##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2003



Commission File No. 1-14473



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Sky Financial Group, Inc.

(Exact Name of Registrant as Specified in its Charter)



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|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)



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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 92,305,357 at October 31,
2003.



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



INDEX



|                              |  | Page Number                                                                                                                 
|----------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------
|PART I. FINANCIAL INFORMATION |  |                                                                                                                             
|                              |  |                                                                                                                             
|Item 1.                       |  | Financial Statements (Unaudited)                                                                                            
|                              |  |                                                                                                                             
|                              |  | Condensed Consolidated Balance Sheets September 30, 2003 and December 31, 2002                                              
|                              |  |                                                                                                                             
|                              |  | Condensed Consolidated Statements of Income Three and nine months ended September 30, 2003 and 2002                         
|                              |  |                                                                                                                             
|                              |  | Condensed Consolidated Statements of Changes in Shareholders Equity Three and nine months ended September 30, 2003 and 2002
|                              |  |                                                                                                                             
|                              |  | Condensed Consolidated Statements of Cash Flows nine months ended September 30, 2003 and 2002                               
|                              |  |                                                                                                                             
|                              |  | Notes to Condensed Consolidated Financial Information                                                                       
|                              |  |                                                                                                                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                       
|                              |  |                                                                                                                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  
|                              |  |                                                                                                                             
|Item 4.                       |  | Controls and Procedures                                                                                                     
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                             
|                              |  |                                                                                                                             
|Item 1.                       |  | Legal Proceedings                                                                                                           
|                              |  |                                                                                                                             
|Item 2.                       |  | Changes in Securities and Use of Proceeds                                                                                   
|                              |  |                                                                                                                             
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                             
|                              |  |                                                                                                                             
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                         
|                              |  |                                                                                                                             
|Item 5.                       |  | Other Information                                                                                                           
|                              |  |                                                                                                                             
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                                                            
|                              | 
|SIGNATURES                    |  | 36                                                                                                                          
|                              | 
|EXHIBIT INDEX                 |  | 37                                                                                                                          



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements



SKY FINANCIAL GROUP, INC.



Condensed
Consolidated Balance Sheets (Unaudited)



|(Dollars in thousands, except share data)                                                                           |  | September 30, 2003 |            |   | December 31, 2002 |  
|------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | - | ----------------- | -
|ASSETS                                                                                                              |  |                    |            |   |                   |  
|Cash and due from banks                                                                                             |  | $                  | 196,059    |   |                   | $
|Interest-earning deposits with financial institutions                                                               |  |                    | 82,375     |   |                   |  
|Federal funds sold                                                                                                  |  |                    |           |   |                   |  
|Loans held for sale                                                                                                 |  |                    | 35,560     |   |                   |  
|Securities available for sale                                                                                       |  |                    | 2,573,009  |   |                   |  
|Total loans                                                                                                         |  |                    | 9,079,479  |   |                   |  
|Less allowance for credit losses                                                                                    |  |                    | (141,353   | ) |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|Net loans                                                                                                           |  |                    | 8,938,126  |   |                   |  
|Premises and equipment                                                                                              |  |                    | 153,164    |   |                   |  
|Goodwill                                                                                                            |  |                    | 165,414    |   |                   |  
|Core deposits and other intangibles                                                                                 |  |                    | 51,140     |   |                   |  
|Accrued interest receivable and other assets                                                                        |  |                    | 423,760    |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|TOTAL ASSETS                                                                                                        |  | $                  | 12,618,607 |   |                   | $
|                                                                                                                    |  |                    |            |   |                   |  
|LIABILITIES                                                                                                         |  |                    |            |   |                   |  
|Deposits                                                                                                            |  |                    |            |   |                   |  
|Non-interest bearing deposits                                                                                       |  | $                  | 1,157,822  |   |                   | $
|Interest-bearing deposits                                                                                           |  |                    | 7,453,863  |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|Total deposits                                                                                                      |  |                    | 8,611,685  |   |                   |  
|Securities under repurchase agreements and federal funds purchased                                                  |  |                    | 780,608    |   |                   |  
|Debt and Federal Home Loan Bank advances                                                                            |  |                    | 1,958,629  |   |                   |  
|Obligated mandatorily redeemable capital securities of subsidiary trusts                                            |  |                    | 171,176    |   |                   |  
|Accrued interest payable and other liabilities                                                                      |  |                    | 164,565    |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|TOTAL LIABILITIES                                                                                                   |  |                    | 11,686,663 |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|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; 90,382,865 and 87,276,888 shares issued in 2003 and
2002 |  |                    | 718,631    |   |                   |  
|Retained earnings                                                                                                   |  |                    | 210,686    |   |                   |  
|Treasury stock; 58,450 and 222,450 shares in 2003 and 2002                                                          |  |                    | (266       | ) |                   |  
|Accumulated other comprehensive income                                                                              |  |                    | 2,893      |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|TOTAL SHAREHOLDERS EQUITY                                                                                          |  |                    | 931,944    |   |                   |  
|                                                                                                                    |  |                    |            |   |                   |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                          |  | $                  | 12,618,607 |   |                   | $
|                                                                                                                    |  |                    |            |   |                   |  



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



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



Condensed
Consolidated Statements of Income (Unaudited)



|(Dollars in thousands,except per share data)          |      | Three Months Ended September 30, |         | Nine months Ended September 30,
|----------------------------------------------------- | ---- | -------------------------------- | ------- | -------------------------------
|                                                      | 2003 |                                  |         | 2002                           
|Interest Income                                       |      |                                  |         |                                
|Loans, including fees                                 |      | $                                | 145,060 |                                
|Securities                                            |      |                                  |         |                                
|Taxable                                               |      |                                  | 23,522  |                                
|Nontaxable                                            |      |                                  | 391     |                                
|Federal funds sold and other                          |      |                                  | 154     |                                
|                                                      |      |                                  |         |                                
|Total interest income                                 |      |                                  | 169,127 |                                
|                                                      |      |                                  |         |                                
|Interest Expense                                      |      |                                  |         |                                
|Deposits                                              |      |                                  | 35,091  |                                
|Borrowed funds                                        |      |                                  | 25,993  |                                
|                                                      |      |                                  |         |                                
|Total interest expense                                |      |                                  | 61,084  |                                
|                                                      |      |                                  |         |                                
|Net Interest Income                                   |      |                                  | 108,043 |                                
|Provision for Credit Losses                           |      |                                  | 10,011  |                                
|                                                      |      |                                  |         |                                
|Net interest income after provision for credit losses |      |                                  | 98,032  |                                
|                                                      |      |                                  |         |                                
|Non-interest Income                                   |      |                                  |         |                                
|Trust services income                                 |      |                                  | 3,585   |                                
|Service charges and fees on deposit accounts          |      |                                  | 9,932   |                                
|Mortgage banking income                               |      |                                  | 19,359  |                                
|Brokerage and insurance commissions                   |      |                                  | 10,047  |                                
|Net securities gains (losses)                         |      |                                  | (2,034  | )                              
|Other income                                          |      |                                  | 9,706   |                                
|                                                      |      |                                  |         |                                
|Total non-interest income                             |      |                                  | 50,595  |                                
|                                                      |      |                                  |         |                                
|Non-interest Expense                                  |      |                                  |         |                                
|Salaries and employee benefits                        |      |                                  | 47,711  |                                
|Occupancy and equipment expense                       |      |                                  | 13,298  |                                
|Merger, integration and restructuring expense         |      |                                  |        |                                
|Amortization expense                                  |      |                                  | 1,869   |                                
|Other operating expense                               |      |                                  | 23,328  |                                
|                                                      |      |                                  |         |                                
|Total non-interest expense                            |      |                                  | 86,206  |                                
|                                                      |      |                                  |         |                                
|Income Before Income Taxes                            |      |                                  | 62,421  |                                
|Income Taxes                                          |      |                                  | 20,853  |                                
|                                                      |      |                                  |         |                                
|Net Income                                            |      | $                                | 41,568  |                                
|                                                      |      |                                  |         |                                
|Earnings per Common Share                             |      |                                  |         |                                
|Basic                                                 |      | $                                | .46     |                                
|Diluted                                               |      |                                  | .46     |                                



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)



|(Dollars in thousands,except per share data)                             |      | Three Months EndedSeptember 30, |         |      | Nine months EndedSeptember 30, |  
|------------------------------------------------------------------------ | ---- | ------------------------------- | ------- | ---- | ------------------------------ | -
|                                                                         | 2003 |                                 |         | 2002 |                                |  
|Balance at beginning of period                                           |      | $                               | 915,010 |      |                                | $
|                                                                         |      |                                 |         |     
|Comprehensive income                                                     |      |                                 |         |      |                                |  
|Net income                                                               |      |                                 | 41,568  |      |                                |  
|Other comprehensive income (loss)                                        |      |                                 | (12,797 | )    |                                |  
|                                                                         |      |                                 |         |      |                                |  
|Total comprehensive income                                               |      |                                 | 28,771  |      |                                |  
|                                                                         |      |                                 |         |      |                                |  
|Common cash dividends                                                    |      |                                 | (18,081 | )    |                                |  
|Treasury shares acquired                                                 |      |                                 |         |      |                                |  
|Shares issued for stock option exercise                                  |      |                                 | 2,518   |      |                                |  
|Common shares issued to acquire Metropolitan Financial Corp              |      |                                 |         |      |                                |  
|Treasury shares issued to acquire Insurance Buyers Service Agency, Inc. |      |                                 | 3,698   |      |                                |  
|Common shares issued to acquire Celaris Group, Inc.                      |      |                                 |         |      |                                |  
|Fractional shares and other items                                        |      |                                 | 28      |      |                                |  
|                                                                         |      |                                 |         |      |                                |  
|Balance at end of period                                                 |      | $                               | 931,944 |      |                                | $
|                                                                         |      |                                 |         |      |                                |  
|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)



|(Dollars in thousands, except share data)                               |      | Nine months Ended September 30, |           
|----------------------------------------------------------------------- | ---- | ------------------------------- | ----------
|                                                                        | 2003 |                                 |           
|Net Cash From Operating Activities                                      |      | $                               | 149,406   
|                                                                        |      |                                 |           
|Investing Activities                                                    |      |                                 |           
|Net decrease in interest bearing deposits in other banks                |      |                                 | (11,842   
|Net change in federal funds sold                                        |      |                                 | 11,100    
|Securities available for sale:                                          |      |                                 |           
|Proceeds from maturities and payments                                   |      |                                 | 1,266,755 
|Proceeds from sales                                                     |      |                                 | 259,618   
|Purchases                                                               |      |                                 | (1,719,901
|Proceeds from sales of non-mortgage loans                               |      |                                 | 452,645   
|Net increase in loans                                                   |      |                                 | (696,873  
|Purchases of premises and equipment                                     |      |                                 | (14,259   
|Proceeds from sales of premises and equipment                           |      |                                 | 3,769     
|Proceeds from sales of other real estate                                |      |                                 | 3,177     
|Cash acquired from Metropolitan Financial Corp, net of cash paid        |      |                                 | 48,394    
|Cash paid to acquire Celaris Group, Inc.                                |      |                                 |           
|Cash paid to acquire Value Added Benefits, Ltd.                         |      |                                 |           
|                                                                        |      |                                 |           
|Other                                                                   |      |                                 | (196      
|                                                                        |      |                                 |           
|Net cash used for investing activities                                  |      |                                 | (397,613  
|                                                                        |      |                                 |           
|Financing Activities                                                    |      |                                 |           
|Net decrease in deposit accounts                                        |      |                                 | 46,539    
|Net (decrease) increase in federal funds and repurchase agreements      |      |                                 | (64,108   
|Net increase in borrowings under bank lines of credit                   |      |                                 | 42,219    
|Net increase in short-term FHLB advances                                |      |                                 | 180,000   
|Proceeds from issuance of debt and long-term FHLB advances              |      |                                 | 195,580   
|Repayment of debt and long-term FHLB advances                           |      |                                 | (159,700  
|Cash dividends and fractional shares paid                               |      |                                 | (54,006   
|Proceeds from issuance of common stock                                  |      |                                 | 4,570     
|Treasury stock purchases                                                |      |                                 |          
|                                                                        |      |                                 |           
|Net cash from financing activities                                      |      |                                 | 191,094   
|                                                                        |      |                                 |           
|Net decrease in cash and due from banks                                 |      |                                 | (57,113   
|Cash and due from banks at beginning of period                          |      |                                 | 253,172   
|                                                                        |      |                                 |           
|Cash and due from banks at end of period                                |      | $                               | 196,059   
|                                                                        |      |                                 |           
|Supplemental Disclosures                                                |      |                                 |           
|                                                                        |      |                                
|Interest paid                                                           |      | $                               | 180,168   
|Income taxes paid                                                       |      |                                 | 63,539    
|Non-cash transactions                                                   |      |                                 |           
|Treasury shares issued to acquire Insurance Buyers Service Agency, Inc. |      |                                 | 3,698     
|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 September 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 nine 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 ended September 30, |        | Nine months ended September 30,
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ------ | -------------------------------
|                                                                                                                                            |  | 2003                             |        | 2002                           
|Net income, as reported                                                                                                                     |  | $                                | 41,568 |                                
|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                                                                                                                        |  | $                                | 40,987 |                                
|                                                                                                                                            |  |                                  |        |                                
|Earnings per share:                                                                                                                         |  |                                  |        |                                
|Basic - as reported                                                                                                                         |  | $                                | .46    |                                
|                                                                                                                                            |  |                                  |        |                                
|Basic  pro-forma                                                                                                                           |  | $                                | .45    |                                
|                                                                                                                                            |  |                                  |        |                                
|Diluted  as reported                                                                                                                       |  | $                                | .46    |                                
|                                                                                                                                            |  |                                  |        |                                
|Diluted  pro-forma                                                                                                                         |  | $                                | .45    |                                
|                                                                                                                                            |  |                                  |        |                                



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



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position or results of operations. Footnote one (Summary of Significant Accounting Policies), footnote four (Loans 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 October 19,
2003, Sky Financial acquired GLB Bancorp, Inc. and its wholly owned subsidiary Great Lakes Bank, a $207 million state member bank headquartered in Mentor, Ohio, for an aggregate purchase price of approximately $42 million payable in Sky Financial
common stock in a tax free exchange. As two shareholders of GLB Bancorp have asserted their dissenters rights of appraisal under Ohio law, up to approximately ten percent of the purchase price may be paid in cash. Sky Financial expects to
issue approximately 1.5 million shares of Sky Financial common stock to non-dissenting GLB shareholders, and expects to issue cash to the holders of the dissenting shares. Sky Financial expects to merge Great Lakes Bank and Sky Bank in December,
2003.



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 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                                 |  |   | 52,717   
|Other assets                             |  |   | 53,221   
|                                         |  |   |          
|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.



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



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 ended September 30, |         | Nine months ended September 30,
|------------------------------ |  | -------------------------------- | ------- | -------------------------------
|                               |  | 2003                             |         | 2002                           
|Net interest income            |  | $                                | 108,043 |                                
|                               |  |                                  |         |                                
|Net income                     |  |                                  | 41,568  |                                
|                               |  |                                  |         |                                
|Net income per share  Basic   |  |                                  | .46     |                                
|                               |  |                                  |         |                                
|Net income per share  Diluted |  |                                  | .46     |                                



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 September 30, 2003 and December 31, 2002 are as follows:



|September 30, 2003                              |  | Estimated Fair Value |           | Gross Unrealized Gains |   | Gross Unrealized Losses | 
|----------------------------------------------- |  | -------------------- | --------- | ---------------------- | - | ----------------------- | 
|U.S. Treasury and U.S. Government agencies      |  | $                    | 382,593   |                        | $ | 4,952                   | 
|Obligations of state and political subdivisions |  |                      | 25,093    |                        |   | 195                     | 
|Corporate and other securities                  |  |                      | 89,481    |                        |   | 2,547                   | 
|Mortgage-backed securities                      |  |                      | 1,947,600 |                        |   | 20,333                  | 
|                                                |  |                      |           |                        |   |                         | 
|Total debt securities available for sale        |  |                      | 2,444,767 |                        |   | 28,027                  | 
|Marketable equity securities                    |  |                      | 128,242   |                        |   | 5,627                   | 
|                                                |  |                      |           |                        |   |                         | 
|Total securities available for sale             |  | $                    | 2,573,009 |                        | $ | 33,654                  | 
|                                                |  |                      |           |                        |   |                         | 



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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:



|                                       |  | September 30, 2003 |           | December 31, 2002
|-------------------------------------- |  | ------------------ | --------- | -----------------
|Real estate loans:                     |  |                    |           |                  
|Construction                           |  | $                  | 450,269   |                  
|Residential mortgage                   |  |                    | 1,840,304 |                  
|Non-residential mortgage               |  |                    | 2,871,444 |                  
|Commercial, financial and agricultural |  |                    | 3,130,026 |                  
|Installment and credit card loans      |  |                    | 787,436   |                  
|                                       |  |                    |           |                  
|Total loans                            |  | $                  | 9,079,479 |                  
|                                       |  |                    |           |                  



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



|                           |  | September 30, 2003 |        | December 31, 2002
|-------------------------- |  | ------------------ | ------ | -----------------
|Non-accrual loans          |  | $                  | 87,188 |                  
|Restructured loans         |  |                    | 1,245  |                  
|                           |  |                    |        |                  
|Total non-performing loans |  | $                  | 88,433 |                  
|                           |  |                    |        |                  



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:



|                                                                          |  | September 30, 2003 |           | December 31, 2002
|------------------------------------------------------------------------- |  | ------------------ | --------- | -----------------
|Borrowings under bank lines of credit                                     |  | $                  | 101,782   |                  
|Asset backed notes:                                                       |  |                    |           |                  
|2001-A Class A-1, due December 2011 at 6.425%                             |  |                    | 19,700    |                  
|2001-A Class A-2, due December 2011 at 9.95%                              |  |                    | 45,000    |                  
|2001-B Class A-1, due July 2012 at 5.55%                                  |  |                    | 32,911    |                  
|2001-B Class A-2, due July 2012 at 6.39%                                  |  |                    | 49,760    |                  
|2001-C Class A-1, due January 2013 at 4.555%                              |  |                    | 22,401    |                  
|2001-C Class A-2, due January 2013 at 5.925%                              |  |                    | 72,000    |                  
|2002-A Class A-1, due July 2018 at 5.398%                                 |  |                    | 55,683    |                  
|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)                 |  |                    | 119,322   |                  
|2003-A, Class A-1, due June 2014 at 4.000%                                |  |                    | 135,301   |                  
|Borrowings under FHLB lines of credit                                     |  |                    | 1,047,791 |                  
|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%                                               |  |                    | 27,206    |                  
|Due June 2027 at 10.20%                                                   |  |                    | 24,578    |                  
|Due May 2030 at 9.34%                                                     |  |                    | 65,642    |                  
|Due June 2028 at 8.60%                                                    |  |                    | 27,750    |                  
|Due June 2029 at 9.50%                                                    |  |                    | 16,000    |                  
|Due October 2033 at 4.09% (variable)                                      |  |                    | 10,000    |                  
|Capital lease obligation                                                  |  |                    | 1,448     |                  
|Other items                                                               |  |                    | 530       |                  
|                                                                          |  |                    |           |                  
|Total borrowings                                                          |  | $                  | 2,129,805 |                  
|                                                                          |  |                    |           |                  



Sky Financial Solutions (SFS)
warehouse line of credit is included under bank lines of credit. At September 30, 2003, $43,556 was outstanding under the warehouse line of credit. No such amounts were outstanding at December 31, 2002.



On September 25, 2003, Sky Financial issued $10,000 in obligated mandatorily redeemable
capital securities of subsidiary trusts. On October 14, 2003, Sky Financial received an additional $20,000 under the same issuance. During October 2003, the proceeds of this issuance were used to call and settle the $27,750 obligated redeemable
capital securities and related interest.



On July 13, 2003, SFS issued $135,301
of fixed rate-interest-rate collateralized notes in a private placement to provide term funding for commercial loans.



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.



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



|                  |  | Contractual Maturity Date |  | Expected Final Payment Date
|----------------- |  | ------------------------- |  | ---------------------------
|2001-A, Class A-1 |  | December 2011             |  | October 2005               
|2001-A, Class A-2 |  | December 2011             |  | July 2009                  
|2001-B, Class A-1 |  | July 2012                 |  | July 2005                  
|2001-B, Class A-2 |  | July 2012                 |  | April 2007                 
|2001-C, Class A-1 |  | January 2013              |  | October 2005               
|2001-C, Class A-2 |  | January 2013              |  | August 2010                
|2002-A, Class A-1 |  | July 2018                 |  | October 2007               
|2002-A, Class A-2 |  | July 2018                 |  | July 2012                  
|2002-B, Class A-1 |  | November 2012             |  | November 2012              
|2003-A, Class A-1 |  | June 2014                 |  | June 2013                  



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 September 30, |         |   | Nine months Ended September 30, |  
|----------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | -
|                                                                  |  | 2003                             |         |   | 2002                            |  
|Securities available for sale:                                    |  |                                  |         |   |                                 |  
|                                                                  |  |                                  |         |  
|Unrealized securities gains (losses) arising during period        |  | $                                | (22,784 | ) |                                 | $
|Reclassification adjustment for (gains) losses included in income |  |                                  | 2,034   |   |                                 |  
|                                                                  |  |                                  |         |   |                                 |  
|                                                                  |  |                                  | (20,750 | ) |                                 |  
|                                                                  |  |                                  |         |   |                                 |  
|Cash flow hedge derivatives                                       |  |                                  |         |   |                                 |  
|Change in fair value of cash flow hedge derivatives               |  |                                  | 443     |   |                                 |  
|Amounts reclassified to interest expense                          |  |                                  | 620     |   |                                 |  
|                                                                  |  |                                  |         |   |                                 |  
|                                                                  |  |                                  | 1,063   |   |                                 |  
|                                                                  |  |                                  |         |   |                                 |  
|Net unrealized gain (loss)                                        |  |                                  | (19,687 | ) |                                 |  
|Tax effect                                                        |  |                                  | 6,890   |   |                                 |  
|                                                                  |  |                                  |         |   |                                 |  
|Total other comprehensive income (loss)                           |  | $                                | (12,797 | ) |                                 | $
|                                                                  |  |                                  |         |   |                                 |  



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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 September 30, 2003 and 2002, 831,000 and 2,841,000 weighted
average shares, respectively, under option were excluded from the diluted earnings per share calculation as they were anti-dilutive. For the nine months ended September 30, 2003 and 2002, 2,186,000 and 1,988,000 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 September 30, |            | Nine months Ended September 30,
|---------------------------------------------------- |  | -------------------------------- | ---------- | -------------------------------
|                                                     |  | 2003                             |            | 2002                           
|Numerator:                                           |  |                                  |            |                                
|Net income                                           |  | $                                | 41,568     |                                
|                                                     |  |                                  |            |                                
|Denominator:                                         |  |                                  |            |                                
|                                                     |  |                                  |            |                                
|Weighted-average common shares outstanding (basic)   |  |                                  | 90,287,000 |                                
|Effect of stock options                              |  |                                  | 901,000    |                                
|                                                     |  |                                  |            |                                
|Weighted-average common shares outstanding (diluted) |  |                                  | 91,188,000 |                                
|                                                     |  |                                  |            |                                
|Earnings per share:                                  |  |                                  |            |                                
|Basic                                                |  | $                                | .46        |                                
|Diluted                                              |  |                                  | .46        |                                



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 September 30, 2003, that Sky Financial and its bank meet all capital adequacy requirements to which they are subject.



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##### Table of Contents

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 and Sky Banks capital ratios are presented in the
following table:



|September 30, 2003                     |        | Actual |           |  | Minimum Required For Capital Adequacy Purposes |        |  | Required to be Well Capitalized Under Prompt Corrective Action Regulations |        
|-------------------------------------- | ------ | ------ | --------- |  | ---------------------------------------------- | ------ |  | -------------------------------------------------------------------------- | -------
|                                       | Amount |        | Ratio     |  |                                                | Amount |  | Ratio                                                                      |        
|Total capital to risk-weighted assets  |        |        |           |  |                                                |        |  |                                                                            |        
|Sky Financial                          |        | $      | 1,155,492 |  | 11.7                                           | %      |  | $                                                                          | 791,935
|Sky Bank                               |        |        | 985,518   |  | 11.1                                           |        |  |                                                                            | 709,442
|                                       |        |        |           |  |                                                |       
|Tier I capital to risk-weighted assets |        |        |           |  |                                                |        |  |                                                                            |        
|Sky Financial                          |        | $      | 871,909   |  | 8.8                                            | %      |  | $                                                                          | 395,968
|Sky Bank                               |        |        | 798,301   |  | 9.0                                            |        |  |                                                                            | 354,721
|                                       |        |        |           |  |                                                |       
|Tier I capital to average assets       |        |        |           |  |                                                |        |  |                                                                            |        
|Sky Financial                          |        | $      | 871,909   |  | 7.1                                            | %      |  | $                                                                          | 494,819
|Sky Bank                               |        |        | 798,301   |  | 7.0                                            |        |  |                                                                            | 457,611
|                                       |        |        |          
|December 31, 2002                      |        | Actual |           |  | Minimum Required For Capital Adequacy Purposes |        |  | Required to be Well Capitalized Under Prompt Corrective Action Regulations |        
|                                       | 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 were no
purchases under this authorization, which expired in September 2003, and the Board has not reauthorized management to purchase any additional shares.



11. Goodwill and Intangible Assets



Goodwill at September 30, 2003 and December 31, 2002 was $165,414 and $108,776 respectively. Sky Financial recorded $52,717 in goodwill as a result of the Metropolitan
acquisition and $3,730 as a result of the Insurance Buyers Services Agency, Inc. acquisition during the second and third quarters of 2003, respectively. Management is still reviewing the valuations of certain 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 September 30, 2003 and December 31, 2002 were $51,140 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 $8,000 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 September 30, 2003 and 2002 is
included in the following tables:



|Three months ended September
30, 2003 |  | Community Banking |            | Financial Services Affiliates |   |        | Sky Financial Solutions |  | Parent And Other |         |  | Total
|------------------------------------- |  | ----------------- | ---------- | ----------------------------- | - | ------ | ----------------------- |  | ---------------- | ------- |  | -----
|Net interest income                   |  | $                 | 101,797    |                               | $ | 74     |                         |  | $                | 6,674   |  | $    
|Provision for credit Losses           |  |                   | 8,100      |                               |   | 225    |                         |  |                  | 1,686   |  |      
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Net interest income after provision   |  |                   | 93,697     |                               |   | (151   | )                       |  |                  | 4,988   |  |      
|Other non-interest income             |  |                   | 36,250     |                               |   | 12,940 |                         |  |                  | 1,544   |  |      
|Other non-interest expense            |  |                   | 66,209     |                               |   | 10,706 |                         |  |                  | 4,714   |  |      
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Income (loss) before income taxes     |  |                   | 63,738     |                               |   | 2,083  |                         |  |                  | 1,818   |  |      
|Income taxes                          |  |                   | 21,407     |                               |   | 831    |                         |  |                  | 687     |  |      
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Net income (loss)                     |  | $                 | 42,331     |                               | $ | 1,252  |                         |  | $                | 1,131   |  | $    
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Goodwill at July 1, 2003              |  | $                 | 131,693    |                               | $ | 29,905 |                         |  | $                |        |  | $    
|Net activity                          |  |                   | 76         |                               |   | 3,740  |                         |  |                  |        |  |      
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Goodwill at September 30, 2003        |  | $                 | 131,769    |                               | $ | 33,645 |                         |  | $                |        |  | $    
|                                      |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Average assets                        |  | $                 | 11,627,583 |                               | $ | 76,973 |                         |  | $                | 760,808 |  | $    
|Depreciation and amortization         |  |                   | 5,276      |                               |   | 170    |                         |  |                  | 102     |  |      



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|Three months ended September
30, 2002 |  | Community Banking |           | Financial Services Affiliates |   |        | Sky Financial Solutions |  |   | Parent and Other |   |  | Total |        
|------------------------------------- |  | ----------------- | --------- | ----------------------------- | - | ------ | ----------------------- |  | - | ---------------- | - |  | ----- | -------
|Net interest income                   |  | $                 | 84,250    |                               | $ | 168    |                         |  | $ | 5,718            |   |  | $     | (914   
|Provision for credit losses           |  |                   | 7,821     |                               |   | 180    |                         |  |   | 1,710            |   |  |       |       
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Net interest income after provision   |  |                   | 76,429    |                               |   | (12    | )                       |  |   | 4,008            |   |  |       | (914   
|Other non-interest income             |  |                   | 23,033    |                               |   | 11,990 |                         |  |   | 712              |   |  |       | 1,376  
|Other non-interest expense            |  |                   | 49,918    |                               |   | 9,992  |                         |  |   | 6,878            |   |  |       | 310    
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Income (loss) before income taxes     |  |                   | 49,544    |                               |   | 1,986  |                         |  |   | (2,158           | ) |  |       | 152    
|Income taxes                          |  |                   | 16,642    |                               |   | 776    |                         |  |   | (640             | ) |  |       | (287   
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Net income (loss)                     |  | $                 | 32,902    |                               | $ | 1,210  |                         |  | $ | (1,518           | ) |  | $     | 439    
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Goodwill at July 1, 2002              |  | $                 | 23,134    |                               | $ | 29,685 |                         |  | $ |                 |   |  | $     |       
|Net activity                          |  |                   |          |                               |   | (36    | )                       |  |   |                 |   |  |       |       
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Goodwill at September 30, 2002        |  | $                 | 23,134    |                               | $ | 29,649 |                         |  | $ |                 |   |  | $     |       
|                                      |  |                   |           |                               |   |        |                         |  |   |                  |   |  |       |        
|Average assets                        |  | $                 | 9,011,238 |                               | $ | 76,201 |                         |  | $ | 529,064          |   |  | $     | 115,816
|Depreciation and amortization         |  |                   | 3,712     |                               |   | 223    |                         |  |   | 114              |   |  |       | 146    



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



|Nine months ended September 30,
2003 |  | Community Banking |            | Financial Services Affiliates |   |        | Sky Financial Solutions |  | Parent And Other |         |  | Total
|------------------------------------ |  | ----------------- | ---------- | ----------------------------- | - | ------ | ----------------------- |  | ---------------- | ------- |  | -----
|Net interest income                  |  | $                 | 289,644    |                               | $ | 295    |                         |  | $                | 21,273  |  | $    
|Provision for credit Losses          |  |                   | 23,475     |                               |   | 675    |                         |  |                  | 6,619   |  |      
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Net interest income after provision  |  |                   | 266,169    |                               |   | (380   | )                       |  |                  | 14,654  |  |      
|Other non-interest income            |  |                   | 94,797     |                               |   | 39,649 |                         |  |                  | 3,416   |  |      
|Other non-interest expense           |  |                   | 185,449    |                               |   | 32,205 |                         |  |                  | 14,757  |  |      
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Income (loss) before income taxes    |  |                   | 175,517    |                               |   | 7,064  |                         |  |                  | 3,313   |  |      
|Income taxes                         |  |                   | 59,008     |                               |   | 2,827  |                         |  |                  | 1,258   |  |      
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Net income (loss)                    |  | $                 | 116,509    |                               | $ | 4,237  |                         |  | $                | 2,055   |  | $    
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Goodwill at January 1, 2003          |  | $                 | 79,119     |                               | $ | 29,657 |                         |  | $                |        |  | $    
|Net activity                         |  |                   | 52,650     |                               |   | 3,988  |                         |  |                  |        |  |      
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Goodwill at September 30, 2003       |  | $                 | 131,769    |                               | $ | 33,645 |                         |  | $                |        |  | $    
|                                     |  |                   |            |                               |   |        |                         |  |                  |         |  |      
|Average assets                       |  | $                 | 11,020,116 |                               | $ | 74,839 |                         |  | $                | 703,741 |  | $    
|Depreciation and amortization        |  |                   | 15,018     |                               |   | 635    |                         |  |                  | 312     |  |      



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##### Table of Contents

|Nine months ended September 30,
2002 |  | Community Banking |           | Financial Services Affiliates |   | Sky Financial Solutions |  |   | Parent and Other |   |  | Total
|------------------------------------ |  | ----------------- | --------- | ----------------------------- | - | ----------------------- |  | - | ---------------- | - |  | -----
|Net interest income                  |  | $                 | 249,721   |                               | $ | 670                     |  | $ | 13,730           |   |  | $    
|Provision for credit Losses          |  |                   | 23,400    |                               |   | 540                     |  |   | 4,536            |   |  |      
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Net interest income after provision  |  |                   | 226,321   |                               |   | 130                     |  |   | 9,194            |   |  |      
|Other non-interest income            |  |                   | 66,700    |                               |   | 36,956                  |  |   | 2,227            |   |  |      
|Other non-interest expense           |  |                   | 148,717   |                               |   | 30,747                  |  |   | 18,289           |   |  |      
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Income (loss) before income taxes    |  |                   | 144,304   |                               |   | 6,339                   |  |   | (6,868           | ) |  |      
|Income taxes                         |  |                   | 48,152    |                               |   | 2,442                   |  |   | (2,328           | ) |  |      
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Net income (loss)                    |  | $                 | 96,152    |                               | $ | 3,897                   |  | $ | (4,540           | ) |  | $    
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Goodwill at January 1, 2002          |  | $                 | 23,134    |                               | $ | 10,778                  |  | $ |                 |   |  | $    
|Net activity                         |  |                   |          |                               |   | 18,871                  |  |   |                 |   |  |      
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Goodwill at September 30, 2002       |  | $                 | 23,134    |                               | $ | 29,649                  |  | $ |                 |   |  | $    
|                                     |  |                   |           |                               |   |                         |  |   |                  |   |  |      
|Average assets                       |  | $                 | 8,880,977 |                               | $ | 73,348                  |  | $ | 468,371          |   |  | $    
|Depreciation and amortization        |  |                   | 8,730     |                               |   | 570                     |  |   | 347              |   |  |      



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 September 30, 2003.



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



|                       |  | September 30, 2003    |         |            | December 31, 2002
|---------------------- |  | --------------------- | ------- | ---------- | -----------------
|                       |  | Contractual/ Notional |         | Fair Value |                  
|Interest rate swaps    |  |                       |         |            |                  
|Fair value hedges      |  | $                     | 108,600 |            | $                
|Cash flow hedges       |  |                       | 162,193 |            |                  
|Interest rate caps     |  |                       | 48,600  |            |                  
|                       |  |                       |         |            |                  
|Derivative instruments |  | $                     | 319,393 |            | $                
|                       |  |                       |         |            |                  



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 nine months ended September 30, 2003:



|Beginning balance |  | $ | 5,781  |  
|----------------- |  | - | ------ | -
|Accruals          |  |   | 3,486  |  
|Cash payments     |  |   | (7,140 | )
|                  |  |   |        |  
|Ending balance    |  | $ | 2,127  |  
|                  |  |   |        |  



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 September 30, 2003 follows:



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



Sky Financial also has recourse
obligations on $173,846 of sold loans and leases originated by SFS prior to September 30, 2000. At September 30, 2003, Sky Financial has recorded a recourse obligation related to these loans and leases of $3,451.



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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 September 30, 2003 and 2002



Results of Operations



Diluted earnings per common share for the third quarter of 2003 was $.46 ($.46 basic), as compared to $.40 ($.40 basic) for the same period in 2002. Net income for the third quarter of 2003 was $41,568, an increase of
$8,535 over the third quarter of 2002 net income of $33,033. Sky Financials net income during the third quarter of 2003 includes the results of Metropolitan, which was acquired in April 2003, and Three Rivers, which was acquired in October
2002. Return on average equity (ROE) and return on average assets (ROA) were 18.00% and 1.31%, respectively, for the third quarter of 2003, compared to 18.46% and 1.35%, 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 September 30, 2003 and 2002
are summarized in the table below.



|Quarter Ended September 30,   |      | Net Income (Loss) |       
|----------------------------- | ---- | ----------------- | ------
|                              | 2003 |                   |       
|Community Banking             |      | $                 | 42,331
|Financial Services Affiliates |      |                   | 1,252 
|Sky Financial Solutions, Inc. |      |                   | 1,131 
|Parent and Other              |      |                   | (3,146
|                              |      |                   |       
|Consolidated Total            |      | $                 | 41,568
|                              |      |                   |       



The higher community banking net
income in the third quarter of 2003 as compared to the same period of the previous year is mainly due to both an increase in mortgage banking income and due to the acquisitions, which contributed to higher net interest income, and service charges
and fees on deposits. These increases were partially offset by a realized loss on the sale of securities and an increase in other expenses. The efficiency ratio for the community banking segment was 47.64% for the third quarter of 2003 compared to
46.22% in the third quarter of 2002. The 2003 community banking results reflect a ROE of 18.70% and a ROA of 1.44% compared to 19.28% and 1.45%, respectively, in the third quarter of 2002.



Sky Financial Solutions reported net income during the third 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. The
decrease in net income is due to additional non-interest expense at the holding company.



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##### Table of Contents

Net Interest Income



Net interest income for the third quarter of 2003 was $108,043, an increase of $27,356 or 30.66% from $89,222 in the third 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 27.96% from the third quarter last year, with strong growth in average loans, increasing 30.62% from last year, which
included organic growth of 8.2% in addition to the Metropolitan and Three Rivers acquisitions. Average deposits were up 27.77% from the same quarter last year, including organic growth of 3.0% in addition to the Metropolitan and Three Rivers
acquisitions. Sky Financials net interest margin for the three months ended September 30, 2003 was 3.70%, a decrease of 3 basis points from last quarter and 20 basis points from third 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 September 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 Ended September 30, 2003 |            |                          | Three Months Ended September 30, 2002 |        
|-------------------------------------------------------------------------------------------- |  | ------------------------------------- | ---------- | ------------------------ | ------------------------------------- | -------
|                                                                                             |  | Average Balance                       |            | Interest Income/ Expense |                                       | Rate   
|Assets                                                                                       |  |                                       |            |                          |                                       |        
|                                                                                             |  |                                       |            |                          |                                       |        
|Interest-earning assets:                                                                     |  |                                       |            |                          |                                       |        
|Interest-bearing deposits in banks                                                           |  | $                                     | 72,304     |                          | $                                     | 152    
|Federal funds sold                                                                           |  |                                       | 1,337      |                          |                                       | 3      
|Securities                                                                                   |  |                                       | 2,499,421  |                          |                                       | 24,841 
|Loans and loans held for sale                                                                |  |                                       | 9,126,048  |                          |                                       | 145,059
|                                                                                             |  |                                       |            |                          |                                       |        
|Total interest-earning assets                                                                |  |                                       | 11,699,110 |                          |                                       | 170,055
|                                                                                             |  |                                       |            |                          |                                       |        
|Noninterest-earning assets                                                                   |  |                                       | 891,167    |                          |                                       |        
|                                                                                             |  |                                       |            |                          |                                       |        
|Total assets                                                                                 |  | $                                     | 12,590,277 |                          |                                       |        
|                                                                                             |  |                                       |            |                          |                                       |        
|Liabilities and Shareholders Equity                                                         |  |                                       |            |                          |                                       |        
|Interest-bearing liabilities:                                                                |  |                                       |            |                          |                                       |        
|Demand deposits                                                                              |  | $                                     | 1,094,032  |                          |                                       | 361    
|Savings deposits                                                                             |  |                                       | 2,647,859  |                          |                                       | 7,031  
|Time deposits                                                                                |  |                                       | 3,799,532  |                          |                                       | 27,699 
|                                                                                             |  |                                       |            |                          |                                       |        
|Total interest-bearing deposits                                                              |  |                                       | 7,541,423  |                          |                                       | 35,091 
|Short-term borrowings                                                                        |  |                                       | 824,163    |                          |                                       | 4,380  
|Trust Preferred Securities                                                                   |  |                                       | 164,569    |                          |                                       | 2,258  
|Asset Backed Notes                                                                           |  |                                       | 626,732    |                          |                                       | 8,941  
|Debt and FHLB advances                                                                       |  |                                       | 1,182,020  |                          |                                       | 10,414 
|                                                                                             |  |                                       |            |                          |                                       |        
|Total interest-bearing liabilities                                                           |  |                                       | 10,338,907 |                          |                                       | 61,084 
|                                                                                             |  |                                       |            |                          |                                       |        
|Noninterest-bearing liabilities                                                              |  |                                       | 1,335,062  |                          |                                       |        
|Shareholders equity                                                                         |  |                                       | 916,308    |                          |                                       |        
|                                                                                             |  |                                       |            |                          |                                       |        
|Total liabilities and equity                                                                 |  | $                                     | 12,590,277 |                          |                                       |        
|                                                                                             |  |                                       |            |                          |                                       |        
|Net interest income (tax equivalent basis)                                                   |  |                                       |            |                          | $                                     | 108,971
|                                                                                             |  |                                       |            |                          |                                       |        
|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 $300 or 3.1% to $10,011 in the third quarter of 2003 compared to $9,711 in the third quarter of 2002. The higher provision for credit losses in the third quarter of 2003 was attributable to higher net
charge-offs due to a



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larger loan portfolio as compared to the third quarter of 2002. Net charge-offs were $9,624 or 0.42% (annualized) of
average loans during the three months ended September 30, 2003, compared to $7,655 or 0.44% (annualized) for the same period in 2002.



|                                                                    |  | September 30, 2003 |   |  | December 31, 2002 |   |  | September 30, 2002 |  
|------------------------------------------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ------------------ | -
|Allowance for credit losses as a percentage of loans                |  | 1.56               | % |  | 1.54              | % |  | 1.57               | %
|Allowance for credit losses as a percentage of non-performing loans |  | 159.84             | % |  | 173.25            | % |  | 164.15             | %



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 and a significant increase in mortgage banking revenues from the comparable quarter.
Non-interest income for the third quarter of 2003 was $50,595, an increase of $13,484 or 36.33% from $37,111 for the same quarter of 2002. Non-interest income growth was most significant in mortgage banking, which recorded revenues of $19,359 during
the third quarter of 2003, an increase of $14,206 or 275.7% from the same period in 2002. Mortgage banking included a $7.1 million recapture of mortgage servicing asset impairment reserves versus $3.2 million of impairment charges in the third
quarter last year. Although mortgage rates rose during the third quarter, mortgage origination volumes were $614 million, up 9% from $562 million in the same quarter last year. Brokerage and insurance commissions were $10,047 for the three months
ended September 30, 2003, up $725 or 7.8% for the same period in 2002, reflecting growth from both increased sales and acquisitions. Service charges for the third quarter of 2003 were $9,932, up $921 or 10.2% from the third quarter of 2002 primarily
due to deposit growth from acquisitions. Other income was $9,706, up $993 or 11.4% from the third quarter of 2002 due primarily to acquisitions. These increases were offset by net securities losses of $2,034 during the third quarter of 2003 versus
net securities gains of $1,664 during the same period of 2002.



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 third quarter of 2003 was $86,206, an increase of $19,108 or 28.5%, from $67,098 reported for the same quarter of 2002. Salary and other
employee costs were $47,711, up $9,001 or 23.3% as compared to the third quarter of 2002 due to an increase in full time equivalent employees, mostly from acquisitions. Occupancy and equipment costs were $13,298, up $2,915 or 28.1% compared to the
same period of 2002 and other operating expenses were $25,197, up $7,192 or 39.9% as compared to the third quarter of 2002, both due primarily to acquisitions. The efficiency ratio was 54.03% for the third quarter of 2003, up from 52.81% for the
same quarter last year.



Income Taxes



The provision for income taxes for the third quarter of 2003 increased $4,362 to $20,853
from $16,491 for the same period in 2002. The effective tax rate for the three months ended September 30, 2003 was 33.41% as compared to 33.30% for the same period in 2002.



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Nine months ended September 30, 2003 and 2002



Results of Operations



Diluted earnings per common share for the nine months ended September 30, 2003 was $1.29 ($1.30 basic), as compared to $1.13 ($1.14 basic) for the same period in 2002.
Net income through September 30, 2003 was $115,150, an increase of $21,281 as compared to net income of $93,869 for the same period of 2002. Sky Financials net income during the nine months ended September 30, 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 nine months of 2003 related to the
acquisition of Metropolitan. Sky Financial recognized expenses of $5,652 related to its technology implementation during the first nine months of 2002. Based on net income, ROE and ROA were 17.39% and 1.29%, respectively, for the first nine months
of 2003, compared to 18.15% and 1.32%, 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 nine months ended September 30, 2003 and 2002 are summarized in the table below.



|Nine months Ended September 30, |      | Net Income (Loss) |        
|------------------------------- | ---- | ----------------- | -------
|                                | 2003 |                   |        
|Community Banking               |      | $                 | 116,509
|Financial Services Affiliates   |      |                   | 4,237  
|Sky Financial Solutions, Inc.   |      |                   | 2,055  
|Parent and Other                |      |                   | (7,651 
|                                |      |                   |        
|Consolidated Total              |      | $                 | 115,150
|                                |      |                   |        



The higher community banking net
income during the first nine months of 2003 as compared to the same period of the previous year is due mainly to both an increase in mortgage banking income and due to the acquisitions, which contributed to higher net interest income, and service
charges and fees on deposits. 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 47.93% through September 30, 2003 compared to
46.64% for the same period in 2002. The 2003 year to date community banking results reflect a ROE of 18.66% and a ROA of 1.41% compared to 19.54% and 1.44%, respectively, for the first nine months of 2002.



Sky Financial Solutions reported net income through September 30, 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. The decrease in net income is due to additional non-interest expense at the holding company.



Net Interest Income



Net interest income for the nine months ended September 30, 2003 was $310,034, an increase of $49,483 or 19.0% from $260,551 for the same period in 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



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##### Table of Contents

interest-earning assets and interest-bearing liabilities. Average earning assets increased 24.3% from September 30, 2002,
with strong growth in average loans, increasing 27.4% from last year, which included organic growth of 12.41% in addition to the Metropolitan and Three Rivers acquisitions. Average deposits were up 22.2% from September 30, 2003, due primarily
to the Metropolitan and Three Rivers acquisitions. Sky Financials net interest margin for the nine months ended September 30, 2003 was 3.76%, a decrease of 17 basis points from the nine months ended September 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 nine months ended September 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)                                                                       |  | Nine months Ended September 30, 2003 |            |                          | Nine months Ended September 30, 2002 |        
|-------------------------------------------------------------------------------------------- |  | ------------------------------------ | ---------- | ------------------------ | ------------------------------------ | -------
|                                                                                             |  | Average Balance                      |            | Interest Income/ Expense |                                      | Rate   
|Assets                                                                                       |  |                                      |            |                          |                                      |        
|                                                                                             |  |                                      |            |                          |                                      |        
|Interest-earning assets:                                                                     |  |                                      |            |                          |                                      |        
|Interest-bearing deposits in banks                                                           |  | $                                    | 64,450     |                          | $                                    | 429    
|Federal funds sold                                                                           |  |                                      | 1,415      |                          |                                      | 48     
|Securities                                                                                   |  |                                      | 2,418,163  |                          |                                      | 76,652 
|Loans and loans held for sale                                                                |  |                                      | 8,630,426  |                          |                                      | 419,738
|                                                                                             |  |                                      |            |                          |                                      |        
|Total interest-earning assets                                                                |  |                                      | 11,114,454 |                          |                                      | 496,867
|                                                                                             |  |                                      |            |                          |                                      |        
|Noninterest-earning assets                                                                   |  |                                      | 801,778    |                          |                                      |        
|                                                                                             |  |                                      |            |                          |                                      |        
|Total assets                                                                                 |  | $                                    | 11,916,232 |                          |                                      |        
|                                                                                             |  |                                      |            |                          |                                      |        
|Liabilities and Shareholders Equity                                                         |  |                                      |            |                          |                                      |        
|Interest-bearing liabilities:                                                                |  |                                      |            |                          |                                      |        
|Demand deposits                                                                              |  | $                                    | 970,665    |                          |                                      | 996    
|Savings deposits                                                                             |  |                                      | 2,520,960  |                          |                                      | 24,064 
|Time deposits                                                                                |  |                                      | 3,755,737  |                          |                                      | 85,909 
|                                                                                             |  |                                      |            |                          |                                      |        
|Total interest-bearing deposits                                                              |  |                                      | 7,247,362  |                          |                                      | 110,969
|Short-term borrowings                                                                        |  |                                      | 826,439    |                          |                                      | 13,702 
|Trust Preferred Securities                                                                   |  |                                      | 144,677    |                          |                                      | 5,495  
|Asset Backed Notes                                                                           |  |                                      | 559,219    |                          |                                      | 24,736 
|Debt and FHLB advances                                                                       |  |                                      | 1,037,928  |                          |                                      | 29,461 
|                                                                                             |  |                                      |            |                          |                                      |        
|Total interest-bearing liabilities                                                           |  |                                      | 9,815,625  |                          |                                      | 184,363
|                                                                                             |  |                                      |            |                          |                                      |        
|Noninterest-bearing liabilities                                                              |  |                                      | 1,215,296  |                          |                                      |        
|Shareholders equity                                                                         |  |                                      | 885,311    |                          |                                      |        
|                                                                                             |  |                                      |            |                          |                                      |        
|Total liabilities and equity                                                                 |  | $                                    | 11,916,232 |                          |                                      |        
|                                                                                             |  |                                      |            |                          |                                      |        
|Net interest income (tax equivalent basis)                                                   |  |                                      |            |                          | $                                    | 312,504
|                                                                                             |  |                                      |            |                          |                                      |        
|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 $2,293 or 8.1% to $30,769 during the first nine months of 2003 compared to $28,476 during the first nine months of 2002. The higher provision for credit losses through September 2003 was attributable to higher
net charge-offs due to a larger loan portfolio as compared to the same period of 2002. Net charge-offs were $25,993 or 0.41% (annualized) of average loans during the nine months ended September 30, 2003, compared to $21,880 or 0.44% (annualized) for
the same period in 2002.



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Non-Interest Income



The change in non-interest income reflects the emphasis of Sky Financial on expanding its profitable fee-based businesses and a significant increase in mortgage banking
revenues from the previous year. Non-interest income for the nine months ended September 30, 2003, was $138,528, an increase of $32,780 or 31.8% from the $105,130 for the same period 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 $42,602, up $27,499 or 182.19%. Mortgage banking revenues includes a $2.4 million recapture of
mortgage servicing asset impairment reserves versus $2.8 million of impairment charges during the nine months ended September 30, 2002. Brokerage and insurance commissions were $31,453 for the nine months ended September 30, 2003, up $3,845 or 13.9%
for the same period in 2002, reflecting both growth from both increased sales and acquisitions. Service charges for the nine months ended September 30, 2003 were $28,026, up $3,026 or 12.1% from the same period of 2002 primarily due to deposit
growth from acquisitions. These increases were offset by net securities losses of $1,474 through September 30, 2003 versus net securities gains of $3,109 during the same period of 2002.



Non-Interest Expense



Non-interest expense for the nine months ended September 30, 2003, was $244,131, an increase of $47,054 or 23.9%, from $197,077 reported for the same period of 2002. Sky
Financial recorded merger, integration and restructuring charges of $3,486 for the Metropolitan acquisition during the second quarter of 2003 and $5,652 for its new technology implementation during the second quarter 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 acquisitions. The efficiency ratio was 54.1% for the nine months ended September 30, 2003, up from 53.5% for
the same period last year, due to higher merger and integration and restructuring charges.



Income Taxes



The provision for income
taxes for the nine months ended September 30, 2003, increased $12,253 to $58,512 from $46,259 for the same period in 2002. The effective tax rate for the nine months ended September 30, 2003 was 33.7% as compared to 33.0% for the same period in
2002.



Balance Sheet



At September 30, 2003, total assets were $12,618,607, an increase of $1,604,664 from
December 31, 2002. This increase was primarily attributable to the acquisition of Metropolitan in April 2003. The increase in loans of $1,193,958, included $937,427 from Metropolitan as well as 11% organic growth. Securities available for sale
increased $325,828 due to the Metropolitan acquisition and additional investment purchases. Other assets increased $166,007, of which $89,462 was due to assets acquired from Metropolitan and the recognition of $52,717 of goodwill and $11,807 in core
deposit intangibles.



The net growth in assets was funded primarily by growth
in total deposits, up $996,265, which consisted of $949,725 from the Metropolitan acquisition and from organic growth. Debt increased $529,055, due to assumption of $271,142 from Metropolitan, issuance of asset backed notes of 135,301 and additional
borrowings under bank lines of credit of $42,633.



Shareholders equity
totaled $931,944 at September 30, 2003, increasing $99,511 from December 31, 2002. Common stock increased $59,864, mainly due to $55,294 of stock issued to Metropolitan shareholders. Net retained earnings (net income less cash dividends) for the
nine months ended September 30, 2003 totaled $61,596. Accumulated other comprehensive income decreased by $25,195, primarily due to a decrease in the market value of securities available for sale and cash flow derivatives.



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Non-Performing Assets



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



|                                                                     |  | September 30, 2003 |        |   | December 31, 2002 |   |        | September 30, 2002 | 
|-------------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | ------------------ | 
|Non-accrual loans                                                    |  | $                  | 87,188 |   |                   | $ | 66,855 |                    | 
|Restructured loans                                                   |  |                    | 1,245  |   |                   |   | 3,203  |                    | 
|                                                                     |  |                    |        |   |                   |   |        |                    | 
|Total non-performing loans                                           |  |                    | 88,433 |   |                   |   | 70,058 |                    | 
|Other real estate owned                                              |  |                    | 7,583  |   |                   |   | 4,178  |                    | 
|                                                                     |  |                    |        |   |                   |   |        |                    | 
|Total non-performing assets                                          |  | $                  | 96,016 |   |                   | $ | 74,236 |                    | 
|                                                                     |  |                    |        |   |                   |   |        |                    | 
|Loans 90 days or more past due and not on non-accrual                |  | $                  | 12,623 |   |                   | $ | 12,458 |                    | 
|Non-performing loans to total loans                                  |  |                    | .97    | % |                   |   | .89    | %                  | 
|Non-performing assets to total loans plus other real estate owned    |  |                    | 1.06   |   |                   |   | .94    |                    | 
|Allowance for credit losses to total non-performing loans            |  |                    | 159.84 |   |                   |   | 173.25 |                    | 
|Loans 90 days or more past due and not on non-accrual to total loans |  |                    | .14    |   |                   |   | .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 $97,880 and $85,929 at September 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 September 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 September
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 and nine months ended September
30, 2003 and 2002.



|                                                      |  | Three Months Ended |         |   | Nine months Ended |  
|----------------------------------------------------- |  | ------------------ | ------- | - | ----------------- | -
|                                                      |  | 2003               |         |   | 2002              |  
|Balance of allowance at beginning of year             |  | $                  | 140,965 |   |                   | $
|                                                      |  |                    |         |  
|Loans charged-off:                                    |  |                    |         |   |                   |  
|Real estate                                           |  |                    | (3,963  | ) |                   |  
|Commercial and agricultural                           |  |                    | (3,371  | ) |                   |  
|Installment and credit card                           |  |                    | (5,078  | ) |                   |  
|Other loans                                           |  |                    | (126    | ) |                   |  
|                                                      |  |                    |         |   |                   |  
|Total loans charged-off                               |  |                    | (12,538 | ) |                   |  
|                                                      |  |                    |         |   |                   |  
|Recoveries                                            |  |                    |         |   |                   |  
|Real estate                                           |  |                    | 264     |   |                   |  
|Commercial and agricultural                           |  |                    | 1,196   |   |                   |  
|Installment and credit card                           |  |                    | 1,455   |   |                   |  
|Other loans                                           |  |                    |        |   |                   |  
|                                                      |  |                    |         |   |                   |  
|Total recoveries                                      |  |                    | 2,915   |   |                   |  
|                                                      |  |                    |         |   |                   |  
|Net loans charged off                                 |  |                    | (9,623  | ) |                   |  
|Provision charged to operating expense                |  |                    | 10,011  |   |                   |  
|Acquired through business combinations                |  |                    |        |   |                   |  
|                                                      |  |                    |         |   |                   |  
|Balance of allowance at end of period                 |  | $                  | 141,353 |   |                   | $
|                                                      |  |                    |         |   |                   |  
|Ratio of net charge-offs to average loans outstanding |  |                    | .42     | % |                   |  



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, macro 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 September 30, 2003 and December 31, 2002.



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|                                       |  | September 30, 2003 |         | December 31, 2002
|-------------------------------------- |  | ------------------ | ------- | -----------------
|Construction                           |  | $                  | 2,091   |                  
|Real estate                            |  |                    | 43,863  |                  
|Commercial, financial and agricultural |  |                    | 60,364  |                  
|Installment and credit card            |  |                    | 26,669  |                  
|Unallocated                            |  |                    | 8,366   |                  
|                                       |  |                    |         |                  
|Total                                  |  | $                  | 141,353 |                  
|                                       |  |                    |         |                  



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 September 30, 2003, securities and other short term investments with maturities of one year or less totaled $64,506. In addition, the mortgage-backed securities provide an estimated cash flow of
approximately $793,000 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 September 30, 2003, the banking
subsidiary had total credit availability with the FHLB of $1,205,894, of which it had outstanding borrowings of $1,013,351.



On September 25, 2003, Sky Financial issued $10,000 in obligated mandatorily redeemable capital securities of subsidiary trusts. On October 14, 2003, Sky Financial
received an additional $20,000 under the same issuance. The proceeds of this issuance were used to retire the $27,750 obligated redeemable capital securities and related interest in October 2003.



During May 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. During October 2003, Sky Financial negotiated for an additional $15,000. At September 30, 2003, Sky Financial had borrowings of $60,000 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 September 30, 2003, approximately $41,782 was outstanding under the warehouse line of
credit. SFS has outstanding term funding of $642,078 at September 30, 2003 through the issuance of collateralized notes in a private placement. On July 13, 2003, SFS issued an additional $135,001 of fixed 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 September 30, 2003 follows:



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



Sky Financial also has recourse
obligations on $173,846 of sold loans and leases originated by SFS prior to September 30, 2000. At September 30, 2003, Sky Financial has recorded a recourse provision related to these loans and leases of $3,451.



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 $42,826 at September 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 September 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; or difficulties associated with data conversions in acquisitions; 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. We do not anticipate any significant changes in the operations of and
reporting by Sky Financial as a result of the act. In



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accordance with the requirements of the Sarbanes-Oxley Act, written 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 September 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.



|             |  | September 30, 2003 |   |  | ALCO Max |   |  | Guidelines Min |  
|------------ |  | ------------------ | - |  | -------- | - |  | -------------- | -
|Six Month    |  | 119.9              | % |  | 125      | % |  | 95             | %
|Twelve Month |  | 112.0              |   |  | 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.



|                                    |  | September 30, 2003 |   |  | December 31, 2002 |   |  | ALCO Guidelines |  
|----------------------------------- |  | ------------------ | - |  | ----------------- | - |  | --------------- | -
|One Year Net Interest Income Change |  |                    |   |  |                   |   |  |                 |  
|+300 Basis points                   |  | 3.28               | % |  | 9.2               | % |  |                | %
|+200 Basis points                   |  | 2.64               |   |  | 7.6               |   |  | (10.0           | )
|+100 Basis points                   |  | 1.70               |   |  | 5.0               |   |  | (5.0            | )
|-100 Basis points                   |  | (3.30              | ) |  | (6.0              | ) |  | (5.0            | )
|Net present value of Equity Change  |  |                    |   |  |                   |   |  |                 |  
|+300 Basis points                   |  | (14.1              | ) |  | 7.7               |   |  |                |  
|+200 Basis points                   |  | (7.4               | ) |  | 9.9               |   |  | (15.0           | )
|+100 Basis points                   |  | (2.9               | ) |  | 7.6               |   |  | (10.0           | )
|-100 Basis points                   |  | (1.0               | ) |  | (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 September 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 September 30, 2003, the fair values of Sky Financials derivative arrangements aggregated $5,646 on contracts with notional amounts of $319,393.



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 September 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 September 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 September
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 September 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



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breach of contract, bad faith and allege that the Sureties are liable for the payments due to Sky under the terms of the
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 and discovery in the MDL Proceeding is underway.



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 constitue 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



Not applicable.



Item 5. Other Information



Not
applicable.



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits



|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 September 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 June 5, 2003 announcing
the acquisition of Metropolitan Financial Corp., Highland Hills, Ohio and its wholly-owned subsidiary, Metropolitan Bank and Trust Company and that, as of the close of business on May 16, 2003, Metropolitan Bank and Trust Company was merged into Sky
Bank and became the banks eighth operating region.



Current report on Form 8-K dated July 17, 2003 filing Investor Slides presented at the McDonald Investments, Inc. 2003 Bank Conference on June 11, 2003.



Current report on Form 8-K dated July 17, 2003 reporting Sky Financials second quarter earnings.



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##### Table of Contents

Current report on Form 8-K dated September 15, 2003 announcing that Sky Financial called for redemption
its 8.60% Junior Subordinated Deferrable Interest Debentures due June 30, 2028.



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



Current report on Form 8-K dated October 23, 2003 filing Investor Slides presented to current and potential investors.



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: November 13, 2003                           
|SKY FINANCIAL GROUP, INC.                         



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EXHIBIT INDEX



|Exhibit No. |  | Description                                                                                                                                                                                                                                                      |  | Page Number
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|(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 September 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.                                                                                                                                                                                                           |  |            



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