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TABLE OF CONTENTS

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      Letter to Shareholders............................................  1

      Selected Consolidated Financial and Other Data...................   2

      Management's Discussion and Analysis of Financial
           Condition and Results of Operations.........................   4

      Report of Independent Auditors...................................  18

      Consolidated Financial Statements and Notes......................  19

      Shareholder Information..........................................  49

      Directors and Executive Officers.................................  50



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ANNUAL MEETING

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The annual  Meeting of  Shareholders  is scheduled for October 20, 1998, at 1:00
p.m.,  at Bowling  Green  Country Club located at 923 Fairview  Avenue,  Bowling
Green, Ohio.
<PAGE>
To Our Shareholders:

Fiscal 1998 was a record year for Wood  Bancorp,  Inc. and First  Federal  Bank.
Significant  improvement  was  realized  in all aspects of our  business  and we
continue to see excellent  results from our strategy to be the community bank in
our markets.  In August,  1993, our depositors invested $10.6 million with us in
hopes of  obtaining a fair return on their  investment.  Wood  Bancorp  value on
NASDAQ  reached  over $71  million  during the past  fiscal year and we are most
pleased with acceptance of our company by the marketplace.

Earnings  improved  to a record  $2,369,190  and our  return on  average  assets
averaged a record 1.43 per cent for the year. Loan quality  improved and remains
well above the average of our peers. Our associates  charged with generating and
processing quality assets did an excellent job in fiscal 1998. Total loan volume
increased  to $91.9  million for 1998, a 28.7 per cent  increase  over volume in
fiscal 1997 and more than 129 per cent over volume in 1995,  our first full year
as a public  company.  For the calendar year of 1997,  Toledo's  newspaper,  The
Blade, recognized Wood Bancorp as Northwest Ohio's best performing publicly held
company with a total return to shareholders of 111 per cent.

Continuing our community banking theme, First Federal Bank launched  Generations
Gold, a value added checking account program.  This common  partnership  between
our  affiliate  First  Federal  Bank and over 275 local  merchants  rewards  our
checking  customers  with discounts on items they purchase  daily.  In addition,
shopping  dollars  remain at home to help  local  merchants  remain  viable  and
profitable.  This  program is yet another  example of our local bank  supporting
local businesses for a better community.

The delivery of financial  services continues to become less personal in today's
consolidation  of our  industry.  We stay  committed to our strategy to focus on
customers by  developing  products and services that enhance their lives and our
communities. We believe in our approach to customers and remain steadfast in our
quest to take business from the  competition  and to be the best in our markets.
To that end, our associates deserve the credit for our success in 1998.

While 1998 will rank as our all time best performance,  it is now history and we
will not rest on past performance. Thank you for your continued support.

Sincerely,


Robert E. Spitler                          Richard L. Gordley
Chairman of the Board                      President and Chief Executive Officer
<PAGE>
<TABLE>
<CAPTION>
                              SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

                                                                     At June 30,
                                         ----------------------------------------------------------------
                                                                   (In Thousands)
                                           1998          1997          1996          1995          1994
                                         --------      --------      --------      --------      --------
<S>                                      <C>           <C>           <C>           <C>           <C>     
Selected Financial Condition Data:
Total assets .......................     $166,150      $163,918      $146,249      $135,081      $124,375
Cash and cash equivalents ..........        5,187         2,915         2,637         2,821         1,870
Repurchase agreement ...............                                    2,500
Securities available for sale ......       10,929        14,149        15,886         3,178         3,106
Mortgage-backed securities available
  for sale .........................        8,234         8,844         9,648         5,751         6,315
Securities held to maturity ........                                                  7,251         6,531
Mortgage-backed securities held
  to maturity ......................                                                  1,454         1,690
Loans, net .........................      135,618       131,318       111,456       110,817       100,505
Deposits ...........................      130,086       120,546       115,830       104,845       100,388
Advances from Federal Home
  Loan Bank ........................       11,923        21,775         9,316         9,576         4,853
Shareholders' equity ...............       22,551        20,166        20,122        19,614        18,241
<CAPTION>
                                                            For the Year Ended June 30,
                                         ----------------------------------------------------------------
                                                                   (In Thousands)
                                           1998          1997           1996          1995          1994
                                         --------      --------      --------      --------      --------
<S>                                      <C>           <C>           <C>           <C>           <C>     
Selected Operations Data:
Total interest income ..............     $ 13,581      $ 12,635      $ 11,085      $  9,647      $  8,063
Total interest expense .............        6,501         6,107         5,289         4,395         3,835
                                         --------      --------      --------      --------      --------
     Net interest income ...........        7,080         6,528         5,796         5,252         4,228
Provision for loan losses ..........          120           120           120            60            51
                                         --------      --------      --------      --------      --------
     Net interest income after
       provision for loan losses ...        6,960         6,408         5,676         5,192         4,177
Noninterest income:
     Service charges ...............          319           282           227           208           207
     Securities gains, net .........           13                                         5             4
     Gain on sale of loans .........          651           199           105            25             1
     Other .........................          128           104           127            84            96
                                         --------      --------      --------      --------      --------
         Total noninterest income ..        1,111           585           459           322           308
Total noninterest expense ..........        4,283         4,371         3,473         3,276         2,903
                                         --------      --------      --------      --------      --------
Income before income taxes .........        3,788         2,622         2,662         2,238         1,582
Income tax expenses ................        1,419           947           994           737           504
Cumulative effect of change in
  accounting for income taxes ......                                                                   40
                                         --------      --------      --------      --------      --------
Net income .........................     $  2,369      $  1,675      $  1,668      $  1,501      $  1,118
                                         ========      ========      ========      ========      ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                      <C>           <C>           <C>           <C>           <C>     
Basic earnings per share (1) .......     $    .91      $    .62      $    .60      $    .54      $    .32
Diluted earnings per share (1) .....          .86           .59           .57           .52           .32
Dividends per share ................          .33           .20           .12           .11           .05
Dividend payout ratio ..............        36.01%        32.52%        20.20%        19.73%        17.72%
</TABLE>
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(1)  Does not  include  earnings  prior  to  August  31,  1993,  the date of the
     consummation of the mutual to stock conversion.

                                       2.

<PAGE>
<TABLE>
<CAPTION>
                                                                   As of or for the Year Ended June 30,
                                                         --------------------------------------------------------
                                                         1998         1997         1996         1995         1994
                                                         ----         ----         ----         ----         ----
<S>                                                    <C>          <C>          <C>          <C>          <C>   
Selected Financial Ratios and Other Data:
Performance Ratios:
     Return on assets:
         Before SAIF assessment                          1.43%        1.34%        1.20%        1.16%        0.90%
         After SAIF assessment                           1.43         1.07         1.20         1.16         0.90
     Interest rate spread information:
         Average during year                             3.94         3.70         3.66         3.69         3.21
         End of year                                     3.80         3.54         3.46         3.37         3.13
     Net interest margin (1)                             4.42         4.26         4.26         4.19         3.57
     Ratio of noninterest expense to
       average total assets                              2.58         2.78         2.49         2.53         2.34
     Return on equity:
         Before SAIF assessment                         11.12        10.25         8.33         7.93         6.77
         After SAIF assessment                          11.12         8.25         8.33         7.93         6.77

Asset Quality Ratios:
     Nonperforming assets to total
       assets                                            0.14%        0.24%        0.17%        0.24%        0.11%
     Allowance for loan losses to non-
       performing loans(2)                             273.78       155.26       238.60       126.08       257.35

Capital Ratios:
     Shareholders' equity to total
       assets                                           13.57%       12.30%       13.76%       14.52%       14.67%
     Average shareholders' equity
       to average assets                                12.86        12.92        14.36        14.63        13.31
     Ratio of average interest-earning
       assets to average interest-bearing
       liabilities                                     111.18       113.78       115.33       114.33       111.04

Number of offices (3)                                    7            6            6            6            6

</TABLE>
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(1)  Net interest income divided by average interest-earning assets.
(2)  Nonperforming  loans consist of nonaccruing  loans and accruing loans which
     are past due 90 or more days.
(3)  Includes two limited-service offices in 1998. 

                                       3.
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General

The  following  is  management's  analysis  of Wood  Bancorp,  Inc.  ("Company")
financial  condition and results of operations as of and for the year ended June
30, 1998, compared to prior years. This discussion is designed to provide a more
comprehensive  review of the operating results and financial position than could
be obtained from an examination of the financial statements alone. This analysis
should be read in conjunction  with the  consolidated  financial  statements and
related  footnotes and the selected  financial  data included  elsewhere in this
report.


Forward Looking Statements

When  used  in this  discussion  or  future  filings  by the  Company  with  the
Securities   and   Exchange   Commission,   or  other   public  or   shareholder
communications,  or in oral  statements  made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated,"  "estimate,"  "project," "believe" or similar
expressions  are intended to identify  "forward-looking  statements"  within the
meaning of the Private  Securities  Litigation  Reform Act of 1995.  The Company
wishes  to  caution   readers   not  to  place   undue   reliance  on  any  such
forward-looking statements,  which speak only as of the date made, and to advise
readers  that  various  factors,   including   regional  and  national  economic
conditions,  changes in levels of market interest rates, credit risks of lending
activities and  competitive and regulatory  factors,  could affect the Company's
financial  performance  and could cause the Company's  actual results for future
periods to differ materially from those anticipated or projected.

The Company is not aware of any trends,  events or uncertainties  that will have
or are reasonably  likely to have a material  effect on its  liquidity,  capital
resources or operations except as discussed herein.  The Company is not aware of
any  current  recommendations  by  regulatory  authorities  that would have such
effect if implemented.

The Company does not undertake,  and specifically  disclaims,  any obligation to
publicly  release  the  result  of  any  revisions  which  may  be  made  to any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

The Company was formed as part of the  conversion of First Federal Bank ("Bank")
from a mutual to a stock  savings  bank,  which was completed on August 31, 1993
("Conversion").  In the Conversion,  2,998,125  shares of the Company's $.01 par
value common  stock,  as adjusted for the July 1996,  July 1997 and January 1998
stock splits,  were sold to the public for an aggregate gross  consideration  of
$10,660,000. The Company retained approximately 50% of the net proceeds and used
the  remainder  to  purchase  all of the  outstanding  stock of the  Bank.  This
discussion  should  be read  in  conjunction  with  the  consolidated  financial
statements  and  accompanying  Notes  included  elsewhere  in this  report. 


                                       4.
<PAGE>
The Company's results of operations are dependent on net interest income,  which
is the difference  ("spread")  between the interest  income earned on its loans,
securities,  and other interest-earning assets and its cost of funds, consisting
of interest paid on its deposits and borrowed money. The interest rate spread is
affected by regulatory, economic and competitive factors that influence interest
rates,  loan demand and deposit flows. The Company's net income is also affected
by, among other things,  loan fee income,  provisions  for loan losses,  service
charges,  gains on sales of loans,  operating  expenses and franchise and income
taxes.  The Company's  revenues are derived  primarily from interest on mortgage
loans, consumer loans,  commercial loans and securities,  as well as income from
service  charges  and gains on loan  sales.  The  Company's  operating  expenses
principally  consist of employee  compensation  and  benefits,  occupancy,  data
processing,   federal   deposit   insurance   premiums  and  other  general  and
administrative   expenses.   The  Company's   results  of  operations  are  also
significantly   affected  by  general   economic  and  competitive   conditions,
particularly  changes in market interest rates,  government policies and actions
of regulatory authorities.

The main office of the Company and the Bank is located in Bowling  Green,  Ohio,
which is located in Wood County,  Ohio. The Bank operates seven offices:  two in
Bowling  Green,  and one  each  in  Grand  Rapids,  North  Baltimore,  Rossford,
Pemberville  and  Woodville.  All  branches  are located in Wood County with the
exception of the  Woodville  office which is located four miles from Wood County
in Sandusky  County,  Ohio.  The Bank  considers  Wood County its primary market
area. In 1998, the Bank  purchased  land in  Perrysburg,  Ohio for the Company's
eighth office which is currently  under  construction.  In June,  1995, the Bank
purchased land adjacent to its Bowling Green West office for possible  expansion
at this location.

The Bank has been, and intends to continue to be, a community oriented financial
institution  offering a variety of  financial  services to meet the needs of the
communities it serves.  The Bank attracts deposits from the public and uses such
deposits,  together  with  borrowings  and other  funds,  to  originate  one- to
four-family  residential  mortgage loans and  short-term  consumer  loans.  To a
lesser extent,  the Bank also originates  residential  construction loans in its
market area,  home equity loans, a limited  amount of commercial  business loans
and loans secured by multi-family and  non-residential  real estate.  The Bank's
deposits are insured up to the maximum  allowable  amount by the Federal Deposit
Insurance  Corporation  ("FDIC")  in  the  Savings  Association  Insurance  Fund
("SAIF"). The Bank also invests in mortgage-backed securities, most of which are
insured or guaranteed by federal  agencies,  as well as securities issued by the
U.S.  Government or agencies  thereof.  In July 1995, First Federal  organized a
service corporation subsidiary, Wood Service Corp., Inc., which offers financial
planning  services and related  products,  including mutual funds and annuities,
through an agreement with a third party.  Revenues of Wood Service  Corp.,  Inc.
were not significant for the fiscal years ended June 30, 1998, 1997 and 1996.


Financial Condition

Total  assets of the Company were $166.1  million at June 30, 1998,  compared to
$163.9 million at June 30, 1997,  representing  an increase of $2.2 million,  or
1.4%.  The growth was primarily  attributable  to increases in loans,  offset by
decreases  in  securities.  The increase  was  primarily

                                       5.
<PAGE>
funded by increases in deposits.  The changes in the consolidated balance sheets
and the factors that caused the changes are discussed below.

Securities.  Total  securities  decreased  $3.8  million,  or 16.7%,  from $23.0
million at June 30, 1997 to $19.2 million at June 30, 1998. The decrease was the
result of the Company investing funds obtained through  maturities of securities
to fund loans and repay FHLB advances.

At June 30, 1998, the Company's mortgage-backed  securities portfolio classified
as available for sale was comprised  primarily of agency-issued  adjustable rate
securities.  The net unrealized  gains on these  investments  totaled $35,000 at
June  30,  1998.  Management's  strategy  emphasizes  investment  in  securities
guaranteed by the U.S.  Government and its agencies in order to minimize  credit
risk.  The   investment   strategy  also  includes   purchasing   variable  rate
mortgage-backed  security products with monthly and annually  adjusting interest
rates in order to minimize  interest  rate risk.  These  securities  provide the
Company a continued cash flow stream through principal  paydowns and help reduce
the Company's  exposure to interest  rate risk.  See also Note 3 of the Notes to
Consolidated Financial Statements.

At June 30,  1998,  CMOs and  REMICs  comprised  $4.7  million of the total $8.2
million  mortgage-backed  securities  portfolio  with all but $49,000  issued by
government  agencies.  The Company does not consider these  securities high risk
and does not expect loss of principal.

Loans. Loans increased from $131.3 million at June 30, 1997 to $135.6 million at
June 30, 1998. Average loans comprised 85.1% of average  interest-earning assets
in 1998 compared to 81.6% in 1997.  During the period, a significant  portion of
the new loan originations were fixed rate loans which were sold to the secondary
market. The sale of these fixed rate loan originations corresponds to the Bank's
policy of selling  virtually all fixed rate loan  originations  in the secondary
market, while maintaining variable rate loans in the Bank's portfolio.

The Bank  originated  $66.5  million in mortgages  during  fiscal 1998, of which
$32.1 million were refinancing transactions. This compares with $44.3 million in
mortgages  originated in fiscal 1997,  of which $14.3  million were  refinancing
transactions. The Bank maintained $32.3 million of the 1998 loan originations in
portfolio, while the remaining $34.2 million were sold to the secondary market.

Consumer and other loans increased $4.3 million, or 21.0%, from $20.7 million at
June 30, 1997 to $25.0 million at June 30, 1998.  The increases  were  primarily
due to  management's  increased  emphasis on  originating  commercial  and other
loans,  which resulted in a $2.4 million increase in commercial loans and a $1.9
million  increase in automobile  and other loans.  At June 30, 1998,  commercial
loans  comprised  41.9% of consumer and other loans.  See also Notes 4 and 10 of
the Notes to Consolidated Financial Statements.

Deposits and  Borrowings.  The Company's  deposits are obtained  primarily  from
individuals  and businesses in its market area.  Total  deposits  increased $9.5
million, or 7.9%, from $120.5 million at June 30, 1997 to $130.1 million at June
30, 1998. The growth was primarily in certificates of deposits,  which increased
$6.3 million during the period.

FHLB advances  decreased by $9.9 million  during the period,  bringing the total
balance from $21.8  million at June 30, 1997 to $11.9  million at June 30, 1998.
The Company  intends to 

                                       6.
<PAGE>
continue using FHLB  advances,  as needed,  to fund loan growth.  As of June 30,
1998, the Company had the ability of borrow an additional $28.6 million from the
FHLB. See also Note 8 of the Notes to Consolidated Financial Statements.


Comparison of Results of Operations for the Years Ended June 30, 1998 and 1997

General.  Net income  increased  $694,000 to $2,369,000 for 1998 from $1,675,000
for 1997.  The Company  experienced a return on average  assets of 1.43% in 1998
compared to 1.07% in 1997, while return on average  shareholders' equity for the
same  periods was 11.12% and 8.25%.  The  primary  factors  contributing  to the
increase in net income were an increase in net interest income of $551,000,  the
impact of a 1997  special  assessment  levied by the Federal  Deposit  Insurance
Corporation upon  institutions with deposits insured by the SAIF and an increase
in gains from sales of loans  partially  offset by  increases  in  salaries  and
benefits, occupancy and equipment and data processing expenses. See also Note 11
of the Notes to Consolidated Financial Statements.

Net  Interest  Income.  Net  interest  income is the  largest  component  of the
Company's net income,  and consists of the difference  between  interest  income
generated  on   interest-earnings   assets  and  interest  expense  incurred  on
interest-bearing  liabilities.  Net interest income is primarily affected by the
volumes,   interest  rates  and  composition  of  interest-earning   assets  and
interest-bearing liabilities.

Net interest income  increased  $551,000,  or 8.4%, from $6.5 million in 1997 to
$7.1  million in fiscal  1998.  The primary  component of this change was a $1.2
million,  or 11.4%,  increase  in  interest  income on loans.  The  increase  in
interest  income on loans  consisted  of a $923,000  increase  due to  increased
average  volume in the loan  portfolio  and $307,000  increase due to increasing
average  interest  rates.  The  increase  in  interest  income of  $946,000  was
partially  offset  by an  $394,000,  or  6.5%,  increase  in  interest  expense,
primarily on deposits.

Average loans outstanding  during fiscal 1998 increased $10.5 million,  or 8.4%,
compared to fiscal 1997,  while average  securities  decreased $6.2 million,  or
24.4%,  compared to the prior year. In fiscal 1998,  the Company  experienced an
increase in the yield on assets of  twenty-four  basis points.  The net interest
margin  increased 16 basis points.  The Company's  average  interest rate spread
increased from 3.70% in 1997 to 3.94% in 1998.

The tables appearing  elsewhere in this report provide a more detailed  analysis
of the  changes  in  average  balances,  yields/rates  and net  interest  income
identifying  that portion of change in average volume versus that portion due to
change in average  rates.  See "Average  Balances,  Interest  Rates and Yields,"
"Rate/Volume Analysis of Net Interest Income" and "Weighted Average Yields."

Provision  for  Loan  Losses.   The  provision  for  loan  losses  is  based  on
management's regular review of the loan portfolio,  which considers factors such
as past experience,  prevailing  general economic  conditions and considerations
applicable to specific  loans,  such as the ability of the borrower to repay the
loan and the estimated value of the underlying collateral, as well as changes in
the size and growth of the loan portfolio. Management believes the allowance for
loan losses is adequate to absorb reasonably  foreseeable losses inherent in the
loan  portfolio; 

                                       7.
<PAGE>
however,  future additions to the allowance may be necessary based on changes in
economic conditions.

The provision for loan losses  remained  constant at $120,000 for 1998 and 1997.
At June 30, 1998, the allowance for loan losses  represented  .48% of loans, net
of unearned and deferred income, compared to .44% at June 30, 1997.

Noninterest  Income. The Company experienced a $526,000,  or 90.0%,  increase in
noninterest  income during 1998.  The increase was primarily due to increases in
loan sale gains.  The Company  originated $34.2 million of loans for sale in the
secondary market during 1998 compared to $14.2 million in 1997.

Noninterest  Expense.  Noninterest expense decreased $88,000 or 2.0%,  primarily
due to the  SAIF  assessment  paid in  1997.  Salaries  and  benefits  increased
$448,000 for 1998,  compared to 1997. Of that increase,  $216,000 was related to
additional  personnel added for loan  production and annual salary reviews,  and
$232,000 was related to costs  associated with the ESOP plan due to increases in
the Company's stock price.  Occupancy and equipment expense increased $94,000 or
24.7% due to an additional  office in 1998.  Data processing  expense  increased
$111,000 or 35.8% due to additional services and restructuring of telephone line
charges.

Income Taxes.  The provision for income taxes totaled  $1,419,000 in fiscal 1998
compared  to  $947,000  in  fiscal  1997.  See also  Note 8 of the  Notes to the
Consolidated Financial Statements.


Comparison of Results of Operations for the Years Ended June 30, 1997 and 1996

General.  Net income remained  relatively  constant at $1.7 million for 1997 and
1996.  This includes the $443,000 after tax impact of a 1997 special  assessment
levied by the Federal  Deposit  Insurance  Corporation  upon  institutions  with
deposits insured by the SAIF. The Company experienced a return on average assets
of  1.07%  in  1997  compared  to  1.20%  in  1996,   while  return  on  average
shareholders'  equity for the same  periods  was 8.25% and 8.33%,  respectively.
Excluding  the SAIF  assessment,  the Company  would have reported net income of
$2.1 million,  an increase of $450,000,  or 27.0%, over 1996. The primary factor
contributing to the increase in net income,  excluding the SAIF assessment,  was
an increase in net interest income of $732,000.

Net Interest Income. Net interest income increased  approximately  $732,000,  or
12.6%,  from $5.8 million in 1996 to $6.5  million in fiscal  1997.  The primary
component  of this  change was a $1.3  million,  or 14.1%,  increase in interest
income on loans.  The  increase  in  interest  income  on loans  consisted  of a
$1,392,000  increase due to a higher average loan portfolio and $59,000 decrease
due to a lower  average  interest  rate.  The  increase  in  interest  income of
$1,550,000 was partially offset by an $818,000,  or 15.5%,  increase in interest
expense, primarily on FHLB borrowings.

Average loans outstanding during fiscal 1997 increased $16.1 million,  or 14.8%,
compared to fiscal 1996,  while average  securities  increased $4.8 million,  or
23.0%,  compared  to the prior year.  In fiscal  1997,  the Company  experienced
increases  in yield on assets  and cost of  liabilities  of nine and five  basis
points,  respectively,  resulting in the $1,550,000  increase in interest income
and  $818,000  increase in  interest  expense.  Net  interest  margin,  however,
remained constant at

                                       8.
<PAGE>
4.26%. The Company's average interest rate spread increased  slightly from 3.66%
in 1996 to 3.70% in 1997.

Provision for Loan Losses.  The provision for loan losses  remained  constant at
$120,000 for 1997 and 1996.  At June 30,  1997,  the  allowance  for loan losses
represented .44% of loans, net of unearned and deferred income, compared to .46%
at June 30, 1996.

Noninterest  Income. The Company experienced a $125,000,  or 27.3%,  increase in
noninterest  income during 1997.  The increase was primarily due to increases in
loan sale gains  related to the adoption of  Statement  of Financial  Accounting
Standards No. 122,  which  requires  lenders who sell or  securitize  originated
loans and retain the servicing rights to recognize as separate assets the rights
to  service  mortgage  loans  for  others.  See  also  Note  1 of the  Notes  to
Consolidated Financial Statements.

Noninterest Expense. Noninterest expense increased $898,000, or 25.8%, primarily
due to the SAIF assessment and increased salaries and benefits expense. Salaries
and benefits increased  $196,000,  or 11.1%, for 1997, compared to 1996. Of that
increase, $136,000 was related to additional personnel added for loan production
and annual salary reviews,  and $60,000 was related to costs associated with the
ESOP plan.

Income Taxes.  The  provision  for income taxes totaled  $947,000 in fiscal 1997
compared  to  $994,000  in  fiscal  1996.  See also  Note 8 of the  Notes to the
Consolidated Financial Statements.


                                       9.
<PAGE>
Average  Balances,  Interest Rates and Yields.  The following table presents for
the periods  indicated the total dollar  amount of interest  income from average
interest-earning  assets  and the  resultant  yields,  as  well as the  interest
expense on average interest-bearing  liabilities,  expressed in both dollars and
rates.  Average balances for both 1998 and 1997 are derived from daily balances.
Nonaccrual loans have been included in the table as loans carrying a zero yield.
<TABLE>
<CAPTION>
                                                                   Year Ended June 30,
                                   -------------------------------------------------------------------------------
                                                       1998                                     1997
                                   -------------------------------------     -------------------------------------
                                       Average        Interest                  Average        Interest
                                     Outstanding      Earned/     Yield/      Outstanding      Earned/      Yield/
                                       Balance         Paid        Rate         Balance         Paid         Rate
                                    -----------   -----------   --------     -----------    -----------   --------
                                                                   (Dollars in Thousands)
<S>                                 <C>           <C>           <C>          <C>            <C>           <C>  
Interest-earning assets:
   Loans (1)                        $   135,436   $    12,034       8.89%    $   124,973    $    10,804      8.65%
   Securities (2)                        11,721           745       6.36          16,211          1,071      6.57
   Mortgage-backed
     securities (2)                       7,578           558       6.50           9,320            604      6.41
   FHLB deposits                          1,548            83       5.33             353             20      5.77
   Interest-bearing cash
     accounts                               867            28       3.24             646             21      3.26
   Other interest-earning
     assets                                 534            29       5.50             255             20      7.72
   FHLB stock                             1,442           104       7.25           1,343             95      7.05
                                    -----------   -----------   --------     -----------    -----------   -------
     Total interest-earnings
       assets                           159,126        13,581       8.48         153,101         12,635      8.24

Interest-bearing liabilities:
   Money market                          21,062           875       4.15          20,602            852      4.13
   Savings deposits                      20,192           556       2.75          19,598            535      2.73
   NOW                                   16,305           203       1.25          12,858            222      1.72
   Time deposits                         68,588         3,879       5.66          61,557          3,349      5.44
   FHLB borrowings                       16,661           981       5.89          19,706          1,143      5.80
   Other borrowings                         252             7       2.78             240              6      2.48
                                    -----------   -----------   --------     -----------    -----------   -------
     Total interest-bearing
       liabilities                      143,060         6,501       4.54         134,561          6,107      4.54
                                    -----------   -----------   --------     -----------    -----------   -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                 <C>           <C>           <C>          <C>            <C>           <C>  
Net interest income                               $     7,080                               $     6,528
                                                  ===========                               ===========
Net interest rate spread                                            3.94%                                    3.70%
                                                                ========                                  =======
Net earning assets                  $    16,066                              $    18,540
                                    ===========                              ===========
Net yield on average
  interest-earning assets                                           4.42%                                    4.26%
Average interest-earning
  assets to average interest-
  bearing liabilities                                  111.23%                                  113.78%
</TABLE>
--------------------- 
(1) Calculated net of deferred loan  origination  fees, loans in process and the
    allowance for loan losses.
(2) Average  balance is  computed using the carrying  value of  securities.  The
    average yield has been computed  using  the average  amortized  cost balance
    for available for sale securities.

                                       10.
<PAGE>
Rate/Volume  Analysis of Net Interest  Income.  The following table presents the
dollar  amount of changes in  interest  income and  interest  expense  for major
components  of  interest-earning  assets and  interest-bearing  liabilities.  It
distinguishes  between the  increase or decrease  related to changes in balances
and/or changes in interest rates. For each category of  interest-earning  assets
and   interest-bearing   liabilities,   information   is   provided  on  changes
attributable to (i) changes in volume (changes in volume multiplied by old rate)
and (ii)  changes  in rate  (changes  in rate  multiplied  by old  volume).  For
purposes  of this table,  changes  attributable  to both rate and volume,  which
cannot be segregated,  have been allocated  proportionately to the change due to
volume and the change due to rate.
<TABLE>
<CAPTION>
                                                                              Year Ended June 30,
                                           ------------------------------------------------------------------------------------
                                                           1998 vs. 1997                               1997 vs. 1996
                                           -----------------------------------------   ----------------------------------------
                                                     Increase                                    Increase
                                                    (Decrease)              Total               (Decrease)              Total
                                                       Due to              Increase               Due to              Increase
                                                Volume         Rate       (Decrease)       Volume         Rate       (Decrease)
                                            -----------    -----------   -----------   -----------   -----------    -----------    
                                                                           (Dollars in Thousands)
<S>                                         <C>            <C>           <C>           <C>           <C>            <C>            
Interest-earning assets:
   Loans                                    $       923    $       307   $     1,230   $     1,392   $       (59)   $     1,333    
   Securities                                      (287)           (39)         (326)          305            74            379    
   Mortgage-backed securities                       (48)             2           (46)           16            11             27    
   FHLB deposits                                     64             (1)           63          (182)           15           (167)   
   Interest-bearing cash accounts                     7                            7           (10)           (3)           (13)   
   Other interest-earning assets                     17             (8)            9           (25)            9            (16)   
   FHLB stock                                         7              2             9             6             1              7    
                                            -----------    -----------   -----------   -----------   -----------    -----------    
     Total interest-earning                                                                                                        
        assets                              $       683    $       263           946   $     1,502   $        48          1,550    
                                            ===========    ===========                 ===========   ===========                   
                                                                                                                                   
Interest-bearing liabilities:                                                                                                      
   Money market                             $        19    $         4            23   $        76   $       (57)            19    
   Savings deposits                                  16              5            21           (16)          (26)           (42)   
   NOW                                               51            (70)          (19)           16           (19)            (3)   
   Time deposits                                    394            136           530            90            18            108    
   FHLB borrowings                                 (179)            17          (162)          745           (10)           735    
   Other borrowings                                                  1             1             1                            1    
                                            -----------    -----------   -----------   -----------   -----------    -----------    
     Total interest-bearing                                                                                                        
       liabilities                          $       301    $        93           394   $       912   $       (94)           818    
                                            ===========    ===========   -----------   ===========   ===========    -----------    
                                                                                                                                   
Net interest income                                                      $       552                                $       732    
                                                                         ===========                                ===========    
                                            
</TABLE>

                                      11.
<PAGE>
Weighted  Average Yields.  The following  table sets forth the weighted  average
yields earned on the Company's  interest-earning  assets,  the weighted  average
interest rates paid on its  interest-bearing  liabilities  and the interest rate
spread between the average yields earned and rates paid at the dates indicated.
<TABLE>
<CAPTION>

                                                                 At June 30,
                                                            ------------------
                                                            1998          1997
                                                            ----          ----
<S>                                                         <C>           <C>  
     Weighted average yield on:
         Loans receivable                                   8.53%         8.46%
         Mortgage-backed securities                         6.56          6.52
         Securities                                         6.30          6.87
         Other interest-earning assets                      4.77          5.97
              Combined weighted average yield
               on interest-earning assets                   8.24          8.12
     Weighted average rate paid on:
         Savings deposits                                   2.75          2.75
         NOW deposits                                       0.86          1.68
         Money market accounts                              4.22          4.05
         Time deposits                                      5.66          5.60
         Borrowings                                         5.97          5.88
              Combined weighted average rate
                paid on interest-bearing liabilities        4.44          4.58
     Spread                                                 3.80          3.54

</TABLE>
Asset/Liability Management

The Company's  asset/liability  management  strategy emphasizes the retention of
adjustable rate loans and  mortgage-backed  securities in its portfolio in order
to reduce the effective maturity of its assets. In addition, the Bank originates
other loans,  specifically  consumer and commercial loans, with shorter terms to
maturity or which reprice more  frequently than do long-term fixed rate mortgage
loans, yet provide a positive margin over the Company's cost of funds. Under the
Bank's current  policy,  virtually all fixed rate mortgage loans are sold in the
secondary  market.  At June 30, 1998 and 1997,  fixed rate loans  totaled  $28.7
million,  or 20.4% and $26.8  million,  or 20.0%,  of the  Company's  gross loan
portfolio. At such dates, adjustable rate loans totaled $111.9 million, or 79.6%
and $107.5 million, or 80.0%, of the Company's gross loan portfolio.

As part of its effort to monitor and manage  interest  rate risk,  the Bank uses
the "net portfolio value" ("NPV")  methodology adopted by the OTS as part of its
capital  regulations.  Although  the  Bank  is  not  currently  subject  to  NPV
regulation because such regulation does not apply to institutions with less than
$300 million in assets and risk-based  capital in excess of 12%,  application of
NPV methodology may illustrate the Bank's interest rate risk.


                                      12.
<PAGE>
Generally,  NPV is the  discounted  present  value  of  the  difference  between
incoming cash flows on interest-earning and other assets and outgoing cash flows
on  interest-bearing  and other liabilities.  The application of the methodology
attempts  to  quantify  interest  rate risk as the  change in the NPV that would
result from a  theoretical  basis point (1 basis point equals  0.01%)  change in
market  interest  rates.  The OTS  considers  an  institution  to be  subject to
interest-rate  risk if the NPV would  decrease  by more  than 2% of the  present
value of the  institution's  assets  with  either an  increase  or a decrease in
market rates.

At June 30, 1998, 2% of the present  value of the Bank's assets was  $3,368,000.
The interest rate risk of a 200 basis point  increase in market  interest  rates
(which was greater  than the interest  rate risk of a 200 basis point  decrease)
was  $284,000 at June 30, 1998,  which was less than 2% of the present  value of
the Bank's assets.

First Federal's  asset/liability  management strategy dictates acceptable limits
on the  amounts  of change in NPV  given  certain  changes  in  interest  rates.
Presented  below,  as of June 30,  1998 is an OTS  analysis  of First  Federal's
interest rate risk as measured by changes in NPV for instantaneous and sustained
parallel shifts in the yield curve, in 100 basis point  increments,  up and down
300 basis points and compared to Bank policy limits. OTS assumptions are used in
calculating the amounts in this table.
<TABLE>
<CAPTION>
           Changes in                                Actual at June 30, 1998
         Interest Rates        Bank Limit              As Measured by OTS
         (Basis Points)         % Change            $ Change       % Change
         --------------         --------            --------       --------
                                                    (Dollars in thousands)

<S>           <C>                  <C>           <C>                  <C>    
              +300                 60%           $   (1,272)          (6.89)%
              +200                 40                  (284)          (1.54)
              +100                 15                   175            0.95
                 0                  0                   ---             ---
              -100                 15                  (123)          (0.67)
              -200                 40                  (194)          (1.05)
              -300                 60                   180            0.98
</TABLE>

Management  has  structured  its  assets  and  liabilities  to attempt to lessen
exposure to interest  rate risk. In case of a 300 basis point change in interest
rates,  First  Federal would  experience a 0.98%  increase in NPV in a declining
interest  rate  environment  and a  6.89%  decrease  in a  rising  interest-rate
environment.  During  periods of rising  interest  rates,  the value of monetary
assets and monetary liabilities generally decline. Conversely, during periods of
falling interest rates,  the value of monetary assets and liabilities  generally
increase.  However,  the  amount  of  change  in value of  specific  assets  and
liabilities  due to  changes  in  interest  rates  is not the  same in a  rising
interest rate environment as in a falling  interest rate environment  (i.e., the
amount of value increase  under a specific  interest rate decrease may not equal
the amount of value decrease under an identical interest rate increase).

In evaluating the Bank's  exposure to interest rate risk,  certain  shortcomings
inherent  in the method of analysis  presented  in the  foregoing  table must be
considered.  For  example,  although  certain  assets and  liabilities  may have
similar maturities or periods to repricing,  they may react in different degrees
to changes in market interest rates. In addition,  the interest rates on certain

                                      13.
<PAGE>
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while  interest rates on other types may lag behind changes in
market  rates.  Furthermore,  in  the  event  of a  change  in  interest  rates,
prepayments and early withdrawal levels would likely deviate  significantly from
those assumed in calculating the table.  Finally,  the ability of many borrowers
to  service  their  debt may  decrease  in case of an  interest  rate  increase.
Therefore,  the actual  effect of changing  interest  rates may differ from that
presented in the foregoing table.


Liquidity and Capital Resources

Liquidity.  The Company's liquidity,  primarily represented by cash equivalents,
is a  result  of  its  operating,  investing  and  financing  activities.  These
activities  are  summarized  below for the years ended June 30,  1998,  1997 and
1996.
<TABLE>
<CAPTION>
                                                    Year Ended June 30,
                                                       (In Thousands)
                                               1998          1997          1996

<S>                                         <C>           <C>           <C>     
Net income ............................     $  2,369      $  1,675      $  1,668
Adjustments to reconcile net income
  to net cash from operating activities          561           943           (62)
                                            --------      --------      --------
Net cash from operating activities ....        2,930         2,618         1,606
Net cash used in investing activities .          424       (17,505)      (11,239)
Net cash from financing activities ....       (1,082)       15,165         9,449
                                            --------      --------      --------
Net change in cash and cash equivalents        2,272           278          (184)
Cash and cash equivalents at beginning
  of period ...........................        2,915         2,637         2,821
                                            --------      --------      --------
Cash and cash equivalents at end
  of period ...........................     $  5,187      $  2,915      $  2,637
                                            ========      ========      ========
</TABLE>
The  Company's  principal  sources  of  funds  are  deposits,  loan  repayments,
maturities of securities  and other funds  provided by  operations.  The Company
also has the ability to borrow from the FHLB.  While  scheduled loan  repayments
and maturing securities are relatively predictable, deposit flows and early loan
prepayments are more influenced by interest rates,  general economic  conditions
and competition.  The Company maintains  investments in liquid assets based upon
management's  assessment of (1) need for funds,  (2) expected deposit flows, (3)
yields  available  on  short-term  liquid  assets  and  (4)  objectives  of  the
asset/liability management program.

OTS regulations  presently require the Bank to maintain an average daily balance
of  investments  in  U.S.   Treasury,   federal  agency  obligations  and  other
investments  in an amount  equal to 4% of the sum of the  Bank's  average  daily
balance of net withdrawable  deposit accounts and borrowings payable in one year
or less.  The liquidity  requirement,  which may be changed from time to time by
the OTS to reflect changing economic conditions, is intended to provide a source
of relatively  liquid funds on which the Bank may rely,  if  necessary,  to fund
deposit  withdrawals or other  short-term  funding needs.  At June 30, 1998, the
Bank's  regulatory  liquidity was 15.48% The Company considers its liquidity and
capital reserves  sufficient to 

                                      14.
<PAGE>
meet its  outstanding  short- and long-term  needs.  See Note 10 of the Notes to
Consolidated Financial Statements.

Capital  Resources.  The Bank is required by regulations to meet certain minimum
capital  requirements,  which must be generally as stringent as the requirements
established for commercial banks. Current capital requirements call for tangible
capital of 1.5% of adjusted  total assets,  core capital  (which,  for the Bank,
consists  solely of  tangible  capital)  of 3.0% of  adjusted  total  assets and
risk-based  capital (which,  for the Bank,  consists of core capital and general
valuation  allowances) of 8.0% of  risk-weighted  assets (assets are weighted at
percentage levels ranging from 0% to 100% depending on their relative risk). The
following  table indicates that the requirement for core capital is 4.0% because
that is the level that the OTS prompt corrective action  regulations  require to
be considered adequately capitalized.

The following table summarizes the Bank's capital amounts (in thousands) and the
ratios required by law at June 30, 1998.
<TABLE>
<CAPTION>
                                        Required                  Actual    Required
                             Amount      Amount      Excess        Ratio      Ratio
                             ------      ------      ------        -----      -----
<S>                         <C>         <C>         <C>             <C>       <C>  
Tangible capital to
  adjusted total assets     $13,871     $ 2,455     $11,416         8.47%     1.50%
Core capital to
  adjusted total assets      13,871       6,548       7,323         8.47      4.00
Core capital to risk
  weighted assets .....      13,871       4,309       9,562        12.88      4.00
Total capital to risk
  weighted assets .....      14,493       8,618       5,875        13.45      8.00
</TABLE>
Accounting Standards

Recent  pronouncements by the Financial  Accounting Standards Board ("FASB") may
have an impact on financial  statements issued in subsequent periods.  Set forth
below are summaries of such pronouncements.

Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income" - SFAS No. 130  establishes  standards  for reporting and
display of comprehensive income and its components  (revenues,  expenses,  gains
and losses) in a full set of general-purpose financial statements.  SFAS No. 130
requires  that all items that are  required to be  recognized  under  accounting
standards  as  components  of  comprehensive  income be  reported in a financial
statement  that is  displayed  with  the  same  prominence  as  other  financial
statements.  It does not require a specific format for that financial  statement
but  requires  that  an  enterprise   display  an  amount   representing   total
comprehensive income for the period in that financial statement.

SFAS  No.  130  requires  that  an  enterprise   (a)  classify  items  of  other
comprehensive  income by their nature in a financial  statement  and (b) display
the accumulated balance of other  comprehensive  income separately from retained
earnings and additional  paid-in capital in the 

                                      15.
<PAGE>
equity  section  of a  statement  of  financial  position.  SFAS No. 130 will be
effective in fiscal 1999 and is not expected to have a significant impact on the
Company's financial statements.

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information"  - SFAS No. 131 changes the way that  public  business  enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report selected  information  about reportable
segments  in  interim  financial   reports  issued  to  shareholders.   It  also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas and major customers.  SFAS No. 131 uses a "management approach"
to  disclose  financial  and  descriptive   information  about  an  enterprise's
reportable  operating  segments which is based on reporting  information the way
that  management  organizes  the  segments  within  the  enterprise  for  making
operating  decisions  and  assessing  performance.  For  many  enterprises,  the
management  approach  will likely  result in more segments  being  reported.  In
addition,  SFAS No. 131 requires  significantly more information to be disclosed
for each reportable segment than is presently being reported in annual financial
statements.  SFAS No. 131 also requires  selected  information to be reported in
interim financial statements.  SFAS No. 131 will be effective in fiscal 1999 and
is not  expected  to  have a  significant  impact  on  the  Company's  financial
statements.

SFAS No. 132,  "Employers'  Disclosures about Pensions and Other  Postretirement
Benefits" - SFAS No. 132 amends the disclosure  requirements of previous pension
and other  postretirement  benefit accounting  standards by requiring additional
disclosures  about such plans as well as eliminating  some disclosures no longer
considered useful.  SFAS No. 132 also allows greater  aggregation of disclosures
for employers  with multiple  defined  benefit plans.  Non-public  companies are
subject to reduced disclosure requirements,  although such entities may elect to
follow the full  disclosure  requirements  of SFAS No. 132. SFAS No. 132 will be
effective in fiscal 1999 and is not expected to have a significant impact on the
Company's financial statements.

SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging Activities" -
SFAS No. 133 requires  companies to record  derivatives  on the balance sheet as
assets or liabilities,  measured at fair value.  Gains or losses  resulting from
changes in the values of those  derivatives  would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting. The key
criterion for hedge accounting is that the hedging  relationship  must be highly
effective in achieving  offsetting changes in fair value or cash flows. SFAS No.
133 does  not  allow  hedging  of a  security  which  is  classified  as held to
maturity.  Upon adoption of SFAS No. 133,  companies may reclassify any security
from held to maturity to available for sale if they wish to be able to hedge the
security in the future.  SFAS No. 133 is effective  for fiscal  years  beginning
after  June 15,  1999 with early  adoption  encouraged  for any  fiscal  quarter
beginning  July 1, 1998 or later,  with no retroactive  application.  Management
does not expect the adoption of SFAS No. 133 to have a significant impact on the
Company's financial statements.


Impact on Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance  with generally  accepted  accounting  principles,  which require the
measurement of financial 

                                      16.
<PAGE>
position  and results of  operations  primarily in terms of  historical  dollars
without  considering changes in the relative purchasing power of money over time
due to  inflation.  Unlike  most  industrial  companies,  most of the assets and
liabilities  of the Company are monetary in nature.  Therefore,  interest  rates
have a more significant impact on a financial institution's performance than the
effects of general levels of inflation.  Interest rates do not necessarily  move
in the same  direction  or in the same  magnitude  as the  prices  of goods  and
services.  The liquidity,  maturity  structure and quality of the Company assets
and  liabilities  are  critical to the  maintenance  of  acceptable  performance
levels.


Year 2000 Issue

The Company's  lending and deposit  activities are almost entirely  dependent on
computer systems which process and record transactions, although the Company can
effectively  operate with manual  systems for brief periods when its  electronic
systems  malfunction  or cannot be accessed.  The Company uses the services of a
nationally  recognized data processing  service bureau that  specializes in data
processing  for  financial  institutions.  In  addition  to its basic  operating
activities,  the  Company's  facilities  and  infrastructure,  such as  security
systems  and  communications  equipment,  are  dependent  to varying  degrees on
computer systems.

The Company is aware of the potential Year 2000 related problems that may affect
the  computers  that  control  or  operate  the  Company's   operating  systems,
facilities  and  infrastructure.  In 1997,  the  Company  began the  process  of
identifying  any Year  2000  related  problems  that may be  experienced  by its
computer operated or dependent systems.  The Company has contacted the companies
that supply or service the Company's  computer  operated or dependent systems to
obtain  confirmation  that each system that is material to the operations of the
Company is either  currently  Year 2000 compliant or is expected to be Year 2000
compliant.  With respect to systems  that cannot  presently be confirmed as Year
2000 compliant,  the Company will continue to work with the appropriate supplier
or servicer  to ensure that all such  systems  will be rendered  compliant  in a
timely  manner,  with  minimal  expense  to the  Company  or  disruption  of the
Company's operations.  If, by the end of 1998, any of the Company's suppliers or
servicers  are  unable to  certify  Year 2000  compliance  with  respect  to any
systems,  the  failure  of which  would have a  material  adverse  effect on the
Company's  operations,  financial  condition or results,  the Company would then
have  sufficient  time to identify and contract with suppliers and servicers who
are able to  certify  Year  2000  compliance.  The  expense  of such a change in
suppliers or servicers is not expected to be material to the Company.

In addition to possible  expense  related to its own systems,  the Company could
incur losses if loan  payments are delayed due to Year 2000  problems  affecting
any of the Company's  significant  borrowers or impairing the payroll systems of
large employers in the Company's  primary market area. The Company has contacted
all commercial loan customers informing them of the year 2000 problems.  Because
the Company's  loan  portfolio is highly  diversified  with regard to individual
borrowers and types of businesses  and the Company's  primary market area is not
significantly dependent on one employer or industry, the Company does not expect
any significant or prolonged Year 2000 related difficulties that will affect net
earnings or cash flow. At this time,  however,  the expense that may be incurred
by the Company in connection with Year 2000 issues cannot be determined.

                                      17.
<PAGE>



                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
Wood Bancorp, Inc.
Bowling Green, Ohio


We have audited the  accompanying  consolidated  balance sheets of Wood Bancorp,
Inc. as of June 30, 1998 and 1997,  and the related  consolidated  statements of
income,  changes  in  shareholders'  equity and cash flows for each of the three
years in the period  ended June 30, 1998.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Wood Bancorp,  Inc.
as of June 30,  1998 and 1997,  and the results of its  operations  and its cash
flows  for  each of the  three  years  in the  period  ended  June  30,  1998 in
conformity with generally accepted accounting principles.



                                                   Crowe, Chizek and Company LLP

Columbus, Ohio
July 31, 1998


                                      18.
<PAGE>
<TABLE>
<CAPTION>
                                            WOOD BANCORP, INC.
                                       CONSOLIDATED BALANCE SHEETS
                                          June 30, 1998 and 1997

 
                                                                              1998               1997
                                                                        -------------      -------------
<S>                                                                     <C>                <C>          
ASSETS
     Cash and due from banks ......................................     $   4,786,582      $   2,844,578
     Federal funds sold ...........................................           400,000             70,000
                                                                        -------------      -------------
         Cash and cash equivalents ................................         5,186,582          2,914,578
     Interest-bearing time deposits in other financial institutions           731,398          2,229,104
     Securities available for sale ................................        10,928,948         14,148,537
     Mortgage-backed securities available for sale ................         8,234,190          8,844,333
     Loans, net ...................................................       135,617,811        131,317,923
     Office properties and equipment, net .........................         2,433,618          1,860,331
     Federal Home Loan Bank stock .................................         1,507,600          1,403,200
     Accrued interest receivable ..................................           847,379            853,736
     Other assets .................................................           662,119            346,100
                                                                        -------------      -------------

              Total assets ........................................     $ 166,149,645      $ 163,917,842
                                                                        =============      =============
LIABILITIES
     Deposits $ ...................................................       130,086,695      $ 120,546,079
     Federal Home Loan Bank advances ..............................        11,922,708         21,775,306
     Accrued interest payable .....................................           143,758            193,166
     Other liabilities ............................................         1,445,505          1,237,711
                                                                        -------------      -------------
         Total liabilities ........................................       143,598,666        143,752,262

SHAREHOLDERS' EQUITY
     Preferred stock, $.01 par value, 500,000 shares authorized,
       no shares issued or outstanding
     Common stock, $.01 par value, 5,000,000 shares authorized,
      3,107,065 shares issued in 1998, 1,657,347 shares issued
       in 1997 ....................................................            31,071             16,573
     Additional paid-in capital ...................................        11,412,177         10,884,182
     Retained earnings-substantially restricted ...................        14,294,514         12,805,953
     Treasury stock at cost,  438,313 shares in 1998,
       244,886 shares in 1997 .....................................        (3,033,704)        (3,130,066)
     Unearned employee stock ownership plan shares ................          (198,442)          (301,741)
     Unearned recognition and retention plan shares ...............           (15,234)           (30,977)
     Net unrealized gain(loss) on available for sale securities,
        net of tax ................................................            60,597            (78,344)
                                                                        -------------      -------------
         Total shareholders' equity ...............................        22,550,979         20,165,580
                                                                        -------------      -------------

              Total liabilities and shareholders' equity ..........     $ 166,149,645      $ 163,917,842
                                                                        =============      =============

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

                                       19.
<PAGE>
<TABLE>
<CAPTION>
                                CONSOLIDATED STATEMENTS OF INCOME
                             Years ended June 30, 1998, 1997 and 1996

                                                      1998             1997              1996
                                                 ------------     ------------      ------------
<S>                                              <C>              <C>               <C>          
Interest income
     Loans, including fees .................     $ 12,033,516     $ 10,804,173      $  9,471,271
     Securities ............................          745,108        1,070,865           691,907
     Mortgage-backed and related securities           557,664          604,152           576,583
     FHLB deposits .........................           82,557           20,365           187,556
     Other .................................          162,023          135,505           157,591
                                                 ------------     ------------      ------------
         Total interest income .............       13,580,868       12,635,060        11,084,908

Interest expense
     Deposits ..............................        5,512,630        4,957,409         4,875,161
     FHLB borrowings .......................          981,008        1,143,352           408,071
     Other .................................            7,413            5,974             5,361
                                                 ------------     ------------      ------------
         Total interest expense ............        6,501,051        6,106,735         5,288,593
                                                 ------------     ------------      ------------

Net interest income ........................        7,079,817        6,528,325         5,796,315

Provision for loan losses ..................          120,000          120,000           120,000
                                                 ------------     ------------      ------------

Net interest income after provision for loan
  losses ...................................        6,959,817        6,408,325         5,676,315

Noninterest income
     Service charges .......................          318,944          282,447           227,099
     Security gains ........................           13,226             (461)
     Net gains from sale of loans ..........          650,953          199,162           105,039
     Other .................................          128,120          103,686           127,395
                                                 ------------     ------------      ------------
         Total noninterest income ..........        1,111,243          584,834           459,533

Noninterest expense
     Salaries and benefits .................        2,420,230        1,972,201         1,775,920
     Occupancy and equipment ...............          473,141          379,551           346,669
     Data processing .......................          415,352          305,852           269,794
     Insurance .............................          113,202          864,479           284,642
     Franchise taxes .......................          211,577          228,574           250,077
     Advertising and promotional ...........          145,160          159,718           142,754
     Other .................................          504,458          460,864           403,563
                                                 ------------     ------------      ------------
         Total noninterest expense .........        4,283,120        4,371,239         3,473,419
                                                 ------------     ------------      ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                              <C>              <C>               <C>          
Income before income tax ...................        3,787,940        2,621,920         2,662,429

Income tax expense .........................        1,418,750          946,525           994,150
                                                 ------------     ------------      ------------

Net income .................................     $  2,369,190     $  1,675,395      $  1,668,279
                                                 ============     ============      ============

Basic earnings per common share ............     $        .91     $        .62      $        .60
                                                 ============     ============      ============
Diluted earnings per common share ..........     $        .86     $        .59      $        .57
                                                 ============     ============      ============ 
</TABLE>
          See accompanying notes to consolidated financial statements.

                                      20.
<PAGE>
<TABLE>
<CAPTION>


                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                              Years ended June 30, 1998, 1997 and 1996



                                                                                                                                    
                                                                 Additional                                   Unearned              
                                                   Common          Paid-in       Retained       Treasury        ESOP       Unearned 
                                                    Stock          Capital       Earnings         Stock        Shares     RRP Shares
                                                    -----          -------       --------         -----        ------     ----------
<S>                                              <C>         <C>             <C>              <C>          <C>          <C>         
Balance at July 1, 1995                          $  11,039   $  10,577,639   $  10,363,525    $ (738,204)  $ (521,781)  $ (101,345) 

Commitment to release employee stock
  ownership plan shares                                             84,690                                    112,620               

Compensation expense with respect to
  recognition and retention plan                                                                                            58,784  

Tax benefit related to recognition and
  retention plan                                                    23,704                                                          

Purchase of treasury stock                                                                      (960,925)                           

Stock options exercised                                                             (6,379)       27,638                            

Change in unrealized gain (loss) on securities
  available for sale                                                                                                                

Net income for the year ended June 30, 1996                                      1,668,279                                          

Cash dividends - $.12 per share                                                   (336,958)                                         
                                                 ---------   -------------   -------------    ----------   ----------   ----------  

Balance at June 30, 1996                         $  11,039   $  10,686,033   $  11,688,467    $(1,671,491) $ (409,161)  $  (42,561) 
                                                 =========   =============   =============    ===========  ==========   ========== 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                               Unrealized Gain              
                                                  (Loss) on                 
                                                 Securities         Total     
                                                  Available      Shareholders' 
                                                  for Sale         Equity     
                                                  --------         ------     
<S>                                              <C>         <C>                    
Balance at July 1, 1995                          $  23,425   $   19,614,298         
                                                                             
Commitment to release employee stock                                         
  ownership plan shares                                             197,310  
                                                                             
Compensation expense with respect to                                         
  recognition and retention plan                                     58,784  
                                                                             
Tax benefit related to recognition and                                       
  retention plan                                                     23,704  
                                                                             
Purchase of treasury stock                                         (960,925) 
                                                                             
Stock options exercised                                              21,259  
                                                                             
Change in unrealized gain (loss) on securities                               
  available for sale                              (163,753)        (163,753) 
                                                                             
Net income for the year ended June 30, 1996                       1,668,279  
                                                                             
Cash dividends - $.12 per share                                    (336,958) 
                                                 ---------   --------------  
                                                                             
Balance at June 30, 1996                         $(140,328)  $   20,121,998  
                                                 =========   ==============  
                                                                              
</TABLE>
                                   (Continued)

                                       21.
<PAGE>
<TABLE>
<CAPTION>


                               CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)
                                              Years ended June 30, 1998, 1997 and 1996

                                                                                                                                    
                                                                                                                                    
                                                                 Additional                                   Unearned              
                                                   Common          Paid-in       Retained       Treasury        ESOP       Unearned 
                                                    Stock          Capital       Earnings         Stock        Shares     RRP Shares
                                                    -----          -------       --------         -----        ------     ----------
<S>                                                <C>         <C>             <C>             <C>            <C>         <C>  
Balance at June 30, 1996                           $ 11,039    $  10,686,033   $ 11,688,467    $ (1,671,491)  $ (409,161) $ (42,561)
                                                                                                                                    
Commitment to release employee stock                                                                                                
  ownership plan shares                                              150,012                                     107,420            
                                                                                                                                    
Compensation expense with respect to                                                                                                
  recognition and retention plan                                                                                             34,834 
                                                                                                                                    
Tax benefit related to recognition and                                                                                              
  retention plan                                                      24,902                                                        
                                                                                                                                    
Purchase of treasury stock                                                                       (1,491,300)                        
                                                                                                                                    
Stock options exercised                                                              (7,546)         32,725                         
                                                                                                                                    
Change in unrealized gain (loss) on securities                                                                                      
  available for sale                                                                                                                
                                                                                                                                    
Stock split effected in the form a stock dividends    5,519                          (5,519)                                        
                                                                                                                                    
Shares issued with respect to recognition                                                                                           
  and retention plan                                     15           23,235                                                (23,250)
                                                                                                                                    
Net income for the year ended June 30, 1997                                       1,675,395                                         
                                                                                                                                    
Cash dividends - $.20 per share                                                    (544,844)                                        
                                                   --------    -------------   ------------    ------------   ----------  --------- 
                                                                                                                                    
Balance at June 30, 1997                           $ 16,573    $  10,884,182   $ 12,805,953    $ (3,130,066)  $ (301,741) $ (30,977)
                                                   ========    =============   ============    ============   ==========  ========= 
</TABLE>
<PAGE>
<TABLE>                                                       
<CAPTION>
                                                    Unrealized Gain             
                                                      (Loss) on                 
                                                      Securities       Total    
                                                       Available   Shareholders'
                                                       for Sale        Equity    
                                                       --------        ------    
<S>                                                  <C>          <C>                                    
Balance at June 30, 1996                             $ (140,328)  $   20,121,998                         
                                                                                  
Commitment to release employee stock                                              
  ownership plan shares                                                  257,432  
                                                                                  
Compensation expense with respect to                                              
  recognition and retention plan                                          34,834  
                                                                                  
Tax benefit related to recognition and                                            
  retention plan                                                          24,902  
                                                                                  
Purchase of treasury stock                                            (1,491,300) 
                                                                                  
Stock options exercised                                                   25,179  
                                                                                  
Change in unrealized gain (loss) on securities                                    
  available for sale                                     61,984           61,984  
                                                                                  
Stock split effected in the form a stock dividends                                
                                                                                  
Shares issued with respect to recognition                                         
  and retention plan                                                              
                                                                                  
Net income for the year ended June 30, 1997                            1,675,395  
                                                                                  
Cash dividends - $.20 per share                                         (544,844) 
                                                     ----------   --------------  
                                                                                  
Balance at June 30, 1997                             $  (78,344)  $   20,165,580  
                                                     ==========   ==============  
                                                                                  
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       22.
<PAGE>
<TABLE>
<CAPTION>
                               CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)
                                              Years ended June 30, 1998, 1997 and 1996

                                                                                                                                    
                                                                 Additional                                   Unearned              
                                                   Common          Paid-in       Retained       Treasury        ESOP       Unearned 
                                                    Stock          Capital       Earnings         Stock        Shares     RRP Shares
                                                    -----          -------       --------         -----        ------     ----------
<S>                                               <C>         <C>             <C>              <C>          <C>          <C> 
Balance at June 30, 1997                          $  16,573   $  10,884,182   $  12,805,953    $(3,130,066) $ (301,741)  $  (30,977)
                                                                                                                                    
Commitment to release employee stock                                                                                                
  ownership plan shares                                             386,427                                    103,299              
                                                                                                                                    
Compensation expense with respect to                                                                                                
  recognition and retention plan                                                                                             15,743 
                                                                                                                                    
Tax benefit related to recognition and                                                                                              
  retention plan                                                    104,125                                                         
                                                                                                                                    
Tax benefit related to nonqualified stock options                                                                                   
  exercised                                                          37,443                                                         
                                                                                                                                    
Stock options exercised                                                             (13,104)       96,362                           
                                                                                                                                    
Change in unrealized gain (loss) on securities                                                                                      
  available for sale                                                                                                                
                                                                                                                                    
Stock splits effected in the form of stock                                                                                          
  dividends                                          14,498                         (14,498)                                        
                                                                                                                                    
Net income for the year ended June 30, 1998                                       2,369,190                                         
                                                                                                                                    
Cash dividends - $.33 per share                                                    (853,027)                                        
                                                  ---------   -------------   -------------    ----------   ----------   ---------- 
                                                                                                                                    
Balance at June 30, 1998                          $  31,071   $  11,412,177   $  14,294,514    $(3,033,704) $ (198,442)  $  (15,234)
                                                  =========   =============   =============    ===========  ==========   ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                   Unrealized Gain             
                                                      (Loss) on                
                                                     Securities         Total    
                                                     Available     Shareholders'
                                                      for Sale         Equity    
                                                      --------         ------    
                                                     
<S>                                                 <C>         <C>                    
Balance at June 30, 1997                            $ (78,344)  $   20,165,580         
                                                                                
Commitment to release employee stock                                            
  ownership plan shares                                                489,726  
                                                                                
Compensation expense with respect to                                            
  recognition and retention plan                                        15,743  
                                                                                
Tax benefit related to recognition and                                          
  retention plan                                                       104,125  
                                                                                
Tax benefit related to nonqualified stock options                               
  exercised                                                             37,443  
                                                                                
Stock options exercised                                                 83,258  
                                                                                
Change in unrealized gain (loss) on securities                                  
  available for sale                                  138,941          138,941  
                                                                                
Stock splits effected in the form of stock                                      
  dividends                                                                     
                                                                                
Net income for the year ended June 30, 1998                          2,369,190  
                                                                                
Cash dividends - $.33 per share                                       (853,027) 
                                                    ---------   --------------  
                                                                                
Balance at June 30, 1998                            $  60,597   $   22,550,979  
                                                    =========   ==============  
                                                     
</TABLE>
                                   (Continued)

                                       23.
<PAGE>
<TABLE>
<CAPTION>
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 Years ended June 30, 1998, 1997 and 1996



                                                              1998              1997              1996
                                                         ------------      ------------      ------------
<S>                                                      <C>               <C>               <C>         
Cash flows from operating activities
     Net income ....................................     $  2,369,190      $  1,675,395      $  1,668,279
     Adjustments to reconcile net income to net
       cash from operating activities
         Depreciation ..............................          201,110           131,122           115,493
         Gain on loan sales ........................         (650,953)         (199,162)         (105,039)
         Gain on sale of real estate owned .........           (5,601)
         Loans originated for sale .................      (34,155,386)      (14,182,540)      (18,497,220)
         Proceeds from sale of loans ...............       34,464,785        14,234,957        18,602,259
         Provision for loan losses .................          120,000           120,000           120,000
         Net accretion .............................          (70,049)         (117,999)          (36,775)
         Security gains ............................          (13,226)              461
         FHLB stock dividends ......................         (104,400)          (94,600)          (87,700)
         Amortization of mortgage servicing rights .           55,921             8,089
         RRP compensation expense ..................           15,743            34,834            58,784
         Tax benefit realized on vesting of RRP
           shares and exercise of nonqualified
           stock options ...........................          141,568            24,902            23,704
         ESOP expense ..............................          489,726           257,432           197,310
         Change in
              Interest receivable ..................            6,357           (37,235)         (209,577)
              Other assets .........................          (30,386)          351,716          (258,867)
              Income taxes payable .................          101,754           (35,191)          (32,335)
              Other liabilities ....................          (76,470)          256,606           (23,015)
              Interest payable .....................          (49,408)          103,954            (9,836)
              Deferred loan fees ...................            5,314            (8,074)             (454)
              Deferred taxes .......................          110,933            92,731            81,554
                                                         ------------      ------------      ------------
                  Net cash from operating activities        2,926,522         2,617,398         1,606,565

Cash flows from investing activities
     Net change in interest-bearing time deposits
       in other financial institutions .............        1,497,706        (2,151,389)          274,686
     Securities available for sale
         Proceeds from sales .......................                          1,050,000
         Proceeds from maturities and calls ........        6,750,000         5,220,000           713,481
         Purchases .................................       (3,393,320)       (4,300,000)      (10,177,915)
         Proceeds from principal payments on
           mortgage-backed securities ..............          766,845           782,565         1,341,966

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

                                       24.
<PAGE>
<TABLE>
<CAPTION>
                            CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                Years ended June 30, 1998, 1997 and 1996


                                                           1998              1997              1996
                                                       ------------      ------------      ------------
<S>                                                    <C>               <C>                   <C>      
Cash flows from investing activities  (continued)
      Securities held to maturity
         Proceeds from maturities and calls ......                                         $    500,000
         Purchases ...............................                                             (662,944)
         Proceeds from principal payments on
           mortgage-backed securities ............                                              174,342
      Net increase in loans ......................     $ (4,451,158)     $(19,973,557)         (758,798)
      Proceeds from sale of real estate owned ....           31,557
      Properties and equipment expenditures, net .         (774,397)         (632,419)         (143,354)
      Purchases of repurchase agreements .........                                           (5,000,000)
      Proceeds from repurchase agreements ........                          2,500,000         2,500,000
                                                       ------------      ------------      ------------
         Net cash from investing activities ......          427,233       (17,504,800)      (11,238,536)

Cash flows from financing activities
      Net change in deposits .....................        9,540,616         4,716,188        10,985,291
      Proceeds from FHLB borrowings ..............        2,000,000        24,150,000         8,500,000
      Repayment of FHLB borrowings ...............      (11,852,598)      (11,690,639)       (8,759,883)
      Proceeds from issuance of stock ............           83,258            25,179            21,259
      Cash dividends paid ........................         (853,027)         (544,844)         (336,958)
      Purchase of treasury stock .................                         (1,491,300)         (960,925)
                                                       ------------      ------------      ------------
         Net cash from financing activities ......       (1,081,751)       15,164,584         9,448,784
                                                       ------------      ------------      ------------

Net change in cash and cash equivalents ..........        2,272,004           277,182          (183,187)

Cash and cash equivalents at beginning
  of year ........................................        2,914,578         2,637,396         2,820,583
                                                       ------------      ------------      ------------

Cash and cash equivalents at end of year .........     $  5,186,582      $  2,914,578      $  2,637,396
                                                       ============      ============      ============

Supplemental disclosures of cash flow
  information
      Cash paid during the year for
         Interest ................................     $  6,556,760      $  6,002,781      $  5,298,429
         Income taxes ............................        1,268,000           842,850           860,682
      Noncash activities
         Transfer securities to available for sale                                            8,705,534
         Transfer from loans to real estate owned            25,956

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

                                      25.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation Policy: The consolidated financial statements include the accounts
of Wood Bancorp,  Inc. (the  "Company") and its wholly owned  subsidiary,  First
Federal  Bank  (the  "Bank").  All  significant  intercompany  transactions  and
balances have been eliminated.

Nature of  Operations:  The Company is engaged in the  business of banking  with
operations conducted through its main office and six branches located in Bowling
Green,  Ohio, and neighboring  communities.  These communities are the source of
substantially all of the Company's deposit and loan activities.  The majority of
the Company's income is derived from one- to four-family residential real estate
loans.

Use of Estimates:  To prepare financial  statements in conformity with generally
accepted accounting principles, management makes estimates and assumptions based
on available  information.  These estimates and  assumptions  affect the amounts
reported  in the  financial  statements  and the  disclosures  provided.  Future
results  could  differ  from  current  estimates.  Areas  involving  the  use of
management's  estimates and assumptions which are particularly subject to change
include the allowance for loan losses,  the  realization of deferred tax assets,
fair value of financial instruments and status of contingencies.

Cash  Reserves:  At June 30, 1998 and 1997,  the  Company  was  required to have
$382,000 and $342,000 on deposit with the Federal  Reserve  Bank,  or as cash on
hand. These reserves do not earn interest.

Securities:  Securities are classified as held to maturity,  available for sale,
and trading  categories.  Held to maturity securities are those that the Company
has the  positive  intent and ability to hold to  maturity,  and are reported at
amortized cost.  Available for sale securities are those,  which the Company may
decide to sell if needed for  liquidity,  asset-liability  management,  or other
reasons.  Available  for  sale  securities  are  reported  at fair  value,  with
unrealized  gains or losses included as a separate  component of equity,  net of
tax.

Realized gains or losses on sales are determined  based on the amortized cost of
the specific security sold.  Amortization of premiums and accretion of discounts
are computed under the  level-yield  method and are recognized as adjustments to
interest income.  Prepayment activity on mortgage-backed  securities is affected
primarily by changes in interest rates. Yields on mortgage-backed securities are
adjusted  as  prepayments  occur  through  changes  to premium  amortization  or
discount accretion.

Loans: Loans are reported at the principal balance outstanding,  net of deferred
loan fees and  costs,  the  allowance  for loan  losses  and  loans in  process.
Interest income is reported on the interest method and includes  amortization of
net deferred loan fees and costs over the loan term.

                                  (Continued)
                                      26.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mortgage  loans  originated  by the Bank and intended for sale in the  secondary
market  are  carried  at the  lower  of cost or  estimated  market  value in the
aggregate.  Net unrealized  losses are recognized in a valuation  allowance by a
charge to income.  To mitigate the interest rate risk associated with loans held
for sale,  management  obtains fixed secondary  market purchase  commitments for
these loans. No loans were held for sale at June 30, 1998 and 1997.

In July 1996,  the  Company  adopted  SFAS No.  122,  "Accounting  for  Mortgage
Servicing  Rights,"  which requires  companies  that engage in mortgage  banking
activities to recognize as separate assets rights to service  mortgage loans for
others.  The servicing  asset is amortized in proportion to, and over the period
of, estimated net servicing revenues. Impairment of mortgage servicing rights is
periodically  assessed based on the estimated  fair value of those rights.  SFAS
No. 122 was applied prospectively to servicing rights arising from loans sold by
the Company  after July 1, 1996,  and did not  materially  impact the  Company's
financial  statements.  SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," was adopted by the Company
in 1998.  This  statement  supersedes  SFAS No. 122  relative to loan  servicing
rights, but only marginally modifies the accounting and disclosure  requirements
described by SFAS No. 122.  SFAS No. 125 also impacts the  accounting  treatment
for certain other  transfers of assets and  liabilities  and did not  materially
affect the Company's 1998 financial statements.

Interest income is not reported when full loan repayment is in doubt,  typically
when  payments  are past due over 90 days.  Payments  received on such loans are
reported as principal reductions.

Allowance  for Loan  Losses:  The  allowance  for  loan  losses  is a  valuation
allowance,  increased  by  the  provision  for  loan  losses  and  decreased  by
charge-offs less recoveries. Management estimates the allowance balance required
based on past loan loss  experience,  known and inherent risks in the portfolio,
information about specific borrower situations and estimated  collateral values,
economic conditions and other factors.  Allocations of the allowance may be made
for specific loans,  but the entire allowance is available for any loan that, in
management's judgment, should be charged-off.

Loan  impairment  is  reported  when full  payment  under the loan  terms is not
expected.  Impairment is evaluated in total for smaller-balance loans of similar
nature such as residential  mortgage,  consumer and credit card loans, and on an
individual  basis for  other  loans.  If a loan is  impaired,  a portion  of the
allowance is allocated  so the loan is  reported,  net, at the present  value of
estimated  future cash flows using the loan's existing rate or at the fair value
of collateral  if repayment is expected  solely from the  collateral.  Loans are
evaluated for impairment  when payments are delayed,  typically 90 days or more,
or when it is probable  that not all  principal  and  interest  amounts  will be
collected according to the original terms of the loan.


                                  (Continued)
                                      27.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Real  Estate  Owned:  Real  estate  owned,  other than that which is used in the
normal  course of business,  is recorded at fair value less  estimated  costs to
sell. For real estate acquired through foreclosure, any initial loss is recorded
as a charge to the allowance for loan losses  before being  transferred  to real
estate  owned.  Any  subsequent  reduction  in fair  value  is  recognized  in a
valuation allowance by charges to income.

Office  Properties and Equipment:  Office properties and equipment are stated at
cost less accumulated  depreciation.  Depreciation is computed based on both the
straight-line  method and the accelerated method over the estimated useful lives
of the respective properties and equipment. Maintenance and repairs are expensed
and major improvements are capitalized.

Profit  Sharing  Plan:   The  Company   maintains  a  profit  sharing  plan  for
substantially all employees.  Annual contributions to the plan are determined by
the Board of Directors. Expense related to the profit-sharing plan was $136,000,
$101,000 and $101,000 for the years ended June 30, 1998, 1997 and 1996.

Income Taxes: Income tax expense is the sum of current-year income of tax due or
refundable and the change in deferred tax assets and  liabilities.  Deferred tax
assets and  liabilities  are the expected  future tax  consequences of temporary
differences   between  the  carrying   amounts  and  tax  bases  of  assets  and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to this amount expected to be realized.

Stock Compensation:  Expense for employee  compensation under stock option plans
is reported  only if options are granted  below market price at grant date.  Pro
forma  disclosures  of net income and  earnings per share are provided as if the
fair value method were used for stock-based compensation.

Concentrations  of  Credit  Risk:  The Bank  grants  residential,  consumer  and
commercial loans to customers located primarily in Wood and surrounding counties
in Ohio. Real estate mortgage loans make up  approximately  82% of the Company's
loan  portfolio  and the  remaining  18% are made up of consumer and  commercial
loans.  The Bank, in the normal course of business,  makes  commitments  to make
loans that are not reflected in the financial statements.  These commitments are
discussed in Note 10.

Fair Values of Financial  Instruments:  Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed separately.  Fair value estimates involve uncertainties and matters of
significant  judgment  regarding  interest rates,  credit risk,  prepayments and
other factors,  especially in the absence of broad markets for particular items.
Changes in assumptions or in market  conditions could  significantly  affect the
estimates.  The fair value  estimates  of  existing  on- and  off-balance  sheet
financial instruments do not include the value of anticipated future business or
the values of assets and liabilities not considered financial instruments.


                                  (Continued)
                                      28.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Statement  of  Cash  Flows:  For  purposes  of this  statement,  cash  and  cash
equivalents  are defined to include the Company's  cash on hand,  due from banks
and federal  funds sold.  The Company  reports net cash flows for customer  loan
transactions, deposit transactions and interest-bearing deposits made with other
financial institutions.

Earnings  Per Common  Share:  Basic and diluted  earnings  per common  share are
computed under a new accounting  standard  effective  beginning with the quarter
ended  December 31, 1997.  All prior earnings per common share amounts have been
restated to be  comparable.  Basic earnings per common share is based on the net
income  divided by the  weighted  average  number of common  shares  outstanding
during the period.  ESOP shares are  considered  outstanding  for  earnings  per
common share calculations as they are committed to be released;  unearned shares
are not considered  outstanding.  Recognition  and retention plan ("RRP") shares
are considered  outstanding  for earnings per common share  calculations as they
become vested.  Diluted  earnings per common share shows the dilutive  effect of
additional  potential  common shares  issuable under stock options and nonvested
shares issued under the RRP. On June 18, 1996, the Board of Directors declared a
three-for-two  stock split effected in the form of a 50% stock dividend  payable
on July  29,  1996.  On  July  1,  1997,  the  Board  of  Directors  declared  a
three-for-two  stock split effected in the form of a 50% stock dividend  payable
on July 29,  1997.  On  January  5,  1998,  the Board of  Directors  declared  a
five-for-four  stock split effected in the form of a 25% stock dividend  payable
on  January  29,  1998.  Stock  dividends  in  excess  of 20%  are  reported  by
transferring the par value of the stock issued from retained  earnings to common
stock.  Stock dividends for 20% or less are reported by transferring  the market
value, as of the ex-dividend date, of the stock issued from retained earnings to
common stock and additional  paid-in capital.  Fractional share amounts are paid
in cash with a reduction in retained earnings. All share and per share data have
been retroactively adjusted to reflect the stock splits.

Financial Statement  Presentation:  Certain items in the 1997 and 1996 financial
statements have been reclassified to correspond with the 1998 presentation.


                                  (Continued)
                                      29.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 2 - EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

A reconciliation  of the numerators and denominators  used in the computation of
the basic  earnings  per common  share and diluted  earnings per common share is
presented below:
<TABLE>
<CAPTION>
                                                               Year ended June  30,
                                                     1998             1997             1996
                                                 -----------      -----------      -----------
<S>                                              <C>              <C>              <C>        
Basic Earnings Per Common Share
    Numerator
      Net income ...........................     $ 2,369,190      $ 1,675,395      $ 1,668,279
                                                 ===========      ===========      ===========
    Denominator
      Weighted average common shares
        outstanding ........................       2,656,990        2,768,442        2,913,126
      Less:  Average unallocated ESOP shares         (53,113)         (81,866)        (112,078)
      Less:  Average nonvested RRP shares ..          (1,828)          (5,545)         (11,970)
                                                 -----------      -----------      -----------
      Weighted average common shares
        outstanding for basis earnings per
        common share .......................       2,602,049        2,681,031        2,789,078
                                                 ===========      ===========      ===========

    Basic earnings per common share ........     $       .91      $       .62      $       .60
                                                 ===========      ===========      ===========
<CAPTION>
                                                               Year ended June 30,
                                                      1998            1997             1996
                                                 -----------      -----------      -----------
<S>                                              <C>              <C>              <C>        
Diluted Earnings Per Common Share
    Numerator
      Net income ...........................     $ 2,369,190      $ 1,675,395      $ 1,668,279
                                                 ===========      ===========      ===========
    Denominator
      Weighted average common shares
        outstanding for basic earnings per
        common share .......................       2,602,049        2,681,032        2,789,078
      Add:  Dilutive effects of average
       nonvested RRP shares ................             111            1,107            5,624
      Add:  Dilutive effects of assumed
        exercises of stock options .........         154,663          135,138          107,102
                                                 -----------      -----------      -----------
      Weighted average common shares
        and dilutive potential common
        shares outstanding .................       2,756,823        2,817,277        2,901,804
                                                 ===========      ===========      ===========

    Diluted earnings per common share ......     $       .86      $       .59      $       .57
                                                 ===========      ===========      ===========
</TABLE>
                                  (Continued)
                                      30.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 2 - EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
  (Continued)

Stock  options for 3,375 shares of common stock,  granted  during the year ended
June 30, 1998,  were not  considered  in computing  diluted  earnings per common
share for the year ended June 30, 1998 because they were antidilutive.


NOTE 3 - SECURITIES

The amortized cost,  gross unrealized gains and losses and estimated fair values
of securities at June 30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
                                      -------------------------------1998------------------------------
                                                             Gross          Gross           Estimated
                                           Amortized      Unrealized     Unrealized           Fair
                                             Cost            Gains         Losses             Value
                                      ---------------    ------------   ------------   ----------------
<S>                                   <C>                <C>                           <C>             
Available for sale
      U.S. Treasury securities        $       606,158    $    159,742                  $        765,900
      U.S. Government agencies              7,199,395          14,510   $     41,729          7,172,176
      Mutual funds and equity
        securities                          2,894,447           4,035         79,659          2,818,823
      Municipal bonds                         172,049                                           172,049
                                      ---------------    ------------   ------------   ----------------
                                           10,872,049         178,287        121,388         10,928,948
      Mortgage-backed securities            8,199,276         104,007         69,093          8,234,190
                                      ---------------    ------------   ------------   ----------------
      Total securities
        available for sale            $    19,071,325    $    282,294   $    190,481   $     19,163,138
                                      ===============    ============   ============   ================

<CAPTION>
                                      ------------------------------1997-------------------------------
                                                             Gross         Gross            Estimated
                                          Amortized       Unrealized    Unrealized            Fair
                                            Cost             Gains        Losses              Value
                                      ---------------    ------------   ------------   ----------------
<S>                                   <C>                <C>            <C>            <C>             
Available for sale
      U.S. Treasury securities        $       540,627    $    152,073                  $        692,700
      U.S. Government agencies             10,772,708          23,327   $     95,899         10,700,136
      Mutual funds and equity
        securities                          2,821,306             276         65,881          2,755,701
                                      ---------------    ------------   ------------   ----------------
                                           14,134,641         175,676        161,780         14,148,537
      Mortgage-backed securities            8,976,932          47,396        179,995          8,844,333
                                      ---------------    ------------   ------------   ----------------
      Total  securities
        available for sale            $    23,111,573    $    223,072   $    341,775   $     22,992,870
                                      ===============    ============   ============   ================
</TABLE>
                                  (Continued)
                                      31.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 3 - SECURITIES (Continued)

The amortized  cost and estimated  fair value of securities at June 30, 1998, by
contractual  maturity,  are shown  below.  Actual  maturities  may  differ  from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>

                                                       Amortized       Estimated
                                                         Cost         Fair Value
                                                     -----------     -----------
<S>                                                  <C>             <C>        
Available for sale
     Due in one year or less ...................     $ 1,299,954     $ 1,295,170
     Due after one year through five years .....       3,178,460       3,307,352
     Due after five years through ten years ....       3,499,188       3,507,603
                                                     -----------     -----------
                                                       7,977,602       8,110,125
     Mortgage-backed securities ................       8,199,276       8,234,190
     Mutual funds and equity securities ........       2,894,447       2,818,823
                                                     -----------     -----------

                                                     $19,071,325     $19,163,138
                                                     ===========     ===========
</TABLE>

No securities were sold during the year ended June 30, 1998 Securities called or
settled by the issuer during 1998  resulted in gross gains of $13,226.  Proceeds
from the sale of  securities  for the year ended June 30, 1997 were  $1,050,000,
resulting in gross losses of $2,410.  Securities called or settled by the issuer
during 1997 resulted in gross gains of $1,949.  No  securities  were sold during
1996.

Securities  with carrying  values of $1,527,000 and $500,000 as of June 30, 1998
and 1997,  were  pledged to secure  public  deposits  and for other  purposes as
required or permitted by law.

                                  (Continued)
                                      32.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 4 - LOANS

Loans were as follows at June 30:
<TABLE>
<CAPTION>
                                                               1998             1997
                                                          ------------     ------------
<S>                                                       <C>              <C> 
Real estate mortgage loans (principally conventional)
      Principal balances
         Secured by one- to four- family residences .     $ 87,923,561     $ 93,537,749
         Secured by other properties ................       10,578,260        7,295,761
         Construction ...............................        6,403,535        4,515,950
         Home equity ................................       10,679,082        8,334,481
                                                          ------------     ------------
                                                           115,584,438      113,683,941
      Less:
         Loans in process ...........................        4,105,037        2,245,571
         Net deferred loan origination fees .........          195,346          200,660
                                                          ------------     ------------
             Total real estate mortgage loans .......      111,284,055      111,237,710

Consumer and other loans
      Principal balances
         Automobile .................................        7,666,776        7,695,651
         Commercial .................................       10,463,418        8,035,167
         Other ......................................        6,857,912        4,925,380
                                                          ------------     ------------
             Total consumer and other loans .........       24,988,106       20,656,198
                                                          ------------     ------------

                                                           136,272,161      131,893,908
Allowance for loan losses ...........................          654,350          575,985
                                                          ------------     ------------

Loans, net ..........................................     $135,617,811     $131,317,923
                                                          ============     ============
</TABLE>
A summary of the activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
                                           1998           1997           1996
                                        ---------      ---------      ---------
<S>                                     <C>            <C>            <C>      
Balance at beginning of period ....     $ 575,985      $ 513,367      $ 409,706
Provision for loan losses .........       120,000        120,000        120,000
Recoveries ........................        11,675         33,097          1,111
Charge-offs .......................       (53,310)       (90,479)       (17,450)
                                        ---------      ---------      ---------

Balance at end of period ..........     $ 654,350      $ 575,985      $ 513,367
                                        =========      =========      =========
</TABLE>
The Bank is not committed to lend  additional  funds to debtors whose loans have
been modified.

                                  (Continued)
                                      33.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 4 - LOANS (Continued)

There  were no  nonaccrual  loans  at June  30,  1998  and  1997.  Interest  not
recognized on nonaccrual loans totaled  approximately  $0, $2,000 and $3,000 for
the years ended June 30, 1998, 1997 and 1996.  Impaired loans were insignificant
at June 30, 1998 and 1997 and during the fiscal years ended June 30, 1998,  1997
and 1996.

In the course of its business, the Bank has granted loans to executive officers,
directors, and their related business interests. A summary of related party loan
activity,  for loans aggregating $60,000 or more to any one related party, is as
follows for the year ended June 30:
<TABLE>
<CAPTION>
                                                      1998               1997
                                                   ---------          ---------
<S>                                                <C>                <C>      
Balance at beginning of period ...........         $ 582,502          $ 510,521
New loans ................................           203,355            268,100
Repayments ...............................           (34,973)          (196,119)
Other change .............................           (51,795)
                                                   ---------          ---------

Balance at end of period .................         $ 699,089          $ 582,502
                                                   =========          =========
</TABLE>
Other  change  represents  the  inclusion  or  exclusion  of loans to  executive
officers,  directors  and their related  business  interests due to loans in the
aggregate  exceeding  or not  exceeding  $60,000 at the  beginning or end of the
period.


NOTE 5 - OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment consists of the following:
<TABLE>
<CAPTION>
                                                        1998             1997
                                                     ----------       ----------
<S>                                                  <C>              <C>       
Land .........................................       $  809,541       $  605,879
Buildings and improvements ...................        2,130,106        1,892,967
Furniture and equipment ......................          754,511          979,019
Construction in process ......................          152,413           78,150
                                                     ----------       ----------
Total cost ...................................        3,846,571        3,556,015
Accumulated depreciation .....................        1,412,953        1,695,684
                                                     ----------       ----------

Office properties and equipment, net .........       $2,433,618       $1,860,331
                                                     ==========       ==========
</TABLE>
                                  (Continued)
                                      34.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 6 - LOAN SERVICING

Mortgage  loans  serviced  for others are not  reported  as assets.  These loans
totaled $60,082,329 and $32,418,955 at June 30, 1998 and 1997.

Activity for capitalized  mortgage servicing rights included in other assets was
as follows:
<TABLE>
<CAPTION>
                                                    1998                 1997
                                                 ---------            ---------
<S>                                              <C>                  <C>      
Beginning of year ....................           $ 138,656
Additions ............................             341,554            $ 146,745
Amortized to expense .................             (55,921)              (8,089)
                                                 ---------            ---------
End of year ..........................           $ 424,289            $ 138,646
                                                 =========            =========
</TABLE>
NOTE 7 - DEPOSITS

Deposits consisted of the following at June 30:
<TABLE>
<CAPTION>
                                                      1998               1997
                                                 ------------       ------------
<S>                                              <C>                <C>         
Noninterest-bearing demand deposits ......       $  1,500,731       $  1,033,148
NOW and money market accounts ............         36,842,486         34,029,482
Savings deposits .........................         21,305,979         21,307,244
Time deposits ............................         70,437,499         64,176,205
                                                 ------------       ------------

                                                 $130,086,695       $120,546,079
                                                 ============       ============
</TABLE>

The  aggregate  amount of deposits with a minimum  denomination  of $100,000 was
$15,724,499 and $16,984,405 at June 30, 1998 and 1997.

At June 30,  1998,  scheduled  maturities  of  certificates  of  deposit  are as
follows:

               Year ended June 30, 1999              $45,702,615
                                   2000               16,885,897
                                   2001                7,489,565
                                   2002                  114,723
                                   2003                  238,493
                                   Thereafter              6,206
                                                     -----------

                                                     $70,437,499
                                                     ===========

                                  (Continued)
                                      35.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 8 - INCOME TAXES

The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
                                           1998           1997           1996
                                        ----------     ----------     ----------
<S>                                     <C>            <C>            <C>       
Current ...........................     $1,166,249     $  828,892     $  888,892
Tax effect of vesting RRP
  shares and exercise of
  nonqualified stock options ......        141,568         24,902         23,704
Deferred ..........................        110,933         92,731         81,554
                                        ----------     ----------     ----------

Total income tax provision ........     $1,418,750     $  946,525     $  994,150
                                        ==========     ==========     ==========
</TABLE>
The differences  between the financial  statement provision and amounts computed
by applying the statutory  federal income tax rate of 34% to income before taxes
are as follows:
<TABLE>
<CAPTION>
                                        1998             1997            1996
                                    -----------      -----------     -----------
<S>                                 <C>              <C>             <C> 
Income tax computed at the
  statutory federal rate ......     $ 1,287,900      $   891,453     $   905,226

Add (subtract) tax effect of
     ESOP deduction ...........         131,385           51,004          28,795
     Other ....................            (535)           4,068          60,129
                                    -----------      -----------     -----------

Total income tax provision ....     $ 1,418,750      $   946,525     $   994,150
                                    ===========      ===========     ===========
</TABLE>
The tax effects of principal  temporary  differences and the resulting  deferred
tax assets and  liabilities  that  comprise  the net deferred tax balance are as
follows at June 30:
<PAGE>
<TABLE>
<CAPTION>
                                                             1998           1997
                                                          ---------      ---------

<S>                                                       <C>            <C> 
Items giving rise to deferred tax assets:
    Deferred loan fees ..............................     $  66,415      $  68,225
    Recognition and retention plan ..................                       10,355
    Accrued vacation ................................        10,636          7,087
    Accelerated ESOP expense ........................         4,716          6,159
    Allowance for loan losses less than tax reserve .         7,877
    Unrealized loss on securities available for sale                        40,359

Items giving rise to deferred tax liabilities:
    FHLB stock dividend .............................      (181,317)      (145,821)
    Franchise taxes .................................       (37,467)       (32,180)
    Depreciation ....................................        (1,391)       (11,771)
    Allowance for loan losses more than tax reserve .                      (18,767)
    Mortgage servicing rights .......................      (144,258)       (47,143)
    Unrealized gains on securities available for sale       (31,217)
                                                          ---------      ---------
         Net deferred tax liability .................     $(306,006)     $(123,497)
                                                          =========      =========
</TABLE>

                                  (Continued)
                                      36.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 8 - INCOME TAXES (Continued)

Prior to the enactment of legislation discussed below, thrifts which met certain
tests  relating to the  composition  of assets had been  permitted  to establish
reserves for bad debts and to make annual additions thereto which could,  within
specified  formula limits,  be taken as a deduction in computing  taxable income
for federal  income tax purposes.  The amount of the bad debt reserve  deduction
for  "nonqualifying  loans" was computed under the experience method. The amount
of the bad debt reserve  deduction for "qualifying real property loans" could be
computed under either the experience  method or the percentage of taxable income
method, based on an annual election.

In August  1996,  legislation  was enacted  that  repeals the reserve  method of
accounting  used by many thrifts to calculate their bad debt reserve for federal
income tax purposes.  Therefore,  small thrifts such as the Bank must  recapture
that  portion of the reserve  that exceeds the amount that could have been taken
under the experience method for tax years beginning after December 31, 1987. The
legislation  also requires  thrifts to account for bad debts for federal  income
tax purposes on the same basis as commercial banks for tax years beginning after
December  31,  1995.  The  recapture  will  occur over a  six-year  period,  the
commencement  of which will be delayed  until the first  taxable-year  beginning
after  December 31, 1997,  provided the  institution  meets certain  residential
lending requirements.  At June 30, 1998, the Bank had approximately  $631,000 in
bad debt  reserves  subject to recapture for federal  income tax  purposes.  The
deferred tax liability related to the recapture has been previously established.
In  fiscal  1998,  no bad  debt  reserves  were  recaptured  as the Bank met the
residential lending requirements.

Retained  earnings at June 30, 1998 and 1997 includes  approximately  $2,300,000
for which no  provision  for  federal  income  taxes has been made.  This amount
represents  the tax bad debt reserve at June 30,  1988,  which is the end of the
Bank's base year for  purposes of  calculating  the bad debt  deduction  for tax
purposes.  If this  portion of  retained  earnings is used in the future for any
purpose other than to absorb bad debts,  the amount used will be added to future
taxable  income.  The unrecorded  deferred tax liability on the above amount was
approximately $782,000.


                                 (Continued)
                                      37.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 9 - ADVANCES FROM FEDERAL HOME LOAN BANK

The  Company  had the  following  outstanding  Federal  Home Loan Bank  ("FHLB")
advances at June 30:
<TABLE>
<CAPTION>
                                                      --------------------------1998--------------------------
                                                                          Interest
                                                          Amount            Rate                 Maturity
<S>                                                   <C>                   <C>                         <C> 
Mortgage Matched Advance, (monthly
  principal and interest payment of
  $16,255) fixed rate                                 $     1,459,659       6.20%                  June 2008
Mortgage Matched Advance (monthly
  principal and interest payment of
  $16,048) fixed rate                                       1,463,049       6.00                   July 2008
Libor Index Advance, variable rate                          2,000,000       5.66                   June 2000
Libor Index Advance, variable rate                          2,000,000       5.70                   June 2001
Regular Fixed Rate                                          5,000,000       6.10               November 1999
                                                     ----------------

                                                     $     11,922,708
                                                     ================
<CAPTION>
                                                      ---------------------------1997-------------------------
                                                                          Interest
                                                          Amount            Rate                   Maturity
<S>                                                   <C>                   <C>                         <C> 
Mortgage Matched Advance, (monthly
  principal and interest payment of
  $16,255) fixed rate                                 $     1,560,786       6.20%                  June 2008
Mortgage Matched Advance (monthly
  principal and interest payment of
  $16,048) fixed rate                                       1,564,520       6.00                   July 2008
Libor Index Advance, variable rate                          2,000,000       5.69                   June 1998
Libor Index Advance, variable rate                          2,000,000       5.74                   June 2001
Cash Management Advance, variable rate                      7,500,000       5.75                July through
                                                                                              September 1997
Regular Fixed Rate                                            200,000       6.35                 August 1997
Regular Fixed Rate                                            450,000       6.45                January 1998
Regular Fixed Rate                                          5,000,000       6.10               November 1999
Short Term Fixed Rate                                       1,500,000       5.60                 August 1997
                                                     ----------------

                                                     $     21,775,306
                                                     ================
</TABLE>
                                  (Continued)
                                      38.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996


NOTE 9 - ADVANCES FROM FEDERAL HOME LOAN BANK (Continued)

At June 30, 1998, scheduled principal payments on FHLB advances are as follows:

                1999                             $        216,403
                2000                                    7,229,978
                2001                                    2,244,406
                2002                                      259,740
                2003                                      276,035
                Thereafter                              1,696,146
                                                 ----------------

                                                 $     11,922,708
                                                 ================

All advances are  collateralized  by the  Company's  FHLB stock and  residential
mortgage loans totaling $17,884,000 and $32,663,000 at June 30, 1998 and 1997.


NOTE 10 - COMMITMENTS AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-
  SHEET RISK

Various contingent  liabilities are not reflected in the consolidated  financial
statements, including claims and legal actions arising in the ordinary course of
business.  In the opinion of management,  after consultation with legal counsel,
the  ultimate  disposition  of these  matters is not expected to have a material
effect on the Company's financial condition or results of operations.

Some financial instruments are used in the normal course of business to meet the
financing  needs of customers  and to reduce  exposure to interest rate changes.
These  financial  instruments  include  commitments  to extend  credit,  standby
letters of credit and financial  guarantees.  These involve, to varying degrees,
credit and  interest-rate  risk more than the amounts  reported in the financial
statements.

Exposure to credit loss if the other  party does not perform is  represented  by
the  contractual  amount for  commitments to extend credit,  standby  letters of
credit and financial  guarantees written.  The same credit policies are used for
commitments  and  conditional  obligations as are used for loans.  The amount of
collateral obtained,  if deemed necessary,  on extension of credit is based upon
management's   credit  evaluation  and  generally  consists  of  residential  or
commercial real estate.


           
                                   (Continued)
                                      39.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 10 - COMMITMENTS AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-
  SHEET RISK (Continued)

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there  is  no  violation  of  any  condition   established  in  the  commitment.
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 used, the total  commitments do not  necessarily  represent
future cash  requirements.  Standby  letters of credit and financial  guarantees
written are conditional  commitments to guarantee a customer's  performance to a
third party.

As of June 30, 1998 and 1997,  variable rate  commitments  to make loans or fund
outstanding   lines  of  credit  amounted  to   approximately   $12,313,000  and
$9,467,000,  respectively, and fixed rate commitments amounted to $3,789,000 and
$2,231,000, respectively. The interest rates on variable rate commitments ranged
from 6.50% to 12.00% and interest  rates on fixed rate  commitments  ranged from
6.25%  to  15.00%  at June  30,  1998.  The  interest  rates  on  variable  rate
commitments  ranged  from  6.75% to  11.50%  and  interest  rates on fixed  rate
commitments ranged from 7.00% to 12.50% at June 30, 1997. Since loan commitments
may expire without being used, the amounts do not necessarily  represent  future
cash commitments.


NOTE 11 - FDIC INSURANCE

Included in insurance  expense in the Consolidated  Statements of Income for the
year ended June 30, 1997 is $670,623  for a special  assessment  resulting  from
legislation  passed and enacted into law on September  30, 1996 to  recapitalize
the  Savings  Association  Insurance  Fund  of  the  Federal  Deposit  Insurance
Corporation.  Thrifts  such as the Bank paid a one-time  assessment  in November
1996 of $0.657 for each $100 in  deposits as of March 31,  1995.  Because of the
recapitalization,  the Bank began paying  lower  deposit  insurance  premiums in
January 1997.


NOTE 12 - EMPLOYEE STOCK OWNERSHIP PLAN

The Company has  established an Employee  Stock  Ownership Plan ("ESOP") for the
benefit of employees  who have  completed at least one year of service and 1,000
hours of work.  Contributions under the ESOP are conditioned upon the ESOP being
qualified  under  Sections 401 and 501 of the Internal  Revenue Code of 1986, as
amended (the "Code"). Wood Bancorp, Inc. has received a favorable  determination
letter  dated June 19,  1995,  from the  Commissioner  of the  Internal  Revenue
Service.


                                  (Continued)
                                      40.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 12 - EMPLOYEE STOCK OWNERSHIP PLAN (Continued)

To fund the plan,  the ESOP borrowed  $746,200 from the Company for the purposes
of  purchasing  209,868  shares  of  stock at $3.56  per  share of the  Company.
Principal  and  interest  payments  on the loan are due in  annual  installments
beginning June 1994,  with the final payments of principal and accrued  interest
being due and  payable  at  maturity,  which is June 2000.  Interest  is payable
during the term of the loan at a fixed rate of 6%. The loan is collateralized by
the shares of the Company's common stock purchased with the proceeds. The shares
purchased  with the loan proceeds are held in a suspense  account for allocation
among  participants  as the loan is repaid.  As payments are made and the shares
are released  from the  suspense  account,  such shares will be validly  issued,
fully paid and nonassessable.  Shares will be allocated among participants based
on all taxable  compensation  and any amount of compensation  contributed to the
Bank's cafeteria plan.

Shares  pledged as  collateral  are  reported  as  unearned  ESOP  shares in the
Consolidated Balance Sheets. As shares are released from collateral, the Company
reports compensation expense equal to the current market price of the shares and
the shares become outstanding for earnings-per-share computations.  Dividends on
allocated  ESOP shares are recorded as a reduction of retained  earnings,  while
dividends on unallocated  ESOP shares are recorded as a reduction of debt.  ESOP
compensation  expense was  $489,726,  $257,432 and  $197,310 for 1998,  1997 and
1996.

The ESOP shares were as follows at June 30:
<TABLE>
<CAPTION>
                                                         1998              1997
                                                        -------         --------

<S>                                                     <C>               <C>   
Allocated shares .............................          128,108           97,900
Shares committed to be released ..............           28,730           30,208
Unreleased shares ............................           53,030           81,760
                                                       --------         --------
    Total ESOP shares ........................          209,868          209,868
                                                       ========         ========

Fair value of unreleased shares ..............         $848,496         $735,840
                                                       ========         ========
</TABLE>
NOTE 13 - STOCK OPTION AND INCENTIVE PLAN

The Company  sponsors a shareholder  approved stock option plan that  authorizes
the  Stock  Option  Committee  of the Board of  Directors  to grant  options  to
directors, officers and employees of the Company or its subsidiaries. A total of
299,812 common shares, as adjusted for stock splits,  were reserved for issuance
under the Plan.  Options  may be  granted  at a price not less than fair  market
value at the date of grant.  Options are subject to a five-year vesting schedule
for those  granted to  employees  and a  four-year  vesting  schedule  for those
granted to non-employee directors.

                                  (Continued)
                                      41.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 13 - STOCK OPTION AND INCENTIVE PLAN (Continued)

Information about options granted is as follows:
<TABLE>
<CAPTION>
                                      1998                          1997                          1996
                            -----------------------      -----------------------        -----------------------
                                          Weighted                      Weighted                       Weighted
                                           Average                      Average                        Average
                              Number      Exercise          Number      Exercise          Number       Exercise
                            of Options      Price         of Options      Price         of Options       Price
<S>                           <C>        <C>                <C>         <C>                <C>         <C>     
Options outstanding
  July 1                      243,363    $    3.74          244,064     $   3.56           251,843     $   3.56
Options granted                 3,375        18.80            9,375         8.27             5,625         5.38
Options forfeited                                             2,998         3.56             7,425         4.94
Options exercised              20,650         3.99            7,078         3.56             5,979         3.56
                              -------                       -------                        ------- 
Options outstanding
  June 30                     226,088         3.94          243,363         3.74           244,064         3.56
                              =======                       =======                        ======= 

Options exercisable           187,631                       149,139                        103,734

Remaining shares
  available for grant          40,017                        43,392                         49,769
</TABLE>
The following table summarized  information  about stock options  outstanding at
June 30, 1998:
<TABLE>
<CAPTION>
                           Number             Weighted Average            Number
                         Outstanding              Remaining             Exercisable
Exercise Price        at June 30, 1998        Contractual Life       at June 30, 1998
--------------        ----------------        ----------------       ----------------
<S>                         <C>                     <C>                   <C>    
 $    3.56                  215,213                 5.25 years            187,631
      8.27                    7,500                 8.25                       --
     18.80                    3,375                 9.50                       --
</TABLE>
SFAS No. 123,  effective  for fiscal years  beginning  after  December 15, 1995,
requires  pro form  disclosures  for  companies  not  adopting  its  fair  value
accounting method for stock-based compensation.  Accordingly,  the following pro
forma information  presents net income and earnings per share had the fair value
method  been used to  measure  compensation  cost for  stock  option  plans.  No
compensation expense was recognized for years ended June 30, 1998 and 1997.
<PAGE>
<TABLE>
<CAPTION>
                                                            1998          1997
                                                         ----------    ---------- 
<S>                                                      <C>           <C>       
         Net income as reported .....................    $2,369,190    $1,675,395
         Pro forma net income .......................     2,364,267     1,672,852

         Basic earnings per share as reported .......          0.91          0.62
         Pro forma basic earnings per share .........          0.91          0.62

         Diluted earnings per share as reported .....          0.86          0.59
         Pro forma diluted earnings per share .......          0.86          0.59
</TABLE>

                                  (Continued)
                                      42.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 13 - STOCK OPTION AND INCENTIVE PLAN (Continued)

The  following  table  presents  the fair  value of  options  granted  using the
Black-Scholes  options  pricing model,  along with the  assumptions  used in the
computation:
<TABLE>
<CAPTION>
                       Fair Value         Risk-Free       Expected     Expected
  Date of Grant       of Options       Interest Rate        Life       Dividends
  -------------       ----------       -------------        ----       ---------
<S>                    <C>                  <C>           <C>            <C>  
  January 1998         $   6.88             5.52%         10 years       1.80%
  October 1996             2.75             6.65          10             2.74
</TABLE>


NOTE 14 - RECOGNITION AND RETENTION PLAN

The  Bank  adopted  a  Recognition  and  Retention  Plan  ("RRP")  as a means of
providing  directors  and certain key  employees  of the Bank with an  ownership
interest in the Company in a manner designed to reward and retain such directors
and key  employees.  The Company  initially  awarded  106,718  shares out of its
authorized but unissued shares at the conclusion of the  Conversion.  The shares
vested at a rate of 20% per year with the first  installment  vesting six months
after the completion of the Conversion and each additional  installment  vesting
on each subsequent anniversary of such date. All shares in the initial award are
vested at June 30,  1998.  The Company  awarded an  additional  2,812  shares on
October  1,  1996.  These  shares  vest at a rate of 20% per year on each of the
first five anniversaries of the date of the award.  Compensation expense related
to the plan was $15,743,  $34,864 and $58,784 for the years ended June 30, 1998,
1997 and 1996. The unamortized  unearned  compensation value of the RRP is shown
as a reduction to shareholders' equity in the Consolidated Balance Sheets.


NOTE 15 -REGULATORY MATTERS

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies.  Failure to meet minimum capital  requirements can
initiate  certain  mandatory  actions that, if  undertaken,  could have a direct
material  effect on the Bank's  financial  statements.  Under  capital  adequacy
guidelines and the regulatory  framework for prompt corrective  action, the Bank
must meet specific capital guidelines that involve quantitative  measures of the
Bank's assets,  liabilities  and certain  off-balance-sheet  items as calculated
under  regulatory   accounting   practices.   The  Bank's  capital  amounts  and
classifications  are also subject to  qualitative  judgments  by the  regulators
about the Bank's components, risk weightings and other factors. At June 30, 1998
and 1997 management believes the Company and the Bank comply with all regulatory
capital  requirements.  Based on the Bank's computed  regulatory capital ratios,
the Bank is considered well capitalized  under the Federal Deposit Insurance Act
at June 30,  1998.and  1997.  Management  believes no  conditions or events have
occurred  after June 30,  1998 that would cause the Bank's  capital  category to
change.

                                   (Continued)
                                      43.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 15 -REGULATORY MATTERS (Continued)

At June 30, 1998 and 1997, the Bank's actual capital levels and minimum required
levels were:
<TABLE>
<CAPTION>
                                                                                To Be Adequately                Minimum Required
                                                                                 Capitalized Under          To Be Well Capitalized
                                                                                Prompt Corrective           Under Prompt Corrective
                                                             Actual             Action Regulations             Action Regulations
                                                      Amount        Ratio        Amount      Ratio            Amount         Ratio
                                                      ------        -----        ------      -----            ------         -----
                                                                             (Dollars in Thousands)
<S>                                                  <C>            <C>        <C>            <C>            <C>            <C>   
1998
Total capital (to risk weighted assets) ........     $14,493        13.45%     $ 8,618        8.00%          $10,772        10.00%
Tier 1 (core) capital (to risk weighted assets)       13,871        12.88        4,309        4.00             6,463         6.00
Tier 1 (core) capital (to adjusted total assets)      13,871         8.47        6,548        4.00             8,185         5.00
Tangible capital (to adjusted total assets) ....      13,871         8.47        2,455        1.50               N/A

1997
Total capital (to risk weighted assets) ........     $14,554        15.20%     $ 7,658        8.00%          $ 9,573        10.00%
Tier 1 (core) capital (to risk weighted assets)       14,041        14.67        3,829        4.00             5,744         6.00
Tier 1 (core) capital (to adjusted total assets)      14,041         8.71        4,834        3.00             8,056         5.00
Tangible capital (to adjusted total assets) ....      14,041         8.71        2,417        1.50               N/A
</TABLE>
In addition to certain federal income tax considerations, OTS regulations impose
limitations  on the payment of  dividends  and other  capital  distributions  by
savings  associations.  Under OTS  regulations  applicable to converted  savings
associations,  the Bank is not  permitted  to pay a cash  dividend on its common
shares  if its  regulatory  capital  would,  as a  result  of  payment  of  such
dividends,  be reduced below the amount required for the Liquidation Account, or
below applicable regulatory capital requirements prescribed by the OTS.

OTS regulations  applicable to all savings and loan associations  provide that a
savings  association  which immediately prior to, and on a pro forma basis after
giving  effect to, a proposed  capital  distribution  (including a dividend) has
total capital (as defined by OTS  regulations)  that is equal to or greater than
the amount of its  capital  requirements  is  generally  permitted  without  OTS
approval  (but  subsequent  to 30 days' prior notice to the OTS) to make capital
distributions,  including dividends,  during a calendar year in an amount not to
exceed the greater of (1) 100% of its net  earnings to date during the  calendar
year,  plus an amount equal to one-half of the amount by which its total capital
to assets ratio  exceeded its required  capital to assets ratio at the beginning
of the  calendar  year,  or (2) 75% of its net  earnings  for  the  most  recent
four-quarter period. Savings associations that meet the capital requirements but
have  been  notified  by the OTS  that  they  are in need  of more  than  normal
supervision will be subject to restrictions on dividends.  A savings association
that fails to meet current  minimum  capital  requirements  is  prohibited  from
making any capital distributions without the prior approval of the OTS.

The Bank currently  meets all of its capital  requirements  and,  unless the OTS
determines  that  the  Bank  is  an  institution   requiring  more  than  normal
supervision,  the Bank  may pay  dividends  in  accordance  with  the  foregoing
provisions of OTS regulations.

                                  (Continued)
                                      44.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 16 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Condensed financial information of Wood Bancorp, Inc. is as follows at June 30:
<TABLE>
<CAPTION>
                                     CONDENSED BALANCE SHEETS

                                                                        1998              1997
                                                                   ------------      ------------
<S>                                                                <C>               <C>  
Assets
Cash .........................................................     $  5,348,130      $  3,066,707
Interest-bearing time deposits in other financial institutions           99,000            99,000
Securities available for sale ................................        2,154,730         2,033,443
Mortgage-backed and related securities available for sale ....          571,765           599,973
Loan receivable from subsidiary ..............................          213,200           319,800
Investment in subsidiary .....................................       14,099,806        14,021,379
Other assets .................................................           68,348            26,424
                                                                   ------------      ------------
    Total assets .............................................     $ 22,554,979      $ 20,166,726
                                                                   ============      ============

Liabilities and Shareholders' Equity
Other liabilities ............................................     $      4,000      $      1,146
Common stock .................................................           31,071            16,573
Additional paid-in capital ...................................       11,412,177        10,884,182
Retained earnings ............................................       14,294,514        12,805,953
Treasury stock ...............................................       (3,033,704)       (3,130,066)
Unearned employee stock ownership plan shares ................         (198,442)         (301,741)
Unearned recognition and retention plan shares ...............          (15,234)          (30,977)
Unrealized gain (loss) on available for sale securities, net .           60,597           (78,344)
                                                                   ------------      ------------
    Total liabilities and shareholders' equity ...............     $ 22,554,979      $ 20,166,726
                                                                   ============      ============

</TABLE>
                                           (Continued)
                                               45.


<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 16 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
  (Continued)
<TABLE>
<CAPTION>

                         CONDENSED STATEMENTS OF INCOME
                For the years ended June 30, 1998, 1997 and 1996

                                                         1998             1997            1996
                                                     -----------      -----------     -----------
<S>                                                  <C>              <C>             <C>                     
Interest income
    Dividends from subsidiary ..................     $ 3,000,000                      $ 5,000,000
    Securities .................................         118,734      $   116,740         113,119
    Mortgage-backed and related securities .....          32,740           37,836          38,575
    Loan to subsidiary .........................          19,454           25,939          32,423
    Other interest income ......................           8,640            6,703          23,227
                                                     -----------      -----------     -----------
         Total interest income .................       3,179,568          187,218       5,207,344

Operating expenses .............................          71,466           89,967          96,272
                                                     -----------      -----------     -----------

Income before income taxes and equity in
      undistributed earnings of subsidiary .....       3,108,102           97,251       5,111,072

Income tax expense .............................          36,750           33,100          37,750
                                                     -----------      -----------     -----------

Income before equity in undistributed
      earnings of subsidiary ...................       3,071,352           64,151       5,073,322

(Distributions in excess of earnings)
      equity in undistributed earnings
      of subsidiary ............................        (702,162)       1,611,244      (3,405,043)
                                                     -----------      -----------     -----------

Net income .....................................     $ 2,369,190      $ 1,675,395     $ 1,668,279
                                                     ===========      ===========     ===========

</TABLE>
                                   (Continued)
                                      46.

<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 16 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
  (Continued)
<TABLE>
<CAPTION>
                                CONDENSED STATEMENTS OF CASH FLOWS
                         For the years ended June 30, 1998, 1997 and 1996

                                                       1998             1997             1996
                                                   -----------      -----------      -----------
<S>                                                <C>              <C>              <C> 
Cash flows from operating activities
Net income ...................................     $ 2,369,190      $ 1,675,395      $ 1,668,279
Adjustments to reconcile net income to net
  cash from operating activities:
    Distributions in excess of earnings
      (equity in undistributed earnings)
      of subsidiary ..........................         702,162       (1,611,244)       3,405,043
    Principal repayments on loan to ESOP .....         106,600          106,600          106,600
    Net accretion ............................            (130)            (186)            (726)
    Change in
         Other assets ........................         (36,174)         147,628          (80,267)
         Other liabilities ...................           2,854         (433,698)         374,839
                                                   -----------      -----------      -----------
    Net cash from operating activities .......       3,144,502         (115,505)       5,473,768

Cash flows from investing activities
Purchase of interest-bearing deposits in other
  financial institutions .....................                              (63)         (98,937)
Purchases of securities ......................        (423,141)                         (405,777)
Maturities of securities .....................         300,000                           800,000
Proceeds from principal payments on
  mortgage-backed securities .................          29,831           30,992           51,579
                                                   -----------      -----------      -----------
    Net cash from investing activities .......         (93,310)          30,929          346,865

Cash flows from financing activities
Cash dividends paid ..........................        (853,027)        (544,844)        (336,958)
Purchase of treasury stock ...................                       (1,491,300)        (960,925)
Proceeds from issuance of stock ..............          83,258           25,179           21,259
                                                   -----------      -----------      -----------
    Net cash from financing activities .......        (769,769)      (2,010,965)      (1,276,624)
                                                   -----------      -----------      -----------

Net change in cash ...........................       2,281,423       (2,095,541)       4,544,009

Cash at beginning of period ..................       3,066,707        5,162,248          618,239
                                                   -----------      -----------      -----------

Cash at end of period ........................     $ 5,348,130      $ 3,066,707      $ 5,162,248
                                                   ===========      ===========      ===========
</TABLE>
                                   (Continued)
                                       47.
<PAGE>
                                  WOOD BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996

NOTE 17 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The  following  table shows the  estimated  fair value and the related  carrying
value of the Company's financial instruments at June 30, 1998 and 1997:
<TABLE>
<CAPTION>
                                        -----------------1998--------------     ---------------1997----------------
                                            Carrying            Estimated           Carrying           Estimated
                                              Value            Fair Value             Value           Fair Value
                                        ---------------     ---------------     ---------------    ----------------
<S>                                     <C>                 <C>                 <C>                <C>             
Assets
Cash and cash equivalents               $     5,186,582     $     5,187,000     $     2,914,578    $      2,915,000
Interest-bearing time deposits in
  other financial institutions                  731,398             731,000           2,229,104           2,229,000
Securities available for sale                10,928,948          10,929,000          14,148,537          14,149,000
Mortgage-backed securities
  available for sale                          8,234,190           8,234,000           8,844,333           8,844,000
Loans, net                                  135,617,811         135,867,000         131,317,923         134,050,000
FHLB Stock                                    1,507,600           1,508,000           1,403,200           1,403,000
Accrued interest receivable                     847,379             847,000             853,736             854,000

Liabilities
Demand and savings deposits                 (60,018,162)        (60,018,000)        (56,369,874)        (56,370,000)
Time deposits                               (70,437,499)        (70,850,000)        (64,176,205)        (64,114,000)
FHLB borrowings                             (11,922,708)        (11,888,000)        (21,775,306)        (21,463,000)
Accrued interest payable                       (143,758)           (144,000)           (193,166)           (193,000)
</TABLE>

The estimated fair value approximates carrying amount for all items except those
described  below.  Estimated fair value for securities is based on quoted market
values for the  individual  securities or for equivalent  securities.  Estimated
fair  value for loans is based on the rates  charged at  year-end  for new loans
with  similar  maturities,  applied  until the loan is  assumed to reprice or be
paid.  Estimated fair values for time deposits and FHLB  borrowings are based on
the rates paid at year-end for similar new deposits  and  long-term  borrowings,
applied until maturity. Estimated fair value for other financial instruments and
off-balance sheet loan commitments is considered nominal.



                                      48.
<PAGE>



                             SHAREHOLDER INFORMATION

Dividends

The Board of  Directors  intends  to  continue  the  payment of  quarterly  cash
dividends, dependent on the results of operations and financial condition of the
Company, tax considerations,  industry standards,  economic conditions,  general
business practices and other factors.  The Company's ability to pay dividends is
dependent on the dividend  payments it receives from the Bank,  which is subject
to continued compliance with all regulatory capital requirements. See Note 15 of
the  Notes  to  Consolidated  Financial  Statements  for  information  regarding
regulatory requirements applicable to the payment of cash dividends by the Bank.


Market Information

Wood  Bancorp,  Inc.  common  stock is traded over the counter and quoted on the
Nasdaq  Small-Cap  Market under the symbol "FFWD".  At September 4, 1998,  there
were 2,684,740 shares of Wood Bancorp,  Inc. common stock issued and outstanding
by 758  holders  of  record.  The table  below sets forth the high and low daily
closing  price  for the  common  stock as  reported  on the  Nasdaq,  as well as
dividends declared per share, by quarter for the last two years.

Quarter Ended                    High               Low           Dividends
-------------                    ----               ---           ---------

September 30, 1996......       $  8.33          $   6.58          $   .05
December 31, 1996.......          9.20              8.20              .05
March 31, 1997..........          9.20              8.40              .05
June 30, 1997...........          9.07              8.47              .05
September 30, 1997......         14.40              9.37              .08
December 31, 1997.......         18.80             13.50              .08
March 31, 1998..........         27.00             18.80              .085
June 30, 1998...........         20.50             15.50              .085



                                      49.
<PAGE>
Annual Report on Form 10-KSB

A copy of Wood  Bancorp,  Inc.'s  Annual Report on Form 10-KSB as filed with the
Securities and Exchange  Commission may be obtained  without charge upon written
request to David L. Nagel, Executive Vice President, Chief Financial Officer and
Secretary,  124 East Court Street,  Bowling Green, Ohio 43402-2259 or by calling
(419) 352-3502.

Corporate Headquarters                       Market Makers
124 East Court                               The Ohio Company
Bowling Green, Ohio  43402-2259              Herzog, Heine, Geduld, Inc.
                                             McDonald & Company Securities, Inc.

Registrar / Transfer Agent                   General Counsel
Registrar and Transfer Company               Spitler, Vogtsberger & Huffman
10 Commerce Drive                            Bowling Green, OH
Cranford, NJ  07016

Special Counsel
Silver, Freedman & Taff, L.L.P.
Washington, DC

                        DIRECTORS AND EXECUTIVE OFFICERS

                               WOOD BANCORP, INC.
                                       And
                               FIRST FEDERAL BANK

                                    Directors

Robert E. Spitler                          Richard L. Gordley
Chairman of the Board of Wood              President and Chief Executive Officer
  Bancorp, Inc. and First Federal Bank       of Wood Bancorp, Inc. and First
Partner - Law Firm of Spitler,               Federal Bank
  Vogtsberger & Huffman

David L. Nagel                             Randal R. Huber
Executive Vice President, Chief            Officer and Part-Owner
  Financial Officer and Secretary          Huber, Harger, Welt and Smith
  of Wood Bancorp, Inc. and First          Insurance Agency
  Federal Bank

Michael A. Miesle                          Dale L. Myers
Chief Executive Officer                    Pharmacist - Retired
  Wood County Hospital

                               Executive Officers

Richard L. Gordley                         David L. Nagel
President and Chief Executive Officer      Executive Vice President, Chief
                                           Financial Officer and Secretary

David A. Weaks                             John H. Bick
Vice President                             Executive Vice President


                                      50.