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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



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|x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 [FEE REQUIRED]
|- | ---------------------------------------------------------------------------------------------------

For the Fiscal Year Ended December 31, 2005



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|- | ----------------------------------------------------------------------------------------------------------

For the transition period from  to
.

Commission File No. 000-24147



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Killbuck Bancshares, Inc.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1700284                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

165 North Main Street

Killbuck, Ohio 44637

(Address of principal executive offices)



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Registrants telephone
number, including area code: (330) 276-2771

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

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



|                          |  |                                          
|------------------------- |  | -----------------------------------------
|Title of each class       |  | Name of each exchange on which registered
|Common Stock No Par Value |  | None                                     



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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.     Yes ̈No  x

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 than the registrant was required to
file such report(s), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-K or any amendment to
this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

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

The aggregate market value of the voting stock held by nonaffiliates of the registrant, calculated by reference to the stock valuation done on Killbuck Bancshares, Inc.
common stock as of June 30, 2005 was $63,370,799 (Registrant has assumed that all of its executive officers and directors are affiliates. Such assumption shall not be deemed to be conclusive for any other purpose):

There were 647,760 shares of no par value common stock outstanding as of December 31, 2005.

DOCUMENTS INCORPORATED BY REFERENCE



|1. | Portions of the Annual Report to Shareholders for the Year ended December 31, 2005. (Part II, III and IV)
|-- | ---------------------------------------------------------------------------------------------------------



|2. | Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held on April 24, 2006 for the Year ended December 31, 2005. (Part III)
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

FORM 10-K INDEX



|         |  |                                                                                       |  | 
|-------- |  | ------------------------------------------------------------------------------------- |  | 
|PART I   |  |                                                                                      
|         |  |                                                                                      
|Item 1.  |  | Business                                                                              |  | 
|         |  |                                                                                      
|Item 1A  |  | Risk Factors                                                                          |  | 
|         |  |                                                                                      
|Item 1B  |  | Unresolved Staff Comments                                                             |  | 
|         |  |                                                                                      
|Item 2.  |  | Properties                                                                            |  | 
|         |  |                                                                                      
|Item 3.  |  | Legal Proceedings                                                                     |  | 
|         |  |                                                                                      
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  | 
|         | 
|PART II  |  |                                                                                      
|         |  |                                                                                      
|Item 5.  |  | Market for the Registrants Common Stock and Related Stockholder Matters              |  | 
|         |  |                                                                                      
|Item 6.  |  | Selected Financial Data                                                               |  | 
|         |  |                                                                                      
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 
|         |  |                                                                                      
|Item 7A. |  | Quantitative and Qualitative Disclosure About Market Risk                             |  | 
|         |  |                                                                                      
|Item 8.  |  | Financial Statements and Supplementary Data                                           |  | 
|         |  |                                                                                      
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 
|         |  |                                                                                      
|Item 9A. |  | Controls and Procedures                                                               |  | 
|         | 
|PART III |  |                                                                                      
|         |  |                                                                                      
|Item 10. |  | Directors and Executive Officers of Registrant                                        |  | 
|         |  |                                                                                      
|Item 11. |  | Executive Compensation                                                                |  | 
|         |  |                                                                                      
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 
|         |  |                                                                                      
|Item 13. |  | Certain Relationships and Related Transactions                                        |  | 
|         |  |                                                                                      
|Item 14. |  | Principal Accountant Fees and Services                                                |  | 
|         | 
|PART IV  |  |                                                                                      
|         |  |                                                                                      
|Item 15. |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 
|         |  |                                                                                      
|         |  | Signatures                                                                            |  | 



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##### Table of Contents

PART I

Killbuck Bancshares, Inc. (the Company) may from time to time make written or oral forward-looking
statements, including statements contained in the Companys filings with the securities and exchange commission (including this annual report on Form 10-K and the exhibits thereto), in its report to shareholders and in other
communications by the Company, which are made in good faith by the Company pursuant to the safe harbor provisions of the private securities litigation reform act of 1995.

These forward-looking statements involve risks and uncertainties, such as statements of the Companys plans, objectives, expectations, estimates and intentions that are subject to change based on various
important factors (some of which are beyond the Companys control). The following factors, among others, could cause the Companys financial performance to differ materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary and
fiscal policies and laws, including interest rate policies of the board of governors of the federal reserve system, inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services of
the Company and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors products and services; the willingness of users to substitute competitors products
and services for the Companys products and services; the success of the Company in gaining regulatory approval of its products and services, when required; the impact of changes in financial services laws and regulations (including laws
concerning taxes, banking, securities and insurance); technological changes, acquisitions; changes in consumer spending and savings habits; and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether
written or oral, that may be made from time to time by or on behalf of the Company.

Item 1. Business

Killbuck Bancshares, Inc. (the Company) was incorporated under the laws of the State of
Ohio on November 29, 1991 at the direction of management of the Killbuck Savings Bank Company (the Bank,) for the purpose of becoming a bank holding company by acquiring all of the outstanding shares of the Bank. In November 1992,
the Company became the sole shareholder of the Bank. The Bank carries on business under the name The Killbuck Savings Bank Company. The principal office of the Company is located at 165 N. Main Street, Killbuck, Ohio. The Killbuck
Savings Bank Company was established under the banking laws of the State of Ohio in September, 1900.

The Bank is headquartered in Killbuck, Ohio, which is
located in the northeast portion of Ohio, in the County of Holmes. Holmes County has a population of approximately 37,000.

The Bank provides a wide range
of retail banking services to individuals and small to medium-sized businesses. These services include various deposit products, business and personal loans, credit cards, residential mortgage loans, home equity loans, internet banking, bill
payment, and other consumer oriented financial services including IRA accounts, Health Savings Accounts (HSA), safe deposit and night depository facilities. The Bank also has automatic teller machines located at all locations providing 24 hour
banking service to our customers. The Bank belongs to STAR, a national ATM network with thousands of locations nationwide. Neither the Company nor the Bank has any foreign operations, assets, investments or deposits.

The Company has one wholly owned subsidiary, The Killbuck Savings Bank Company. The Bank has ten offices, with seven in Holmes County including a loan production office,
two in Knox County and one in Tuscarawas County. The full service branch facility in Sugarcreek, Ohio in Tuscarawas County opened in February 2000. The full service branch facility in Howard, Ohio in Knox County opened in July 2001. The Loan
Production office in Millersburg, Ohio in Holmes County opened in July 2003. The full service branch facility in Berlin, Ohio in Holmes County opened in the German Village Market complex in April 2004.



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The Company, through its subsidiary, The Killbuck Savings Bank Company, conducts the business of a commercial banking
organization. At December 31, 2005, the Company and its subsidiary had consolidated total assets of $298,049,960 and consolidated total equity of $37,049,303. The capital of the Company consists of 1,000,000 authorized shares of capital stock,
no par value of which 647,760 shares were outstanding at December 31, 2005 to 1,023 shareholders.

The Bank is a state banking Company. The Bank is
regulated by the Ohio Division of Financial Institutions (ODFI) and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to the extent permitted by law and, as a subsidiary of the Company, is regulated
by the Federal Reserve Board.

Employees

As of
December 31, 2005, the Bank had 99 full-time and 25 part-time employees. The Company had no employees. The Bank provides a number of benefits for its full-time employees, including health and life insurance, pension, workers compensation,
social security, paid vacations, and numerous bank services. No employees are union participants or subject to a collective bargaining agreement.

Competition

The commercial banking business in the market areas served by the Bank is very competitive. The Company and the Bank are
in competition with commercial banks located in their own service areas. Some competitors of the Company and the Bank are substantially larger than the Bank. In addition to local bank competition, the Bank competes with larger commercial banks
located in metropolitan areas, savings banks, savings and loan associations, credit unions, finance companies and other financial institutions for loans and deposits.

There are eight financial institutions operating in Holmes County. As of June 30, 2005 (the most recent date for which information is available) the Bank had the largest market share with $198.8 million in total
deposits as of such date, representing a market share of 39.54%. The institution with the second largest market share had deposits of $194.0 million as of such date, representing a market share of 38.65%. The Bank had total assets as of
December 31, 2005, of $298.1 million compared to the other institutions total assets of $321.0 million as of such date.

Certain
Regulatory Considerations

The following is a summary of certain statutes and regulations affecting the Company and its subsidiary. This summary is
qualified in its entirety by such statutes and regulations.

The Company

The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, (BHC Act) and as such is subject to regulation by the Federal Reserve Board. A bank holding company
is required to file with the Federal Reserve Board quarterly reports and other information regarding its business operations and those of its subsidiaries. A bank holding company and its subsidiary banks are also subject to examination by the
Federal Reserve Board.

The BHC Act requires every bank holding company to obtain the prior approval of the Federal Reserve Board before acquiring
substantially all the assets of any bank or bank holding company or ownership or control of any voting shares of any bank or bank holding company, if, after such acquisition, it would own or control, directly or indirectly, more than five percent
(5%) of the voting shares of such bank or bank holding company.



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In approving acquisitions by bank holding companies of companies engaged in banking-related activities, the Federal
Reserve Board considers whether the performance of any such activity by a subsidiary of the holding company reasonably can be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency,
which outweigh possible adverse effects, such as over concentration of resources, decrease of competition, conflicts of interest, or unsound banking practices.

Bank holding companies are restricted in, and subject to, limitations regarding transactions with subsidiaries and other affiliates.

In addition,
bank holding companies and their subsidiaries are prohibited from engaging in certain tie in arrangements in connection with any extensions of credit, leases, sales of property, or furnishing of services.

The Company Subsidiary

The Company operates a single bank,
namely, The Killbuck Savings Bank Company. As an Ohio state chartered commercial bank, the Bank is supervised and regulated by the ODFI, and subject to laws and regulations applicable to Ohio banks.

Capital

The Federal Reserve
Board, ODFI, and FDIC require banks and holding companies to maintain minimum capital ratios.

The Federal Reserve Board adopted final
risk-adjusted capital guidelines for bank holding companies. The guidelines became fully implemented as of December 31, 1992. The ODFI and FDIC have adopted substantially similar risk-based capital guidelines. These ratios involve a
mathematical process of assigning various risk weights to different classes of assets, then evaluating the sum of the risk-weighted balance sheet structure against the Companys capital base. The rules set the minimum guidelines for the ratio
of capital to risk-weighted assets (including certain off-balance sheet activities, such as standby letters of credit) at 8%. At least half of the total capital is to be composed of common equity, retained earnings, and a limited amount of perpetual
preferred stock less certain goodwill items (Tier 1 Capital). The remainder may consist of a limited amount of subordinated debt, other preferred stock, or a limited amount of loan loss reserves.

In addition, the federal banking regulatory agencies have adopted leverage capital guidelines for banks and bank holding companies. Under these guidelines, banks and
bank holding companies must maintain a minimum ratio of three percent (3%) Tier 1 Capital (as defined for purposes of the year-end 1992 risk-based capital guidelines) to total assets. The Federal Reserve Board has indicated, however, that
banking organizations that are experiencing or anticipating significant growth, are expected to maintain capital ratios well in excess of the minimum levels.

Regulatory authorities may increase such minimum requirements for all banks and bank holding companies or for specified banks or bank holding companies. Increases in the minimum required ratios could adversely affect the Company and the
Bank, including their ability to pay dividends.

At December 31, 2005, the Companys respective total and Tier 1 risk-based capital ratios and
leverage ratios exceeded the minimum regulatory requirements. See Note 17 in the audited consolidated financial statements included in the Annual Report and incorporated herein by reference in the report as Exhibit 13.



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##### Table of Contents

Additional Regulation

The Bank is also subject to federal regulation as to such matters as required reserves, limitation as to the nature and amount of its loans and investments, regulatory approval of any merger or consolidation, issuance or retirement of their
own securities, limitations upon the payment of dividends and other aspects of banking operations. In addition, the activities and operations of the Bank are subject to a number of additional detailed, complex and sometimes overlapping laws and
regulations. These include state usury and consumer credit laws, state laws relating to fiduciaries, the Federal Truth-in-Lending Act and Regulation Z, the Federal Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act, the
Truth in Savings Act, the Community Reinvestment Act, anti-redlining legislation and antitrust laws.

Dividend Regulation

The ability of the Company to obtain funds for the payment of dividends and for other cash requirements is largely dependent on the amount of dividends that may be
declared by the Bank. Generally, the Bank may not declare a dividend, without the approval of the ODFI, if the total of dividends declared in a calendar year exceeds the total of its net profits for that year combined with its retained profits of
the preceding two years.

Government Policies and Legislation

The policies of regulatory authorities, including the ODFI, Federal Reserve Board, FDIC and the Depository Institutions Deregulation Committee, have had a significant effect on the operating results of commercial
banks in the past and are expected to do so in the future. An important function of the Federal Reserve System is to regulate aggregate national credit and money supply through such means as open market dealings in securities, establishment of the
discount rate on member bank borrowings, and changes in reserve requirements against member bank deposits. Policies of these agencies may be influenced by many factors, including inflation, unemployment, short-term and long-term changes in the
international trade balance and fiscal policies of the United States government.

Financial Services Modernization Act of 1999

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

The Financial Services Modernization
Act defines financial in nature to include



| |  |  | securities underwriting, dealing and market making;
| | - |  | ---------------------------------------------------



| |  |  | sponsoring mutual funds and investment companies;
| | - |  | -------------------------------------------------



| |  |  | insurance underwriting and agency;
| | - |  | ----------------------------------



| |  |  | merchant bank activities and activities that the Federal Reserve Board has determined to be closely relating to banking.
| | - |  | ------------------------------------------------------------------------------------------------------------------------



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In addition, a financial holding company may not acquire a company that is engaged in activities that are financial in
nature unless each of the subsidiary banks of the financial holding company has a Community Reinvestment Act rating of satisfactory or better.

The United
States Congress has periodically considered and adopted legislation, such as the Gramm-Leach-Bliley Act, which has resulted in further deregulation of both banks and other financial institutions, including mutual funds, securities brokerage firms
and investment banking firms. No assurance can be given as to whether any additional legislation will be adopted or as to the effect such legislation would have on the business of the Bank or the Company.

Deposit Insurance

The Federal Deposit Insurance Company
Improvement Act of 1991 (FDICIA) requires federal bank regulatory authorities to take prompt corrective action with respect to banks that do not meet minimum capital requirements. For these purposes, FDICIA establishes five
capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.

As an
FDIC-insured institution, the Bank is required to pay deposit insurance premium assessments to the FDIC. The amount each institution pays for FDIC deposit insurance coverage is determined in accordance with a risk-based assessment system under which
all insured depository institutions are placed into one of nine categories and assessed insurance premiums based upon their level of capital and supervisory evaluation. Institutions classified as well capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than adequately capitalized (as defined by the FDIC) and considered substantial supervisory concerns pay the highest premium. Because the Bank is presently well
capitalized it pays the minimum deposit insurance premiums.

The FDIC may terminate the deposit insurance of any insured depository institution if
the FDIC determines, after a hearing, that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order, or any condition
imposed in writing by, or written agreement with, the FDIC. The FDIC may also suspend deposit insurance temporarily during the hearing process for a permanent termination of insurance if the institution has no tangible capital. Management of the
Company is not aware of any activity or condition that could result in termination of the deposit insurance of the Bank.

USA Patriot Act

In October 2001, the President signed into law the USA Patriot Act, which strengthens anti-money laundering provisions of the Bank Secrecy Act. The
Act requires financial institutions to establish certain procedures to be able to identify and verify the identity of its customers. Specifically, the new rules, developed by the Secretary of the Treasury, require that the Bank have procedures in
place to:



| |  |  | Verify the identity of persons applying to open an account,
| | - |  | -----------------------------------------------------------



| |  |  | Ensure adequate maintenance of the records used to verify a persons identity, and
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Determine whether a person is on any U.S. governmental agency list of known or suspected terrorists or a terrorist organization
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

The Bank has implemented the required internal controls to ensure proper compliance with the USA Patriot Act.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act, signed
into law July 30, 2002, was intended to bolster public confidence in the nations capital markets by imposing new duties and penalties for non-compliance on public companies and their executives, directors, auditors, attorneys and
securities analysts. Some of the more significant aspects of the act include:



| |  |  | Corporate Responsibility for Financial Reports  requires Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) to personally certify and be accountable for their
Corporations financial records and accounting and internal controls.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Management Assessment of Internal Controls  requires auditors to certify the Corporations underlying controls and processes that are used to compile the financial
results.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Real-time Issuer Disclosures  require that companies provide real-time disclosures of any events that may affect a firms stock price or financial performance within a
48-hour period.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Criminal Penalties for Altering Documents  provides severe penalties for whoever knowingly alters, destroys, mutilates any record of document with intent to impede
an investigation. Penalties include monetary fines and prison time.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The act also imposes requirements for corporate governance, auditor
independence and accounting standards, executive compensation, insider loans and whistleblower protection. As a result of Sarbanes-Oxley, Killbuck Bancshares, Inc. adopted a Code of Business Conduct and Ethics applicable to its CEO, CFO and
Controller, which meets the requirements of Sarbanes-Oxley, to supplement its long-standing Code of Ethics, which applies to all employees.

Proposed
Legislation

There have been proposed a number of legislative and regulatory proposals designed to strengthen the federal deposit insurance system
and to improve the overall financial stability of the U.S. banking system. It is impossible to predict whether or in what form these proposals may be adopted in the future, and if adopted, what their effect would be on the Company or Bank.



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Monetary Policies

The earnings of the Company are dependent upon the earnings of its wholly owned subsidiary bank. The earnings of the subsidiary bank are affected by the policies of regulatory authorities, including the Ohio Division of Financial
Institutions, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation. The policies and regulations of the regulatory agencies have had and will continue to have a significant effect on deposits, loans and
investment growth, as well as the rate of interest earned and paid, and therefore will affect the earnings of the subsidiary bank and the Company in the future, although the degree of such impact cannot accurately be predicted.

Securities Laws and Compliance

As of June 30, 1998, the
Companys common stock was registered with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended (1934 Act). This registration requires ongoing compliance with the 1934 Act
and its periodic filing requirements as well as a wide range of Federal and State securities laws. These requirements include, but are not limited to, the filing of annual, quarterly and other reports with the SEC, certain requirements as to the
solicitation of proxies from shareholders as well as other proxy rules, and compliance with the reporting requirements and short-swing profit rules imposed by section 16 of the 1934 Act.

Item 1A Risk Factors

The following discusses risks that management believes are specific to our business and could
have a negative impact on the Banks financial performance. When analyzing an investment in the Bank, the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this report
should be carefully considered. This list should not be viewed as comprehensive and may not include all risks that may effect the financial performance of the Bank:

Interest Rate Risk

The Banks profitability is largely a function of the spread between the interest rates
earned on earning assets and the interest rates paid on deposits and other interest-bearing liabilities. Like most financial institutions, the Banks net interest income and margin will be affected by general economic conditions and other
factors, including fiscal and monetary policies of the Federal government, that influence market interest rates and the Banks ability to respond to changes in such rates. At any given time, the Banks assets and liabilities may be such
that they are affected differently by a change in interest rates. As a result, an increase or decrease in rates, the length of loan terms or the mix of adjustable- and fixed- rate loans or investment securities in the Banks portfolio could
have a positive or negative effect on its net income, capital and liquidity. Although management believes it has implemented strategies and guidelines to reduce the potential effects of changes in interest rates on results of operations, any
substantial and prolonged change in market interest rates could adversely affect operating results.

Credit Risk

As a lender, the Bank is exposed to the risk that its borrowers may be unable to repay their loans and that any collateral securing the payment of their loans may not be
sufficient to assure repayment in full. Credit losses are inherent in the lending business and could have a material adverse effect on the operating results of the Bank. Adverse changes in the economy or business conditions, either nationally or in
the Banks market areas, could increase credit related losses and expenses and/or limit growth. Substantially all of the Banks loans are to businesses and individuals in its limited geographic area and any economic decline in this market
could impact the Bank adversely. The Bank makes various assumptions and judgments about the collectibility of its loan portfolio and provides an allowance for loan losses based on a number of factors. If these assumptions are incorrect, the
allowance for loan losses may not be sufficient to cover losses, thereby having an adverse effect on operating results, and may cause the Bank to increase the allowance in the future by increasing the provision for loan losses. The Bank has adopted
underwriting and credit monitoring procedures and credit policies that management believes are appropriate to control these risks, however, such policies and procedures may not prevent unexpected losses that could have a material adverse affect on
the Banks financial condition or results of operations.



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##### Table of Contents

Impairment Risk

The
Bank regularly purchases U.S. Government agency debt securities, U.S. Government agency issued mortgage-backed securities, State and Political Subdivisions debt securities, corporate debt securities and equity securities. The Bank is exposed
to the risk that the issuers of these securities may experience significant deterioration in credit quality which could impact the market value of the issue. The Bank periodically evaluates its investments to determine if market value declines are
other-than-temporary. Once a decline is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized.

Competition

The financial services industry is highly competitive with competition for attracting and retaining
deposits and making loans coming from other banks and savings institutions, credit unions, mutual fund companies, insurance companies and other non-bank businesses. Some of the Banks competitors are much larger in terms of total assets and
market capitalization, have a higher lending limit, and have greater access to capital and funding. In light of this, the Banks ability to continue to compete effectively is dependent upon its ability to maintain and build relationships
through top quality service.

Government Regulation and Supervision

The banking industry is heavily regulated under both Federal and state law. Banking regulations, designed primarily for the safety of depositors, may limit a financial institutions growth and the return to its
investors, by restricting such activities as the payment of dividends, mergers with or acquisitions by other institutions, expansion of branch offices and the offering of securities. The Bank is also subject to capitalization guidelines established
by Federal law and could be subject to enforcement actions to the extent that its subsidiary bank is found, by regulatory examiners, to be undercapitalized. It is improbable to predict what changes, if any, will be made to existing Federal and state
legislation and regulations or the effect that such changes may have on the Banks future business and earnings prospects. Any substantial changes to applicable laws or regulations could also subject the Bank to additional costs, limit the
types of financial services and products it may offer, and inhibit its ability to compete with other financial service providers.

Internal Controls and
Procedures

Management diligently reviews and updates its internal controls, disclosure controls and procedures, and corporate governance policies and
procedures. This system is designed to provide reasonable, not absolute, assurances that the objectives comply with appropriate regulatory guidance; any undetected circumvention of these controls could have a material adverse impact on the
Banks financial condition and results of operations.

Litigation

Although there is currently no litigation to which the Bank is the subject, future litigation that arises during the normal course of business could be material and have a negative impact on the Banks earnings.
Future litigation or changes in current litigation could also adversely impact the reputation of the Bank in the communities that it serves.

Attracting
and Retaining Skilled Personnel

Attracting and retaining key personnel is critical to the Banks success, and difficulty finding qualified
personnel could have a significant impact on the Banks business due to the lack of required skill sets and years of industry experience. Management is cognizant of these risks and succession planning is built into the long-range strategic
planning process. The Bank currently has employment agreements with its executive officers.



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##### Table of Contents

Goodwill

When the
Bank acquired the Danville Office, a portion of the purchase price was allocated to goodwill and other indentifiable intangible assets. The amount of the purchase price which was allocated to goodwill and other intangible assets is determined by the
excess of the purchase price over the net identifiable assets acquired. Under current accounting standards, if the Bank determines goodwill or intangible assets are impaired, it is required to write down the carrying value of these assets. The Bank
cannot provide assurance that it will not be required to take an impairment charge in the future. Any impairment charge would have a negative effect on its stockholders equity and current financial results.

Item 1B Unresolved Staff Comments

None



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##### Table of Contents

Item 2 Description of Property

Properties

The Company owns no real property but utilizes the main office of the Bank. The Companys and the Banks executive offices are located at 165 North Main Street, Killbuck, Ohio. The Company pays no rent or
other form of consideration for the use of this facility. All offices are owned by the Bank. The Bank has seven offices located in Holmes County (1), two in Knox County (2), and one in Tuscarawas County (3). A loan production facility in
Millersburg, Ohio opened in July 2003. The Banks total investment in office property and equipment was $10.2 million with a net book value $5.1 million at December 31, 2005. The offices are at the following locations.



|                             |  |                              |  |                           
|---------------------------- |  | ---------------------------- |  | --------------------------
|Main Office: (1)             |  | Berlin Branch (1)            |  | Mt. Hope Branch (1)       
|165 North Main Street        |  | 4853 East Main Street        |  | 8115 State Rt. 241        
|Killbuck, Ohio 44637         |  | Berlin, Ohio 44610           |  | Mt. Hope, Ohio 44660      
|                             |  |                             
|Millersburg North Branch (1) |  | Millersburg South Branch (1) |  | Millersburg Loan Annex (1)
|181 N. Washington Street     |  | 1642 S. Washington Street    |  | 164 N. Clay Street        
|Millersburg, Ohio 44654      |  | Millersburg, Ohio 44654      |  | Millersburg, Ohio 44654   
|                             |  |                             
|German Village Branch (1)    |  | Sugarcreek Branch (3)        |  | Apple Valley Branch (2)   
|4900 Oak Street              |  | 1035 W. Main Street          |  | 21841 Plank Road          
|Berlin, Ohio 44610           |  | Sugarcreek, Ohio 44681       |  | Howard, Ohio 43028        
|                             |  |                             
|Danville Branch (2)          |  |                              |  |                           
|701 S. Market Street         |  |                              |  |                           
|Danville, Ohio 43014         |  |                              |  |                           

Item 3 Legal Proceedings

Neither the Bank nor the Company is involved in any material legal proceedings. The Bank,
from time to time, is a party to litigation, which arises in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the business of the Bank. In the
opinion of management, the resolution of any such issues would not have a material adverse impact on the financial position, results of operation, or liquidity of the Bank or the Company.

In addition, no material proceedings are known to be contemplated by governmental authorities against the Bank or the Company or any of their properties.

Item 4 Submission of Matters to Vote of Security Holders

No matters were submitted to a vote of security holders
during the fourth quarter of the fiscal year covered by this report.

PART II

Item 5 Market for Registrants Common Stock and Related Stockholder Matters

As of December 31, 2005, the
Company had 1,023 shareholders of record, as calculated by excluding individual participants in securities positions listings, who collectively held 647,760 of the 1,000,000 authorized shares of the Companys no par value stock.



---

##### Table of Contents

There is no established public trading market for the Companys common stock and the shares of the Company are not
listed on any exchange. Sale price information is based on information reported to the Company by individual buyers and sellers of the Company stock. The following table summarizes the high and low prices and dividend information for 2005 and 2004.
Cash dividends are paid on a semi-annual basis.



|              |  |              |  |     |        |                   |   |        |  |   |     
|------------- |  | ------------ |  | --- | ------ | ----------------- | - | ------ |  | - | ----
|Quarter Ended |  | High         |  | Low |        | CashDividendsPaid
|2005          |  | March 31     |  | $   | 98.75  |                   | $ | 97.64  |  |   | N/A 
|              |  | June 30      |  |     | 100.06 |                   |   | 98.85  |  | $ | 1.05
|              |  | September 30 |  |     | 102.44 |                   |   | 100.80 |  |   | N/A 
|              |  | December 31  |  |     | 103.45 |                   |   | 102.44 |  | $ | 1.15
|              |  |              |  |    
|2004          |  | March 31     |  | $   | 95.00  |                   | $ | 95.00  |  |   | N/A 
|              |  | June 30      |  |     | 95.00  |                   |   | 95.00  |  |   | .95 
|              |  | September 30 |  |     | 96.69  |                   |   | 95.00  |  |   | N/A 
|              |  | December 31  |  |     | 97.38  |                   |   | 96.38  |  | $ | 1.00

The Company has paid regular semi-annual cash dividends since it became a bank holding company in 1992, and
assuming the ability to do so, it is anticipated that the Company will continue to declare regular semi-annual cash dividends.

For information on
dividends per share, net income per share and ratio of dividends to net income per share see the Selected Financial Data of the Annual Report to Shareholders of Killbuck Bancshares, Inc. for the year ended December 31, 2005, included in this
report as Exhibit 13 and is incorporated herein by reference.

The ability of the Company to pay dividends will depend on the earnings of its subsidiary
bank and its financial condition, as well as other factors such as market conditions, interest rates and regulatory requirements. Therefore, no assurances may be given as to the continuation of the Companys ability to pay dividends or maintain
its present level of earnings. For a discussion on subsidiary dividends see Note 16 to the audited Consolidated Financial Statements of the Annual Report to Shareholders of Killbuck Bancshares, Inc. for the year ended December 31, 2005,
included in this report as Exhibit 13 and is incorporated herein by reference.

The common stock of the Company is not subject to any redemption provisions
or restrictions on alienability. The common stock is entitled to share pro rata in dividends and in distributions in the event of dissolution or liquidation. There are not any options, warrants, privileges nor other rights with respect to Company
stock at the present time, nor are any such rights proposed to be issued.



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##### Table of Contents

Unregistered Sales of Equity Securities and Use of Proceeds

None

ISSUER PURCHASES
OF EQUITY SECURITIES



|                       |  |                                              |  |                                           |        |                                                                                             |     |                                                                                                                        |    
|---------------------- |  | -------------------------------------------- |  | ----------------------------------------- | ------ | ------------------------------------------------------------------------------------------- | --- | ---------------------------------------------------------------------------------------------------------------------- | ---
|Period                 |  | (a) TotalNumber ofShares (or Units)Purchased |  | (b) Average Price Paid per Share(or Unit) |        | (c) Total Number ofShares (or Units)Purchased as Part ofPublicly AnnouncedPlans or
Programs |     | (d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that May Yet BePurchased Under
thePlans or Programs
|January 1  31, 2005   |  |                                             |  |                                           |       |                                                                                             | N/A |                                                                                                                        | N/A
|February 1  29, 2005  |  | 458                                          |  | $                                         | 97.64  |                                                                                             | N/A |                                                                                                                        | N/A
|March 1  31, 2005     |  | 600                                          |  | $                                         | 98.30  |                                                                                             | N/A |                                                                                                                        | N/A
|April 1  30, 2005     |  |                                             |  |                                           |       |                                                                                             | N/A |                                                                                                                        | N/A
|May 1  31, 2005       |  |                                             |  |                                           |       |                                                                                             | N/A |                                                                                                                        | N/A
|June 1  30, 2005      |  | 340                                          |  | $                                         | 98.85  |                                                                                             | N/A |                                                                                                                        | N/A
|July 1  31, 2005      |  | 1,750                                        |  | $                                         | 100.06 |                                                                                             | N/A |                                                                                                                        | N/A
|August 1  31, 2005    |  | 2,000                                        |  | $                                         | 100.80 |                                                                                             | N/A |                                                                                                                        | N/A
|September 1  30, 2005 |  | 939                                          |  | $                                         | 101.69 |                                                                                             | N/A |                                                                                                                        | N/A
|October 1  31, 2005   |  |                                             |  |                                           |       |                                                                                             | N/A |                                                                                                                        | N/A
|November 1  30, 2005  |  | 539                                          |  | $                                         | 103.45 |                                                                                             | N/A |                                                                                                                        | N/A
|December 1  31, 2005  |  | 3,100                                        |  | $                                         | 102.44 |                                                                                             | N/A |                                                                                                                        | N/A
|Total (1)              |  | 9,726                                        |  | $                                         | 101.05 |                                                                                             | N/A |                                                                                                                        | N/A

---

|(1) | 9,726 shares of common stock were purchased by Killbuck Bancshares in open-market transactions.
|--- | -----------------------------------------------------------------------------------------------

Item 6 Selected Financial Data

Selected Financial Data of the annual report to shareholders of Killbuck Bancshares,
Inc. for the year ended December 31, 2005, included in this report as Exhibit 13, is incorporated herein by reference.



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##### Table of Contents

Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations

Managements
Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report to Shareholders of Killbuck Bancshares, Inc. for the year ended December 31, 2005, included in this report as Exhibit 13, and is incorporated herein
by reference. Additional statistical information noted below is provided pursuant to SECs Industry Guide 3, Statistical Disclosure by Bank Holding Companies.

Investment Portfolio

Book
Value of Investments

Book values of investment securities at December 31 are as follows (in thousands):



|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|-------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                                         |  | 2005 |        | 2004 |   | 2003   |  | 2002 |        | 2001
|Securities available for sale:                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Obligations of U.S. Government Agencies and Corporations |  | $    | 14,307 |      | $ | 9,754  |  | $    | 17,582 |      | $ | 39,048 |  | $ | 51,420
|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Total available for sale                                 |  |      | 14,307 |      |   | 9,754  |  |      | 17,582 |      |   | 39,048 |  |   | 51,420
|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Securities held to maturity:                             |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Obligations of States and Political subdivisions         |  |      | 30,771 |      |   | 35,564 |  |      | 39,900 |      |   | 40,591 |  |   | 38,305
|Corporate securities                                     |  |      |       |      |   | 451    |  |      | 729    |      |   | 987    |  |   | 1,498 
|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Total held to maturity                                   |  |      | 30,771 |      |   | 36,015 |  |      | 40,629 |      |   | 41,578 |  |   | 39,803
|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Total                                                    |  | $    | 45,078 |      | $ | 45,769 |  | $    | 58,211 |      | $ | 80,626 |  | $ | 91,223
|                                                         |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       



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##### Table of Contents

MATURITY SCHEDULE OF INVESTMENTS

The following table presents the investment portfolio, the weighted average yield and maturities at December 31, 2005 (dollars in thousands):



|                                                                                |  |                     |   |       |                                       |   |        |                                     |       |  |                                |        |  |                |        |  |        |   |       |   |        |        |      |       |  |   |       |  |      |   |  |   |       
|------------------------------------------------------------------------------- |  | ------------------- | - | ----- | ------------------------------------- | - | ------ | ----------------------------------- | ----- |  | ------------------------------ | ------ |  | -------------- | ------ |  | ------ | - | ----- | - | ------ | ------ | ---- | ----- |  | - | ----- |  | ---- | - |  | - | ------
|                                                                                |  | Within three months |   |       | After three months butWithin one year |   |        | After one year butWithin five years |       |  | After five butWithin ten years |        |  | After 10 years |        |  |       
|                                                                                |  | Amount              |   | Yield |                                       |   | Amount |                                     | Yield |  |                                | Amount |  | Yield          |        |  | Amount |   | Yield |   |        | Amount |      | Yield |  |   | Total
|Available for Sale (1) Obligations of U.S. Government Agencies and Corporations |  | $                   |  |       | 0.00                                  | % |        | $                                   | 1,984 |  | 3.20                           | %      |  | $              | 11,107 |  | 9.28   | % |       | $ | 819    |        | 4.39 | %     |  | $ | 397   |  | 5.31 | % |  | $ | 14,307
|                                                                                |  |                     |   |       |                                       |   |        |                                     |       |  |                                |        |  |                |        |  |        |   |       |   |        |        |      |       |  |   |       |  |      |   |  |   |       
|Total                                                                           |  | $                   |  |       | 0.00                                  | % |        | $                                   | 1,984 |  | 3.20                           | %      |  | $              | 11,107 |  | 9.28   | % |       | $ | 819    |        | 4.39 | %     |  | $ | 397   |  | 5.31 | % |  | $ | 14,307
|                                                                                |  |                     |   |       |                                       |   |        |                                     |       |  |                                |        |  |                |        |  |        |   |       |   |        |        |      |       |  |   |       |  |      |   |  |   |       
|Held to Maturity Obligations of States and Political subdivisions (2)           |  | $                   |  |       | 0.00                                  | % |        | $                                   | 3,571 |  | 4.24                           | %      |  | $              | 14,706 |  | 4.37   | % |       | $ | 12,298 |        | 4.42 | %     |  | $ | 196   |  | 3.35 | % |  | $ | 30,771
|                                                                                |  |                     |   |       |                                       |   |        |                                     |       |  |                                |        |  |                |        |  |        |   |       |   |        |        |      |       |  |   |       |  |      |   |  |   |       
|Total                                                                           |  | $                   |  |       | 0.00                                  | % |        | $                                   | 3,571 |  | 4.24                           | %      |  | $              | 14,706 |  | 4.37   | % |       | $ | 12,298 |        | 4.42 | %     |  | $ | 196   |  | 3.35 | % |  | $ | 30,771
|                                                                                |  |                     |   |       |                                       |   |        |                                     |       |  |                                |        |  |                |        |  |        |   |       |   |        |        |      |       |  |   |       |  |      |   |  |   |       

---

|(1) | The weighted average yield has been computed using the historical amortized cost for available for sale securities.
|--- | -------------------------------------------------------------------------------------------------------------------

|(2) | Weighted average yields on nontaxable obligations have been computed based on actual yield stated on the security.
|--- | ------------------------------------------------------------------------------------------------------------------

Excluding holdings of U.S. Treasury and other agencies and corporations of the U.S. Government, there were no investments in securities of any one issuer that exceeded
10% of the Banks shareholder equity at December 31, 2005.



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##### Table of Contents

TYPES OF LOANS

The
following table presents the composition of the loan portfolio and the percentage of loans by type as follows (dollars in thousands):



|                         |  |              |         |                 |       |   |        |      |                 |  |       |        |  |                  |         |  |        |   |                  |   |         |        |       |                  |  |   |         |  |       |  
|------------------------ |  | ------------ | ------- | --------------- | ----- | - | ------ | ---- | --------------- |  | ----- | ------ |  | ---------------- | ------- |  | ------ | - | ---------------- | - | ------- | ------ | ----- | ---------------- |  | - | ------- |  | ----- | -
|                         |  | December 31, |        
|                         |  | 2005         |         |                 | 2004  |   |        | 2003 |                 |  | 2002  |        |  | 2001             |        
|                         |  | Amount       |         | % ofTotal Loans |       |   | Amount |      | % ofTotal Loans |  |       | Amount |  | % of Total Loans |         |  | Amount |   | % of Total Loans |   |         | Amount |       | % of Total Loans | 
|Real estate-residential  |  | $            | 90,976  |                 | 43.5  | % |        | $    | 97,811          |  | 45.0  | %      |  | $                | 88,649  |  | 44.0   | % |                  | $ | 73,143  |        | 41.8  | %                |  | $ | 55,812  |  | 36.7  | %
|Real estate-farm         |  |              | 14,550  |                 | 7.0   |   |        |      | 12,309          |  | 5.6   |        |  |                  | 12,298  |  | 6.1    |   |                  |   | 9,108   |        | 5.2   |                  |  |   | 3,377   |  | 2.2   |  
|Real estate-commercial   |  |              | 47,312  |                 | 22.7  |   |        |      | 47,226          |  | 21.8  |        |  |                  | 42,090  |  | 20.8   |   |                  |   | 35,005  |        | 20.0  |                  |  |   | 24,117  |  | 15.9  |  
|Real estate-construction |  |              | 9,447   |                 | 4.5   |   |        |      | 11,000          |  | 5.1   |        |  |                  | 10,978  |  | 5.4    |   |                  |   | 11,812  |        | 6.7   |                  |  |   | 2,937   |  | 1.9   |  
|Commercial and other     |  |              | 38,399  |                 | 18.4  |   |        |      | 40,752          |  | 18.8  |        |  |                  | 38,269  |  | 19.0   |   |                  |   | 35,160  |        | 20.1  |                  |  |   | 37,205  |  | 24.4  |  
|Consumer and credit card |  |              | 8,217   |                 | 3.9   |   |        |      | 8,075           |  | 3.7   |        |  |                  | 9,413   |  | 4.7    |   |                  |   | 10,929  |        | 6.2   |                  |  |   | 28,710  |  | 18.9  |  
|                         |  |              |         |                 |       |   |        |      |                 |  |       |        |  |                  |         |  |        |   |                  |   |         |        |       |                  |  |   |         |  |       |  
|                         |  | $            | 208,901 |                 | 100.0 | % |        | $    | 217,173         |  | 100.0 | %      |  | $                | 201,697 |  | 100.0  | % |                  | $ | 175,157 |        | 100.0 | %                |  | $ | 152,158 |  | 100.0 | %
|                         |  |              |         |                 |       |   |        |      |                 |  |       |        |  |                  |         |  |        |   |                  |   |         |        |       |                  |  |   |         |  |       |  



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##### Table of Contents

The largest category of loans comprising the Banks loan portfolio is residential real estate loans. These loans are
primarily single-family residential real estate loans secured by a first mortgage on the dwelling. The risks associated with these loans are primarily the risk of default in repayment and inadequate collateral. Real estate commercial loans represent
the second largest category and include development loans as well as investment commercial real estate loans. These loans have risks, which include the risk of default in the repayment of principal and inadequate collateral as well as the risk of
cash flow interruption due to, in the case of rental real estate, the inability to obtain or collect adequate rental rates. The next largest loan segment of the Banks loan portfolio is the commercial and other category. The loans comprising
this category represent loans to business interest located primarily within the Banks defined market areas, with no significant industry concentration. Commercial loans include both secured and unsecured loans. The risks associated with these
loans are principally the risk in default of the repayment of principal resulting from economic problems of the commercial customer, economic downturn affecting the market in general and in the case of secured loans, inadequate collateral.

MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATE

The following table presents maturity distribution and interest rate sensitivity of real estate  commercial, real estate - construction and commercial and other loans at December 31, 2005 (dollars in thousands):



|                           |  |              |        |                           |   |               |  |       |       |  |   |       
|-------------------------- |  | ------------ | ------ | ------------------------- | - | ------------- |  | ----- | ----- |  | - | ------
|                           |  | Within 1Year |        | After 1 YearWithin 5Years |   | After 5 Years |  | Total
|Real estate  commercial   |  | $            | 44,603 |                           | $ | 2,426         |  | $     | 283   |  | $ | 47,312
|Real estate  construction |  |              | 7,582  |                           |   | 1,006         |  |       | 859   |  |   | 9,447 
|Commercial and other       |  |              | 31,431 |                           |   | 6,759         |  |       | 209   |  |   | 38,399
|                           |  |              |        |                           |   |               |  |       |       |  |   |       
|                           |  | $            | 83,616 |                           | $ | 10,191        |  | $     | 1,351 |  | $ | 95,158
|                           |  |              |        |                           |   |               |  |       |       |  |   |       
|Fixed interest rates       |  | $            | 5,516  |                           | $ | 8,252         |  | $     | 1,351 |  | $ | 15,119
|Variable interest rates    |  |              | 78,100 |                           |   | 1,939         |  |       |      |  |   | 80,039
|                           |  |              |        |                           |   |               |  |       |       |  |   |       
|                           |  | $            | 83,616 |                           | $ | 10,191        |  | $     | 1,351 |  | $ | 95,158
|                           |  |              |        |                           |   |               |  |       |       |  |   |       



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##### Table of Contents

RISK ELEMENTS

Loans
are subject to ongoing periodic monitoring by management and the board of directors. A loan is classified as nonaccrual when, in the opinion of management, there are doubts about collectibility of interest and principal. At the time the accrual of
interest is discontinued, future income is recognized only when cash is received. Renegotiated loans are those loans which terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the deterioration of
the borrower. At December 31, 2005, all of the non-accrual loans are comprised of 13 loans. The two commercial loans total approximately $158,000 secured by equipment and real estate. Nine residential loans of approximately $463,000 are secured
by real estate. The remaining two loans are consumer loans of approximately $11,000 secured by automobiles. On the commercial real estate and equipment loan, which became delinquent in the third quarter of 2004, the real estate was transferred to
Other Real Estate Owned pending sale. The collateral was not sold by the end of the fiscal year as anticipated; the sale was completed the first quarter of 2006. The following table presents information concerning nonperforming assets including
nonaccrual loans, loans 90 days or more past due, renegotiated loans, other real estate and repossessed assets at December 31, (dollars in thousands).



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##### Table of Contents

|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|------------------------------------------------- |  | ------------ | ----- | - | ---- | - | ----- | ---- |  | - | ---- | - |  | ---- | --- | - |  | - | --- | -
|                                                  |  | December 31, |      
|                                                  |  | 2005         |       |   | 2004 |   |       | 2003 |  |   | 2002 |   |  | 2001 |    
|Loans on nonaccrual basis                         |  | $            | 632   |   |      | $ | 1,095 |      |  | $ | 220  |   |  | $    | 149 |   |  | $ | 144 |  
|Loans past due 90 days or more                    |  |              |      |   |      |   |      |      |  |   | 1    |   |  |      |    |   |  |   | 125 |  
|Renegotiated loans                                |  |              |      |   |      |   |      |      |  |   |     |   |  |      |    |   |  |   |    |  
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|Total nonperforming loans                         |  |              | 632   |   |      |   | 1,095 |      |  |   | 221  |   |  |      | 149 |   |  |   | 269 |  
|Other real estate                                 |  |              | 700   |   |      |   |      |      |  |   |     |   |  |      |    |   |  |   |    |  
|Repossessed assets                                |  |              |      |   |      |   |      |      |  |   |     |   |  |      |    |   |  |   |    |  
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|Total nonperforming assets                        |  | $            | 1,332 |   |      | $ | 1,095 |      |  | $ | 221  |   |  | $    | 149 |   |  | $ | 269 |  
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|Nonperforming loans as a percent of total loans   |  |              | .30   | % |      |   | .50   | %    |  |   | .11  | % |  |      | .08 | % |  |   | .18 | %
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|Nonperforming loans as a percent of total assets  |  |              | .21   | % |      |   | .37   | %    |  |   | .08  | % |  |      | .05 | % |  |   | .10 | %
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  
|Nonperforming assets as a percent of total assets |  |              | .45   | % |      |   | .37   | %    |  |   | .08  | % |  |      | .05 | % |  |   | .10 | %
|                                                  |  |              |       |   |      |   |       |      |  |   |      |   |  |      |     |   |  |   |     |  



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##### Table of Contents

The amount of interest income that would have been recognized had the loans performed in accordance with their original
terms was approximately $18,600 and the amount of interest income that was recognized was $0 for the year ended December 31, 2005.

There are no loans
as of December 31, 2005, other than those disclosed above, where known information about the borrower caused management to have serious doubts about the borrowers ability to comply with their contractual repayment obligations. There are
no concentrations of loans to borrowers engaged in similar activities, which exceed 10% of total loans that management is aware of. Based upon the ongoing quarterly review and assessment of credit quality, management is not aware of any trends or
uncertainties related to any accounts which might have a material adverse effect on future earnings, liquidity or capital resources.

There are no other
interest bearing assets that would be subject to disclosure as either nonperforming or impaired if such interest bearing assets were loans.

LOAN LOSS
EXPERIENCE

Management makes periodic provisions to the allowance for loan losses to maintain the allowance at an acceptable level commensurate with the
credit risks inherent in the loan portfolio. There can be no assurances, however, that additional provisions will not be required in future periods. The following table presents a summary of loan losses by loan type and changes in the allowance for
loan losses for the years ended December 31, (dollars in thousands):



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##### Table of Contents

|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|----------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                      |  | Year Ended December 31, |        
|                                                      |  | 2005                    |         |   | 2004 |   |         | 2003 |  |   | 2002    |   |  | 2001 |        
|Allowance for loan losses at beginning of year        |  | $                       | 2,646   |   |      | $ | 2,702   |      |  | $ | 2,326   |   |  | $    | 2,261   |   |  | $ | 2,359   |  
|Provision charged to expense                          |  |                         | 377     |   |      |   | 225     |      |  |   | 390     |   |  |      | 210     |   |  |   | 262     |  
|Charge-offs:                                          |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Real estate-residential                               |  |                         | 4       |   |      |   | 17      |      |  |   | 6       |   |  |      | 18      |   |  |   |        |  
|Real estate-farm                                      |  |                         |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Real estate-commercial                                |  |                         | 500     |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Real estate-construction                              |  |                         |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Commercial and other                                  |  |                         | 228     |   |      |   | 311     |      |  |   | 16      |   |  |      | 43      |   |  |   | 122     |  
|Consumer and credit card                              |  |                         | 52      |   |      |   | 28      |      |  |   | 99      |   |  |      | 262     |   |  |   | 364     |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total charge-offs                                     |  |                         | 784     |   |      |   | 356     |      |  |   | 121     |   |  |      | 323     |   |  |   | 486     |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Recoveries:                                           |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Real estate-residential                               |  |                         |        |   |      |   | 1       |      |  |   |        |   |  |      |        |   |  |   |        |  
|Real estate-farm                                      |  |                         |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Real estate-commercial                                |  |                         |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Real estate-construction                              |  |                         |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Commercial and other                                  |  |                         | 25      |   |      |   | 13      |      |  |   | 19      |   |  |      | 14      |   |  |   | 21      |  
|Consumer and credit card                              |  |                         | 49      |   |      |   | 61      |      |  |   | 88      |   |  |      | 164     |   |  |   | 105     |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total recoveries                                      |  |                         | 74      |   |      |   | 75      |      |  |   | 107     |   |  |      | 178     |   |  |   | 126     |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net charge-offs                                       |  |                         | 710     |   |      |   | 281     |      |  |   | 14      |   |  |      | 145     |   |  |   | 360     |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Allowance for loan losses at end of period            |  | $                       | 2,313   |   |      | $ | 2,646   |      |  | $ | 2,702   |   |  | $    | 2,326   |   |  | $ | 2,261   |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total loans outstanding                               |  | $                       | 208,901 |   |      | $ | 217,173 |      |  | $ | 201,697 |   |  | $    | 175,157 |   |  | $ | 152,158 |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Average loans outstanding                             |  | $                       | 215,486 |   |      | $ | 213,463 |      |  | $ | 187,554 |   |  | $    | 162,413 |   |  | $ | 153,488 |  
|                                                      |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Allowance for loan losses as a percent of total loans |  |                         | 1.11    | % |      |   | 1.22    | %    |  |   | 1.34    | % |  |      | 1.33    | % |  |   | 1.49    | %
|                                                      |  |                         |         |   |     
|Net charge-offs as a percent of average loans         |  |                         | .33     | % |      |   | .13     | %    |  |   | .01     | % |  |      | .09     | % |  |   | .24     | %



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##### Table of Contents

The Bank reviews the adequacy of its allowance for loan losses on a quarterly basis. In determining the adequacy of its
allowance account the Bank makes general allocations based upon loan categories, nonaccrual, past due and classified loans. After general allocations, the Bank makes specific allocations for individual credits. The Bank has determined that the
reserve is adequate as of December 31, 2005, based upon its analysis and experience. However, there can be no assurance that the current allowance for loan losses will be adequate to absorb all future loan losses.

The following table presents managements estimate of the allocation of the allowance for loan losses among the loan categories, although the entire allowance
balance is available to absorb any actual charge-offs that may occur, along with the percentage of loans in each category to total loans for the years ended December 31 (dollars in thousands):



|                           |  |           |       |                       |       |   |           |      |                        |  |        |           |  |                       |       |  |           |   |                       |   |       |           |       |                       |  |   |       |  |       |  
|-------------------------- |  | --------- | ----- | --------------------- | ----- | - | --------- | ---- | ---------------------- |  | ------ | --------- |  | --------------------- | ----- |  | --------- | - | --------------------- | - | ----- | --------- | ----- | --------------------- |  | - | ----- |  | ----- | -
|                           |  | 2005      |       |                       | 2004  |   |           | 2003 |                        |  | 2002   |           |  | 2001                  |      
|                           |  | Allowance |       | % ofLoanstoTotalLoans |       |   | Allowance |      | % ofLoansto TotalLoans |  |        | Allowance |  | % ofLoanstoTotalLoans |       |  | Allowance |   | % ofLoanstoTotalLoans |   |       | Allowance |       | % ofLoanstoTotalLoans | 
|Real estate  residential  |  | $         | 323   |                       | 43.5  | % |           | $    | 478                    |  | 45.0   | %         |  | $                     | 432   |  | 44.0      | % |                       | $ | 338   |           | 41.8  | %                     |  | $ | 254   |  | 36.7  | %
|Real estate  farm         |  |           |      |                       | 7.0   |   |           |      | 58                     |  | 5.7    |           |  |                       | 124   |  | 6.1       |   |                       |   | 60    |           | 5.2   |                       |  |   | 74    |  | 2.2   |  
|Real estate  commercial   |  |           | 257   |                       | 22.7  |   |           |      | 755                    |  | 21.7   |           |  |                       | 704   |  | 20.8      |   |                       |   | 376   |           | 20.0  |                       |  |   | 373   |  | 15.9  |  
|Real estate  construction |  |           |      |                       | 4.5   |   |           |      |                       |  | 5.1    |           |  |                       |      |  | 5.4       |   |                       |   |      |           | 6.7   |                       |  |   |      |  | 1.9   |  
|Commercial and other loans |  |           | 1,598 |                       | 18.4  |   |           |      | 1,034                  |  | 18.8   |           |  |                       | 1,038 |  | 19.0      |   |                       |   | 967   |           | 20.1  |                       |  |   | 964   |  | 24.4  |  
|Consumer and credit loans  |  |           | 135   |                       | 3.9   |   |           |      | 321                    |  | 3.7    |           |  |                       | 404   |  | 4.7       |   |                       |   | 585   |           | 6.2   |                       |  |   | 596   |  | 18.9  |  
|                           |  |           |       |                       |       |   |           |      |                        |  |        |           |  |                       |       |  |           |   |                       |   |       |           |       |                       |  |   |       |  |       |  
|                           |  | $         | 2,313 |                       | 100.0 | % |           | $    | 2,646                  |  | 100.00 | %         |  | $                     | 2,702 |  | 100.0     | % |                       | $ | 2,326 |           | 100.0 | %                     |  | $ | 2,261 |  | 100.0 | %
|                           |  |           |       |                       |       |   |           |      |                        |  |        |           |  |                       |       |  |           |   |                       |   |       |           |       |                       |  |   |       |  |       |  



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##### Table of Contents

CONTRACTUAL OBLIGATIONS

The following table presents, as of December 31, 2005, significant fixed and determinable contractual obligations to third parties by payment date. Further discussion of the nature of each obligation is included in the referenced note
to the financial statements for December 31, 2005, attached hereto as Exhibit 13 to this Form 10K.



|                                   |  |               |  |                 |  |                  |  |                   |  |                |  |        
|---------------------------------- |  | ------------- |  | --------------- |  | ---------------- |  | ----------------- |  | -------------- |  | -------
|(In thousands)                     |  | NoteReference |  | One Yearor Less |  | One toThreeYears |  | Three toFiveYears |  | Over FiveYears |  | Total  
|Borrowed funds                     |  | 9, 10         |  | 6,329           |  | 1,362            |  | 1,221             |  | 687            |  | 9,599  
|Certificates of Deposit            |  | 8             |  | 66,892          |  | 31,212           |  | 11,787            |  | 19             |  | 109,910
|Operating Leases                   |  | 13            |  | 19              |  | 38               |  | 39                |  | 294            |  | 390    
|Deposits without a stated maturity |  |              |  | 140,439         |  |                 |  |                  |  |               |  | 140,439

The Company has entered into an operating lease to lease 1,600 square feet with a drive-thru facility within the
German Village Store in Berlin, Ohio beginning in April 2004 and expiring in the year 2024 with an additional ten year option.

COMMITMENTS

The following table details the amounts and expected maturities of significant commitments as of December 31, 2005. Further discussion of these
commitments is included in Note 15 to the financial statements as of December 31, 2004, attached hereto as Exhibit 13 to this Form 10K.



|                             |  |                 |  |                  |  |                   |  |                |  |       
|---------------------------- |  | --------------- |  | ---------------- |  | ----------------- |  | -------------- |  | ------
|(In thousands)               |  | One Yearor Less |  | One toThreeYears |  | Three toFiveYears |  | Over FiveYears |  | Total 
|Commitments to extent credit |  |                 |  |                  |  |                   |  |                |  |       
|Commercial                   |  | 15,617          |  | 2,561            |  |                  |  |               |  | 18,178
|Residential real estate      |  | 4,056           |  | 23               |  |                  |  |               |  | 4,079 
|Revolving home equity        |  |                |  |                 |  |                  |  | 11,012         |  | 11,012
|and credit card lines        |  | 1,742           |  |                 |  |                  |  |               |  | 1,742 
|Standby letters of credit    |  | 730             |  |                 |  |                  |  |               |  | 730   



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##### Table of Contents

Item 7A Quantitative and Qualitative Disclosures About Market Risk

The Banks primary market risk exposure is
interest rate risk and, to a lesser extent, liquidity risk. Because of the nature of the Banks operations, the Bank is not subject to currency exchange or commodity price risk and, since the Bank has no trading portfolio, it is not subject to
trading risk. The Banks loan portfolio, concentrated primarily within the surrounding market area, is subject to risks associated with the local economy. Since all of the interest earning assets and interest bearing liabilities are located at
the Bank, all of the interest rate risk lies at the Bank level. As a result, all significant interest rate risk management procedures are performed at the Bank level.

The Bank actively manages interest rate sensitivity and asset/liability products through an asset/liability management committee. The principle purposes of asset-liability management are to maximize current net
interest income while minimizing the risk to future earnings of negative fluctuations in net interest margin and to insure adequate liquidity exists to meet operational needs.

In an effort to reduce interest rate risk and protect itself from the negative effects or rapid or prolonged changes in interest rates, the Bank has instituted certain asset and liability management measures,
including underwriting long-term fixed rate loans that are saleable in the secondary market, offering longer term deposit products and diversifying the loan portfolio into shorter term consumer and commercial business loans. In addition, since the
mid-1980s, the Bank has originated adjustable-rate loans and as of December 31, 2005, they comprised approximately 84.6% of the total loan portfolio.

One of the principal functions of the Companys asset/liability management program is to monitor the level to which the balance sheet is subject to interest rate risk. The goal of this program is to manage the relationship between
interest-earning assets and interest-bearing liabilities to minimize the fluctuations in the net interest spread and achieve consistent growth in net interest income during periods of changing interest rates.

Interest rate sensitivity is measured as the difference between the volume of assets and liabilities that are subject to repricing in a future period of time. These
differences are known as interest sensitivity gaps. The Bank utilizes gap management as the primary means of measuring interest rate risk. Gap analysis identifies and quantifies the Banks exposure or vulnerability to changes in interest rates
in relationship to the Banks interest rate sensitivity position. A rate sensitive asset or liability is one, which is capable of being repriced (i.e., the interest rate can be adjusted or principal can be reinvested) within a specified period
of time. Subtracting total rate sensitive liabilities (RSL) from total rate sensitive assets (RSA) within specified time horizons nets the Banks gap positions. These gaps reflect the Banks exposure to changes in market interest rates, as
discussed below.



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##### Table of Contents

Because many of the Banks deposit liabilities are capable of being immediately repriced, the Bank offers variable
rate loan products in order to help maintain a proper balance in its ability to reprice various interest bearing assets and liabilities. Furthermore, the Banks deposit rates are not tied to an external index. As a result, although changing
market interest rates impact repricing, the Bank has retained much of its control over repricing.

The Bank conducts the rate sensitivity analysis through
the use of a simulation model which also monitors earnings at risk by projecting earnings of the Bank based upon an economic forecast of the most likely interest rate movement. The model also calculates earnings of the Bank based upon what are
estimated to be the largest foreseeable rate increase and the largest foreseeable rate decrease. Such analysis translates interest rate movements and the Banks rate sensitivity position into dollar amounts by which earnings may fluctuate as a
result of rate changes. A 2% immediate increase in interest rates would increase earnings by 21.7% and a 2% immediate decrease in interest rates would decrease earnings by 21.4%.

The data included in the table that follows indicates that the Bank is asset sensitive within one year. Generally, an asset sensitive gap could negatively affect net interest income in an environment of decreasing
interest rates as a greater amount of interest bearing assets could be repricing at lower rates. During times of rising interest rates, an asset sensitive gap could positively affect net interest income as rates would be increased on a larger volume
of assets as compared to deposits. As a result, interest income would increase more rapidly than interest expense. A liability sensitive gap indicates that declining interest rates could positively affect net interest income as expense of
liabilities would decrease more rapidly than interest income would decline. Conversely, rising rates could negatively affect net interest income as income from assets would increase less rapidly than deposit costs. Although rate sensitivity analysis
enables the Bank to minimize interest rate risk, the magnitude of rate increases or decreases on assets versus liabilities may not correlate directly. As a result, fluctuations in interest spreads can occur even when repricing capabilities are
perfectly matched.

It is the policy of the Bank to generally maintain a gap ratio within a range that is minus 10 percent to plus 20 percent of total
assets for the time horizon of one year. When Management believes that interest rates will increase it can take actions to increase the RSA/RSL ratios. When Management believes interest rates will decline, it can take actions to decrease the RSA/RSL
ratio.

During 2005, the Banks focus was on spreading out the maturities of time deposits within the one to five year time frame while continuing to
make variable rate loans. The above strategy was implemented to better position the Bank for rate changes in a rising rate environment. The Banks asset/liability management focus for 2005 will include improving the Banks rate sensitivity
gap. As noted above, at December 31, 2005 the Bank was asset sensitive; however, the cumulative rate sensitivity gap was such that the Banks earnings and capital should not be materially affected by the repricing of assets and liabilities
due to decreases in interest rates in 2006.



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##### Table of Contents

Changes in market interest rates can also affect the Banks liquidity position through the impact rate changes may
have on the market value of the Banks investment portfolio. Rapid increases in market rates can negatively impact the market values of investment securities. As securities values decline it becomes more difficult to sell investments to meet
liquidity demands without incurring a loss. The Bank can address this by increasing liquid funds, which may be utilized to meet unexpected liquidity needs when a decline occurs in the value of securities.



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##### Table of Contents

The following table presents the Banks interest rate sensitivity gap position as of December 31, 2005 (dollars
in thousands):

INTEREST RATE SENSITIVITY GAPS

(IN THOUSANDS)



|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|-------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ---------- | - | ------ | ----- |  | - | ------ | - |  | - | -------
|                                                                                 |  | 2006 |         |   | 2007 |   |         | 2008 |  |   | 2009    |   |  | 2010 |         |   | Thereafter |   |        | Total
|Interest-earnings assets:                                                        |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Loans:                                                                           |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Fixed                                                                            |  | $    | 13,951  |   |      | $ | 6,125   |      |  | $ | 3,898   |   |  | $    | 2,473   |   |            | $ | 988    |       |  | $ | 4,667  |   |  | $ | 32,102 
|Variable                                                                         |  |      | 174,834 |   |      |   | 486     |      |  |   | 1,186   |   |  |      | 13      |   |            |   | 280    |       |  |   |       |   |  |   | 176,799
|Securities:                                                                      |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Fixed                                                                            |  |      | 5,555   |   |      |   | 7,344   |      |  |   | 7,336   |   |  |      | 5,858   |   |            |   | 5,275  |       |  |   | 13,710 |   |  |   | 45,078 
|Variable                                                                         |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |       |       |  |   |       |   |  |   |       
|Other interest-earning assets                                                    |  |      | 18,395  |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |       |       |  |   |       |   |  |   | 18,395 
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Total interest-earning assets                                                    |  |      | 212,735 |   |      |   | 13,955  |      |  |   | 12,420  |   |  |      | 8,344   |   |            |   | 6,543  |       |  |   | 18,377 |   |  |   | 272,374
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Interest-bearing liabilities:                                                    |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Demand and savings deposits                                                      |  |      | 27,440  |   |      |   | 27,440  |      |  |   | 27,440  |   |  |      | 27,440  |   |            |   |       |       |  |   |       |   |  |   | 109,760
|Time deposits:                                                                   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Fixed                                                                            |  |      | 66,892  |   |      |   | 19,217  |      |  |   | 11,994  |   |  |      | 8,858   |   |            |   | 2,930  |       |  |   | 19     |   |  |   | 109,910
|Variable                                                                         |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |       |       |  |   |       |   |  |   |       
|Short-term borrowings                                                            |  |      | 3,610   |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |       |       |  |   |       |   |  |   | 3,610  
|FHLB advances                                                                    |  |      | 2,719   |   |      |   | 692     |      |  |   | 670     |   |  |      | 652     |   |            |   | 569    |       |  |   | 687    |   |  |   | 5,989  
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Total interest-bearing liabilities                                               |  |      | 100,661 |   |      |   | 47,349  |      |  |   | 40,104  |   |  |      | 36,950  |   |            |   | 3,499  |       |  |   | 706    |   |  |   | 229,269
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Interest rate sensitivity gap                                                    |  |      | 112,074 |   |      |   | (33,394 | )    |  |   | (27,684 | ) |  |      | (28,606 | ) |            |   | 3,044  |       |  |   | 17,671 |   |  |   |        
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Cumulative rate sensitivity gap                                                  |  | $    | 112,074 |   |      | $ | 78,680  |      |  | $ | 50,996  |   |  | $    | 22,390  |   |            | $ | 25,434 |       |  | $ | 43,105 |   |  |   |        
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        
|Cumulative interest rate sensitivity gap as a percent of interest earning assets |  |      | 41.15   | % |      |   | 28.89   | %    |  |   | 18.72   | % |  |      | 8.22    | % |            |   | 9.34   | %     |  |   | 15.83  | % |  |   |        
|                                                                                 |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |            |   |        |       |  |   |        |   |  |   |        



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##### Table of Contents

Item 8 Financial Statements and Supplementary Data

The report of independent auditors, consolidated financial
statements and selected quarterly financial data included in the Annual Report to shareholders of Killbuck Bancshares, Inc. for the year ended December 31, 2005, included in this report as Exhibit 13, are incorporated herein by reference.

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

The Company has carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Companys President and Chief Executive Officer and Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the President and Chief Executive Officer and Vice President and Chief Financial Officer concluded that the Companys disclosure controls and procedures
are effective, as of the end of the period covered by this report, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings.

Disclosure controls and procedures are the control and other procedures of the Company that are designed to ensure that the information required to be
disclosed by the Company in its reports or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchanges Commissions rules and forms.

There was no change in the Companys internal control over financial reporting that occurred during the Companys fiscal quarter ended December 31, 2005
that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

PART III

Item 10 Directors and Executive Officers of Registrant

The following table lists the Executive Officers of the
Company and its subsidiary, Killbuck Savings Bank Company, and certain other information with respect to each individual, as of December 31, 2005. The information required by this item with respect to Directors and other executive officers of
the Company and its subsidiary, Killbuck Savings Bank Company, is incorporated herein by reference to the information under the heading Election of Directors and Information with Respect to Directors and Officers in the Proxy Statement
of the Company. The information required regarding disclosure of any known late filings or failure by an insider to file a report required by Section 16(a) of the Securities Exchange Act is incorporated herein by reference to the information
under the heading Compliance with Section 16(a) of the Securities Exchange Act of 1934 in the Proxy Statement of the Company.



|                 |  |     |  |                                                                                                                                               
|---------------- |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|Name             |  | Age |  | All Positions with Company and Bank                                                                                                           
|Luther E. Proper |  | 56  |  | President and CEO of the Company and the Bank since 1991. Vice-chairman of the Board of Directors of both the Company and the Bank since 2001.
|                 |  |    
|Craig A. Lawhead |  | 48  |  | Vice president and treasurer of Company since 1992; Executive vice president of bank since 1991.                                              
|                 |  |    
|Diane S. Knowles |  | 43  |  | Vice president and secretary of Company since July, 2000; Senior vice president and Chief Financial Officer of Bank since June, 2000.         



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##### Table of Contents

The Board of Directors has determined that the Company does not have an audit committee financial expert serving on its
audit committee. However, the Board of Directors has determined that each audit committee member has sufficient knowledge in financial and auditing matters to serve on the committee. At this time, the Board does not believe it is necessary to
actively search for an outside person to serve on the Board who would qualify as a financial expert.

The Company has adopted a code of ethics that applies
to its principal executive, financial and accounting officers. A copy of the code of ethics is posted on the Companys web site at http://www.killbuckbank.com/bank.cfm. In the event we make any amendment to, or grant any waiver of, a
provision of the code of ethics that applies to the principal executive, financial or accounting officer, or any person performing similar functions, that requires disclosure under applicable SEC rules, we intend to disclose such amendment or
waiver, the nature of and reasons for it, along with the name of the person to whom it was granted and the date, on our internet website.

Item 11 Executive Compensation

Information required by this item is incorporated herein by reference to the
information under the heading Executive Compensation and Other Information in the Proxy Statement of the Company.

Item 12 Security Ownership of Certain Beneficial Owners and Management

Information required by this item is
incorporated herein by reference to the information under the heading Security Ownership of Certain Beneficial Owners and Management in the Proxy Statement of the Company. The Company currently has no equity compensation plans or
arrangements, such as stock option or restricted stock arrangements, pursuant to which equity securities of the Company are authorized for issuance.

Item 13 Certain Relationships and Related Transactions

Information required by this item is incorporated herein by
reference to the information under the heading Certain Relationships and Related Transactions in the Proxy Statement of the Company and in Note 4 of the Notes to Consolidated Financial statements included in the Annual Report to
Shareholders for the year ended December 31, 2005, included in this report as Exhibit 13, and incorporated herein by reference.

Item 14 Principal Accountant Fees and Services

Information required by this item is incorporated here in by reference
to the information under the heading Audit Committee Report in the Proxy Statement of the Company.



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##### Table of Contents

PART IV

Item 15 Exhibits, Financial Statement Schedules and Reports on Form 8

Financial Statements and Schedules

The following consolidated financial statements of Killbuck Bancshares, Inc. and subsidiary, included in the Annual Report to Shareholders for the
year ended December 31, 2005, are incorporated by reference in item 8:

Report of Independent Registered Public
Accounting Firm

Consolidated Balance Sheet at December 31, 2005 and 2004

Consolidated Statement of Income for the Years ended December 31, 2005, 2004 and 2003

Consolidated Statement of Changes in Shareholders Equity for the Years ended December 31, 2005, 2004 and 2003

Consolidated Statement of Cash Flows for the Years ended December 31, 2005, 2004 and 2003

Notes to Consolidated Financial Statements

Schedules are omitted because they are inapplicable, not required, or the information is included in the consolidated financial statements or notes thereto.



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##### Table of Contents

Exhibits

The following exhibits are filed herewith and/or are incorporated herein by reference.



|              |  |                                                                                                                        
|------------- |  | -----------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                            
|3(i)          |  | Certificate and Articles of Incorporation of Killbuck Bancshares, Inc.*                                                
|              | 
|3(ii)         |  | Code of regulations of Killbuck Bancshares, Inc.*                                                                      
|              | 
|10.1          |  | Employment Agreement dated April 25, 2005 between Killbuck Savings Bank Company and Luther E. Proper.                  
|              | 
|10.2          |  | Employment Agreement dated April 25, 2005 between Killbuck Savings Bank Company and Craig A. Lawhead.                  
|              | 
|10.3          |  | Employment Agreement dated April 25, 2005 between Killbuck Savings Bank Company and Diane S. Knowles.                  
|              | 
|12            |  | Statement regarding computation of ratios.                                                                             
|              | 
|13            |  | Portions of the 2005 Annual Report to Shareholders                                                                     
|              | 
|21            |  | Subsidiary of the Holding Company.*                                                                                    
|              | 
|31.1          |  | Section 302 Certification                                                                                              
|              | 
|31.2          |  | Section 302 Certification                                                                                              
|              | 
|32.1          |  | Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003.
|              | 
|32.2          |  | Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003.

---

|* | Incorporated by reference to an identically numbered exhibit to the Form 10 (File No. 000-24147) filed with SEC on April 30, 1998 and subsequently amended on July 8, 1998
and July 31, 1998.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SIGNATURES

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



|                                               |  |                          
|---------------------------------------------- |  | -------------------------
|                                               |  | Killbuck Bancshares, Inc.
|                                               | 
|                                               |  | (Registrant)             
|                                               | 
|By:                                            |  | /s/ Luther E. Proper     
|Luther E. Proper                              
|President and Chief Executive Officer/Director
|(Duly authorized representative)              

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



|                                        |  |  |  |                                                 |  |               
|--------------------------------------- |  |  |  | ----------------------------------------------- |  | --------------
|Signatures                              |  |  |  | Description                                     |  | Date          
|                                        |  |  | 
|/s/ Luther E. Proper Luther E.
Proper   |  |  |  | President, Chief Executive Officer and Director |  | March 23, 2006
|                                        |  |  | 
|/s/ John W. Baker John W.
Baker         |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Ted Bratton Ted
Bratton             |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Richard L. Fowler Richard L.
Fowler |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Allan R. Mast Allan R.
Mast         |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Max A. Miller Max A.
Miller         |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Dean J. Mullet Dean J.
Mullet       |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Kenneth E. Taylor Kenneth E.
Taylor |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Michael S. Yoder Michael S.
Yoder   |  |  |  | Director                                        |  | March 23, 2006
|                                        |  |  | 
|/s/ Diane S. Knowles Diane S.
Knowles   |  |  |  | Chief Financial and Chief Accounting Officer    |  | March 23, 2006