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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT of 1934
|- | ---------------------------------------------------------------------------------------



For the Quarterly Period Ended September 30, 2003



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



For the transition period from
 to
.



Commission File No. 1-13652



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First West Virginia Bancorp, Inc.

(Exact name of registrant as specified in its charter)



|West Virginia                                                  |  | 55-6051901                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



1701 Warwood Avenue

Wheeling, West Virginia 26003

(Address of principal executive offices)



Registrants telephone number, including area code: (304) 277-1100



N/A

(Former name, former address and former fiscal year,

if changed since last report)



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



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



APPLICABLE ONLY
TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:



Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ̈Yes ̈No  x  N/A



APPLICABLE
ONLY TO CORPORATE ISSUERS:



Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest practible date.



The number of shares outstanding of the issuers common stock as of November 8, 2003:



Common Stock, $5.00 Par Value, shares outstanding 1,538,443 shares



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##### Table of Contents

FORM 10-Q INDEX



|PART I - Financial Information |  |                                                                                      
|------------------------------ |  | -------------------------------------------------------------------------------------
|                               |  |                                                                                      
|Item 1                         |  | Financial Statements and Accompanying Notes                                          
|                               |  |                                                                                      
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               |  |                                                                                      
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                           
|                               |  |                                                                                      
|Item 4                         |  | Controls and Procedures                                                              
|                               | 
|PART II - Other Information    |  |                                                                                      
|                               |  |                                                                                      
|Item 1                         |  | Legal Proceedings                                                                    
|                               |  |                                                                                      
|Item 2                         |  | Changes in Securities and Use of Proceeds                                            
|                               |  |                                                                                      
|Item 3                         |  | Defaults upon Senior Securities                                                      
|                               |  |                                                                                      
|Item 4                         |  | Submission of matters to a Vote of Security Holders                                  
|                               |  |                                                                                      
|Item 5                         |  | Other Information                                                                    
|                               |  |                                                                                      
|Item 6                         |  | Exhibits and Reports on Form 8-K                                                     
|                               |  |                                                                                      
|                               |  | Exhibit Index                                                                        
|                               |  |                                                                                      
|                               |  | Reports on Form 8-K                                                                  
|                               |  |                                                                                      
|                               |  | Signatures                                                                           





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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED BALANCE SHEETS



|                                                                                                                               |  | September 30,2003 |             |   | December 31,2002 |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ----------- | - | ---------------- | -
|                                                                                                                               |  | (Unaudited)       |             |   |                  |  
|ASSETS                                                                                                                         |  |                   |             |   |                  |  
|Cash and due from banks                                                                                                        |  | $                 | 6,428,202   |   |                  | $
|Due from banks - interest bearing                                                                                              |  |                   | 4,153,504   |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total cash and cash equivalents                                                                                                |  |                   | 10,581,706  |   |                  |  
|Federal funds sold                                                                                                             |  |                   | 558,000     |   |                  |  
|Investment securities                                                                                                          |  |                   |             |   |                  |  
|Available for sale (at fair value)                                                                                             |  |                   | 122,065,572 |   |                  |  
|Held to maturity - fair value of $4,775,678 at September 30, 2003 and $7,969,329 at December 31, 2002                          |  |                   | 4,541,807   |   |                  |  
|Loans                                                                                                                          |  |                   | 139,162,376 |   |                  |  
|Less allowance for possible loan losses                                                                                        |  |                   | (2,125,005  | ) |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Net loans                                                                                                                      |  |                   | 137,037,371 |   |                  |  
|Premises and equipment, net                                                                                                    |  |                   | 3,948,891   |   |                  |  
|Accrued income receivable                                                                                                      |  |                   | 1,548,799   |   |                  |  
|Intangible assets                                                                                                              |  |                   | 391,985     |   |                  |  
|Goodwill                                                                                                                       |  |                   | 1,644,119   |   |                  |  
|Other assets                                                                                                                   |  |                   | 2,309,924   |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total assets                                                                                                                   |  | $                 | 284,628,174 |   |                  | $
|                                                                                                                               |  |                   |             |   |                  |  
|LIABILITIES                                                                                                                    |  |                   |             |   |                  |  
|Noninterest bearing deposits:                                                                                                  |  |                   |             |   |                  |  
|Demand                                                                                                                         |  | $                 | 23,685,116  |   |                  | $
|Interest bearing deposits:                                                                                                     |  |                   |             |   |                  |  
|Demand                                                                                                                         |  |                   | 38,159,795  |   |                  |  
|Savings                                                                                                                        |  |                   | 87,022,333  |   |                  |  
|Time                                                                                                                           |  |                   | 92,285,002  |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total deposits                                                                                                                 |  |                   | 241,152,246 |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Repurchase agreements                                                                                                          |  |                   | 17,699,018  |   |                  |  
|Other borrowings                                                                                                               |  |                   | 1,320,000   |   |                  |  
|Accrued interest payable                                                                                                       |  |                   | 404,468     |   |                  |  
|Other liabilities                                                                                                              |  |                   | 1,044,553   |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total liabilities                                                                                                              |  |                   | 261,620,285 |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|STOCKHOLDERS EQUITY                                                                                                           |  |                   |             |   |                  |  
|Common Stock - 2,000,000 shares authorized at $5 par value 1,538,443 shares issued at September 30, 2003 and December 31,
2002 |  |                   | 7,692,215   |   |                  |  
|Surplus                                                                                                                        |  |                   | 4,982,606   |   |                  |  
|Retained Earnings                                                                                                              |  |                   | 9,654,884   |   |                  |  
|Accumulated other comprehensive income                                                                                         |  |                   | 678,184     |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total stockholders equity                                                                                                     |  |                   | 23,007,889  |   |                  |  
|                                                                                                                               |  |                   |             |   |                  |  
|Total liabilities and stockholders equity                                                                                     |  | $                 | 284,628,174 |   |                  | $
|                                                                                                                               |  |                   |             |   |                  |  



The accompanying notes
are an integral part of the financial statements



3



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



|                                                             |  | Three Months EndedSeptember 30, |           | Nine Months Ended September 30,
|------------------------------------------------------------ |  | ------------------------------- | --------- | -------------------------------
|                                                             |  | 2003                            |           | 2002                           
|INTEREST INCOME                                              |  |                                 |           |                                
|Interest and fees on loans and lease financing:              |  |                                 |           |                                
|Taxable                                                      |  | $                               | 2,228,765 |                                
|Tax-exempt                                                   |  |                                 | 148,685   |                                
|Investment securities:                                       |  |                                 |           |                                
|Taxable                                                      |  |                                 | 726,989   |                                
|Tax-exempt                                                   |  |                                 | 180,464   |                                
|Dividends                                                    |  |                                 | 3,696     |                                
|Other interest income                                        |  |                                 | 6,494     |                                
|Interest on federal funds sold                               |  |                                 | 17,280    |                                
|                                                             |  |                                 |           |                                
|Total interest income                                        |  |                                 | 3,312,373 |                                
|INTEREST EXPENSE                                             |  |                                 |           |                                
|Deposits                                                     |  |                                 | 1,070,245 |                                
|Repurchase agreements                                        |  |                                 | 55,009    |                                
|Other borrowings                                             |  |                                 | 1,364     |                                
|                                                             |  |                                 |           |                                
|Total interest expense                                       |  |                                 | 1,126,618 |                                
|                                                             |  |                                 |           |                                
|Net interest income                                          |  |                                 | 2,185,755 |                                
|PROVISION FOR POSSIBLE LOAN LOSSES                           |  |                                 | 45,000    |                                
|                                                             |  |                                 |           |                                
|Net interest income after provision for possible loan losses |  |                                 | 2,140,755 |                                
|NONINTEREST INCOME                                           |  |                                 |           |                                
|Service charges and other fees                               |  |                                 | 198,908   |                                
|Securities gains, net                                        |  |                                 | 8         |                                
|Other operating income                                       |  |                                 | 112,377   |                                
|                                                             |  |                                 |           |                                
|Total noninterest income                                     |  |                                 | 311,293   |                                
|NONINTEREST EXPENSE                                          |  |                                 |           |                                
|Salary and employee benefits                                 |  |                                 | 931,154   |                                
|Net occupancy expense of premises                            |  |                                 | 233,953   |                                
|Other operating expenses                                     |  |                                 | 494,366   |                                
|                                                             |  |                                 |           |                                
|Total noninterest expense                                    |  |                                 | 1,659,473 |                                
|                                                             |  |                                 |           |                                
|Income before income taxes                                   |  |                                 | 792,575   |                                
|                                                             |  |                                 |           |                                
|INCOME TAXES                                                 |  |                                 | 183,652   |                                
|                                                             |  |                                 |           |                                
|Net income                                                   |  | $                               | 608,923   |                                
|                                                             |  |                                 |           |                                
|WEIGHTED AVERAGE SHARES OUTSTANDING                          |  |                                 | 1,538,443 |                                
|                                                             |  |                                 |           |                                
|EARNINGS PER COMMON SHARE                                    |  | $                               | 0.40      |                                
|                                                             |  |                                 |           |                                



The accompanying notes
are an integral part of the financial statements



4



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(Unaudited)



|                                                                                   |        | Common Stock |        | Surplus |           | RetainedEarnings |   |           | AccumulatedOtherComprehensiveIncome |   |           | Comprehensive Income |  |   | Total     |  
|---------------------------------------------------------------------------------- | ------ | ------------ | ------ | ------- | --------- | ---------------- | - | --------- | ----------------------------------- | - | --------- | -------------------- |  | - | --------- | -
|                                                                                   | Shares |              | Amount |         |           |                  |   |          
|Balance, December 31, 2002                                                         |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 8,566,520 |                      |  | $ | 1,218,292 |  
|Comprehensive income                                                               |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|Net income for the nine months ended September 30, 2003                            |        |             |        |         |          |                  |   |          |                                     |   | 1,919,123 |                      |  |   |          |  
|Other comprehensive income, net of tax                                             |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|Unrealized loss on securities, net of reclassification adjustment (see disclosure) |        |             |        |         |          |                  |   |          |                                     |   |          |                      |  |   | (540,108  | )
|                                                                                   |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|Comprehensive income                                                               |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|                                                                                   |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|Cash dividend ($.54 per share)                                                     |        |             |        |         |          |                  |   |          |                                     |   | (830,759  | )                    |  |   |          |  
|                                                                                   |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  
|Balance, September 30, 2003                                                        |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 9,654,884 |                      |  | $ | 678,184   |  
|                                                                                   |        |              |        |         |           |                  |   |           |                                     |   |           |                      |  |   |           |  



|                                                                                    |        | Common Stock |        | Surplus |           | RetainedEarnings |   |           | AccumulatedOtherComprehensiveIncome |   | ComprehensiveIncome |   | Total |  
|----------------------------------------------------------------------------------- | ------ | ------------ | ------ | ------- | --------- | ---------------- | - | --------- | ----------------------------------- | - | ------------------- | - | ----- | -
|                                                                                    | Shares |              | Amount |         |           |                  |   |          
|Balance, December 31, 2001                                                          |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 6,954,229           |   |       | $
|Comprehensive income                                                                |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|Net income for the nine months ended September 30, 2002                             |        |             |        |         |          |                  |   |          |                                     |   | 1,959,735           |   |       |  
|Other comprehensive income, net of tax                                              |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|Unrealized gains on securities, net of reclassification adjustment (see disclosure) |        |             |        |         |          |                  |   |          |                                     |   |                    |   |       |  
|                                                                                    |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|Comprehensive income                                                                |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|Cash dividend ($.51 per share)                                                      |        |             |        |         |          |                  |   |          |                                     |   | (784,606            | ) |       |  
|                                                                                    |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  
|Balance, September 30, 2002                                                         |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 8,129,358           |   |       | $
|                                                                                    |        |              |        |         |           |                  |   |           |                                     |   |                     |   |       |  



|                                                                   |  | For the nine months ended September 30,
|------------------------------------------------------------------ |  | ---------------------------------------
|                                                                   |  | 2003                                   
|Disclosure of reclassification amount, net of tax:                 |  |                                        
|                                                                   |  |                                        
|Unrealized holding gains (losses) arising during the period        |  | $                                      
|Less: reclassification adjustment for gains included in net income |  |                                        
|                                                                   |  |                                        
|Net unrealized gains (losses) on securities                        |  | $                                      
|                                                                   |  |                                        



The accompanying notes
are an integral part of the financial statements



5



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                  |  | Nine Months Ended September 30, |             
|--------------------------------------------------------------------------------- |  | ------------------------------- | ------------
|                                                                                  |  | 2003                            |             
|OPERATING ACTIVITIES                                                              |  |                                 |             
|Net Income                                                                        |  | $                               | 1,919,123   
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                 |             
|Provision for loan losses                                                         |  |                                 | 210,000     
|Depreciation and amortization                                                     |  |                                 | 325,862     
|Amortization of investment securities, net                                        |  |                                 | 763,749     
|Investment security gains                                                         |  |                                 | (105,208    
|Gain on sales of premises and equipment, net                                      |  |                                 | (436        
|Increase in interest receivable                                                   |  |                                 | (263,860    
|Increase (decrease) in interest payable                                           |  |                                 | (88,801     
|Other, net                                                                        |  |                                 | (523,221    
|                                                                                  |  |                                 |             
|Net cash provided by operating activities                                         |  |                                 | 2,237,208   
|                                                                                  |  |                                 |             
|INVESTING ACTIVITIES                                                              |  |                                 |             
|Net decrease in federal funds sold                                                |  |                                 | 5,845,000   
|Net increase in loans, net of charge-offs                                         |  |                                 | (2,511,013  
|Proceeds from sales of securities available for sale                              |  |                                 | 4,054,077   
|Proceeds from maturities of securities available for sale                         |  |                                 | 161,593,800 
|Proceeds from maturities of securities held to maturity                           |  |                                 | 3,155,000   
|Principal collected on mortgage-backed securities                                 |  |                                 | 29,544,945  
|Purchases of securities available for sale                                        |  |                                 | (218,404,942
|Purchases of securities held to maturity                                          |  |                                 |            
|Recoveries on loans previously charged-off                                        |  |                                 | 8,496       
|Cash acquired in purchase of branch office                                        |  |                                 |            
|Purchases of premises and equipment                                               |  |                                 | (124,953    
|Proceeds from sale of premises and equipment                                      |  |                                 | 159,471     
|                                                                                  |  |                                 |             
|Net cash used by investing activities                                             |  |                                 | (16,680,119 
|                                                                                  |  |                                 |             
|FINANCING ACTIVITIES                                                              |  |                                 |             
|Net increase in deposits                                                          |  |                                 | 9,776,664   
|Dividends paid                                                                    |  |                                 | (830,759    
|Increase in short term borrowings                                                 |  |                                 | 8,661,216   
|Increase in long term borrowings                                                  |  |                                 | 1,320,000   
|                                                                                  |  |                                 |             
|Net cash provided by financing activities                                         |  |                                 | 18,927,121  
|                                                                                  |  |                                 |             
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  |  |                                 | 4,484,210   
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |  |                                 | 6,097,496   
|                                                                                  |  |                                 |             
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        |  | $                               | 10,581,706  
|                                                                                  |  |                                 |             
|Supplemental Disclosures:                                                         |  |                                 |             
|Cash Paid for Interest                                                            |  | $                               | 3,590,182   
|Cash Paid for Income Taxes                                                        |  | $                               | 609,599     



The accompanying notes
are an integral part of the financial statements



6



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1 - Accounting Policies



Basis of Presentation



The accompanying unaudited consolidated interim financial statements of First West Virginia Bancorp, Inc. (the Company) and its
subsidiary were prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and notes required by accounting
principles generally accepted in the United States for complete financial statements. The accounting and reporting policies followed are consistent with those used in preparation of the corporations 2002 Annual Report. In the opinion of
management, adjustments ( all of which are normal and recurring in nature) necessary to present fairly the financial position and the results of operations were made. The notes to the financial statements contained in the Annual Report for December
31, 2002, should be read in conjunction with these financial statements.



Income Taxes



The provision for income
taxes is at a rate which management believes will approximate the effective rate for the year.



Reclassifications



Certain prior year amounts have been reclassified to conform to the 2003 presentation.



Recent Accounting Pronouncements



In August 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards
(FAS) No. 143, Accounting for Asset RetirementObligations, which requires that the fair value of a liability be recognized when incurred for the retirement of a long-lived asset and the value of the asset be increased by
that amount. The statement also requires that the liability be maintained at its present value in subsequent periods and outlines certain disclosures for such obligations. The adoption of this statement, which was effective January 1, 2003, did not
have a material effect on the Companys financial position or results of operations.



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



The FASB issued FAS No. 147, Acquisitions of
Certain Financial Institutions. Except for transactions between two or more mutual enterprises, this Statement removes acquisitions of financial institutions from the scope of both FAS No. 72, Accounting for Certain Acquisitions of
Banking and Thrift Institutions and FASB Interpretation No. 9, Applying APB Opinions No. 16 and 17 When a Savings and Loan Association or Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase
Method. FAS No. 147 requires that these transactions be accounted for in accordance with FASB Statements No. 141, Business Combinations and No. 142, Goodwill and Other Intangible Assets. This statement also amends FAS
No. 144 to include in its scope long-term customer-relationship intangible assets of financial institutions such as depositor- and borrower- relationship intangible assets and credit cardholder intangible assets. The effective date of this Statement
is generally for activities on or after October 1, 2002.



As a result of
adopting FAS No. 147, the Company reclassified approximately $1.6 million of previously unidentifiable intangible assets to goodwill and ceased the regularly scheduled amortization expense of those intangible assets. The transition provisions of
this pronouncement required the Company to adjust all interim and annual financial statements issued after January 1, 2002, the



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1 - Accounting Policies (Continued)



date of initial adoption of FAS No. 142, Goodwill and Other Intangible Assets.
As such, the following table illustrates the effect of the adoption of FAS No. 147 on net income for the three and nine months ended September 30, 2002 presented in the preceding interim financial statement:



|                                            |  | September 30, 2002
|------------------------------------------- |  | ------------------
|                                            |  | Three MonthsEnded 
|Net income:                                 |  |                   
|                                            |  |                   
|Reported net income                         |  | $                 
|Add back goodwill amortization (net of tax) |  |                   
|                                            |  |                   
|Adjusted net income                         |  | $                 
|                                            |  |                   
|Earnings per common share:                  |  |                   
|                                            |  |                   
|Reported earnings per share                 |  | $                 
|Add back goodwill amortization (net of tax) |  |                   
|                                            |  |                   
|Adjusted earnings per share                 |  | $                 
|                                            |  |                   



On December 31, 2002, the FASB issued
FAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, which amends FAS No. 123, Accounting for Stock-Based Compensation. FAS No. 148 amends the disclosure requirements of FAS No. 123 to require more
prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. Under the provisions of FAS No. 123, companies that adopted the preferable, fair value based method were required to apply that method
prospectively for new stock option awards. This contributed to a ramp-up effect on stock-based compensation expense in the first few years following adoption, which caused concern for companies and investors because of the lack of
consistency in reported results. To address that concern, FAS No. 148 provides two additional methods of transition that reflect an entitys full complement of stock-based compensation expense immediately upon adoption, thereby eliminating the
ramp-up effect. FAS No. 148 also improves the clarity and prominence of disclosures about the pro forma effects of using the fair value based method of accounting for stock-based compensation for all companies - regardless of the accounting method
used - by requiring that the data be presented more prominently and in a more user- friendly format in the footnotes to the financial statements. In addition, the statement improves the timeliness of those disclosures by requiring that this
information be included in interim as well as annual financial statements. The transition guidance and annual disclosure provisions of FAS No. 148 are effective for fiscal years ending after December 15, 2002, with earlier application permitted in
certain circumstances. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The adoption of FAS No. 148 did not have a material impact on the
Company.



In November, 2002, the FASB issued Interpretation No. 45,
Guarantors Accounting and Disclosure requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. This interpretation clarifies that a guarantor is required to disclose (a) the nature of the guarantee, including the approximate term of the guarantee, how the guarantee
arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments under the guarantee; (c) the carrying amount of the liability, if any, for the
guarantors obligations under the guarantee; and (d) the nature and extent of any recourse provisions or available collateral that would enable the guarantor to recover the amounts paid under the guarantee. This interpretation also clarifies
that a guarantor is required to recognize, at the inception of a guarantee, a liability for the obligations it has undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the
event that the specified triggering events or conditions occur. The objective of the initial measurement of that liability is the fair value of the guarantee at its inception. The initial recognition and initial measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantors fiscal year-end. The disclosure requirements in this interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002. The adoption of this interpretation did not have a material effect on the Companys financial position or results of operations.



8



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1 - Accounting Policies (Continued)



In January, 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities,in an effort to expand upon and strengthen existing accounting guidance that addresses when a company should include in its financial statements the assets, liabilities and activities of another entity. The objective of this
interpretation is not to restrict the use of variable interest entities but to improve financial reporting by companies involved with variable interest entities. Until now, one company generally has included another entity in its consolidated
financial statements only if it controlled the entity through voting interests. This interpretation changes that by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss
from the variable interest entitys activities or entitled to receive a majority of the entitys residual returns or both. The consolidation requirements of this interpretation apply immediately to variable interest entities created after
January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31,
2003, regardless of when the variable interest entity was established. The adoption of this interpretation has not and is not expected to have a material effect on the Companys financial position or results of operations. In October, 2003, the
FASB decided to defer to the fourth quarter from the third quarter the implementation date for Interpretation No. 46. This deferral only applies to variable interest entities that existed prior to February 1, 2003.



In April, 2003, the FASB issued FAS No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities. This statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under FAS No. 133. The amendments set
forth in FAS No. 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. In particular, this statement clarifies under what circumstances a contract with an initial net investment meets
the characteristic of a derivative as discussed in FAS No. 133. In addition, it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. FAS No. 149 amends certain other existing
pronouncements. Those changes will result in more consistent reporting of contracts that are derivatives in their entirety or that contain embedded derivatives that warrant separate accounting. This statement is effective for contracts entered into
or modified after June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. The guidance should be applied prospectively. The provisions of this statement that relate to FAS No. 133 Implementation Issues
that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In addition, certain provisions relating to forward purchases or sales of when-issued
securities or other securities that do not yet exist, should be applied to existing contracts as well as new contracts entered into after June 30, 2003. The adoption of this statement did not have a material effect on the Companys financial
position or results of operations.



In May 2003, the FASB issued Statement No.
150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Such instruments may have been previously classified as equity. This Statement is
effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this statement did not have a material effect on
the Companys financial position or results of operations.



Forward-Looking Information



Certain
information contained in this report, which are not historical facts, may be forward-looking statements that involve risks and uncertainties. These statements are subject to important factors that could cause action results to differ materially from
those contemplated by such statements, including without limitation, the effect of changing economic conditions, changes in interest rates, changes in lending activities, changes in state and federal regulations, and other external factors which may
materially impact the Companys operational and financial performance.





9



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of Operations



First West Virginia Bancorp, Inc., a West Virginia corporation headquartered in Wheeling, West Virginia, has one wholly-owned subsidiary: Progressive Bank, N.A., which
operates in Wheeling, Wellsburg, Moundsville, New Martinsville, Buckhannon and Weston, West Virginia and Bellaire, Ohio. Following is a discussion and analysis of the significant changes in the financial condition and results of operations of First
West Virginia Bancorp, Inc., (the Holding Company), and its subsidiary for the three months and nine months ended September 30, 2003 and 2002. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements,
Notes, and tables contained in this report, as well as with the Holding Companys Annual Report contained on Form 10-K for the year ended December 31, 2002.



Results of Operations



The Holding Company reported net income of $1,919,123 or $1.25 per share for the nine months ended September 30, 2003 compared to $1,959,735
or $1.28 per share for the same period during 2002. The decrease of $40,612 or 2.1% in earnings was primarily due to the decrease in net interest income combined with the increase in operating expenses, offset in part by an increase in noninterest
income and the decrease in the provision for loan losses for the nine months ended September 30, 2003 as compared to the same period in 2002. The Holding Companys return on average assets (ROA) was .93% for the nine month period ended
September 30, 2003 and 1.05% for the nine month period ended September 30, 2002. For the nine month period ended September 30, 2003 compared to September 30, 2002, the annualized return on average equity (ROE) was 11.81% and 13.03%, respectively.



For the three month period ended September 30, 2003, net income was $608,923
or $.40 per share as compared to $675,707 or $.44 per share for the same period in 2002. The decrease of $66,784 or 9.9% in earnings was primarily due to the decrease in net interest income combined with the increase in operating expenses, offset in
part by an increase in noninterest income and the decrease in the provision for loan losses for the three months ended September 30, 2003 as compared to the same period in 2002. The ROA was .85% for the three months ended September 30, 2003 as
compared to 1.03% for the same period of the prior year. For the three months ended September 30, 2003 compared to September 30, 2002, the ROE was 10.93% and 13.07%, respectively.



Table One is a summary of Selected Financial Data of the Holding Company. The sections that follow discuss in more detail the information
summarized in Table One.



Net Interest
Income



Net interest income, which is the difference between interest
earned on loans and investments and interest paid on deposits and other liabilities, is the primary source of earnings for the Holding Company. Changes in the volume and mix of earning assets and interest bearing liabilities combined with changes in
market rates of interest greatly effect net interest income. Tables Two and Three present the average balance sheet and interest rate analysis for the three and nine months ended September 30, 2003 and 2002.



For the nine months ended September 30, 2003, net interest income was $6,538,470, a decrease
of $324,721 or 4.7%, from the same period in 2002. The decrease in net interest income was primarily due to the decrease in the interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit
liabilities.



Interest income decreased $695,917 or 6.5% for the first nine
months of 2003 compared to the same period of the prior year. Interest and fees on loans decreased $330,602 or 4.50% for the nine month period ended September 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans
declined .62%, from 7.86% at December 31, 2002 to 7.24% at September 30, 2003. The decline in the taxable equivalent yield was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan
volume. Interest income on investment securities decreased $236,579 or 7.7% during the nine months ended September 30, 2003 over 2002. The taxable equivalent average yield on investment securities decreased 1.10%, from 4.79% at December 31, 2002 to
3.69% at September 30, 2003. The decline in the taxable equivalent yield was primarily attributable to the decrease in the interest rates paid on investment securities, offset in part by an increase in the average volume of investment securities.



10



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table One

SELECTED FINANCIAL DATA

(Unaudited, figures in thousands, except per share data)



|                                 |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |   |         | Year endedDecember 31, | 
|-------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---------------------- | 
|                                 |  | 2003                            |         |   | 2002                           |   |         | 2003                   | 
|SUMMARY OF OPERATIONS            |  |                                 |         |   |                                |   |         |                        | 
|Total interest income            |  | $                               | 3,312   |   |                                | $ | 3,634   |                        | 
|Total interest expense           |  |                                 | 1,126   |   |                                |   | 1,299   |                        | 
|Net interest income              |  |                                 | 2,186   |   |                                |   | 2,335   |                        | 
|Provision for loan losses        |  |                                 | 45      |   |                                |   | 150     |                        | 
|Total other income               |  |                                 | 311     |   |                                |   | 282     |                        | 
|Total other expenses             |  |                                 | 1,659   |   |                                |   | 1,527   |                        | 
|Income before income taxes       |  |                                 | 793     |   |                                |   | 940     |                        | 
|Net income                       |  |                                 | 609     |   |                                |   | 676     |                        | 
|                                 |  |                                 |         |   |                               
|PER SHARE DATA                   |  |                                 |         |   |                                |   |         |                        | 
|Net income                       |  | $                               | 0.40    |   |                                | $ | 0.44    |                        | 
|Cash dividends declared          |  |                                 | 0.18    |   |                                |   | 0.17    |                        | 
|Book value per share             |  |                                 | 14.96   |   |                                |   | 14.25   |                        | 
|                                 |  |                                 |         |   |                               
|AVERAGE BALANCE SHEET SUMMARY    |  |                                 |         |   |                                |   |         |                        | 
|Total loans, net                 |  | $                               | 138,128 |   |                                | $ | 133,326 |                        | 
|Investment securities            |  |                                 | 123,091 |   |                                |   | 97,867  |                        | 
|Deposits - Interest Bearing      |  |                                 | 219,959 |   |                                |   | 206,180 |                        | 
|Stockholders equity             |  |                                 | 22,112  |   |                                |   | 20,523  |                        | 
|Total Assets                     |  |                                 | 284,754 |   |                                |   | 260,429 |                        | 
|                                 |  |                                 |         |   |                               
|SELECTED RATIOS                  |  |                                 |         |   |                                |   |         |                        | 
|Return on average assets         |  |                                 | .85     | % |                                |   | 1.03    | %                      | 
|Return on average equity         |  |                                 | 10.93   | % |                                |   | 13.07   | %                      | 
|Average equity to average assets |  |                                 | 7.77    | % |                                |   | 7.88    | %                      | 
|Dividend payout ratio            |  |                                 | 45.00   | % |                                |   | 38.64   | %                      | 
|Loan to Deposit ratio            |  |                                 | 57.71   | % |                                |   | 58.02   | %                      | 



|                                           |  | September 30, |         | December 31,
|------------------------------------------ |  | ------------- | ------- | ------------
|                                           |  | 2003          |         | 2002        
|BALANCE SHEET                              |  |               |         |             
|Investments                                |  | $             | 126,607 |             
|Loans                                      |  |               | 139,162 |             
|Other assets                               |  |               | 18,859  |             
|                                           |  |               |         |             
|Total Assets                               |  | $             | 284,628 |             
|                                           |  |               |         |             
|Deposits                                   |  | $             | 241,152 |             
|Repurchase agreements                      |  |               | 17,699  |             
|Other borrowings                           |  |               | 1,320   |             
|Other liabilities                          |  |               | 1,449   |             
|Stockholders equity                       |  |               | 23,008  |             
|                                           |  |               |         |             
|Total Liabilities and Stockholders Equity |  | $             | 284,628 |             
|                                           |  |               |         |             



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Net Interest Income -
Continued



During the nine months ended September 30, 2003, interest
expense decreased $371,196 or 9.6% as compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .39%, from 2.45% at December 31, 2002 to 2.06% at September 30, 2003. The decrease in the interest rates paid
on interest bearing liabilities, which were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the first nine months of 2003.



The changes in the volume and mix of earning assets and interest bearing liabilities combined
with the changes in the market rates of interest resulted in taxable equivalent net interest yields on average earning assets of 3.66% for the nine month period ended September 30, 2003 as compared to 4.15% at December 31, 2002.



For the three months ended September 30, 2003, net interest income was $2,185,755, a decrease
of $149,354 or 6.4%, from the same period in 2002. The decrease in net interest income was primarily due to the decrease in the interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit
liabilities.



Interest income decreased $321,351 or 8.8% during the third
quarter of 2003 as compared to the same period of the prior year. Interest and fees on loans decreased $136,318 or 5.4% for the three months ended September 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans
declined .75%, from 7.86% at December 31, 2002 to 7.11% at September 30, 2003. The decline in the taxable equivalent yield was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan
volume. Interest income on investment securities decreased $141,656 or 13.5% during the three months ended September 30, 2003 over 2002. The taxable equivalent average yield on investment securities decreased 1.48%, from 4.79% at December 31, 2002
to 3.31% at September 30, 2003. The decline in the taxable equivalent yield was primarily attributable to the decrease in the interest rates paid on investment securities, offset in part by an increase in the average volume of investment securities.



During the three months ended September 30, 2003, interest expense decreased
$171,997 or 13.2% as compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .54%, from 2.45% at December 31, 2002 to 1.91% at September 30, 2003. The decrease in the interest rates paid on interest
bearing liabilities, which were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the third quarter of 2003.



The taxable equivalent net interest yields on average earning assets was 3.52% for the three
month period ended September 30, 2003 as compared to 4.15% at December 31, 2002.



Noninterest Income



Noninterest income increased $181,238 or 23.7% for the nine months ended September 30, 2003 as compared to the same period of the prior year. The increase in noninterest
income was primarily due to gains on sales of investment securities available for sale and the increase in service charge income for the first nine months of 2003.



Sales of investment securities for the nine months ended September 30, 2003 were primarily the result of sales by the Holding Company and
its subsidiary bank. The Holding Company accounted for securities gains of $1,720 and securities losses of $13,849 during the period ended September 30, 2003 and securities gains of $1,347 and securities losses of $1,107 during the period ended
September 30, 2002 and those sales were attributable to sales of marketable equity securities. The subsidiary bank accounted for securities gains of $118,944 and securities losses of $1,607 during the period ended September 30, 2003 and securities
gains of $28,341 and securities losses of $16,075 during the period ended September 30, 2002 and those sales were attributable to sales of securities available for sale.



12



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Noninterest Income - Continued



Service charges increased $58,240 during the nine months ended September 30, 2003, up 11.9%,
from the same period in 2002. Service charges and other fees represent the major component of noninterest income. These charges are earned from assessments made on checking and savings accounts.



During the nine months ended September 30, 2003, other operating income increased $30,296 or
11.5% compared to the same period in 2002. Other operating income represents fees from safe deposit box rentals, sales of checkbooks, sales of cashiers checks and money orders, utility collections, ATM charges and card fees, home equity credit
line fees, credit life commissions, credit card fees and commissions and various other charges and fees related to normal customer banking relationships. The increase in other operating income primarily resulted from increases in checkbook sales and
ATM fees, and were offset in part by a decrease in other credit card income for the first nine months of 2003 as compared to the same period in 2002.



For the third quarter of 2003, noninterest income increased $28,879 or 10.2% as compared to the same period of the prior year. The increase in noninterest income resulted
primarily from an increase in service charge income and an increase in other operating income for the third quarter of 2003 as compared to the prior year. For the third quarter of 2003, service charges increased $17,387, up 9.6%, from the same
period in 2002. These charges are earned from assessments made on checking and savings accounts. Other operating income increased $11,487 or 11.4%, during the third quarter of 2003 compared to the same period in 2002.



For the nine months ended September 30, 2003, noninterest expense increased $291,372 or 6.6%
as compared to the same period of the prior year. Salary and employee benefits increased $246,455 or 10.8% for the nine months ended September 30, 2003 as compared to the same period in the prior year. The increase was primarily attributable to the
hiring of additional loan personnel combined with normal annual merit adjustments. A loan administration department was established at the subsidiary bank in order to centralize operations which required the hiring of additional personnel in the
lending area. Other operating expenses increased $59,548 or 4.1%, for the nine month period ended September 30, 2003 as compared to the same period in the prior year. Increased service expense, regulatory assessment and deposit insurance, other
taxes and other operating expenses, offset in part by decreased directors fees, postage and transportation expense, advertising expense, and stationery and supplies expense primarily contributed to the increase in other operating expenses for
the nine months ended September 30, 2003 as compared to the same period in the prior year.



13



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Non-Interest Expense



For the three months ended September 30, 2003 as compared to the same period
of the prior year, noninterest expense increased $132,305 or 8.7% and was primarily due to the increase in salary and employee benefits, offset in part by the decrease in occupancy expenses. During the quarter ended September 30, 2003, salary and
employee benefits increased $142,439 or 18.1%. The increase was primarily due to merit adjustments in salaries. Occupancy expenses decreased $16,182 or 6.5% during the third quarter of 2003 compared to the same period in 2002.



Income Taxes



For the nine months ended September 30, 2003, income tax expense was $615,219, a decrease of
20.1% compared to the same period in 2002. Income tax expense decreased primarily due to a decrease in pre-taxable income of $194,855 combined with an increase in tax exempt income of $105,182 for the first nine months of 2003 over the same period
in 2002.



Income tax expense for the three months ended September 30, 2003 was
$183,652, a decrease of 30.6% over the same period in 2002. Income tax expense decreased primarily due to an increase in tax exempt income of $27,884 combined with the decrease in pre-taxable income of $147,780 during the third quarter of 2003 as
compared to the same period in 2002.



For federal income tax purposes,
tax-exempt income is based on qualified state, county, and municipal bonds and loans. Tax-exempt income was $329,149 and $301,265 for the three month periods ended September 30, 2003 and 2002, respectively. For the nine months ended September 30,
2003 and 2002, tax exempt income was $967,212 and $862,030, respectively.



Federal income tax rates and West Virginia corporate net income tax rates remain consistent at 34% and 9%, for the three and nine months ended September 30, 2003 and 2002 and for the year ended December 31, 2002.



14



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Two



Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and
Interest Differential



The following table presents an average balance sheet,
interest earned on interest bearing assets, interest paid on interest bearing liabilities, average interest rates and interest differentials for the nine months ended September 30, 2003 and September 30, 2002 and the year ended December 31, 2002.
Average balance sheet information as of September 30, 2003 and September 30, 2002 and the year ended December 31, 2002 was compiled using the daily average balance sheet. Loan fees and unearned discounts were included in income for average rate
calculation purposes. Average yields on investment securities available for sale have been calculated based on amortized costs. Non-accrual loans were included in the average balance computations; however, no interest was included in income
subsequent to the non-accrual status classification. Average rates were annualized for the nine month periods ended September 30, 2003 and 2002.



|                                                                                                                                                                                                                                                                                                                                                                                |  | For the nine months endedSeptember 30, 2003 (Unaudited) |         | December 31, 2002 |          | For the nine months ended September 30, 2002 (Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------- | ------- | ----------------- | -------- | --------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                |  | AverageVolume                                           |         |                   | Interest |                                                         
|ASSETS:                                                                                                                                                                                                                                                                                                                                                                         |  |                                                         |         |                   |          |                                                         
|Investment securities:                                                                                                                                                                                                                                                                                                                                                          |  |                                                         |         |                   |          |                                                         
|U.S. Treasury and other U. S. Government agencies                                                                                                                                                                                                                                                                                                                               |  | $                                                       | 42,733  |                   |          | $                                                       
|Mortgage-backed securities                                                                                                                                                                                                                                                                                                                                                      |  |                                                         | 45,861  |                   |          |                                                         
|Obligations of states and political subdivisions                                                                                                                                                                                                                                                                                                                                |  |                                                         | 20,492  |                   |          |                                                         
|Other securities                                                                                                                                                                                                                                                                                                                                                                |  |                                                         | 6,825   |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total Investment securities:                                                                                                                                                                                                                                                                                                                                                    |  |                                                         | 115,911 |                   |          |                                                         
|Interest bearing deposits                                                                                                                                                                                                                                                                                                                                                       |  |                                                         | 990     |                   |          |                                                         
|Federal funds sold                                                                                                                                                                                                                                                                                                                                                              |  |                                                         | 7,952   |                   |          |                                                         
|Loans, net of unearned income                                                                                                                                                                                                                                                                                                                                                   |  |                                                         | 136,562 |                   |          |                                                         
|Other earning assets                                                                                                                                                                                                                                                                                                                                                            |  |                                                         | 853     |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total earning assets                                                                                                                                                                                                                                                                                                                                                            |  |                                                         | 262,268 |                   |          |                                                         
|Cash and due from banks                                                                                                                                                                                                                                                                                                                                                         |  |                                                         | 5,803   |                   |          |                                                         
|Bank premises and equipment                                                                                                                                                                                                                                                                                                                                                     |  |                                                         | 4,044   |                   |          |                                                         
|Other assets                                                                                                                                                                                                                                                                                                                                                                    |  |                                                         | 5,141   |                   |          |                                                         
|Allowance for possible loan losses                                                                                                                                                                                                                                                                                                                                              |  |                                                         | (2,104  | )                 |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total Assets                                                                                                                                                                                                                                                                                                                                                                    |  | $                                                       | 275,152 |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|LIABILITIES                                                                                                                                                                                                                                                                                                                                                                     |  |                                                         |         |                   |          |                                                         
|Certificates of deposit                                                                                                                                                                                                                                                                                                                                                         |  | $                                                       | 94,970  |                   |          | $                                                       
|Savings deposits                                                                                                                                                                                                                                                                                                                                                                |  |                                                         | 85,752  |                   |          |                                                         
|Interest bearing demand deposits                                                                                                                                                                                                                                                                                                                                                |  |                                                         | 36,018  |                   |          |                                                         
|Repurchase agreements                                                                                                                                                                                                                                                                                                                                                           |  |                                                         | 10,916  |                   |          |                                                         
|Other borrowings                                                                                                                                                                                                                                                                                                                                                                |  |                                                         | 39      |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total interest bearing liabilities                                                                                                                                                                                                                                                                                                                                              |  |                                                         | 227,695 |                   |          |                                                         
|Demand deposits                                                                                                                                                                                                                                                                                                                                                                 |  |                                                         | 24,156  |                   |          |                                                         
|Other liabilities                                                                                                                                                                                                                                                                                                                                                               |  |                                                         | 1,581   |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total Liabilities                                                                                                                                                                                                                                                                                                                                                               |  |                                                         | 253,432 |                   |          |                                                         
|STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                            |  |                                                         | 21,720  |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total Liabilities and Stockholders Equity                                                                                                                                                                                                                                                                                                                                      |  | $                                                       | 275,152 |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Net yield on earning assets                                                                                                                                                                                                                                                                                                                                                     |  |                                                         |         |                   |          | $                                                       
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                               
|The fully taxable equivalent basis of interest income from obligations of states and political subdivisions has been
determined using a combined Federal and State corporate income tax rate of 40% for the nine months ended September 30, 2003 and 2002, and the year ended December 31, 2002, respectively. The effect of this adjustment is presented below (in
thousands).
|Investment securities                                                                                                                                                                                                                                                                                                                                                           |  | $                                                       | 115,911 |                   |          | $                                                       
|Loans                                                                                                                                                                                                                                                                                                                                                                           |  |                                                         | 136,562 |                   |          |                                                         
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Total earning assets                                                                                                                                                                                                                                                                                                                                                            |  | $                                                       | 262,268 |                   |          | $                                                       
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         
|Taxable equivalent net yield on earning assets                                                                                                                                                                                                                                                                                                                                  |  |                                                         |         |                   |          | $                                                       
|                                                                                                                                                                                                                                                                                                                                                                                |  |                                                         |         |                   |          |                                                         





15



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Three



Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and
Interest Differential (in thousands)



The following table presents an average
balance sheet, interest earned on interest bearing assets, interest paid on interest bearing liabilities, average interest rates and interest differentials for the three months ended September 30, 2003 and September 30, 2002. Average balance sheet
information as of September 30, 2003 and September 30, 2002 was compiled using the daily average balance sheet. Loan fees and unearned discounts were included in income for average rate calculation purposes. Non-accrual loans were included in the
average balance computations; however, no interest was included in income subsequent to the non-accrual status classification. Average rates were annualized for the three month periods ended September 30, 2003 and 2002.



|                                                                                                                                                                                                                                                                                                                                           |  | For the Three Months ended September 30,
2003 (Unaudited) |         | For the Three Months ended September 30, 2002 (Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------- | ------- | ---------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                           |  | AverageVolume                                             |         |                                                          
|ASSETS:                                                                                                                                                                                                                                                                                                                                    |  |                                                           |         |                                                          
|Investment securities:                                                                                                                                                                                                                                                                                                                     |  |                                                           |         |                                                          
|U.S. Treasury and other U. S. Government agencies                                                                                                                                                                                                                                                                                          |  | $                                                         | 47,979  |                                                          
|Mortgage backed securities                                                                                                                                                                                                                                                                                                                 |  |                                                           | 46,151  |                                                          
|Obligations of states and political subdivisions                                                                                                                                                                                                                                                                                           |  |                                                           | 22,279  |                                                          
|Other securities                                                                                                                                                                                                                                                                                                                           |  |                                                           | 6,682   |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total Investment Securities                                                                                                                                                                                                                                                                                                                |  |                                                           | 123,091 |                                                          
|Interest bearing deposits                                                                                                                                                                                                                                                                                                                  |  |                                                           | 1,569   |                                                          
|Federal funds sold                                                                                                                                                                                                                                                                                                                         |  |                                                           | 7,493   |                                                          
|Loans, net of unearned income                                                                                                                                                                                                                                                                                                              |  |                                                           | 138,128 |                                                          
|Other earning assets                                                                                                                                                                                                                                                                                                                       |  |                                                           | 881     |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total earning assets                                                                                                                                                                                                                                                                                                                       |  |                                                           | 271,162 |                                                          
|Cash and due from banks                                                                                                                                                                                                                                                                                                                    |  |                                                           | 6,591   |                                                          
|Bank premises and equipment                                                                                                                                                                                                                                                                                                                |  |                                                           | 3,981   |                                                          
|Other earning assets                                                                                                                                                                                                                                                                                                                       |  |                                                           | 5,153   |                                                          
|Allowance for possible loan losses                                                                                                                                                                                                                                                                                                         |  |                                                           | (2,133  | )                                                        
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total Assets                                                                                                                                                                                                                                                                                                                               |  | $                                                         | 284,754 |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|LIABILITIES                                                                                                                                                                                                                                                                                                                                |  |                                                           |         |                                                          
|Certificates of deposit                                                                                                                                                                                                                                                                                                                    |  | $                                                         | 93,239  |                                                          
|Savings deposits                                                                                                                                                                                                                                                                                                                           |  |                                                           | 88,352  |                                                          
|Interest bearing demand deposits                                                                                                                                                                                                                                                                                                           |  |                                                           | 38,368  |                                                          
|Repurchase agreements                                                                                                                                                                                                                                                                                                                      |  |                                                           | 13,961  |                                                          
|Other borrowings                                                                                                                                                                                                                                                                                                                           |  |                                                           | 115     |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total interest bearing liabilities                                                                                                                                                                                                                                                                                                         |  |                                                           | 234,035 |                                                          
|Demand deposits                                                                                                                                                                                                                                                                                                                            |  |                                                           | 26,973  |                                                          
|Other liabilities                                                                                                                                                                                                                                                                                                                          |  |                                                           | 1,634   |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total Liabilities                                                                                                                                                                                                                                                                                                                          |  |                                                           | 262,642 |                                                          
|SHAREHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                       |  |                                                           | 22,112  |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total Liabilities and Shareholders Equity                                                                                                                                                                                                                                                                                                 |  | $                                                         | 284,754 |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Net yield on earning assets                                                                                                                                                                                                                                                                                                                |  |                                                           |         |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|                                                                                                                                                                                                                                                                                                                                          
|The fully taxable equivalent basis of interest income from obligations of states and political subdivisions has been
determined using a combined Federal and State corporate income tax rate of 40% for the three months ended September 30, 2003 and 2002, respectively. The effect of this adjustment is presented below (in thousands).
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Investment securities                                                                                                                                                                                                                                                                                                                      |  | $                                                         | 123,091 |                                                          
|Loans                                                                                                                                                                                                                                                                                                                                      |  |                                                           | 138,128 |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Total earning assets                                                                                                                                                                                                                                                                                                                       |  | $                                                         | 271,162 |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          
|Taxable equivalent net yield on earning assets                                                                                                                                                                                                                                                                                             |  |                                                           |         |                                                          
|                                                                                                                                                                                                                                                                                                                                           |  |                                                           |         |                                                          



16



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Balance Sheet Analysis



Investments



Investment securities increased $18,542,270 or 17.2% from $108,065,109 at December 31, 2002,
to $126,607,379 at September 30, 2003. Taxable securities comprised 82.5% of total securities at September 30, 2003, as compared to 83.4% at December 31, 2002. Other than the normal risks inherent in purchasing U.S. Treasury securities, U.S.
Government corporation and agencies securities, and obligations of states and political subdivisions, i.e. interest rate risk, management has no knowledge of other market or credit risk involved in these investments. The corporation does not have
any high risk hybrid/derivative instruments.



Available for sale securities, at
market value increased $21,688,393 or 21.6% from December 31, 2002, and represented 96% of the investment portfolio at September 30, 2003. The increase was primarily due to purchases of U.S. Treasury securities, U.S. Government corporation and
agencies securities and municipal securities. The held to maturity securities decreased $3,146,123 or 40.9% from December 31, 2002 and represented 4% of the investment portfolio as of September 30, 2003. The decrease was primarily the result of
maturities and calls of municipal securities. As the investment portfolio consists primarily of fixed rate debt securities, changes in the market rates of interest will effect the carrying value of securities available for sale, adjusted upward or
downward under the requirements of FAS 115 and represent temporary adjustments in values. The carrying value of securities available for sale was increased by $1,085,366 at September 30, 2003 and increased by $1,943,664 at December 31, 2002. The
market value of securities classified as held to maturity was above book value by $233,871 and $281,399 at September 30, 2003 and December 31, 2002, respectively.



Table Four

Investment Portfolio



The following table
presents the book values of investment securities:

(in thousands):



|                                                                                      |  | (Unaudited) September 30,2003 |         | December 31,2002
|------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | ----------------
|Securities held to maturity:                                                          |  |                               |         |                 
|Obligations of states and political subdivisions                                      |  | $                             | 4,542   |                 
|                                                                                      |  |                               |         |                 
|Total held to maturity                                                                |  | $                             | 4,542   |                 
|                                                                                      |  |                               |         |                 
|Securities available for sale :                                                       |  |                               |         |                 
|U.S. Treasury securities and obligations of U.S. Government corporations and agencies |  | $                             | 54,660  |                 
|Obligations of states and political subdivisions                                      |  |                               | 17,571  |                 
|Corporate debt securities                                                             |  |                               | 6,455   |                 
|Mortgage-backed securities                                                            |  |                               | 42,829  |                 
|Equity Securities                                                                     |  |                               | 550     |                 
|                                                                                      |  |                               |         |                 
|Total available for sale                                                              |  | $                             | 122,065 |                 
|                                                                                      |  |                               |         |                 
|Total                                                                                 |  | $                             | 126,607 |                 
|                                                                                      |  |                               |         |                 



17



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Four

Investment Portfolio ( Continued)

(in thousands)



The maturity distribution using book value including accretion of discounts and amortization
of premiums (expressed in thousands) and approximate yield of investment securities at September 30, 2003 and December 31, 2002 are presented in the following table. Tax equivalent yield basis was used on tax exempt obligations. Approximate yield
was calculated using a weighted average of yield to maturities.



|                                                 |  | (Unaudited) September 30, 2003 |       |       | December 31, 2002            |  
|------------------------------------------------ |  | ------------------------------ | ----- | ----- | ---------------------------- | -
|                                                 |  | Securities Held to Maturity    |       |       | SecuritiesAvailable for Sale |  
|                                                 |  | Amount                         |       | Yield |                              |  
|U.S. Treasury and other U.S. Government Agencies |  |                                |       |       |                              |  
|                                                 |  |                                |       |       |                              |  
|Within One Year                                  |  | $                              |      |       |                             | %
|After One But Within Five Years                  |  |                                |      |       |                             |  
|After Five But Within Ten Years                  |  |                                |      |       |                             |  
|After Ten Years                                  |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|                                                 |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|States & Political Subdivisions                  |  |                                |       |       |                              |  
|                                                 |  |                                |       |       |                              |  
|Within One Year                                  |  |                                | 300   |       | 5.47                         |  
|After One But Within Five Years                  |  |                                | 2,619 |       | 5.97                         |  
|After Five But Within Ten Years                  |  |                                | 1,623 |       | 6.56                         |  
|After Ten Years                                  |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|                                                 |  |                                | 4,542 |       | 6.15                         |  
|                                                 |  |                                |       |       |                              |  
|Corporate Debt Securities                        |  |                                |       |       |                              |  
|                                                 |  |                                |       |       |                              |  
|Within One Year                                  |  |                                |      |       |                             |  
|After One But Within Five Years                  |  |                                |      |       |                             |  
|After Five But Within Ten Years                  |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|                                                 |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|Mortgage-Backed Securities                       |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|Equity Securities                                |  |                                |      |       |                             |  
|                                                 |  |                                |       |       |                              |  
|Total                                            |  | $                              | 4,542 |       | 6.15                         | %
|                                                 |  |                                |       |       |                              |  



18



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Loans



Loans net of unearned income increased $2,390,616 or 1.7% from December 31, 2002. The
additional growth in the loan portfolio during the first nine months of 2003 was primarily due to increases in commercial real estate loans and non-rated industrial development obligations, offset in part by the decrease in commercial loans. Real
estate residential loans which include real estate construction, real estate farmland, and real estate residential loans comprise thirty-seven percent (37%) of the loan portfolio. Commercial loans which include real estate secured by non-farm, non
residential and commercial and industrial loans comprise forty-two percent (42%) of the loan portfolio. Installment loans comprise thirteen percent (13%) of the loan portfolio. Other loans include non-rated industrial development obligations, direct
financing leases and other loans comprise eight percent (8%) of the loan portfolio. There were no changes in the composition of the loan portfolio from December 31, 2002 to September 30, 2003.



The loan portfolio is not dominated by concentrations of credit within any one industry;
therefore, the impact of a weakening economy on any particular industry should be minimal. Management believes that the loan portfolio does not contain any excessive or abnormal elements of risk.



Table Five

Loan Portfolio



Loans outstanding are as
follows (in thousands):



|                                               |  | (Unaudited) September 30,2003 |         | December 31,2002
|---------------------------------------------- |  | ----------------------------- | ------- | ----------------
|Real Estate - Residential                      |  |                               |         |                 
|Real estate-construction                       |  | $                             | 857     |                 
|Real estate-farmland                           |  |                               | 348     |                 
|Real estate-residential                        |  |                               | 50,207  |                 
|                                               |  |                               |         |                 
|                                               |  | $                             | 51,412  |                 
|                                               |  |                               |         |                 
|Commercial                                     |  |                               |         |                 
|Real estate-secured by nonfarm, nonresidential |  | $                             | 42,016  |                 
|Commercial & industrial                        |  |                               | 16,244  |                 
|                                               |  |                               |         |                 
|                                               |  | $                             | 58,260  |                 
|                                               |  |                               |         |                 
|Installment                                    |  |                               |         |                 
|Installment and other loans to individuals     |  | $                             | 17,866  |                 
|                                               |  |                               |         |                 
|Others                                         |  |                               |         |                 
|Non-rated industrial Development obligations   |  | $                             | 11,745  |                 
|Other loans                                    |  |                               | 32      |                 
|                                               |  |                               |         |                 
|                                               |  | $                             | 11,777  |                 
|                                               |  |                               |         |                 
|Total                                          |  |                               | 139,315 |                 
|Less unearned interest                         |  |                               | 153     |                 
|                                               |  |                               |         |                 
|                                               |  | $                             | 139,162 |                 
|                                               |  |                               |         |                 



19



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Six

Loan Portfolio - Maturities and sensitivities of Loans to Changes in Interest Rates



The following table presents the contractual maturities of loans other than installment
loans and residential mortgages for all banks as of September 30, 2003 and December 31, 2002 (in thousands):





|                                                                    |  | (Unaudited) September 30, 2003
|------------------------------------------------------------------- |  | ------------------------------
|                                                                    |  | In oneYear or Less            
|Real Estate - construction                                          |  | $                             
|Commercial real estate-secured by nonfarm, non-residential property |  |                               
|Commercial and Industrial                                           |  |                               
|Nonrated industrial development obligations                         |  |                               
|                                                                    |  |                               
|Total                                                               |  | $                             
|                                                                    |  |                               
|                                                                    | 
|                                                                    |  | December 31, 2002             
|                                                                    |  | In one Year or Less           
|Real Estate - construction                                          |  | $                             
|Commercial real estate-secured by nonfarm, non-residential property |  |                               
|Commercial and Industrial                                           |  |                               
|Nonrated industrial development obligations                         |  |                               
|                                                                    |  |                               
|Total                                                               |  | $                             
|                                                                    |  |                               



The following table presents an
analysis of fixed and variable rate loans as of September 30, 2003 and December 31, 2002 along with the contractual maturities of loans other than installment loans and residential mortgages (in thousands):



|               |  | (Unaudited) September 30, 2003
|-------------- |  | ------------------------------
|               |  | In oneYear or Less            
|Fixed Rates    |  | $                             
|Variable Rates |  |                               
|               |  |                               
|Total          |  | $                             
|               |  |                               
|               | 
|               |  | December 31, 2002             
|               |  | In one Year or Less           
|Fixed Rates    |  | $                             
|Variable Rates |  |                               
|               |  |                               
|Total          |  | $                             
|               |  |                               



20



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Total non-performing loans were $1,278,000 at September 30, 2003
and $1,682,000 at December 31, 2002. Loans classified as non-accrual were $1,215,000 or .9% of total loans as of September 30, 2003, as compared to $1,567,000 or 1.1% of total loans at December 31, 2002. There were no loans classified as
renegotiated as of September 30, 2003 and December 31, 2002. The loans past due 90 days or more decreased $13,000 to $63,000 at September 30, 2003. Other real estate owned decreased $39,000 since December 31, 2002 due to the sale of the properties
by the subsidiary bank. Management continues to monitor the non-performing assets to ensure against deterioration in collateral values.



Table Seven

Risk Elements



The following table presents loans which are in the process of collection, but are
contractually past due 90 days or more as to interest or principal, non-accrual loans and other real estate ( in thousands):



|                                                                 |  | (Unaudited) September 30, 2003 |       |   | December 31,2002 |  
|---------------------------------------------------------------- |  | ------------------------------ | ----- | - | ---------------- | -
|Past Due 90 Days or More:                                        |  |                                |       |   |                  |  
|Real Estate - residential                                        |  | $                              | 54    |   |                  | $
|Commercial                                                       |  |                                | 2     |   |                  |  
|Installment                                                      |  |                                | 7     |   |                  |  
|                                                                 |  |                                |       |   |                  |  
|                                                                 |  | $                              | 63    |   |                  | $
|                                                                 |  |                                |       |   |                  |  
|Non-accrual:                                                     |  |                                |       |   |                  |  
|Real Estate - residential                                        |  | $                              |      |   |                  | $
|Commercial                                                       |  |                                | 1,190 |   |                  |  
|Installment                                                      |  |                                | 25    |   |                  |  
|                                                                 |  |                                |       |   |                  |  
|                                                                 |  | $                              | 1,215 |   |                  | $
|                                                                 |  |                                |       |   |                  |  
|Other Real Estate                                                |  | $                              |      |   |                  | $
|                                                                 |  |                                |       |   |                  |  
|Total non-performing assets                                      |  | $                              | 1,278 |   |                  | $
|                                                                 |  |                                |       |   |                  |  
|Total non-performing assets to total loans and other real estate |  |                                | .92   | % |                  |  



The amount of interest income that
would have been recognized had the loans performed in accordance with their original terms was $51,700 and $97,400 for the periods ended September 30, 2003 and December 31, 2002, respectively.



As of September 30, 2003, there are no loans known to management other than those previously
disclosed about which management has any information about possible credit problems of borrowers which causes management to have serious doubts as to the borrowers ability to comply with present loan repayment terms.



21



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Allowance for Possible Loan
Losses



The corporation maintains an allowance for possible loan losses to
absorb probable loan losses. The provision for loan losses was $210,000 during the nine months ended September 30, 2003, as compared to $450,000 during the same period of the prior year. The allowance for possible loan losses represented 1.5% of
total loans outstanding at September 30, 2003 and December 31, 2002, respectively. The reserve for possible loan losses is considered to be adequate to provide for future losses in the portfolio. The amount charged to earnings is based upon
managements evaluations of the loan portfolio, as well as current and anticipated economic conditions, net loans charged off, past loan experiences, changes in character of the loan portfolio, specific problem loans and delinquencies and other
factors.



Table Eight

Analysis of Allowance for Possible Loan Losses



The following table presents a summary of loans charged off and recoveries of loans previously charged off by type of loan (in thousands).



|                                                                           |  | Summary of Loan Loss Experience |        
|-------------------------------------------------------------------------- |  | ------------------------------- | -------
|                                                                           |  | (Unaudited) September 30,       |        
|                                                                           |  | 2003                            |        
|Balance at Beginning of period                                             |  |                                 |        
|Allowance for Possible Loan Losses                                         |  | $                               | 2,027  
|Loans Charged Off:                                                         |  |                                 |        
|Real Estate - residential                                                  |  |                                 | 13     
|Commercial                                                                 |  |                                 | 53     
|Installment                                                                |  |                                 | 54     
|                                                                           |  |                                 |        
|                                                                           |  |                                 | 120    
|Recoveries:                                                                |  |                                 |        
|Real Estate - residential                                                  |  |                                 | 3      
|Commercial                                                                 |  |                                 |       
|Installment                                                                |  |                                 | 5      
|                                                                           |  |                                 |        
|                                                                           |  |                                 | 8      
|                                                                           |  |                                 |        
|Net Charge-offs                                                            |  |                                 | 112    
|                                                                           |  |                                 |        
|Additions Charged to Operations                                            |  |                                 | 210    
|                                                                           |  |                                 |        
|Balance at end of period:                                                  |  | $                               | 2,125  
|                                                                           |  |                                 |        
|Average Loans Outstanding                                                  |  | $                               | 136,562
|                                                                           |  |                                 |        
|Ratio of net charge-offs to Average loans outstanding for the period       |  |                                 | .08    
|Ratio of the Allowance for Loan Losses to Loans Outstanding for the period |  |                                 | 1.53   



22



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Allowance for Possible Loan
Losses - continued



The corporation has allocated the allowance for
possible loan losses to specific portfolio segments based upon historical net charge-off experience, changes in the level of non-performing assets, local economic conditions and management experience as presented in Table Nine. The Corporation has
historically maintained the allowance for loan losses at a level greater than actual charge-offs. In determining the allocation of the allowance for possible loan losses, charge-offs for 2003 are anticipated to be within the historical ranges.
Although a subjective evaluation is determined by management, the corporation believes it has appropriately assessed the risk of loans in the loan portfolio and has provided for an allowance which is adequate based on that assessment. Because the
allowance is an estimate, any change in the economic conditions of the corporations market area could result in new estimates which could affect the corporations earnings. Management monitors loan quality through reviews of past due
loans and all significant loans which are considered to be potential problem loans on a monthly basis. The internal loan review function provides for an independent review of commercial, real estate, and installment loans in order to measure the
asset quality of the portfolio. Managements review of the loan portfolio has not indicated any material amount of loans, not disclosed in the accompanying tables and discussions which are known to have possible credit problems that cause
management to have serious doubts as to the ability of each borrower to comply with their present loan repayment terms.



Table Nine

Loan Portfolio - Allocation of allowance for possible loan losses



The following table presents an allocation of the allowance for possible loan
losses for the nine month period ended September 30, 2003, and the year ended December 31, 2002 (expressed in thousands). The allocation presented below is based on the historical average of net charge offs per category combined with the change in
loan growth and managements review of the loan portfolio.



|                          |  | (Unaudited) September 30, 2003 |       |                                              | December 31, 2002 |  
|------------------------- |  | ------------------------------ | ----- | -------------------------------------------- | ----------------- | -
|                          |  | Amount                         |       | Percentof loansin eachcategory to totalloans |                   |  
|Real estate - residential |  | $                              | 311   |                                              | 36.9              | %
|Commercial                |  |                                | 1,228 |                                              | 41.9              |  
|Installment               |  |                                | 565   |                                              | 12.8              |  
|Others                    |  |                                | 21    |                                              | 8.4               |  
|                          |  |                                |       |                                              |                   |  
|Total                     |  | $                              | 2,125 |                                              | 100.0             | %
|                          |  |                                |       |                                              |                   |  



23



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Deposits



Total deposits were $241,152,246 at September 30, 2003 as compared to $231,375,582 at
December 31, 2002, an increase of 4.2%. The deposit growth during the nine month period was primarily in savings deposits. The subsidiary bank has offered a savings deposit product with a competitive interest rate which has resulted in the increase
in savings deposits. At September 30, 2003, noninterest bearing deposits comprised 10% of total deposits and interest bearing deposits which include NOW, money market, savings and time deposits comprised 90% of total deposits. The change in the
deposit mix from December 31, 2002 to September 30, 2003 was 1% increase in noninterest bearing deposits and 1% decrease in interest bearing deposits.



Table Ten

Deposits



The following table presents a maturity distribution of time certificates of deposit of
$100,000 or more (in thousands):



|                                           |  | (Unaudited) September 30,2003 |        | December 31,2002
|------------------------------------------ |  | ----------------------------- | ------ | ----------------
|Due in three months or less                |  | $                             | 957    |                 
|Due after three months through six months  |  |                               | 3,309  |                 
|Due after six months through twelve months |  |                               | 8,641  |                 
|Due after one year through five years      |  |                               | 11,070 |                 
|                                           |  |                               |        |                 
|Total                                      |  | $                             | 23,977 |                 
|                                           |  |                               |        |                 



Repurchase agreements and Other Borrowings



Repurchase
agreements are short-term borrowings. Repurchase agreements were $17,699,018 at September 30, 2003, an increase of $8,661,216, as compared to December 31, 2002. Other borrowings consist of a Federal Home Loan Bank (FHLB) advance. The
FHLB advance is collateralized by a blanket collateral agreement which assigns a security interest in capital stock, deposits, mortgage loans, securities and FHLB stock. As of September 30, 2003, the FHLB advance was $1,320,000 with an interest rate
of 4.65%. The borrowing will mature in September, 2018.



Capital Resources



Stockholders
equity increased 4.8% during the first nine months of 2003 entirely from current earnings after quarterly dividends, and decreased 2.4% resulting from the effect of the change in the net unrealized gain on securities available for sale.
Stockholders equity amounted to 8.1% of total assets at September 30, 2003 and December 31, 2002. The Holding Companys primary source of funds for payment of dividends to shareholders is from the dividends from its subsidiary banks.
Earnings from subsidiary bank operations are expected to remain adequate to fund payment of stockholders dividends and internal growth. In managements opinion, the subsidiary banks have the capability to upstream sufficient dividends to
meet the cash requirements of the Holding Company.



The Holding Company is
subject to regulatory risk-based capital guidelines administered by the Federal Reserve Board. These risk-based capital guidelines establish minimum capital ratios of Total capital, Tier 1 Capital, and Leverage to assess the capital adequacy of bank
holding companies.



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Capital Resources -
Continued



The following chart shows the regulatory capital levels for the
company at September 30, 2003 and December 31, 2002:



|Ratio              |  | Minimum |   |  | (Unaudited) September 30,2003 |   |  | December 31,2002 |  
|------------------ |  | ------- | - |  | ----------------------------- | - |  | ---------------- | -
|Leverage Ratio     |  | 3       | % |  | 6.9                           | % |  | 7.1              | %
|Risk Based Capital |  |         |   |  |                               |   |  |                  |  
|Tier 1 (core)      |  | 4       | % |  | 11.8                          | % |  | 12.0             | %
|Tier 2 (total)     |  | 8       | % |  | 13.1                          | % |  | 13.2             | %



Liquidity



Liquidity management ensures that funds are
available to meet loan commitments, deposit withdrawals, and operating expenses. Funds are provided by loan repayments, investment securities maturities, or deposits, and can be raised by liquidating assets or through additional borrowings. The
corporation had investment securities with an estimated market value of $122,065,572 classified as available for sale at September 30, 2003. These securities are available for sale at any time based upon managements assessment in order to
provide necessary liquidity should the need arise. In addition, the Holding Companys subsidiary bank, Progressive Bank, N.A., is a member of the Federal Home Loan Bank of Pittsburgh (FHLB). Membership in the FHLB provides an additional source
of short-term and long-term funding, in the form of collateralized advances. The subsidiary bank had an available line with the FHLB in the aggregate amount of $2 million which expires in December 30, 2003. As of September 30, 2003 there were no
borrowings outstanding pursuant to this agreement.



At September 30, 2003 and
December 31, 2002, the Holding Company had outstanding loan commitments and standby letters of credit totaling $24,326,000 and $15,750,000, respectively. As of September 30, 2003, management placed a high probability for required funding within one
year of approximately $20,170,000. Approximately $3,946,000 is principally unused home equity and credit card lines on which management places a low probability for required funding.



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##### Table of Contents

FIRST WEST VIRGINIA BANCORP, INC.

PART I



Item 3 Quantitative and Qualitative Disclosures About Market Risk



The Companys subsidiary bank uses an asset/liability model to measure the impact of changes in interest rates on net interest income on a periodic basis. Assumptions are made to simulate the impact of future
changes in interest rates and/or changes in balance sheet composition. The effect of changes in future interest rates on the mix of assets and liabilities may cause actual results to differ from simulated results. Guidelines established by the
Companys subsidiary bank provides that the estimated net interest income may not change by more than 10% in a one year period given a +/- 200 basis point parallel shift in interest rates. Excluding the potential effect of interest rate changes
on assets and liabilities of the Holding Company which are not deemed material, the anticipated impact on net interest income of the subsidiary bank at September 30, 2003 were as follows: given a 200 basis point increase scenario net interest income
would be decreased by approximately 4%, and given a 200 basis point decrease scenario net interest income would be reduced by approximately 14%. Under the 200 basis point increase in interest rate scenario the subsidiary bank was within the
established guideline at September 30, 2003. However, the Company was not within the established guideline if interest rates were to decrease 200 basis points. Bank management believes it is unlikely that interest rates will decrease an additional
200 basis points based upon the current low interest rate environment. Bank management will continue to monitor current interest rate market fluctuations.



Item 4 Controls and Procedures



Evaluation of Disclosure Controls and Procedures



Based on the evaluation of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)), the Companys President
and Chief Executive Officer, Charles K. Graham, and Senior Vice President and Chief Financial Officer, Francie P. Reppy, has concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, such disclosure controls and
procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities
and Exchange Commission rules and forms.



Changes in Internal Controls



During the quarter under report,
there was no change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

FIRST WEST VIRGINIA BANCORP, INC.

PART II

OTHER INFORMATION



Item 1 Legal Proceedings



The nature of the
business of the Holding Companys subsidiary generates a certain amount of litigation involving matters arising in the ordinary course of business. The Company is unaware of any litigation other than ordinary routine litigation incidental to
the business of the Company, to which it or its subsidiary is a party or of which any of their property is subject.



Item 2 Changes in Securities



Inapplicable



Item 3 Defaults Upon Senior Securities



Inapplicable



Item 4 Submission of Matters to Vote of Security Holders



a. Inapplicable



b.
Inapplicable



c. Inapplicable



d. Inapplicable



Item 5 Other Information



Inapplicable



Item 6 Exhibits and Reports on Form 8-K



|(a) | Reports on Form 8-K
|--- | -------------------



On August 6, 2003 a report on Form 8-K was filed which contained a press release dated August 5, 2003 that reported the earnings of First West Virginia Bancorp, Inc. for the second quarter ended June 30, 2003.



|(b) | Exhibits
|--- | --------



The exhibits listed in the Exhibit Index on page 29 of this FORM 10-Q are incorporated by reference and/or filed herewith.



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##### Table of Contents

SIGNATURES



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



|    |  | First West Virginia Bancorp, Inc                 
|--- |  | -------------------------------------------------
|    |  | (Registrant)                                     
|    | 
|By: |  | /s/ Charles K. Graham                            
|    |  | Charles K. Graham                                
|    |  | President and Chief Executive Officer/Director   
|    | 
|By: |  | /s/ Francie P. Reppy                             
|    |  | Francie P. Reppy                                 
|    |  | Senior Vice President and Chief Financial Officer



Dated: November 6, 2003



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##### Table of Contents

EXHIBIT INDEX



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



|ExhibitNumber |  | Description                                                                                                                                                                                       
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              | 
|3.1           |  | Certificate and Articles of Incorporation of First West Virginia Bancorp, Inc. Incorporated herein by reference.                                                                                  
|              | 
|3.2           |  | Bylaws of First West Virginia Bancorp, Inc. Incorporated herein by reference.                                                                                                                     
|              | 
|10.1          |  | Employment Contract dated December 23, 2002 between First West Virginia Bancorp, Inc. and Charles K. Graham. Incorporated herein by reference.                                                    
|              | 
|10.2          |  | Employment Contract dated December 23, 2002 between First West Virginia Bancorp, Inc. and Beverly A. Barker. Incorporated herein by reference.                                                    
|              | 
|10.3          |  | Lease dated July 20, 1993 between Progressive Bank, N.A., formerly known as First West Virginia Bank, N.A., and Angela I. Stauver. Incorporated herein by
reference.                            
|              | 
|10.4          |  | Banking Services License Agreement dated October 26, 1994 between Progressive Bank, N.A., formerly known as First West Virginia Bank, N.A., and The Kroger Co.
Incorporated herein by reference.
|              | 
|10.5          |  | Lease dated November 14, 1995 between Progressive Bank, N.A. - Buckhannon and First West Virginia Bancorp, Inc. and O. V. Smith & Sons of Big Chimney, Inc. Incorporated herein
by reference.     
|              | 
|10.6          |  | Lease dated May 20, 1998 between Progressive Bank, N.A. and Robert Scott Lumber Company. Incorporated herein by reference.                                                                        
|              | 
|10.7          |  | Lease dated May 12, 2001 between Progressive Bank, N.A. and Sylvan J. Dlesk and Rosalie J. Dlesk doing business as Dlesk Realty & Investment Company. Incorporated herein by
reference.           
|              | 
|11.1          |  | Statement regarding computation of per share earnings. Filed herewith and incorporated herein by reference.                                                                                       
|              | 
|13.3          |  | Summarized Quarterly Financial Information. Filed herewith and incorporated herein by reference.                                                                                                  
|              | 
|15            |  | Letter re unaudited interim financial information. Incorporated herein by reference. See Part 1, Notes to Consolidated Financial Statements                                                       
|              | 
|31            |  | Certification of Chief Executive Officer pursuant to section 302 of the Securities and Exchange Act of 1934. Filed herewith and incorporated herein by reference.                                 
|              | 
|31.1          |  | Certification of Chief Financial Officer pursuant to section 302 of the Securities and Exchange Act of 1934. Filed herewith and incorporated herein by reference.                                 
|              | 
|32            |  | Certification pursuant to 18 U.S.C. §1350, as adopted pursuant to section 906 of the SARBANES-OXLEY ACT of 2002. Filed herewith and incorporated herein by
reference.                             
|              | 
|99.1          |  | Independent Accountants Report. Filed herewith and incorporated herein by reference.                                                                                                             



29