<PAGE>

                                   EXHIBIT 13

                            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.

<PAGE>

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, internet banking, bill payment, 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
2002 and 2001. Cash dividends are paid on a semi-annual basis.

                                                                      Cash
                                                                   Dividends
Quarter Ended                              High         Low           Paid
-------------------------------------    --------    ---------    ------------
2002    March 31                         $  92.54    $   91.97          N/A
        June 30                             93.00        93.00    $     .85
        September 30                        93.00        93.00          N/A
        December 31                         93.00        93.00    $     .90

2001    March 31                         $  94.86    $   88.30          N/A
        June 30                             90.19        88.92    $     .80
        September 30                        92.43        90.35          N/A
        December 31                         93.18        91.42    $     .80

At December 31, 2002 the Company had approximately 1,037 shareholders of record.

<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,
                                        --------------------------------------------------------
                                          2002        2001        2000        1999        1998
                                        --------    --------    --------    --------    --------
<S>                                     <C>         <C>         <C>         <C>         <C>
For The Year:
  Total interest income                 $ 15,988    $ 18,933    $ 19,265    $ 17,069    $ 16,024
  Total interest expense                   5,926       9,237       9,367       8,201       7,892
                                        --------    --------    --------    --------    --------
    Net interest income                   10,062       9,696       9,898       8,868       8,132
  Provision for loan losses                  210         263         540         240         183
                                        --------    --------    --------    --------    --------
    Net interest income after
     provision for loan losses             9,852       9,433       9,358       8,628       7,949
  Total other income                         942         822         724         646         558
  Total other expense                      6,642       6,407       5,720       5,319       4,574
                                        --------    --------    --------    --------    --------
    Income before
     income taxes                          4,152       3,848       4,362       3,955       3,933
  Income tax expense                         934         903       1,079         937       1,017
                                        --------    --------    --------    --------    --------
    Net income                          $  3,218    $  2,945    $  3,283    $  3,018    $  2,916
                                        ========    ========    ========    ========    ========
Per share data
  Net earnings (1)                      $   4.68    $   4.23    $   4.66    $   4.28    $   4.37
  Dividends (1)                         $   1.75    $   1.60    $   1.45    $   1.25    $   1.05
  Book value (at period end)(1)         $  49.81    $  47.65    $  45.18    $  41.00    $  38.90

Average no. of shares outstanding (1)    686,739     696,017     703,784     705,331     684,650

Year-end balances:
  Total loans                           $175,157    $152,158    $151,800    $143,777    $137,891
  Securities                              80,626      91,223      82,287      75,574      65,676
  Total assets                           283,174     281,258     262,000     243,150     231,994
  Deposits                               239,039     237,971     219,168     201,738     192,079
  Borrowings                               9,198       9,522      10,514      12,013      11,922
  Shareholders' equity                    34,204      33,037      31,741      28,917      27,437

Significant ratios:
  Return on average assets                  1.15%       1.10%       1.31%       1.29%       1.40%
  Return on average equity                 10.10        9.34       10.98       10.69       12.35
  Dividends per share to net
   income per share                        37.31       37.86       31.12       29.21       24.03
  Average equity to
   average assets                          11.36       11.75       11.93       12.05       11.32
  Loans to deposits                        73.28       63.94       69.26       71.27       71.79
  Allowance for loan
   loss to total loans                      1.33        1.49        1.55        1.31        1.34
</TABLE>

(1)  Adjusted for 5 for 1 stock split in 1998.

<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.

CRITICAL ACCOUNTING POLICIES

The Company's accounting policies are integral to understanding the results
reported. The accounting policies are described in detail in Note 1 of the
consolidated financial statements. Our most complex accounting policies require
management's judgment to ascertain the valuation of assets, liabilities,
commitments and contingencies. We have established detailed policies and control
procedures that are intended to ensure valuation methods are well controlled and
applied consistently from period to period. In addition, the policies and
procedures are intended to ensure that the process for changing methodologies
occurs in an appropriate manner. The following is a brief description of our
current accounting policies involving significant management valuation
judgments.

ALLOWANCE FOR LOAN LOSSES

Arriving at an appropriate level of allowance for loan losses involves a high
degree of judgment. The Company's allowance for loan losses provides for
probable losses based upon evaluations of known, and inherent risks in the loan
portfolio.

Management uses historical information to assess the adequacy of the allowance
for loan losses as well as the prevailing business environment as it is affected
by changing economic conditions and various external factors, which may impact
the portfolio in ways currently unforeseen. The allowance is increased by
provisions for loan losses and by recoveries of loans previously charged-off and
reduced by loans charged-off. For a full discussion of the Company's methodology
of assessing the adequacy of the reserve for loan losses, refer to Note 1 of
"Notes to Consolidated Financial Statements."

<PAGE>

GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 7 of the consolidated financial statements, the Company
must assess goodwill and other intangible assets each year for impairment. This
assessment involves estimating cash flows for future periods. If the future cash
flows were less than the recorded goodwill and other intangible assets balances,
we would be required to take a charge against earnings to write down the assets
to the lower value.

DEFERRED TAX ASSETS

We use an estimate of future earnings to support our position that the benefit
of our deferred tax assets will be realized. If future income should prove
non-existent or less than the amount of the deferred tax assets within the tax
years to which they may be applied, the asset may not be realized and our net
income will be reduced. Our deferred tax assets are described further in Note 13
of the consolidated financial statements.

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 has allowed us to better
serve our existing clients in this area, while allowing us the opportunity to
attract new customers from the Danville area.

The branch facility in Sugarcreek, Ohio opened for business in February 2000. In
July 2001, a branch facility in Howard, Ohio (Apple Valley Area) opened for
business. These locations have given us a presence in the Sugarcreek and Apple
Valley areas and allowed us to develop new business and deposit relationships in
these areas.

<PAGE>

RESULTS OF OPERATIONS

SUMMARY

For 2002, we recorded net income of $3.2 million compared to $2.9 million for
2001 and $3.3 million for 2000.

Other operating income was $942,000 for 2002 compared to $822,000 for 2001 and
$724,000 for 2000.

Total other operating expenses were $6.6 million in 2002 compared to $6.4
million in 2001 and $5.7 million in 2000.

Earnings per share for 2002 were $4.68 compared to $4.23 for 2001 and $4.66 for
2000.

NET INTEREST INCOME

Our net interest income increased by $366,000 in 2002 from 2001 and decreased by
$202,000 in 2001 from 2000.

Total interest income decreased by $2,945,000 or 15.55% for 2002 from 2001. The
decrease of $2,945,000 for 2002 resulted primarily from a decrease of $2,350,000
in interest income on loans and $148,000 in interest income on investment
securities. The decreases in loan and investment security interest income
resulted primarily from decreases in the current yield on the loan and
investment portfolios which decreased 195 basis points to 7.10% and 61 basis
points to 4.87% respectively. The decrease in the current yield was a result of
the economic environment, more specifically, falling interest rates.

Total interest income decreased by $331,000 or 1.72% for 2001 from 2000. The
decrease of $331,000 for 2001 resulted primarily from a decrease of $345,000 in
interest income on loans and $40,000 in interest income on investment
securities. The decreases in loan and investment security interest income
resulted primarily from decreases in the current yield on the loan and
investment portfolios which decreased 59 basis points to 9.05% and 20 basis
points to 5.48% respectively. The decrease in the current yield was a result of
the economic environment, more specifically, falling interest rates.

The yield on earning assets was 6.04%, 7.53%, and 8.19% for 2002, 2001, and 2000
respectively. The decrease in the yield on earning assets is attributable to the
general decline in interest rates.

<PAGE>

Interest expense for 2002 decreased by $3,311,000 or 35.84% from 2001 and
decreased by $129,000 for 2001 from 2000. The decrease was due to a decrease in
the cost on interest bearing liabilities, which declined 170 basis points from
4.48% in 2001 to 2.78% in 2002.

The decrease in 2001 from 2000 was due to a decrease in the cost on interest
bearing liabilities, which declined 38 basis points from 4.86% to 4.48%.

The average volume of time deposits decreased $5.1 million and interest bearing
demand deposits, money market deposits, and savings deposits increased $3.0
million, $4.3 million, and $5.9 million respectively in 2002 while time deposits
and interest bearing demand deposits increased $10.1 million, and $143,000
respectively for 2001.

The cost on interest bearing liabilities was 2.78% for 2002 and 4.48% for 2001,
and 4.86% for 2000. The decrease for 2002 is due mainly to a decrease in the
cost of time deposits of 199 basis points.

Due mainly to a decrease in the yield on total earning assets, the net yield on
earning assets has decreased again this year reversing the increase of the prior
year. The net yield on interest earning assets is 3.80%, 3.86% and 4.21% for
2002, 2001 and 2000 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):

<PAGE>

AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS

<TABLE>
<CAPTION>
                                                                 For the Year Ended  December 31
                                             ------------------------------------------------------------------
                                                           2002                                2001
                                             ---------------------------------    -----------------------------
                                              Average                    Yield/    Average                Yield/
                                              Balance      Interest       Rate     Balance     Interest    Rate
                                             ---------    ---------      -----    ---------   ---------   -----
<S>                                          <C>          <C>             <C>     <C>         <C>          <C>
Assets
Interest earning assets:
   Loans (1)(2)(3)                           $ 162,079    $  11,504       7.10%   $ 153,119   $  13,854    9.05%
   Securities - taxable (4)                     46,440        2,393       5.15%      43,312       2,689    6.21%
   Securities - nontaxable                      40,599        1,845       4.54%      36,653       1,697    4.63%
   Federal funds sold                           15,370          246       1.60%      18,407         693    3.76%
                                             ---------    ---------               ---------   ---------    ----
       Total interest - earnings assets        264,488       15,988       6.04%     251,491      18,933    7.53%
                                                          ---------                           ---------

Noninterest-earning assets

   Cash and due from other Institutions          8,743                                8,538
   Premises and equipment, net                   5,209                                4,950
   Accrued interest                              1,306                                1,477
   Other assets                                  3,143                                4,095
   Less allowance for loan losses               (2,291)                              (2,286)
                                             ---------                            ---------
       Total                                 $ 280,598                            $ 268,265
                                             =========                            =========
Liabilities and Shareholders
 Equity
Interest bearing liabilities:
   Interest bearing demand                   $  31,768    $     321       1.01%   $  28,817   $     557    1.93%
   Money market accounts                        17,636          330       1.87%      13,316         442    3.32%
   Savings deposits                             36,437          602       1.65%      30,523         788    2.58%
   Time deposits                               118,851        4,346       3.66%     123,928       7,000    5.65%
   Short term borrowings                         3,831            5        .13%       3,942          65    1.65%
</TABLE>

<TABLE>
<CAPTION>
                                             ---------------------------------
                                                              2000
                                             ---------------------------------
                                              Average                    Yield
                                              Balance      Interest       Rate
                                             ---------    ---------      -----
<S>                                          <C>          <C>            <C>
Assets
Interest earning assets:
   Loans (1)(2)(3)                           $ 147,224    $  14,199      9.64%
   Securities - taxable (4)                     44,312        2,854      6.44%
   Securities - nontaxable                      33,600        1,572      4.68%
   Federal funds sold                           10,194          639      6.27%
                                             ---------    ---------
       Total interest - earnings assets        235,330       19,264      8.19%
                                                          ---------

Noninterest-earning assets
   Cash and due from other Institutions          7,666
   Premises and equipment, net                   4,079
   Accrued interest                              1,900
   Other assets                                  3,606
   Less allowance for loan losses               (2,004)
                                             ---------
       Total                                 $ 250,577
                                             =========

Liabilities and Shareholders
 Equity
Interest bearing liabilities:
   Interest bearing demand                   $  28,674    $     736      2.57%
   Money market accounts                        11,249          412      3.66%
   Savings deposits                             27,980          873      3.12%
   Time deposits                               113,868        6,717      5.90%
   Short term borrowings                         4,523          181      4.00%
</TABLE>

<PAGE>

AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (CONTINUED)

<TABLE>
<CAPTION>
                                                                  For the Year Ended  December 31
                                              ------------------------------------------------------------------
                                                            2002                                2001
                                              -----------------------------------    -----------------------------
                                               Average                    Yield/     Average                Yield/
                                               Balance      Interest       Rate      Balance    Interest    Rate
                                              ----------    ----------    -------   ---------   --------    ------
<S>                                           <C>           <C>              <C>    <C>         <C>           <C>
   Federal Home Loan Bank Advances                 4,752           322       6.78%     5,676         385      6.78%
                                              ----------    ----------              ---------   --------
       Total interest bearing liabilities        213,275         5,926       2.78%    206,202      9,237      4.48%
                                                            ----------                          --------

Noninterest bearing liabilities:
   Demand deposits                                33,524                               28,603
   Accrued expenses and other liabilities          1,931                                1,926

Shareholder's equity                              31,868                               31,534
                                              ----------                            ---------
       Total                                  $  280,598                            $ 268,265
                                              ==========                            =========

Net interest income                                         $   10,062                          $  9,696
                                                            ==========                          ========

Interest rate spread (5)                                                    3.26%                             3.05%
                                                                           =====                            ======

Net yield on interest earning assets (6)                                    3.80%                             3.86%
                                                                           =====                            ======
</TABLE>

<TABLE>
<CAPTION>
                                              -----------------------------------
                                                               2000
                                              -----------------------------------
                                               Average                    Yield/
                                               Balance       Interest      Rate
                                              ----------    ----------    ------
<S>                                           <C>           <C>              <C>
   Federal Home Loan Bank Advances                 6,610           447       6.76%
                                              ----------    ----------     ------
       Total interest bearing liabilities        192,904         9,366       4.86%
                                                            ----------

Noninterest bearing liabilities:
   Demand deposits                                27,117
   Accrued expenses and other liabilities            663

Shareholder's equity                              29,893
                                              ----------
       Total                                  $  250,577
                                              ==========

Net interest income                                         $    9,898
                                                            ==========

Interest rate spread (5)                                                     3.33%
                                                                           ======

Net yield on interest earning assets (6)                                     4.21%
                                                                           ======
</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 $414,438,
     $344,664, and $300,335 in 2002, 2001, and 2000, 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)  Interest rate spread represents the difference between the average yield on
     interest earning assets and the average cost of interest bearing
     liabilities.
(6)  Net yield on interest earning assets represents net interest income as a
     percentage of average interest earning assets.

<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>
                                            2002 Compared to 2001                    2001 Compared to 2000
                                   ---------------------------------------   -----------------------------------
                                          Increase (Decrease) Due To              Increase (Decrease) Due To
                                   ---------------------------------------   -----------------------------------
                                    Volume           Rate           Net       Volume         Rate          Net
                                   ---------       --------     ---------    --------      -------       -------
<S>                                <C>             <C>          <C>          <C>           <C>           <C>
Interest income
   Loans                           $     811       $ (3,161)    $  (2,350)   $    569      $  (914)      $  (345)
   Securities-taxable                    194           (490)         (296)        (64)        (101)         (165)
   Securities-nontaxable                 183            (35)          148         143          (18)          125
   Federal funds sold                   (114)          (333)         (447)        515         (461)           54
                                   ---------       --------     ---------    --------      -------       -------
       Total interest earning
        Assets                         1,074         (4,019)       (2,945)      1,163       (1,494)         (331)
                                   ---------       --------     ---------    --------      -------       -------

Interest expense
   Interest bearing demand                57           (293)         (236)          4         (183)         (179)
   Money market accounts                 143           (255)         (112)         76          (46)           30
   Savings deposits                      153           (339)         (186)         79         (163)          (84)
   Time deposits                        (287)        (2,367)       (2,654)        594         (312)          282
   Short-term borrowing                   (2)           (58)          (60)        (23)         (93)         (116)
   Federal Home Loan Bank
    Advances                             (63)             -           (63)        (63)           1           (62)
                                   ---------       --------     ---------    --------      -------       -------
       Total interest bearing
        Liabilities                        1         (3,312)       (3,311)        667         (796)         (129)
                                   ---------       --------     ---------    --------      -------       -------
Net change in interest income         $1,073       $   (707)    $     366    $    496      $  (698)      $  (202)
                                   =========       ========     =========    ========      =======       =======
</TABLE>

<PAGE>

PROVISION FOR LOAN LOSSES

The provision for loan losses was $210,000 for 2002, $262,500 for 2001, and
$540,000 for 2000. 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 1.33%, 1.49% and 1.55% for 2002,
2001 and 2000 respectively.

The allowance for loan losses is Management's estimate of the amount of probable
credit losses in the portfolio. The Company determines the allowance for loan
losses based upon an ongoing evaluation. This evaluation is inherently
subjective, as it requires material estimates, including the amounts and timing
of cash flows expected to be received on impaired loans that may be susceptible
to significant change. Increases to the allowance for loan losses are made by
charges to the provision for loan losses. Loans deemed uncollectable are charged
against the allowance for loan losses. Recoveries of previously charged-off
amounts are credited to the allowance for loan losses.

The Company`s allowance for loan losses is the accumulation of various
components calculated based upon independent methodologies. All components of
the allowance for loan losses represent an estimation performed according to
either Financial Accounting Standards No. 5 or No. 114. Management's estimate of
each allowance component is based on certain observable data that Management
believes is the most reflective of the underlying loan losses being estimated.
Changes in the amount of each component of the allowance for loan losses are
directionally consistent with changes in the observable data and corresponding
analyses. Some of the components that Management factors in are current economic
conditions, loan growth assumptions, and levels of nonperforming loans.

A key element of the methodology for determining the allowance for loan losses
is the Company's credit-risk-evaluation process, which includes credit-risk
grading of individual commercial loans. Loans are assigned credit-risk grades
based on an internal assessment of conditions that affect a borrower's ability
to meet its contractual obligation under the loan agreement. The assessment
process includes reviewing a borrower's current financial information,
historical payment experience, credit documentation, public information, and
other information specific to each individual borrower. Certain commercial loans
are reviewed on an annual or rotational basis or as Management becomes aware of
information affecting a borrower's ability to fulfill its obligation.

While 2000 was a year of strong loan performance; management recognized that the
general economic environment continued to change. Overall economic growth in the
United States slowed and utility prices rose dramatically. These changes also
affected our local communities. The added burden of higher utility prices and
the possibility of slower employment growth, workweek shortages or layoffs, made
meeting monthly consumer debt obligations more difficult.

For the reasons mentioned above, the provision for loan losses was increased
substantially during the fourth quarter of 2000.

<PAGE>

OTHER INCOME

Other income, which is comprised principally of fees and charges on customers'
deposit accounts, increased $120,000 or 14.6% to $942,000 in 2002 from $822,000
in 2001, and increased $98,000 or 1.4% in 2001 from 2000. Service charges on
customer accounts increased $65,000 or 11.6% in 2002 due to increased deposit
activity at the Apple Valley Office, which opened in July 2001 and increases in
new deposit accounts. The Bank started to sell fixed rate loans in the secondary
market in late 1997. Due to market conditions, the Bank originated and sold $5.3
million more of these loans in 2002 compared to 2001. Gains for these sales were
$129,000 in 2002, $76,000 in 2001 and $10,000 in 2000. Income from the
alternative investment service the Bank introduced in 1997 was $13,000 for 2002
and $2,000 for 2001 and $41,000 for 2000. The year 2001 was a rebuilding year
for the program due to the absence of permanent personnel and a change in the
broker/dealer relationship.

OTHER EXPENSE

Other expense increased $235,000 or 3.7% to $6.6 million in 2002 as compared to
$6.4 million in 2001 and increased $687,000 or 12% for 2001 from $5.7 million in
2000.

Salary and employee benefits for 2002 totaled $3.4 million, an increase of
$200,000 or 6.3% from $3.2 million in 2001 and increased $400,000 for 2001 or
14.3% from $2.8 million in 2000. This increase represents the effect of a full
year's expense associated with new employees due to the addition of the branch
in Howard, Ohio in July 2001, and normal recurring employee cost increases for
annual salary raises, staff additions and employee benefits for 2002. The
increase for 2001 is due to the new branch in Howard, Ohio and normal recurring
employee cost increases for annual salary increases, staff additions and
employee benefits.

Occupancy and equipment expense increased $60,000 in 2002 and $89,000 in 2001.
The increase in expense during 2002 was attributable to normal and recurring
items and a full year of occupancy and equipment expense on the Apple Valley
branch in Howard, Ohio. For 2001, the increases were attributable to normal and
recurring items and the opening of the Apple Valley branch.

Other operating expenses for 2002 totaled $2.3 million, a $58,000 or 2.5%
decrease from the $2.3 million reported in 2001 and a $200,000 or 10 % increase
for 2001 from the 2000 total of $2.1 million.

The decrease in other expense is due to several factors including the
elimination of the amortization expense for goodwill of $ 111,000, with the
adoption of FAS No. 142, a $12,000 increase in charitable contribution expenses,
a $16,000 increase in postage expenses, a $36,000 increase in credit card
processing expenses, an $11,000 decrease in professional fees, a $7,000 decrease
in telephone expense, a $11,000 increase in data processing expenses, and
increases in normal and recurring expenses. For further discussion of the
goodwill expense, see Note 7. The charitable contribution expense increase is
due to some larger local projects than usual. The postage expense is
attributable to an increase in deposit accounts, the Apple Valley branch and the
U.S. postal increases. The credit card processing expense increase is due mainly
to the increase in credit card receivables and the increase in merchant
relations. The professional fees decrease is attributable to in-house expertise,
which allows the preparation of many documents that were formerly provided by
outside service providers. The telephone expense is attributable to better
contract pricing with a single vendor. The data processing expense is
attributable to the increase in deposit accounts. The

<PAGE>

increase of $200,000 in 2001 from 2000 in other expenses is attributable to
costs associated with increases in normal and recurring expenses associated with
a new branch and existing branches and a full year costs associated with the
implementation of new technologies.

INCOME TAX EXPENSE

Income tax expense increased by $32,000 for 2002 to $935,000 from $903,000 in
2001 and decreased $176,000 in 2001 from $1,079,000 in 2000. The effective rate
on taxes for 2002, 2001 and 2000 was 22.5%, 23.5% and 24.7% 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, 2002 AND 2001

Total assets at December 31, 2002 amounted to $283 million, an increase of $2
million compared to $281 million at December 31, 2001.

Cash and cash equivalents decreased $10 million or 32.9% from December 31, 2001
to December 31, 2002, with liquid funds held in the form of federal funds sold
decreasing $10.2 million. The decrease in federal funds sold at December 31,
2002 was used to help fund loan growth.

Total investment securities decreased $10.6 million or 11.6% from December 31,
2001 to December 31, 2002. The decrease in investments was due to maturities and
calls and was used to help fund loan growth. Information detailing the book
value of the investment portfolio by security type and classification is present
in Note 3 to the consolidated financial statements.

Total loans were $175.2 million at December 31, 2002 an increase of $23 million
or 15.11% from $152.2 million at December 31, 2001. Of this $23 million increase
approximately $17.3 million was in the residential real estate loan portfolio,
approximately $5.7 million was an increase in the agriculture real estate loan
portfolio, approximately $10.8 million was an increase in the commercial real
estate loan portfolio, approximately $8.9 million was an increase in the
construction real estate loan portfolio, approximately $2 million was a decrease
in the commercial and other loan portfolio, and approximately $17.7 million was
a decrease in the consumer and credit loan portfolio. Approximately $21.7
million of the $17.3 million increase in real estate loans was in residential 1
to 4 family adjustable rate mortgages while approximately $4.4 million in
residential 1 to 4 family fixed rate mortgages decreased. 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 $17.4
million and $12.1 million of loans in 2002 and 2001. Profit on the sale of these
loans was $129,000 and $76,000 for 2002 and 2001. Information detailing the
composition of the loan portfolio is presented in Note 4 to the consolidated
financial statements.

Total deposits increased $1.1 million or .4% from December 31, 2001 to December
31, 2002. All deposit accounts increased except interest bearing demand deposits
and time deposits. The interest bearing demand deposits and the time deposits
decreased $.9 million and $8 million respectively. The increases are
attributable to new deposit account growth and internal growth for existing
accounts. See also, Average Balance Sheet and Net Interest Analysis for
information related to the average amount and average interest paid on deposit
accounts during 2002 and 2001. Information

<PAGE>

related to the maturity of time deposits of $100,000 and over at December 31,
2002 is presented in Note 8 of the accompanying consolidated financial
statements.

Advances were $4.3 million and $5.2 million at December 31, 2002 and 2001
respectively. These advances were used to fund fixed rate residential real
estate loans with similar maturities in prior years. There were no new advances
in 2002 or 2001.

Shareholders' equity increased $1.2 million during 2002 to $34.2 million at
December 31, 2002 from $33 million at December 31, 2001. This increase was the
result of an increase of $2 million in net retained earnings during the year and
a net unrealized gain on securities available for sale of $.1 million. The
Company also purchased treasury stock for $.9 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 1.8% 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, 2002, they
comprised approximately 74.3% 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. Both short term
and long term liquidity needs are 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. The assets defined as
liquid are: cash and cash equivalents and the available for sale security
portfolio. The liquidity ratio as of December 31, 2002 and 2001 are 21% and 29%,
respectively.

<PAGE>

Operating activities, as presented in the statement of cash flows in the
accompanying consolidated financial statements, provided $4.4 and $4.3 million
in cash during 2002 and 2001 respectively, generated principally from net
income.

Investing activities consist primarily of loan originations and repayments,
investment purchases and maturities, and investment in technology. These
activities used $13 million in funds during 2002, principally for the net
funding of loans, and the net purchase of technology and fixed assets totaling
$23.1 million, and $.6 million respectively; and provided the net proceeds of
investments of $10.7 million. For 2001, investing activities used $10.4 million,
principally for the net funding of loans, the net purchase of investments, and
the net purchase of technology and fixed assets totaling $.8 million, $8.5
million, and $1.1 million respectively.

Financing activities consisted of the solicitation and repayment of customer
deposits, borrowings and repayments, and the payment of dividends. For 2002,
financing activities used $1.4 million, comprised mainly of net deposit
increases of $1.1 million, repayment of Federal Home Loan Bank advances of $1
million, net increase in short-term borrowings of $.6 million, purchase of
treasury stock of $.9 million and payment of dividends of $1.2 million. For 2001
financing activities provided $15.8 million, comprised mainly of net deposit
increases of $18.8 million, Federal Home Loan Bank advance repayments of $1.0
million, purchase of treasury stock of $.9 million and payment of dividends of
$1.1 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, 2002.


Our regulatory capital position at December 31, 2002, 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 accounting
principles generally accepted in the United States of America, 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

<PAGE>

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.

<PAGE>


                            KILLBUCK BANCSHARES, INC.

                                 KILLBUCK, OHIO


                                  AUDIT REPORT

                                DECEMBER 31, 2002


<PAGE>

                            KILLBUCK BANCSHARES, INC.
                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

                                                                           Page
                                                                          Number
                                                                          ------
Report of Independent Auditors                                               2

Financial Statements

     Consolidated Balance Sheet                                              3

     Consolidated Statement of Income                                        4

     Consolidated Statement of Changes in Shareholders' Equity               5

     Consolidated Statement of Cash Flows                                    6

Notes to Consolidated Financial Statements                                  7-29

<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, 2002 and 2001, 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, 2002.
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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United States of America.

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


Steubenville, Ohio
February 20, 2003

                                       -2-

<PAGE>

                            KILLBUCK BANCSHARES, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                    2002                2001
                                                                               --------------       -------------
<S>                                                                            <C>                  <C>
ASSETS
     Cash and cash equivalents:
         Cash and amounts due from depository institutions                     $    8,007,448       $   7,768,070
         Federal funds sold                                                        12,300,000          22,500,000
                                                                                -------------       -------------
              Total cash and cash equivalents                                      20,307,448          30,268,070
                                                                                -------------       -------------

     Investment securities:
         Securities available for sale                                             39,048,024          51,419,900
         Securities held to maturity (market value of $44,201,169
          and $40,734,605)                                                         41,578,062          39,803,246
                                                                               --------------       -------------
              Total investment securities                                          80,626,086          91,223,146
                                                                               --------------       -------------

     Loans (net of allowance for loan losses of $2,325,560 and
      $2,260,555)                                                                 172,482,506         149,560,961

     Loans held for sale                                                              419,750             593,200
     Premises and equipment, net                                                    5,203,954           5,138,782
     Accrued interest receivable                                                    1,134,183           1,508,784
     Goodwill, net                                                                  1,329,249           1,329,249
     Other assets                                                                   1,671,219           1,635,996
                                                                               --------------       -------------
              Total assets                                                     $  283,174,395       $ 281,258,188
                                                                               ==============       =============

LIABILITIES
     Deposits:

         Noninterest bearing demand                                            $   35,745,364       $  32,198,109
         Interest bearing demand                                                   31,755,668          32,659,909
         Money market                                                              16,090,756          15,169,110
         Savings                                                                   38,819,993          33,247,687
         Time                                                                     116,626,850         124,696,288
                                                                               --------------       -------------
              Total deposits                                                      239,038,631         237,971,103
     Federal Home Loan Bank advances                                                4,267,666           5,226,732
     Short-term borrowings                                                          4,929,993           4,295,000
     Accrued interest and other liabilities                                           734,446             727,901
                                                                               --------------       -------------
              Total liabilities                                                   248,970,736         248,220,736
                                                                               --------------       -------------

SHAREHOLDERS' EQUITY

     Common stock - No par value: 1,000,000 shares authorized,
      718,431 issued                                                                8,846,670           8,846,670
     Retained earnings                                                             27,462,762          25,445,528
     Accumulated other comprehensive income                                           534,990             493,654
     Treasury stock, at cost (34,771 and 25,144 shares)                            (2,640,763)         (1,748,400)
                                                                               --------------       -------------
              Total shareholders' equity                                           34,203,659          33,037,452
                                                                               --------------       -------------

              Total liabilities and shareholders' equity                       $  283,174,395       $ 281,258,188
                                                                               ===============      =============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       -3-

<PAGE>

                            KILLBUCK BANCSHARES, INC.
                        CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                                                           Year Ended December 31,
                                                                              2002                2001                2000
                                                                          ------------        ------------       -------------
<S>                                                                       <C>                 <C>                <C>
INTEREST INCOME
     Interest and fees on loans                                           $ 11,504,240        $ 13,853,843       $  14,199,350
     Federal funds sold                                                        245,539             693,149             639,622
     Investment securities:
         Taxable                                                             2,393,046           2,688,740           2,853,976
         Exempt from federal income tax                                      1,845,087           1,696,876           1,571,737
                                                                          ------------        ------------        ------------
              Total interest income                                         15,987,912          18,932,608          19,264,685
                                                                          ------------        ------------        ------------

INTEREST EXPENSE

     Deposits                                                                5,599,201           8,786,868           8,738,303
     Federal Home Loan Bank advances                                           321,749             384,809             447,023
     Short term borrowings                                                       4,952              65,289             181,234
                                                                          ------------        ------------        ------------
              Total interest expense                                         5,925,902           9,236,966           9,366,560
                                                                          ------------        ------------        ------------

NET INTEREST INCOME                                                         10,062,010           9,695,642           9,898,125

Provision for loan losses                                                      210,000             262,500             540,000
                                                                          ------------        ------------        ------------

NET INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                                             9,852,010           9,433,142           9,358,125
                                                                          ------------        ------------        ------------

OTHER INCOME
     Service charges on deposit accounts                                       624,197             559,293             499,858
     Gain on sale of loans, net                                                128,645              75,808               9,786
     Other income                                                              189,428             186,602             214,342
                                                                          ------------        ------------        ------------
              Total other income                                               942,270             821,703             723,986
                                                                          ------------        ------------        ------------

OTHER EXPENSE

     Salaries and employee benefits                                          3,401,327           3,167,553           2,827,003
     Occupancy and equipment                                                   958,750             899,194             810,111
     Other expense                                                           2,281,801           2,340,110           2,083,192
                                                                          ------------        ------------        ------------
              Total other expense                                            6,641,878           6,406,857           5,720,306
                                                                          ------------        ------------        ------------

INCOME BEFORE INCOME TAXES                                                   4,152,402           3,847,988           4,361,805
     Income taxes                                                              934,858             903,423           1,078,884
                                                                          ------------        ------------        ------------

NET INCOME                                                                $  3,217,544        $  2,944,565       $   3,282,921
                                                                          ============        ============       =============

EARNINGS PER SHARE                                                        $       4.68        $       4.23       $        4.66
                                                                          ============        ============       =============

WEIGHTED AVERAGE SHARES OUTSTANDING                                            687,216             696,674             704,498
                                                                          ============        ============       =============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       -4-

<PAGE>

                            KILLBUCK BANCSHARES, INC.
           CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                            Accumulated
                                                                                               Other
                                                          Common            Retained       Comprehensive          Treasury
                                                           Stock            Earnings        Income(Loss)           Stock
                                                     ---------------    ---------------    ---------------    ---------------
<S>                                                  <C>                <C>                <C>                <C>
BALANCE, DECEMBER 31, 1999                           $     8,846,670    $    21,352,156    $      (648,620)   $      (633,488)

Net income                                                                    3,282,921
Other comprehensive income:
         Unrealized gain on available for sale
          securities, net of tax of $420,756                                                       816,761

Comprehensive income

Cash dividends paid ($1.45 per share)                                        (1,020,487)
Purchase of Treasury Stock, at cost                                                                                  (254,748)
                                                     ---------------    ---------------    ---------------    ---------------
BALANCE, DECEMBER 31, 2000                                 8,846,670         23,614,590            168,141           (888,236)
Net income                                                                    2,944,565
Other comprehensive income:
         Unrealized gain on available for sale                                                     325,513

          securities, net of tax of $167,689
Comprehensive income                                                         (1,113,627)

Cash dividends paid ($1.60 per share)
Purchase of Treasury Stock, at cost                                                                                  (860,164)
                                                     ---------------    ---------------    ---------------    ---------------
BALANCE, DECEMBER 31, 2001                                 8,846,670         25,445,528            493,654         (1,748,400)
Net income                                                                    3,217,544
Other comprehensive income:
         Unrealized gain on available for sale                                                      41,336
          securities, net of tax of $21,295
Comprehensive income
Cash dividends paid ($1.75 per share)                                        (1,200,310)
Purchase of Treasury Stock, at cost                                                                                  (892,363)
                                                     ---------------    ---------------    ---------------    ---------------
BALANCE, DECEMBER 31, 2002                           $     8,846,670    $    27,462,762    $       534,990    $    (2,640,763)
                                                     ===============    ===============    ===============    ===============
</TABLE>

<TABLE>
<CAPTION>
                                                          Total
                                                      Shareholders'      Comprehensive
                                                          Equity             Income
                                                     ---------------    ---------------
<S>                                                  <C>                <C>
BALANCE, DECEMBER 31, 1999                           $    28,916,718

Net income                                                 3,282,921    $     3,282,921
Other comprehensive income:
         Unrealized gain on available for sale
          securities, net of tax of $420,756                 816,761            816,761
                                                                        ---------------
Comprehensive income                                                    $     4,099,682
                                                                        ===============
Cash dividends paid ($1.45 per share)                     (1,020,487)
Purchase of Treasury Stock, at cost                         (254,748)
                                                     ---------------
BALANCE, DECEMBER 31, 2000                                31,741,165
Net income                                                 2,944,565    $     2,944,565
Other comprehensive income:
         Unrealized gain on available for sale               325,513            325,513
                                                                        ---------------
          securities, net of tax of $167,689
Comprehensive income                                      (1,113,627)   $     3,270,078
                                                                        ===============
Cash dividends paid ($1.60 per share)
Purchase of Treasury Stock, at cost                         (860,164)
                                                     ---------------
BALANCE, DECEMBER 31, 2001                                33,037,452
Net income                                                 3,217,544    $     3,217,544
Other comprehensive income:
         Unrealized gain on available for sale                41,336             41,336
                                                                        ---------------
          securities, net of tax of $21,295
Comprehensive income                                                    $     3,258,880
                                                                        ===============
Cash dividends paid ($1.75 per share)                     (1,200,310)
Purchase of Treasury Stock, at cost                         (892,363)
                                                     ---------------
BALANCE, DECEMBER 31, 2002                           $    34,203,659
                                                     ===============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                      -5-

<PAGE>

                            KILLBUCK BANCSHARES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                    2002             2001             2000
                                                                                ------------     ------------     ------------
<S>                                                                             <C>               <C>              <C>
OPERATING ACTIVITIES
Net income                                                                      $  3,217,544      $ 2,944,565      $ 3,282,921
Adjustments to reconcile net income to net cash
 provided by operating activities:
         Provision for loan losses                                                   210,000          262,500          540,000
         Depreciation, amortization and accretion, net                               509,805          544,535          420,419
         Gain on sale of loans, net                                                 (128,645)         (75,808)          (9,786)
         Origination of loans held for sale                                      (17,408,920)     (12,105,010)      (3,303,720)
         Proceeds from the sale of loans                                          17,711,015       12,107,617        3,149,506
         Federal Home Loan Bank stock dividend                                       (51,200)         (71,500)         (66,400)
         Decrease (increase) in accrued interest and other assets                    369,283          519,703         (421,711)
         Increase in accrued interest and other
          liabilities                                                                  6,545          150,627           95,323
                                                                                ------------     ------------     ------------
              Net cash provided by operating activities                            4,435,427        4,277,229        3,686,552
                                                                                ------------     ------------     ------------

INVESTING ACTIVITIES
   Investment securities available for sale:
         Proceeds from maturities and repayments                                  37,186,127       35,840,062        4,490,576
         Purchases                                                               (24,738,527)     (40,645,564)      (8,260,583)
     Investment securities held to maturity:
         Proceeds from maturities and repayments                                   4,475,491        2,225,527        1,707,128
         Purchases                                                                (6,276,462)      (5,959,703)      (3,465,473)
     Net increase in loans                                                       (23,131,545)        (761,560)      (8,080,826)
     Purchase of premises and equipment                                             (561,915)      (1,058,111)      (1,043,588)
                                                                                ------------     ------------     ------------
              Net cash used in investing activities                              (13,046,831)     (10,359,349)     (14,652,766)
                                                                                ------------     ------------     ------------

FINANCING ACTIVITIES
     Net increase in deposits                                                      1,067,528       18,803,211       17,429,434
     Repayment of Federal Home Loan Bank advances                                   (959,066)        (971,198)        (914,823)
     Net increase (decrease) in short-term borrowings                                634,993          (20,768)        (584,232)
     Purchase of treasury shares                                                    (892,363)        (860,164)        (254,748)
     Cash dividends paid                                                          (1,200,310)      (1,113,627)      (1,020,487)
                                                                                ------------     ------------     ------------
              Net cash provided by (used in) financing activities                 (1,349,218)      15,837,454       14,655,144
                                                                                ------------     ------------     ------------

              (Decrease) increase  in cash and cash equivalents                   (9,960,622)       9,755,334        3,688,930

Cash and cash equivalents at beginning of year                                    30,268,070       20,512,736       16,823,806
                                                                                ------------     ------------     ------------
Cash and cash equivalents at end of year                                        $ 20,307,448     $ 30,268,070      $20,512,736
                                                                                ============     ============     ============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       -6-

<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 eight locations. The
Board of Governors of the Federal Reserve System supervises the 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 accounting principles generally accepted in the
United States of America 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 consolidated 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 Great Lakes
Bankers Bank represent ownership in institutions, which are wholly-owned by
other financial institutions. These securities are accounted for at cost and are
classified with other assets.

                                       -7-

<PAGE>

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. All loans are sold to Federal Home Loan
Mortgage Corporation ("Freddie Mac").

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses represents the amount which management estimates
is adequate to provide for probable losses inherent 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.

                                       -8-

<PAGE>

ALLOWANCE FOR LOAN LOSSES (CONTINUED)

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 principally computed on the straight-line method over the
estimated useful lives of the related assets, which range from three to ten
years for furniture, fixtures and equipment and 25 to 50 years for building
premises. Leasehold improvements are amortized over the shorter of their
estimated useful lives or their respective lease terms, which range from seven
to fifteen years. Expenditures for maintenance and repairs are charged against
income as incurred. Costs of 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, 2002 and 2001 respectively, net goodwill was $1,329,249 and $1,329,249. On
January 1, 2002, the Company adopted Statements of Financial Accounting
Standards ("FAS") No. 142, Goodwill and Other Intangible Assets, which changed
the accounting for goodwill from an amortization method to an impairment-only
approach. This statement eliminates the regularly scheduled amortization of
goodwill and replaces this method with a two-step process for testing the
impairment of goodwill on at least an annual basis. This approach could cause
more volatility in the Company's reported net income because impairment losses,
if any, could occur irregularly and in varying amounts. In addition, the Company
performed its initial impairment analysis of goodwill and other intangible
assets and determined that the estimated fair value exceeded the carrying
amount.

                                       -9-

<PAGE>

MORTGAGE SERVICING RIGHTS ("MSRs")

The Company has agreements for the express purpose of selling loans in the
secondary market. The Company maintains all servicing rights for these loans.
Originated MSRs are recorded by allocating total costs incurred between the loan
and servicing rights based on their relative fair values. MSRs are amortized in
proportion to the estimated servicing income over the estimated life of the
servicing portfolio. Impairment is evaluated based on the fair value of the
right, based on portfolio interest rates and prepayment characteristics. MSRs
are a component of other assets on the Consolidated Balance Sheet.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board ("FASB") issued FAS No.
143, Accounting for Asset Retirement Obligations, which requires that the fair
value of a liability be recognized when incurred for the retirement of a
long-lived asset and the value of the asset be increased by that amount. The
statement also requires that the liability be maintained at its present value in
subsequent periods and outlines certain disclosures for such obligations. The
adoption of this statement, which is effective January 1, 2003, is not expected
to have a material effect on the Company's financial statements.

In October 2001, the FASB issued FAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. FAS No. 144 supercedes FAS No. 121 and applies to
all long-lived assets (including discontinued operations) and consequently
amends APB Opinion No. 30, Reporting Results of Operations-Reporting the Effects
of Disposal of a Segment of a Business. FAS No. 144 requires that long-lived
assets that are to be disposed of by sale be measured at the lower of book value
or fair value less costs to sell. FAS No. 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001 and,
generally, its provisions are to be applied prospectively. The adoption of this
statement did not have a material effect on the Company's financial statements.

In April 2002, the FASB issued FAS No. 145, Recission of FASB Statement No. 4,
44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. FAS
No. 145 rescinds FAS No. 4, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria
in APB Opinion No. 30 will now be used to classify those gains and losses. This
statement also amends FAS No. 13 to require that certain lease modifications
that have economic effects similar to sale-leaseback transactions be accounted
for in the same manner as sale-leaseback transactions. This statement also makes
technical corrections to existing pronouncements, which are not substantive but
in some cases may change accounting practice. The provisions of this statement
related to the rescission of FAS No. 4 shall be applied in fiscal years
beginning after May 15, 2002. Any gain or loss on extinguishments of debt that
was classified as an extraordinary item in prior periods presented that does not
meet the criteria in APB Opinion No. 30 for classification as an extraordinary
item shall be reclassified. Early adoption of the provisions of this statement
related to FAS No. 13 shall be effective for transactions occurring after May
15, 2002. All other provisions of this statement shall be effective for
financial statements issued on or after May 15, 2002. Early application of this
statement is encouraged. The adoption of the effective portions of this
statement did not have an impact on the Company's financial position of results
of operations. The adoption of the remaining portions of this statement is not
expected to have an impact on the Company's financial position or results of
operations.

                                      -10-

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In July 2002, the FASB issued FAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities, which requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. This statement replaces
EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring). The new statement will be effective for exit or disposal
activities initiated after December 31, 2002, the adoption of which is not
expected to have a material effect on the Company's financial statements.

On October 1, 2002, FASB issued FAS No. 147, Acquisitions of Certain Financial
Institutions, effective for all business combinations initiated after October 1,
2002. This statement addresses the financial accounting and reporting for the
acquisition of all or part of a financial institution, except for a transaction
between two or more mutual enterprises. This statement removes acquisitions of
financial institutions, other than transactions between two or more mutual
enterprises, from the scope of FAS No. 72, Accounting for Certain Acquisitions
of Banking or Thrift Institutions, and FASB Interpretation No. 9, Applying APB
Opinions No. 16 and 17 When a Savings and Loan Association or a Similar
Institution Is Acquired in a Business Combination Accounted for by the Purchase
Method. The acquisition of all or part of a financial institution that meets the
definition of a business combination shall be accounted for by the purchase
method in accordance with FAS No. 141, Business Combinations, and FAS No. 142,
Goodwill and Other Intangible Assets. This statement also provides guidance on
the accounting for the impairment or disposal of acquired long-term
customer-relationship intangible assets (such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible
assets), including those acquired in transactions between two or more mutual
enterprises. The adoption of this statement did not have a material effect on
the Company's financial statements.

On December 31, 2002, the FASB issued FAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, which amends FAS No. 123, Accounting
for Stock-Based Compensation. FAS No. 148 amends the disclosure requirements of
FAS No. 123 to require more prominent and more frequent disclosures in financial
statements about the effects of stock-based compensation. Under the provisions
of FAS No. 123, companies that adopted the preferable, fair value based method
were required to apply that method prospectively for new stock option awards.
This contributed to a "ramp-up" effect on stock-based compensation expense in
the first few years following adoption, which caused concern for companies and
investors because of the lack of consistency in reported results. To address
that concern, FAS No. 148 provides two additional methods of transition that
reflect an entity's full complement of stock-based compensation expense
immediately upon adoption, thereby eliminating the ramp-up effect. FAS No. 148
also improves the clarity and prominence of disclosures about the pro forma
effects of using the fair value based method of accounting for stock-based
compensation for all companies--regardless of the accounting method used--by
requiring that the data be presented more prominently and in a more
user-friendly format in the footnotes to the financial statements. In addition,
the statement improves the timeliness of those disclosures by requiring that
this information be included in interim as well as annual financial statements.
The transition guidance and annual disclosure provisions of FAS No. 148 are
effective for fiscal years ending after December 15, 2002, with earlier
application permitted in certain circumstances. The interim disclosure
provisions are effective for financial reports containing financial statements
for interim periods beginning after December 15, 2002.

                                      -11-

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In November, 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. This interpretation elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. This interpretation
clarifies that a guarantor is required to disclose (a) the nature of the
guarantee, including the approximate term of the guarantee, how the guarantee
arose, and the events or circumstances that would require the guarantor to
perform under the guarantee; (b) the maximum potential amount of future payments
under the guarantee; (c) the carrying amount of the liability, if any, for the
guarantor's obligations under the guarantee; and (d) the nature and extent of
any recourse provisions or available collateral that would enable the guarantor
to recover the amounts paid under the guarantee. This interpretation also
clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the obligations it has undertaken in issuing the
guarantee, including its ongoing obligation to stand ready to perform over the
term of the guarantee in the event that the specified triggering events or
conditions occur. The objective of the initial measurement of that liability is
the fair value of the guarantee at its inception. The initial recognition and
initial measurement provisions of this interpretation are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002,
irrespective of the guarantor's fiscal year-end. The disclosure requirements in
this interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002.

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.

INCOME TAXES

The Company and its subsidiary file a consolidated federal income tax return.
Income tax expense is allocated among the parent company and the subsidiary as
if each had filed a separate 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 average number of shares outstanding 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 is comprised exclusively of unrealized holding gains and losses on the
available for sale securities portfolio. The Company has elected to report the
effects of other comprehensive income as part of the Statement of Changes in
Shareholders' Equity.

                                      -12-

<PAGE>

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 2002, 2001 and 2000 were $6,043,639, $9,305,850, and $9,291,388,
respectively. Cash payments for income taxes for 2002, 2001, and 2000 were
$895,358, $718,294, and $1,209,236 respectively.

RECLASSIFICATION OF COMPARATIVE AMOUNTS

Certain amounts in the 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.

2.   FEDERAL FUNDS SOLD

     Federal funds sold at December 31 consists of the following:

<TABLE>
<CAPTION>
                                                   2002                            2001
                                      -----------------------------   -----------------------------
              Institution               Maturity         Balance        Maturity         Balance
     ------------------------------   -------------   -------------   -------------   -------------
     <S>                                    <C>       <C>                   <C>       <C>
     National City Bank                     1-02-03   $   8,400,000         1-02-02   $  19,600,000
     Great Lakes Bankers Bank               1-02-03       3,900,000         1-02-02       2,900,000
                                                      -------------                   -------------
                                                      $  12,300,000                   $  22,500,000
                                                      =============                   =============
</TABLE>

3.   INVESTMENT SECURITIES

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

     Securities available for sale

<TABLE>
<CAPTION>
                                                                  2002
                                      -------------------------------------------------------------
                                          Gross           Gross        Estimated
                                        Amortized      Unrealized      Unrealized        Market
                                          Cost            Gains          Losses           Value
                                      -------------   -------------   -------------   -------------
     <S>                              <C>             <C>             <C>             <C>
     Obligations of U.S. Government   $  38,237,433   $     810,591   $           -   $  39,048,024
      Agencies and Corporations
                                      -------------   ----=--------   -------------   -------------

       Total                          $  38,237,433   $     810,591   $           -   $  39,048,024
                                      =============   =============   =============   =============
</TABLE>

<TABLE>
<CAPTION>
                                                                  2001
                                      -------------------------------------------------------------
                                                          Gross           Gross         Estimated
                                        Amortized      Unrealized       Unrealized       Market
                                           Cost           Gains           Losses          Value
                                      -------------   -------------   -------------   -------------
     <S>                              <C>             <C>             <C>             <C>
     Obligations of U.S. Government   $  50,671,940   $     747,960   $           -   $  51,419,900
      Agencies and Corporations
                                      -------------   -------------   -------------   -------------

       Total                          $  50,671,940   $     747,960   $           -   $  51,419,900
                                      =============   =============   =============   =============
</TABLE>

                                      -13-

<PAGE>

3.   INVESTMENT SECURITIES (CONTINUED)

     Securities held to maturity

<TABLE>
<CAPTION>
                                                                                  2002
                                                      -------------------------------------------------------------
                                                                          Gross          Gross          Estimated
                                                        Amortized      Unrealized       Unrealized       Market
                                                           Cost           Gains           Losses          Value
                                                      -------------   -------------   -------------   -------------
     <S>                                              <C>             <C>             <C>             <C>
     Obligations of States and Political
      Subdivisions                                    $  40,591,090   $   2,590,623   $       9,613   $  43,172,100
     Corporate Securities                                   986,972          45,611           3,514       1,029,069
                                                      -------------   -------------   -------------   -------------
       Total                                          $  41,578,062   $   2,636,234   $      13,127   $  44,201,169
                                                      =============   =============   =============   =============
</TABLE>

<TABLE>
<CAPTION>
                                                                                  2001
                                                      -------------------------------------------------------------
                                                                          Gross           Gross        Estimated
                                                        Amortized       Unrealized      Unrealized       Market
                                                           Cost           Gains          Losses           Value
                                                      -------------   -------------   -------------   -------------
     <S>                                              <C>             <C>             <C>             <C>
     Obligations of States and Political
      Subdivisions                                    $  38,304,631   $   1,003,792   $      69,573   $  39,238,850
     Corporate Securities                                 1,498,615          25,342          28,202       1,495,755
                                                      -------------   -------------   -------------   -------------
       Total                                          $  39,803,246   $   1,029,134   $      97,775   $  40,734,605
                                                      =============   =============   =============   =============
</TABLE>

The amortized cost and estimated market values of debt securities at December
31, 2002, 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                          $   2,999,943   $   3,074,687   $   4,849,741   $   4,936,000
     Due after one year through five years               31,764,306      32,429,551      14,408,665      15,441,133
     Due after five through ten years                     2,613,152       2,679,885      17,334,393      18,622,207
     Due after ten years                                    860,032         863,901       4,985,263       5,201,829
                                                      -------------   -------------   -------------   -------------
                                                      $  38,237,433   $  39,048,024   $  41,578,062   $  44,201,169
                                                      =============   =============   =============   =============
</TABLE>

Investment securities with an approximate carrying value of $46,069,000 and
$40,376,000 at December 31, 2002 and 2001, respectively were pledged to secure
public deposits, securities sold under agreement to repurchase and for other
purposes as required or permitted by law.

                                      -14-

<PAGE>

4.   LOANS

Major classification of loans are summarized as follows:

                                                 2002               2001
                                           ---------------    ---------------
     Real estate - residential             $    73,142,906    $    55,811,947
     Real estate - farm                          9,108,253          3,377,083
     Real estate - commercial                   35,004,950         24,116,828
     Real estate - construction                 11,811,973          2,937,181
     Commercial and other loans                 35,159,800         37,205,543
     Consumer and credit loans                  10,928,716         28,709,892
                                           ---------------    ---------------
                                               175,156,598        152,158,474
     Less allowance for loan losses             (2,325,560)        (2,260,555)
     Less net deferred loan fees                  (348,532)          (336,958)
                                           ---------------    ---------------
       Loans, net                          $   172,482,506    $   149,560,961
                                           ===============    ===============

Loans held for sale at December 31, 2002 and 2001 were $419,750 and $593,200
respectively. 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 $27,203,187 and $14,172,071 at December 31,
2002 and 2001, respectively.

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.

                                    2002         2001         2000
                                 ----------   ----------   ----------
Principal outstanding            $  148,928   $  221,050   $  298,286
Contractual interest due         $   12,583   $   21,254   $   10,013
Interest income recognized       $        -   $        -   $        -

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, 2002 and 2001, 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, 2002 is as follows:

              Balance                             Amounts         Balance
         December 31, 2001        Additions      Collected    December 31, 2002
      ------------------------   ------------   -----------   -----------------
              $ 238,228           $  3,466,322   $    78,689   $       3,625,861

                                      -15-

<PAGE>

5.   ALLOWANCE FOR LOAN LOSSES

An analysis of the change in the allowance for loan losses follows:

<TABLE>
<CAPTION>
                                                2002               2001                2000
                                           ---------------    ---------------    ---------------
     <S>                                   <C>                <C>                <C>
     Balance, January 1                    $     2,260,555    $     2,358,759    $     1,887,773
        Add:
          Provision charged to operations          210,000            262,500            540,000
          Loan recoveries                          177,543            125,822            180,850
        Less: Loans charged off                   (322,538)          (486,526)          (249,864)
                                           ---------------    ---------------    ---------------
     Balance, December 31                  $     2,325,560    $     2,260,555    $     2,358,759
                                           ===============    ===============    ===============
</TABLE>

6.   PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows:

                                               2002            2001
                                           -------------   -------------
     Land                                  $   1,403,945   $   1,053,945
     Building and improvements                 4,089,605       4,034,816
     Furniture, fixtures and equipment         3,950,589       3,793,463
                                           -------------   -------------
                                               9,444,139       8,882,224
     Less accumulated depreciation             4,240,185       3,743,442
                                           -------------   -------------
       Total                               $   5,203,954   $   5,138,782
                                           =============   =============

Depreciation expense charged to operations was $496,743 for 2002, $441,444 for
2001, and $361,338 for 2000.

7.   GOODWILL

As of December 31, 2002 and 2001, goodwill had a gross carrying amount of
$1,661,561 and an accumulated amortization amount of $332,312 resulting in a net
carrying amount of $1,329,249. Amortization expense for 2001 amounted to
$110,771.

The gross carrying amount of goodwill is tested for impairment in the fourth
quarter, after the annual forecasting process. Due to an increase in overall
earning asset growth, operating profits and cash flows were greater than
expected. Based on fair value of the reporting unit, estimated using the
expected present value of future cash flows, no goodwill impairment loss was
recognized in the current year.

                                      -16-

<PAGE>

7.   GOODWILL (CONTINUED)

The following tables set forth a comparison of net income and basic and diluted
earnings per share adjusted for the adoption of FAS No. 142, Goodwill and Other
Intangible Assets:

<TABLE>
<CAPTION>
                                                           2002             2001              2000
                                                     ---------------   ---------------   ---------------
     <S>                                             <C>               <C>               <C>
     Goodwill amortization                           $             -   $       110,771   $       110,771
     Net income                                      $     3,217,544   $     2,944,565   $     3,282,921
     Addback: Goodwill amortization (net of tax)                   -            73,109            73,109
                                                     ---------------   ---------------   ---------------
     Adjusted net income                             $     3,217,544   $     3,017,674   $     3,356,030
                                                     ===============   ===============   ===============
     Basic earnings per share:
        Net income                                   $          4.68   $          4.23   $          4.66
        Goodwill amortization                                      -               .10               .10
                                                     ---------------   ---------------   ---------------
        Adjusted basic earnings per share            $          4.68   $          4.33   $          4.76
                                                     ===============   ===============   ===============
</TABLE>

8.   DEPOSITS

Time deposits include certificates of deposit in denominations of $100,000 or
more. Such deposits aggregated $40,887,282 and $40,779,099 at December 31, 2002
and 2001, respectively.

Interest expense on certificates of deposit $100,000 and over amounted to
$1,281,223 in 2002, $2,021,500 in 2001, and $1,874,053 in 2000.

The following table sets forth the remaining maturity of time certificates of
deposits of $100,000 or more at December 31, 2002.

     3 months or less                                      $    11,589,470
     Over 3 through 6 months                                     9,322,564
     Over 6 through 12 months                                   14,737,021
     Over 12 months                                              5,238,227
                                                           ---------------
       Total                                               $    40,887,282
                                                           ===============

The following table sets forth the remaining maturity of all time deposits at
December 31, 2002.

     12 month or less                                      $    93,416,568
     12 months through 24 months                                11,149,105
     24 months through 36 months                                 3,628,317
     36 months through 48 months                                 1,624,461
     48 months through 60 months                                 6,801,275
     Over 60 months                                                  7,124
                                                           ---------------
                                                           $   116,626,850
                                                           ===============

                                      -17-

<PAGE>

9.   SHORT-TERM BORROWINGS

Short-term borrowings consist 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
Company 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>
                                                         2002             2001
                                                    -------------    -------------
<S>                                                 <C>              <C>
Short-term borrowings:
    Ending balance                                  $   4,929,993    $   4,295,000
    Maximum month-end balance during the year           4,929,993        4,760,409
    Average month-end balance during the year           3,858,749        3,991,246
    Weighted average at year end                              .13%             .13%
    Weighted average rate during the year                     .13%            1.64%
</TABLE>

The Company has pledged investment securities with carrying values of $5,692,968
and $6,201,093 as of December 31, 2002 and 2001, respectively, as collateral for
the repurchase agreements.

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, 2001 are as follows:

                           Year Ending
                           December 31,                     Amount
                        -------------------              ------------

                        2003                             $    580,566
                        2004                                  526,063
                        2005                                  477,895
                        2006                                  435,279
                        2007                                  397,707
                        2008 and thereafter                 1,850,156
                                                         ------------
                        Total                            $  4,267,666
                                                         ============

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, 2002 the Bank had a borrowing capacity of approximately $33.7
million with the FHLB. At December 31, 2002 and 2001 there was $4,267,666 and
$5,226,732, respectively borrowed against this credit arrangement.

                                      -18-

<PAGE>

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 20% of a participant's compensation. For 2002, the annual
contribution to a participant's retirement account may not exceed $40,000. 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 2002 and 2001 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 pension costs charged to operating expense for the years 2002, 2001 and 2000
amounted to $207,608, $192,433 and $178,801, respectively.

12.  OTHER OPERATING EXPENSE

Other operating expense included the following:

<TABLE>
<CAPTION>
                                               2002            2001            2000
                                           -------------   -------------   -------------
     <S>                                   <C>             <C>             <C>
     Professional fees                     $     259,355   $     270,198   $     255,325
     Franchise tax                               397,238         388,226         343,662
     Credit Card Processing                      259,530         223,168         155,293
     Stationery, supplies and printing           167,055         174,025         174,861
     Postage, express and freight                162,264         146,072         130,375
     Other                                     1,036,359       1,138,421       1,023,676
                                           -------------   -------------   -------------
     Total                                 $   2,281,801   $   2,340,110   $   2,083,192
                                           =============   =============   =============
</TABLE>

13.  INCOME TAXES

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

                                  2002             2001               2000
                            ---------------   ---------------   ---------------
     Current payable        $       918,823   $       831,042   $     1,221,389
     Deferred                        16,035            72,381          (142,505)
                            ---------------   ---------------   ---------------
       Total provision      $       934,858   $       903,423   $     1,078,884
                            ===============   ===============   ===============

                                      -19-

<PAGE>

13.  INCOME TAXES (CONTINUED)

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>
                                                 2002                               2001                            2000
                                    ------------------------------     ------------------------------     ------------------------
                                                         % 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    $   1,411,817             34.0%    $   1,308,316             34.0%    $   1,483,013       34.0%
     Tax exempt income                   (627,878)           (15.1)         (577,998)           (15.0)         (535,451)     (12.3)
     Non-deductible interest
      Expense                              59,082              1.4            82,503              2.1            83,133        1.9
     Non-deductible amortization                -                -            37,662              1.0            37,662         .9
     Other, net                            91,837              2.2            52,940              1.4            10,527         .2
                                    -------------    -------------     -------------    -------------     -------------    -------
     Tax expense
      and effective rate            $     934,858             22.5%    $     903,423             23.5%    $   1,078,884       24.7%
                                    =============    =============     =============    =============     =============    =======
</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:

                                               2002            2001
                                           ------------    ------------
     Deferred Tax Assets:
        Allowance for loan losses          $    597,006    $    574,949
        Deferred loan fees                       11,782          13,822
                                           ------------    ------------
          Deferred tax asset                    608,788         588,771
                                           ------------    ------------
     Deferred Tax Liabilities:
        Premise and equipment                   222,611         224,209
        Stock dividends                         144,364         126,956
        Net unrealized gain on securities       275,601         254,307
        Other, net                               56,951          36,709
                                           ------------    ------------
          Deferred tax liabilities              699,527         642,181
                                           ------------    ------------
          Net deferred tax liabilities     $    (90,739)   $    (53,410)
                                           ============    ============



                                      -20-

<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:

                                           2002           2001
                                      -------------   -------------
     Commitments to extend credit     $  19,671,000   $  20,984,000
     Standby letters of credit              398,000         253,000
                                      -------------   -------------
         Total                        $  20,069,000   $  21,237,000
                                      =============   =============

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 2002 or 2001.

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.

                                      -21-

<PAGE>

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 2003, without
the approval of the regulatory authorities, is approximately $2,187,000 plus
2003 profits retained up to the date of the dividend declaration.

Included in cash and due from banks are required federal reserves of $2,991,000
and $2,696,000 at December 31, 2002 and 2001, 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, 2002 and 2001.

16.  REGULATORY CAPITAL REQUIREMENTS

Federal regulations require the Company and the Bank to maintain minimum amounts
of capital. Specifically, each is required to maintain certain minimum dollar
amounts and ratios of Total and Tier I capital to risk-weighted assets and of
Tier I capital to average total assets.

In addition to the capital requirements, the Federal Deposit Insurance
Corporation Improvement Act ("FDICIA") established five capital categories
ranging from "well capitalized" to "critically undercapitalized." Should any
institution fail to meet the requirements to be considered "adequately
capitalized," it would become subject to a series of increasingly restrictive
regulatory actions.

As of December 31, 2002 and 2001, the FDIC categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. To be
classified as a well capitalized financial institution, Total risk-based, Tier I
risk-based, and Tier I Leverage capital ratios must be at least ten percent, six
percent, and five percent, respectively. There have been no conditions or events
since notification that management believes have changed this category.

                                      -22-

<PAGE>

16.  REGULATORY CAPITAL REQUIREMENTS (CONTINUED)

The Company's actual capital ratios are presented in the following table, which
shows the Company met all regulatory capital requirements. The capital position
of the Bank does not differ significantly from the Company's.

<TABLE>
<CAPTION>
                                                                    2002                       2001
                                                          -----------------------    -----------------------
                                                            Amount        Ratio        Amount        Ratio
                                                          ----------    ---------    ----------    ---------
<S>                                                       <C>               <C>      <C>               <C>
Total Risk Based Capital (to Risk Weighted Assets)
     Actual                                               $   34,622        18.74%   $   33,216        20.75%
     For Capital Adequacy Purposes                            14,778         8.00        12,804         8.00
     To be well capitalized                                   18,472        10.00        16,005        10.00
Tier 1 Capital (to Risk Weighted Assets)
    Actual                                                $   32,339        17.51%   $   31,215        19.50%
    For Capital Adequacy Purposes                              7,389         4.00         6,402         4.00
    To be well capitalized                                    11,083         6.00         9,603         6.00
Tier 1 Capital (to Average Assets)
    Actual                                                $   32,339        11.35%   $   31,215        11.27%
    For Capital Adequacy Purposes                             11,394         4.00        11,074         4.00
    To be well capitalized                                    14,243         5.00        13,843         5.00
</TABLE>

17.  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values at December 31 are as follows:

<TABLE>
<CAPTION>
                                                              2002                                 2001
                                                ---------------------------------   ---------------------------------
                                                    Carrying           Fair            Carrying            Fair
                                                     Amount            Value            Amount             Value
                                                ---------------  ----------------   ---------------   ---------------
     <S>                                        <C>               <C>               <C>               <C>
     Financial assets:
         Cash and due from banks                $     8,007,448   $     8,007,448   $     7,768,070   $     7,768,070
         Federal funds sold                          12,300,000        12,300,000        22,500,000        22,500,000
         Securities available for sale               39,048,024        39,048,024        51,419,900        51,419,900
         Securities held to maturity                 41,578,062        44,201,062        39,803,246        40,734,605
         Net loans                                  172,482,506       178,506,554       149,560,961       156,422,796
         Loans held for sale                            419,750           429,446           593,200           628,204
         Accrued interest receivable                  1,134,183         1,134,183         1,508,784         1,508,784
         Regulatory Stock                             1,442,010         1,442,010         1,390,810         1,390,810
                                                ---------------   ---------------   ---------------   ---------------
              Total                             $   276,411,983   $   285,068,727   $   274,544,971   $   282,373,169
                                                ===============   ===============   ===============   ===============
     Financial liabilities:
         Deposits                               $   239,038,631   $   241,340,000   $   237,971,103   $   241,558,000
         Federal Home Loan Bank advances              4,267,666         4,765,000         5,226,732         5,545,563
         Short term borrowings                        4,929,993         4,929,993         4,295,000         4,295,000
         Accrued interest payable                       228,550           228,550           346,287           346,287
                                                ---------------   ---------------   ---------------   ---------------
              Total                             $   248,464,840   $   251,263,543   $   247,839,122   $   251,744,850
                                                ===============   ===============   ===============   ===============
</TABLE>

                                      -23-

<PAGE>

17.  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS (CONTINUED)

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,
REGULATORY STOCK, SHORT-TERM BORROWINGS, AND ACCRUED INTEREST PAYABLE

The fair value approximates the current carrying value.

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.

                                      -24-

<PAGE>

17.  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS (CONTINUED)

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.

                                      -25-

<PAGE>

18.  PARENT COMPANY

The following are parent only condensed financial statements:

                             CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                        December 31,
                                                                    2002            2001
                                                               -------------   -------------
<S>                                                            <C>             <C>
ASSETS
     Cash                                                      $     143,049   $     460,755
     Investment in bank subsidiary                                34,060,610      32,576,697
                                                               -------------   -------------
              Total assets                                     $  34,203,659   $  33,037,452
                                                               =============   =============
LIABILITIES AND SHAREHOLDERS' EQUITY
     Shareholders' equity                                      $  34,203,659   $  33,037,452
                                                               -------------   -------------
              Total liabilities and shareholders' equity       $  34,203,659   $  33,037,452
                                                               =============   =============
</TABLE>

                          CONDENSED STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                         2002            2001             2000
                                                                    -------------   --------------    -------------
<S>                                                                 <C>             <C>               <C>
INCOME
     Dividends from bank subsidiary                                 $   1,775,000    $   2,200,000    $   1,200,000
     Operating expenses                                                        50               50               50
                                                                    -------------    -------------    -------------
              Income before income taxes                                1,774,950        2,199,950        1,199,950
Income tax benefit                                                            (17)             (17)             (17)
                                                                    -------------    -------------    -------------
              Income before equity in undistributed net income
               of subsidiary                                            1,774,967        2,199,967        1,199,967
Equity in undistributed net income of subsidiary                        1,442,577          744,598        2,082,954
                                                                    -------------    -------------    -------------
NET INCOME                                                          $   3,217,544    $   2,944,565    $   3,282,921
                                                                    =============    =============    =============
</TABLE>

                                      -26-

<PAGE>

18.  PARENT COMPANY (CONTINUED)

                        CONDENSED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                    2002            2001             2000
                                                               -------------    -------------    -------------
<S>                                                            <C>              <C>              <C>
OPERATING ACTIVITIES
     Net income                                                $   3,217,544    $   2,944,565    $   3,282,921
     Adjustments to reconcile net income to net cash
      provided by operating activities:
         Equity in undistributed net income of subsidiary         (1,442,577)        (744,598)      (2,082,954)
                                                               -------------    -------------    -------------
              Net cash provided by operating activities            1,774,967        2,199,967        1,199,967
                                                               -------------    -------------    -------------
FINANCING ACTIVITIES
     Purchase of treasury shares                                    (892,363)        (860,163)        (254,749)
     Dividends paid                                               (1,200,310)      (1,113,627)      (1,020,487)
                                                               -------------    -------------    -------------
              Net cash used in financing activities               (2,092,673)      (1,973,790)      (1,275,236)
                                                               -------------    -------------    -------------
(DECREASE) INCREASE  IN CASH                                        (317,706)         226,177          (75,269)
CASH AT BEGINNING OF YEAR                                            460,755          234,578          309,847
                                                               -------------    -------------    -------------
CASH AT END OF YEAR                                            $     143,049    $     460,755    $     234,578
                                                               =============    =============    =============
</TABLE>

                                      -27-

<PAGE>

19.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (IN THOUSANDS EXCEPT PER
     SHARE DATA)

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                           -------------------------------------------------
                                             March         June       September    December
                                              2002         2002         2002         2002
                                           ----------   ----------   ----------   ----------
<S>                                        <C>          <C>          <C>          <C>
Total interest income                      $    4,161   $    4,036   $    3,945   $    3,846
Total interest expense                          1,676        1,521        1,434        1,295
                                           ----------   ----------   ----------   ----------
Net interest income                             2,485        2,515        2,511        2,551
Provision for loan losses                          45           45           60           60
                                           ----------   ----------   ----------   ----------
Net interest income after
  provision for loans losses                    2,440        2,470        2,451        2,491
Total other income                                205          214          236          288
Total other expense                             1,589        1,725        1,594        1,734
                                           ----------   ----------   ----------   ----------
Income before income taxes                      1,056          959        1,093        1,045
Income taxes                                      254          201          228          252
                                           ----------   ----------   ----------   ----------
Net income                                 $      802   $      758   $      865   $      793
                                           ==========   ==========   ==========   ==========
Per share data:
Net earnings                               $     1.16   $     1.10   $     1.26   $     1.16
                                           ==========   ==========   ==========   ==========
Weighted average shares outstanding           691,251      688,574      684,926      684,111
                                           ==========   ==========   ==========   ==========
</TABLE>

                                      -28-

<PAGE>

19.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED) (IN THOUSANDS
     EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                           -------------------------------------------------
                                             March         June      September     December
                                              2001         2001         2001         2001
                                           ----------   ----------   ----------   ----------
<S>                                        <C>          <C>          <C>          <C>
Total interest income                      $    4,993   $    4,923   $    4,657   $    4,452
Total interest expense                          2,538        2,427        2,278        1,994
                                           ----------   ----------   ----------   ----------
Net interest income                             2,455        2,496        2,379        2,458
Provision for loan losses                          83           90           90           --
                                           ----------   ----------   ----------   ----------
Net interest income after
  provision for loans losses                    2,372        2,406        2,289        2,458
Total other income                                165          180          186          199
Total other expense                             1,563        1,635        1,558        1,651
                                           ----------   ----------   ----------   ----------
Income before income taxes                        974          951          917        1,006
Income taxes                                      249          217          206          231
                                           ----------   ----------   ----------   ----------
Net income                                 $      725   $      734   $      711   $      775
                                           ==========   ==========   ==========   ==========
Per share data:
Net earnings                               $     1.04   $     1.05   $     1.02   $     1.12
                                           ==========   ==========   ==========   ==========
Weighted average shares outstanding           698,661      697,579      696,213      694,241
                                           ==========   ==========   ==========   ==========
</TABLE>

                                      -29-