth in average loans, increasing 29.9% from last
year, which included organic growth of 9.4% in addition to the Metropolitan and Three Rivers acquisitions. Average deposits were up 22.0% from the same quarter last year, primarily due to the Metropolitan and Three Rivers acquisitions. Sky
Financials net interest margin for the three months ended June 30, 2003 was 3.73%, a decrease of 15 basis points from last quarter and 21 basis points from second quarter a year ago. The lower net interest margin primarily reflects the impact
of the extended low rate environment and the incremental effect of the Metropolitan acquisition.



The following table reflects the components of Sky Financials net interest income for the three months ended June 30, 2003 and 2002. Rates are
computed on a tax equivalent basis and non-accrual loans have been included in the average balances.



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|(Dollars in thousands)                                                                       |  | Three Months EndedJune 30, 2003 |            |                        | Three Months EndedJune 30, 2002 |        
|-------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | ---------------------- | ------------------------------- | -------
|                                                                                             |  | AverageBalance                  |            | InterestIncome/Expense |                                 | Rate   
|Assets                                                                                       |  |                                 |            |                        |                                 |        
|Interest-earning assets:                                                                     |  |                                 |            |                        |                                 |        
|Interest-bearing deposits in banks                                                           |  | $                               | 61,588     |                        | $                               | 157    
|Federal funds sold                                                                           |  |                                 | 1,084      |                        |                                 | 41     
|Securities                                                                                   |  |                                 | 2,497,796  |                        |                                 | 25,126 
|Loans and loans held for sale                                                                |  |                                 | 8,773,738  |                        |                                 | 142,736
|                                                                                             |  |                                 |            |                        |                                 |        
|Total interest-earning assets                                                                |  |                                 | 11,334,206 |                        |                                 | 168,060
|                                                                                             |  |                                 |            |                        |                                 |        
|Noninterest-earning assets                                                                   |  |                                 | 812,067    |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        
|Total assets                                                                                 |  | $                               | 12,146,273 |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        
|Liabilities and Shareholders Equity                                                         |  |                                 |            |                        |                                 |        
|Interest-bearing liabilities:                                                                |  |                                 |            |                        |                                 |        
|Demand deposits                                                                              |  | $                               | 215,687    |                        |                                 | 370    
|Savings deposits                                                                             |  |                                 | 3,344,855  |                        |                                 | 8,683  
|Time deposits                                                                                |  |                                 | 3,806,940  |                        |                                 | 28,464 
|                                                                                             |  |                                 |            |                        |                                 |        
|Total interest-bearing deposits                                                              |  |                                 | 7,367,482  |                        |                                 | 37,517 
|Short-term borrowings                                                                        |  |                                 | 882,223    |                        |                                 | 4,978  
|Trust Preferred Securities                                                                   |  |                                 | 152,419    |                        |                                 | 1,604  
|Asset Backed Notes                                                                           |  |                                 | 520,389    |                        |                                 | 8,040  
|Debt and FHLB advances                                                                       |  |                                 | 1,110,998  |                        |                                 | 10,658 
|                                                                                             |  |                                 |            |                        |                                 |        
|Total interest-bearing liabilities                                                           |  |                                 | 10,033,511 |                        |                                 | 62,797 
|                                                                                             |  |                                 |            |                        |                                 |        
|Noninterest-bearing liabilities                                                              |  |                                 | 1,216,248  |                        |                                 |        
|Shareholders equity                                                                         |  |                                 | 896,514    |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        
|Total liabilities and equity                                                                 |  | $                               | 12,146,273 |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        
|Net interest income (tax equivalent basis)                                                   |  |                                 |            |                        | $                               | 105,263
|                                                                                             |  |                                 |            |                        |                                 |        
|Net interest rate spread (tax equivalent basis)                                              |  |                                 |            |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        
|Net interest margin, (interest income, taxable equivalent basis, to interest earning assets) |  |                                 |            |                        |                                 |        
|                                                                                             |  |                                 |            |                        |                                 |        



Provision for Credit Losses



The provision for credit losses represents the charge to
income necessary to adjust the allowance for loan losses to an amount that represents managements assessment of the estimated probable credit losses inherent in Sky Financials loan portfolio which have been incurred at each balance sheet
date. The provision for credit losses increased $1,129 or 12.0% to $10,573 in the second quarter of 2003 compared to $9,444 in the second quarter of 2002. The higher provision for credit losses in the second quarter of 2003 was attributable to
growth in the loan



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##### Table of Contents

portfolio and higher net charge-offs due to a larger loan portfolio and overall market conditions as compared to the
second quarter of 2002. Net charge-offs were $7,927 or 0.37% (annualized) of average loans during the three months ended June 30, 2003, compared to $6,721 or 0.40% (annualized) for the same period in 2002.



|                                                                    |  | June 30,2003 |  | December 31,2002 |  | June 30,2002
|------------------------------------------------------------------- |  | ------------ |  | ---------------- |  | ------------
|Allowance for credit losses as a percentage of loans                |  | 1.56%        |  | 1.54%            |  | 1.58%       
|Allowance for credit losses as a percentage of non-performing loans |  | 160.08%      |  | 173.25%          |  | 177.98%     



See section titled
Non-Performing Assets of managements discussion and analysis regarding $26.6 million of non-performing loans backed by sureties.



Non-Interest Income



The change in non-interest income reflects the emphasis of Sky Financial on expanding its profitable fee-based businesses. Non-interest income for the
second quarter of 2003 was $47,582, an increase of $12,386 or 35.2% from $35,196 for the same quarter of 2002. Non-interest income growth was most significant in mortgage banking income due to increases in origination volumes in the continued
favorable interest rate environment. Mortgage banking revenues were $13,884, up $9,387 or 208.7%, despite the inclusion of $3,622 of mortgage servicing asset impairment charges in the second quarter of 2003 versus $75 during the same period of 2002.
Brokerage and insurance commissions were $10,815 for the three months ended June 30, 2003, up $1,261 or 13.2% for the same period in 2002, reflecting growth from both increased sales and acquisitions. Service charges for the second quarter of 2003
were $9,489, up $1,110 or 13.2% from the second quarter of 2002 primarily due to deposit growth from acquisitions. Other income was $9,659, up $1,397 or 16.9% from the second quarter of 2002 due primarily to acquisitions.



Non-Interest Expense



The change in non-interest expense is primarily attributed to additional costs as a result of the Metropolitan and Three
Rivers acquisitions. Non-interest expense for the second quarter of 2003 was $84,702, an increase of $14,906 or 21.4%, from $69,796 reported for the same quarter of 2002. Salary and other employee costs were $43,225, up $6,984 or 19.3% as compared
to the second quarter of 2002 due to an increase in full time equivalent employees. Occupancy and equipment costs were $12,254, up $3,196 or 35.3% compared to the same period of 2002, primarily due to acquisitions and the implementation of Sky
Financials new technology platform during the second quarter of 2002. Other operating expenses were $25,737, up $6,892 or 36.6% as compared to the second quarter of 2002 due primarily to increased head count and facilities from acquisitions.
Merger, integration and restructuring charges of $3,486 related to the Metropolitan acquisition were recognized during the second quarter of 2003. During the second quarter of 2002, Sky Financial recognized merger, integration and restructuring
charges of $5,652 related to its company wide systems implementation. The efficiency ratio, including merger, integration and restructuring charges, was 55.42% for the second quarter of 2003, down from 56.56% for the same quarter last year.



Income Taxes



The provision for income taxes for the second quarter of 2003 increased
$5,050 to $19,236 from $14,186 for the same period in 2002. The effective tax rate for the three months ended June 30, 2003 was 33.89% as compared to 32.75% for the same period in 2002.



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##### Table of Contents

Six months ended June 30, 2003 and 2002



Results of Operations



Diluted earnings per common share for the first half of 2003 was $.83 ($.84 basic), as compared to $.73 ($.74 basic) for the same period in 2002. Net
income for the first half of 2003 was $73,579, an increase of $12,743 over the first half of 2002 net income of $60,836. Sky Financials net income during the first half of 2003 includes the results of Metropolitan, which was acquired in April
2003, and Three Rivers, which was acquired in October 2002. Additionally, Sky Financial recognized merger, integration and restructuring charges of $3,486 during the first six months of 2003 related to the acquisition of Metropolitan. Sky Financial
recognized $5,652 related to its technology implementation during the first six months of 2002. Based on net income, ROE and ROA were 17.06% and 1.28%, respectively, for the first half of 2003, compared to 17.98% and 1.30%, respectively, in 2002.



Business Line Results



Sky Financials three major lines of business include community
banking, financial services and commercial finance lending through Sky Financial Solutions. Community banking includes lending and related services to businesses and consumers, mortgage banking and deposit-gathering. Commercial finance lending
includes specialized lending to health care professionals, primarily dentists. Other financial services consists of non-banking companies engaged in trust and wealth management, insurance and other financial-related services. Sky Financials
business line results for the six months ended June 30, 2003 and 2002 are summarized in the table below.



|                              |  | Net Income (Loss) |       
|----------------------------- |  | ----------------- | ------
|Six Months Ended June 30,     |  | 2003              |       
|Community Banking             |  | $                 | 74,176
|Financial Services Affiliates |  |                   | 2,984 
|Sky Financial Solutions, Inc. |  |                   | 924   
|Parent and Other              |  |                   | (4,505
|                              |  |                   |       
|Consolidated Total            |  | $                 | 73,579
|                              |  |                   |       



The higher community
banking net income during the first six months of 2003 as compared to the same period of the previous year is due to higher net interest income, service charges and fees on deposits and mortgage banking income. These increases were partially offset
by a higher provision for loan losses and an increase in other expenses. The efficiency ratio for the community banking segment was 49.76% for the first half of 2003 compared to 47.60% in the first half of 2002. The 2003 year to date community
banking results reflect a ROE of 18.09% and a ROA of 1.36% compared to 19.52% and 1.44%, respectively, for the first six months of 2002.



Sky Financial Solutions reported net income during the first half of 2003 as compared to a net loss for the same period in the previous year as net
interest income continues to increase as a result of the continued growth in its retained loan portfolio.



The financial service affiliates net income increased as compared to 2002 from growth in brokerage and insurance commissions.



Parent and other includes the net funding costs of the parent company and
merger integration and restructuring charges.



Net Interest Income



Net interest income for the first half of 2003 was
$201,991, an increase of $30,662 or 17.9% from $171,329 in the first half of 2002. Net interest income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the
most significant component of Sky Financials earnings. Net interest income is affected by changes in the volumes, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 22.3% from
the first quarter last year, with strong growth in average loans, increasing 25.7% from last year, which included organic growth of 11% in addition



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##### Table of Contents

to the Metropolitan and Three Rivers acquisitions. Average deposits were up 19.2% from the same quarter last year, due
primarily to the Metropolitan and Three Rivers acquisitions. Sky Financials net interest margin for the six months ended June 30, 2003 was 3.79%, a decrease of 16 basis points from the fist six months ended June 30, 2002. The lower net
interest margin primarily reflects the impact of the extended low rate environment and the effect of the Metropolitan acquisition.



The following table reflects the components of Sky Financials net interest income for the three months ended June 30, 2003 and 2002. Rates are
computed on a tax equivalent basis and non-accrual loans have been included in the average balances.



|(Dollars in thousands)                                                                       |  | Six Months Ended June 30, 2003 |            |                        | Six Months Ended June 30, 2002 |        
|-------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | ---------------------- | ------------------------------ | -------
|                                                                                             |  | AverageBalance                 |            | InterestIncome/Expense |                                | Rate   
|Assets                                                                                       |  |                                |            |                        |                                |        
|Interest-earning assets:                                                                     |  |                                |            |                        |                                |        
|Interest-bearing deposits in banks                                                           |  | $                              | 60,457     |                        | $                              | 277    
|Federal funds sold                                                                           |  |                                | 1,455      |                        |                                | 45     
|Securities                                                                                   |  |                                | 2,376,861  |                        |                                | 51,811 
|Loans and loans held for sale                                                                |  |                                | 8,378,508  |                        |                                | 274,679
|                                                                                             |  |                                |            |                        |                                |        
|Total interest-earning assets                                                                |  |                                | 10,817,281 |                        |                                | 326,812
|                                                                                             |  |                                |            |                        |                                |        
|Noninterest-earning assets                                                                   |  |                                | 756,343    |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        
|Total assets                                                                                 |  | $                              | 11,573,624 |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        
|Liabilities and Shareholders Equity                                                         |  |                                |            |                        |                                |        
|Interest-bearing liabilities:                                                                |  |                                |            |                        |                                |        
|Demand deposits                                                                              |  | $                              | 183,531    |                        |                                | 642    
|Savings deposits                                                                             |  |                                | 3,180,886  |                        |                                | 17,026 
|Time deposits                                                                                |  |                                | 3,733,478  |                        |                                | 58,210 
|                                                                                             |  |                                |            |                        |                                |        
|Total interest-bearing deposits                                                              |  |                                | 7,097,895  |                        |                                | 75,878 
|Short-term borrowings                                                                        |  |                                | 827,595    |                        |                                | 9,322  
|Trust Preferred Securities                                                                   |  |                                | 134,566    |                        |                                | 3,234  
|Asset Backed Notes                                                                           |  |                                | 524,903    |                        |                                | 16,082 
|Debt and FHLB advances                                                                       |  |                                | 964,689    |                        |                                | 18,763 
|                                                                                             |  |                                |            |                        |                                |        
|Total interest-bearing liabilities                                                           |  |                                | 9,549,648  |                        |                                | 123,279
|                                                                                             |  |                                |            |                        |                                |        
|Noninterest-bearing liabilities                                                              |  |                                | 1,154,420  |                        |                                |        
|Shareholders equity                                                                         |  |                                | 869,556    |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        
|Total liabilities and equity                                                                 |  | $                              | 11,573,624 |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        
|Net interest income(tax equivalent basis)                                                    |  |                                |            |                        | $                              | 203,533
|                                                                                             |  |                                |            |                        |                                |        
|Net interest rate spread (tax equivalent basis)                                              |  |                                |            |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        
|Net interest margin, (interest income, taxable equivalent basis, to interest earning assets) |  |                                |            |                        |                                |        
|                                                                                             |  |                                |            |                        |                                |        





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Provision for Credit Losses



The provision for credit losses represents the charge to income necessary to adjust the allowance for loan losses to an
amount that represents managements assessment of the estimated probable credit losses inherent in Sky Financials loan portfolio which have been incurred at each balance sheet date. The provision for credit losses increased $1,993 or
10.6% to $20,758 in the first half of 2003 compared to $18,765 in the first half of 2002. The higher provision for credit losses in the first half of 2003 was attributable to growth in the loan portfolio and higher net charge-offs due to a larger
loan portfolio and overall market conditions as compared to the first half of 2002. Net charge-offs were $16,370 or 0.40% (annualized) of average loans during the six months ended June 30, 2003, compared to $14,224 or 0.43% (annualized) for the same
period in 2002.



Non-Interest Income



The change in non-interest income reflects the emphasis of Sky Financial on
expanding its profitable fee-based businesses. Non-interest income for the first half of 2003 was $87,931, an increase of $19,912 or 29.3% from the $68,019 for the same quarter of 2002. Non-interest income growth was most significant in mortgage
banking income due to increases in origination volumes in the continued favorable interest rate environment. Mortgage banking revenues were $23,242, up $13,292 or 133.59%, despite the inclusion of $4,694 of mortgage servicing asset impairment
charges in the first half of 2003 versus $579 of impairment recapture during the same period of 2002. Brokerage and insurance commissions were $21,406 for the six months ended June 30, 2003, up $3,120 or 17.1% for the same period in 2002, reflecting
both growth from both increased sales and acquisitions. Service charges for the first quarter of 2003 were $18,094, up $2,105 or 13.2% from the first quarter of 2002 primarily due to deposit growth.



Non-Interest Expense



Non-interest expense for the first half of 2003 was $157,926; an increase of $27,947 or 21.5%, from $129,979 reported for
the first half of 2002. Sky Financial recorded merger, integration and restructuring charges of $3,486 for the Metropolitan acquisition during the first half of 2003 and $5,652 for its new technology implementation during the first half of 2002. The
remaining increase in non-interest expense is due primarily to the increase in salary and other employee costs as a result of the Metropolitan and Three Rivers acquisition. Including merger, integration and restructuring charges, the efficiency
ratio was 54.18% for the first half of 2003, up from 53.9% for the same period last year.



Income Taxes



The
provision for income taxes for the first half of 2003 increased $7,891 to $37,659 from $29,768 for the same period in 2002. The effective tax rate for the six months ended June 30, 2003 was 33.9% as compared to 32.9% for the same period in 2002.



Balance Sheet



At June 30, 2003, total assets were $12,727,061, an increase of $1,713,118
from December 31, 2002. This increase was primarily attributable to the acquisition of Metropolitan in April 2003. The increase in loans of $1,177,343, included $937,427 from Metropolitan as well as 11% organic growth. Securities available for sale
increased $181,539 due to the Metropolitan acquisition and additional investment purchases. Other assets increased $148,966, of which $89,462 was due to assets acquired from Metropolitan and the recognition of $52,641 of goodwill and $11,807 in core
deposit intangibles.



The net growth in assets was funded
primarily by growth in total deposits, up $1,092,915, which consisted of $949,725 from the Metropolitan acquisition and from organic growth. Debt increased $506,483, due to assumption of $271,142 from Metropolitan and additional borrowings under
bank lines of credit of $105,674.



Shareholders equity
totaled $915,010 at June 30, 2003, increasing $82,577 from December 31, 2002. Common stock increased $57,346, mainly due to $55,294 of stock issued to Metropolitan shareholders. Net retained earnings (net income less cash dividends) for the six
months ended June 30, 2003 totaled $38,106. Other comprehensive



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income decreased by $12,398, primarily due to a decrease in the market value of securities available for sale and cash
flow derivatives.



Non-Performing Assets



The following table presents the aggregate amounts of non-performing assets
and respective ratios on the dates indicated.



|                                                                     |  | June 30, 2003 |        |   | December 31, 2002 |   |        | June 30, 2002 | 
|-------------------------------------------------------------------- |  | ------------- | ------ | - | ----------------- | - | ------ | ------------- | 
|Non-accrual loans                                                    |  | $             | 86,793 |   |                   | $ | 66,855 |               | 
|Restructured loans                                                   |  |               | 1,266  |   |                   |   | 3,203  |               | 
|                                                                     |  |               |        |   |                   |   |        |               | 
|Total non-performing loans                                           |  |               | 88,059 |   |                   |   | 70,058 |               | 
|Other real estate owned                                              |  |               | 6,840  |   |                   |   | 4,178  |               | 
|                                                                     |  |               |        |   |                   |   |        |               | 
|Total non-performing assets                                          |  | $             | 94,899 |   |                   | $ | 74,236 |               | 
|                                                                     |  |               |        |   |                   |   |        |               | 
|Loans 90 days or more past due and not on non-accrual                |  | $             | 12,189 |   |                   | $ | 12,458 |               | 
|Non-performing loans to total loans                                  |  |               | .97    | % |                   |   | .89    | %             | 
|Non-performing assets to total loans plus other real estate owned    |  |               | 1.05   |   |                   |   | .94    |               | 
|Allowance for credit losses to total non-performing loans            |  |               | 160.08 |   |                   |   | 173.25 |               | 
|Loans 90 days or more past due and not on non-accrual to total loans |  |               | .13    |   |                   |   | .16    |               | 



Performing loans where
some concerns exist as to the ability of the borrower to comply with present loan repayment terms, excluding non-performing loans, approximated $100,008 and $85,929 at June 30, 2003 and December 31, 2002, respectively, and are being closely
monitored by management and the Boards of Directors of the subsidiaries. The amount included in these loans results from an evaluation, on a loan-by-loan basis, of loans classified as doubtful and substandard but are not
included in the non-performing loan category. The classification of these loans, however, does not imply that management expects losses on each of these loans, but believes that a higher level of scrutiny is prudent under the circumstances. These
loans require close monitoring despite the fact that they are currently performing. Such classifications relate to specific concerns relating to each individual borrower and do not relate to any concentrated risk elements common to all loans in this
group.



Included in non-accrual loans at June 30, 2003 are
$26.6 million of loans that are secured by pools of commercial leases for which payment is over 90 days past due. These loans are guaranteed by surety bonds or insurance policies issued by A.M. Best A rated insurance companies. Sky
Financial is engaged in litigation with these insurance companies to enforce their payment obligations, as are a number of other banks nationwide. After consultation with its counsel as to the strength of its position, Sky believes that the credits
are well secured and the prospects for recovery of all principal and interest are good.



As of June 30, 2003, Sky Financial did not have any loan concentrations which exceeded 10% of total loans.



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Allowance for Credit Losses



The following tables presents a summary of Sky Financials credit loss experience for the three months ended June 30,
2003 and 2002.



|                                                      |  | Three Months Ended |         |   | Six Months Ended |  
|----------------------------------------------------- |  | ------------------ | ------- | - | ---------------- | -
|                                                      |  | 2003               |         |   | 2002             |  
|Balance of allowance at beginning of year             |  | $                  | 123,114 |   |                  | $
|                                                      |  |                    |         |   |                  |  
|Loans charged-off:                                    |  |                    |         |   |                  |  
|Real estate                                           |  |                    | (1,706  | ) |                  |  
|Commercial and agricultural                           |  |                    | (3,869  | ) |                  |  
|Installment and credit card                           |  |                    | (4,331  | ) |                  |  
|Other loans                                           |  |                    | (79     | ) |                  |  
|                                                      |  |                    |         |   |                  |  
|Total loans charged-off                               |  |                    | (9,985  | ) |                  |  
|                                                      |  |                    |         |   |                  |  
|Recoveries                                            |  |                    |         |   |                  |  
|Real estate                                           |  |                    | 371     |   |                  |  
|Commercial and agricultural                           |  |                    | 389     |   |                  |  
|Installment and credit card                           |  |                    | 1,295   |   |                  |  
|Other loans                                           |  |                    | 3       |   |                  |  
|                                                      |  |                    |         |   |                  |  
|Total recoveries                                      |  |                    | 2,058   |   |                  |  
|                                                      |  |                    |         |   |                  |  
|Net loans charged off                                 |  |                    | (7,927  | ) |                  |  
|                                                      |  |                    |         |   |                  |  
|Provision charged to operating expense                |  |                    | 10,573  |   |                  |  
|Acquired through business combinations                |  |                    | 15,205  |   |                  |  
|                                                      |  |                    |         |   |                  |  
|Balance of allowance at end of period                 |  | $                  | 140,965 |   |                  | $
|                                                      |  |                    |         |   |                  |  
|Ratio of net charge-offs to average loans outstanding |  |                    | .37     | % |                  |  



Sky Financial
maintains an allowance for credit losses at a level adequate to absorb managements estimate of probable losses inherent in the loan portfolio. The allowance is comprised of a general allowance, a specific allowance for identified problem loans
and an unallocated allowance.



The general allowance is
determined by applying estimated loss factors to the credit exposures from outstanding loans. For construction, commercial and commercial real estate loans, loss factors are applied based on internal risk grades of these loans. For residential real
estate, installment, credit card and other loans, loss factors are applied on a portfolio basis. Loss factors are based on Sky Financials historical loss experience and are reviewed for revision on a quarterly basis, along with other factors
affecting the collectibility of the loan portfolio.



Specific
allowances are established for all criticized and classified loans, where management has determined that, due to identified significant conditions, the probability that a loss has been incurred exceeds the general allowance loss factor determination
for those loans.



The unallocated allowance recognizes the
estimation risk associated with the allocated general and specific allowances and incorporates managements evaluation of existing conditions that are not included in the allocated allowance determinations. These conditions are reviewed
quarterly by management and include general economic conditions, credit quality trends, and internal loan review and regulatory examination findings. The following table sets forth Sky Financials allocation of the allowance for credit losses
as of June 30, 2003 and December 31, 2002.



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|                                       |  | June 30, 2003 |         | December 31, 2002
|-------------------------------------- |  | ------------- | ------- | -----------------
|Construction                           |  | $             | 2,054   |                  
|Real estate                            |  |               | 44,856  |                  
|Commercial, financial and agricultural |  |               | 57,446  |                  
|Installment and credit card            |  |               | 25,448  |                  
|Unallocated                            |  |               | 11,161  |                  
|                                       |  |               |         |                  
|Total                                  |  | $             | 140,965 |                  
|                                       |  |               |         |                  



Liquidity and Capital Resources



Management of liquidity is of growing importance to the
banking industry. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities. The ability of a financial institution
to meet its current financial obligations is a function of balance sheet structure, the ability to liquidate assets, and the availability of alternative sources of funds.



In addition to maintaining a stable core deposit base, Sky Financials banking subsidiary maintains adequate liquidity
primarily through the use of investment securities and unused borrowing capacity. At June 30, 2003, securities and other short term investments with maturities of one year or less totaled $57,223. In addition, the mortgage-backed securities provide
an estimated cash flow of approximately $737,000 over a twelve-month timeframe. The banking subsidiary is a member of the Federal Home Loan Bank (FHLB). The FHLB provides a reliable source of funds over and above retail deposits. As of June 30,
2003, the banking subsidiary had total credit availability with the FHLB of $986,373, of which it had outstanding borrowings of $935,193.



On May 30, 2003, Sky Financial renegotiated an agreement with non-affiliated financial institutions which enabled Sky Financial to borrow up to $105,000
through May 30, 2004. At June 30, 2003, Sky Financial had borrowings of $75,000 under this agreement.



During March 2003, Sky Financial sold $50,000 in subordinated note arrangements in a private transaction pursuant to an applicable exemption from
registration under the Securities Act of 1933. Sky Financial used these proceeds to pay Metropolitans shareholders who elected to receive cash as merger consideration in exchange for their common shares and the remaining proceeds were used to
pay down $13,960 of Metropolitan subordinated debt.



During
September 2002, Sky Bank sold $65,000 in subordinated note arrangements in a private transaction pursuant to an applicable exemption from registration under the Securities Act of 1933. Sky Bank used the proceeds to pay down certain subordinated
indebtedness owed to Sky Financial. Sky Financial used these proceeds received from Sky Bank to partially fund the Three Rivers Bancorp, Inc., merger that was completed on October 1, 2002.



Sky Financial, through Sky Financial Solutions (SFS), entered into a conduit
warehousing facility with a financial institution to provide up to $125,000 of interim funding for loans originated by SFS. At June 30, 2003, approximately $89,823 was outstanding under the warehouse line of credit. SFS has outstanding term funding
of $516,697 at June 30, 2003 through the issuance of collateralized notes in a private placement. On July 13, 2003, SFS issued an additional $135,000 of fixed rate-interest-rate collateralized notes in a private placement to provide term funding for
commercial loans.



Sky Financial also enters into derivative
contracts under which it is required to either receive cash or pay cash to counterparties depending on changes in interest rates. Derivative contracts are carried at their fair value on the consolidated balance sheet with the fair value representing
the net present value of expected future cash receipts or payments based on market interest rates as of the balance sheet date. The contracts are primarily interest rate swaps and cash is settled quarterly.



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A schedule of significant commitments at June 30, 2003 follows:



|                             |  | June 30,2003
|---------------------------- |  | ------------
|Commitments to extend credit |  | $           
|Standby letters of credits   |  |             
|Letters of credits           |  |             



Sky Financial also has
recourse obligations on $206,137 of sold loans and leases originated by SFS prior to June 30, 2000. At June 30, 2003, Sky Financial has recorded a recourse provision related to these loans and leases of $4,381.



Sky Financial does not expect to make any share repurchases during 2003 in
order to enhance liquidity.



Since Sky Financial is a holding
company and does not conduct operations, its primary sources of liquidity are dividends paid to it by its banking subsidiary and borrowings from outside sources. For the banking subsidiary, regulatory approval is required in order to pay dividends
in excess of the subsidiarys earnings retained for the current year plus retained net profits for the prior two years. As a result of these restrictions, dividends that could be paid to Sky Financial by its bank subsidiary, without prior
regulatory approval, were limited to $22,786 at June 30, 2003.



Asset/Liability Management



Closely related to
liquidity management is the management of interest-earning assets and interest-bearing liabilities. Sky Financial manages its rate sensitivity position to avoid wide swings in net interest margins and to minimize risk due to changes in interest
rates. At June 30, 2003, Sky Financials gap position, the difference between the dollar value of interest rate sensitive assets and interest rate sensitive liabilities, was positive for six months and one year and remained within Sky
Financials Asset/Liability Committee (ALCO) guideline. Therefore Sky Financial does not expect to experience any significant fluctuations in its net interest income as a consequence of changes in interest rates. See also Item. 3,
Quantitative and Qualitative Disclosures About Market Risk.



Forward-Looking Statements



This report
includes forward-looking statements by Sky Financial relating to such matters as anticipated operating results, credit quality expectations, prospects for new lines of business, technological developments, economic trends (including interest rates),
acquisition and reorganization transactions and similar matters. Such statements are based upon the current beliefs and expectations of Sky Financials management and are subject to risks and uncertainties. While Sky Financial believes that the
assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could prove to be inaccurate, and accordingly, actual results and experience could differ materially from the anticipated results or other
expectations expressed by Sky Financial in its forward-looking statements. Factors that could cause actual results or experience to differ from results discussed in the forward-looking statements include, but are not limited to: economic conditions;
volatility and direction of market interest rates; capital investment in and operating results of non-banking business ventures of Sky Financial; governmental legislation and regulation; material unforeseen changes in the financial condition or
results of operations of Sky Financials customers; customer reaction to and unforeseen complications with respect to Sky Financials restructuring or integration of acquisitions; difficulties in realizing expected cost savings from
acquisitions; difficulties associated with data conversions in acquisitions or migrations to a single platform system; and other risks identified from time-to-time in Sky Financials other public documents on file with the Securities and
Exchange Commission. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of this paragraph is to secure the use of the safe harbor provisions.



Sarbanes-Oxley Act of 2002



On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of
2002, which contains important new requirements for public companies in the area of financial disclosure and corporate governance. Although parts of the act are still being assessed, we do not anticipate any significant changes in the operations of
and reporting by Sky Financial as a result of the act. In accordance with the requirements of the Sarbanes-Oxley Act, written



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certifications for this quarterly report on Form 10-Q by the chief executive officer and the chief financial officer
accompany this report as filed with the SEC. See Controls and Procedures for Sky Financials evaluation of disclosure controls and procedures.



Item 3.    
Quantitative and Qualitative Disclosures About Market Risk



Market risk is the risk that a financial institutions earnings and capital, or its ability to meet its business objectives, will be adversely affected by movements in market rates or prices such as interest
rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices. Within Sky Financial, the dominant market risk exposure is changes in interest rates. The negative effects of this exposure is felt through the net interest
margin, mortgage banking revenues and the market value of various assets and liabilities.



Sky Financial manages market risk through its Asset/Liability Committee (ALCO) at the consolidated level. This committee monitors interest rate risk through sensitivity analysis, whereby it measures potential changes
in future earnings and the fair market values of financial instruments that may result from one or more hypothetical changes in interest rates. This analysis is performed by estimating the expected cash flows of Sky Financials financial
instruments using interest rates in effect at June 30, 2003 and December 31, 2002. For the fair value estimates, the cash flows are then discounted to year end to arrive at an estimated present value of Sky Financials financial instruments.
Hypothetical changes in interest rates are then applied to the financial instruments, and the cash flows and fair values are again estimated using these hypothetical rates. For the net interest income estimates, the hypothetical rates are applied to
the financial instruments based on the assumed cash flows. Sky Financial applied these interest rate shocks to its financial instruments up 300, 200 and 100 basis points and down 100 basis points. Down 300 and 200 basis points was not measured due
to the low probability of such a decline.



The following table
presents the potential ratio of Sky Financials interest rate sensitive assets (i.e. assets that will mature or reprice within a specific time period) divided by its interest rate sensitive liabilities (i.e. liabilities that will mature or
reprice within a specific time period), commonly referred to as the interest rate sensitivity gap or gap, over a six month time period and a twelve month time period.



|             |  | June 30,2003 |   |  | ALCOMax |   |  | GuidelinesMin |  
|------------ |  | ------------ | - |  | ------- | - |  | ------------- | -
|Six Month    |  | 115.2        | % |  | 125     | % |  | 95            | %
|Twelve Month |  | 117.8        |   |  | 125     | % |  | 95            | %



The following table
presents an analysis of the potential sensitivity of Sky Financials annual net interest income to sudden and sustained 300, 200 and 100 basis-point changes in market rates.



|                      |  | June 30,2003 |   |  | December 31,2002 |   |  | ALCOGuidelines |  
|--------------------- |  | ------------ | - |  | ---------------- | - |  | -------------- | -
|One Year Net Interest |  |              |   |  |                  |   |  |                |  
|Income Change         |  |              |   |  |                  |   |  |                |  
|+300 Basis points     |  | 8.56         | % |  | 9.2              | % |  |               | %
|+200 Basis points     |  | 7.36         |   |  | 7.6              |   |  | (10.0          | )
|+100 Basis points     |  | 4.82         |   |  | 5.0              |   |  | (5.0           | )
|-100 Basis points     |  | (4.47        | ) |  | (6.0             | ) |  | (5.0           | )
|Net present value of  |  |              |   |  |                  |   |  |                |  
|Equity Change         |  |              |   |  |                  |   |  |                |  
|+300 Basis points     |  | (10.3        | ) |  | 7.7              |   |  |               |  
|+200 Basis points     |  | (3.8         | ) |  | 9.9              |   |  | (15.0          | )
|+100 Basis points     |  | .4           |   |  | 7.6              |   |  | (10.0          | )
|-100 Basis points     |  | (7.5         | ) |  | (9.1             | ) |  | (10.0          | )



ALCO is aggressively
managing the companys risk to net interest income in response to continued declines in the interest rate environment.



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The projected volatility of net interest income and the net present value of equity rates to a + 200
basis points change and + 100 basis point change at June 30, 2003 and December 31, 2002 fall within the ALCO guidelines.



The preceding analysis is based on numerous assumptions, including relative levels of market interest rates, loan prepayments and reactions of depositors
to changes in interest rates, and should not be relied upon as being indicative of actual results. Further, the analysis does not necessarily contemplate all actions Sky Financial may undertake in response to changes in interest rates.



Sky Financial also utilizes interest rate swaps and caps to effectively
move its liability interest rate re-pricing down the yield curve to more effectively match the re-pricing characteristics of its assets. At June 30, 2003, the fair values of Sky Financials derivative arrangements aggregated $4,676 on contracts
with notional amounts of $409,798.



Item 4.    
Controls and Procedures



The
management of Sky Financial is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934. As of June 30, 2003, an evaluation was
performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Sky Financials disclosure and controls procedures.
Based on that evaluation, management concluded that Sky Financials disclosure controls and procedures as of June 30, 2003 were effective in ensuring that information required to be disclosed in this Quarterly Report on Form 10-Q were recorded,
processed, summarized and reported within the time period required by the United States Securities and Exchange Commissions rules and forms.



Managements responsibilities related to establishing and maintaining effective disclosure controls and procedures include maintaining effective
internal controls over financial reporting that are designed to produce reliable financial statements in accordance with accounting policies generally accepted in the United States of America. Management has assessed Sky Financials system of
internal control over financial reporting as described in Internal ControlIntegrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as
of June 30, 2003, its system of internal control over financial reporting met those criteria.



There have been no significant changes in Sky Financials internal controls or in other factors that could significantly affect internal controls subsequent to June 30, 2003.



PART II.    OTHER INFORMATION



Item 1.    
Legal Proceedings



Between August
2000 and December 2001, Sky Bank provided financing to a commercial borrower and its affiliated entities for the purchase of three separate portfolios of commercial lease pools, and a warehouse line of credit to finance lease pools. During 2001,
Metropolitan Bank and Trust Company, which was merged with Sky Bank on May 16, 2003, provided similar financing to the same commercial borrower and its affiliated entities. These loans, with a current outstanding balance of $26.6 million, are
secured by assignments of the payment streams from the underlying leases, surety bonds or insurance policies, and a limited guarantee from the sole member of the commercial borrower.



Upon default of these commercial loans, Sky Bank (and its predecessor Metropolitan) made demand for payment from Illinois
Union Insurance Company (IU), RLI Insurance Company (RLI), and Royal Indemnity Company (Royal) under the relevant surety bonds and insurance policies. IU, RLI, and Royal (collectively, the Sureties)
have failed to make the payments required under the surety bonds and insurance policies. As a result, in the spring of 2002, Sky filed suit against each of the Sureties seeking to enforce Sky Banks rights under the surety bonds and insurance
policies issued by the Sureties in connection with the commercial lease pools. Skys complaints claim breach of contract, bad faith and allege that the Sureties are liable for the payments due to Sky under the terms of the



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bonds and are estopped from asserting fraud as a defense to paying any claims under the bonds. A similar suit was filed
by Metropolitan in June, 2002. In October, 2002, the suits were consolidated for pretrial purposes with more than 35 other lawsuits involving similar claims in the United States District Court for the Northern District of Ohio, Eastern Division,
under the Federal Multi-district Litigation (MDL) Rules.



On January 31, 2003, Sky Bank and the other Claimants in the MDL Proceeding (MDL 02CV16000, Docket No. 1490) filed a consolidated Motion for Judgment on the Pleadings (the Motion) seeking a determination that the Sureties are
liable, as a matter of law, under the relevant surety bonds and insurance policies. The Motion is pending with the MDL Court, however, there is no indication when the MDL Court will rule on the Motion. Meanwhile, discovery in the MDL Proceeding is
underway, and depositions began on July 1, 2003.



The key
defense of the Sureties in denying Sky Banks claims under the surety bonds is that they were fraudulently induced by the originator of the commercial leases to issue the surety bonds in the first instance. The Sureties have also asserted
related defenses that the underlying equipment leases are invalid, usurious, or otherwise unenforceable. Sky Bank believes that none of these defenses can defeat Sky Banks claims under the surety bonds, which, in the view of Sky Bank, provide
for absolute and unconditional guarantees of payment.



Sky Bank
believes that the language of the surety bonds (and in the case of Illinois Union, the insurance policies) clearly provides that the Sureties are responsible to Sky Bank, as the Obligee or Named Insured under the bonds, for the underwriting of the
lessees and leases, including all issues of fraud, and that the Sureties waived any defense of fraud to claims under the bonds. Sky Bank also believes that the surety bonds make it clear that the Sureties were responsible for the performance of the
originator of the leases as sub-servicer of the leases. Finally, Sky Bank believes that the surety bonds provide that if the Obligee or Named Insured fails to receive a payment due under a lease from the sub-servicer, a default under the lease
occurs, and the Sureties payment obligations are triggered. Relevant excerpts from the RLI and Royal surety bonds are set forth below:



The Surety is responsible to the Obligee for the individual underwriting of each lessee and Lease, including but not limited to, all
related credit matters, issues of fraud, bankruptcy and the accurate and timely performance by any sub-servicer designated by Surety, and Surety shall assert no defenses to any claim under this Bond as a result of any of the foregoing. This Lease
Bond and the Suretys obligation constitute an unconditional and absolute guarantee of payment, not collection. If the Obligee fails to receive a payment under the Lease from the Surety, as servicer, or from any sub-servicer, on the scheduled
due date, a default under the Lease occurs. Upon such default, the Surety shall have thirty (30) days to cause the default to be remedied. The Surety shall make payment on this bond to Obligee upon receipt of demand from Obligee, within this 30 day
period.



Relevant excerpts from the IU insurance policies are
set forth below:



The issuance of this
endorsement shall represent the Companys approval of the individual underwriting and execution and delivery of each Lease, including, but not limited to, all related credit matters, issues of fraud, bankruptcy, validity, legality and
enforceability and the Company shall pay all claims hereunder unconditionally and assert no defenses to any claim under this endorsement as a result of any of the foregoing or based on any act or omission of the master-servicer or sub-servicer. If
the named insured fails to receive a payment under the lease from the lesseethen default under the lease occurs. Upon such default, the Company shall have thirty (30) days to cause the default to be remedied. Upon the passage of such 30-day
period, then the Company shall make payment hereunder to the named insured in immediately available funds



Furthermore, Sky Bank believes that as a further inducement to Sky Bank to extend credit, the Sureties issued representation letters and legal opinions
which confirmed the validity and enforceability of its surety bonds, and in effect acknowledged the assignment of the bonds to Sky Bank.



Sky Financial has reviewed the relevant matters of fact and law with its special counsel and believes that it has substantial and meritorious claims
against the Sureties, due in part to the fact that, under the terms of the bonds, the Sureties undertake the responsibility for all credit matters and any fraud that may have occurred in the underwriting of the credit, and waive all defenses
associated with the bonds, including defenses of fraud. Sky Financial has and will continue to vigorously assert all the rights and remedies available to it to obtain payment under the bonds.



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While the ultimate outcome of this matter cannot be determined at this time, Sky Financial management
does not believe that the outcome of any of these pending legal proceedings will materially affect the consolidated financial position or results of operations of Sky Financial.



Sky Financial is, from time to time, involved in various lawsuits and claims that arise in the normal course of business. In
the opinion of management, any liabilities that may result from these lawsuits and claims will not materially affect the consolidated financial position or results of operations of Sky Financial.



Item 2.    
Changes in Securities and Use of Proceeds



Not applicable.



Item 3.    
Defaults Upon Senior Securities



Not applicable.



Item 4.    
Submission of Matters to a Vote of Security Holders



At the Annual Meeting of Shareholders of Sky Financial Group, Inc. held April 16, 2003, ballot totals for the election of five (5) Class II Directors to serve a three-year term until the Annual Meeting of Shareholders
in 2006 were as follows:



|Class II Directors Term Expires
2006 |  | FOR        |  | WITHHELD 
|------------------------------------ |  | ---------- |  | ---------
|George N. Chandler                   |  | 68,935,017 |  | 1,201,598
|Robert C Duvall                      |  | 68,563,485 |  | 1,573,129
|D. James Hilliker                    |  | 68,950,535 |  | 1,186,080
|Gregory L. Ridler                    |  | 68,695,672 |  | 1,440,943
|Emerson J. Ross Jr.                  |  | 68,624,316 |  | 1,512,299



Ballot totals for the
election of the following Class I Director to serve a two-year term until the Annual Meeting of Shareholders in 2005 were as follows:



|Class I Directors Term Expires
2005 |  | FOR        |  | WITHHELD 
|----------------------------------- |  | ---------- |  | ---------
|Marylouise Fennell, RSM             |  | 68,623,955 |  | 1,512,660



Total shares voted
were 70,136,615 or 80.55% of the outstanding shares.



The
following incumbent Class I and Class III Directors who were not nominees for election at the April 16, 2003 Annual Meeting were as follows:



|Marty E. Adams             |  | Thomas J. OShane  
|-------------------------- |  | -------------------
|Richard R. Hollington, Jr. |  | Edward J. Reiter   
|Fred H. Johnson III        |  | C. Gregory Spangler
|Jonathan A. Levy           |  | Robert E. Spitler  
|James C. McBane            |  | Joseph N. Tosh II  
|Gerard P. Mastroianni      |  |                    



Item 5.    
Other Information



Not
applicable.



Item 6.    
Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------



34



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##### Table of Contents

|Exhibit No. |  | Description                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11.1)      |  | Statement Re Computation of Earnings Per Common Share The information required by this exhibit is incorporated herein by reference from the information contained in Note 7
"Earnings Per Share" on page 11 of Sky Financial's Form 10-Q forJune 30, 2003.
|            | 
|(31.1)      |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                                                                         
|            | 
|(31.2)      |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                                                                         
|            | 
|(32.1)      |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                                                                    
|            | 
|(32.2)      |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                                                                    
|            | 
|(b)         |  | Reports on Form 8-K                                                                                                                                                                                                                                       



Current report on Form 8-K dated April 16, 2003 reporting Sky Financials first quarter earnings.



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 hereunto duly authorized.





|SKY FINANCIAL GROUP, INC.                                                                                            
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|/S/ KEVIN T. THOMPSON                                                                                                
|                                                                                                                     
|Kevin T. Thompson Executive Vice
President / Chief Financial Officer  DATE: August 12, 2003 SKY FINANCIAL GROUP, INC.



35



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##### Table of Contents

EXHIBIT INDEX



|Exhibit No. |  | Description                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11.1)      |  | Statement Re Computation of Earnings Per Common Share                                                                                                                                                
|            |  | The information required by this exhibit is incorporated herein by reference from the information contained in Note 7 Earnings Per Share
on page 11 of Sky Financials Form 10-Q for June 30, 2003.
|(31.1)      |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                    
|(31.2)      |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                    
|(32.1)      |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                               
|(32.2)      |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                               



36