<PAGE>
                           KILLBUCK BANCSHARES, INC.


CORPORATE PROFILE

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
Bank, for the purpose of becoming a bank holding company by acquiring all of
the outstanding shares of The Killbuck Savings Bank Company.  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 November of 1900.  The Bank is headquartered in Killbuck,
Ohio, which is located in the northeast portion of Ohio, in Holmes County.
The Bank is insured by the Federal Deposit Insurance Corporation, and is
regulated by the Ohio Division of Financial Institutions and the Board of
Governors of the Federal Reserve System.

The Bank provides customary retail and commercial banking services to its
customers, including checking and savings accounts, time deposits,
interest-bearing accounts, safe deposit facilities, real estate mortgage
loans and consumer loans.  The Bank also makes secured and unsecured
commercial loans.

STOCK MARKET INFORMATION

There is no established public trading market for our common stock and our
shares are not listed on any exchange.  Sale price information is based on
information reported to us by individual buyers and sellers of our stock.  The
following table summarizes the high and low prices and dividend information
for 1999 and 1998, adjusted for the five for one stock split on May 1, 1998.
Cash dividends are paid on a semi-annual basis.

                                                             Cash
                                                           Dividends
  Quarter Ended             High              Low            Paid
-----------------         -------           -------        ---------
1999      March 31        $ 92.88           $ 92.03              N/A
          June 30           94.47             93.48              .60
          September 30      94.87             93.62              N/A
          December 31       96.33             96.12              .65

1998      March 31        $ 69.50           $ 69.50              N/A
          June 30         Unknown           Unknown              .50
          September 30      82.63             82.63              N/A
          December 31       90.56             85.31              .55

At December 31, 1999 the Company had approximately 975 shareholders of record.

                                     6

<PAGE>
SELECTED FINANCIAL DATA

The following table sets forth general information and ratios of the Company
at the dates indicated (in thousands except per share data and shares).
<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                        ---------------------------------------------------------
                                           1999        1998        1997       1996        1995
                                        ----------  ----------  ---------- ----------  ----------
<S>                                     <C>         <C>         <C>        <C>         <C>
For The Year:
     Total interest income              $   17,069  $   16,024  $   15,224  $  13,982  $   12,811
     Total interest expense                  8,201       7,892       7,344      6,626       5,816
                                        ----------  ----------  ---------- ----------  ----------
          Net interest income                8,868       8,132       7,880      7,356       6,995
     Provision for loan losses                 240         183         180        180         180
                                        ----------  ----------  ---------- ----------  ----------
          Net interest income after
           provision for loan losses         8,628       7,949       7,700      7,176       6,815
     Total other income                        646         558         449        439         411
     Total other expense                     5,319       4,574       4,036      3,799       3,610
                                        ----------  ----------  ---------- ----------  ----------
        Income before
           income taxes                      3,955       3,933       4,113      3,816       3,616
     Income tax expense                        937       1,017       1,108      1,069         989
                                        ----------  ----------  ---------- ----------  ----------
          Net income                    $    3,018  $    2,916  $    3,005  $   2,747  $    2,627
                                        ==========  ==========  ========== ==========  ==========

Per share data
     Net earnings (1)                      $ 4.28       $ 4.37      $ 4.52     $ 4.10      $ 3.89
     Dividends (1)                         $ 1.25       $ 1.05      $ 0.92     $ 0.76      $ 0.65
     Book value (at period end)(1)         $41.00       $38.90      $33.48     $29.86      $27.06

Average no. of shares outstanding (1)     705,331      666,779     665,215    669,465     675,000

Year-end balances:
     Total loans                        $  143,777  $  137,891  $  122,034  $ 116,259  $  107,255
     Securities                             76,736      66,777      58,477     51,208      42,171
     Total assets                          243,150     231,994     197,909    182,692     172,522
     Deposits                              201,738     192,079     163,809    157,399     150,413
     Borrowings                             12,013      11,922      11,455      4,815       3,329
Shareholders' equity                        28,917      27,437      22,158     19,934      18,266

Significant ratios:
     Return on average assets                 1.29%       1.40%       1.55%      1.56%       1.66%
     Return on average equity                10.69       12.35       14.26      14.57       15.20
     Dividends per share to net
      income per share                       29.21       24.03       20.35      18.54       16.71
     Average equity to
      average assets                         12.05       11.32       10.86      10.73       10.93
     Loans to deposits                       71.27       71.79       74.50      73.86       71.31
     Allowance for loan
      loss to total loans                     1.31        1.34        1.43       1.42        1.44
</TABLE>
(1)     Adjusted for 5 for 1 stock split in 1998.

                                             7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Killbuck Bancshares, Inc. ("Killbuck" or the "Company") is the parent holding
company for the Killbuck Savings Bank Company (the "Bank").  The following
discussion and analysis is intended to provide information about the
financial condition and results of operation of the Company and should be
read in conjunction with the audited Consolidated Financial Statements,
footnotes and other discussions appearing elsewhere in this annual report and
the Company's Form 10-K.

Certain information presented in this discussion and analysis and other
statements concerning future performance, developments or events, and
expectations for growth and market forecasts constitute forward-looking
statements which are subject to a number of risks and uncertainties,
including interest rate fluctuations, changes in local or national economic
conditions, and government and regulatory actions which might cause actual
results to differ materially from stated expectations or estimates.

OVERVIEW

The reported results of the Company are dependent on a variety of factors,
including the general interest rate environment, competitive conditions in
the industry, governmental policies and regulations and conditions in the
markets for financial assets.  We are not aware of any market or
institutional trends, events or uncertainties that are expected to have a
material effect on liquidity, capital resources or operations.  Net interest
income is the largest component of net income, and consists of the difference
between income generated on interest-earning assets and interest expense
incurred on interest-bearing liabilities.  Net interest income is primarily
affected by the volume, interest rates and composition of interest-earning
assets and interest-bearing liabilities.

During 1998, we completed the merger of Commercial and Savings Bank Company of
Danville, Ohio with, and into the Bank.  This merger will allow us to better
serve our existing clients in this area, while allowing us the opportunity to
attract new customers from the Danville area.

In 1999 construction began on a new branch facility in Sugarcreek, Ohio.  The
branch opened for business in February, 2000.  This new location will give us
a presence in the Sugarcreek, Ohio area and allows us to develop new business
and deposit relationships in this area.


RESULTS OF OPERATIONS

SUMMARY

For 1999, we recorded net income of $3.0 million compared to $2.9 million for
1998 and $3.0 million for 1997.

Other operating income was $646,000 for 1999 compared to $558,000 for 1998 and
$449,000 for 1997.

Total other operating expenses were $5.3 million in 1999 compared to $4.6
million in 1998 and $4.0 million in 1997.

Earnings per share for 1999 were $4.28 compared to $4.37 for 1998 and $4.52
for 1997.  These earnings per share are adjusted for the 5 for 1 stock split
in 1998.

                                         8
<PAGE>

NET INTEREST INCOME

Our net interest income increased by $736,000 in 1999 from 1998 and $252,000
in 1998 from 1997.

Total interest income increased by $1,045,000 or 6.52% for 1999 from 1998.
The increase of $1,045,000 for 1999 resulted primarily from an increase of
$655,000 in interest income on loans and $461,000 in interest income on
investment securities.  The increases in loan and investment security interest
income resulted primarily from increases in the average outstanding balances
of the loan and investment portfolios of $13.0 million and $10.5 million
respectively.

The increase in loan volume served to offset the reduction in the current
yield on the loan portfolio which declined .41 basis points to 9.06%.  The
decline in yield is due to a general decline in long-term interest rates,
combined with increased competition for loan customers.

Total interest income increased by $800,000 or 5.26% for 1998 from 1997 due
mainly to an increase in the average outstanding balance of the loan and
federal funds sold of $7.6 million and $5.2 million respectively.

The yield on earning assets was 7.70%, 8.06% and 8.26% for 1999, 1998 and 1997
respectively.  The decrease in the yield on earning assets is attributable to
the general decline in interest rates and increased competition for loans.

Interest expense for 1999 increased by $308,000 from 1998 and by $548,000 for
1998 from 1997.  These increases were due mainly to increases in the average
volume of interest bearing liabilities which rose $17.3 million during 1999
and $10.7 million during 1998.  The average volume of time deposits and
interest bearing demand deposits increased $9.9 million and $5.4 million
respectively in 1999 while time deposits, interest bearing demand deposits,
and Federal Loan Bank advances increased $6.9 million, $1.2 million and $2.3
million respectively for 1998.

The cost on interest bearing liabilities was 4.55% for 1999 and 4.85% for
1998, and 4.83% for 1997.  The decrease for 1999 is due mainly to a decrease
in the cost of time deposits of .34 basis points.

Due mainly to a decrease in the yield on total earning assets, the net yield
on earning assets has decreased the last three years.  The net yield on
interest earning assets was 4.00%, 4.09% and 4.27% for 1999, 1998 and 1997
respectively.

The following table sets forth, for the periods indicated, information
regarding the total dollar amounts of interest income from average
interest-earning assets and the resulting yields, the total dollar amount of
interest expense on average interest-bearing liabilities and the resulting
rate paid, net interest income, interest rate spread and the net yield on
interest-earning assets (dollars in thousands):

                                  9
<PAGE>
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
<TABLE>
<CAPTION>
                                                  For the Year Ended December 31
                          ----------------------------------------------------------------------------------
                                      1999                      1998                         1997
                          -------------------------- --------------------------  --------------------------
                          Average             Yield/  Average            Yield/  Average             Yield/
                          Balance   Interest   Rate   Balance  Interest   Rate   Balance   Interest   Rate
                          --------  --------  ------ --------  --------  ------  --------  --------  ------
<S>                       <C>       <C>        <C>    <C>      <C>        <C>    <C>       <C>        <C>
Assets
Interest earning assets:
  Loans (1)(2)(3)         $140,202  $ 12,698   9.06% $127,214  $ 12,043   9.47%  $119,552  $ 11,490   9.61%
  Securities-taxable (4)    38,778     2,309   5.95%   33,800     2,070   6.12%    36,389     2,296   6.31%
  Securities-nontaxable     30,345     1,420   4.68%   24,857     1,201   4.83%    20,641     1,001   4.85%
  Securities-equity (4)(5)   1,137        72   6.33%    1,078        70   6.49%     1,008        65   6.45%
  Federal funds sold        11,115       570   5.13%   11,904       640   5.38%     6,749       372   5.51%
                          --------  --------         --------  --------          --------  --------
    Total interest-
     earnings assets       221,577    17,069   7.70%  198,853    16,024   8.06%   184,339    15,224   8.26%
                                    --------                   --------                    --------
Noninterest-earning assets
     Cash and due from
      other Institutions     7,292                      6,625                       6,144
     Premises and equipment,
      net                    3,533                      2,891                       2,888
     Accrued interest        1,301                      1,164                       1,549
     Other assets            2,515                        842                         697
     Less allowance for
      loan losses           (1,939)                    (1,810)                     (1,694)
                          --------                   --------                    --------
          Total           $234,279                   $208,565                    $193,923
                          ========                   ========                    ========

                                          10
<PAGE>
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (CONTINUED)

</TABLE>
<TABLE>
<CAPTION>
                                                                      For the Year Ended December 31
                                             ----------------------------------------------------------------------------------
                                                        1999                      1998                      1997
                                             -------------------------- --------------------------  --------------------------
                                             Average             Yield/  Average            Yield/  Average             Yield/
                                             Balance   Interest   Rate   Balance  Interest   Rate   Balance   Interest   Rate
                                             --------  --------  ------ --------  --------  ------  --------  --------  ------

     <S>                                     <C>         <C>   <C>       <C>        <C>   <C>       <C>         <C>   <C>
Liabilities and Shareholders
 Equity
Interest bearing liabilities:
  Interest bearing demand                    $ 27,102  $    691   2.55%   21,655  $    549   2.54%  $ 20,464      523  2.56%
  Money market accounts                        11,364       401   3.53%   15,364       620   4.04%    16,894      684  4.05%
  Savings deposits                             26,583       829   3.12%   19,745       589   2.98%    19,421      552  2.84%
  Time deposits                               104,202     5,660   5.43%   94,289     5,437   5.77%    87,375    5,091  5.83%
  Short term borrowings                         3,090        86   2.78%    2,637        79   3.00%     1,147       39  3.40%
  Federal Home Loan Bank Advances               7,805       534   6.84%    9,132       618   6.77%     6,789      455  6.70%
                                             --------  --------         --------  --------          --------  --------
    Total interest bearing liabilities        180,146     8,201   4.55%  162,822     7,892   4.85%   152,090    7,344  4.83%

Noninterest bearing liabilities:
     Demand deposits                           25,144                     21,290                      20,174
     Accrued expenses and other  liabilities      751                        838                         592

Shareholder's equity                           28,238                     23,615                      21,067
                                              -------                    -------                     -------
          Total                              $234,279                   $208,565                    $193,923
                                              =======                    =======                     =======
Net interest income                                    $  8,868                   $  8,132                    $  7,880
                                                       ========                   ========                     =======
Interest rate spread (6)                                          3.15%                      3.21%                       3.43%
                                                                 ======                     ======                      ======
Net yield on interest earning assets (7)                          4.00%                      4.09%                       4.27%
                                                                 ======                     ======                      ======
</TABLE>
(1)     For purposes of these computations, the daily average loan amounts
        outstanding are net of deferred loan fees.
(2)     Included in loan interest income are loan related fees of $252,742,
        $217,604, and $210,030 in 1999, 1998 and 1997, respectively.
(3)     Nonaccrual loans are included in loan totals and do not have a
        material impact on the information presented.
(4)     Average balance is computed using the carrying value of securities.
        The average yield has been computed using the historical amortized
        cost average balance for available for sale securities.
(5)     Equity securities is comprised of common stock of the Federal Home
        Loan Bank, Federal Reserve Bank and Independent State Bank of Ohio.
(6)     Interest rate spread represents the difference between the average
        yield on interest earning assets and the average cost of interest
        bearing liabilities.
(7)     Net yield on interest earning assets represents net interest income
        as a percentage of average interest earning assets.

                                     11
<PAGE>


RATE/VOLUME ANALYSIS

The table below sets forth certain information regarding changes in interest
income and interest expense of the Company for the periods indicated.  For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (I) changes in volume
(changes in average volume multiplied by old rate) and (ii) changes in rates
(changes in rate multiplied by old average volume).  Changes which are not
solely attributable to rate or volume are allocated to changes in rate due to
rate sensitivity of interest-earning assets and interest-bearing liabilities
(dollars in thousands).
<TABLE>
<CAPTION>
                                       1999 Compared to 1998                1998 Compared to 1997
                                 ---------------------------------   -----------------------------------
                                     Increase (Decrease) Due To           Increase (Decrease) Due To
                                 ---------------------------------   -----------------------------------
                                   Volume       Rate        Net         Volume      Rate        Net
                                 ----------  ----------  ---------   ----------  ----------  ----------
<S>                              <C>         <C>         <C>          <C>        <C>         <C>
Interest income
     Loans                       $   1,230   $    (575)  $    655     $    736   $    (183)  $     553
     Securities-taxable                305         (66)       239         (163)        (63)       (226)
     Securities-nontaxable             265         (46)       219          207          (7)        200
     Securities-equities                 4          (2)         2            4           1           5
     Federal funds sold                (42)        (28)       (70)         284         (16)        268
                                 ----------  ----------  ---------   ----------  ----------  ----------
          Total interest earning
           Assets                    1,762        (717)     1,045        1,068        (268)        800
                                 ----------  ----------  ---------   ----------  ----------  ----------
Interest expense
     Interest bearing demand           138           4        142           30          (4)         26
     Money market accounts            (162)        (57)      (219)         (61)         (3)        (64)
     Savings deposits                  204          36        240            9          28          37
     Time deposits                     572        (349)       223          403         (57)        346
     Short-term borrowing               14          (7)         7           51         (11)         40
     Federal Home Loan Bank
      Advances                         (90)          6        (84)         157           6         163
                                 ----------  ----------  ---------   ----------  ----------  ----------
           Total interest bearing
           Liabilities                 676        (367)       309          589         (41)        548
                                 ----------  ----------  ---------   ----------  ----------  ----------
Net change in interest income    $   1,086   $    (350)  $    736     $    479   $    (227)  $     252
                                 =========   ==========  =========   ==========  ==========  ==========

</TABLE>
PROVISION FOR LOAN LOSSES

The provision for loan losses was $240,000 for 1999, $183,000 for 1998 and
$180,000 for 1997.  We make 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 allowance for loan losses as a percent of total loans was 1.31%, 1.34%
and 1.43% for 1999, 1998 and 1997 respectively.

OTHER INCOME

Other income, which is comprised principally of fees and charges on
customers' deposit accounts, increased $88,000 or 15.9% to $646,000 in 1999
from $558,000 in 1998, and increased $108,000 or 24.02% in 1998 from 1997.
Service charges on customer accounts increased $75,000 or 18.31% in 1999 due
to increased deposit activity caused by the merger of Commercial and Savings
Bank Company in late 1998 and increases in new deposit accounts.  The Bank
started to sell fixed rate loans in the secondary market in late 1997.  Gains
for these sales were $42,000 in 1999, $42,000 in 1998 and $2,000 in 1997.
Income from the alternative investment service the Bank introduced in 1997
was $32,000 for 1999 and $31,000 for 1998 and $11,000 for 1997.

                                  12
<PAGE>

OTHER EXPENSE

Other expense increased $745,000 or 16.28% to $5.3 million in 1999 as
compared to $4.6 million in 1998 and increased $538,000 or 13.34% for 1998
from $4.0 million in 1997.

Salary and employee benefits for 1999 totaled $2.6 million, an increase of
$313,000 or 13.61% from $2.3 million in 1998 and increased $273,000 for 1998
or 13.47% from $2.0 million in 1997.  This increase represents the effect of
a full year's expense associated with new employees due to the merger with
Commercial and Savings Bank Company in November, 1998 and normal recurring
employee cost increases for annual salary increases, staff additions and
employee benefits for 1999.  The increase for 1998 was due to an increase in
hospitalization insurance costs, effect of a part year's expense associated
with new employees due to the merger in November, 1998 and normal recurring
employee cost increases for annual salary increases, staff additions and
employee benefits.  For 2000, in addition to normal recurring salary, benefit
adjustments and staff additions, it is expected salary and benefit costs will
increase due to additional employees for the new branch office in Sugarcreek,
Ohio.

Occupancy and equipment expense increased $97,000 in 1999 and $27,000 in
1998.  The increase in expense during 1999 was attributable to a full year of
occupancy and equipment expense on the Danville branch and additional
improvements and equipment purchases for operations in 1999.  For 1998, the
increases were attributable to normal and recurring items.  For 2000, it is
expected occupancy and equipment expense will increase due to the addition of
the new branch office in Sugarcreek, Ohio.

Other expenses for 1999 totaled $2.0 million, a $334,000 or 20.51% increase
from the $1.6 million reported in 1998 and a $238,000 or 17.09% increase for
1998 from the 1997 total of $1.4 million.  The major increases in 1999 were
in professional fees of $70,000 and other expenses of $225,000.  The increase
in professional fees of $70,000 is mainly attributed to costs associated with
the completion of the merger and costs of becoming a securities and exchange
registrant.   The increase in other expense is due mainly to the recognition
of a full year of goodwill amortization associated with the merger and
increases in normal and recurring expenses associated with a new branch and
existing branches.  The increase of $238,000 in 1998 from 1997 in other
expenses is attributable to increases in normal and recurring items and
recognition of a partial year of amortization of goodwill and other costs
associated with the merger .  For 2000, in addition to normal recurring
increases, other expense is expected to increase due to the addition of the
new branch in Sugarcreek, Ohio.

INCOME TAX EXPENSE

Income tax expense decreased by $79,000 for 1999 to $937,000 from $1.0
million in 1998 and decreased $92,000 in 1998 from $1.1 million in 1997.  The
effective rate on taxes for 1999, 1998 and 1997 was 23.7%, 25.9% and 26.9%
respectively.  The effective tax rate is affected by the amount of tax exempt
income earned by the Company each year.

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 1999 AND 1998

Total assets at December 31, 1999 amounted to $243.2 million, an increase of
$11.2 million compared to $232.0 million at December 31,1998.

Cash and cash equivalents decreased $5.3 million or 24.12% from December 31,
1998 to December 31, 1999, with liquid funds held in the form of federal
funds sold decreasing $6.5 million.  The decrease in federal funds sold at
December 31, 1999 was used to help fund loan and investment growth in 1999.

Total investment securities increased $9.9 million or 14.91% from December
31, 1998 to December 31, 1999.  The increase in investments was funded by the
increase in deposits and the decrease in federal funds in 1999.  Information
detailing the book value of the investment portfolio by security type and
classification is present in Note 4 to the consolidated financial statements.

Total loans were $143.8 million at December 31, 1999 an increase of $5.9
million or 4.27% from $137.9 million at December 31, 1998.  Of this $5.9
million increase approximately $5.0 million was in the consumer and credit
loan portfolio.  Of this $5.0 million increase, vehicle loans increased $2.1
million and consumer loans on vacant land increased $2.7 million.  Late in
1997 we began to offer residential mortgage customers a new fixed rate
product.  This program enables us to offer competitive long-term fixed rates.
These loans are made with the intent to sell in the secondary loan market.
We originated and sold $4.7 million and $4.9 million of loans in 1999 and
1998.  Profit on the sale of these loans was $42,000 for both 1999 and 1998.
Information detailing the composition of the loan portfolio is presented in
Note 5 to the consolidated financial statements.

                                    13

<PAGE>
Total deposits increased $9.7 million or 5.03% from December 31, 1998 to
December 31, 1999.  All deposit accounts increased with the exception of
money market accounts.  The increases are attributable to new deposit account
growth and internal growth for existing accounts.  The decrease in money
market accounts of $3.4 million in 1999 is due to a decrease in public fund
accounts.  See also, "Average Balance Sheets and Net Interest Analysis" for
information related to the average amount and average interest paid on
deposit accounts during 1999 and 1998.  Information related to the maturity
of time deposits of $100,000 and over at December 31, 1999 is presented in
Note 8 of the accompanying consolidated financial statements.

Advances were $7.1 million and $8.6 million at December 31, 1999 and 1998
respectively.  These borrowings were used to fund fixed rate residential real
estate loans with similar maturities.  New borrowings totaled $-0- and $1.5
million in 1999 and 1998 respectively.

Shareholders' equity increased $1.5 million during 1999 to $28.9 million at
December 31, 1999 from $27.4 million at December 31, 1998.  This increase was
the result of an increase of $2.1 million in net retained earnings during the
year and an unrealized loss on securities available for sale of $.6 million.

MARKET RISK AND ASSET/LIABILITY MANAGEMENT

Our primary market risk exposure is interest rate risk and, to a lesser
extent, liquidity risk.  Because of the nature of our operations, we are not
subject to currency exchange or commodity price risk and, since we have no
trading portfolio, it is not subject to trading risk.  Currently, we have
equity securities that represent only 1.51% of its investment portfolio and,
therefore, equity price risk is not significant.

We actively manage interest rate sensitivity and asset/liability products
through an asset/liability management committee.  The principle objectives 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, we have
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, we have originated adjustable-rate loans and
as of December 31, 1999, they comprised approximately 62% of the total loan
portfolio.

LIQUIDITY

Liquidity represents our ability to meet normal cash flow requirements of our
customers for the funding of loans and repayment of deposits.  Liquidity is
generally derived from the repayments and maturities of loans and investment
securities, and the receipt of deposits.  Management monitors liquidity
daily, and on a monthly basis incorporates liquidity management into its
asset/liability program.

Operating activities, as presented in the statement of cash flows in the
accompanying consolidated financial statements, provided $3.4 and $3.2
million in cash during 1999 and 1998 respectively, generated principally from
net income and depreciation and amortization.

Investing activities consist primarily of loan originations and repayments,
and investment purchases and maturities.  These activities used $17.6 million
in funds during 1999, principally for the net funding of loans and the net
purchase of investments totaling $6.1 million and $11.0 million respectively.
For 1998, investing activities used $9.6 million, principally for the net
funding of loans and the net purchase of investments totaling $5.2 million
and $5.4 million respectively, offset by $1.3 million of cash acquired in the
merger.

                                  14

<PAGE>

Financing activities consisted of the solicitation and repayment of customer
deposits, borrowings and repayments and the payment of dividends.  For 1999,
financing activities provided $8.9 million, comprised mainly of net deposit
increases of $9.7 million, repayment of Federal Home Loan Bank advances of
$1.5 million, net short-term borrowings increases of $1.6 million and payment
of dividends of $.9 million.  For 1998 financing activities provided $14.0
million, comprised mainly of net deposit increases of $14.3 million, net
Federal Home Loan Bank advance repayments of $.2 million, net short-term
borrowing increases of $.6 million and payment of dividends of $.7 million.

In addition to using the loan, investment and deposit portfolios as sources
of liquidity, we have  access to funds from the Federal Home Loan Bank of
Cincinnati.  We also have a ready source of funds through the
available-for-sale component of the investment securities portfolio.

CAPITAL RESOURCES

Capital adequacy is our ability to support growth while protecting the
interests of shareholders and depositors.  Bank regulatory agencies have
developed certain capital ratio requirements, which are used to assist them in
monitoring the safety and soundness of financial institutions.  We
continually monitor these capital requirements and believe the Company to be
in compliance with these regulations at December 31, 1999.

Our regulatory capital position at December 31, 1999, as compared to the
minimum regulatory capital requirements imposed on us by banking regulators
at that date is presented in Note 16 of the accompanying consolidated
financial statements.  We are not aware of any actions contemplated by
banking regulators which would result in us being in non-compliance with
capital requirements.

IMPACT OF INFLATION CHANGING PRICES

The consolidated financial statements and the accompanying notes presented
elsewhere in this document, have been prepared in accordance with generally
accepted accounting principles, which require the measurement of financial
position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time
and due to inflation.  Unlike most industrial companies, virtually all of the
assets and liabilities are monetary in nature.  The impact of inflation is
reflected in the increased cost of operations.  As a result, interest rates
have a greater impact on performance than do the effects of general levels of
inflation.  Interest rates do not necessarily move in the same direction or to
the same extent as the prices of goods and services.

                                   15

<PAGE>

YEAR 2000

The Company relies on computers to conduct its business and information
systems processing. Industry experts were concerned that on January 1, 2000,
some computers might not be able to interpret the new year properly, causing
computer malfunctions.  Some banking experts remain concerned that some
computers may not be able to interpret additional dates in the year 2000
properly.  The Company has operated and evaluated its computer operating
systems following January 1, 2000 and has not identified any errors or
experienced any computer system malfunctions.  Nevertheless, the Company
continues to monitor its computer operating systems to assess whether
its systems are at risk of misinterpreting any future dates and will develop,
if needed, appropriate contingency plans to prevent  any potential system
malfunction or correct any system failures.  The Company has not been
informed of any such problem experienced by its vendors or its customers.

The Company will continue to monitor its significant vendors of goods and
services and customers with respect to any Year 2000 problems they may
encounter, as those issues may effect its ability to continue operations,
or might adversely affect the company's financial position, results of
operations and cash flows.  At this time, the Company does not believe that
these potential problems will materially impact the ability to continue
operations.  However, no assurance can be given that this will be the case.

                                  16

<PAGE>

                           REPORT OF INDEPENDENT AUDITORS
                           ------------------------------

The Board of Directors and Shareholders
Killbuck Bancshares, Inc.


We have audited the accompanying consolidated balance sheet of Killbuck
Bancshares, Inc. and subsidiary as of December 31, 1999 and 1998, and the
related consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
1999.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present  fairly, in all material respects, the financial position of Killbuck
Bancshares, Inc. and subsidiary as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1999 in conformity with generally accepted
accounting principles.

/s/ S.R. Snodgrass, A.C.


Steubenville, Ohio
January 28, 2000

S.R. Snodgrass, A.C.
626 North Fourth Street
Steubenville, OH  43952-1982
Phone: 740-282-2771
Facsimile: 740-282-1606

                                         17
<PAGE>
<TABLE>
<CAPTION>
                                             Killbuck Bancshares, Inc.
                                            CONSOLIDATED BALANCE SHEET


                                                                           December 31,
                                                                        1999               1998
                                                                     -----------       ------------
<S>                                                                  <C>               <C>
ASSETS
     Cash and cash equivalents:
          Cash and amounts due from depository institutions          $ 8,123,806       $  6,972,224
          Federal funds sold                                           8,700,000         15,200,000
                                                                    ------------       ------------
               Total cash and cash equivalents                        16,823,806         22,172,224
                                                                    ------------       ------------

     Investment securities:
           Securities available for sale                              42,311,490         39,228,084
           Securities held to maturity (market value of $33,578,899
             and $28,341,531)                                         34,424,679         27,549,053
                                                                    ------------       ------------
               Total investment securities                            76,736,169         66,777,137
                                                                    ------------       ------------
     Loans (net of allowance for loan losses of $1,887,773 and
       $1,851,175)                                                   141,521,075         35,644,314

     Loans held for sale                                                 356,000            233,750
     Premises and equipment, net                                       3,851,975          3,368,645
     Accrued interest                                                  1,622,480          1,629,508
     Other assets                                                      2,238,375          2,168,315
                                                                    ------------       ------------
               Total assets                                         $243,149,880       $231,993,893
                                                                    ============       ============

LIABILITIES
     Deposits:
          Noninterest bearing demand                                 $28,935,106       $ 26,150,636
          Interest bearing demand                                     29,579,519         25,576,971
          Money market                                                 8,746,151         12,182,491
          Savings                                                     28,173,933         25,707,998
          Time                                                       106,303,749        102,460,585
                                                                    ------------       ------------
               Total deposits                                        201,738,458        192,078,681
     Federal Home Loan Bank advances                                   7,112,753          8,587,302
     Short-term borrowings                                             4,900,000          3,335,000
          Accrued expenses and other liabilities                         481,951            555,699
                                                                    ------------       ------------
               Total liabilities                                     214,233,162        204,556,682
                                                                    ------------       ------------
SHAREHOLDERS' EQUITY
     Common stock   No par value: 1,000,000 shares authorized,
      718,431 issued                                                   8,846,670          8,846,670
     Retained earnings                                                21,352,156         19,215,493
     Accumulated other comprehensive income (loss)                      (648,620)             8,536
     Treasury stock, at cost (13,100 shares)                            (633,488)          (633,488)
                                                                    ------------       ------------
               Total shareholders' equity                             28,916,718         27,437,211
                                                                    ------------       ------------

               Total liabilities and shareholders' equity           $243,149,880       $231,993,893
                                                                    ============       ============

</TABLE>
See accompanying notes to the consolidated financial statements.

                                                        18
<PAGE>
<TABLE>
<CAPTION>
                                            Killbuck Bancshares, Inc.
                                         CONSOLIDATED STATEMENT OF INCOME

                                                                    Year Ended December 31,
                                                              1999           1998           1997
                                                           -----------   -----------     -----------
<S>                                                        <C>            <C>            <C>
INTEREST INCOME
     Interest and fees on loans                            $12,698,236   $12,043,400     $11,489,797
     Federal funds sold                                        568,636       639,968         372,153
      Investment securities:
           Taxable                                           2,381,982     2,129,061      2,349,656
           Exempt from federal income tax                    1,419,777     1,211,898      1,012,341
                                                           -----------   -----------    -----------
               Total interest income                        17,068,631    16,024,327     15,223,947
                                                           -----------   -----------    -----------

INTEREST EXPENSE
     Deposits                                                7,580,106     7,194,761      6,850,752
     Federal Home Loan Bank advances                           534,468       618,347        454,791
     Short term borrowings                                      85,826        79,351         38,637
                                                           -----------   -----------    -----------
               Total interest expense                        8,200,400     7,892,459      7,344,180
                                                           -----------   -----------    -----------

NET INTEREST INCOME                                          8,868,231     8,131,868      7,879,767

Provision for loan losses                                      240,000       183,000        180,000
                                                           -----------   -----------    -----------

NET INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                             8,628,231     7,948,868      7,699,767
                                                           -----------   -----------    -----------
OTHER INCOME
     Service charges on deposit accounts                       483,071       408,321        375,676
     Gain on sale of loans, net                                 41,581        41,712          2,033
     Other income                                              121,232       107,491         71,850
                                                           -----------   -----------    -----------
               Total other income                              645,884       557,524        449,559
                                                           -----------   -----------    -----------

OTHER EXPENSE
     Salaries and employee benefits                          2,615,225     2,301,849      2,028,629
     Occupancy and equipment                                   741,289       643,854        616,445
     Other expense                                           1,962,189     1,628,186      1,390,581
                                                           -----------   -----------    -----------
               Total other expense                           5,318,703     4,573,889      4,035,655
                                                           -----------   -----------    -----------

INCOME BEFORE INCOME TAXES                                   3,955,412     3,932,503      4,113,671
      Income taxes                                             937,085     1,016,542      1,108,209
                                                           -----------   -----------    -----------

NET INCOME                                                 $ 3,018,327    $2,915,961    $ 3,005,462
                                                           ===========   ===========    ===========
EARNINGS PER SHARE                                         $      4.28    $     4.37    $      4.52
                                                           ===========   ===========    ===========

AVERAGE SHARES OUTSTANDING                                     705,331       666,779        665,215
                                                           ===========   ===========    ===========


</TABLE>
See accompanying notes to the consolidated financial statements.

                                                      19
<PAGE>
<TABLE>
<CAPTION>
                                                                     Killbuck Bancshares, Inc.
                                                     CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                                                                         Accumulated
                                                                            Other                         Total
                                                   Common     Retained   Comprehensive     Treasury    Shareholders'  Comprehensive
                                                   Stock      Earnings   Income (Loss)      Stock         Equity         Income
                                                 ----------  ----------- --------------  ------------  -------------  -------------
<S>                                              <C>         <C>          <C>            <C>           <C>            <C> <C>
BALANCE, DECEMBER 31,1996                        $5,806,500  $14,624,364  $   (176,066)  $  (321,058)  $  19,933,740

     Net income                                                3,005,462                                   3,005,462  $   3,005,462
     Other comprehensive income:
          Unrealized gain on available for sale
           securities, net of tax of $73,280                                   142,249                       142,249        142,249
                                                                                                                      -------------
     Comprehensive income                                                                                             $   3,147,711
                                                                                                                      =============
     Cash dividends paid ($.92 per share)                       (611,412)                                   (611,412)
     Purchase of treasury shares                                                             (312,430)      (312,430)
                                                 ----------  ----------- --------------  ------------  -------------

BALANCE, DECEMBER 31, 1997                        5,806,500   17,018,414        (33,817)     (633,488)    22,157,609

     Net income                                                2,915,961                                   2,915,961  $   2,915,961
     Other comprehensive income:
          Unrealized gain on available for sale
           securities, net of tax of $21,818                                     42,353                       42,353         42,353
                                                                                                                      -------------
     Comprehensive income                                                                                             $   2,958,314
                                                                                                                      =============
     Cash dividends paid ($1.05 per share)                      (718,882)                                   (718,882)
     Business acquisition                         3,040,170                                                3,040,170
                                                 ----------  ----------- --------------  ------------  -------------

BALANCE, DECEMBER 31, 1998                        8,846,670   19,215,493          8,536      (633,488)    27,437,211

     Net income                                                3,018,327                                   3,018,327  $   3,018,327
     Other comprehensive income:
          Unrealized loss on available for sale
           securities, net of tax benefit
           of $338,535                                                         (657,156)                    (657,156)      (657,156)
                                                                                                                      -------------
     Comprehensive income                                                                                             $   2,361,171
                                                                                                                      =============
     Cash dividends paid ($1.25 per share)                      (881,664)                                   (881,664)
                                                 ----------  ----------- --------------  ------------  -------------

BALANCE, DECEMBER 31, 1999                       $8,846,670  $21,352,156  $    (648,620) $   (633,488) $  28,916,718
                                                 ==========  =========== ============== ============= ==============


</TABLE>


See accompanying notes to the consolidated financial statements.

                                        20
<PAGE>
<TABLE>
<CAPTION>
                                                                Killbuck Bancshares, Inc.
                                                          CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                             Year Ended December 31,
                                                                     1999               1998                 1997
                                                                 ------------      -------------        -------------

<S>                                                              <C>               <C>                  <C>
OPERATING ACTIVITIES
     Net income                                                  $  3,018,327      $   2,915,961        $   3,005,462
     Adjustments to reconcile net income to net cash
      provided by operating activities:
          Provision for loan losses                                   240,000            183,000              180,000
          Depreciation, amortization and accretion, net               414,035            307,868              245,393
          Gain on sale of loans, net                                  (41,581)           (41,712)              (2,033)
          Origination of loans held for sale                       (4,674,850)        (4,924,449)            (282,300)
          Proceeds from the sale of loans                           4,594,181          4,732,411             284,333
          Federal Home Loan Bank stock dividend                       (60,500)           (57,800)             (53,300)
          (Increase) decrease in accrued interest and other assets    (31,268)            80,983              (77,114)
          (Decrease) increase in accrued expenses and other
           liabilities                                                (75,547)            (5,076)             (57,407)
          (Decrease) increase in federal income tax payable            (1,799)           (86,032)               6,466
          (Decrease) increase in deferred federal income tax          (22,661)            69,582               17,580
                                                                 ------------      -------------        -------------
               Net cash provided by operating activities            3,358,337          3,174,736            3,267,080
                                                                 ------------      -------------        -------------

INVESTING ACTIVITIES
     Investment securities available for sale:
          Proceeds from maturities and repayments                  15,067,374         25,874,036           14,051,028
          Purchases                                               (19,131,130)       (27,154,089)         (16,051,726)
     Investment securities held to maturity:
          Proceeds from maturities and repayments                   1,967,986          2,786,713            2,249,094
          Purchases                                                (8,885,152)        (6,856,609)          (7,262,638)
     Net increase in loans                                         (6,116,761)        (5,195,049)          (5,899,602)
     Purchase of premises and equipment                              (550,970)          (395,902)            (119,386)
     Decrease in other real estate owned                               73,334                  -                    -
     Cash funds acquired in business acquisition                            -          1,296,338                    -
                                                                 ------------      -------------        -------------
               Net cash used in investing activities              (17,575,319)        (9,644,562)         (13,033,230)
                                                                 ------------      -------------        -------------

FINANCING ACTIVITIES
     Net increase in deposits                                       9,659,777         14,304,976            6,409,485
     Proceeds from Federal Home Loan Bank advances                          -          1,500,000            4,600,000
     Repayment of Federal Home Loan Bank advances                  (1,474,549)        (1,657,872)            (669,474)
     Net increase in short-term borrowings                          1,565,000            625,000            2,710,000
     Purchase of treasury shares                                            -                  -             (312,430)
     Cash dividends paid including fractions shares                  (881,664)          (730,831)            (611,412)
                                                                 ------------      -------------        -------------
               Net cash provided by financing activities            8,868,564         14,041,273           12,126,169
                                                                 ------------      -------------        -------------

               (Decrease) increase in cash and cash equivalents    (5,348,418)         7,571,447            2,360,019

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                     22,172,224         14,600,777           12,240,758
                                                                 ------------      -------------        -------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                         $ 16,823,806      $  22,172,224        $  14,600,777
                                                                 ============      =============        =============
</TABLE>
See accompanying notes to the consolidated financial statements.

                                                               21
<PAGE>

                                Killbuck Bancshares, Inc.
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting and reporting policies applied in the
presentation of the consolidated financial statements follows:

NATURE OF OPERATIONS AND BASIS OF PRESENTATION
----------------------------------------------

Killbuck Bancshares, Inc. (the "Company") is an Ohio corporation organized as
the holding company of The Killbuck Savings Bank Company (the "Bank").  The
Bank is a state-chartered bank located in Ohio. The Company and its subsidiary
operate in the single industry of commercial banking and derive substantially
all their income from banking and bank-related services which include interest
earnings on residential real estate, commercial mortgage, commercial and
consumer loan financing as well as interest earnings on investment securities
and charges for deposit services to its customers through six locations.  The
Board of Governors of the Federal Reserve System supervises the holding
company and bank, while the Bank is also subject to regulation and
supervision by the Ohio Division of Financial Institutions.

The consolidated financial statements of the Company include its wholly owned
subsidiary, the Bank.  All intercompany transactions have been eliminated in
consolidation.  The investment in subsidiary on the parent company financial
statements is carried at the parent company's equity in the underlying net
assets.

The accounting principles followed by the Company and the methods of applying
these principles conform with generally accepted accounting principles and
with general practice within the banking industry.  In preparing the financial
statements, management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities as of the balance sheet
date and related revenues and expenses for the period.  Actual results may
differ significantly from those estimates.

INVESTMENT SECURITIES
---------------------

Investment securities are classified, at the time of purchase, based upon
management's intention and ability, as securities held to maturity or
securities available for sale.  Debt securities acquired with the intent and
ability to hold to maturity are stated at cost adjusted for amortization of
premium and accretion of discount which are computed using the level yield
method.  Certain other debt and equity securities have been classified as
available for sale to serve principally as a source of liquidity.  Unrealized
holding gains and losses on available for sale securities are reported as a
separate component of shareholders' equity, net of tax, until realized.
Realized securities gains and losses are computed using the specific
identification method.  Interest and dividends on investment securities are
recognized as income when earned.

Common stock of the Federal Home Loan Bank, Federal Reserve Bank and
Independent State Bank of Ohio represent ownership in institutions which are
wholly-owned by other financial institutions.  These securities are accounted
for at cost and are classified with equity securities available for sale.

LOANS
-----

Loans are stated at their outstanding principal, less the allowance for loan
losses and any net deferred loan fees.  Interest income on loans is recognized
on the accrual method.  Accrual of interest on loans is generally discontinued
when it is determined that a reasonable doubt exists as to the collectibility
of principal, interest, or both.  Loans are returned to accrual status when
past due interest is collected, and the collection of principal is probable.

Loan origination and commitment fees, as well as certain direct origination
costs, are deferred and amortized as a yield adjustment over the lives of the
related loans using the interest method.  Amortization of deferred loan fees
is discontinued when a loan is placed on nonaccrual status.

Mortgage loans originated and held for sale in the secondary market are
carried at the lower of cost or market value determined on an aggregate
basis.  Net unrealized losses are recognized in a valuation allowance through
charges to income.  Gains and losses on the sale of loans held for sale are
determined using the specific identification method.

                                       22
<PAGE>
ALLOWANCE FOR LOAN LOSSES
-------------------------

The allowance for loan losses represents the amount which management estimates
is adequate to provide for potential losses in its loan portfolio.  The
allowance method is used in providing for loan losses.  Accordingly, all loan
losses are charged to the allowance, and all recoveries are credited to it.
The allowance for loan losses is established through a provision for loan
losses which is charged to operations.  The provision is based upon
management's periodic evaluation of individual loans, the overall risk
characteristics of the various portfolio segments, past experience with
losses, the impact of economic conditions on borrowers, and other relevant
factors.  The estimates used in determining the adequacy of the allowance for
loan losses including the amounts and timing of future cash flows expected on
impaired loans, are particularly susceptible to significant change in the near
term.

Impaired loans are commercial and commercial real estate loans for which it is
probable that the Company will not be able to collect all amounts due
according to the contractual terms of the loan agreement.  The Company
individually evaluates such loans for impairment and does not aggregate loans
by major risk classifications.  The definition of "impaired loans" is not the
same as the definition of "nonaccrual loans," although the two categories
overlap.  The Company may choose to place a loan on nonaccrual status due to
payment delinquency or uncertain collectibility, while not classifying the
loan as impaired, provided the loan is not a commercial or commercial real
estate classification.  Factors considered by management in determining
impairment include payment status and collateral value.  The amount of
impairment for these types of loans is determined by the difference between
the present value of the expected cash flows related to the loan, using the
original interest rate, and its recorded value, or as a practical expedient
in the case of collateralized loans, the difference between the fair value of
the collateral and the recorded amount of the loans.  When foreclosure is
probable, impairment is measured based on the fair value of the collateral.

Mortgage loans secured by one-to-four family properties and all consumer loans
are large groups of smaller balance homogeneous loans and are measured for
impairment collectively.  Loans that experience insignificant payment delays,
which are defined as 90 days or less, generally are not classified as
impaired.  Management determines the significance of payment delays on a
case-by-case basis, taking into consideration all of the circumstances
concerning the loan, the credit worthiness and payment history of the
borrower, the length of the payment delay, and the amount of shortfall in
relation to the principal and interest owed.

PREMISES AND EQUIPMENT
----------------------

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets.  Maintenance and repairs are expensed as incurred
while major additions and improvements are capitalized.

REAL ESTATE OWNED
-----------------

Real estate acquired in settlement of loans is stated at the lower of the
recorded investment in the property or its fair value minus estimated costs of
sale.  Prior to foreclosure the value of the underlying collateral is written
down by a charge to the allowance for loan losses if necessary.  Any
subsequent write-downs are charged against operating expenses.  Operating
expenses of such properties, net of related income and losses on their
disposition, are included in other expenses.

INTANGIBLE ASSETS AND LIABILITIES
---------------------------------

Goodwill represents the amount by which the market value of the stock issued
in the merger of Commercial Saving Bank Co. (Commercial) of Danville, Ohio
with and into The Killbuck Savings Bank Company exceeded the market value of the
assets, liabilities and capital of Commercial on the date of the merger.  As
of December 31, 1999 and 1998 respectively, net goodwill of $1,550,790 and
$1,661,561 is included in other assets on the balance sheet and is being
amortized using the straight-line method over fifteen years.

Market value adjustments to various asset and liabilities accounts are being
amortized using the straight-line method over the period to be benefited.  The
market value adjustments are components of their respective account balances
on the balance sheet.

EMPLOYEE BENEFITS PLANS
-----------------------

The Bank maintains an integrated money purchase pension plan and a 401(K) plan
covering eligible employees.  The Bank's contributions are based upon the
plan's contribution formula.

                                    23
<PAGE>
INCOME TAXES
------------

The Company and its subsidiary file a consolidated federal income tax return.
Deferred tax assets and liabilities are reflected at currently enacted income
tax rates applicable to the period in which the deferred tax assets or
liabilities are expected to be realized or settled.  As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through
the provision for income taxes.  Deferred income tax expenses or benefits are
based on the changes in the deferred tax asset or liability from period to
period.

EARNINGS PER SHARE
------------------

The Company currently maintains a simple capital structure; therefore, there
are no dilutive effects on earnings per share.  As such, earnings per share
are calculated using the weighted number of shares for the period.

COMPREHENSIVE INCOME
--------------------

The Company is required to present comprehensive income in a full set of
general purpose financial statements for all periods presented.  Other
comprehensive income (loss) is comprised exclusively of unrealized holding
gains (losses) on the available for sale securities portfolio.  The Company
has elected to report the effects of other comprehensive income (loss) as
part of the Statement of Changes in Shareholders' Equity.

CASH FLOW INFORMATION
---------------------

For purposes of reporting cash flows, cash and cash equivalents include cash
and amounts due from financial institutions and federal funds sold.  Cash
payments for interest in 1999, 1998 and 1997 were $8,229,575, $7,809,677, and
$7,359,808, respectively.  Cash payments for income taxes for 1999, 1998, and
1997 were $960,417, $1,055,913, and $1,081,332 respectively.

PENDING ACCOUNTING PRONOUNCEMENTS
---------------------------------

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended for in June, 1999
by SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities   Deferral of the Effective Date of FASB Statement No. 133."  The
Statement provides accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, by requiring the recognition of those items as assets or
liabilities in the statement of financial position, recorded at fair value.
Statement No. 133 precludes a held to maturity security from being designated
as a hedged item; however, at the date of initial application of this
Statement, an entity is permitted to transfer any held to maturity security
into the available for sale or trading categories.  The unrealized holding
gain or loss on such transferred securities shall be reported consistent with
the requirements of Statement No. 115, "Accounting for Certain Investments in
Debt and Equity Securities."  Such transfers do not raise an issue regarding
an entity's intent to hold other debt securities to maturity in the future.
This Statement applies prospectively for all fiscal quarters of all years
beginning after June 15, 2000.  Earlier adoption is permitted for any fiscal
quarter that begins after the issue date of this Statement.

RECLASSIFICATION OF COMPARATIVE AMOUNTS
---------------------------------------

Certain amounts in prior year consolidated financial statements have been
reclassified to conform to the current year presentation.  These
reclassifications had no effect on shareholders' equity or net income.

During 1998, retroactive recognition was given for the elimination of the
stated value of the Company's Common Stock.  This caused the capital surplus
to be reduced to zero, with the balance of $3,106,500 being reclassified to
Common Stock.  Such action had no effect on Total Shareholders' Equity
disclosed previously.

2.     STOCK SPLIT

On April 13, 1998 the Board of Directors authorized an increase in the
authorized common shares from 200,000 to 1,000,000 shares and also authorized
a 5 for 1 stock split of common stock to shareholders of record on May 1,
1998.  Per share amounts in the accompanying consolidated financial statements
have been restated to reflect the stock split.

                                        24
<PAGE>
3.     FEDERAL FUNDS SOLD

     Federal funds sold at December 31 consists of the following:
<TABLE>
<CAPTION>
                                                   1999                         1998
                                        ----------------------------     ----------------------------
          Institution                   Maturity             Balance     Maturity             Balance
          -----------                   --------          -----------    ---------        -----------
          <S>                             <C>             <C>              <C>            <C>
          National Bank of Detroit             -          $         -      1-04-99        $ 8,000,000
          National City Bank              1-3-00            3,700,000      1-04-99          7,200,000
          Independent State Bank of Ohio  1-3-00            5,000,000                               -
                                                          -----------                     -----------
                                                          $ 8,700,000                     $15,200,000
                                                          ===========                     ===========
</TABLE>
4.     INVESTMENT SECURITIES

     The amortized cost of securities and their estimated market values are
     as follows:

     SECURITIES AVAILABLE FOR SALE
<TABLE>
<CAPTION>

                                                                       1999
                                          ------------------------------------------------------------------
                                                              Gross              Gross            Estimated
                                          Amortized         Unrealized         Unrealized           Market
                                             Cost              Gains              Losses             Value
                                          -----------    ----------------     --------------    ------------

          <S>                            <C>                  <C>               <C>              <C>
          U.S. Treasury securities       $ 2,998,811          $    1,455        $       610      $ 2,999,656
          Obligations of U.S. Government
           Agencies and Corporations      39,133,728                   -            983,604       38,150,124
                                         -----------          ----------        -----------     ------------
               Total debt securities      42,132,539               1,455            984,214       41,149,780

          Equity securities                1,161,710                   -                  -        1,161,710
                                         -----------          ----------        -----------      -----------
               Total                     $43,294,249          $    1,455        $   984,214      $42,311,490
                                         ===========          ==========        ===========     ============

</TABLE>
<TABLE>
<CAPTION>
                                                                        1998
                                          ------------------------------------------------------------------
                                                              Gross              Gross            Estimated
                                         Amortized        Unrealized          Unrealized          Market
                                           Cost              Gains              Losses             Value
                                         -----------          ----------        -----------     ------------

          <S>                            <C>                  <C>               <C>              <C>
          U.S. Treasury securities       $ 9,312,753          $   59,431        $         -      $ 9,372,184
          Obligations of U.S. Government
           Agencies and Corporations      28,801,188              40,191             86,689       28,754,690
                                         -----------          ----------        -----------     ------------
               Total debt securities      38,113,941              99,622             86,689       38,126,874

          Equity securities                1,101,210                   -                  -        1,101,210
                                         -----------          ----------        -----------     ------------
               Total                     $39,215,151          $   99,622        $    86,689      $39,228,084
                                         ===========          ==========        ===========      ===========
</TABLE>
                                                                  25

<PAGE>
     SECURITIES HELD TO MATURITY
<TABLE>
<CAPTION>
                                                                            1999
                                              --------------------------------------------------------------
                                                                    Gross            Gross         Estimated
                                                 Amortized        Unrealized      Unrealized         Market
                                                    Cost            Gains           Losses           Value
                                                -----------      -----------     -----------     -----------

          <S>                                   <C>              <C>             <C>              <C>
          Obligations of States and Political
           Subdivisions                         $32,797,040      $   106,508     $   843,411     $32,060,137
          Corporate Securities                    1,627,639                -         108,877       1,518,762
                                                -----------      -----------     -----------     -----------
               Total                            $34,424,679      $   106,508     $   952,288     $33,578,899
                                                ===========      ===========     ===========     ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                             1998
                                              --------------------------------------------------------------
                                                                    Gross            Gross         Estimated
                                                 Amortized        Unrealized      Unrealized         Market
                                                    Cost            Gains           Losses           Value
                                                -----------      -----------     -----------     -----------

          <S>                                   <C>              <C>             <C>              <C>
          Obligations of States and Political
           Subdivisions                         $25,909,260      $   822,022     $     7,341     $26,723,941
          Corporate Securities                    1,639,793              781          22,984       1,617,590
                                                -----------      -----------     -----------     -----------
               Total                            $27,549,053      $   822,803     $    30,325     $28,341,531
                                                ===========      ===========     ===========     ===========
</TABLE>
The amortized cost and estimated market values of debt securities at
December 31, 1999, by contractual maturity, are shown below.  Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or repay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
                                                     Available For Sale                   Held to Maturity
                                                ----------------------------        ----------------------------
                                                                   Estimated                          Estimated
                                                Amortized            Market         Amortized           Market
                                                   Cost              Value             Cost              Value
                                                ------------    ------------        ------------    ------------
          <S>                                   <C>             <C>                 <C>             <C>
          Due in one year or less               $  4,498,811    $  4,487,593        $  1,532,435    $  1,544,150
          Due after one year through five years   28,492,608      27,770,306          10,393,347      10,360,974
          Due after five through ten years         9,141,120       8,891,881          17,091,122      16,575,608
          Due after ten years                              -               -           5,407,775       5,098,167
                                                ------------    ------------        ------------    ------------
                                                $ 42,132,539    $ 41,149,780        $ 34,424,679    $ 33,578,899
                                                ============    ============        ============    ============
</TABLE>
Investment securities with an approximate carrying value of $31,225,000 and
$30,600,000 at December 31, 1999 and 1998, respectively were pledged to
secure public deposits, securities sold under agreement to repurchase and for
other purposes as required or permitted by law.  There were no security sales
in 1999, 1998 and 1997.



                                                          26
<PAGE>
5.     LOANS

       Major classification of loans are summarized as follows:

                                            1999                1998
                                        -------------       -------------

          Real estate - residential     $  48,959,970       $  49,226,429
          Real estate - farm                4,380,211           4,376,208
          Real estate - commercial         23,717,573          22,713,385
          Real estate - construction        1,396,523           1,237,523
          Commercial and other loans       37,767,378          37,752,447
          Consumer and credit loans        27,555,540          22,584,896
                                        -------------       -------------
                                          143,777,195         137,890,888
          Less allowance for loan losses   (1,887,773)         (1,851,175)
          Less net deferred loan fees        (368,347)           (395,399)
                                        -------------       -------------
               Loans, net               $ 141,521,075       $ 135,644,314
                                        =============       =============

Loans held for sale at December 31, 1999 and 1998 were $356,000 and $233,750
respectively.  In 1999 the Bank started servicing loans originated and sold
in the secondary market.  The Bank is currently collecting a fee of .25% for
servicing these loans.  Real estate loans serviced for Freddie Mac, which are
not included in the consolidated balance sheet, totaled $900,691 at
December 31, 1999.

Total nonaccrual loans and the related interest for the years ended
December 31 are as follows.  In management's opinion, these loans did not
meet the definition of impaired loans.

                                     1999             1998             1997

                                 ------------     ------------    ------------
 Principal outstanding           $    287,017     $     21,323     $   120,805
 Contractual interest due        $     19,969     $        923     $     6,120
 Interest income recognized      $          0     $          0     $     7,000


The Company's primary business activity is with customers located within its
local trade area. Residential, commercial, personal, and agricultural loans
are granted.  The Company also selectively funds loans originated outside of
its trade area provided such loans meet its credit policy guidelines.
Although the Company has a diversified loan portfolio at December 31, 1999
and 1998, loans outstanding to individuals and businesses are dependent upon
the local economic conditions in its immediate trade area.

The Bank entered into transactions with certain directors, executive
officers, significant stockholders, and their affiliates.  A summary of loan
activity for those directors, executive officers, and their associates with
loan balances in excess of $60,000 for the year ended December 31, 1999 is as
follows:

                 Balance                     Amounts        Balance
               12-31-1998     Additions     Collected     12-31-1999
               ----------     ---------     ---------     ----------

               $  293,210     $ 808,600     $ 243,471     $  858,339


6.     ALLOWANCE FOR LOAN LOSSES

       An analysis of the change in the allowance for loan losses follows:
<TABLE>
<CAPTION>
                                                         1999             1998              1997
                                                     ------------     ------------      ------------
          <S>                                        <C>               <C>              <C>
          Balance, January 1                         $  1,851,175      $ 1,744,586      $  1,653,322
               Add:
                    Provision charged to operations       240,000          183,000           180,000
                    Loan recoveries                        80,135           47,657           101,397
                     Acquired in business acquisition           -           93,001                 -
               Less: Loans charged off                   (283,537)        (217,069)         (190,133)
                                                     ------------     ------------      ------------
          Balance, December 31                       $  1,887,773      $ 1,851,175      $  1,744,586
                                                     ============     ============      ============
</TABLE>

                                            27
<PAGE>

7.     PREMISES AND EQUIPMENT

     Premises and equipment are summarized as follows:
<TABLE>
<CAPTION>
                                                         1999               1998
                                                     ------------      ------------
          <S>                                        <C>                <C>
          Land                                       $    909,930       $   909,930
          Building and improvements                     3,265,750         2,728,374
          Furniture, fixtures and equipment             2,616,955         2,363,977
                                                     ------------      ------------
                                                        6,792,635         6,002,281
          Less accumulated depreciation                 2,940,660         2,633,636
                                                     ------------      ------------
               Total                                 $  3,851,975       $ 3,368,645
                                                     ============      ============
</TABLE>
Depreciation expense charged to operations was $321,492 for 1999, $283,300
for 1998, and $285,094 for 1997.

8.     DEPOSITS

Time deposits include certificates of deposit in denominations of $100,000 or
more.  Such deposits aggregated $27,186,935 and $27,715,774 at
December 31, 1999 and 1998, respectively.

Interest expense on certificates of deposit $100,000 and over amounted to
$1,487,708 in 1999, $1,496,632 in 1998, and $1,306,783 in 1997.

The following table sets forth the remaining maturity of time certificates of
deposits of $100,000 or more at December 31, 1999.

                                            December 31,
                                                1999
                                            ------------
     3 months or less                       $  6,276,334
     Over 3 through 6 months                   8,588,521
     Over 6 through 12 months                 11,619,617
     Over 12 months                              702,463
                                            ------------
               Total                        $ 27,186,935
                                            ============

9.     SHORT-TERM BORROWINGS

       Short-term borrowings consists of securities sold under agreements to
       repurchase.  These retail repurchase agreements are with customers in
       their respective loan market areas.  These borrowings are
       collateralized with securities owned by the Bank and held in their
       safekeeping account at an independent correspondent bank.  The
       outstanding balances and related information for short-term borrowings
       are summarized as follows:
<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                                       1999               1998
                                                      ------------     ------------
     <S>                                           <C>               <C>
     Short-term borrowings:
          Ending balance                           $  4,900,000      $ 3,335,000
          Maximum month-end balance during the year   4,900,000        3,440,000
          Average month-end balance during the year   3,275,567        2,763,000
          Weighted average at year end                     3.28%            2.58%
          Weighted average rate during the year            2.62%            2.88%
</TABLE>
     The Company has pledged investment securities with carrying values of
     $5,803,550 and $4,013,900 as of December 31, 1999 and 1998,
     respectively, as collateral for the  repurchase agreements.



                                           28
<PAGE>
10.  FEDERAL HOME LOAN BANK ADVANCES

     The Federal Home Loan Bank advances have monthly principal and interest
     payments due with maturity dates from 2009 through 2017.  Interest rates
     range from 6.00% to 8.90% on the advances.  The scheduled aggregate
     minimum future principal payments on the advances outstanding as of
     December 31, 1999 are as follows:

                                      Year Ending
                           December 31,             Amount
                           ------------           ----------
                           2000                   $  822,116
                           2001                      746,687
                           2002                      681,181
                           2003                      623,394
                           2004                      572,636
                           2005 and thereafter     3,666,739
                                                  ----------
                           Total                  $7,112,753
                                                  ==========

  The Bank maintains a credit arrangement with Federal Home Loan Bank of
  Cincinnati, Ohio ("FHLB").  The FHLB borrowings, when used, are
  collateralized by the Bank's investment in Federal Home Loan Bank stock and
  a blanket collateral pledge agreement with FHLB under which the Bank has
  pledged certain qualifying assets equal to 150 percent of the unpaid amount
  of the outstanding balances.  At December 31, 1999 and 1998 the Bank had a
  borrowing capacity of approximately $22.7 and $17.0 million, respectively
  with the FHLB.  At December 31, 1999 and 1998 there was $7,112,753 and
  $8,587,302, respectively borrowed against this credit arrangement.

11.  EMPLOYEE BENEFIT PLANS

     The Bank maintains an integrated money purchase pension plan and a
     401(k) plan.

     Under the integrated money purchase pension plan contribution formula,
     the Bank, for each plan year, will contribute an amount equal to 8% of
     an employee's compensation for the plan year and 5.7% of the amount of
     an employee's excess compensation for the plan year.  Excess
     compensation is a participant's compensation in excess of the designated
     integration level.  This designated integration level is 100% of the
     taxable wage base in effect at the beginning of the plan year.  The
     federal government annually adjusts the taxable wage base. This plan
     does not permit nor require employees to make contributions to the plan.

     The 401(k) plan allows employees to make salary reduction contributions
     to the plan up to 10% of their compensation for the plan year.  For each
     plan year, the Bank may contribute to the plan an amount of matching
     contributions for a particular plan year.  The Bank may choose not to
     make matching contributions for a particular plan year.  For 1999 and
     1998 the Bank matched 25% of the employees voluntary contributions up
     to 1% of the employee's compensation.

     Both plans cover substantially all employees with one year of service
     and attained age 21.

     The Bank terminated its defined benefit pension plan in 1997.  This plan
     was funded by individually allocated retirement income and retirement
     annuity contracts.  Assets of the plan equal cash values of the
     contracts.  The allocated insurance contracts cash values fully
     guarantee the amount of benefit payments.  This plan's assets were
     transferred to the respective individual's account in the integrated
     money purchase pension plan.

     The pension costs charged to operating expense for the years 1999, 1998
     and 1997 amounted to $180,369, $153,374 and $136,666, respectively.

                                        29
<PAGE>

12.     OTHER OPERATING EXPENSE

     Other operating expense included the following:
<TABLE>
<CAPTION>
                                                   1999          1998           1997
                                               -----------     -----------   -----------
          <S>                                  <C>             <C>           <C>
          Stationery, supplies and printing    $   166,224     $   155,064   $   137,760
          Professional fees                        257,986         187,813       144,027
          Franchise tax                            361,089         333,689       298,457
          Other                                  1,176,890         951,620       810,337
                                               -----------     -----------   -----------
               Total                           $ 1,962,189     $ 1,628,186   $ 1,390,581
                                               ===========     ===========   ===========
</TABLE>
13.  INCOME TAXES

     The provision for federal income taxes for the years ended December 31
     consist of:

                                         1999            1998           1997
                                      -----------     -----------   -----------
          Current payable            $   959,746     $   946,960    $1,090,629
          Deferred                       (22,661)         69,582        17,580
                                      -----------     -----------   -----------
               Total provision        $   937,085     $ 1,016,542    $1,108,209
                                      ===========     ===========   ===========

     The following is a reconcilement between the actual provision for
     federal income taxes and the amount of income taxes which would have
     been provided at statutory rates for the year ended December 31:
<TABLE>
<CAPTION>
                                              1999                        1998                        1997
                                    ----------------------     ----------------------       ----------------------
                                                   % of                       % of                         % of
                                                  Pre-Tax                    Pre-Tax                      Pre-Tax
                                      Amount      Income          Amount     Income           Amount      Income
                                    ----------  ----------      ---------- ----------       ----------  ----------
     <S>                            <C>             <C>         <C>            <C>          <C>              <C>
     Provision at statutory rate    $1,344,840       34.0%      $1,337,051      34.0%       $1,398,648       34.0%
     Tax exempt income                (482,724)     (12.2)        (408,414)    (10.4)         (340,323)      (8.3)
     Non-deductible interest
      Expense                           81,600        2.1           64,937       1.7            53,716        1.3
     Other, net                         (6,631)     (  .2)%         22,968        .6            (3,832)       (.1)
                                    ----------  -----------     ---------- ----------       ----------  -----------
     Tax expense
      and effective rate            $  937,085        23.7%     $1,016,542      25.9%       $1,108,209        26.9%
                                    ==========  ===========     ========== ==========       ==========  ===========

</TABLE>

     The tax effects of deductible and taxable temporary differences that
     gave rise to significant portions of the net deferred tax assets and
     liabilities at December 31 are as follows:

<TABLE>
<CAPTION>
                                                                1999             1998
                                                            ----------     ----------
          <S>                                               <C>            <C>
          Deferred Tax Assets:
               Allowance for loan losses                    $   48,255      $ 435,761
               Deferred loan fees                               25,817         40,097
               Net unrealized loss on securities               334,138              -
                                                            ----------     ----------
                    Deferred tax asset                         808,210        475,858
                                                            ----------     ----------

          Deferred Tax Liabilities:
               Premise and equipment depreciation              256,213        268,113
               Stock dividends                                  79,900         59,500
               Net unrealized gain on securities                     -          4,397
               Other, net                                        7,185         40,132
                                                            ----------     ----------
                    Deferred tax liabilities                   343,298        372,142
                                                            ----------     ----------
                    Net deferred tax assets                 $  464,912      $ 103,716
                                                            ==========     ==========
</TABLE>
No valuation allowance was established at December 31, 1999 and 1998 in view
of certain tax strategies coupled with the anticipated future taxable income
as evidenced by the Company's earnings potential.

                                          30
<PAGE>
14.     COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS
-----------

In the normal course of business, the Company has outstanding commitments and
contingent liabilities, such as commitments to extend credit and standby
letters of credit, which are not included in the accompanying consolidated
financial statements.  The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial instruments for
commitments to extend credit and standby letters of credit is represented by
the contractual or notional amount of those instruments.  The Company uses the
same credit policies in making such commitments as it does for instruments
that are included in the consolidated balance sheet.

These commitments were comprised of the following at December 31:
<TABLE>
<CAPTION>
                                                                1999             1998
                                                            ------------     ------------

     <S>                                                    <C>              <C>
     Commitments to extend credit                           $ 13,014,017     $ 17,872,990
     Standby letters of credit                                   964,224          607,681
                                                            ------------     ------------
          Total                                             $ 13,978,241     $ 18,480,671
                                                            ============     ============
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since many of the commitments are
expected to expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements.  The Company evaluates
each customer's creditworthiness on a case-by-case basis.  The amount of
collateral obtained, if deemed necessary by the Company upon extension of
credit, is based on management's credit evaluation.  Collateral held varies
but may include accounts receivable, inventory, property and equipment, and
income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party.  Standby letters of
credit generally have fixed expiration dates or other termination clauses and
may require payment of a fee.  The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loan facilities
to customers.  The Company's policy for obtaining collateral, and the nature
of such collateral, is essentially the same as that involved in making
commitments to extend credit.

The Company has not been required to perform any financial guarantees during
the past two years.  The Company has not incurred any losses on its
commitments in either 1999 or 1998.

CONTINGENT LIABILITIES
----------------------

The Company and its subsidiary are subject to claims and lawsuits which arise
primarily in the ordinary course of business.  It is the opinion of management
that the disposition or ultimate resolution of such claims and lawsuits will
not have a material adverse effect on the consolidated financial position of
the Company.


15.     REGULATORY MATTERS

The approval of regulatory authorities is required if the total of all
dividends declared by the Bank in any calendar year exceeds net profits as
defined for that year combined with its retained net profits for the two
preceding calendar years less any required transfers to surplus.  Under this
formula, the amount available for payment of dividends by the Bank to the
Company in 2000, without the approval of the regulatory authorities, is
$4,040,650 plus 2000 profits retained up to the date of the dividend
declaration.

Included in cash and due from banks are required federal reserves of
$2,225,000 and $1,124,000 at December 31, 1999 and 1998, respectively, for
facilitating the implementation of monetary policy by the Federal Reserve
System.  The required reserves are computed by applying prescribed ratios to
the classes of average deposit balances.  These are held in the form of cash
on hand and/or balances maintained directly with the Federal Reserve Bank.

Federal law prevents the Company from borrowing from the Bank unless the loans
are secured by specific obligations.  Further, such secured loans are limited
in amount to ten percent of the Bank's capital.  The Company had no such
borrowings at December 31, 1999 and 1998.

                                           31
<PAGE>
16.     REGULATORY CAPITAL REQUIREMENTS
The Company and the Bank are subject to various regulatory capital
requirements administered by the federal banking agencies.  Failure to meet
minimum capital requirements can initiate certain mandatory and possibly
additional discretionary actions by the regulators that, if undertaken, could
have a direct material effect on the Company's and Bank's financial
statements.  Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, both entities must meet specific capital
guidelines that involve quantitative measures of their assets, liabilities,
and certain off-balance sheet items as calculated under regulatory accounting
practices.  The capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.

Quantitative measures established by the regulation to ensure capital
adequacy require the Company and Bank to maintain minimum amounts and ratios
of Total and Tier 1 capital (as defined in the regulations) to risk-weighted
assets (as defined), and of Tier 1 capital to average assets (as defined).
Management believes, as of December 31, 1999 and 1998, that the Company and
Bank meets all capital adequacy requirements to which they are subject.

As of December 31, 1999, the most recent notification from the appropriate
regulatory authority has categorized the Company and Bank as well capitalized
under the regulatory framework for prompt corrective action.  To be
categorized as well capitalized, an entity must maintain minimum Total
Risk-Based, Tier 1  Risk-Based and Tier 1 Leverage ratios at least 100 to 200
basis points above those ratios set forth in the table below.  There have
been no conditions or events since that notification that management believes
have changed this category.  The consolidated capital position of the Company
does not materially differ from the Banks, therefore, the following table
sets forth the Company's capital position and minimum requirements as of
December 31  (dollars in thousands):
<TABLE>
<CAPTION>
                                                          1999                           1998
                                                 ----------------------         ----------------------
                                                   Amount       Ratio             Amount       Ratio
                                                 ----------  ----------         ----------  ----------
     <S>                                         <C>            <C>             <C>             <C>
     Total Capital (to Risk Weighted Assets)
     ---------------------------------------
          Actual                                 $   29,700      19.85%         $   27,432      19.64%
          For Capital Adequacy Purposes              11,970       8.00              11,173       8.00
          To be well capitalized                     14,962      10.00              13,967      10.00

     Tier 1 Capital (to Risk Weighted Assets)
     ----------------------------------------
          Actual                                 $   27,829      18.60%         $   25,685      18.39%
          For Capital Adequacy Purposes               5,985       4.00               5,587       4.00
          To be well capitalized                      8,977       6.00               8,380       6.00

     Tier 1 Capital (to Average Assets)
     ----------------------------------
          Actual                                 $   27,829      11.55%         $   25,68 5     11.25%
          For Capital Adequacy Purposes               9,641       4.00                9,134      4.00
          To be well capitalized                     12,052       5.00               11,418      5.00
</TABLE>

17.     OTHER COMPREHENSIVE INCOME

Other comprehensive income included in the Consolidated Statement of
Shareholders' Equity consists solely of net unrealized gains and losses on
available for sales securities.  The Company incurred an unrealized net loss for
the period ended December 31, 1999 of $657,156.  For the periods ended
December 31, 1998 and 1997, the Company incurred unrealized net gains of
$42,353 and $142,249, respectively.

                                      32
<PAGE>

18.     FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

     The carrying amounts and estimated fair values at December 31 are as
     follows:
<TABLE>
<CAPTION>
                                                          1999                                 1998
                                              --------------------------          --------------------------
                                                Carrying       Fair                 Carrying       Fair
                                                 Amount        Value                 Amount        Value
                                              ------------  ------------          ------------  ------------
     <S>                                      <C>           <C>                   <C>           <C>
     Financial assets:
          Cash and due from banks             $  8,123,806  $  8,123,806          $  6,972,224  $  6,972,224
          Federal funds sold                     8,700,000     8,700,000            15,200,000    15,200,000
          Securities available for sale         42,311,490    42,311,490            39,228,084    39,228,084
          Securities held to maturity           34,424,679    33,578,899            27,549,053    28,341,531
          Net loans                            141,521,075   144,230,000           135,644,314   141,319,000
          Loans held for sale                      356,000       357,285               233,750       236,087
          Accrued interest receivable            1,622,480     1,622,480             1,629,508     1,629,508
                                              ------------  ------------          ------------  ------------
               Total                          $237,059,530  $238,923,960          $226,456,933  $232,926,434
                                              ============  ============          ============  ============
     Financial liabilities:
          Deposits                            $201,738,458  $202,004,000          $192,078,681  $193,434,000
          Federal Home Loan Bank advances        7,112,753     7,200,000             8,587,302     9,661,000
          Short term borrowings                  4,900,000     4,900,000             3,335,000     3,335,000
          Accrued interest payable                 339,999       339,999               369,174       369,174
                                              ------------  ------------          ------------  ------------
              Total                           $214,091,210  $214,443,999          $204,370,157  $206,799,174
                                              ============  ============          ============  ============
</TABLE>
Financial instruments are defined as cash, evidence of ownership interest in
an entity, or a contract which creates an obligation or right to receive or
deliver cash or another financial instrument from/to a second entity on
potentially favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be
exchanged in a current transaction between willing parties other than in a
forced or liquidation sale.  If a quoted market price is available for a
financial instrument, the estimated fair value would be calculated based upon
the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial
instruments should be based upon management's judgment regarding current
economic conditions, interest rate risk, expected cash flows, future
estimated losses, and other factors as determined through various option
pricing formulas or simulation modeling.  As many of these assumptions result
from judgments made by management based upon estimates which are inherently
uncertain, the resulting estimated fair values may not be indicative of the
amount realizable in the sale of a particular financial instrument.  In
addition, changes in assumptions on which the estimated fair values are based
may have a significant impact on the resulting estimated fair values.

As certain assets and liabilities such as deferred tax assets and liabilities,
premises and equipment and many other operational elements of the Company, are
not considered financial instruments, but have value, this estimated fair
value of financial instruments would not represent the full market value of
the Company.


The Company employed simulation modeling in determining the estimated fair
value of financial instruments for which quoted market prices were not
available based upon the following assumptions:

CASH AND DUE FROM BANKS, FEDERAL FUNDS SOLD, ACCRUED INTEREST RECEIVABLE,
------------------------------------------------------------------------
SHORT-TERM BORROWINGS, AND ACCRUED INTEREST PAYABLE
---------------------------------------------------

The fair value approximates the current carrying value.

                                      33
<PAGE>

INVESTMENT SECURITIES AND LOANS HELD FOR SALE
---------------------------------------------

The fair value of investment securities and loans held for sale are equal to
the available quoted market price.  If no quoted market price is available,
fair value is estimated using the quoted market price for similar securities.

LOANS, DEPOSITS, AND FEDERAL HOME LOAN BANK ADVANCES
----------------------------------------------------

The fair value of loans is estimated by discounting the future cash flows
using a simulation model which estimates future cash flows and constructs
discount rates that consider reinvestment opportunities, operating expenses,
non-interest income, credit quality, and prepayment risk.  Demand, savings,
and money market deposit accounts are valued at the amount payable on demand
as of year end.  Fair values for time deposits and Federal Home Loan Bank
advances are estimated using a discounted cash flow calculation that applies
contractual costs currently being offered in the existing portfolio to
current market rates being offered for deposits and borrowings of similar
remaining maturities.

COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT
----------------------------------------------------------

These financial instruments are generally not subject to sale, and estimated
fair values are not readily available.  The carrying value, represented by
the net deferred fee arising from the unrecognized commitment or letter of
credit, and the fair value, determined by discounting the remaining
contractual fee over the term of the commitment using fees currently charged
to enter into similar agreements with similar credit risk, are not considered
material for disclosure.  The contractual amounts of unfunded commitments and
letters of credit are presented previously in the commitments and contingent
liabilities note.

19. MERGER

The merger of Commercial and Savings Bank Company of Danville, Ohio, with and
into The Killbuck Savings Bank Company, with Killbuck Savings Bank being the
surviving bank was completed on November 21, 1998 using the purchase method of
accounting.

Each outstanding share of Commercial and Savings Bank Company was exchanged
for 2.1585 shares of Killbuck Bancshares, Inc. stock in a tax free exchange.
A total of 43,471 shares of Killbuck Bancshares, Inc. stock were issued to
shareholders of Commercial and Savings Bank Company, with cash being paid for
any fractional shares.  Commercial and Savings Bank Company had total assets
of $15.6 million on the date of the merger and operated out of one location in
Danville, Ohio.


                                        34
<PAGE>
20.     PARENT COMPANY

The following are parent only condensed financial statements:


                                    CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                     December 31,
                                                                1999              1998
                                                            ------------       ------------
<S>                                                         <C>                <C>
ASSETS
     Cash                                                   $    309,847       $     16,709
     Investment in bank subsidiary                            28,606,871         27,420,502
                                                            ------------       ------------
               Total assets                                 $ 28,916,718       $ 27,437,211
                                                            ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY
     Shareholders' equity                                   $ 28,916,718       $ 27,437,211
                                                            ------------       ------------
               Total liabilities and shareholders' equity   $ 28,916,718       $ 27,437,211
                                                            ============       ============

</TABLE>
<TABLE>
<CAPTION>
                                                  CONDENSED STATEMENT OF INCOME


                                                                             Year Ended December 31,
                                                                    1999            1998            1997
                                                                 -----------    -----------     -----------
<S>                                                              <C>            <C>             <C>
INCOME
     Dividends from bank subsidiary                              $ 1,175,000    $   718,950     $   921,412

     Operating expenses                                                  300            172           8,323
                                                                 -----------    -----------     -----------
          Income before income taxes                               1,174,700        718,778         913,089

Income tax benefit                                                      (102)           (58)         (2,830)
                                                                 -----------    -----------     -----------

           Income before equity in undistributed net income
             of subsidiary                                         1,174,802        718,836         915,919

Equity in undistributed net income of subsidiary                   1,843,525      2,197,125       2,089,543
                                                                 -----------    -----------     -----------
          NET INCOME                                             $ 3,018,327    $ 2,915,961     $ 3,005,462
                                                                 ===========    ===========     ===========
</TABLE>


                                                           35
<PAGE>
20.     PARENT COMPANY (CONTINUED)
<TABLE>
<CAPTION>
                                               CONDENSED STATEMENT OF CASH FLOWS



                                                                           Year Ended December 31,
                                                                    1999           1998             1997
                                                                 -----------    -----------     -----------
<S>                                                              <C>            <C>             <C>
OPERATING ACTIVITIES
     Net income                                                  $ 3,018,327    $ 2,915,961     $ 3,005,462
     Adjustments to reconcile net income to net cash
      provided by operating activities:
          Equity in undistributed net income of subsidiary        (1,843,525)    (2,197,125)     (2,089,543)
          Amortization                                                     -              -           8,109
                                                                 -----------    -----------     -----------
               Net cash provided by operating activities           1,174,802        718,836         924,028
                                                                 -----------    -----------     -----------
FINANCING ACTIVITIES
     Purchase of treasury shares                                           -              -        (312,430)
     Dividends paid including fractional shares                     (881,664)      (730,831)       (611,412)
                                                                 -----------    -----------     -----------
    Net cash used in financing activities                           (881,664)      (730,831)       (923,842)
                                                                 -----------    -----------     -----------
INCREASE (DECREASE) IN CASH                                          293,138        (11,995)            186

CASH AT BEGINNING OF YEAR                                             16,709         28,704          28,518
                                                                 -----------    -----------     -----------
CASH AT END OF YEAR                                              $   309,847    $    16,709     $    28,704
                                                                 ===========    ===========     ============

</TABLE>

                                                         36