##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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



For the Quarterly Period Ended June 30, 2003



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



For the transition period from
 to
 .



Commission File No. 1-13652



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First West Virginia Bancorp, Inc.

(Exact name of registrant as specified in its charter)



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



1701 Warwood Avenue

Wheeling, West Virginia 26003

(Address of principal executive offices)



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



N/A

(Former name, former address and former fiscal year, if changed since last report)



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



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



APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:



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



APPLICABLE ONLY TO CORPORATE ISSUERS:



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



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



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



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##### Table of Contents

FORM 10-Q INDEX



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



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED BALANCE SHEETS



|                                                                                                                        |  | June 30, 2003 |             |   | December 31, 2002 |  
|----------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | -
|                                                                                                                        |  | (Unaudited)   |             |   |                   |  
|ASSETS                                                                                                                  |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Cash and due from banks                                                                                                 |  | $             | 6,533,625   |   |                   | $
|Due from banksinterest bearing                                                                                         |  |               | 208,800     |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total cash and cash equivalents                                                                                         |  |               | 6,742,425   |   |                   |  
|Federal funds sold                                                                                                      |  |               | 7,062,000   |   |                   |  
|Investment securities                                                                                                   |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Available for sale (at fair value)                                                                                      |  |               | 109,676,157 |   |                   |  
|Held to maturityfair value of $5,503,533 at June 30, 2003 and $7,969,329 at December 31, 2002                          |  |               | 5,211,625   |   |                   |  
|Loans                                                                                                                   |  |               | 138,395,385 |   |                   |  
|Less allowance for possible loan losses                                                                                 |  |               | (2,111,965  | ) |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Net loans                                                                                                               |  |               | 136,283,420 |   |                   |  
|Premises and equipment, net                                                                                             |  |               | 4,002,096   |   |                   |  
|Accrued income receivable                                                                                               |  |               | 1,307,601   |   |                   |  
|Intangible assets                                                                                                       |  |               | 414,172     |   |                   |  
|Goodwill                                                                                                                |  |               | 1,644,119   |   |                   |  
|Other assets                                                                                                            |  |               | 1,914,030   |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total assets                                                                                                            |  | $             | 274,257,645 |   |                   | $
|                                                                                                                        |  |               |             |   |                   |  
|LIABILITIES                                                                                                             |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Noninterest bearing deposits:                                                                                           |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Demand                                                                                                                  |  | $             | 24,075,318  |   |                   | $
|Interest bearing deposits:                                                                                              |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Demand                                                                                                                  |  |               | 33,506,246  |   |                   |  
|Savings                                                                                                                 |  |               | 88,610,123  |   |                   |  
|Time                                                                                                                    |  |               | 93,863,797  |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total deposits                                                                                                          |  |               | 240,055,484 |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Federal funds purchased and repurchase agreements                                                                       |  |               | 9,572,921   |   |                   |  
|Accrued interest payable                                                                                                |  |               | 415,977     |   |                   |  
|Other liabilities                                                                                                       |  |               | 949,717     |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total liabilities                                                                                                       |  |               | 250,994,099 |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|STOCKHOLDERS EQUITY                                                                                                    |  |               |             |   |                   |  
|                                                                                                                        |  |              
|Common Stock2,000,000 shares authorized at $5 par value 1,538,443 shares issued at June 30, 2003 and December 31,
2002 |  |               | 7,692,215   |   |                   |  
|Surplus                                                                                                                 |  |               | 4,982,606   |   |                   |  
|Retained Earnings                                                                                                       |  |               | 9,322,881   |   |                   |  
|Accumulated other comprehensive income                                                                                  |  |               | 1,265,844   |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total stockholders equity                                                                                              |  |               | 23,263,546  |   |                   |  
|                                                                                                                        |  |               |             |   |                   |  
|Total liabilities and stockholders equity                                                                              |  | $             | 274,257,645 |   |                   | $
|                                                                                                                        |  |               |             |   |                   |  



The accompanying notes
are an integral part of the financial statements



3



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



|                                                             |  | Three Months Ended June 30, |           |      | Six Months Ended June 30,
|------------------------------------------------------------ |  | --------------------------- | --------- | ---- | -------------------------
|                                                             |  | 2003                        |           | 2002 |                          
|INTEREST INCOME                                              |  |                             |           |      |                          
|Interest and fees on loans and lease financing:              |  |                             |           |      |                          
|                                                             |  |                             |           |     
|Taxable                                                      |  | $                           | 2,199,262 |      | $                        
|Tax-exempt                                                   |  |                             | 150,670   |      |                          
|Investment securities:                                       |  |                             |           |      |                          
|Taxable                                                      |  |                             | 775,666   |      |                          
|Tax-exempt                                                   |  |                             | 172,083   |      |                          
|Dividends                                                    |  |                             | 5,133     |      |                          
|Other interest income                                        |  |                             | 6,051     |      |                          
|Interest on federal funds sold                               |  |                             | 22,306    |      |                          
|                                                             |  |                             |           |      |                          
|Total interest income                                        |  |                             | 3,331,171 |      |                          
|INTEREST EXPENSE                                             |  |                             |           |      |                          
|Deposits                                                     |  |                             | 1,132,513 |      |                          
|Other borrowings                                             |  |                             | 37,715    |      |                          
|                                                             |  |                             |           |      |                          
|Total interest expense                                       |  |                             | 1,170,228 |      |                          
|                                                             |  |                             |           |      |                          
|Net interest income                                          |  |                             | 2,160,943 |      |                          
|PROVISION FOR POSSIBLE LOAN LOSSES                           |  |                             | 75,000    |      |                          
|                                                             |  |                             |           |      |                          
|Net interest income after provision for possible loan losses |  |                             | 2,085,943 |      |                          
|NONINTEREST INCOME                                           |  |                             |           |      |                          
|Service charges and other fees                               |  |                             | 182,776   |      |                          
|Securities gains (losses), net                               |  |                             | 105,200   |      |                          
|Other operating income                                       |  |                             | 81,956    |      |                          
|                                                             |  |                             |           |      |                          
|Total noninterest income                                     |  |                             | 369,932   |      |                          
|NONINTEREST EXPENSE                                          |  |                             |           |      |                          
|Salary and employee benefits                                 |  |                             | 798,380   |      |                          
|Net occupancy expense of premises                            |  |                             | 234,278   |      |                          
|Other operating expenses                                     |  |                             | 498,924   |      |                          
|                                                             |  |                             |           |      |                          
|Total noninterest expense                                    |  |                             | 1,531,582 |      |                          
|                                                             |  |                             |           |      |                          
|Income before income taxes                                   |  |                             | 924,293   |      |                          
|                                                             |  |                             |           |      |                          
|INCOME TAXES                                                 |  |                             | 233,564   |      |                          
|                                                             |  |                             |           |      |                          
|Net income                                                   |  | $                           | 690,729   |      | $                        
|                                                             |  |                             |           |      |                          
|WEIGHTED AVERAGE SHARES OUTSTANDING                          |  |                             | 1,538,443 |      |                          
|                                                             |  |                             |           |      |                          
|EARNINGS PER COMMON SHARE                                    |  | $                           | 0.45      |      | $                        
|                                                             |  |                             |           |      |                          



The accompanying notes
are an integral part of the financial statements



4



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(Unaudited)





|                                                                                    |  | Common Stock |  | Surplus |           | RetainedEarnings |   |           | AccumulatedOtherComprehensiveIncome |   | ComprehensiveIncome |   | Total |  
|----------------------------------------------------------------------------------- |  | ------------ |  | ------- | --------- | ---------------- | - | --------- | ----------------------------------- | - | ------------------- | - | ----- | -
|                                                                                    |  | Shares       |  | Amount  |           |                  |   |           |                                    
|Balance, December 31, 2002                                                          |  | 1,538,443    |  | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 8,566,520           |   |       | $
|                                                                                    |  |              |  |         |           |                  |  
|Comprehensive income                                                                |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |  |              |  |         |           |                  |  
|Net income for the six months ended June 30, 2003                                   |  |             |  |         |          |                  |   |          |                                     |   | 1,310,200           |   |       |  
|                                                                                    |  |              |  |         |           |                  |  
|Other comprehensive income, net of tax                                              |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Unrealized gains on securities, net of reclassification adjustment (see disclosure) |  |             |  |         |          |                  |   |          |                                     |   |                    |   |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Comprehensive income                                                                |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Cash dividend ($.36 per share)                                                      |  |             |  |         |          |                  |   |          |                                     |   | (553,839            | ) |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Balance, June 30, 2003                                                              |  | 1,538,443    |  | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 9,322,881           |   |       | $
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |  |              |  |         |           |                 
|                                                                                    |  | Common Stock |  | Surplus |           | RetainedEarnings |   |           | AccumulatedOtherComprehensiveIncome |   | ComprehensiveIncome |   | Total |  
|                                                                                    |  | Shares       |  | Amount  |           |                  |   |           |                                    
|Balance, December 31, 2001                                                          |  | 1,538,443    |  | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 6,954,229           |   |       | $
|                                                                                    |  |              |  |         |           |                  |  
|Comprehensive income                                                                |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |  |              |  |         |           |                  |  
|Net income for the six months ended June 30, 2002                                   |  |             |  |         |          |                  |   |          |                                     |   | 1,284,027           |   |       |  
|                                                                                    |  |              |  |         |           |                  |  
|Other comprehensive income, net of tax                                              |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Unrealized gains on securities, net of reclassification adjustment (see disclosure) |  |             |  |         |          |                  |   |          |                                     |   |                    |   |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Comprehensive income                                                                |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Cash dividend ($.34 per share)                                                      |  |             |  |         |          |                  |   |          |                                     |   | (523,071            | ) |       |  
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  
|Balance, June 30, 2002                                                              |  | 1,538,443    |  | $       | 7,692,215 |                  | $ | 4,982,606 |                                     | $ | 7,715,185           |   |       | $
|                                                                                    |  |              |  |         |           |                  |   |           |                                     |   |                     |   |       |  



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



The accompanying notes
are an integral part of the financial statements



5



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##### Table of Contents

First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                  |  | Six Months Ended June 30, |            
|--------------------------------------------------------------------------------- |  | ------------------------- | -----------
|                                                                                  |  | 2003                      |            
|OPERATING ACTIVITIES                                                              |  |                           |            
|Net Income                                                                        |  | $                         | 1,310,200  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |            
|Provision for loan losses                                                         |  |                           | 165,000    
|Depreciation and amortization                                                     |  |                           | 217,625    
|Amortization (accretion) of investment securities, net                            |  |                           | 454,112    
|Investment security gains                                                         |  |                           | (105,200   
|Gain on sales of premises and equipment, net                                      |  |                           | (436       
|Increase in interest receivable                                                   |  |                           | (22,662    
|Decrease in interest payable                                                      |  |                           | (77,292    
|Other, net                                                                        |  |                           | (576,718   
|                                                                                  |  |                           |            
|Net cash provided by operating activities                                         |  |                           | 1,364,629  
|                                                                                  |  |                           |            
|INVESTING ACTIVITIES                                                              |  |                           |            
|Net (increase) decrease in federal funds sold                                     |  |                           | (659,000   
|Net increase in loans, net of charge-offs                                         |  |                           | (1,710,732 
|Proceeds from sales of securities available for sale                              |  |                           | 3,032,086  
|Proceeds from maturities of securities available for sale                         |  |                           | 58,948,000 
|Proceeds from maturities of securities held to maturity                           |  |                           | 2,485,000  
|Principal collected on mortgage-backed securities                                 |  |                           | 20,386,890 
|Purchases of securities available for sale                                        |  |                           | (91,937,654
|Recoveries on loans previously charged-off                                        |  |                           | 7,167      
|Cash acquired in purchase of branch office                                        |  |                           |           
|Purchases of premises and equipment                                               |  |                           | (92,110    
|Proceeds from sale of premises and equipment                                      |  |                           | 159,471    
|                                                                                  |  |                           |            
|Net cash used by investing activities                                             |  |                           | (9,380,882 
|                                                                                  |  |                           |            
|FINANCING ACTIVITIES                                                              |  |                           |            
|Net increase in deposits                                                          |  |                           | 8,679,902  
|Dividends paid                                                                    |  |                           | (553,839   
|Increase in short term borrowings                                                 |  |                           | 535,119    
|                                                                                  |  |                           |            
|Net cash provided by financing activities                                         |  |                           | 8,661,182  
|                                                                                  |  |                           |            
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  |  |                           | 644,929    
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |  |                           | 6,097,496  
|                                                                                  |  |                           |            
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        |  | $                         | 6,742,425  
|                                                                                  |  |                           |            
|Supplemental Disclosures:                                                         |  |                           |            
|                                                                                  |  |                          
|Cash Paid for Interest                                                            |  | $                         | 2,452,055  
|Cash Paid for Income Taxes                                                        |  | $                         | 354,599    



The accompanying notes
are an integral part of the financial statements



6



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1Accounting Policies



Basis of Presentation



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



Income Taxes



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



Reclassifications



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



Recent Accounting Pronouncements



The Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS)No. 143, Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This statement requires an entity to recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. This
statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. Initial application of this statement is as of the beginning of an entitys fiscal year. The adoption of SFAS No. 143 did not have a material
impact on the Company.



The FASB issued SFAS No. 146, Accounting for
Costs Associated with Exit or Disposal Activities. This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value when the liability is incurred. This
statement nullifies Emerging Issues Task Force Issue No. 94-3, which required the recognition of a liability for an exit cost at the date of an entitys commitment to an exit plan. The effective date of this statement is for exit or disposal
activities that are initiated after December 31, 2002, with early application encouraged. The adoption of this Statement did not have a material impact on the Company.



The FASB issued SFAS No. 147, Acquisitions of Certain Financial Institutions. Except for transactions between two or more mutual
enterprises, this Statement removes acquisitions of financial institutions from the scope of both 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. The effective date of this Statement is generally for activities on or after October 1, 2002.



7



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1Accounting Policies (Continued)



As a result of adopting 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. The transition provisions of this pronouncement required the Company to adjust all interim and annual
financial statements issued after January 1, 2002, the date of initial adoption of SFAS No. 142, Goodwill and Other Intangible Assets. As such, the following table illustrates the effect of the adoption of SFAS No. 147 on net income for
the three and six months ended June 30, 2002 presented in the preceding interim financial statement:



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



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



In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This interpretation elaborates on the disclosures to be made by a guarantor in
its interim and annual financial statements about its obligations under certain guarantees that it has issued. This interpretation clarifies that a guarantor is required to disclose (a) the nature of the guarantee, including the approximate term of
the guarantee, how the guarantee arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments under the guarantee; (c) the carrying amount of the
liability, if any, for the guarantors obligations



8



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1Accounting Policies (Continued)



under the guarantee; and (d) the nature and extent of any recourse provisions or available
collateral that would enable the guarantor to recover the amounts paid under the guarantee. This interpretation also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the obligations it has
undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. The objective of the initial measurement of that
liability is the fair value of the guarantee at its inception. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002,
irrespective of the guarantors fiscal year end. The disclosure requirements in this interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. Adoption did not have a material impact on
the Company.



In January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities which addresses whether certain types of entities, referred to as variable interest entities (VIE), should be consolidated in a companys financial statements. A VIE is an
entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control the entity, the obligation to absorb the entitys expected losses and the right to
receive the entitys expected residual returns), or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses
of the VIE. An entity should consolidate a VIE if it stands to absorb a majority of the VIEs expected losses or to receive a majority of the VIEs expected residual returns. The Company adopted the Interpretation for relationships with
VIEs that begin on or after February 1, 2003. The implementation of the consolidation guidance did not have a material effect on the Company.



On April 30, 2003, the FASB issued SFAS No. 149 Amendment of Statement 133 on Derivative Instruments and Hedging Activities. The statement amends and
clarifies accounting for derivative instruments embedded in other contracts, and for hedging activities under Statement 133. The amendments improve financial reporting by requiring that contracts with comparable characteristics be accounted for
similarly. The statement also clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative. In addition, it clarifies when a derivative contains a financing component that warrants special
reporting in the statement of cash flows. The statement is generally effective for contracts entered into or modified after June 30, 2003. Management does not believe the adoption of SFAS No. 149 will have a material impact on the Company.



In May 2003, the FASB issued SFAS No. 150 Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity. The statement improves the accounting for certain financial instruments that, under previous guidance, could be accounted for as equity and requires that those
instruments be classified as liabilities. This statement affects accounting for three types of freestanding financial instruments. One type is mandatorily redeemable shares, which the issuing company is obligated to buy back in exchange for cash or
other assets. A second type, which includes put options and forward purchase contracts, involves instruments that do or may require the issuer to buy back some of its shares in exchange for cash or other assets. The third type, are instruments whose
obligations can be settled with shares, the monetary value is fixed , tied solely or predominately to a variable such as a market index, or varies inversely with the value of the isuuers shares. SFAS No. 150 does not apply to features embedded
in a financial instrument that is not a derivative in its entirety. Most of the guidance is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. Management does not believe the adoption of SFAS No. 150 will have a material impact on the Company.



9



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##### Table of Contents

First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1Accounting Policies (Continued)



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.



10



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of Operations



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



Results of Operations



The Holding Company reported net income of $1,310,200 or $.85 per share for the six months
ended June 30, 2003 compared to $1,284,027 or $.84 per share for the same period during 2002. The increase of $26,173 or 2.0% in earnings was primarily due to the increase in noninterest income and the decrease in the provision for loan losses,
offset in part by increased operating expenses and the decrease in net interest income for the six months ended June 30, 2003 as compared to the same period in 2002. The Holding Companys return on average assets (ROA) was .98% for the first
six months of 2003 as compared to 1.07% for the same period in 2002. The annualized return on average equity (ROE) was 12.28% for the first six months of 2003 as compared to 13.00% for the same period in 2002.



For the second quarter of 2003, net income was $690,729 or $.45 per share as compared to
$673,063 or $.44 per share for the same period in 2002. The increase in earnings of $17,666 or 2.6% was primarily due to the increase in noninterest income and the decrease in the provision for loan losses, offset in part by the increase in
noninterest expense and the decrease in net interest income. The ROA was 1.01% for the three months ended June 30, 2003 as compared to 1.07% for the same period of the prior year. For the three months ended June 30, 2003 compared to June 30, 2002,
the ROE was 12.78% and 13.44%, respectively.



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



Net Interest Income



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



For the six months ended June 30, 2003, net interest income was $4,352,715, a decrease of $175,367 or 3.9%, from the same period in 2002. The decrease in net interest income was primarily due to the decrease in the
interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit liabilities.



Interest income decreased $374,566 or 5.3% for the first six months of 2003 compared to the same period of the prior year. Interest and fees on loans decreased $194,284
or 4.0% for the six month period ended June 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans declined .56%, from 7.86% at December 31, 2002 to 7.30% at June 30, 2003. The decline in the taxable equivalent yield
was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan volume. Interest income on investment securities decreased $94,924 or 4.7% during the six months ended June 30, 2003 over 2002.
The taxable equivalent average yield on investment securities decreased .88%, from 4.79% at December 31, 2002 to 3.91% at June 30, 2003. The decline in the taxable equivalent yield was primarily attributable to the decrease in the interest rates
paid on investment securities, offset in part by an increase in the average volume of investment securities.



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table One

SELECTED FINANCIAL DATA

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



|                                 |  | Three months ended June 30, |         |   | Six months ended June 30, |   |         | Year ended December 31, | 
|-------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ----------------------- | 
|                                 |  | 2003                        |         |   | 2002                      |   |         | 2003                    | 
|SUMMARY OF OPERATIONS            |  |                             |         |   |                           |   |         |                         | 
|Total interest income            |  | $                           | 3,331   |   |                           | $ | 3,659   |                         | 
|Total interest expense           |  |                             | 1,170   |   |                           |   | 1,300   |                         | 
|Net interest income              |  |                             | 2,161   |   |                           |   | 2,359   |                         | 
|Provision for loan losses        |  |                             | 75      |   |                           |   | 150     |                         | 
|Total other income               |  |                             | 370     |   |                           |   | 236     |                         | 
|Total other expenses             |  |                             | 1,532   |   |                           |   | 1,501   |                         | 
|Income before income taxes       |  |                             | 924     |   |                           |   | 944     |                         | 
|Net income                       |  |                             | 691     |   |                           |   | 673     |                         | 
|                                 |  |                             |         |   |                          
|PER SHARE DATA                   |  |                             |         |   |                           |   |         |                         | 
|Net income                       |  | $                           | 0.45    |   |                           | $ | 0.44    |                         | 
|Cash dividends declared          |  |                             | 0.18    |   |                           |   | 0.17    |                         | 
|Book value per share             |  |                             | 15.12   |   |                           |   | 13.83   |                         | 
|                                 |  |                             |         |   |                          
|AVERAGE BALANCE SHEET SUMMARY    |  |                             |         |   |                           |   |         |                         | 
|Total loans, net                 |  | $                           | 135,871 |   |                           | $ | 131,062 |                         | 
|Investment securities            |  |                             | 115,622 |   |                           |   | 91,742  |                         | 
|DepositsInterest Bearing        |  |                             | 217,596 |   |                           |   | 200,168 |                         | 
|Stockholders equity             |  |                             | 21,691  |   |                           |   | 20,092  |                         | 
|Total Assets                     |  |                             | 273,845 |   |                           |   | 251,694 |                         | 
|                                 |  |                             |         |   |                          
|SELECTED RATIOS                  |  |                             |         |   |                           |   |         |                         | 
|Return on average assets         |  |                             | 1.01    | % |                           |   | 1.07    | %                       | 
|Return on average equity         |  |                             | 12.78   | % |                           |   | 13.44   | %                       | 
|Average equity to average assets |  |                             | 7.92    | % |                           |   | 7.98    | %                       | 
|Dividend payout ratio            |  |                             | 40.00   | % |                           |   | 38.64   | %                       | 
|Loan to Deposit ratio            |  |                             | 57.65   | % |                           |   | 59.16   | %                       | 



|                                                  |  | June 30, |         | December 31,
|------------------------------------------------- |  | -------- | ------- | ------------
|BALANCE SHEET                                     |  | 2003     |         | 2002        
|Investments                                       |  | $        | 114,888 |             
|Loans                                             |  |          | 138,395 |             
|Other assets                                      |  |          | 20,975  |             
|                                                  |  |          |         |             
|Total Assets                                      |  | $        | 274,258 |             
|                                                  |  |          |         |             
|Deposits                                          |  | $        | 240,055 |             
|Federal funds purchased and repurchase agreements |  |          | 9,573   |             
|Other liabilities                                 |  |          | 1,366   |             
|Stockholders equity                              |  |          | 23,264  |             
|                                                  |  |          |         |             
|Total Liabilities and Stockholders Equity        |  | $        | 274,258 |             
|                                                  |  |          |         |             



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Net Interest IncomeContinued



During the six months ended June 30, 2003, interest expense decreased $199,199 or 7.7% as
compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .32%, from 2.45% at December 31, 2002 to 2.13% at June 30, 2003. The decrease in the interest rates paid on interest bearing liabilities, which
were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the first six months of 2003.



The changes in the volume and mix of earning assets and interest bearing liabilities combined with the changes in the market rates of
interest resulted in taxable equivalent net interest yields on average earning assets of 3.74% for the six month period ended June 30, 2003 as compared to 4.15% at December 31, 2002.



For the three months ended June 30, 2003, net interest income was $2,160,943, a decrease of $198,290 or 8.4%, from the same period in 2002.
The decrease in net interest income was primarily due to the decrease in the interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit liabilities.



Interest income decreased $328,550 or 9.0% during the second quarter of 2003 as compared to
the same period of the prior year. Interest and fees on loans decreased $181,837 or 7.2% for the three months ended June 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans declined .63%, from 7.86% at December 31,
2002 to 7.23% at June 30, 2003. The decline in the taxable equivalent yield was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan volume. Interest income on investment securities
decreased $108,450 or 10.3% during the three months ended June 30, 2003 over 2002. The taxable equivalent average yield on investment securities decreased 1.11%, from 4.79% at December 31, 2002 to 3.68% at June 30, 2003. The decline in the taxable
equivalent yield was primarily attributable to the decrease in the interest rates paid on investment securities, offset in part by an increase in the average volume of investment securities.



During the three months ended June 30, 2003, interest expense decreased $130,260 or 10.0% as
compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .39%, from 2.45% at December 31, 2002 to 2.06% at June 30, 2003. The decrease in the interest rates paid on interest bearing liabilities, which
were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the second quarter of 2003.



The taxable equivalent net interest yields on average earning assets was 3.64% for the three month period ended June 30, 2003 as compared to
4.15% at December 31, 2002.



Noninterest
Income



Noninterest income increased $152,358 or 31.6% for the six months
ended June 30, 2003 as compared to the same period of the prior year. The increase in noninterest income was primarily due to gains on sales of investment securities available for sale and the increase in service charge income for the first six
months of 2003.



Sales of investment securities for the six months ended June
30, 2003 were primarily the result of sales by the Holding Company and its subsidiary bank. The Holding Company accounted for securities gains of $1,712 and securities losses of $13,849 during the period ended June 30, 2003 and securities gains of
$1,344 and securities losses of $1,107 during the period ended June 30, 2002 and those sales were attributable to sales of marketable equity securities. The subsidiary bank accounted for securities gains of $118,944 and securities losses of $1,607
during the period ended June 30, 2003 and securities gains of $28,341 and securities losses of $16,075 during the period ended June 30, 2002 and those sales were attributable to sales of securities available for sale.



13



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Noninterest IncomeContinued



Service charges increased $40,853 during the six months ended June 30, 2003, up 13.3%, from
the same period in 2002. Service charges and other fees represent the major component of noninterest income. These charges are earned from assessments made on checking and savings accounts.



During the six months ended June 30, 2003, other operating income increased $18,808 or 11.6%
compared to the same period in 2002. Other operating income represents fees from safe deposit box rentals, sales of checkbooks, sales of cashiers checks and money orders, utility collections, ATM charges and card fees, home equity credit line
fees, credit life commissions, credit card fees and commissions and various other charges and fees related to normal customer banking relationships. The increase in other operating income primarily resulted from increases in checkbook sales and ATM
fees, and were offset in part by a decrease in other credit card income for the first six months of 2003 as compared to the same period in 2002.



For the second quarter of 2003, noninterest income increased $133,776 or 56.7% as compared to the same period of the prior year. The increase in noninterest income was
primarily due to gains on sales of investment securities available for sale by the Holding Companys subsidiary bank for the second quarter of 2003 as compared to the prior year.



For the second quarter of 2003, sales of investment securities were primarily the result of sales by the Holding Company and its subsidiary
bank. The Holding Company accounted for securities gains of $1,712 and securities losses of $13,849 during the second quarter of 2003 and securities losses of $11 during the second quarter of 2002 and those sales were attributable to sales of
marketable equity securities. The subsidiary bank accounted for securities gains of $118,944 and securities losses of $1,607 during the second quarter of 2003 and securities gains of $10,624 and securities losses of $15,587 during the second quarter
of 2002 and those sales were attributable to sales of securities available for sale.



Service charges increased $12,620 during the second quarter of 2003, up 7.4%, from the same period in 2002. These charges are earned from assessments made on checking and savings accounts.



During the second quarter of 2003, other operating income increased $10,982 or 15.5% compared
to the same period in 2002. The increase in other operating income primarily resulted from increases in checkbook sales and ATM fees for the second quarter of 2003 as compared to the same period in 2002.



For the six months ended June 30, 2003, noninterest expense increased $159,065 or 5.4% as
compared to the same period of the prior year. Salary and employee benefits increased $104,016 or 7.0% for the six months ended June 30, 2003 as compared to the same period in the prior year. The increase was primarily attributable to the hiring of
additional loan personnel combined with normal annual merit adjustments. A loan administration department was established at the subsidiary bank in order to centralize operations which required the hiring of additional personnel in the lending area.
Other operating expenses increased $53,499 or 5.6%, for the six month period ended June 30, 2003 as compared to the same period in the prior year. Increased service expense, regulatory assessment and deposit insurance, other taxes and other
operating expenses, offset in part by decreased directors fees, postage and transportation expense, advertising expense, and stationery and supplies expense primarily contributed to the increase in other operating expenses for the six months
ended June 30, 2003 as compared to the same period in the prior year.



14



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Non-Interest Expense



For the three months ended June 30, 2003 as compared to the same period of the prior year,
noninterest expense increased $29,947 or 2.0% and was primarily due to the increase in other operating expenses and salary and employee benefits, offset in part by the decrease in occupancy expenses. Other operating expenses increased $50,844, or
11.4%, for the three month period ended June 30, 2003 as compared to the same period in the prior year. Increases in directors fees, other taxes, service expense, postage and transportation expense, regulatory assessment and deposit insurance,
stationery and supplies expense and other operating expenses, offset in part by the decrease in advertising expense primarily contributed to the increase in other operating expenses during the three month period ended June 30, 2003. During the
quarter ended June 30, 2003, salary and employee benefits increased $6,251 or .8%. The increase was primarily due to normal annual merit adjustments in salaries. Occupancy expenses decreased $27,148 or 10.4% during the second quarter of 2003
compared to the same period in 2002.



Income Taxes



For the six months ended June 30, 2003, income
tax expense was $431,567, a decrease of 14.5% compared to the same period in 2002. Income tax expense decreased primarily due to an increase in tax exempt income of $77,298 combined with the decrease in pre-taxable income of $47,074 during the first
six months of 2003 over the same period in 2002. Components of the income tax expense for June 30, 2003 were $346,727 for federal taxes and $84,840 for West Virginia corporate net income taxes.



Income tax expense for the three months ended June 30, 2003 was $233,564, a decrease of 13.7%
over the same period in 2002. Income tax expense decreased primarily due to an increase in tax exempt income of $41,470 combined with the decrease in pre-taxable income of $19,461 during the second quarter of 2003 as compared to the same period in
2002.



For federal income tax purposes, tax-exempt income is based on qualified
state, county, and municipal bonds and loans. Tax-exempt income was $322,753 and $281,283 for the three month periods ended June 30, 2003 and 2002, respectively. For the six months ended June 30, 2003 and 2002, tax exempt income was $638,063 and
$560,765, respectively.



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



15



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Two



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



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



|                                                  |  | For the six months ended June 30, 2003 |         | December 31, 2002 |          | For the six months ended June 30, 2002
|------------------------------------------------- |  | -------------------------------------- | ------- | ----------------- | -------- | --------------------------------------
|                                                  |  | AverageVolume                          |         |                   | Interest |                                       
|ASSETS:                                           |  |                                        |         |                   |          |                                       
|Investment securities:                            |  |                                        |         |                   |          |                                       
|U.S. Treasury and other U. S. Government agencies |  | $                                      | 40,065  |                   |          | $                                     
|Mortgage-backed securities                        |  |                                        | 45,714  |                   |          |                                       
|Obligations of states and political subdivisions  |  |                                        | 19,584  |                   |          |                                       
|Other securities                                  |  |                                        | 6,898   |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total Investment securities:                      |  |                                        | 112,261 |                   |          |                                       
|Interest bearing deposits                         |  |                                        | 696     |                   |          |                                       
|Federal funds sold                                |  |                                        | 8,186   |                   |          |                                       
|Loans, net of unearned income                     |  |                                        | 135,767 |                   |          |                                       
|Other earning assets                              |  |                                        | 838     |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total earning assets                              |  |                                        | 257,748 |                   |          |                                       
|Cash and due from banks                           |  |                                        | 5,396   |                   |          |                                       
|Bank premises and equipment                       |  |                                        | 4,076   |                   |          |                                       
|Other assets                                      |  |                                        | 5,135   |                   |          |                                       
|Allowance for possible loan losses                |  |                                        | (2,090  | )                 |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total Assets                                      |  | $                                      | 270,265 |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|LIABILITIES                                       |  |                                        |         |                   |          |                                       
|Certificates of deposit                           |  | $                                      | 95,849  |                   |          | $                                     
|Savings deposits                                  |  |                                        | 84,431  |                   |          |                                       
|Interest bearing demand deposits                  |  |                                        | 34,823  |                   |          |                                       
|Federal funds purchased and Repurchase agreements |  |                                        | 9,369   |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total interest bearing liabilities                |  |                                        | 224,472 |                   |          |                                       
|Demand deposits                                   |  |                                        | 22,718  |                   |          |                                       
|Other liabilities                                 |  |                                        | 1,555   |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total Liabilities                                 |  |                                        | 248,745 |                   |          |                                       
|STOCKHOLDERS EQUITY                              |  |                                        | 21,520  |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Total Liabilities and Stockholders Equity        |  | $                                      | 270,265 |                   |          |                                       
|                                                  |  |                                        |         |                   |          |                                       
|Net yield on earning assets                       |  |                                        |         |                   |          | $                                     
|                                                  |  |                                        |         |                   |          |                                       



The fully taxable equivalent basis of
interest income from obligations of states and political subdivisions has been determined using a combined Federal and State corporate income tax rate of 40% for the six months ended June 30, 2003 and 2002, and the year ended December 31, 2002,
respectively. The effect of this adjustment is presented below (in thousands).



|Investment securities                          |  | $ | 112,261 |  | $ | 2,174 |  | 3.91 | % |  | $ | 93,962  |  | $ | 4,503  |  | 4.79 | % |  | $ | 86,049  |  | $ | 2,248 |  | 5.27 | %
|---------------------------------------------- |  | - | ------- |  | - | ----- |  | ---- | - |  | - | ------- |  | - | ------ |  | ---- | - |  | - | ------- |  | - | ----- |  | ---- | -
|Loans                                          |  |   | 135,767 |  |   | 4,914 |  | 7.30 | % |  |   | 131,383 |  |   | 10,327 |  | 7.86 | % |  |   | 127,482 |  |   | 5,078 |  | 8.03 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |        |  |      |   |  |   |         |  |   |       |  |      |  
|Total earning assets                           |  | $ | 257,748 |  | $ | 7,153 |  | 5.60 | % |  | $ | 240,365 |  | $ | 15,088 |  | 6.28 | % |  | $ | 230,738 |  | $ | 7,477 |  | 6.53 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |        |  |      |   |  |   |         |  |   |       |  |      |  
|Taxable equivalent net yield on earning assets |  |   |         |  | $ | 4,778 |  | 3.74 | % |  |   |         |  | $ | 9,987  |  | 4.15 | % |  |   |         |  | $ | 4,903 |  | 4.29 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |        |  |      |   |  |   |         |  |   |       |  |      |  



16



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Three



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



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



|                                                  |  | For the Three Months ended June 30, 2003 |         | For the Three Months ended June 30, 2002
|------------------------------------------------- |  | ---------------------------------------- | ------- | ----------------------------------------
|                                                  |  | AverageVolume                            |         |                                         
|ASSETS:                                           |  |                                          |         |                                         
|Investment securities:                            |  |                                          |         |                                         
|U.S. Treasury and other U. S. Government agencies |  | $                                        | 41,549  |                                         
|Mortgage backed securities                        |  |                                          | 47,576  |                                         
|Obligations of states and political subdivisions  |  |                                          | 19,687  |                                         
|Other securities                                  |  |                                          | 6,810   |                                         
|                                                  |  |                                          |         |                                         
|Total Investment Securities                       |  |                                          | 115,622 |                                         
|Interest bearing deposits                         |  |                                          | 1,177   |                                         
|Federal funds sold                                |  |                                          | 7,719   |                                         
|Loans, net of unearned income                     |  |                                          | 135,871 |                                         
|Other earning assets                              |  |                                          | 852     |                                         
|                                                  |  |                                          |         |                                         
|Total earning assets                              |  |                                          | 261,241 |                                         
|Cash and due from banks                           |  |                                          | 5,495   |                                         
|Bank premises and equipment                       |  |                                          | 4,032   |                                         
|Other earning assets                              |  |                                          | 5,190   |                                         
|Allowance for possible loan losses                |  |                                          | (2,113  | )                                       
|                                                  |  |                                          |         |                                         
|Total Assets                                      |  | $                                        | 273,845 |                                         
|                                                  |  |                                          |         |                                         
|LIABILITIES                                       |  |                                          |         |                                         
|Certificates of deposit                           |  | $                                        | 95,139  |                                         
|Savings deposits                                  |  |                                          | 87,029  |                                         
|Interest bearing demand deposits                  |  |                                          | 35,428  |                                         
|Federal funds purchased and Repurchase agreements |  |                                          | 9,953   |                                         
|                                                  |  |                                          |         |                                         
|Total interest bearing liabilities                |  |                                          | 227,549 |                                         
|Demand deposits                                   |  |                                          | 23,062  |                                         
|Other liabilities                                 |  |                                          | 1,543   |                                         
|                                                  |  |                                          |         |                                         
|Total Liabilities                                 |  |                                          | 252,154 |                                         
|SHAREHOLDERS EQUITY                              |  |                                          | 21,691  |                                         
|                                                  |  |                                          |         |                                         
|Total Liabilities And Shareholders Equity        |  | $                                        | 273,845 |                                         
|                                                  |  |                                          |         |                                         
|Net yield on earning assets                       |  |                                          |         |                                         
|                                                  |  |                                          |         |                                         



The fully taxable equivalent basis of
interest income from obligations of states and political subdivisions has been determined using a combined Federal and State corporate income tax rate of 40% for the three months ended June 30, 2003 and 2002, respectively. The effect of this
adjustment is presented below (in thousands).



|Investment securities                          |  | $ | 115,622 |  | $ | 1,062 |  | 3.68 | % |  | $ | 91,742  |  | $ | 1,159 |  | 5.07 | %
|---------------------------------------------- |  | - | ------- |  | - | ----- |  | ---- | - |  | - | ------- |  | - | ----- |  | ---- | -
|Loans                                          |  |   | 135,871 |  |   | 2,450 |  | 7.23 | % |  |   | 131,062 |  |   | 2,616 |  | 8.01 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |       |  |      |  
|Total earning assets                           |  | $ | 261,241 |  | $ | 3,545 |  | 5.44 | % |  | $ | 239,194 |  | $ | 3,847 |  | 6.45 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |       |  |      |  
|Taxable equivalent net yield on earning assets |  |   |         |  | $ | 2,374 |  | 3.64 | % |  |   |         |  | $ | 2,547 |  | 4.27 | %
|                                               |  |   |         |  |   |       |  |      |   |  |   |         |  |   |       |  |      |  



17



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Balance Sheet Analysis



Investments



Investment securities increased $6,822,673 or 6.3% from $108,065,109 at December 31, 2002,
to $114,887,782 at June 30, 2003. Taxable securities comprised 82.5% of total securities at June 30, 2003, as compared to 83.4% at December 31, 2002. Other than the normal risks inherent in purchasing U.S. Treasury securities, U.S. Government
corporation and agencies securities, and obligations of states and political subdivisions, i.e. interest rate risk, management has no knowledge of other market or credit risk involved in these investments. The corporation does not have any high risk
hybrid/derivative instruments.



Available for sale securities, at market value
increased $9,298,978 or 9.3% from December 31, 2002, and represented 95% of the investment portfolio at June 30, 2003. The increase was primarily due to purchases of mortgage-backed securities and municipal securities. The held to maturity
securities decreased $2,476,305 or 32.2% from December 31, 2002 and represented 5% of the investment portfolio as of June 30, 2003. The decrease was primarily the result of maturities and calls of municipal securities. As the investment portfolio
consists primarily of fixed rate debt securities, changes in the market rates of interest will effect the carrying value of securities available for sale, adjusted upward or downward under the requirements of FAS 115 and represent temporary
adjustments in values. The carrying value of securities available for sale was increased by $2,029,571 at June 30, 2003 and increased by $1,943,664 at December 31, 2002. The market value of securities classified as held to maturity was above book
value by $291,908 and $281,399 at June 30, 2003 and December 31, 2002, respectively.



Table Four



Investment Portfolio



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



|                                                                                      |  | (Unaudited)June 30,2003 |         | December 31,2002
|------------------------------------------------------------------------------------- |  | ----------------------- | ------- | ----------------
|Securities held to maturity:                                                          |  |                         |         |                 
|Obligations of states and political subdivisions                                      |  | $                       | 5,212   |                 
|                                                                                      |  |                         |         |                 
|Total held to maturity                                                                |  | $                       | 5,212   |                 
|                                                                                      |  |                         |         |                 
|Securities available for sale :                                                       |  |                         |         |                 
|U.S. Treasury securities and obligations of U.S. Government corporations and agencies |  | $                       | 37,245  |                 
|Obligations of states and political subdivisions                                      |  |                         | 16,015  |                 
|Corporate debt securities                                                             |  |                         | 6,554   |                 
|Mortgage-backed securities                                                            |  |                         | 49,321  |                 
|Equity Securities                                                                     |  |                         | 541     |                 
|                                                                                      |  |                         |         |                 
|Total available for sale                                                              |  | $                       | 109,676 |                 
|                                                                                      |  |                         |         |                 
|Total                                                                                 |  | $                       | 114,888 |                 
|                                                                                      |  |                         |         |                 



18



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Four

Investment Portfolio ( Continued)

(in thousands)



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



|                                                 |  | (Unaudited) June 30, 2003  |       |       | December 31, 2002            |  
|------------------------------------------------ |  | -------------------------- | ----- | ----- | ---------------------------- | -
|                                                 |  | SecuritiesHeld to Maturity |       |       | SecuritiesAvailable for Sale |  
|                                                 |  | Amount                     |       | Yield |                              |  
|U.S. Treasury and other U.S. Government Agencies |  |                            |       |       |                              |  
|                                                 |  |                            |       |       |                              |  
|Within One Year                                  |  | $                          |      |       |                             | %
|After One But Within Five Years                  |  |                            |      |       |                             |  
|After Five But Within Ten Years                  |  |                            |      |       |                             |  
|After Ten Years                                  |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|                                                 |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|States & Political Subdivisions                  |  |                            |       |       |                              |  
|                                                 |  |                            |       |       |                              |  
|Within One Year                                  |  |                            | 200   |       | 5.21                         |  
|After One But Within Five Years                  |  |                            | 2,950 |       | 5.97                         |  
|After Five But Within Ten Years                  |  |                            | 2,062 |       | 6.57                         |  
|After Ten Years                                  |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|                                                 |  |                            | 5,212 |       | 6.18                         |  
|                                                 |  |                            |       |       |                              |  
|Corporate Debt Securities                        |  |                            |       |       |                              |  
|                                                 |  |                            |       |       |                              |  
|Within One Year                                  |  |                            |      |       |                             |  
|After One But Within Five Years                  |  |                            |      |       |                             |  
|After Five But Within Ten Years                  |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|                                                 |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|Mortgage-Backed Securities                       |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|Equity Securities                                |  |                            |      |       |                             |  
|                                                 |  |                            |       |       |                              |  
|Total                                            |  | $                          | 5,212 |       | 6.18                         | %
|                                                 |  |                            |       |       |                              |  



19



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Loans



Loans net of unearned income increased $1,623,625 or 1.2% from December 31, 2002. The additional growth in the loan portfolio during the
first six months of 2003 was primarily due to increases in other loans and residential real estate loans, offset in part by the decrease in commercial and installment loans. Real estate residential loans which include real estate construction, real
estate farmland, and real estate residential loans comprise thirty-eight percent (38%) of the loan portfolio. Commercial loans which include real estate secured by non-farm, non residential and commercial and industrial loans comprise forty-one
percent (41%) of the loan portfolio. Installment loans comprise twelve percent (12%) of the loan portfolio. Other loans include nonrated industrial development obligations, direct financing leases and other loans comprise nine percent (9%) of the
loan portfolio. The changes in the composition of the loan portfolio from December 31, 2002 to June 30, 2003 were a 1% increase in residential real estate loans, a 1% increase in other loans, a 1% decrease in installment loans and a 1% decrease in
commercial loans.



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



Table Five

Loan Portfolio



Loans outstanding are as follows (in thousands):



|                                               |  | (Unaudited)June 30,2003 |         | December 31,2002
|---------------------------------------------- |  | ----------------------- | ------- | ----------------
|Real EstateResidential                        |  |                         |         |                 
|Real estateconstruction                       |  | $                       | 399     |                 
|Real estatefarmland                           |  |                         | 352     |                 
|Real estateresidential                        |  |                         | 51,487  |                 
|                                               |  |                         |         |                 
|                                               |  | $                       | 52,238  |                 
|                                               |  |                         |         |                 
|Commercial                                     |  |                         |         |                 
|Real estatesecured by nonfarm, nonresidential |  | $                       | 40,203  |                 
|Commercial & industrial                        |  |                         | 16,479  |                 
|                                               |  |                         |         |                 
|                                               |  | $                       | 56,682  |                 
|                                               |  |                         |         |                 
|Installment                                    |  |                         |         |                 
|Installment and other loans to individuals     |  | $                       | 17,507  |                 
|                                               |  |                         |         |                 
|Others                                         |  |                         |         |                 
|Nonrated industrial development obligations    |  | $                       | 12,045  |                 
|Other loans                                    |  |                         | 44      |                 
|                                               |  |                         |         |                 
|                                               |  | $                       | 12,089  |                 
|                                               |  |                         |         |                 
|Total                                          |  |                         | 138,516 |                 
|Less unearned interest                         |  |                         | 121     |                 
|                                               |  |                         |         |                 
|                                               |  | $                       | 138,395 |                 
|                                               |  |                         |         |                 



20



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Table Six

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



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



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



|                                                                    |  | December 31, 2002 
|------------------------------------------------------------------- |  | ------------------
|                                                                    |  | In oneYear or Less
|Real Estateconstruction                                            |  | $                 
|Commercial real estate-secured by nonfarm, non-residential property |  |                   
|Commercial and Industrial                                           |  |                   
|Nonrated industrial development obligations                         |  |                   
|                                                                    |  |                   
|Total                                                               |  | $                 
|                                                                    |  |                   



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



|               |  | (Unaudited) June 30, 2003
|-------------- |  | -------------------------
|               |  | In oneYear or Less       
|Fixed Rates    |  | $                        
|Variable Rates |  |                          
|               |  |                          
|Total          |  | $                        
|               |  |                          



|               |  | December 31, 2002 
|-------------- |  | ------------------
|               |  | In oneYear or Less
|Fixed Rates    |  | $                 
|Variable Rates |  |                   
|               |  |                   
|Total          |  | $                 
|               |  |                   



21



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Total non-performing loans were $1,403,000 at June 30, 2003 and $1,682,000 at December 31, 2002. Loans classified as
non-accrual were $1,298,000 or .9% of total loans as of June 30, 2003, as compared to $1,567,000 or 1.1% of total loans at December 31, 2002. There were no loans classified as renegotiated as of June 30, 2003 and December 31, 2002. The loans past
due 90 days or more increased $19,000 to $95,000 at June 30, 2003. Other real estate owned was $10,000 at June 30, 2003 as compared to $39,000 at December 31, 2002. Management continues to monitor the non-performing assets to ensure against
deterioration in collateral values.



Table
Seven

Risk Elements



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



|                                                                 |  | (Unaudited)June 30,2003 |       |   | December 31,2002 |  
|---------------------------------------------------------------- |  | ----------------------- | ----- | - | ---------------- | -
|Past Due 90 Days or More:                                        |  |                         |       |   |                  |  
|Real Estateresidential                                          |  | $                       | 85    |   |                  | $
|Commercial                                                       |  |                         |      |   |                  |  
|Installment                                                      |  |                         | 10    |   |                  |  
|                                                                 |  |                         |       |   |                  |  
|                                                                 |  | $                       | 95    |   |                  | $
|                                                                 |  |                         |       |   |                  |  
|Non-accrual:                                                     |  |                         |       |   |                  |  
|Real Estateresidential                                          |  | $                       |      |   |                  | $
|Commercial                                                       |  |                         | 1,296 |   |                  |  
|Installment                                                      |  |                         | 2     |   |                  |  
|                                                                 |  |                         |       |   |                  |  
|                                                                 |  | $                       | 1,298 |   |                  | $
|                                                                 |  |                         |       |   |                  |  
|Other Real Estate                                                |  | $                       | 10    |   |                  | $
|                                                                 |  |                         |       |   |                  |  
|Total non-performing assets                                      |  | $                       | 1,403 |   |                  | $
|                                                                 |  |                         |       |   |                  |  
|Total non-performing assets to total loans and other real estate |  |                         | 1.01  | % |                  |  



The amount of interest income that
would have been recognized had the loans performed in accordance with their original terms was $45,800 and $97,400 for the periods ended June 30, 2003 and December 31, 2002, respectively.



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



22



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Allowance for Possible Loan Losses



The corporation maintains an allowance for possible loan losses to absorb probable loan
losses. The provision for loan losses was $165,000 during the six months ended June 30, 2003, as compared to $300,000 during the same period of the prior year. The allowance for possible loan losses represented 1.5% of total loans outstanding at
June 30, 2003 and December 31, 2002, respectively. The reserve for possible loan losses is considered to be adequate to provide for future losses in the portfolio. The amount charged to earnings is based upon managements evaluations of the
loan portfolio, as well as current and anticipated economic conditions, net loans charged off, past loan experiences, changes in character of the loan portfolio, specific problem loans and delinquencies and other factors.



Table Eight

Analysis of Allowance for Possible Loan Losses



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



|                                                                           |  | Summary of Loan Loss Experience |        
|-------------------------------------------------------------------------- |  | ------------------------------- | -------
|                                                                           |  | (Unaudited) June 30,            |        
|                                                                           |  | 2003                            |        
|Balance at Beginning of period                                             |  |                                 |        
|Allowance for Possible Loan Losses                                         |  | $                               | 2,027  
|Loans Charged Off:                                                         |  |                                 |        
|Real Estateresidential                                                    |  |                                 | 13     
|Commercial                                                                 |  |                                 | 40     
|Installment                                                                |  |                                 | 34     
|                                                                           |  |                                 |        
|                                                                           |  |                                 | 87     
|Recoveries:                                                                |  |                                 |        
|Real Estateresidential                                                    |  |                                 | 3      
|Commercial                                                                 |  |                                 |       
|Installment                                                                |  |                                 | 4      
|                                                                           |  |                                 |        
|                                                                           |  |                                 | 7      
|                                                                           |  |                                 |        
|Net Charge-offs                                                            |  |                                 | 80     
|                                                                           |  |                                 |        
|Additions Charged to Operations                                            |  |                                 | 165    
|                                                                           |  |                                 |        
|Balance at end of period:                                                  |  | $                               | 2,112  
|                                                                           |  |                                 |        
|Average Loans Outstanding                                                  |  | $                               | 135,767
|                                                                           |  |                                 |        
|Ratio of net charge-offs to Average loans outstanding for the period       |  |                                 | .06    
|Ratio of the Allowance for Loan Losses to Loans Outstanding for the period |  |                                 | 1.53   



23



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Allowance for Possible Loan Lossescontinued



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



Table Nine

Loan PortfolioAllocation of allowance for possible loan losses



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



|                        |  | June 30,2003 |       |                                                  | December 31,2002 |  
|----------------------- |  | ------------ | ----- | ------------------------------------------------ | ---------------- | -
|                        |  | Amount       |       | Percent of loans in each category to total loans |                  |  
|Real estateresidential |  | $            | 311   |                                                  | 37.8             | %
|Commercial              |  |              | 1,226 |                                                  | 40.9             |  
|Installment             |  |              | 554   |                                                  | 12.6             |  
|Others                  |  |              | 21    |                                                  | 8.7              |  
|                        |  |              |       |                                                  |                  |  
|Total                   |  | $            | 2,112 |                                                  | 100.0            | %
|                        |  |              |       |                                                  |                  |  



24



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Deposits



Total deposits were $240,055,484 at June 30, 2003 as compared to $231,375,582 at December 31, 2002, an increase of 3.8%. The deposit growth
during the first six months of 2003 was primarily in savings deposits. The subsidiary banks have offered a savings deposit product with a competitive interest rate which has resulted in the increase in savings deposits. At June 30, 2003,
noninterest bearing deposits comprised 10% of total deposits and interest bearing deposits which include NOW, money market, savings and time deposits comprised 90% of total deposits. The change in the deposit mix from December 31, 2002 to June 30,
2003 was 1% increase in noninterest bearing deposits and 1% decrease in interest bearing deposits.



Table Ten

Deposits



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



|                                           |  | (Unaudited)June 30,2003 |        | December 31,2002
|------------------------------------------ |  | ----------------------- | ------ | ----------------
|Due in three months or less                |  | $                       | 2,363  |                 
|Due after three months through six months  |  |                         | 847    |                 
|Due after six months through twelve months |  |                         | 10,153 |                 
|Due after one year through five years      |  |                         | 11,477 |                 
|                                           |  |                         |        |                 
|Total                                      |  | $                       | 24,840 |                 
|                                           |  |                         |        |                 



Repurchase agreements



Repurchase agreements are short-term
borrowings. Repurchase agreements were $9,572,921 at June 30, 2003, an increase of $535,119, as compared to December 31, 2002. The increase of repurchase agreements was primarily due to an increase in the number of commercial customers and in the
balances maintained by existing commercial customers.



Capital Resources



Stockholders equity increased 3.4%
during the first six months of 2003 entirely from current earnings after quarterly dividends, and increased .2% resulting from the effect of the change in the net unrealized gain on securities available for sale. Stockholders equity amounted
to 8.5% of total assets at June 30, 2003 and December 31, 2002. The Holding Companys primary source of funds for payment of dividends to shareholders is from the dividends from its subsidiary banks. Earnings from subsidiary bank operations are
expected to remain adequate to fund payment of stockholders dividends and internal growth. In managements opinion, the subsidiary banks have the capability to upstream sufficient dividends to meet the cash requirements of the Holding
Company.



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



25



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##### Table of Contents

First West Virginia Bancorp, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations



Capital ResourcesContinued



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



|Ratio              |  | Minimum |  | June 30,2003 |  | December 31,2002
|------------------ |  | ------- |  | ------------ |  | ----------------
|Leverage Ratio     |  | 3%      |  | 7.2%         |  | 7.1%            
|Risk Based Capital |  |         |  |              |  |                 
|Tier 1 (core)      |  | 4%      |  | 12.0%        |  | 12.0%           
|Tier 2 (total)     |  | 8%      |  | 13.3%        |  | 13.2%           



Liquidity



Liquidity management ensures that funds are
available to meet loan commitments, deposit withdrawals, and operating expenses. Funds are provided by loan repayments, investment securities maturities, or deposits, and can be raised by liquidating assets or through additional borrowings. The
corporation had investment securities with an estimated market value of $109,676,157 classified as available for sale at June 30, 2003. These securities are available for sale at any time based upon managements assessment in order to provide
necessary liquidity should the need arise. In addition, the Holding Companys subsidiary bank, Progressive Bank, N.A., is a member of the Federal Home Loan Bank of Pittsburgh (FHLB). Membership in the FHLB provides an additional source of
short-term and long-term funding, in the form of collateralized advances. The subsidiary bank had an available line with the FHLB in the aggregate amount of $7 million which expires in December 31, 2003. As of June 30, 2003 there were no borrowings
outstanding pursuant to this agreement.



At June 30, 2003 and December 31,
2002, the Holding Company had outstanding loan commitments and standby letters of credit totaling $23,504,000 and $15,750,000, respectively. As of June 30, 2003, management placed a high probability for required funding within one year of
approximately $19,299,000. Approximately $3,863,000 is principally unused home equity and credit card lines on which management places a low probability for required funding.



26



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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, 2003 were as follows: given a 200 basis point increase scenario net interest income
would be decreased by approximately 4%, and given a 200 basis point decrease scenario net interest income would be reduced by approximately 10%. Under both interest rate scenarios the subsidiary bank was within the established guideline at June 30,
2003.



Item 4 Controls and Procedures



Evaluation of Disclosure Controls and Procedures



The Companys President and Chief Executive Officer, Charles K. Graham, and Senior Vice President 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



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 subsidiaries 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 any of its subsidiaries is a party or of which any of their property is subject.



Item 2 Changes in Securities



Inapplicable



Item 3 Defaults Upon Senior Securities



Inapplicable



Item 4 Submission of Matters to Vote of Security Holders



| | a. |  | The matters discussed in 4c. were submitted to a vote of security holders at the April 8, 2003, Annual Meeting of Shareholders.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------



| | b. |  | Inapplicable
| | -- |  | ------------



| | c. |  | Election of Directors
| | -- |  | ---------------------



The following directors were elected to the Board of Directors as Class II, for terms expiring at the annual meeting in 2006:

Sylvan J. Dlesk, James C. Inman, Jr., and Thomas A. Noice.

The results of the election were as follows:



|                    |  | SHARES VOTED
|------------------- |  | ------------
|NAME                |  | For         
|Sylvan J. Dlesk     |  | 1,339,451   
|James C. Inman, Jr. |  | 1,339,061   
|Thomas A. Noice     |  | 1,334,928   

---

|* |  | Cumulative Shares Voted
|- |  | -----------------------



Continuing directors were as follows:



|                     |  | Terms Expiring
|-------------------- |  | --------------
|Charles K. Graham    |  | 2004          
|Laura G. Inman       |  | 2005          
|Sylvan J. Dlesk      |  | 2006          
|James C. Inman, Jr.  |  | 2006          
|Thomas A. Noice      |  | 2006          
|Nada E. Beneke       |  | 2004          
|R. Clark Morton      |  | 2004          
|William G. Petroplus |  | 2004          



| | d. |  | Inapplicable
| | -- |  | ------------



Item 5 Other Information



Inapplicable



Item 6 Exhibits and Reports on Form 8-K



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



On May 15, 2003 a report on Form 8-K was filed which contained a press release dated May 13, 2003 that reported the earnings of First West Virginia Bancorp, Inc. for the first quarter ended March 31, 2003.



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



The exhibits listed in the Exhibit Index on page 30 of this FORM 10-Q are incorporated by reference and/or filed herewith.



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##### Table of Contents

SIGNATURES



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



First West Virginia Bancorp, Inc(Registrant)By:

/s/    Charles K. GrahamCharles K. GrahamPresident and Chief Executive Officer/DirectorBy:

/s/    Francie P. ReppyFrancie P. ReppySenior Vice President and Chief Financial Officer




Dated: August 5, 2003



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##### Table of Contents

EXHIBIT INDEX



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



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



30