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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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

For the Quarterly Period Ended June 30, 2006



| ̈ | 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)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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 a large accelerated filer, an accelerated filer or a non-accelerated filer as defined by Rule 12b-2 of the Exchange Act.



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large Accelerated Filer ̈ |  | Accelerated Filer ̈ |  | Non-accelerated filer  x

Indicate by check mark whether the Registrant is a shell company as defined by Rule 12b-2 of the
Exchange 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 August 7, 2006: Common Stock, $5.00 Par Value, shares
outstanding: 1,528,443 shares



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##### Table of Contents

FORM 10-Q INDEX



|                               |  |                                                                                       |  |      
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | -----
|PART I - Financial Information |  |                                                                                      
|                               |  |                                                                                      
|Item 1                         |  | Financial Statements and Accompanying Notes                                           |  | 3-11 
|                               |  |                                                                                      
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12-27
|                               |  |                                                                                      
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 27   
|                               |  |                                                                                      
|Item 4                         |  | Controls and Procedures                                                               |  | 27   
|                               | 
|PART II - Other Information    |  | 28                                                                                   
|                               |  |                                                                                      
|Item 1                         |  | Legal Proceedings                                                                     |  | 28   
|                               |  |                                                                                      
|Item 1A                        |  | Risk Factors                                                                          |  | 28   
|                               |  |                                                                                      
|Item 2                         |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 28   
|                               |  |                                                                                      
|Item 3                         |  | Defaults upon Senior Securities                                                       |  | 28   
|                               |  |                                                                                      
|Item 4                         |  | Submission of matters to a Vote of Security Holders                                   |  | 28   
|                               |  |                                                                                      
|Item 5                         |  | Other Information                                                                     |  | 29   
|                               |  |                                                                                      
|Item 6                         |  | Exhibits and Reports on Form 8-K                                                      |  | 29   
|                               |  |                                                                                      
|                               |  | Reports on Form 8-K                                                                   |  | 29   
|                               |  | Signatures                                                                            |  | 30   
|                               |  | Exhibit Index                                                                         |  | 31   



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##### Table of Contents

FIRST WEST VIRGINIA BANCORP, INC.

PART I

FINANCIAL INFORMATION

First West Virginia Bancorp, Inc.

CONSOLIDATED BALANCE SHEETS



|                                                                           |  |               |             |   |                  |   |             |  
|-------------------------------------------------------------------------- |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                           |  | June 30, 2006 |             |   | December 31,2005 |  
|                                                                           |  | (Unaudited)   |             |   |                  |  
|ASSETS                                                                     | 
|Cash and due from banks                                                    |  | $             | 5,786,623   |   |                  | $ | 5,929,513   |  
|Due from banks - interest bearing                                          |  |               | 156,893     |   |                  |   | 1,066,142   |  
|Federal funds sold                                                         |  |               | 3,133,000   |   |                  |   | 4,753,000   |  
|                                                                           |  |               |             |   |                  |   |             |  
|Total cash and cash equivalents                                            |  |               | 9,076,516   |   |                  |   | 11,748,655  |  
|Investment securities:                                                     |  |               |             |   |                  |   |             |  
|Available-for-sale (at fair value)                                         |  |               | 104,785,577 |   |                  |   | 106,222,137 |  
|Held-to-maturity (fair value of $1,514,809 and $1,810,834, respectively)   |  |               | 1,496,598   |   |                  |   | 1,776,295   |  
|Loans                                                                      |  |               | 130,436,714 |   |                  |   | 135,214,258 |  
|Less allowance for loan losses                                             |  |               | (2,325,159  | ) |                  |   | (2,319,871  | )
|                                                                           |  |               |             |   |                  |   |             |  
|Net loans                                                                  |  |               | 128,111,555 |   |                  |   | 132,894,387 |  
|Premises and equipment, net                                                |  |               | 4,043,618   |   |                  |   | 4,166,929   |  
|Accrued income receivable                                                  |  |               | 1,250,763   |   |                  |   | 1,255,328   |  
|Other intangible assets                                                    |  |               | 147,919     |   |                  |   | 192,295     |  
|Goodwill                                                                   |  |               | 1,644,119   |   |                  |   | 1,644,119   |  
|Bank owned life insurance                                                  |  |               | 3,249,187   |   |                  |   | 3,193,977   |  
|Other assets                                                               |  |               | 3,937,516   |   |                  |   | 3,119,278   |  
|                                                                           |  |               |             |   |                  |   |             |  
|Total assets                                                               |  | $             | 257,743,368 |   |                  | $ | 266,213,400 |  
|                                                                           |  |               |             |   |                  |   |             |  
|LIABILITIES                                                                | 
|Noninterest bearing deposits:                                              |  |               |             |   |                  |   |             |  
|Demand                                                                     |  | $             | 24,371,955  |   |                  | $ | 26,044,841  |  
|Interest bearing deposits:                                                 |  |               |             |   |                  |   |             |  
|Demand                                                                     |  |               | 35,943,546  |   |                  |   | 36,891,497  |  
|Savings                                                                    |  |               | 62,838,260  |   |                  |   | 70,288,524  |  
|Time                                                                       |  |               | 86,648,734  |   |                  |   | 85,592,439  |  
|                                                                           |  |               |             |   |                  |   |             |  
|Total deposits                                                             |  |               | 209,802,495 |   |                  |   | 218,817,301 |  
|Federal funds purchased and securities sold under agreements to repurchase |  |               | 20,931,389  |   |                  |   | 19,084,324  |  
|Federal Home Loan Bank and other long-term borrowings                      |  |               | 2,364,056   |   |                  |   | 3,384,893   |  
|Accrued interest payable                                                   |  |               | 398,662     |   |                  |   | 404,372     |  
|Other liabilities                                                          |  |               | 585,352     |   |                  |   | 563,881     |  
|                                                                           |  |               |             |   |                  |   |             |  
|Total liabilities                                                          |  |               | 234,081,954 |   |                  |   | 242,254,771 |  
|                                                                           |  |               |             |   |                  |   |             |  
|STOCKHOLDERS EQUITY                                                       | 
|Common stock - 2,000,000 shares authorized at $5 par value:                |  |               |             |   |                  |   |             |  
|1,538,443 shares issued at June 30, 2006 and December 31, 2005             |  |               | 7,692,215   |   |                  |   | 7,692,215   |  
|Treasury stock - 10,000 shares at cost:                                    |  |               | (228,100    | ) |                  |   | (228,100    | )
|Surplus                                                                    |  |               | 4,982,606   |   |                  |   | 4,982,606   |  
|Retained earnings                                                          |  |               | 13,106,724  |   |                  |   | 12,538,056  |  
|Accumulated other comprehensive loss                                       |  |               | (1,892,031  | ) |                  |   | (1,026,148  | )
|                                                                           |  |               |             |   |                  |   |             |  
|Total stockholders equity                                                 |  |               | 23,661,414  |   |                  |   | 23,958,629  |  
|                                                                           |  |               |             |   |                  |   |             |  
|Total liabilities and stockholders equity                                 |  | $             | 257,743,368 |   |                  | $ | 266,213,400 |  
|                                                                           |  |               |             |   |                  |   |             |  

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



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##### Table of Contents

First West Virginia Bancorp, Inc.

CONSOLIDATED STATEMENTS OF INCOME



|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|--------------------------------------------------- |  | --------------------------- | --------- | -------------------------- | - | --------- |  | ---- | --------- |  | - | ---------
|                                                    |  | Three Months Ended,June 30, |           | Six Months Ended, June 30,
|                                                    |  | 2006                        |           | 2005                       |   | 2006      |  | 2005
|                                                    |  | (Unaudited)                 |           | (Unaudited)               
|INTEREST AND DIVIDEND INCOME                        |  |                             |           |                            |   |           |  |      |           |  |   |          
|Loans, including fees:                              |  |                             |           |                            |   |           |  |      |           |  |   |          
|Taxable                                             |  | $                           | 2,074,480 |                            | $ | 2,137,658 |  | $    | 4,087,567 |  | $ | 4,307,221
|Tax-exempt                                          |  |                             | 144,543   |                            |   | 161,503   |  |      | 292,052   |  |   | 329,422  
|Debt securities:                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Taxable                                             |  |                             | 967,459   |                            |   | 767,110   |  |      | 1,887,042 |  |   | 1,538,835
|Tax-exempt                                          |  |                             | 194,200   |                            |   | 150,982   |  |      | 383,801   |  |   | 309,992  
|Dividends                                           |  |                             | 12,828    |                            |   | 4,067     |  |      | 17,248    |  |   | 8,563    
|Other interest income                               |  |                             | 6,514     |                            |   | 2,378     |  |      | 21,052    |  |   | 8,292    
|Federal funds sold                                  |  |                             | 41,695    |                            |   | 47,585    |  |      | 114,010   |  |   | 74,672   
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Total interest and dividend income                  |  |                             | 3,441,719 |                            |   | 3,271,283 |  |      | 6,802,772 |  |   | 6,576,997
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|INTEREST EXPENSE                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Deposits                                            |  |                             | 946,034   |                            |   | 880,376   |  |      | 1,877,863 |  |   | 1,766,379
|Federal funds purchased and repurchase agreements   |  |                             | 159,686   |                            |   | 89,324    |  |      | 303,994   |  |   | 161,783  
|FHLB and other long-term borrowings                 |  |                             | 41,468    |                            |   | 40,155    |  |      | 88,198    |  |   | 68,964   
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Total interest expense                              |  |                             | 1,147,188 |                            |   | 1,009,855 |  |      | 2,270,055 |  |   | 1,997,126
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Net interest income                                 |  |                             | 2,294,531 |                            |   | 2,261,428 |  |      | 4,532,717 |  |   | 4,579,871
|PROVISION FOR LOAN LOSSES                           |  |                             |          |                            |   | 90,000    |  |      |          |  |   | 180,000  
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Net interest income after provision for loan losses |  |                             | 2,294,531 |                            |   | 2,171,428 |  |      | 4,532,717 |  |   | 4,399,871
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|NONINTEREST INCOME                                  |  |                             |           |                            |   |           |  |      |           |  |   |          
|Service charges and other fees                      |  |                             | 233,903   |                            |   | 188,792   |  |      | 434,715   |  |   | 354,695  
|Net gains on available for sale securities          |  |                             | 44,215    |                            |   | 2,390     |  |      | 44,109    |  |   | 80,245   
|Other operating income                              |  |                             | 104,621   |                            |   | 115,104   |  |      | 230,864   |  |   | 244,275  
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Total noninterest income                            |  |                             | 382,739   |                            |   | 306,286   |  |      | 709,688   |  |   | 679,215  
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|NONINTEREST EXPENSE                                 |  |                             |           |                            |   |           |  |      |           |  |   |          
|Salary and employee benefits                        |  |                             | 1,103,399 |                            |   | 917,481   |  |      | 1,993,390 |  |   | 1,878,098
|Net occupancy expense of premises                   |  |                             | 280,238   |                            |   | 273,315   |  |      | 589,547   |  |   | 580,135  
|Other operating expenses                            |  |                             | 620,288   |                            |   | 666,575   |  |      | 1,234,699 |  |   | 1,329,640
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Total noninterest expense                           |  |                             | 2,003,925 |                            |   | 1,857,371 |  |      | 3,817,636 |  |   | 3,787,873
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Income before income taxes                          |  |                             | 673,345   |                            |   | 620,343   |  |      | 1,424,769 |  |   | 1,291,213
|INCOME TAXES                                        |  |                             | 123,912   |                            |   | 109,560   |  |      | 275,293   |  |   | 234,701  
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|Net income                                          |  | $                           | 549,433   |                            | $ | 510,783   |  | $    | 1,149,476 |  | $ | 1,056,512
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|WEIGHTED AVERAGE SHARES OUTSTANDING                 |  |                             | 1,528,443 |                            |   | 1,528,443 |  |      | 1,528,443 |  |   | 1,528,443
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|EARNINGS PER COMMON SHARE                           |  | $                           | 0.36      |                            | $ | 0.33      |  | $    | 0.75      |  | $ | 0.69     
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          
|DIVIDENDS PER COMMON SHARE                          |  | $                           | 0.19      |                            | $ | 0.19      |  | $    | 0.38      |  | $ | 0.38     
|                                                    |  |                             |           |                            |   |           |  |      |           |  |   |          

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



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##### Table of Contents

First West Virginia Bancorp, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(Unaudited)



|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|----------------------------------------------------------------------------------- | ------ | ------------ | ------ | ------- | --------- | ---------------- | - | --------- | ------------- | - | ---------- | ------------------------------------------ |  | - | ------------------- | - |  | ----- | ---------- | - |  | - | --------- | - |  | - | ---------- | -
|                                                                                    |        | Common Stock |        | Surplus |           | RetainedEarnings |   |           | TreasuryStock |   |            | AccumulatedOtherComprehensiveIncome (loss) |  |   | ComprehensiveIncome |   |  | Total |           
|                                                                                    | Shares |              | Amount |         |           |                  |   |           |              
|BALANCE, DECEMBER 31, 2005                                                          |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |               | $ | 12,538,056 |                                            |  | $ | (228,100            | ) |  | $     | (1,026,148 | ) |  |   |           |   |  | $ | 23,958,629 |  
|                                                                                    |        |              |        |         |           |                  |   |          
|Comprehensive income:                                                               |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Net income                                                                          |        |             |        |         |          |                  |   |          |               |   | 1,149,476  |                                            |  |   |                    |   |  |       |           |   |  | $ | 1,149,476 |   |  |   | 1,149,476  |  
|Other comprehensive loss, net of tax                                                |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Unrealized losses on securities net of reclassification adjustment (see disclosure) |        |             |        |         |          |                  |   |          |               |   |           |                                            |  |   |                    |   |  |       | (865,883   | ) |  |   | (865,883  | ) |  |   | (865,883   | )
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Comprehensive income                                                                |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  | $ | 283,593   |   |  |   |            |  
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Cash dividend ($.38 per share)                                                      |        |             |        |         |          |                  |   |          |               |   | (580,808   | )                                          |  |   |                    |   |  |       |           |   |  |   |           |   |  |   | (580,808   | )
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|BALANCE, JUNE 30, 2006                                                              |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |               | $ | 13,106,724 |                                            |  | $ | (228,100            | ) |  | $     | (1,892,031 | ) |  |   |           |   |  | $ | 23,661,414 |  
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|                                                                                    |        |              |        |         |           |                  |  
|                                                                                    |        | Common Stock |        | Surplus |           | RetainedEarnings |   |           | TreasuryStock |   |            | AccumulatedOtherComprehensiveIncome (loss) |  |   | ComprehensiveIncome |   |  | Total |           
|                                                                                    | Shares |              | Amount |         |           |                  |   |           |              
|BALANCE, DECEMBER 31, 2004                                                          |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |               | $ | 11,437,407 |                                            |  | $ | (228,100            | ) |  | $     | 68,908     |   |  |   |           |   |  | $ | 23,953,036 |  
|                                                                                    |        |              |        |         |           |                  |   |          
|Comprehensive income:                                                               |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Net income                                                                          |        |             |        |         |          |                  |   |          |               |   | 1,056,512  |                                            |  |   |                    |   |  |       |           |   |  | $ | 1,056,512 |   |  |   | 1,056,512  |  
|Other comprehensive loss, net of tax                                                |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Unrealized losses on securities net of reclassification adjustment (see disclosure) |        |             |        |         |          |                  |   |          |               |   |           |                                            |  |   |                    |   |  |       | (327,375   | ) |  |   | (327,375  | ) |  |   | (327,375   | )
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Comprehensive income                                                                |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  | $ | 729,137   |   |  |   |            |  
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|Cash dividend ($.38 per share)                                                      |        |             |        |         |          |                  |   |          |               |   | (580,808   | )                                          |  |   |                    |   |  |       |           |   |  |   |           |   |  |   | (580,808   | )
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  
|BALANCE, JUNE 30, 2005                                                              |        | 1,538,443    |        | $       | 7,692,215 |                  | $ | 4,982,606 |               | $ | 11,913,111 |                                            |  | $ | (228,100            | ) |  | $     | (258,467   | ) |  |   |           |   |  | $ | 24,101,365 |  
|                                                                                    |        |              |        |         |           |                  |   |           |               |   |            |                                            |  |   |                     |   |  |       |            |   |  |   |           |   |  |   |            |  



|                                                                  |  |                                  |          |   |      |   |          |  
|----------------------------------------------------------------- |  | -------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                  |  | For the Six Months EndedJune 30, |         
|                                                                  |  | 2006                             |          |   | 2005 |  
|Disclosure of reclassification amount, net of tax:                |  |                                  |          |   |      |   |          |  
|Unrealized holding losses arising during the period               |  | $                                | (838,372 | ) |      | $ | (277,326 | )
|Less reclassification adjustment for gains included in net income |  |                                  | 27,511   |   |      |   | 50,049   |  
|                                                                  |  |                                  |          |   |      |   |          |  
|Net unrealized losses on securities                               |  | $                                | (865,883 | ) |      | $ | (327,375 | )
|                                                                  |  |                                  |          |   |      |   |          |  

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



5



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##### Table of Contents

First West Virginia Bancorp, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                  |  |                                   |             |   |      |   |              |  
|--------------------------------------------------------------------------------- |  | --------------------------------- | ----------- | - | ---- | - | ------------ | -
|                                                                                  |  | For the Six Months Ended June 30, |            
|                                                                                  |  | 2005                              |             |   | 2005 |  
|OPERATING ACTIVITIES                                                              |  |                                   |             |   |      |   |              |  
|Net income                                                                        |  | $                                 | 1,149,476   |   |      | $ | 1,056,512    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                   |             |   |      |   |              |  
|Provision for loan losses                                                         |  |                                   |            |   |      |   | 180,000      |  
|Depreciation and amortization                                                     |  |                                   | 221,630     |   |      |   | 230,467      |  
|Amortization of investment securities, net                                        |  |                                   | (6,597      | ) |      |   | 183,162      |  
|Investment security gains                                                         |  |                                   | (44,109     | ) |      |   | (80,245      | )
|Net losses on sales of premises and equipment                                     |  |                                   |            |   |      |   | 49,198       |  
|Increase in cash surrender value of bank-owned life insurance                     |  |                                   | (55,210     | ) |      |   | (60,636      | )
|Decrease in interest receivable                                                   |  |                                   | 4,565       |   |      |   | 69,363       |  
|Increase (decrease) in interest payable                                           |  |                                   | (5,710      | ) |      |   | 20,762       |  
|Other, net                                                                        |  |                                   | (274,351    | ) |      |   | 153,504      |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|Net cash provided by operating activities                                         |  |                                   | 989,694     |   |      |   | 1,802,087    |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|INVESTING ACTIVITIES                                                              |  |                                   |             |   |      |   |              |  
|Net decrease in loans, net of charge-offs                                         |  |                                   | 4,744,630   |   |      |   | 10,457,803   |  
|Proceeds from sales of securities available-for-sale                              |  |                                   | 336,321     |   |      |   | 2,836,382    |  
|Proceeds from maturities of securities available-for-sale                         |  |                                   | 54,010,598  |   |      |   | 148,014,726  |  
|Proceeds from maturities of securities held-to-maturity                           |  |                                   |            |   |      |   |             |  
|Principal collected on mortgage-backed securities                                 |  |                                   | 5,101,208   |   |      |   | 6,577,175    |  
|Purchases of securities available-for-sale                                        |  |                                   | (59,069,463 | ) |      |   | (150,322,142 | )
|Recoveries on loans previously charged-off                                        |  |                                   | 38,202      |   |      |   | 15,305       |  
|Purchases of premises and equipment                                               |  |                                   | (53,943     | ) |      |   | (601,341     | )
|Proceeds from sales of premises and equipment                                     |  |                                   |            |   |      |   | 15,524       |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|Net cash used in investing activities                                             |  |                                   | 5,107,553   |   |      |   | 16,993,432   |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|FINANCING ACTIVITIES                                                              |  |                                   |             |   |      |   |              |  
|Net decrease in deposits                                                          |  |                                   | (9,014,806  | ) |      |   | (13,844,218  | )
|Dividends paid                                                                    |  |                                   | (580,808    | ) |      |   | (580,808     | )
|Increase (decrease) in short-term borrowings                                      |  |                                   | 1,847,065   |   |      |   | (94,079      | )
|Proceeds from long-term borrowings                                                |  |                                   |            |   |      |   | 2,000,000    |  
|Principal payments on FHLB and other long-term borrowings                         |  |                                   | (1,020,837  | ) |      |   | (19,870      | )
|                                                                                  |  |                                   |             |   |      |   |              |  
|Net cash used in financing activities                                             |  |                                   | (8,769,386  | ) |      |   | (12,538,975  | )
|                                                                                  |  |                                   |             |   |      |   |              |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  |  |                                   | (2,672,139  | ) |      |   | 6,256,544    |  
|                                                                                  |  |                                  
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                      |  |                                   | 11,748,655  |   |      |   | 8,120,166    |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |  | $                                 | 9,076,516   |   |      | $ | 14,376,710   |  
|                                                                                  |  |                                   |             |   |      |   |              |  
|Supplemental Disclosures:                                                         |  |                                   |             |   |      |   |              |  
|Cash Paid for Interest                                                            |  | $                                 | 2,275,766   |   |      | $ | 1,976,364    |  
|Cash Paid for Income Taxes                                                        |  | $                                 | 260,000     |   |      | $ | 347,812      |  

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



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2006 AND 2005

(Unaudited)

Note 1 - Summary of
Significant Accounting Policies

The accounting and reporting policies 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, (US GAAP) and to general practices within the financial services industry. The preparation of financial statements in
conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management has identified the
accounting policies described below as those that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Companys consolidated financial statements and managements discussion
and analysis. A summary of the significant accounting and reporting policies applied in the presentation of the accompanying financial statements follows.

Nature of Operations and Basis of Presentation: First West Virginia Bancorp, Inc. (the Company) is a West Virginia Company. The Company provides a variety of banking services to individuals and businesses through the
branch network of its affiliate bank (the Bank). The Bank operates ten full service branches located in Wheeling (3), Wellsburg, Moundsville (2), New Martinsville, Buckhannon, and Weston, West Virginia and Bellaire, Ohio. Primary deposit
products consist of checking accounts, savings accounts, and certificates of deposit. Primary lending products consist of commercial and residential real estate loans, consumer loans, and business loans.

Principles of Consolidation: The consolidated financial statements of the Company include the financial statements of the parent and its wholly-owned subsidiary,
Progressive Bank, N.A. All significant intercompany transactions and accounts have been eliminated in consolidation.

Reclassifications:Certain
prior year amounts have been reclassified to conform to the 2006 presentation.

Use of Estimates: The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to material
change in the near term relate to the determination of the allowance for loan losses and the valuation of deferred tax assets.

Cash Flows: Cash and cash equivalents consist of cash on hand and amounts due from banks and federal funds sold.

Income
Recognition: The Company recognizes interest income by methods conforming to US GAAP that include general accounting practices within the financial services industry. Interest income on loans and investment securities is recognized by
methods that result in level rates of return on principal amounts outstanding, including yield adjustments resulting from the amortization of loan costs and premiums on investment securities and accretion of loan fees and discounts on investment
securities.

In the event management believes collection of all or a portion of contractual interest on a loan has become doubtful, which
generally occurs after the loan is 90 days past due, the accrual of interest is discontinued. In addition, previously accrued interest deemed uncollectible that was recognized in income is reversed. Interest received on nonaccrual loans is included
in income only if principal recovery is reasonably assured. A nonaccrual loan is restored to accrual status when it is brought current or has performed in accordance with contractual terms for a reasonable period of time, and the collectibility of
the total contractual principal and interest is no longer doubtful.

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

Common stock of the Federal Home Loan Bank (FHLB) and
Federal Reserve Bank represents ownership interest in institutions that are wholly owned by other financial institutions. These equity securities are accounted for at cost and are classified with other assets.

While temporary changes in the market value of available-for-sale securities are not recognized in earnings, a decline in fair value below amortized cost
deemed to be other-than-temporary results in an adjustment to the cost basis of the investment, with a corresponding loss charged against earnings. Management evaluates the investment securities for other-than-temporary declines in estimated fair
value on a quarterly basis. This analysis requires management to consider various factors in order to determine if a decline in estimated fair value is temporary or other-than-temporary. These factors include duration and magnitude of the decline in
value, the financial condition of the issuer, and the companys ability and intent to continue holding the investment for a period of time sufficient to allow for any anticipated recovery in market value. At June 30, 2006, there were no
investment securities identified by management to be other-than-temporarily impaired. If investments decline in fair value due to adverse changes in the financial markets, charges to income could occur in future periods.



7



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2006 AND 2005

(Unaudited)

NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Loans: Interest income on loans is accrued based on the principal outstanding. It is the
Companys policy to discontinue the accrual of interest when either the principal or interest is past due 90 days or more, unless the loan is both well secured and in the process of collection. The Company accounts for impaired loans in
accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 114 and No. 118, Accounting for Creditors for Impairment of a Loan. It is the Companys policy not to recognize interest
income on specific impaired loans unless the likelihood of future loss is remote. Interest payments received on such loans are applied as a reduction of the loan principal balance. Loan origination and commitment fees and certain direct loan
origination costs are deferred and the net amount amortized over the contractual life of the related loans or commitments as an adjustment of the related loans yield.

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

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

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

Individual loan reviews are based upon specific quantitative and qualitative criteria, including the size of the loan, loan quality ratings, value of
collateral, repayment ability of borrowers, and historical experience factors. The historical experience factors utilized for individual loan reviews are based upon past loss experience, known trends in losses and delinquencies, the growth of loans
in particular markets and industries, and known changes in economic conditions in the particular lending markets. Allowances for homogeneous loans (such as residential mortgage loans, personal loans, etc.) are evaluated based upon historical loss
experience, trends in losses and delinquencies, growth of loans in particular markets, and known changes in economic conditions in each lending market. There can be no assurance the allowance for loan losses will be adequate to cover all losses, but
management believes the allowance for loan losses in the amount of $2,325,159 at June 30, 2006, was adequate to provide for probable losses from existing loans based on information currently available. While management uses available
information to provide for loan losses, the ultimate collectibility of a substantial portion of the loan portfolio, and the need for future additions to the allowance, will be based on changes in economic conditions and other relevant factors. As
such, an adverse change in economic activity could reduce cash flows for both commercial and individual borrowers, which would likely cause the Company to experience increases in problem assets, delinquencies and losses on loans.

Premises and Equipment: Premises and equipment are stated at cost, less accumulated depreciation and amortization. Provisions for depreciation and amortization
are computed generally using the straight-line method over the estimated useful lives of the assets.

When units of property are disposed
of, the premises and equipment accounts are relieved of the cost and the accumulated depreciation related to such units. Any resulting gains or losses are credited to or charged against income. Cost of repairs and maintenance is charged to expense
as incurred. Additions and improvements are capitalized at cost.

Goodwill and Other Intangible Assets The Company adopted SFAS No. 147,
Acquisitions of Certain Financial Institutions - an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9. Except for transactions between two or more mutual enterprises, this Statement removes acquisitions
of financial institutions from the scope of both SFAS 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. SFAS 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 SFAS 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.



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2006 AND 2005

(Unaudited)

NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Goodwill resulted from the Companys purchase of a less-than-whole financial
institution (the branch). Upon adoption of FASB 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. As such, goodwill value is supported ultimately by revenue that is driven by the volume of business transacted. A decline in earnings as a result of a lack of growth or the inability to deliver cost effective services over
sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods.

An identifiable intangible
asset resulted from the purchase of the core deposits of another financial institution in 2001 and, as such, are amortized into noninterest expense on the straight-line basis over the period the Company expects to benefit from such assets (7 years).
The Company recognized amortization expense of $22,188 and $44,376 in the three and six month periods ended June 30, 2006 and 2005, respectively. The unamortized balance from the purchase of these core deposit intangible assets is $147,919 and
$192,295 at June 30, 2006 and December 31, 2005, respectively. The estimated aggregate amortization expense for each of the succeeding periods is as follows: $44,375 in 2006, $88,751 in 2007; and $14,793 in 2008. While management feels the
assumptions and variables used to value the acquisition was reasonable, the use of different, but still reasonable, assumptions could produce different results.

Goodwill and other intangibles are periodically reviewed for impairment. No impairment losses were recognized. Additionally, future events could cause management to conclude that impairment indicators exist and that
the goodwill is impaired, which would result in the Company recording an impairment loss. Any resulting impairment loss could have a material, adverse impact on the Companys financial condition and results of operations.

Bank-owned Life Insurance Bank owned life insurance consists of investments in life insurance policies on executive officers and other members of the banks
management. The policies are carried at their net cash surrender value. Changes in the policy value are recorded as an adjustment to the carrying value with the corresponding amount recognized as non-interest income or expense. Earnings on these
policies are based on the net earnings on the cash surrender value of the policies. The net cash surrender value of bank-owned life insurance was $3,249,187 and $3,193,977 at June 30, 2006 and December 31, 2005, respectively. The face
value of the bank-owned life insurance at June 30, 2006 was $9.1 million. An agreement has been executed with all officers whereby a $40,000 death benefit is payable upon the participants death while employed by the Company to their
designated beneficiary.

Other Real Estate Owned: Other real estate owned are carried at the lower of cost or their estimated current fair value,
less estimated costs to sell and are included in other assets. Other real estate owned consist primarily of properties acquired through, or in lieu of foreclosures. Any subsequent declines in fair value, and gains or losses on the disposition of
these assets are credited to or charged against income.

Comprehensive Income:

The Company is required to present comprehensive income in a full set of general-purpose financial statements for all periods presented. The following represents comprehensive income for the three and six month
periods ended June 30, 2006 and June 30, 2005. Other comprehensive income comprises unrealized holding gains (losses) on the available-for-sale securities portfolio. The Company has elected to report the effects of other comprehensive
income as part of the Consolidated Statement of Changes in Stockholders Equity.

The following table represents other comprehensive income before tax
and net of tax:



|                           |  |                                    |          |   |                                  |   |          |      |  |   |            |   |  |   |           |  
|-------------------------- |  | ---------------------------------- | -------- | - | -------------------------------- | - | -------- | ---- |  | - | ---------- | - |  | - | --------- | -
|                           |  | For the three months endedJune 30, |          |   | For the six months endedJune 30, |  
|                           |  | 2006                               |          |   | 2005                             |   |          | 2006 |  |   | 2005       |  
|Before-tax amount          |  | $                                  | (747,841 | ) |                                  | $ | 725,613  |      |  | $ | (1,388,300 | ) |  | $ | (524,892  | )
|Tax effect                 |  |                                    | 281,412  |   |                                  |   | (273,047 | )    |  |   | 522,417    |   |  |   | 197,517   |  
|                           |  |                                    |          |   |                                  |   |          |      |  |   |            |   |  |   |           |  
|Net of tax effect          |  |                                    | (466,429 | ) |                                  |   | 452,566  |      |  |   | (865,883   | ) |  |   | (327,375  | )
|Net income as reported     |  |                                    | 549,433  |   |                                  |   | 510,783  |      |  |   | 1,149,476  |   |  |   | 1,056,512 |  
|                           |  |                                    |          |   |                                  |   |          |      |  |   |            |   |  |   |           |  
|Total comprehensive income |  | $                                  | 83,004   |   |                                  | $ | 963,349  |      |  | $ | 283,593    |   |  | $ | 729,137   |  
|                           |  |                                    |          |   |                                  |   |          |      |  |   |            |   |  |   |           |  



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2006 AND 2005

(Unaudited)

NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Advertising Costs: Advertising costs are expensed as the costs are incurred. Advertising expenses amounted to $25,328 and $31,651 for the three month periods
ended June 30, 2006 and 2005, respectively. For the six month periods ended June 30, 2006 and 2005 advertising expenses amounted to $57,870 and $70,197, respectively.

Earnings Per Common Share: Earnings per common share are calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the year. The Company has no securities
which would be considered potential common stock.

NOTE 2 - REGULATORY MATTERS

In December, 2004, the Companys subsidiary bank entered into an agreement with the Office of the Comptroller of the Currency (OCC) relating to the results of its most recent report of examination. The Formal
Agreement contains certain required actions and certain restrictions. The agreement requires the subsidiary bank to develop plans, programs, policies, and procedures relating to management and board supervision, long-term strategic goals, loan
portfolio, criticized assets, capital, internal audit and internal loan review by certain dates and then to implement and follow those plans, programs, policies and procedures. A review and evaluation of certain groups of loans and correction of
deficiencies is also required. Additionally, the formal agreement mandates that the subsidiary bank achieve and maintain a 7.50% Tier 1 leverage ratio and 13.0% Tier 1 capital ratio by March 31, 2005. The subsidiary bank has met the Tier 1
leverage and capital ratio requirements since June 30, 2005. Under the terms of the Formal agreement, the board of directors of the subsidiary bank is responsible for the proper and sound management of the Bank and must appoint a compliance
committee from among their independent members, and report to the OCC on the progress in complying with the agreement. The subsidiary bank board appointed a compliance committee and has filed the required reports with the OCC.

The Companys board of directors also adopted a resolution with the Federal Reserve Bank of Cleveland, under authority given it by the Board of Governors of the
Federal Reserve System, the federal regulatory agency for the Company. As with the agreement of the OCC, the Federal Reserve resolution necessitates certain actions and restrictions. Without prior Federal Reserve approval and a 30 day prior notice
requirement, the resolution prohibits the Company from paying dividends, incurring debt, or participating in the acquisition of treasury stock. In addition, prior written approval is required before engaging in any non-bank activities. To date, the
Company has taken, and intends to continue to take, all appropriate steps to comply with the Federal Reserve requirements.

NOTE 3 - RECENT ACCOUNTING
PRONOUNCEMENTS

In February 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting (FAS)
No. 155, Accounting for Certain Hybrid Instruments, as an amendment of FASB Statements No. 133 and 140. FAS No. 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the
need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. This statement is effective for all financial instruments acquired or issued after the beginning of an entitys
first fiscal year that begins after September 15, 2006. The adoption of this standard is not expected to have a material effect on the Companys results of operations or financial position.

In March 2006, the FASB issued FAS No. 156, Accounting for Servicing of Financial Assets. This Statement, which is an amendment to FAS No. 140, will
simplify the accounting for servicing assets and liabilities, such as those common with mortgage securitization activities. Specifically, FAS No. 156 addresses the recognition and measurement of separately recognized servicing assets and
liabilities and provides an approach to simplify efforts to obtain hedge-like (offset) accounting. FAS No. 156 also clarifies when an obligation to service financial assets should be separately recognized as a servicing asset or a servicing
liability, requires that a separately recognized servicing asset or servicing liability be initially measured at fair value, if practicable, and permits an entity with a separately recognized servicing asset or servicing liability to choose either
of the amortization or fair value methods for subsequent measurement. The provisions of FAS No. 156 are effective as of the beginning of the first fiscal year that begins after September 15, 2006. The adoption of this standard is not
expected to have a material effect on the Companys results of operations or financial position.

In June 2006, the FASB issued FASB Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes. FIN 48 is an interpretation of FAS No. 109, Accounting for Income Taxes, and it seeks to reduce the diversity in practice associated with certain
aspects of measurement and recognition in accounting for income taxes. In addition, FIN No. 48 requires expanded disclosure with respect to the uncertainty in income taxes and is effective for fiscal years beginning after December 15,
2006. The Company is currently evaluating the impact the adoption of the standard will have on the Companys results of operations.



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations

Table One

SELECTED FINANCIAL DATA(Dollars in thousands, except per share data)



|                                 |  |                            |         |   |                           |   |         |                          |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------- |  | -------------------------- | ------- | - | ------------------------- | - | ------- | ------------------------ |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                 |  | (Unaudited)                |         |   | (Unaudited)               |   |         |                          |  |   |         |   |  |      |        
|                                 |  | Three Months EndedJune 30, |         |   | Six Months Ended June 30, |   |         | Years ended December 31, | 
|                                 |  | 2006                       |         |   | 2005                      |   |         | 2006                     |  |   | 2005    |   |  | 2005 |         |   | 2004 |   |         | 2003 | 
|SUMMARY OF OPERATIONS            |  |                            |         |   |                           |   |         |                          |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total interest income            |  | $                          | 3,442   |   |                           | $ | 3,271   |                          |  | $ | 6,803   |   |  | $    | 6,577   |   |      | $ | 13,128  |      |  | $ | 13,406  |   |  | $ | 13,319  |  
|Total interest expense           |  |                            | 1,147   |   |                           |   | 1,010   |                          |  |   | 2,270   |   |  |      | 1,997   |   |      |   | 4,070   |      |  |   | 4,195   |   |  |   | 4,603   |  
|Net interest income              |  |                            | 2,295   |   |                           |   | 2,261   |                          |  |   | 4,533   |   |  |      | 4,580   |   |      |   | 9,058   |      |  |   | 9,211   |   |  |   | 8,716   |  
|Provision for loan losses        |  |                            |        |   |                           |   | 90      |                          |  |   |        |   |  |      | 180     |   |      |   | 180     |      |  |   | 300     |   |  |   | 435     |  
|Total other income               |  |                            | 383     |   |                           |   | 306     |                          |  |   | 710     |   |  |      | 679     |   |      |   | 1,378   |      |  |   | 1,284   |   |  |   | 1,346   |  
|Total other expenses             |  |                            | 2,004   |   |                           |   | 1,857   |                          |  |   | 3,817   |   |  |      | 3,788   |   |      |   | 7,451   |      |  |   | 6,747   |   |  |   | 6,342   |  
|Income before income taxes       |  |                            | 673     |   |                           |   | 620     |                          |  |   | 1,425   |   |  |      | 1,291   |   |      |   | 2,804   |      |  |   | 3,448   |   |  |   | 3,285   |  
|Net income                       |  |                            | 549     |   |                           |   | 511     |                          |  |   | 1,149   |   |  |      | 1,057   |   |      |   | 2,262   |      |  |   | 2,637   |   |  |   | 2,518   |  
|                                 |  |                            |         |   |                           |   |        
|PER SHARE DATA                   |  |                            |         |   |                           |   |         |                          |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Net income                       |  | $                          | 0.36    |   |                           | $ | 0.33    |                          |  | $ | 0.75    |   |  | $    | 0.69    |   |      | $ | 1.48    |      |  | $ | 1.73    |   |  | $ | 1.64    |  
|Cash dividends declared          |  |                            | 0.19    |   |                           |   | 0.19    |                          |  |   | 0.38    |   |  |      | 0.38    |   |      |   | 0.76    |      |  |   | 0.76    |   |  |   | 0.73    |  
|Book value per share             |  |                            | 15.48   |   |                           |   | 15.77   |                          |  |   | 15.48   |   |  |      | 15.77   |   |      |   | 15.68   |      |  |   | 15.67   |   |  |   | 15.07   |  
|                                 |  |                            |         |   |                           |   |        
|AVERAGE BALANCE SHEET SUMMARY    |  |                            |         |   |                           |   |         |                          |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total loans, net                 |  | $                          | 133,690 |   |                           | $ | 145,206 |                          |  | $ | 134,053 |   |  | $    | 148,609 |   |      | $ | 144,528 |      |  | $ | 151,562 |   |  | $ | 137,826 |  
|Investment securities            |  |                            | 109,213 |   |                           |   | 104,266 |                          |  |   | 109,292 |   |  |      | 105,630 |   |      |   | 102,882 |      |  |   | 110,528 |   |  |   | 117,758 |  
|Deposits - interest bearing      |  |                            | 189,559 |   |                           |   | 203,143 |                          |  |   | 191,286 |   |  |      | 206,662 |   |      |   | 200,902 |      |  |   | 215,937 |   |  |   | 217,064 |  
|Stockholders equity             |  |                            | 25,270  |   |                           |   | 24,282  |                          |  |   | 25,158  |   |  |      | 24,148  |   |      |   | 24,409  |      |  |   | 23,092  |   |  |   | 21,884  |  
|Total assets                     |  |                            | 262,563 |   |                           |   | 273,626 |                          |  |   | 265,035 |   |  |      | 277,103 |   |      |   | 270,500 |      |  |   | 284,930 |   |  |   | 277,952 |  
|                                 |  |                            |         |   |                           |   |        
|SELECTED RATIOS                  |  |                            |         |   |                           |   |         |                          |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Return on average assets         |  |                            | 0.84    | % |                           |   | 0.75    | %                        |  |   | 0.87    | % |  |      | 0.77    | % |      |   | 0.84    | %    |  |   | 0.93    | % |  |   | 0.91    | %
|Return on average equity         |  |                            | 8.71    | % |                           |   | 8.44    | %                        |  |   | 9.21    | % |  |      | 8.83    | % |      |   | 9.27    | %    |  |   | 11.42   | % |  |   | 11.51   | %
|Average equity to average assets |  |                            | 9.62    | % |                           |   | 8.87    | %                        |  |   | 9.49    | % |  |      | 8.71    | % |      |   | 9.02    | %    |  |   | 8.10    | % |  |   | 7.87    | %
|Dividend payout ratio            |  |                            | 52.78   | % |                           |   | 57.58   | %                        |  |   | 50.67   | % |  |      | 55.07   | % |      |   | 51.35   | %    |  |   | 43.93   | % |  |   | 44.51   | %
|Loan to Deposit ratio            |  |                            | 62.17   | % |                           |   | 64.69   | %                        |  |   | 62.17   | % |  |      | 64.69   | % |      |   | 61.79   | %    |  |   | 65.35   | % |  |   | 60.64   | %



|                                                  |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        
|------------------------------------------------- |  | ----------- | ------- | ------------ | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                                                  |  | (Unaudited) |         |              |   |         |  |     
|                                                  |  | June 30,    |         | December 31,
|                                                  |  | 2006        |         | 2005         |   | 2005    |  | 2004 |         | 2003
|BALANCE SHEET                                     |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        
|Investments                                       |  | $           | 106,282 |              | $ | 98,827  |  | $    | 107,998 |      | $ | 106,561 |  | $ | 119,245
|Loans                                             |  |             | 130,437 |              |   | 143,813 |  |      | 135,214 |      |   | 154,331 |  |   | 146,711
|Other assets                                      |  |             | 21,024  |              |   | 25,183  |  |      | 23,001  |      |   | 18,910  |  |   | 18,155 
|                                                  |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        
|Total Assets                                      |  | $           | 257,743 |              | $ | 267,823 |  | $    | 266,213 |      | $ | 279,802 |  | $ | 284,111
|                                                  |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        
|Deposits                                          |  | $           | 209,803 |              | $ | 222,327 |  | $    | 218,817 |      | $ | 236,171 |  | $ | 241,947
|Federal funds purchased and repurchase agreements |  |             | 20,931  |              |   | 15,665  |  |      | 19,084  |      |   | 15,759  |  |   | 15,089 
|FHLB borrowings                                   |  |             | 2,364   |              |   | 2,405   |  |      | 2,385   |      |   | 2,425   |  |   | 2,464  
|Long term debt                                    |  |             |        |              |   | 2,000   |  |      | 1,000   |      |   |        |  |   |       
|Other liabilities                                 |  |             | 984     |              |   | 1,325   |  |      | 968     |      |   | 1,494   |  |   | 1,580  
|Stockholders equity                              |  |             | 23,661  |              |   | 24,101  |  |      | 23,959  |      |   | 23,953  |  |   | 23,031 
|                                                  |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        
|Total Liabilities and Stockholders equity        |  | $           | 257,743 |              | $ | 267,823 |  | $    | 266,213 |      | $ | 279,802 |  | $ | 284,111
|                                                  |  |             |         |              |   |         |  |      |         |      |   |         |  |   |        



11



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and

Results of Holding Company 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 Company), and its subsidiary
for the three and six month periods ended June 30, 2006 and 2005. 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, 2005.

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.

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

Other Than Temporary Impairment of Equity Securities:Equity securities are evaluated periodically to determine whether a
decline in their value is other than temporary. Management utilizes criteria such as the magnitude and duration of the decline, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary. The
term other than temporary is not intended to indicate that the decline is permanent. It indicates that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair
values equal to, or greater than, the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized.

Allowance for Loan Losses: Arriving at an appropriate level of allowance for loan losses involves a high degree of judgment. The Companys allowance for loan
losses provides for probable losses based upon evaluations of known, and inherent risks in the loan portfolio. Management uses historical information to assess the adequacy of the allowance for loan losses as well as the prevailing business
environment; as it is affected by changing economic conditions and various external factors, which may impact the portfolio in ways currently unforeseen. The allowance is increased by provisions for loan losses and by recoveries of loans previously
charged-off and reduced by loans charged-off. For a full discussion of the Companys methodology of assessing the adequacy of the reserve for loan losses, refer to Note 1 of the Consolidated Financial Statements.

Goodwill and Other Intangible Assets:As discussed in Note 1 of the notes to the Consolidated Financial Statements, the Company must assess goodwill and other
intangible assets each year for impairment. This assessment involves estimating cash flows for future periods. If the future cash flows were less than the recorded goodwill and other intangible assets balances, we would be required to take a charge
against earnings to write down the assets to the lower value.

Deferred Tax Assets: The Company uses an estimate of future earnings to support its
position that the benefit of the deferred tax assets will be realized. If future income should prove non-existent or less than the amount of the deferred tax assets within the tax years to which they may be applied, the asset may not be realized and
our net income will be reduced. The deferred tax assets are described further in Note 1 of the Consolidated Financial Statements.

OVERVIEW

The Company reported net income of $1,149,476 or $.75 per share for the six months ended June 30, 2006 compared to $1,056,512 or $.69 per share
for the same period during 2005. The increase of $92,964 or 8.8% in earnings was primarily due to the increase in noninterest income combined with the decline in the provision for loan losses, offset in part by the decrease in net interest income
and an increase in noninterest expenses for the six months ended June 30, 2006 as compared to the same period in 2005.

For the second quarter of
2006, net income was $549,433 or $.36 per share as compared to $510,783 or $.33 per share for the same period in 2005. The increase in earnings of $38,650 or 7.6% was primarily due to increases in net interest income and noninterest income combined
with the reduction in the provision for loan losses, offset in part by an increase in noninterest expenses. The ROA was .84% for the three months ended June 30, 2006 as compared to .75% for the same period of the prior year. For the three
months ended June 30, 2006 compared to June 30, 2005, the ROE was 8.71% and 8.44%, respectively.



12



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



OVERVIEW - Continued

Net interest income increased $33,103 or 1.5% primarily due to the increase in the interest rates earned on investment securities, offset in part by the decrease in interest earned on loans and the increased interest paid on interest
bearing liabilities. The provision for loan losses was also decreased by $90,000 in the second quarter of 2006 as compared to the same period in 2005. The increase in noninterest income was primarily due to the increase in service charges and other
fee income and the increase in gains on sales of investment securities offset in part by an decrease in other operating income. Noninterest expenses increased $146,554 or 7.9% during the three month period ended June 30, 2006 as compared to the
same period in 2005 primarily due to the increase in salary and employee benefits expense combined with the increase in occupancy expenses, offset in part by the reduction in other operating expenses.

The Company ended the second quarter of 2006 with total assets of $257,743,368. Loans declined since December 31, 2005 by $4,777,544, or 3.5%, to $130.4 million.
Total deposits decreased by $9,014,806, or 4.1% since December 31, 2005 and was primarily due to decreases in noninterest bearing and interest bearing demand deposits and savings deposits, which were offset in part by the increase in time
deposits. The allowance for loan losses amounted to $2,325,159 or 1.8% of total loans at June 30, 2006, compared to $2,319,871 or 1.7% of total loans at December 31, 2005. Non-performing assets were $1,631,000 at June 30, 2006, as
compared to $1,510,000 at December 31, 2005. The increase in non-performing assets was primarily due to the increase in loans placed in nonaccrual during the first six months of 2006.

During the second quarter of 2006, the Company repaid the $1 million loan obtained on a non-revolving $3 million line of credit with a financial institution. There were
no outstanding borrowings on this line of credit at June 30, 2006. The Companys line of credit available under this agreement is $1 million.

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

EARNINGS ANALYSIS - For the six months ended June 30, 2006

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. Table Two presents the average balance sheets
and an interest rate analysis for the six months ended June 30, 2006 and 2005 and the year ended December 31, 2005.

For the six months ended
June 30, 2006, net interest income was $4,532,717, a decrease of $47,154 or 1.0%, from the same period in 2005. The decrease in net interest income was primarily due to the increase in interest paid on deposit liabilities combined with the
decline in interest and fees on loans offset in part by the increase in interest earned on investment securities.

During the six months ended
June 30, 2006, interest expense increased $272,929 or 13.7% as compared to the same period in 2005. Increases in the average volume of time deposits and repurchase agreements and the interest rates paid on interest bearing liabilities, offset
in part by the decrease in the average volume of savings deposits contributed to the increase in interest expense during the six month period ended June 30, 2006. The average yield paid on interest bearing liabilities increased .28%, from 1.86%
at December 31, 2005 to 2.14% at June 30, 2006. Interest and fees on loans decreased $257,024 or 5.5%, from the same period in 2005. The decline in interest and fees on loans during the six month period ended June 30, 2006 was
primarily due to the decline in the average loan volume which was partially offset by an increase in the average yield on loans. The average loan volume decreased $10.5 million or 7.2% in 2006. The taxable equivalent yield on loans increased .21% in
2006 from 6.67% at December 31, 2005 to 6.88% at June 30, 2006. Interest income on investment securities during the first six months of 2006 increased $422,016 or 22.8% as compared to the same period of the prior year. The rise in interest
rates combined with the increase in the average volume of investment securities contributed to the increase in interest earned on investment securities during the first six months of 2006. The taxable equivalent yield on investment securities rose
..67% in 2006, from 3.99% at December 31, 2005 to 4.66% at June 30, 2006. The average volume of investment securities increased $6.4 million or 6.2% since December 31, 2005.



13



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Table Two Average Balance Sheets and Interest Rate Analysis(dollars 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 six months ended June 30, 2006 and 2005 and the year ended December 31, 2005. Average balance sheet information for the periods ended June 30, 2006 and 2005 and December 31, 2005 was
compiled using the daily averages. 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 cost. Non-accrual
loans were included in the average balance computations; however, no interest was included in income subsequent to the non-accrual status classification.



|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ----------- | ------------- | ----- | ------------- |  | - | ----------- | - | ----------- | - | ------ | ------------- | ---- | - | -------- | - | ----------- | - |  | - | ----- |  | ---- | -
|                                                                                                                                                                                                                                                                                                                                                           |  | (Unaudited)   |         |   |                   |   |             |               |       |               |  |   | (Unaudited) |  
|                                                                                                                                                                                                                                                                                                                                                           |  | June 30, 2006 |         |   | December 31, 2005 |   |             | June 30, 2005 |      
|                                                                                                                                                                                                                                                                                                                                                           |  | AverageVolume |         |   | Interest          |   | AverageRate |               |       | AverageVolume |  |   | Interest    |   | AverageRate |   |        | AverageVolume |      |   | Interest |   | AverageRate |  
|ASSETS:                                                                                                                                                                                                                                                                                                                                                    |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Investment securities:                                                                                                                                                                                                                                                                                                                                     |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|U.S. Treasury and U. S. Government agencies                                                                                                                                                                                                                                                                                                                |  | $             | 41,572  |   |                   | $ | 780         |               | 3.78  | %             |  | $ | 45,684      |   |             | $ | 1,492  |               | 3.27 | % |          | $ | 47,617      |   |  | $ | 756   |  | 3.20 | %
|Mortgage backed securities                                                                                                                                                                                                                                                                                                                                 |  |               | 45,441  |   |                   |   | 1,055       |               | 4.68  | %             |  |   | 37,239      |   |             |   | 1,460  |               | 3.92 | % |          |   | 38,086      |   |  |   | 718   |  | 3.80 | %
|States and political subdivisions                                                                                                                                                                                                                                                                                                                          |  |               | 21,963  |   |                   |   | 406         |               | 3.73  | %             |  |   | 19,050      |   |             |   | 697    |               | 3.66 | % |          |   | 18,607      |   |  |   | 339   |  | 3.67 | %
|Other securities                                                                                                                                                                                                                                                                                                                                           |  |               | 316     |   |                   |   | 30          |               | 19.14 | %             |  |   | 909         |   |             |   | 36     |               | 3.96 | % |          |   | 1,320       |   |  |   | 30    |  | 4.58 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total Investment securities:                                                                                                                                                                                                                                                                                                                               |  |               | 109,292 |   |                   |   | 2,271       |               | 4.19  | %             |  |   | 102,882     |   |             |   | 3,685  |               | 3.58 | % |          |   | 105,630     |   |  |   | 1,843 |  | 3.52 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |      
|Interest bearing deposits                                                                                                                                                                                                                                                                                                                                  |  |               | 615     |   |                   |   | 14          |               | 4.59  | %             |  |   | 881         |   |             |   | 29     |               | 3.29 | % |          |   | 640         |   |  |   | 8     |  | 2.52 | %
|Federal funds sold                                                                                                                                                                                                                                                                                                                                         |  |               | 5,020   |   |                   |   | 114         |               | 4.58  | %             |  |   | 5,646       |   |             |   | 178    |               | 3.15 | % |          |   | 5,675       |   |  |   | 75    |  | 2.67 | %
|Loans, net of unearned income                                                                                                                                                                                                                                                                                                                              |  |               | 134,053 |   |                   |   | 4,380       |               | 6.59  | %             |  |   | 144,528     |   |             |   | 9,208  |               | 6.37 | % |          |   | 148,609     |   |  |   | 4,637 |  | 6.29 | %
|Other earning assets                                                                                                                                                                                                                                                                                                                                       |  |               | 854     |   |                   |   | 24          |               | 5.67  | %             |  |   | 1,257       |   |             |   | 28     |               | 2.23 | % |          |   | 765         |   |  |   | 14    |  | 3.69 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total earning assets                                                                                                                                                                                                                                                                                                                                       |  |               | 249,834 |   |                   |   | 6,803       |               | 5.49  | %             |  |   | 255,194     |   |             |   | 13,128 |               | 5.14 | % |          |   | 261,319     |   |  |   | 6,577 |  | 5.08 | %
|Cash and due from banks                                                                                                                                                                                                                                                                                                                                    |  |               | 5,491   |   |                   |   |             |               |       |               |  |   | 6,092       |   |             |   |        |               |      |   |          |   | 6,144       |   |  |   |       |  |      |  
|Bank premises and equipment                                                                                                                                                                                                                                                                                                                                |  |               | 4,094   |   |                   |   |             |               |       |               |  |   | 4,111       |   |             |   |        |               |      |   |          |   | 4,023       |   |  |   |       |  |      |  
|Other assets                                                                                                                                                                                                                                                                                                                                               |  |               | 7,954   |   |                   |   |             |               |       |               |  |   | 7,566       |   |             |   |        |               |      |   |          |   | 8,049       |   |  |   |       |  |      |  
|Allowance for loan losses                                                                                                                                                                                                                                                                                                                                  |  |               | (2,338  | ) |                   |   |             |               |       |               |  |   | (2,463      | ) |             |   |        |               |      |   |          |   | (2,432      | ) |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total Assets                                                                                                                                                                                                                                                                                                                                               |  | $             | 265,035 |   |                   |   |             |               |       |               |  | $ | 270,500     |   |             |   |        |               |      |   |          | $ | 277,103     |   |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|LIABILITIES                                                                                                                                                                                                                                                                                                                                                |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Time deposits                                                                                                                                                                                                                                                                                                                                              |  | $             | 87,407  |   |                   | $ | 1,530       |               | 3.53  | %             |  | $ | 83,666      |   |             | $ | 2,750  |               | 3.29 | % |          | $ | 84,095      |   |  | $ | 1,334 |  | 3.20 | %
|Savings deposits                                                                                                                                                                                                                                                                                                                                           |  |               | 66,440  |   |                   |   | 291         |               | 0.88  | %             |  |   | 78,648      |   |             |   | 704    |               | 0.90 | % |          |   | 83,561      |   |  |   | 378   |  | 0.91 | %
|Interest bearing demand deposits                                                                                                                                                                                                                                                                                                                           |  |               | 37,439  |   |                   |   | 57          |               | 0.31  | %             |  |   | 38,588      |   |             |   | 120    |               | 0.31 | % |          |   | 39,006      |   |  |   | 54    |  | 0.28 | %
|Federal funds purchased and repurchase agreements                                                                                                                                                                                                                                                                                                          |  |               | 19,238  |   |                   |   | 307         |               | 3.22  | %             |  |   | 13,894      |   |             |   | 312    |               | 2.25 | % |          |   | 15,695      |   |  |   | 162   |  | 2.08 | %
|FHLB and other long-term borrowings                                                                                                                                                                                                                                                                                                                        |  |               | 3,159   |   |                   |   | 85          |               | 5.43  | %             |  |   | 3,501       |   |             |   | 184    |               | 5.26 | % |          |   | 2,813       |   |  |   | 69    |  | 4.95 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total interest bearing liabilities                                                                                                                                                                                                                                                                                                                         |  |               | 213,683 |   |                   |   | 2,270       |               | 2.14  | %             |  |   | 218,297     |   |             |   | 4,070  |               | 1.86 | % |          |   | 225,170     |   |  |   | 1,997 |  | 1.79 | %
|Demand deposits                                                                                                                                                                                                                                                                                                                                            |  |               | 25,113  |   |                   |   |             |               |       |               |  |   | 26,388      |   |             |   |        |               |      |   |          |   | 26,319      |   |  |   |       |  |      |  
|Other liabilities                                                                                                                                                                                                                                                                                                                                          |  |               | 1,081   |   |                   |   |             |               |       |               |  |   | 1,406       |   |             |   |        |               |      |   |          |   | 1,466       |   |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total Liabilities                                                                                                                                                                                                                                                                                                                                          |  |               | 239,877 |   |                   |   |             |               |       |               |  |   | 246,091     |   |             |   |        |               |      |   |          |   | 252,955     |   |  |   |       |  |      |  
|STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                       |  |               | 25,158  |   |                   |   |             |               |       |               |  |   | 24,409      |   |             |   |        |               |      |   |          |   | 24,148      |   |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total Liabilities and Stockholders Equity                                                                                                                                                                                                                                                                                                                 |  | $             | 265,035 |   |                   |   |             |               |       |               |  | $ | 270,500     |   |             |   |        |               |      |   |          | $ | 277,103     |   |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Net yield on earning assets                                                                                                                                                                                                                                                                                                                                |  |               |         |   |                   | $ | 4,533       |               | 3.66  | %             |  |   |             |   |             | $ | 9,058  |               | 3.55 | % |          |   |             |   |  | $ | 4,580 |  | 3.53 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                                                          
|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 six months ended June 30, 2006 and 2005, and the year ended December 31, 2005, respectively. The effect of this adjustment is presented below. | 
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |      
|Investment securities                                                                                                                                                                                                                                                                                                                                      |  | $             | 109,292 |   |                   | $ | 2,527       |               | 4.66  | %             |  | $ | 102,882     |   |             | $ | 4,110  |               | 3.99 | % |          | $ | 105,630     |   |  | $ | 2,055 |  | 3.92 | %
|Loans                                                                                                                                                                                                                                                                                                                                                      |  |               | 134,053 |   |                   |   | 4,574       |               | 6.88  | %             |  |   | 144,528     |   |             |   | 9,641  |               | 6.67 | % |          |   | 148,609     |   |  |   | 4,856 |  | 6.59 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Total earning assets                                                                                                                                                                                                                                                                                                                                       |  | $             | 249,834 |   |                   | $ | 7,253       |               | 5.85  | %             |  | $ | 255,194     |   |             | $ | 13,986 |               | 5.48 | % |          | $ | 261,319     |   |  | $ | 7,008 |  | 5.41 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  
|Taxable equivalent net yield on earning assets                                                                                                                                                                                                                                                                                                             |  |               |         |   |                   | $ | 4,983       |               | 4.02  | %             |  |   |             |   |             | $ | 9,916  |               | 3.89 | % |          |   |             |   |  | $ | 5,011 |  | 3.87 | %
|                                                                                                                                                                                                                                                                                                                                                           |  |               |         |   |                   |   |             |               |       |               |  |   |             |   |             |   |        |               |      |   |          |   |             |   |  |   |       |  |      |  



14



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



EARNINGS ANALYSIS - For the six months ended June 30, 2006 (Continued)

Noninterest Income

Noninterest income increased $30,473 or
4.5% for the six months ended June 30, 2006 as compared to same period of the prior year. The increase in noninterest income was primarily due to the increase in service charges and other fee income, offset in part by a decrease in gains on
sales of investment securities combined with a decrease in other operating income. Service charges increased $80,020 during the six months ended June 30, 2006, up 22.6%, from the same period in 2005. The increase in service charges primarily
resulted from an increase in overdraft fees assessed on deposit accounts as compared to the prior year due to implementation of an overdraft protection program in December 2005. The Company and its subsidiary bank accounted for securities gains of
$65,341 and securities losses of $21,232 during the six month period ended June 30, 2006 and securities gains of $95,200 and securities losses of $14,955 during the period ended June 30, 2005. 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. For the six month period ended June 30, 2006, other operating income decreased $13,411 or 5.5% compared to the same period in 2005. The decline in other operating income
primarily relates to the gains received in 2005 on sales of assets and a decline in miscellaneous income compared to the same period in 2005. Additionally, the declines in other operating income were offset by increases in ATM fees, other credit
card fee income and an increase in premiums and service fees on the secondary market mortgage sales during the six months ended June 30, 2006 compared to the same period in the prior year.

Noninterest Expense

Noninterest expense increased $29,763 or
..8% for the six months ended June 30, 2006 as compared to same period of the prior year. The increase in noninterest expense was primarily due to increases in salary and employee benefits and net occupancy expense, offset in part by a decrease
in other operating expenses.

Salary and employee benefits increased $115,292 or 6.1% during the six months ended June 30, 2006 over the same period
in 2005. The increased salary and employee benefit expense in 2006 compared to 2005 was primarily due to the hiring of additional personnel to enhance lending development and operations, and normal annual merit adjustments. Occupancy expenses rose
$9,412 or 1.6% during the six months ended June 30, 2006 compared to the same period in 2005. Increased real estate taxes and property insurance costs primarily contributed to the increase in occupancy expenses in 2006 as compared to 2005.

Other operating expense amounted to $1,234,699, a decrease of $94,941, or 7.1%, compared to the same period of the prior year. The decline in other
operating expenses was attributable primarily to a reduction in service expenses due to the subsidiary banks compliance with the Formal Agreement in 2005, combined with a decrease in directors fees, advertising expenses, postage and
transportation expenses and other expenses, offset in part by increased regulatory assessments and other taxes.

Other operating expenses for the six
months ended June 30 included the following:



|                                            |  |      |           |      |   |          
|------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|Unaudited                                   |  | 2006 |           | 2005
|Directors fees                             |  | $    | 78,175    |      | $ | 97,800   
|Stationery and supplies                     |  |      | 93,979    |      |   | 90,458   
|Regulatory assessment and deposit insurance |  |      | 107,995   |      |   | 78,835   
|Advertising                                 |  |      | 57,870    |      |   | 70,197   
|Postage and transportation                  |  |      | 98,445    |      |   | 107,988  
|Other taxes                                 |  |      | 108,601   |      |   | 72,958   
|Service expense                             |  |      | 241,252   |      |   | 291,377  
|Other                                       |  |      | 448,382   |      |   | 520,027  
|                                            |  |      |           |      |   |          
|Total                                       |  | $    | 1,234,699 |      | $ | 1,329,640
|                                            |  |      |           |      |   |          

Income Taxes

Income tax expense for the six month period ended June 30, 2006 was $275,293, increasing 17.3% compared to the same period in 2005. Income tax expense increased primarily due to the increase in pre-taxable income of $133,556, offset by
an increase in tax-exempt income during the first six months of 2006 over the same period in 2005. Components of the income tax expense for June 30, 2006 were $214,899 for federal taxes and $60,394 for West Virginia corporate net income taxes.

Federal income tax rates and West Virginia corporate net income tax rates remain consistent at 34% and 9%, respectively, for the six months ended
June 30, 2006 and 2005 and for the year ended December 31, 2005.



15



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Table Three Average Balance Sheets and Interest Rate Analysis(dollars 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 June 30, 2006 and 2005. Average balance sheet information for the periods ended June 30, 2006 and 2005 was compiled using the daily averages. 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 cost. 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 June 30, 2006 and 2005.



|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ------------- | - | ----------- |  | ----- | ------------- |  | - | -------- | - | ----------- | - | ----- |  | ---- | -
|                                                                                                                                                                                                                                                                                                                       |  | (Unaudited)   |         |   | (Unaudited)   |  
|                                                                                                                                                                                                                                                                                                                       |  | June 30, 2006 |         |   | June 30, 2005 |  
|                                                                                                                                                                                                                                                                                                                       |  | AverageVolume |         |   | Interest      |   | AverageRate |  |       | AverageVolume |  |   | Interest |   | AverageRate |  
|ASSETS:                                                                                                                                                                                                                                                                                                                |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Investment securities:                                                                                                                                                                                                                                                                                                 |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|U.S. Treasury and other U. S. Government agencies                                                                                                                                                                                                                                                                      |  | $             | 40,835  |   |               | $ | 388         |  | 3.81  | %             |  | $ | 47,763   |   |             | $ | 382   |  | 3.21 | %
|Mortgage backed securities                                                                                                                                                                                                                                                                                             |  |               | 45,944  |   |               |   | 541         |  | 4.72  | %             |  |   | 37,712   |   |             |   | 361   |  | 3.84 | %
|Obligations of states and political subdivisions                                                                                                                                                                                                                                                                       |  |               | 22,123  |   |               |   | 205         |  | 3.72  | %             |  |   | 18,186   |   |             |   | 166   |  | 3.66 | %
|Other securities                                                                                                                                                                                                                                                                                                       |  |               | 311     |   |               |   | 28          |  | 36.11 | %             |  |   | 605      |   |             |   | 4     |  | 2.65 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total Investment securities:                                                                                                                                                                                                                                                                                           |  |               | 109,213 |   |               |   | 1,162       |  | 4.27  | %             |  |   | 104,266  |   |             |   | 913   |  | 3.51 | %
|Interest bearing deposits                                                                                                                                                                                                                                                                                              |  |               | 217     |   |               |   | 3           |  | 5.55  | %             |  |   | 750      |   |             |   | 5     |  | 2.67 | %
|Federal funds sold                                                                                                                                                                                                                                                                                                     |  |               | 3,430   |   |               |   | 42          |  | 4.91  | %             |  |   | 6,694    |   |             |   | 47    |  | 2.82 | %
|Loans, net of unearned income                                                                                                                                                                                                                                                                                          |  |               | 133,690 |   |               |   | 2,219       |  | 6.66  | %             |  |   | 145,206  |   |             |   | 2,299 |  | 6.35 | %
|Other earning assets                                                                                                                                                                                                                                                                                                   |  |               | 920     |   |               |   | 16          |  | 6.98  | %             |  |   | 742      |   |             |   | 7     |  | 3.78 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total earning assets                                                                                                                                                                                                                                                                                                   |  |               | 247,470 |   |               |   | 3,442       |  | 5.58  | %             |  |   | 257,658  |   |             |   | 3,271 |  | 5.09 | %
|Cash and due from banks                                                                                                                                                                                                                                                                                                |  |               | 5,360   |   |               |   |             |  |       |               |  |   | 6,213    |   |             |   |       |  |      |  
|Bank premises and equipment                                                                                                                                                                                                                                                                                            |  |               | 4,067   |   |               |   |             |  |       |               |  |   | 4,187    |   |             |   |       |  |      |  
|Other assets                                                                                                                                                                                                                                                                                                           |  |               | 8,004   |   |               |   |             |  |       |               |  |   | 8,040    |   |             |   |       |  |      |  
|Allowance for loan losses                                                                                                                                                                                                                                                                                              |  |               | (2,338  | ) |               |   |             |  |       |               |  |   | (2,472   | ) |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total Assets                                                                                                                                                                                                                                                                                                           |  | $             | 262,563 |   |               |   |             |  |       |               |  | $ | 273,626  |   |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|LIABILITIES                                                                                                                                                                                                                                                                                                            |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Time deposits                                                                                                                                                                                                                                                                                                          |  | $             | 87,535  |   |               | $ | 778         |  | 3.56  | %             |  | $ | 82,986   |   |             | $ | 673   |  | 3.25 | %
|Savings deposits                                                                                                                                                                                                                                                                                                       |  |               | 64,869  |   |               |   | 141         |  | 0.87  | %             |  |   | 81,897   |   |             |   | 182   |  | 0.89 | %
|Interest bearing demand deposits                                                                                                                                                                                                                                                                                       |  |               | 37,155  |   |               |   | 27          |  | 0.29  | %             |  |   | 38,260   |   |             |   | 26    |  | 0.27 | %
|Federal funds purchased and repurchase agreements                                                                                                                                                                                                                                                                      |  |               | 19,011  |   |               |   | 162         |  | 3.42  | %             |  |   | 15,703   |   |             |   | 89    |  | 2.27 | %
|FHLB and other long-term borrowings                                                                                                                                                                                                                                                                                    |  |               | 2,941   |   |               |   | 39          |  | 5.32  | %             |  |   | 3,202    |   |             |   | 40    |  | 5.01 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total interest bearing liabilities                                                                                                                                                                                                                                                                                     |  |               | 211,511 |   |               |   | 1,147       |  | 2.18  | %             |  |   | 222,048  |   |             |   | 1,010 |  | 1.82 | %
|Demand deposits                                                                                                                                                                                                                                                                                                        |  |               | 24,680  |   |               |   |             |  |       |               |  |   | 25,947   |   |             |   |       |  |      |  
|Other liabilities                                                                                                                                                                                                                                                                                                      |  |               | 1,102   |   |               |   |             |  |       |               |  |   | 1,349    |   |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total Liabilities                                                                                                                                                                                                                                                                                                      |  |               | 237,293 |   |               |   |             |  |       |               |  |   | 249,344  |   |             |   |       |  |      |  
|STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                   |  |               | 25,270  |   |               |   |             |  |       |               |  |   | 24,282   |   |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total Liabilities and Stockholders Equity                                                                                                                                                                                                                                                                             |  | $             | 262,563 |   |               |   |             |  |       |               |  | $ | 273,626  |   |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Net yield on earning assets                                                                                                                                                                                                                                                                                            |  |               |         |   |               | $ | 2,295       |  | 3.72  | %             |  |   |          |   |             | $ | 2,261 |  | 3.52 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|                                                                                                                                                                                                                                                                                                                      
|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 June 30, 2006 and 2005, respectively. The effect of this adjustment is presented below. | 
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |  
|Investment securities                                                                                                                                                                                                                                                                                                  |  | $             | 109,213 |   |               | $ | 1,291       |  | 4.74  | %             |  | $ | 104,266  |   |             | $ | 1,019 |  | 3.92 | %
|Loans                                                                                                                                                                                                                                                                                                                  |  |               | 133,690 |   |               |   | 2,315       |  | 6.95  | %             |  |   | 145,206  |   |             |   | 2,407 |  | 6.65 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Total earning assets                                                                                                                                                                                                                                                                                                   |  | $             | 247,470 |   |               | $ | 3,667       |  | 5.94  | %             |  | $ | 257,658  |   |             | $ | 3,485 |  | 5.43 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  
|Taxable equivalent net yield on earning assets                                                                                                                                                                                                                                                                         |  |               |         |   |               | $ | 2,520       |  | 4.08  | %             |  |   |          |   |             | $ | 2,475 |  | 3.85 | %
|                                                                                                                                                                                                                                                                                                                       |  |               |         |   |               |   |             |  |       |               |  |   |          |   |             |   |       |  |      |  



16



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



EARNINGS ANALYSIS - For the three months ended June 30, 2006

Net Interest Income

For the three months ended June 30,
2006, net interest income was $2,294,531, increasing $33,103 or 1.5%, from the same period in 2005. The increase in net interest income was primarily due to the increase in interest rates on investment securities, offset in part by a decrease in
interest and fees on loans combined with the increase in interest paid on deposit liabilities. 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 4.08% for the three months ended June 30, 2006, as compared to 3.85% at June 30, 2005. Table Three presents the average balance sheets and an interest rate analysis for
the three months ended June 30, 2006 and 2005.

Interest income increased $170,436 or 5.2% during the second quarter of 2006 compared to the same
period of the prior year. Interest income on investment securities increased $243,567 or 26.5% during the three months ended June 30, 2006 over 2005 and was primarily the result of the increase in the yield earned on investment securities. The
taxable equivalent yield earned on investment securities was 4.74% for the three months ended June 30, 2006 as compared to 3.92% for the same period in 2005. Interest and fees on loans declined $80,138 or 3.5% for the three month period ended
June 30, 2006 as compared to the same period in 2005. The decrease in interest and fees on loans was primarily due to the decline in the average volume of loans.

During the three months ended June 30, 2006, interest expense increased $137,333 or 13.6% as compared to the same period in 2005. The higher interest rates paid on interest bearing liabilities offset in part by
the decrease in the average volume of interest bearing liabilities primarily resulted in the increased interest expense. The average yield paid on interest bearing liabilities increased .36%, from 1.82% at June 30, 2005 to 2.18% at
June 30, 2006. The increase in the average yield on interest bearing liabilities was primarily due to the rise in the interest rates on time deposits, federal funds purchased and repurchase agreements and FHLB and other long term borrowings.

Noninterest Income

Noninterest income
increased $76,453 or 25.0% for the three months ended June 30, 2006 as compared to same period of the prior year. The increase in noninterest income was primarily due to the increase in service charges and other fee income combined with the
increase in gains on sales of investment securities offset in part by a decrease in other operating income.

Service charges increased $45,111 during the
three months ended June 30, 2006, up 23.9%, from the same period in 2005. The increase in service charges primarily resulted from the additional fee income due to implementation of an overdraft protection program in December 2005. The Company
accounted for securities gains of $65,341 and securities losses of $21,126 during the three month period ended June 30, 2006 and securities gains of $9,075 and securities losses of $6,685 during the same period in 2005.

For the second quarter of 2006, other operating income decreased $10,483 or 9.1% as compared to same period of the prior year. The decline in other operating income for
the three months ended June 30, 2006 as compared to 2005 primarily relates to the following: gains received on sales of assets in 2005, a decrease in earnings related to the cash surrender value of the bank owned life insurance on its key
officers, a decrease in income related to checkbook sales, and a decline in miscellaneous income. The declines in other operating income were offset by increases in ATM fees, other credit card fee income and an increase in premiums and service fees
on the secondary market mortgage sales during the three months ended June 30, 2006 compared to the same period in the prior year.

Noninterest
Expense

Noninterest expense increased $146,554 or 7.9% for the three months ended June 30, 2006 as compared to same period of the prior year.
The increase in noninterest expense was primarily due to increases in salary and employee benefits and occupancy expenses offset in part by a decrease in other operating expenses.

Salary and employee benefits increased $185,918 or 20.3% during the three months ended June 30, 2006 over the same period in 2005. The increased salary and employee benefit expense in 2006 compared to 2005
resulted from the following three factors. The subsidiary bank hired additional personnel to enhance lending development and operations. In addition to granting normal annual merit increases the Companys Corporate Governance and Compensation
Committee assessed salaries for key positions and approved adjustments in order to bring compensation in line with the market. This was done to attract and retain a quality team of management and line staff. In 2006 the Company also changed from
monthly to bi-weekly payments for its salaried personnel resulting in additional expense in the second quarter due to the timing of the payments.

Other
operating expense decreased $46,287, or 6.9%, compared to the same period of the prior year. The decline in other operating expenses during the three month period ended June 30, 2006 as compared to 2005 was attributable primarily to the
decreases in service expenses and director fees as result of the subsidiary banks compliance with the Formal Agreement in 2005, combined with decreases in advertising expenses and postage and transportation expenses which were partially offset
by increases in other taxes, regulatory assessments, stationery and supplies expenses and other expenses.



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



EARNINGS ANALYSIS - For the three months ended June 30, 2006

Noninterest Expense - continued

Other operating expenses for the three months ended June 30 included the following:



|                                            |  |      |         |      |   |        
|------------------------------------------- |  | ---- | ------- | ---- | - | -------
|Unaudited                                   |  | 2006 |         | 2005
|Directors fees                             |  | $    | 36,150  |      | $ | 48,925 
|Stationery and supplies                     |  |      | 52,082  |      |   | 45,779 
|Regulatory assessment and deposit insurance |  |      | 53,708  |      |   | 39,277 
|Advertising                                 |  |      | 25,328  |      |   | 31,651 
|Postage and transportation                  |  |      | 49,819  |      |   | 51,928 
|Other taxes                                 |  |      | 55,819  |      |   | 34,351 
|Service expense                             |  |      | 123,776 |      |   | 195,881
|Other                                       |  |      | 223,606 |      |   | 218,783
|                                            |  |      |         |      |   |        
|Total                                       |  | $    | 620,288 |      | $ | 666,575
|                                            |  |      |         |      |   |        

Income Taxes

Income tax expense for the three month period ended June 30, 2006 was $123,912, increasing 13.1% compared to the same period in 2005. Income tax expense increased primarily due to the increase in pre-taxable income of $53,002 during
the three month period ended June 30, 2006 over the same period in 2005. Components of the income tax expense for the three months ended June 30, 2006 were $95,550 for federal taxes and $28,362 for West Virginia corporate net income taxes.

Balance Sheet Analysis

Investments

Investment securities decreased $1.7 million or 1.6% from December 31, 2005 to June 30, 2006. The investment portfolio is managed to attempt to achieve an
optimum mix of asset quality, liquidity and maximum yield on investments. Taxable securities comprised 80.3% and 80.5% of total securities at June 30, 2006 and December 31, 2005, respectively. 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 Company does not have any high risk hybrid/derivative instruments.

Table Four - Investment Portfolio

The following table presents the book values of investment securities (in thousands):



|                                                                                      |  |               |         |                   |   |        
|------------------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                                                                                      |  | (Unaudited)   |         |                  
|                                                                                      |  | June 30, 2006 |         | December 31, 2005
|Securities held to maturity:                                                          |  |               |         |                   |   |        
|Obligations of States & Political Subdivisions                                        |  | $             | 1,497   |                   | $ | 1,776  
|                                                                                      |  |               |         |                   |   |        
|Total held to maturity                                                                |  | $             | 1,497   |                   | $ | 1,776  
|                                                                                      |  |               |         |                   |   |        
|Securities available for sale:                                                        |  |               |         |                   |   |        
|U.S. Treasury securities and obligations of U.S. Government corporations and Agencies |  | $             | 38,689  |                   | $ | 40,590 
|Obligations of States & Political Subdivisions                                        |  |               | 20,117  |                   |   | 19,988 
|Mortgage-Backed Securities                                                            |  |               | 45,605  |                   |   | 45,254 
|Equity Securities                                                                     |  |               | 374     |                   |   | 390    
|                                                                                      |  |               |         |                   |   |        
|Total available for sale                                                              |  | $             | 104,785 |                   | $ | 106,222
|                                                                                      |  |               |         |                   |   |        
|Total                                                                                 |  | $             | 106,282 |                   | $ | 107,998
|                                                                                      |  |               |         |                   |   |        



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Investments - Continued

Investment securities that are classified available for sale are available for sale at any time based upon managements assessment of changes in economic or financial market conditions. These securities are carried at fair value and
the unrealized holding gains and losses, net of taxes, are reflected as a separate component of stockholders equity until realized. 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 decreased
by $3,033,558 and $1,645,259 at June 30, 2006 and December 31, 2005, respectively. The fair value of securities classified as held to maturity was above book value by $18,211 and $34,539 at June 30, 2006 and December 31, 2005,
respectively.

Table Five - Maturity distribution of Investment Portfolio

(dollars in thousands)

The maturity distribution using book value including accretion of discounts and amortization of
premiums and approximate yield of investment securities at June 30, 2006 and December 31, 2005 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)                 |       |       |                               |   |        |                             |         |  |                              |        | 
|                                                 |  | June 30, 2006               |       |       | December 31, 2005             |  
|                                                 |  | Securities Held to Maturity |       |       | Securities Available for Sale |   |        | Securities Held to Maturity |         |  | SecuritiesAvailable for Sale |       
|                                                 |  | Amount                      |       | Yield |                               |   | Amount |                             | Yield   |  |                              | Amount |  | Yield |       |  | Amount |   | Yield |  
|U.S. Treasury and other U.S. Government Agencies |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  
|Within One Year                                  |  | $                           |      |       |                              | % |        | $                           | 7,813   |  | 3.02                         | %      |  | $     |      |  |       | % |       | $ | 8,722   |  | 2.65 | %
|After One But Within Five Years                  |  |                             |      |       |                              |   |        |                             | 30,536  |  | 4.27                         |        |  |       |      |  |       |   |       |   | 30,659  |  | 3.91 |  
|After Five But Within Ten Years                  |  |                             |      |       |                              |   |        |                             | 151     |  | 5.68                         |        |  |       |      |  |       |   |       |   | 1,017   |  | 4.43 |  
|After Ten Years                                  |  |                             |      |       |                              |   |        |                             | 189     |  | 5.37                         |        |  |       |      |  |       |   |       |   | 192     |  | 4.39 |  
|                                                 |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  
|                                                 |  |                             |      |       |                              |   |        |                             | 38,689  |  | 4.03                         |        |  |       |      |  |       |   |       |   | 40,590  |  | 3.65 |  
|                                                 |  |                             |       |       |                               |   |        |                            
|States & Political Subdivisions                  |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  
|Within One Year                                  |  |                             | 365   |       | 5.82                          |   |        |                             | 1,241   |  | 5.34                         |        |  |       | 645   |  | 5.74   |   |       |   | 1,272   |  | 5.46 |  
|After One But Within Five Years                  |  |                             | 1,034 |       | 6.91                          |   |        |                             | 4,546   |  | 4.11                         |        |  |       | 1,034 |  | 6.91   |   |       |   | 5,339   |  | 4.71 |  
|After Five But Within Ten Years                  |  |                             | 98    |       | 7.92                          |   |        |                             | 7,306   |  | 4.95                         |        |  |       | 97    |  | 7.95   |   |       |   | 6,742   |  | 5.21 |  
|After Ten Years                                  |  |                             |      |       |                              |   |        |                             | 7,024   |  | 5.88                         |        |  |       |      |  |       |   |       |   | 6,635   |  | 6.09 |  
|                                                 |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  
|                                                 |  |                             | 1,497 |       | 6.71                          |   |        |                             | 20,117  |  | 5.11                         |        |  |       | 1,776 |  | 6.54   |   |       |   | 19,988  |  | 5.38 |  
|Mortgage - Backed Securities                     |  |                             |      |       |                              |   |        |                             | 45,605  |  | 4.94                         |        |  |       |      |  |       |   |       |   | 45,254  |  | 4.70 |  
|                                                 |  |                             |       |       |                               |   |        |                            
|Equity Securities                                |  |                             |      |       |                              |   |        |                             | 374     |  | 16.64                        |        |  |       |      |  |       |   |       |   | 390     |  | 2.57 |  
|                                                 |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  
|Total                                            |  | $                           | 1,497 |       | 6.71                          | % |        | $                           | 104,785 |  | 4.68                         | %      |  | $     | 1,776 |  | 6.54   | % |       | $ | 106,222 |  | 4.42 | %
|                                                 |  |                             |       |       |                               |   |        |                             |         |  |                              |        |  |       |       |  |        |   |       |   |         |  |      |  



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Loans

Loans
represent the largest asset on the Companys balance sheet. Total loans, net of unearned income, decreased $4.8 million or 3.5% from December 31, 2005 to June 30, 2006. A decline in all loan classifications was experienced during the
first six months of 2006, although the largest declines have been in commercial and consumer loans. The outstanding balances in commercial loans were down by $1,913,000 at June 30, 2006 as compared to December 31, 2005. The demand for
quality commercial loans has been hampered during the first six months of 2006 as a result of increased competition from other lending companies and institutions, as well as the rise in the prime lending rate. The outstanding balances of installment
loans declined $1,596,000 since December 31, 2005.

Real estate residential loans which include real estate construction, real estate farmland, and
real estate residential loans comprised thirty-four percent (34%) of the loan portfolio. Commercial loans which include real estate secured by non-farm, non-residential and commercial and industrial loans comprised forty-five percent
(45%) of the loan portfolio. Installment loans comprised eleven percent (11%) of the loan portfolio. Other loans which include non-rated industrial development obligations, direct financing leases and other loans comprised ten percent
(10%) of the loan portfolio. The changes in the composition of the loan portfolio since December 31, 2005 were a 1% increase in real estate residential loans and a 1% decrease in installment loans.

Table Six - Loan Portfolio

Loans
outstanding are as follows: (in thousands)



|                                              |  |              |         |                  |   |        
|--------------------------------------------- |  | ------------ | ------- | ---------------- | - | -------
|                                              |  | (Unaudited)  |         |                 
|                                              |  | June 30,2006 |         | December 31,2005
|Real Estate - residential:                    |  |              |         |                  |   |        
|Real estate - construction                    |  | $            | 1,020   |                  | $ | 759    
|Real estate  farmland                        |  |              | 392     |                  |   | 405    
|Real estate  residential                     |  |              | 43,231  |                  |   | 44,042 
|                                              |  |              |         |                  |   |        
|                                              |  | $            | 44,643  |                  | $ | 45,206 
|                                              |  |              |         |                  |   |        
|Commercial:                                   |  |              |         |                  |   |        
|Real estate-secured by nonfarm nonresidential |  | $            | 48,112  |                  | $ | 46,587 
|Commercial and industrial                     |  |              | 10,283  |                  |   | 13,721 
|                                              |  |              |         |                  |   |        
|                                              |  | $            | 58,395  |                  | $ | 60,308 
|                                              |  |              |         |                  |   |        
|Installment:                                  |  |              |         |                  |   |        
|Installment and other loans to individuals    |  | $            | 15,052  |                  | $ | 16,648 
|                                              |  |              |         |                  |   |        
|Other:                                        |  |              |         |                  |   |        
|Nonrated industrial development obligations   |  | $            | 12,474  |                  | $ | 13,213 
|Other loans                                   |  |              | 66      |                  |   | 43     
|                                              |  |              |         |                  |   |        
|                                              |  | $            | 12,540  |                  | $ | 13,256 
|                                              |  |              |         |                  |   |        
|Total                                         |  |              | 130,630 |                  |   | 135,418
|Less unearned interest                        |  |              | 193     |                  |   | 204    
|                                              |  |              |         |                  |   |        
|                                              |  | $            | 130,437 |                  | $ | 135,214
|                                              |  |              |         |                  |   |        



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Table Seven

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

(dollars in thousands)

The following table presents the contractual maturities of loans other than installment loans and residential mortgages as of June 30, 2006 and December 31,
2005:



|                                                                     |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       
|-------------------------------------------------------------------- |  | ------------------ | ----- | ------------------------------- | - | --------------- |  | ------------------ | ------ | ------------------------------- | - | --------------- |  | - | ------ |  | - | ------
|                                                                     |  | June 30, 2006      |       | December 31, 2005              
|                                                                     |  | In oneYear or Less |       | After oneYear ThroughFive Years |   | AfterFive Years |  | In oneYear or Less |        | After oneYear ThroughFive Years |   | AfterFive Years
|Real estate construction                                             |  | $                  | 245   |                                 | $ | 421             |  | $                  | 354    |                                 | $ | 31              |  | $ | 369    |  | $ | 359   
|Commercial real estate - secured by nonfarm, nonresidential property |  |                    | 1,471 |                                 |   | 4,190           |  |                    | 42,451 |                                 |   | 1,273           |  |   | 1,966  |  |   | 43,348
|Commercial and industrial                                            |  |                    | 1,933 |                                 |   | 5,257           |  |                    | 3,093  |                                 |   | 559             |  |   | 7,205  |  |   | 5,957 
|Nonrated industrial development obligations                          |  |                    | 615   |                                 |   | 3,530           |  |                    | 8,329  |                                 |   | 402             |  |   | 3,027  |  |   | 9,784 
|                                                                     |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       
|Total                                                                |  | $                  | 4,264 |                                 | $ | 13,398          |  | $                  | 54,227 |                                 | $ | 2,265           |  | $ | 12,567 |  | $ | 59,448
|                                                                     |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       

The following table presents an analysis of fixed and variable rate loans as of June 30, 2006 and
December 31, 2005 along with the contractual maturities of loans other than installment loans and residential mortgages:



|               |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       
|-------------- |  | ------------------ | ----- | ------------------------------- | - | --------------- |  | ------------------ | ------ | ------------------------------- | - | --------------- |  | - | ------ |  | - | ------
|               |  | June 30, 2006      |       | December 31, 2005              
|               |  | In oneYear or Less |       | After oneYear ThroughFive Years |   | AfterFive Years |  | In oneYear or Less |        | After oneYear ThroughFive Years |   | AfterFive Years
|Fixed Rates    |  | $                  | 1,437 |                                 | $ | 7,827           |  | $                  | 9,423  |                                 | $ | 747             |  | $ | 7,805  |  | $ | 9,156 
|Variable Rates |  |                    | 2,827 |                                 |   | 5,571           |  |                    | 44,804 |                                 |   | 1,518           |  |   | 4,762  |  |   | 50,292
|               |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       
|Total          |  | $                  | 4,264 |                                 | $ | 13,398          |  | $                  | 54,227 |                                 | $ | 2,265           |  | $ | 12,567 |  | $ | 59,448
|               |  |                    |       |                                 |   |                 |  |                    |        |                                 |   |                 |  |   |        |  |   |       

Non-performing assets include non-accrual loans on which the collectibility of the full amount of interest is
uncertain; loans which have been renegotiated to provide for a reduction or deferral of interest on principal because of a deterioration in the financial position of the borrower; loans past due ninety days or more as to principal or interest; and
other real estate owned. A summary of nonperforming assets is presented in Table Seven.

Total non-performing loans were $1,631,000 at June 30, 2006
as compared to $1,510,000 at December 31, 2005. The increase in non-performing loans was primarily due to the addition of three non-accrual commercial real estate loans and one residentail real estate loan during the first six months of 2006.

Loans are placed in non-accrual when the principal or interest is past due 90 days or more, unless the loan is both well secured and in the process of
collection. Non-accrual loans were at $1,577,000 or 1.2% of total loans outstanding as of June 30, 2006, as compared to $1,367,000 or 1.0% of total loans at December 31, 2005. Management continues to monitor the nonperforming assets to
ensure against deterioration in collateral values.



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Loans - Continued

Table Eight - Risk Elements

Loans which are in the process of collection, but are contractually past due 90 days or more as to interest or
principal, renegotiated, non-accrual loans and other real estate are as follows:



|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|---------------------------------------------------------------- |  | -------------------- | ----- | - | ----------------- | - | ----- | - |  | - | ----- | -
|(dollars in thousands)                                           |  | (Unaudited) June 30, |       |   | December 31, 2005 |  
|                                                                 |  | 2006                 |       |   | 2005              |   |      
|Past Due 90 Days or More:                                        |  |                      |       |   |                   |   |       |   |  |   |       |  
|Real estate - residential                                        |  | $                    |      |   |                   | $ |      |   |  | $ | 85    |  
|Commercial                                                       |  |                      |      |   |                   |   | 117   |   |  |   |      |  
|Installment                                                      |  |                      | 1     |   |                   |   | 8     |   |  |   | 5     |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|                                                                 |  | $                    | 1     |   |                   | $ | 125   |   |  | $ | 90    |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|Non-accrual:                                                     |  |                      |       |   |                   |   |       |   |  |   |       |  
|Real estate - residential                                        |  | $                    | 164   |   |                   | $ | 464   |   |  | $ | 64    |  
|Commercial                                                       |  |                      | 1,394 |   |                   |   | 1,503 |   |  |   | 1,262 |  
|Installment                                                      |  |                      | 19    |   |                   |   | 5     |   |  |   | 41    |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|                                                                 |  | $                    | 1,577 |   |                   | $ | 1,972 |   |  | $ | 1,367 |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|Other Real Estate                                                |  | $                    | 53    |   |                   | $ | 53    |   |  | $ | 53    |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|Total non-performing assets                                      |  | $                    | 1,631 |   |                   | $ | 2,150 |   |  | $ | 1,510 |  
|                                                                 |  |                      |       |   |                   |   |       |   |  |   |       |  
|Total non-performing assets to total loans and other real estate |  |                      | 1.25  | % |                   |   | 1.49  | % |  |   | 1.12  | %

Generally, all banks recognize interest income on the accrual basis, except for certain loans which are placed on
a non-accrual status. Loans are placed on a non-accrual status, when in the opinion of management doubt exists as to its collectibility. In accordance with the Office of the Comptroller of the Currency Policy, banks may not accrue interest on any
loan which either the principal or interest is past due 90 days or more unless the loan is both well secured and in the process of collection. The amount of interest income that would have been recognized had the loans performed in accordance with
their original terms was approximately $51,600, $92,500 and $117,900 for the six months ended June 30, 2006 and 2005 and for the year ended December 31, 2005, respectively.



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Table Nine

Analysis of Allowance for Loan Losses

(dollars in thousands)

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



|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|--------------------------------------------------------------------------------- |  | ----------- | ------- | - | ------------ | - | ------- | ---- |  | - | ------- | -
|                                                                                  |  | (Unaudited) |         |   |              |  
|                                                                                  |  | June 30,    |         |   | December 31, |  
|                                                                                  |  | 2006        |         |   | 2005         |   |         | 2005 | 
|Allowance for loan losses:                                                        |  |             |         |   |              |   |         |      |  |   |         |  
|Balance at beginning of period:                                                   |  | $           | 2,320   |   |              | $ | 2,356   |      |  | $ | 2,356   |  
|                                                                                  |  |             |        
|Loans charged off:                                                                |  |             |         |   |              |   |         |      |  |   |         |  
|Real estate - residential                                                         |  |             |        |   |              |   | 12      |      |  |   | 12      |  
|Commercial                                                                        |  |             |        |   |              |   | 4       |      |  |   | 183     |  
|Installment                                                                       |  |             | 33      |   |              |   | 44      |      |  |   | 71      |  
|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|                                                                                  |  |             | 33      |   |              |   | 60      |      |  |   | 266     |  
|Recoveries:                                                                       |  |             |         |   |              |   |         |      |  |   |         |  
|Real estate - residential                                                         |  |             |        |   |              |   |        |      |  |   |        |  
|Commercial                                                                        |  |             | 30      |   |              |   | 1       |      |  |   | 29      |  
|Installment                                                                       |  |             | 8       |   |              |   | 14      |      |  |   | 21      |  
|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|                                                                                  |  |             | 38      |   |              |   | 15      |      |  |   | 50      |  
|Net charge-offs (recoveries)                                                      |  |             | (5      | ) |              |   | 45      |      |  |   | 216     |  
|Additions charged to operations                                                   |  |             |        |   |              |   | 180     |      |  |   | 180     |  
|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|Balance at end of period:                                                         |  | $           | 2,325   |   |              | $ | 2,491   |      |  | $ | 2,320   |  
|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|Average loans outstanding                                                         |  | $           | 134,053 |   |              | $ | 148,609 |      |  | $ | 144,528 |  
|                                                                                  |  |             |         |   |              |   |         |      |  |   |         |  
|Ratio of net charge-offs (recoveries) to average loans outstanding for the period |  |             | 0.00    | % |              |   | 0.03    | %    |  |   | 0.15    | %
|                                                                                  |  |             |        
|Ratio of the allowance for loan losses to loans outstanding for the period        |  |             | 1.78    | % |              |   | 1.73    | %    |  |   | 1.72    | %

The additions to the allowance for loan losses are based on managements evaluation of characteristics of the
loan portfolio, current and anticipated economic conditions, past loan experiences, net loans charged-off, specific problem loans and delinquencies, and other factors.



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First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Allowance for Loan Losses

In all lending activities there is an inherent risk that borrowers will be unable to repay their obligations. The Company maintains an allowance for loan losses to absorb probable loan losses. The Company has historically maintained the
allowance for loan losses at a level greater than actual charge-offs. Although a subjective evaluation is determined by management, the Company 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 Companys market area could result in new estimates which could affect the Companys earnings.
Management monitors the quality of the loan portfolio 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 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.

The allowance for loan losses increased $5,288 or .2%, since December 31, 2005. The allowance for loan losses represented 1.8% and 1.7% of outstanding loans as of
June 30, 2006 and December 31, 2005, respectively. Net loan recoveries amounted to $5,288 for the six month period ended June 30, 2006, compared to net loan charge-offs of $44,583 for the same period in 2005. There was no provision
made to the allowance for loan losses during the first six months of 2006 compared to $180,000 for the six month period ended June 30, 2005. The credit quality of the loan portfolio combined with the recent level of net charge-offs and
nonperforming assets continue to be considered in the calculation of the provision for loan losses. The Company has allocated the allowance for possible loan losses to specific portfolio segments based upon historical net charge-off experience,
changes in the level of nonperforming assets, local economic conditions and managements experience as presented in Table Ten.

Table Ten

Loan Portfolio - Allocation of allowance for possible loan losses

(dollars in thousands)

The following table presents an allocation of the allowance for possible loan losses at each
of the four year periods ended December 31, 2005, and the six month period ended June 30, 2006. 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) June 30, 2006 |       |                                             | December 31, |     
|                          |  |                           | 2005  |                                             |              | 2004 |        |   | 2003                                        |  |       | 2002   | 
|                          |  | Amount                    |       | Percentof loansin eachcategoryto totalloans |              |      | Amount |   | Percentof loansin eachcategoryto totalloans |  |       | Amount |  | Percentof loansin eachcategoryto totalloans |       |  | Amount |   | Percentof loansin eachcategoryto totalloans |   |       | Amount |       | Percentof loansin eachcategoryto totalloans | 
|Real estate - residential |  | $                         | 327   |                                             | 34.2         | %    |        | $ | 327                                         |  | 33.4  | %      |  | $                                           | 325   |  | 33.5   | % |                                             | $ | 311   |        | 36.0  | %                                           |  | $ | 276   |  | 37.5  | %
|Commercial                |  |                           | 1,495 |                                             | 44.7         |      |        |   | 1,465                                       |  | 44.5  |        |  |                                             | 1,520 |  | 45.2   |   |                                             |   | 1,429 |        | 43.0  |                                             |  |   | 1,161 |  | 41.7  |  
|Installment               |  |                           | 482   |                                             | 11.5         |      |        |   | 507                                         |  | 12.3  |        |  |                                             | 490   |  | 11.9   |   |                                             |   | 544   |        | 12.9  |                                             |  |   | 569   |  | 12.9  |  
|Others                    |  |                           | 21    |                                             | 9.6          |      |        |   | 21                                          |  | 9.8   |        |  |                                             | 21    |  | 9.4    |   |                                             |   | 21    |        | 8.1   |                                             |  |   | 21    |  | 7.9   |  
|                          |  |                           |       |                                             |              |      |        |   |                                             |  |       |        |  |                                             |       |  |        |   |                                             |   |       |        |       |                                             |  |   |       |  |       |  
|Total                     |  | $                         | 2,325 |                                             | 100.0        | %    |        | $ | 2,320                                       |  | 100.0 | %      |  | $                                           | 2,356 |  | 100.0  | % |                                             | $ | 2,305 |        | 100.0 | %                                           |  | $ | 2,027 |  | 100.0 | %
|                          |  |                           |       |                                             |              |      |        |   |                                             |  |       |        |  |                                             |       |  |        |   |                                             |   |       |        |       |                                             |  |   |       |  |       |  



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Deposits

A
stable core deposit base is the major source of funds for the Companys subsidiary bank. The deposit mix depends upon many factors including competition from other financial institutions, depositor interest in certain types of deposits, changes
in the interest rate and the Companys need for certain types of deposit growth. Total deposits were $209,802,495 at June 30, 2006, down 4.1% since December 31, 2005. Since year end the decline in deposits was primarily in savings and
noninterest bearing demand deposits, offset in part by increases in time deposits and interest bearing demand deposits. At June 30, 2006, noninterest bearing deposits comprised 12% of total deposits and interest bearing deposits which include
NOW, money market, savings and time deposits comprised 88% of total deposits. The was no change in the deposit mix from December 31, 2005 to June 30, 2006.

Table Eleven

Deposits - Maturity ofTime Deposits of $100,000 or more

The following table presents other time deposits of $100,000 or more issued by domestic offices by time remaining until maturity of 3 months or less; over 3 through 6
months; over 6 through 12 months; and over 12 months. (In thousands)



|                                     |  |                                                  |        |                   |   |       
|------------------------------------ |  | ------------------------------------------------ | ------ | ----------------- | - | ------
|                                     |  | Maturities of Time Deposits inExcess of $100,000
|                                     |  | (Unaudited)                                      |        |                  
|                                     |  | June 30, 2006                                    |        | December 31, 2005
|Three Months or Less                 |  | $                                                | 3,174  |                   | $ | 2,967 
|Over Three and Less than Six Months  |  |                                                  | 4,695  |                   |   | 2,226 
|Over Six and Less than Twelve Months |  |                                                  | 4,916  |                   |   | 7,321 
|Over Twelve Months                   |  |                                                  | 10,536 |                   |   | 9,841 
|                                     |  |                                                  |        |                   |   |       
|Total                                |  | $                                                | 23,321 |                   | $ | 22,355
|                                     |  |                                                  |        |                   |   |       

Federal Funds Purchased and Repurchase Agreements

Federal funds purchased and repurchase agreements represent borrowings of a short duration, usually less than 30 days. For repurchase agreements, the securities
underlying the agreements remained under the Banks control. Federal funds purchased at June 30, 2006 were $2,000,000 and there were no Federal funds purchased at December 31, 2005. Repurchase agreements decreased .8%, from
December 31, 2005 to June 30, 2006 and was primarily due to a decrease in the balances maintained by commercial customers.

Federal Home Loan
Bank Borrowings

The subsidiary bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB). The FHLB borrowings are secured by a
blanket lien by the FHLB on certain residential real estate loans or securities with a market value at least equal to the outstanding balances. The remaining maximum borrowing capacity with the FHLB at June 30, 2006 was approximately $99.3
million subject to the purchase of additional FHLB stock. The subsidiary bank had FHLB borrowings of $2,364,056 and $2,384,893at June 30, 2006 and December 31, 2005, respectively, with an interest rate of 4.76%. The borrowings will mature
in 2018. The FHLB funding was utilized to mitigate the impact of rising interest rates for a long term fixed rate loan commitment. The subsidiary bank also has a one year line of credit agreement with the FHLB. The maximum credit available under
this agreement is $7 million and expires December, 2006.

Capital Resources

Stockholders equity increased 2.3% during the six month period ended June 30, 2006 entirely from current earnings after quarterly dividends, and a 3.5% decrease in accumulated other comprehensive income.
The decrease in accumulated other comprehensive income is primarily attributable to the effect of the change in the net unrealized loss on securities available for sale. Stockholders equity amounted to 9.2% and 9.0% of total assets at
June 30, 2006 and December 31, 2005, respectively.



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of the Financial Condition and Results of Holding Company Operations



Capital Resources - Continued

The Companys primary source of funds for payment of dividends to shareholders is from the dividends from its subsidiary bank. The subsidiary bank may declare a dividend in 2006 without approval of the
Comptroller of the Currency if certain conditions are met. The Board of Directors adopted a resolution with the Federal Reserve Bank of Cleveland which prohibits the Company from paying dividends or participating in the acquisition of treasury stock
without prior Federal Reserve approval and a 30 day prior notice requirement. The Company has taken, and intends to continue to take, all appropriate steps to comply with the Federal Reserve requirements.

The Company and its subsidiary bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Companys financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Companys and banks assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Companys and banks capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk, weighting, and other factors. Quantitative
measures established by regulation to ensure capital adequacy require the Company and bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as
defined), and of Tier I capital (as defined) to adjusted total assets (as defined).

As of June 30, 2006, the most recent notifications from the
Office of the Comptroller of the Currency categorized the bank as adequately capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes has changed the
capital category. The capital ratios and the regulatory framework for adequately capitalized institutions are depicted as set forth in the following table:



|                                                          |  |        |        |       |                              |   |        |   |        |  |     |  
|--------------------------------------------------------- |  | ------ | ------ | ----- | ---------------------------- | - | ------ | - | ------ |  | --- | -
|                                                          |  | Actual |        |       | For CapitalAdequacy Purposes |  
|(Amounts Expressed in Thousands)                          |  | Amount |        | Ratio |                              |   | Amount |   | Ratio  | 
|As of June 30, 2006                                       |  |        |        |       |                              |   |        |   |        |  |     |  
|Holding Company Total Capital (to Risk Weighted Assets)   |  | $      | 25,656 |       | 16.91                        | % |        | $ | 12,140 |  | 8.0 | %
|Holding Company Tier I Capital (to Risk Weighted Assets)  |  |        | 23,761 |       | 15.66                        | % |        |   | 6,070  |  | 4.0 | %
|Holding Company Tier I Capital (to Adjusted Total Assets) |  |        | 23,761 |       | 9.11                         | % |        |   | 10,431 |  | 4.0 | %
|Subsidiary Bank Total Capital (to Risk Weighted Assets)   |  | $      | 25,276 |       | 16.72                        | % |        | $ | 12,097 |  | 8.0 | %
|Subsidiary Bank Tier I Capital (to Risk Weighted Assets)  |  |        | 23,381 |       | 15.46                        | % |        |   | 6,048  |  | 4.0 | %
|Subsidiary Bank Tier I Capital (to Adjusted Total Assets) |  |        | 23,381 |       | 8.98                         | % |        |   | 10,412 |  | 4.0 | %
|                                                          |  |        |        |      
|As of December 31, 2005                                   |  |        |        |       |                              |   |        |   |        |  |     |  
|Holding Company Total Capital (to Risk Weighted Assets)   |  | $      | 25,073 |       | 16.08                        | % |        | $ | 12,476 |  | 8.0 | %
|Holding Company Tier I Capital (to Risk Weighted Assets)  |  |        | 23,124 |       | 14.83                        | % |        |   | 6,238  |  | 4.0 | %
|Holding Company Tier I Capital (to Adjusted Total Assets) |  |        | 23,124 |       | 8.83                         | % |        |   | 10,480 |  | 4.0 | %
|Subsidiary Bank Total Capital (to Risk Weighted Assets)   |  | $      | 25,701 |       | 16.53                        | % |        | $ | 12,442 |  | 8.0 | %
|Subsidiary Bank Tier I Capital (to Risk Weighted Assets)  |  |        | 23,752 |       | 15.27                        | % |        |   | 6,221  |  | 4.0 | %
|Subsidiary Bank Tier I Capital (to Adjusted Total Assets) |  |        | 23,752 |       | 9.09                         | % |        |   | 10,449 |  | 4.0 | %

The Formal Agreement required Tier 1 capital of at least equal to thirteen percent (13%) of
risk-weighted assets and Tier 1 capital of at least equal to seven and one half percent (7.5%) of adjusted total assets by March 31, 2005. The subsidiary bank has met the requirements established under the terms of the agreement.

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
Holding Company had investment securities with an estimated fair value of $104,785,577 classified as available for sale at June 30, 2006. 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 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 funding, in the form of collateralized advances. At June 30, 2006, the subsidiary bank had a short term line of credit available with the FHLB in the aggregate amount of approximately $7 million. There were no short term borrowings
outstanding pursuant to this agreement as of June 30, 2006.

At June 30, 2006 and December 31, 2005, the Company had outstanding loan
commitments and unused lines of credit totaling $15,145,000 and $14,741,000, respectively. As of June 30, 2006, management placed a high probability for required funding within one year of approximately $7.7 million. Approximately $3.7 million
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 June 30, 2006 was as follows: given a 200 basis point increase scenario net interest income would be reduced by approximately 5.9%, and given a 200 basis point
decrease scenario net interest income would be reduced by approximately 1.5%. The projections provided by the model are not intended as an actual forecast of the banks performance in a particular rate environment, and should not be relied
upon. Actual changes in the interest rate environment normally do not take place instantaneously, but over a period of time, and do not occur in a parallel fashion. Additionally, the balance sheet composition, spread relationships for new dollars
invested, non interest income and expenses, investment practices, and deposit practices all change as a result of changes in interest rates and would need to be considered by the Asset Liability committee.

Item 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Companys Chairman, President and Chief Executive Officer, Sylvan J. Dlesk, and Executive Vice President, Chief Administrative Officer and
Chief Financial Officer, Francie P. Reppy, after evaluating the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days prior to the filing of this
report (the Evaluation Date), have concluded that, as of the Evaluation Date, the Companys disclosure controls and procedures were adequate and effective to ensure that material 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, there were no significant changes in the Companys internal controls or in other factors that could significantly affect the Companys disclosure controls and procedures subsequent to the date of their evaluation, nor were
there any significant deficiencies or material weaknesses in the Companys internal controls. As a result, no corrective actions were required or undertaken.



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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 1A Risk Factors

Please refer to the Companys report on Form 10-K for the year ended
December 31, 2005 for disclosures with respect to risk factors. There have been no material changes since year-end 2005 in the specified risk factors disclosed in the Annual Report on Form 10-K.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

Inapplicable

Item 3 Defaults Upon Senior Securities

Inapplicable

Item 4 Submission of Matters to Vote of Security Holders

a. The matters discussed in 4c. were submitted to
a vote of security holders at the April 11, 2006, Annual Meeting of Shareholders.

b. Inapplicable

c. Election of Directors

The following
directors were elected to the Board of Directors as follows:



|                                    |  |                                                         
|----------------------------------- |  | --------------------------------------------------------
|Class I for terms expiring in 2008  |  | Gary W. Glessner and Thomas L. Sable                    
|Class II for terms expiring in 2009 |  | Sylvan J. Dlesk, James C. Inman, Jr. and Thomas A. Noice

The results of the election were as follows:



|                    |  |           |  |                  |  |                            
|------------------- |  | --------- |  | ---------------- |  | ---------------------------
|Shares
Voted       
|NAME                |  | For       |  | Against/Withheld |  | AbstentionsBroker Non-Votes
|Sylvan J. Dlesk     |  | 1,350,885 |  | 32,387           |  | 0                          
|Gary W. Glessner    |  | 1,373,580 |  | 9,692            |  | 0                          
|James C. Inman, Jr. |  | 1,355,942 |  | 27,330           |  | 0                          
|Thomas A. Noice     |  | 1,353,522 |  | 29,750           |  | 0                          
|Thomas L. Sable     |  | 1,373,090 |  | 10,182           |  | 0                          

Continuing directors were as follows:



|                     |  |               
|-------------------- |  | --------------
|                     |  | Terms Expiring
|Nada E. Beneke       |  | 2007          
|R. Clark Morton      |  | 2007          
|William G. Petroplus |  | 2007          
|Gary W. Glessner     |  | 2008          
|Laura G. Inman       |  | 2008          
|Thomas L. Sable      |  | 2008          
|Sylvan J. Dlesk      |  | 2009          
|James C. Inman, Jr.  |  | 2009          
|Thomas A. Noice      |  | 2009          

d. Inapplicable



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##### Table of Contents

Item 5 Other Information

Inapplicable

Item 6 Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K

On May 12, 2006 a report on Form 8-K was filed which contained a press release
dated May 10, 2006 that reported the earnings of First West Virginia Bancorp, Inc. for the first quarter ended March 31, 2006.

(b)
Exhibits

The exhibits listed in the Exhibit Index on page 32 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/ Sylvan J. Dlesk                                                               
|                                  |  | Sylvan J. Dlesk                                                                   
|                                  |  | Chairman, President and Chief Executive Officer                                   
|                                  | 
|By:                               |  | /s/ Francie P. Reppy                                                              
|                                  |  | Francie P. Reppy                                                                  
|                                  |  | Executive Vice President, Chief Administrative Officer and Chief Financial Officer

Dated: August 8, 2006



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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.                                                                                                                                
|              | 
|10.3          |  | 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 March 7, 2006 between Progressive Bank, N.A. and O. V. Smith & Sons of Big Chimney, Inc. Filed herewith and 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.                      
|              | 
|10.8          |  | Lease dated January 1, 2005 between Progressive Bank, N.A. and Elm Grove Properties LLC. 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            |  | Rule 13a-14(a) / 15d/14(a) Certifications - 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          |  | Rule 13a-14(a) / 15d/14(a) Certifications - 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.                                                                                                                        



31