<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q



[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended                   September 30, 2004
                               -------------------------------------------------

                                       OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the Transition period from                         to
                               -----------------------    ----------------------

Commission File Number                             000-24925
                        --------------------------------------------------------


                                  COMBANC, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                               34-1853493
--------------------------------------------------------------------------------
   (State or other jurisdiction of                 (I.R.S. Employer
    incorporation or organization)                Identification No.)


   229 E. Second St., P. O. Box 429, Delphos, Ohio             45833
--------------------------------------------------------------------------------
       (Address of principal executive offices)             (Zip Code)


                                 (419) 695-1055
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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

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

       Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 2,211,014 shares of the
ComBanc's common stock (no par value) were outstanding as of October 11, 2004.




<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

              Condensed Consolidated Balance Sheets                          3

              Condensed Consolidated Statements of Operations                4

              Condensed Consolidated Statements of Cash Flows                6

              Notes to Condensed Consolidated Financial Statements           7

Item 2. Management's Discussion and Analysis of Financial Condition          9
                  and Results of Operations

Item 3. Quantitative and Qualitative Disclosures about Market Risk          16

Item 4.       Controls and Procedures                                       16


PART II.      OTHER INFORMATION

Item 1. Legal Proceedings                                                   17

Item 6. Exhibits and Reports on Form 8-K                                    17
        Signatures                                                          18
        Exhibits 31.1 and 31.2  Rule 13a-14(a)/15d-14(a) certifications     20
        Exhibits 32.1 and 32.2  Section 1350 certifications                 22



                                       2
<PAGE>

                          COMBANC, INC. AND SUBSIDIARY
                                 DELPHOS, OHIO

                                 -------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                                ($ in thousands)
<TABLE>
<CAPTION>

                                                                                   September 30,        December 31,
                                   ASSETS                                               2004                2003
                                   ------
                                                                                  -----------------    ----------------
                                                                                    (unaudited)
<S>                                                                           <C>                  <C>
Cash and Due from Banks                                                        $             8,076  $            8,297
Federal Funds Sold                                                                          12,573               9,708
                                                                                  -----------------    ----------------
        Cash and Cash Equivalents                                                           20,649              18,005
Investment Securities -
    Available for Sale                                                                      55,238              55,052
Loans Held for Resale                                                                          262                   -
Loans                                                                                      122,816             128,756
Allowance for Loan Losses                                                                   (3,834)             (3,825)
                                                                                  -----------------    ----------------
        Net Loans                                                                          118,982             124,931
Premises and Equipment                                                                       4,259               4,432
Federal Reserve and Federal Home Loan Bank Stock                                             2,067               2,012
Interest Receivable                                                                            844                 760
Other Assets                                                                                 2,320               2,541
                                                                                  -----------------    ----------------
        Total Assets                                                           $           204,621  $          207,733
                                                                                  =================    ================

                    LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits
    Noninterest Bearing                                                        $            16,462  $           15,758
    Interest Bearing                                                                       153,497             156,474
                                                                                  -----------------    ----------------
        Total Deposits                                                                     169,959             172,232
Short Term Borrowings                                                                        7,124               7,540
Long Term Debt                                                                               3,411               4,649
Interest Payable                                                                               440                 392
Other Liabilities                                                                              506                 362
                                                                                  -----------------    ----------------
        Total Liabilities                                                                  181,440             185,175
                                                                                  -----------------    ----------------
Commitments and Contingent Liabilities                                                           -                   -
Shareholders' Equity -
    Common Stock - No Par Value
    5,000,000 shares authorized, 2,376,000 issued
        and 2,211,014 outstanding                                                            1,237               1,237
    Capital Surplus                                                                          1,513               1,513
    Retained Earnings                                                                       22,655              22,034
    Accumulated Other Comprehensive Income                                                     493                 491
    Treasury Stock - 164,986 shares at cost                                                 (2,717)             (2,717)
                                                                                  -----------------    ----------------
        Total Shareholders' Equity                                                          23,181              22,558
                                                                                  -----------------    ----------------
        Total Liabilities and Shareholders' Equity                             $           204,621  $          207,733
                                                                                  =================    ================

</TABLE>

         The accompanying notes are an integral part of the condensed
consolidated financial statements



                                       3
<PAGE>
                          COMBANC, INC. AND SUBSIDIARY
                                 DELPHOS, OHIO

                                 -------------

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                     ($ in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                     For the Three Months Ended
                                                                                           September 30,
                                                                                 -----------------------------------
                                                                                            (unaudited)

                                                                                      2004               2003
                                                                                 ----------------   ----------------
<S>                                                                           <C>                 <C>
Interest Income:
----------------
    Loans Receivable                                                           $           1,891   $          2,058
    Investments Securities
        Taxable                                                                              398                362
        Tax-Exempt                                                                           116                139
    Federal Funds Sold                                                                        40                 22
                                                                                 ----------------   ----------------
            Total Interest Income                                                          2,446              2,582
                                                                                 ----------------   ----------------

Interest Expense:
-----------------
    Deposits                                                                                 609                701
    Short-Term Borrowings                                                                     31                 27
    Long-Term Debt                                                                            48                 70
                                                                                 ----------------   ----------------
            Total Interest Expense                                                           688                798
                                                                                 ----------------   ----------------
Net Interest Income                                                                        1,758              1,784
    Provision for Loan Losses                                                                  -                430
                                                                                 ----------------   ----------------
Net Interest Income after Provision for Loan Losses                                        1,758              1,354

Other Income:
-------------
    Service Charges on Deposit Accounts                                                      143                138
    Net Realized Gains on Sales of Available-for-
        sale Securities                                                                       (3)                 -
    Gain on Sale of Loans                                                                     33                173
    Other Income                                                                              79                200
                                                                                 ----------------   ----------------
            Total Other Income                                                               252                511
                                                                                 ----------------   ----------------

Other Expenses:
---------------
    Salaries and Employee Benefits                                                         1,113                710
    Net Occupancy                                                                            102                 98
    Equipment Expenses                                                                        90                 85
    Data Processing Fees                                                                     101                 97
    Advertising                                                                               22                 28
    Printing and Office Supplies                                                              20                 25
    Legal and Professional Fees                                                              300                 79
    Dues and Memberships                                                                      57                 69
    State Taxes                                                                               74                 58
    Other Expense                                                                            300                194
                                                                                 ----------------   ----------------
            Total Other Expenses                                                           2,179              1,443
                                                                                 ----------------   ----------------

Income/(Loss) - before Income Tax                                                           (169)               422
-------------
    Income Tax Expense/(Credit)                                                              (81)               113
                                                                                 ----------------   ----------------
Net Income/(Loss)                                                              $             (88)  $            309
-----------------
                                                                                 ================   ================
Earnings/(Loss) Per Share                                                      $           (0.04)  $           0.14
Cash Dividends Per Share                                                       $            0.00   $           0.10

</TABLE>

          The accompanying notes are an integral part of the condensed
                       consolidated financial statements




                                       4
<PAGE>

                          COMBANC, INC. AND SUBSIDIARY
                                 DELPHOS, OHIO

                                 -------------

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                     ($ in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                       For the Nine Months Ended
                                                                                             September 30,
                                                                                  ------------------------------------
                                                                                              (unaudited)

                                                                                       2004                2003
                                                                                  ----------------    ----------------
<S>                                                                           <C>                 <C>
Interest Income:
----------------
    Loans Receivable                                                           $            5,827  $            6,509
    Investments Securities
        Taxable                                                                             1,234               1,216
        Tax-Exempt                                                                            350                 432
    Federal Funds Sold                                                                         88                  70
    Deposits with Financial Institutions                                                        1                   1
                                                                                  ----------------    ----------------
            Total Interest Income                                                           7,500               8,228
                                                                                  ----------------    ----------------

Interest Expense:
-----------------
    Deposits                                                                                1,834               2,314
    Short-Term Borrowings                                                                      79                  57
    Long-Term Debt                                                                            162                 278
                                                                                  ----------------    ----------------
            Total Interest Expense                                                          2,075               2,649
                                                                                  ----------------    ----------------
Net Interest Income                                                                         5,425               5,579
    Provision for Loan Losses                                                                  60               2,340
                                                                                  ----------------    ----------------
Net Interest Income after Provision for Loan Losses                                         5,365               3,239

Other Income:
-------------
    Service Charges on Deposit Accounts                                                       412                 407
    Net Realized Gains on Sales of Available-for-
        sale Securities                                                                        12                   -
    Gain on Sale of Loans                                                                     115                 458
    Other Income                                                                              390                 518
                                                                                  ----------------    ----------------
            Total Other Income                                                                929               1,383
                                                                                  ----------------    ----------------

Other Expenses:
---------------
    Salaries and Employee Benefits                                                          2,834               2,364
    Net Occupancy                                                                             297                 291
    Equipment Expenses                                                                        259                 256
    Data Processing Fees                                                                      301                 276
    Advertising                                                                                92                 131
    Printing and Office Supplies                                                               87                  97
    Legal and Professional Fees                                                               536                 199
    Dues and Memberships                                                                      193                 193
    State Taxes                                                                               207                 177
    Other Expense                                                                             725                 565
                                                                                  ----------------    ----------------
            Total Other Expenses                                                            5,531               4,549
                                                                                  ----------------    ----------------

Income - before Income Tax Expense                                                            763                  73
------
    Income Tax Expense/(Credit)                                                               142                (125)
                                                                                  ----------------    ----------------
Net Income                                                                     $              621  $              198
----------
                                                                                  ================    ================
Earnings Per Share                                                             $             0.28  $             0.09
Cash Dividends Per Share                                                       $             0.00  $             0.34

</TABLE>

          The accompanying notes are an integral part of the condensed
                       consolidated financial statements





                                       5
<PAGE>
                          COMBANC, INC. AND SUBSIDIARY
                                 DELPHOS, OHIO

                                 -------------


                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                ($ in thousands)

<TABLE>
<CAPTION>
                                                                                                  For the Nine Months
                                                                                                     September 30,
                                                                                            -----------------------------------
                                                                                                2004               2003
                                                                                           ---------------    ----------------
                                                                                                       (unaudited)
<S>                                                                                      <C>                <C>
Cash Flows from Operating Activities:
    Net Income                                                                             $          621    $            198
    Adjustments to Reconcile Net Income to
            Net Cash Provided by Operating Activities -
        Depreciation and amortization                                                                 298                 297
        Provision for Loan Loss                                                                        60               2,340
        Investment Securities Gains                                                                   (12)                  -
        Federal Home Loan Bank stock Dividends                                                        (55)                (52)
        Investment securities amortization (accretion), Net                                           334                 334
        Proceeds From Sale of Loans Held For Sale                                                  10,403              38,902
        Originations of Loans Held For Sale                                                       (10,550)            (38,051)
        Gain From Sale of Loans                                                                      (115)               (458)
        Net Change in
            Interest receivable                                                                       (84)                 55
            Interest payable                                                                           48                 (68)
            Other assets                                                                              220              (1,175)
            Other liabilities                                                                         143                  33
                                                                                           ---------------    ----------------
            Net Cash Provided by Operating Activities                                               1,311               2,355
                                                                                           ---------------    ----------------

Cash Flows from Investing Activities:
    Purchases of Securities Available for Sale/FHLB Stock                                         (20,104)            (23,452)
    Proceeds from Maturities of Securities
        Available for Sale                                                                         16,848              23,980
    Proceeds from Sales of Securities
        Available for Sale                                                                          2,752                   -
    Net Change in Loans                                                                             5,889               6,552
    Purchases of Premises and Equipment                                                              (125)               (114)
                                                                                           ---------------    ----------------
            Net Cash Provided by Investing Activities                                               5,260               6,966
                                                                                           ---------------    ----------------

Cash Flows from Financing Activities:
    Net change in
        Noninterest-bearing, Interest-bearing Demand and
            Savings Deposits                                                                         (304)               (702)
        Certificates and Other Time Deposits                                                       (1,969)             (8,392)
        Short-term Borrowings                                                                        (416)              2,029
    Repayment of Long-term Debt                                                                    (1,238)             (2,761)
    Dividends Paid                                                                                      -                (752)
                                                                                           ---------------    ----------------
            Net Cash Used in Financing Activities                                                  (3,927)            (10,578)
                                                                                           ---------------    ----------------
Net Change in Cash and Cash Equivalents                                                             2,644              (1,257)
Cash and Cash Equivalents -
    Beginning of Year                                                                              18,005              16,925
                                                                                           ---------------    ----------------
    End of Period                                                                          $       20,649    $         15,668
                                                                                           ===============    ================

</TABLE>

          The accompanying notes are an integral part of the condensed
                       consolidated financial statements



                                       6
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2004


Note 1, Basis of Presentation

Certain information and note disclosures normally included in the Company's
annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-K annual report for 2003 filed with the
Securities and Exchange Commission.

The significant accounting policies followed by ComBanc, Inc. (Company) and its
wholly-owned subsidiary, The Commercial Bank (Bank), for interim financial
reporting are consistent with the accounting policies followed for annual
financial reporting. All adjustments which are, in the opinion of management,
necessary for a fair presentation of the results for the periods reported,
consisting only of normal recurring adjustments, have been included in the
accompanying unaudited condensed consolidated financial statements. The results
of operations for the nine months ended September 30, 2004 and for the three
months ended September 30, 2004 are not necessarily indicative of those expected
for the remainder of the year.

The Condensed Consolidated Balance Sheet at December 31, 2003 has been taken
from audited consolidated financial statements at that date.

Note 2, Earnings Per Share

Earnings per share on the income statement has been computed on the basis of
weighted-average number of shares of common stock outstanding. The
weighted-average shares outstanding for the nine months ending September 30,
2004 and September 30, 2003 were 2,211,014.

Note 3, Commitments and Contingent Liabilities

Outstanding commitments to originate loans were $20,549,000 and $20,770,000 at
September 30, 2004 and December 31, 2003, respectively.

Note 4, Allowance for Loan Losses

Credit risk is the risk of loss from a customer default on a loan. The Bank has
in place a process to identify and manage its credit risk. The process includes
initial credit review and approval, periodic monitoring to measure compliance
with credit agreements and internal credit policies, monitoring changes in the
risk ratings of loans and leases, identification of problem loans and special
procedures for the collection of problem loans. The risk of loss is difficult to
quantify and is subject to fluctuations in values and general economic
conditions and other factors. THE DETERMINATION OF THE ALLOWANCE FOR LOAN LOSSES
IS A CRITICAL ACCOUNTING POLICY WHICH INVOLVES ESTIMATES AND MANAGEMENT'S
JUDGMENT ON A NUMBER OF FACTORS SUCH AS NET CHARGE-OFFS, DELINQUENCIES IN THE
LOAN PORTFOLIO AND GENERAL ECONOMIC CONDITIONS. The Bank considers the allowance
for loan losses of $3,834,000 adequate to cover losses inherent in the loan
portfolios as of September 30, 2004. However, no assurance can be given that the
Bank will not, in any particular period, sustain loan losses that are sizeable
in relation to the amount reserved, or that subsequent evaluations of the loan
portfolio, in light of factors then prevailing,



                                       7
<PAGE>

including economic conditions and the Bank's on-going credit review process,
will not require significant increases in the allowance for loan losses. Among
other factors, a protracted economic slowdown and/or a decline in commercial or
residential real estate values in the Bank's markets may have an adverse impact
on the adequacy of the allowance for loan losses by increasing credit risk and
the risk of potential loss.

Note 5, Merger Agreement

The Company and the Bank entered into an Agreement and Plan of Merger dated as
of August 4, 2004 by and among First Defiance Financial Corp., First Federal
Bank of the Midwest, the Company and the Bank (the "Agreement and Plan of
Merger"). A copy of the Agreement and Plan of Merger was attached as an exhibit
to the Company's Current Report on Form 8-K, which was filed with the SEC on
August 5, 2004. The agreement and plan have been filed with the Securities and
Exchange Commission and may be viewed on the website maintained by the SEC at
http://www.sec.gov.







                                       8
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations


FORWARD-LOOKING STATEMENTS

The Company has made, and may continue to make, various forward-looking
statements with respect to interest rate sensitivity analysis, credit quality
and other financial and business matters for 2004 and, in certain instances,
subsequent periods. The Company cautions that these forward-looking statements
are subject to numerous assumptions, risks and uncertainties, and that
statements for periods subsequent to 2003 are subject to greater uncertainty
because of the increased likelihood of changes in underlying factors and
assumptions. Actual results could differ materially from forward-looking
statements. In addition to those factors previously disclosed by the Company and
those factors identified elsewhere herein, the following factors could cause
actual results to differ materially from such forward looking statements: the
extent and timing of actions of the Federal Reserve, changes in economic
conditions, continued pricing pressures on loan and deposit products, actions of
competitors, customer's acceptance of the Company's products and services, the
extent and timing of legislative and regulatory actions and reforms, changes in
accounting principals, technological changes and increased technology costs,
downturn in demand for loan and deposit products, and changes in the interest
rate environment that reduce interest margins. The Company's forward-looking
statements speak only as the date on which such statements are made. By making
any forward-looking statements, the Company assumes no duty to update them to
reflect new, changing or unanticipated events or circumstances.

ENTITY STATUS

On April 13, 1998, The Commercial Bank became a wholly-owned subsidiary of the
newly formed ComBanc, Inc., a one-bank holding company. Since ComBanc's only
significant asset is the investment in The Commercial Bank, the following
discussion will focus on the operations of The Commercial Bank.

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with
accounting principles generally accepted in the United States and conform to
general practices within the banking industry. The Company's significant
accounting policies are described in detail in the notes to the Company's
consolidated financial statements for the year ended December 31, 2003. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions. The
financial position and results of operations can be affected by these estimates
and assumptions and are integral to the understanding of reported results.
Critical accounting policies are those policies that management believes are the
most important to the portrayal of the Company's financial condition and
results, and they require management to make estimates that are difficult,
subjective, or complex.

Allowance for Credit Losses- The allowance for credit losses provides coverage
for probable losses inherent in the Company's loan portfolio. Management
evaluates the adequacy of the allowance for credit losses each quarter based on
changes, if any, in underwriting activities, the loan portfolio composition
(including product mix and geographic, industry or customer-specific
concentrations), trends in loan performance, regulatory guidance and economic
factors. This evaluation is inherently subjective, as it requires the use of
significant management estimates. Many factors can affect management's estimates
of specific and expected losses, including volatility of default probabilities,



                                       9
<PAGE>

rating migrations, loss severity and economic and political conditions. The
allowance is increased through provisions charged to operating earnings and
reduced by net charge-offs.

The Company determines the amount of the allowance based on relative risk
characteristics of the loan portfolio. The allowance recorded for commercial
loans is based on reviews of individual credit relationships and an analysis of
the migration of commercial loans and actual loss experience. The allowance
recorded for homogeneous consumer loans is based on an analysis of loan mix,
risk characteristics of the portfolio, fraud loss and bankruptcy experiences,
and historical losses, adjusted for current trends, for each homogeneous
category or group of loans. The allowance for credit losses relating to impaired
loans is based on the loan's observable market price, the collateral for certain
collateral-dependent loans, or the discounted cash flows using the loan's
effective interest rate. Regardless of the extent of the Company's analysis of
customer performance, portfolio trends or risk management processes, certain
inherent but undetected losses are probable within the loan portfolio. This is
due to several factors including inherent delays in obtaining information
regarding a customer's financial condition or changes in their unique business
conditions, the judgmental nature of individual loan evaluations, collateral
assessments and the interpretation of economic trends. Volatility of economic or
customer-specific conditions affecting the identification and estimation of
losses for larger non-homogeneous credits and the sensitivity of assumptions
utilized to establish allowances for homogenous groups of loans are among other
factors. The Company estimates a range of inherent losses related to the
existence of these exposures. The estimates are based upon the Company's
evaluation of imprecision risk associated with the commercial and consumer
allowance levels and the estimated impact of the current economic environment.

Mortgage Servicing Rights- Mortgage servicing rights ("MSRs") associated with
loans originated and sold, where servicing is retained, are capitalized and
included in other intangible assets in the consolidated balance sheet. The value
of the capitalized servicing rights represents the present value of the future
servicing fees arising from the right to service loans in the portfolio.
Critical accounting policies for MSRs relate to the initial valuation and
subsequent impairment tests. The methodology used to determine the valuation of
MSRs requires the development and use of a number of estimates, including
anticipated principal amortization and prepayments of that principal balance.
Events that may significantly affect the estimates used are changes in interest
rates, mortgage loan prepayment speeds and the payment performance of the
underlying loans. The carrying value of the MSRs is periodically reviewed for
impairment based on a determination of fair value. For purposes of measuring
impairment, the servicing rights are compared to a valuation prepared based on a
discounted cash flow methodology, utilizing current prepayment speeds and
discount rates. Impairment, if any, is recognized through a valuation allowance
and is recorded as amortization of intangible assets.

FINANCIAL CONDITION

We are currently subject to the terms of the Written Agreement, dated December
18, 2003, among the Company, the Bank, the Federal Reserve Bank of Cleveland and
the Ohio Division of Financial Institutions. We are also currently subject to
the terms of the Agreement and Plan of Merger dated as of August 4, 2004 by and
among First Defiance Financial Corp., First Federal bank of the Midwest,
ComBanc, Inc. and The Commercial Bank.

Total Delinquent and Nonaccrual Loans as of September 30, 2004 stood at
$3,615,000 as compared to $6,948,000 as of December 31, 2003. This decrease
represents a 48.0% improvement since December 31, 2003. Total delinquency
reduction can be credited to the continued emphasis on workout programs and a
steady improvement in the local economy.



                                       10
<PAGE>

TABLE 1:  Analysis of Delinquencies
Dollars in Thousands
<TABLE>
<CAPTION>
                                                          9/30/2004      12/31/2003      12/31/2002     12/31/2001      12/31/2000
<S>                                                     <C>             <C>             <C>            <C>             <C>
Past due 30 to 89 days and still accruing                   $ 2,002         $ 2,758        $  6,672       $  9,863         $ 4,502
Past due 90 days or more and still accruing                      17             680             798          2,810           2,587
Nonaccrual                                                    1,596           3,510           8,456          3,455             542
                                                       ----------------------------------------------------------------------------
     Total delinquencies                                    $ 3,615         $ 6,948        $ 15,926       $ 16,128         $ 7,631
                                                       ============================================================================
Total Delinquencies as a percentage of total loans             2.94%           5.40%          11.37%         10.31%           4.50%
</TABLE>


Total assets decreased $3,112,000 or 1.5% from $207,733,000 at December 31, 2003
to $204,621,000 at September 30, 2004. This change is the result of a $5.9
million decrease in the loan portfolio while there was a $2.6 million increase
in cash and cash equivalents. This reduction was offset through a decrease of
$2.3 million in total deposits, a decrease of $1.2 million in long term debt,
and a $0.4 million decrease in short term borrowings, while there was a $0.6
million increase in total shareholders' equity during the first nine months of
2004.

Total gross loans decreased 4.4% or $5,678,000 from December 31, 2003 to
$123,078,000 at September 30, 2004. The breakdown of the loan portfolio is
detailed in table 2 below. A significant change in the portfolio includes a
decrease in construction and land development loans. This decrease is the result
of the completion of a large construction loan and being converted to an
amortized commercial real estate loan. Another significant change includes 1-4
family secured by first lien mortgages. These loans decreased by $2,002,000 due
to additional refinancing and the Bank selling the loans to the secondary
market. As can be seen in Table 2, secondary market lending to FHLMC has dropped
off significantly to net growth of $136,000 in the first three quarters of 2004.
The decrease in sales to FHLMC is due to the increase of interest rates on the
long end of the yield curve by approximately 50 basis points. These loans will
continue to generate service fee income at .25% per year over the life of the
loan, which currently amounts to approximately $161,000 annually. Another
significant change in the portfolio includes a $1,702,000 decrease in consumer
loans. This decrease is due to management's continued desire to decrease
consumer loans due to the amount of risk that they carry. Commercial loans have
decreased $1,032,000 or 8.2% from December 31, 2003 to September 30, 2004 due to
the management's continued desire to decrease commercial loans not secured by
real estate due to the amount of risk that they carry.

TABLE 2:  Analysis of Loan Portfolio Composition
Dollars in Thousands



                                       11
<PAGE>

Loan Type
<TABLE>
<CAPTION>
                                           9/30/2004          12/31/2003          Difference               %
                                           ---------          ----------          ----------           --------
<S>                                      <C>                 <C>                 <C>                   <C>
Construction/Land Development              $  6,161            $  7,305            $ (1,144)            -15.66%
R/E Secured by Farmland                       5,029               4,598                 431               9.37%
Revol Open-end 1-4 Family LOC                 4,965               5,294                (329)             -6.21%
1-4 Secured by first                         33,110              35,112              (2,002)             -5.70%
1-4 Secured by Junior                           567                 550                  17               3.09%
R/E Secured by Multi Family R/E               3,068               3,179                (111)             -3.49%
R/E Secured by Nonfarm, Nonres               47,903              46,977                 926               1.97%
Ag Loans                                      2,075               2,449                (374)            -15.27%
Commercial Loans                             11,575              12,607              (1,032)             -8.19%
Municipal Loans                                 746               1,100                (354)            -32.18%
Master Card Loans                               525                 566                 (41)             -7.24%
Other Consumer                                   12                   7                   5              71.43%
Consumer Loans                                7,291               8,993              (1,702)            -18.93%
Overdrafts                                       51                  19                  32             168.42%
                                           --------            --------            --------             ------
   Total Loans                              123,078             128,756              (5,678)             -4.41%
Loan Loss Reserve                             3,834               3,825                   9               0.24%
                                           --------            --------            --------             ------
   Total Net Loans                         $119,244            $124,931            $ (5,687)             -4.55%
                                           ========            ========            ========             ======
Serviced FHLMC Mortgages                     63,596              63,460                 136               0.21%
                                           --------            --------            --------             ------
   Total Loans Serviced                    $182,840            $188,391            $ (5,551)             -2.95%
                                           ========            ========            ========             ======
</TABLE>


The Allowance for Loan Losses at September 30, 2004 was 3.1% of total loans
compared to 3.0% at December 31, 2003. This $9,000 increase from December 31,
2003 is the result of a $60,000 provision and net charge-offs of $51,000,
increasing the Allowance for Loan Loss from $3,825,000 at December 31, 2003 to
$3,834,000 at September 30, 2004. Table 3 below illustrates an analysis of the
Allowance for Loan and Lease Losses over the past five years.

TABLE 3:  Analysis of Changes in Allowance for Loan and Lease Losses
Dollars in Thousands

<TABLE>
<CAPTION>
                                                            For the
                                                             Nine
                                                            Months
                                                            Ended                         For the Years Ended
                                                          ---------       ---------------------------------------------------------
                                                          9/30/2004       12/31/2003      12/31/2002     12/31/2001      12/31/2000
                                                          ---------       ----------      ----------     ----------      ----------
<S>                                                     <C>             <C>              <C>            <C>             <C>
Balance of Allowance at Beginning of Year                   $3,825          $2,050          $1,815          $1,331          $1,832
                                                            ------          ------          ------          ------          ------
Loans Actually Charged Off -
    Real Estate - Construction                                --               141            --              --              --
    Real Estate - Mortgage                                     218             444             317            --              --
    Commercial, Financial and Agricultural                      13           1,706             811             281              96
    Installment and Credit Card                                 81             284             307             548             890
                                                            ------          ------          ------          ------          ------
                                                               312           2,575           1,435             829             986
                                                            ------          ------          ------          ------          ------

Recoveries of Loans Previously Charged Off -
    Real Estate - Construction                                  34            --              --              --              --
    Real Estate - Mortgage                                      34            --              --                11            --
    Commercial, Financial and Agricultural                     156              75             599             458              10
    Installment and Credit Card                                 37              95              96              54              55
                                                            ------          ------          ------          ------          ------
                                                               261             170             695             523              65
                                                            ------          ------          ------          ------          ------
Net Charge-Offs (Recoveries)                                    51           2,405             740             306             921
                                                            ------          ------          ------          ------          ------
Addition to Allowance Charged to Expense                        60           4,180             975             790             420
                                                            ------          ------          ------          ------          ------
Balance of Allowance at Period-End                          $3,834          $3,825          $2,050          $1,815          $1,331
                                                            ======          ======          ======          ======          ======
Ratio of Net Charge-Offs to Avg. Loans Outstanding            0.04%           1.79%           0.51%           0.18%           0.55%
Ratio of Allowance for Credit Losses to Total Loans           3.12%           2.97%           1.46%           1.15%           0.79%
</TABLE>


Total deposits decreased $2,273,000 or 1.3% from December 31, 2003 to September
30, 2004. Table 4 below shows a breakdown of deposits by type at both September
30, 2004 and December 31, 2003.



                                       12
<PAGE>

Management attributes the decrease in total deposits to the Bank's slightly less
competitive interest rates being offered on certificates of deposit. Less
competitive interest rates are being offered due to the abundance of liquidity
that the Bank currently maintains.

TABLE 4:  Deposit Balances by Type
(Dollars in Thousands)
Deposit Type
<TABLE>
<CAPTION>

                                                  9/30/2004          12/31/2003        Difference       %
<S>                                               <C>                <C>                <C>         <C>
Non-interest Bearing DDA                          $  16,462          $  15,758          $    704       4.47%
NOW Accounts                                         25,109             25,017                92       0.37%
MMKT Savings                                         11,917             12,139              (222)     -1.83%
Savings                                              32,216             33,093              (877)     -2.65%
Time Deposits                                        84,255             86,225            (1,970)     -2.28%
                                                  ---------          ---------          --------     -------
   Total Deposits                                 $ 169,959          $ 172,232          $ (2,273)     -1.32%
                                                  =========          =========          ========     =======
</TABLE>

Short-term borrowings, which are repurchase agreements, decreased $416,000 from
December 31, 2003 to September 30, 2004. Long-term debt or borrowings with an
original maturity of greater than one year from the Federal Home Loan Bank
decreased $1,238,000 or 26.7% from December 31, 2003 to September 30, 2004. This
decrease is due to a maturing advance, the prepayment of an advance with a
prepayment option and regular principal amortization. Due to the excessive
amount of liquidity, management chose not to borrow additional funds from FHLB.

Total shareholders equity increased $623,000 from December 31, 2003 to September
30, 2004. Included in the overall increase was an increase in retained earnings
of $621,000, which was solely comprised of net income and an increase of $2,000
in Accumulated Other Comprehensive Income, which is the unrealized gain/loss on
the available-for-sale securities portfolio net of federal income tax. No
Treasury Stock was repurchased in the first three quarters of 2004.


RESULTS OF OPERATIONS

Nine Months Ended September 30, 2004 compared to Nine Months Ended September 30,
2003

Net income for the first three quarters of 2004 was $621,000 or $0.28 per share.
This represents an increase of $0.19 per share compared to the first three
quarters of 2003. Annualized Return on average assets was 0.40% for the first
three quarters of 2004, up from 0.13% for the first three quarters of 2003.
Annualized return on average equity increased to 3.61% for the first three
quarters of 2004 from 1.11% for the first three quarters of 2003.

The most significant income statement changes between the nine months ended
September 30, 2004 and the nine months ended September 30, 2003 were as follows:

        -    The provision for loan losses has decreased $2,280,000 in the first
             three quarters of 2004, from $2,340,000 in the first three quarters
             of 2003 to $60,000 in the first three quarters of 2004. At year end
             2003, management chose to have a complete loan review of the
             portfolio by an external consultant. At that time, all classified
             assets were allocated for in the allowance for loan losses charged
             to 2003 earnings. At September 30, 2004, management believes the
             allowance for loan losses is sufficient to cover all known losses.
             As a result, only $60,000 was charged to provision for loan losses
             in the first three quarters of 2004.
        -    Total noninterest income decreased $454,000 in the first three
             quarters of 2004 compared to 2003. This decrease is the result of a
             $343,000 decrease in gain on sale of loans sold to




                                       13
<PAGE>


             FHLMCand a $174,000 decrease in the capitalization of mortgage
             service rights, while there was a $21,000 increase in service fee
             income on FHLMC loans and an $18,000 increase in investment center
             revenue. As interest rates rise, sales of loans to FHLMC will
             continue to decrease.

        -    Total noninterest expense increased $982,000 in the first three
             quarters of 2004 compared to the first three quarters of 2003. This
             is the result of a $337,000 increase in legal and professional fees
             which is due to additional expense incurred to address the Written
             Agreement, the Definitive Agreement with First Defiance,
             shareholder litigation and related matters. There was also an
             increase in Salaries and Employee Benefits in the amount of
             $470,000, which is the result of a $155,000 increase in employee
             health insurance, an increase of $103,000 in post-retirement
             benefits, a $95,000 increase in employee salaries and a $98,000
             increase in retirement expense. Other expense increased $160,000
             due to a $57,000 increase in FDIC assessments, which is a direct
             result of the Written Agreement, a $64,000 increase in other
             expense, due to the loss on the sale of other real estate owned in
             the amount of $70,000, and an $18,000 increase in mortgage service
             right impairments.

        -    Net interest income decreased $154,000 or 2.8% in the first three
             quarters of 2004 compared to the first three quarters of 2003.
             Included in the decrease is a decrease in loan interest and fees
             which is the direct result of a decrease in loan balances of
             $9,690,000 since September 30, 2003. The decrease in loan balances
             is due to the large volume of 1 to 4 family residential loans sold
             to the secondary market in 2003 and management pricing higher risk
             commercial and consumer loans above the competition and allowing
             those loans to leave the institution.

Three Months Ended September 30, 2004 compared to Three Months Ended September
30, 2003

There was a net operating loss in the amount of $88,000 for the third quarter of
2004 or $(0.04) per share. This represents a decrease of $0.18 per share
compared to the third quarter of 2003. Annualized Return on average assets was
(0.17%) for the third quarter of 2004, down from .58% for the third quarter of
2003. Annualized return on average equity decreased to (1.54%) for the third
quarter of 2004 from 5.21% for the third quarter of 2003.

The most significant income statement changes between the three months ended
September 30, 2004 and the three months ended September 30, 2003 were as
follows:

        -    The provision for loan losses has decreased $430,000 in the third
             quarter of 2004. There was no provision recorded in the third
             quarter of 2004. The lower provision was due in part to the
             Company's experience in the first three quarters of 2004, which
             showed net charge-offs of $51,000. Provisions for loan losses are
             charged to earnings to bring the total allowance for loan losses to
             the level deemed appropriate by management based on the following
             factors: historical experience; the volume and type of lending
             conducted by ComBanc, Inc.; the amount of non-performing assets,
             including loans which meet the FASB Statement No. 114 definition of
             impaired; the amount of assets graded by management as substandard,
             doubtful, or loss; industry standards; general economic conditions,
             particularly as they relate to ComBanc, Inc's market area; and
             other factors related to the collectibility of ComBanc, Inc's loan
             portfolio. As of September 30, 2004, management believes the
             balance of the allowance for loan losses is appropriate.
        -    Total noninterest income decreased $259,000 in the third quarter of
             2004 as compared to the third quarter of 2003. Included in the
             decrease is a $140,000 decrease in gain on sale of loans to FHLMC.
             There was also a $121,000 decrease in other income. This decrease
             is solely comprised of a $121,000 decrease in the capitalization of
             mortgage service rights. 15, 20, and 30 year interest rates
             decreased in the third quarter causing prepayment speeds to
             increase, therefore, causing the value of mortgage service rights
             to decrease.

                                       14
<PAGE>

        -    Total noninterest expense increased $736,000 in the third quarter
             of 2004 versus the third quarter of 2003. Included in the increase
             is an increase of $403,000 in salaries and employee benefits. Of
             the $403,000 increase, there was an $187,000 increase in group
             insurance, a $103,000 increase in post-retirement benefits, a
             $60,000 increase in employee salaries and a $53,000 increase in
             employee retirement benefits. There was a $221,000 increase in
             legal and professional fees which is the result of additional
             expense incurred to address the Written Agreement, the Definitive
             Agreement with First Defiance, shareholder litigation and related
             matters. Also included in the$736,000 increase is a $106,000
             increase in other expense. Of the $106,000 increase, $60,000 is
             attributable to an increase in FDIC assessments, as the result of
             the Written Agreement, and $57,000 is the result of the third
             quarter 2004 mortgage service right impairment, which is the direct
             result of the decrease in long-term interest rates. Management
             believes that the $57,000 impairment will be recaptured by December
             31, 2004.


REGULATORY CAPITAL

The Federal Reserve Board's risk-based capital guidelines addressing the capital
adequacy of bank holding companies and banks (collectively, "banking
organizations") include a definition of capital and a framework for calculating
risk-weighted assets and off-balance sheet items to broad risk categories, as
well as minimum ratios to be maintained by banking organizations. A banking
organization's risk-based capital ratios are calculated by dividing its
qualifying capital by its risk-weighted assets.

Under the risk-based capital guidelines, there are two categories of capital:
core capital ("Tier 1") and supplemental capital ("Tier 2") collectively
referred to as Total Capital. Tier 1 Capital includes common stockholders'
equity, qualifying perpetual preferred stock and minority interest in equity
accounts of consolidated subsidiaries. Tier 2 capital includes perpetual
preferred stock (to the extent ineligible for Tier 1), hybrid capital
instruments (i.e., perpetual debt and mandatory convertible securities) and
limited amounts of subordinated debt, intermediate-term preferred stock and the
allowance for credit losses.

The Federal Reserve Board's leverage constraint guidelines establish a minimum
ratio of Tier 1 Capital to quarterly average total assets ("Leverage Ratio").

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
established five capital tiers for banks. Pursuant to that statute the federal
bank regulatory agencies have defined the five capital tiers for banks. Under
these regulations, a bank is defined to be well capitalized, the highest tier,
if it maintains a Tier 1 Capital ratio of at least 6 percent, a Total Capital
ratio of at least 10 percent and a Leverage Ratio of at least 5 percent. At
September 30, 2004 ComBanc, Inc. maintained a Tier I capital ratio of 18.37%, a
total capital ratio of 19.64% and a Tier I leverage ratio of 11.00%.

Based on the respective regulatory capital ratios at September 30, 2004, and
based on the definitions in the regulations issued by the Federal Reserve Board
and the other federal bank regulatory agencies setting forth the general capital
requirements mandated by FDICIA, the Bank is well capitalized.

LIQUIDITY

The liquidity of a banking institution reflects its ability to provide funds to
meet loan requests, to accommodate possible outflows in deposits and to take
advantage of interest rate market opportunities. Funding of loan requests,
providing for liability outflows, and management of interest rate fluctuations
require continuous analysis in order to match the maturities of specific
categories of short-term loans and investments with specific types of deposits
and borrowings. Bank liquidity is thus normally considered in terms of the
nature and mix of the banking institution's sources and uses of funds. Liquid
assets


                                       15
<PAGE>

consist of cash and due from banks, federal funds sold, and securities available
for sale. At September 30, 2004 the Bank's liquid assets amounted to $75,887,000
or 37.1% of total assets compared with 35.2% at December 31, 2003. Management
considers its liquidity to be adequate to meet its normal funding requirements.


Item 3 -- Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the Company's quantitative and
qualitative market risks since December 31, 2003. As discussed in the 2003
Annual Report on Form 10-K, ComBanc, Inc's ability to maximize net income is
dependent on management's ability to plan and control net interest income
through management of the pricing and mix of assets and liabilities. Because a
large portion of assets and liabilities of ComBanc, Inc. are monetary in nature,
changes in interest rates and monetary or fiscal policy affect its financial
condition and can have a significant impact on the net income of the Company.
ComBanc, Inc does not use off balance sheet derivatives to enhance its risk
management, nor does it engage in trading activities beyond the sale of mortgage
loans.

ComBanc, Inc. monitors its exposure to interest rate risk on a monthly basis
through simulation analysis which measures the impact changes in interest rates
can have on net income. The simulation technique analyzes the effect of a
presumed 200 basis point shift in interest rates and takes into account
prepayment speeds on amortizing financial instruments, loan and deposit volumes
and rates, nonmaturity deposit assumptions and capital requirements. The results
of the simulation indicate that in an environment where interest rates rise or
fall 200 basis points over a 12 month period, using September 2004 amounts as a
base case, ComBanc, Inc's net interest income would be impacted by less than the
board mandated guidelines of 15%.


Item 4 -- Controls and Procedures

Under the supervision and with the participation of our management, including
the Chief Executive Officer and principal financial officer, we have evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures as defined in Exchange Act Rule 13a-15(e) and Exchange Act Rule 15d
-- 15(e) as of the end of the period covered by this report. Based on that
evaluation, our Chief Executive Officer and principal financial officer have
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed in reports the Company files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC's rules and forms. There were no
changes in our internal control over financial reporting during the period
covered by this report that have materially affected, or that are reasonably
likely to materially affect, our internal control over financial reporting.






                                       16
<PAGE>

                           PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

As described in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2004, on June 2, 2004, Paul D. Harter, a shareholder of
ComBanc, Inc., filed an action in the Court of Common Pleas for Allen County,
Ohio (the "Court") against the Board of Directors of ComBanc, Inc. (Paul D.
Harter V. Board of Directors, ComBanc, Inc. et al. Case No. CV20040531). On May
28, 2004, Mr. Harter submitted written consents of shareholders requesting the
Company to call a special shareholders meeting "to determine by shareholder vote
whether current members of the Board should be removed and replaced." Mr. Harter
filed the action seeking to compel the Company to call a special meeting. On
September 1, 2004, ComBanc and Harter entered into a Settlement Agreement and
Release which resolved the dispute, and on September 8, 2004, Harter dismissed
the lawsuit with prejudice.

Additionally, the Bank, at any given time, is involved in a number of lawsuits
initiated by the Bank as a plaintiff, intending to collect upon delinquent
accounts, to foreclose upon real property, or to seize and sell personal
property pledged as security for any such account. At September 30, 2004, the
Bank was involved in a number of such cases as a party-plaintiff, and
occasionally, as a party-defendant due to its joinder as a lien holder, either
by mortgage or by judgment lien. In the ordinary case, the Bank's security and
value of its lien is not threatened, except through bankruptcy or loss of value
of the collateral should sale result in insufficient proceeds to satisfy the
judgment.

Item 6 - Exhibits and Reports on Form 8-K

        (a)     Exhibit 11.            Statement regarding computation of
                                       earnings per share is contained in
                                       Part I, Item 2.
                Exhibits 31.1 and 31.2 Rule 13a-14(a)/15d-14(a) Certifications
                Exhibits 32.1 and 32.2 Section 1350 Certifications

        (b)
                 I.       A report on Form 8-K, reported under Items 12 and 7,
                          was filed with the SEC on July 16, 2004, which
                          included Condensed Consolidated Balance Sheets as of
                          June 30, 2004 and December 31, 2003, Condensed
                          Consolidated Statements of Income For the Three Months
                          Ended June 30, 2004 and June 30, 2003 and Condensed
                          Consolidated Statements of Cash Flows For the Six
                          Months June 30, 2004 and June 30, 2003.

                 II.      A second report on Form 8-K, reported under Items 5
                          and 7, was filed with the SEC on August 5, 2004,
                          which included as exhibits, a News Release dated
                          August 4, 2004 and an Agreement and Plan of Merger
                          dated as of August 4, 2004 by and among First
                          Defiance Financial Corp., First Federal Bank of the
                          Midwest, ComBanc, Inc. and The Commercial Bank.




                                       17
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                   COMBANC, INC.


Date:            October 27, 2004                   /s/ Paul G. Wreede
                                                    ------------------
                                                    Paul G. Wreede
                                                    President, CEO, and Director



Date:            October 27, 2004                   /s/ Jason R. Thornell
                                                    ---------------------
                                                    Jason R. Thornell
                                                    VP/Controller






                                       18
<PAGE>

                                  EXHIBIT INDEX


             Exhibit No.                         Description
             -----------                         -----------

a)           Exhibit 11.            Statement regarding computation of earnings
                                    per share is contained in Part I, Item 2.
             Exhibits 31.1 and 31.2 Rule 13a-14(a)/15d-14(a) Certifications
             Exhibits 32.1 and 32.2 Section 1350 Certifications