<PAGE>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                  FORM 10-K

                Annual Report Persuant to Section 13 or 15(d) of
                      The Securities Exchange Act of 1934


   For the calendar year ended December 31, 1998 Commission File No. 2-95114

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

                          LOGAN COUNTY BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)

             West Virginia                            55-0660015
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)                Identification No.)

     P.O. Box 597 Logan, WV                              25601
     (Address of principal executive offices)          (Zip Code)


  Registrant's Telephone Number, including area code: (304) 752-2080

       Securities Registered Pursuant To Section 12(b) of the Act:
                                   NONE

                                                  Name of each exchange
         Title of Each Class                       on which registered


       Securities Registered Pursuant to Section 12(g) of The Act:

                                    NONE
                              (Title of Class)


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

Indicate the number of shares outstanding of each of the registrant's classes 
of common stock as of the latest practicable date:

       Common Stock ($2.50 Par Value)            478,000 Shares

State the aggregate market value of the voting stock held by non-affiliates 
of the registrant.

Aggregate market value of voting stock             Based on last trade price

         $19,120,000                                           $40.00

                      Documents Incorporated by Reference

                                     (NONE)


                                        1


<PAGE>

                        LOGAN COUNTY BANCSHARES, INC.
                                 FORM 10 - K

                                    INDEX
                                    -----

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                       <C>
ITEM  1 - Business.....................................................     3-6

ITEM  2 - Properties...................................................       7

ITEM  3 - Legal Proceedings............................................       7

ITEM  4 - Submission of Matters to a Vote of Security Holders..........       7

ITEM  5 - Market for the Registrant's Common Stock and 
          Related Security Holder Matters..............................       8

ITEM  6 - Selected Financial Data......................................       9

ITEM  7 - Management's Discussion and Analysis.........................   10-30

ITEM  8 - Financial Statements and Supplemental Data...................   31-53

ITEM  9 - Disagreements on Accounting and Financial Disclosures........      54

ITEM 10 - Directors and Executive Officers of the
          Registrant...................................................      54

ITEM 11 - Executive Compensation.......................................      55

ITEM 12 - Security Ownership of Certain Beneficial
          Owners and Management........................................      55

ITEM 13 - Certain Relationships and Related Transactions...............      55

ITEM 14 - Exhibits, Financial Statement Schedules and Reports
          on Form 8K...................................................      55

PROXY MATERIALS........................................................   56-61

SIGNATURES.............................................................      62
</TABLE>




                                       2

<PAGE>

                      LOGAN COUNTY BANCSHARES, INC

    Logan County BancShares, Inc. is a bank holding company which was 
organized under the laws of the State of West Virginia in 1985. On May 17, 
1985, the Corporation acquired all the outstanding capital stock of Logan 
Bank & Trust Company (LB&T) and also all of the outstanding stock of Bank of 
Chapmanville (BC). Both of these subsidiaries are banking corporations 
organized under the laws of the State of West Virginia. On May 28, 1996, the 
subsidiary banks; Logan Bank & Trust Company and Bank of Chapmanville entered 
into a merger agreement whereby they would be merged into Logan Bank & Trust 
Company. The merger was completed after proper regulatory approval and was 
accounted for under the pooling of interest method of accounting.

    Logan Bank & Trust Company was organized in 1963, and still operates at 
its original location at the corner of Washington and Main Streets in Logan, 
West Virginia. The Company also has a separate drive-up facility and 
mini-bank also located on Main Street in Logan, and in early February 1996, 
opened a new full-service branch in the Man area. In November 1996, the bank 
acquired a branch facility from another financial institution located at 
Harts, West Virginia. The facility at Route 10 North, Harts, is operated as a 
full service branch of the bank. Logan Bank & Trust Company is a member of 
the Federal Reserve System and deposits are insured persuant to the Federal 
Deposit Insurance Act.

    Logan Bank & Trust Company provided a complete range of retail banking 
services to individuals and small and medium size businesses. Their services 
include checking, savings, NOW, certificates of deposit and money market 
deposit accounts, business loans, individual loans, mortgage loans, home 
equity loans, consumer loans for various other purposes, other 
consumer-oriented financial services including safety deposit box accounts, 
IRA accounts and night depository. The Company also operates several 
automatic teller machines at three strategic locations in Logan County which 
provide 24-hour working services to customers of Logan Bank & Trust Company. 
The Company is a member of the Cirrus ATM network which has over 100 
locations in West Virginia and more than 10,000 locations in 47 states.

    Logan Bank & Trust Company provides depository lending and related 
financial services to commercial, retail, industrial, financial and 
governmental customers. The lending function includes short and medium term 
loans, letters of credit, inventory and accounts receivable financing and 
real estate construction lending. The Company also offers a discount 
investment brokerage service through a sub-contract arrangement with a larger 
financial institution.

    The Chapmanville Bank of LB&T bank has one location situated on Railroad 
Avenue in Chapmanville, West Virginia.

    This facility also provided a complete range of retail banking services 
to individuals and small and medium sized businesses. These services include 
checking, savings, NOW, certificates of deposit and money market account 
deposits. Business loans, individuals loans, mortgage loans, home equity 
loans, consumer loans for various other purposes are provided as well. In 
addition, the Bank offers consumer oriented financial services such as IRA 
accounts, night depository, safety deposit boxes and other banking related 
services.



                                           3  

<PAGE>

     The branch also provides depository, lending and related financial 
services to commercial, retail, industrial, financial and governmental 
customers. The lending function includes short and medium-term loans, letters 
of credit, inventory and accounts receivable financing, and real estate 
construction lending as do all the branches of Logan Bank & Trust Company.

                           INVESTMENT CONSIDERATIONS

     An investment in the shares offered hereby involves certain risks. A 
subscription for shares should be made only after careful considerations set 
forth below and elsewhere in this Offering Circular, and should be undertaken 
only by persons who can afford an investment involving such risks.

                          MARKET FOR THE COMMON STOCK
                      AND RELATED SECURITY HOLDER MATTERS

     The shares of Logan County Bancshares, Inc. are infrequently traded in 
the over-the-counter and are not listed on the National Association of 
Security Dealers Automated Quotation System (NASDAQ) or on any exchange. 
Management is not aware of any security dealer which makes a market in the 
stock; therefore; no active trading market should be deemed to exist.

     The sales price for Logan County Bancshares, Inc. stock are determined 
by negotiations between individual buyers and sellers. Although Logan keeps 
no records of sale prices paid for Logan stock and has no direct knowledge of 
such prices, for purposes of presentation, Corporation's management estimates 
the approximate market value ranges for 1998 and 1997 to be as follows:

<TABLE>
<CAPTION>

                           First          Second         Third         Fourth
Sale Price:                Quarter        Quarter        Quarter       Quarter
-----------                -------        -------        -------       -------
<S>                        <C>            <C>            <C>           <C>
1998 Common Stock          $35-$40        $40-$40        $40-$40       $40-$40
1997 Common Stock          $28-$30        $28-$30        $30-$35       $35-$35

Per Share Dividends
Declared:
---------
1998 Common Stock          $0.39          $0.40          $0.41         $0.57
1997 Common Stock          $0.30          $0.32          $0.35         $0.63
</TABLE>

                                    COMPETITION

     Vigorous competition exists in the market area of Logan County 
BancShares,Inc. In addition to the three other banks located within the 
market area, the location is in a relatively close proximity to two 
population centers of the State. There is also competition for deposits and 
related financial services from non-bank institutions such as savings and 
loans, insurance companies and brokerage firms, all of which are active in 
the area. Loans are provided by those institutions as well in addition to the 
finance companies. Since the Bank Holding Company Act, passed by the West 
Virginia Legislature in 1982, local banks have been joining Bank holding 
companies around the State. Of the five banks located in Logan County, only 
one is a unit bank. The other four are members of various multi-bank holding 
companies. Logan County BancShares, Inc. has been able to compete effectively 
within the county by having one institution located in the county seat (Logan 
Bank & Trust Company), and Branches located in the high-growth area of the 
county. Also, to stimulate growth, Logan County BancShares, Inc. is the only 
bank holding company owned and controlled from within the county.


                                       4

<PAGE>

     The Corporation is a bank holding company within the meaning of the Bank 
Holding Company Act of 1956 (the Act) and is registered as such with the 
Board of Governors of the Federal Reserve System (the Reserve Board). As a 
bank holding company, the Corporation is required to file with the Federal 
Reserve Board an annual report and such other information as may be required. 
The Federal Reserve Board may also make examinations of the corporation. In 
addition, the Federal Reserve Board has the authority (which it has not 
exercised) to regulate provisions of certain bank holding company debt.

     The Act requires every bank holding company to obtain the prior approval 
of the Federal Reserve Board before acquiring substantially all the assets of 
or direct or indirect ownership or control of more than 5% of the voting 
shares of any bank which is not already majority-owned. The Act also 
prohibits a bank holding company, with certain exceptions, from itself 
engaging in or acquiring direct or indirect control of more than 5% of the 
voting shares of any company engaged in non-banking activities. One of the 
principal exceptions to these prohibitions is for engaging or Acquiring 
shares of a company engaged in activities found by the Federal Reserve Board 
by order or regulation to be so closely related to banking or managing banks 
as to be a proper incident thereto. The Act prohibits the acquisition by a 
bank holding company of more than 5% of the outstanding voting shares of a 
bank located outside the State in which the operations of its banking 
subsidiaries are principally conducted, unless such an acquisition is 
specifically authorized by statute of the State in which the bank acquired is 
located. The Act and regulations of the Federal Reserve Board also prohibit a 
bank holding company and its subsidiaries from engaging in certain tie-in 
arrangements in connection with any extension of credit or provision of any 
property or services.

     Logan Bank & Trust Company is an insured bank organized under the 
Banking Law of the State of West Virginia and is a member of the Federal 
Reserve System. Accordingly, their operations are subject to Federal and 
State laws applicable to commercial banks with trust powers and to regulation 
by the Commissioner of Banking and the West Virginia State Banking 
Commissioner, the Federal Reserve Board and the Federal Deposit Insurance 
Corporation. Among other restrictions, the West Virginia Banking laws state 
that banks organized thereunder may pay dividends only out of undivided 
profits. Under the Federal Reserve Act, the approval of the Federal Reserve 
Board is required for dividends declared by a state member bank which in any 
year exceeds the net profits of such bank for that year, as defined, combined 
with retained net profits for the two preceeding years.

                                        5

<PAGE>

     The earnings and growth of the banking industry and of Logan Bank & Trust 
Company is affected by the credit policies of monetary authorities including 
the Federal Reserve System. An important function of the Federal Reserve 
System is to regulate the national supply of bank credit in order to control 
recessionary and inflationary pressures. Among the instruments of monetary 
policy used by the Federal Reserve to implement these objectives are open 
market operations in the U.S. Government securities, changes in the discount 
rate on member bank borrowings, and changes in reserve requirements against 
member bank deposits. These means are used in varying combinations to 
influence overall growth of bank loans, investments and deposits and may also 
affect interest rates charged on loans or paid for deposits. The monetary 
policies of the Federal Reserve authorities have had a significant effect on 
the operating results of commercial banks in the past and are expected to 
continue to have such an effect in the future.

     In view of changing conditions in the national economy and in the money 
markets, as well as the effect of actions by monetary and fiscal authorities, 
including the Federal Reserve system, no prediction can be made as to 
possible future changes in interest rates, deposit levels, loan demand or 
their effect on the business and earnings of the Corporation, and Logan Bank 
& Trust Company.

                              FOREIGN OPERATIONS

     The corporation and subsidiaries have no foreign operations.

                              EXECUTIVE OFFICERS

     For information concerning the Executive Officers of the Corporation, 
please see Item 10.




                                       6

<PAGE>

                             ITEM 2 - PROPERTIES


     The principal offices of the corporation are shared with those of Logan 
Bank & Trust Company and are situated in Logan, West Virginia. This building, 
a two-story bank and office building, is owned by Logan Bank & Trust company, 
as is a mini-bank and drive-up facility which is located near-by. In 
addition, a one-story office and bank building is located on Railroad Avenue 
in Chapmanville, West Virginia. During 1996 the Bank opened two other branch 
facilities in West Virginia. Both are one-story office and bank buildings 
located at Rt. 10, South Man, West Virginia and Rt. 10 North at Harts, West 
Virginia.


                          ITEM 3 - LEGAL PROCEEDINGS


     There are no legal actions or proceedings pending to which the 
Corporation, or its subsidiaries, are a party.


         ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


     None.





                                       7


<PAGE>

     ITEM 5 -- MARKET FOR THE REGISTRANT'S COMMON STOCK
     AND RELATED SECURITY HOLDER MATTERS

     The shares of Logan County BancShares, Inc. are infrequently traded in 
the over-the-counter and are not listed on the National Association of 
Security Dealers Automated Quotation System (NASDAQ) or on any exchange. 
Management is not aware of any security dealer which makes a market in the 
stock; therefore, no active trading market should be deemed to exist.

     The sales price for Logan County BancShares, Inc. stock are determined 
by negotiations between individual buyers and sellers. Although Logan keeps 
no records of sales prices paid for Logan stock and has no direct knowledge 
of such prices, for purposes of presentation, Corporation's management 
estimates the approximate market value ranges for 1998 and 1997 to be as 
follows:

<TABLE>
<CAPTION>
                      First      Second       Third        Fourth
Sales Price:          Quarter    Quarter      Quarter      Quarter
------------          -------    -------      -------      --------
<S>                   <C>        <C>          <C>          <C>
1998 Common Stock     $35-$40    $40-$40      $40-$50      $40-$40
1997 Common Stock     $28-$30    $28-$30      $30-$35      $35-$35
</TABLE>

<TABLE>
<CAPTION>
Per Share Dividends Declared
----------------------------

<S>                   <C>        <C>          <C>          <C>
1998 Common Stock     $0.39      $0.40        $0.41        $0.57
1997 Common Stock     $0.30      $0.32        $0.35        $0.63

</TABLE>

                                      8

<PAGE>

                       ITEM 6 -- SELECTED FINANCIAL DATA

                 LOGAN COUNTY BANCSHARES, INC. AND SUBSIDIARY

                          (In Thousands of Dollars)


<TABLE>
<CAPTION>

Year Ended December 31:                             1998          1997          1996          1995          1994
-----------------------                           --------     --------      --------      --------      --------
<S>                                                 <C>           <C>           <C>           <C>           <C>
Total Interest Revenue                            $  9,964     $  8,693      $  7,359      $  6,664      $  6,040
Total Interest Expense                               4,260        3,605         2,988         2,687         2,243
                                                  --------     --------      --------      --------      --------
Net Interest Revenue                                 5,704        5,088         4,371         3,977         3,797
Provision for Possible
 Loan Losses                                            90          107            40            59           271
                                                  --------     --------      --------      --------      --------
Net Interest Revenue After
 Provision for Possible
 Loan Losses                                         5,614        4,981         4,331         3,918         3,526
Other Operating Revenue                                989        1,264         1,000           731           529
Other Operating Expense                             (3,269)      (3,294)       (3,026)       (2,794)       (2,690)
                                                  --------     --------      --------      --------      --------
Income Before Income Taxes                           2,974        2,951         2,305         1,855         1,365
Income Taxes                                         1,083        1,057           767           643           300
                                                  --------     --------      --------      --------      --------
Net Income                                        $  1,891     $  1,894      $  1,538      $  1,212      $  1,065
                                                  --------     --------      --------      --------      --------
                                                  --------     --------      --------      --------      --------
Per Common Share:
 Net Income                                       $   3.96     $   4.04      $   3.29      $   2.69      $   2.28
                                                  --------     --------      --------      --------      --------
                                                  --------     --------      --------      --------      --------
Cash Dividends Declared                           $   1.77     $   1.60      $   1.15      $   0.95      $   0.70
                                                  --------     --------      --------      --------      --------
                                                  --------     --------      --------      --------      --------
At December 31:
 Total Loans                                      $ 95,139     $ 84,898      $ 70,872      $ 63,685      $ 59,437
 Total Assets                                      139,278      121,850       107,380        94,719        89,872
 Total Deposits                                    124,420      108,107        95,233        83,717        79,709
 Long-Term Debt                                          0            0             0             0             0
 Total Shareholders' Equity                         14,060       12,983        11,415        10,391         9,555
 Selected Ratios:
  Rate of Return on Average:
   Total Assets                                       1.43%        1.62%         1.52%         1.32%         1.20%
   Shareholders' Equity                              13.99%       15.18%        14.00%        11.98%        11.38%
  Tier 1 Capital to Total
   Assets at Year End                                10.09%       11.09%        10.89%        10.90%        11.47%
  Average Total Shareholders'
   Equity to Average total Assets                    10.22%       10.66%        10.88%        10.99%        10.58%
  Common Dividend Payout Ratio                       44.70%       39.60%        34.95%        36.66%        30.76%
  Nonaccrual and Restructured
   Business Loans as a Percentage
   of Total Loans                                     0.53%        0.64%         0.96%         2.64%         2.70%

</TABLE>


                                       9

<PAGE>

             ITEM 7 -  Management's Discussion and Analysis


              Logan County BancShares, Inc. and Subsidiary
            Management's Discussion and Analysis of Financial
                   Condition and Results of Operations

                              INTRODUCTION

     The Management's Discussion and Analysis reviews and discusses the
financial condition of Logan County BancShares, Inc. and Subsidiary. Included
are (a) the results of operations for 1998 and (b) discussion of liquidity
including an asset and liability sensitivity analysis, and (c) an analysis of
earnings, dividends, and capital. The discussion and analysis discloses any
material changes and any infrequent events and known trends as they relate to
liquidity, capital resources and results of operations. The information
presented reflects the activities of the holding company and the subsidiary
bank, Logan Bank & Trust Company.

     To assist in understanding and evaluating major changes in Logan County
BancShares, Inc.'s financial position and results of operations, this discussion
emphasizes a comparison of the years 1998 to 1997, 1997 to 1996, and 1996 to
1995, and also presents five year information in instances where appropriate.
This discussion should be read concurrently with the audited financial
statements including notes to those statements.

     The following definitions apply to terms used in this report:

     AVERAGE BALANCES: All  balances have been computed on  the basis of
monthly averages.

     NET INTEREST  INCOME: Interest  and related  fee income  on earning
assets, reduced by total interest  paid on interest bearing deposits and
borrowed funds.  This net amount,  when divided by average earning asset
balances becomes net interest margin.

     NET  NON-INTEREST EXPENSE:  Non-interest  expenses  reduced by  the
amount of non-interest income.
                    
                     LIQUIDITY AND CAPITAL RESOURCES

     Liquidity is  provided through short-term investments,  payments on
outstanding loans,  and the  ability to attract  new deposits  or borrow
funds.  At December  31, 1998, and 1997, the funds  available within one
year from investments and loans were $27,105,000. and $26,641,000. 

     Logan County BancShares, Inc.'s deposit mix has increased by $16,313,000.
in 1998, $12,874,000. in 1997, and $11,515,000. in 1996. these increases in the
deposit mix points out a marketing strategy that has attracted new customers to
the Bank. Time deposits represented the major growth in the deposit mix. They
increased by $8,056,000., $10,968,000. and $8,619,000. respectively in 1998,
1997 and 1996. In 1998 all catagories grew while the shift in 1997 and 1996 was
from Savings accounts into Time deposits due to the Banks' promotional
activities; offering competitive interest rates for short-term and long-term
CD's. Demand deposits contributed to the growth in the deposit mix by increasing
$42744,891 in 1998, $2,999,000. in 1997, and $785,000. in 1996. Savings deposits
showed slight decreases in 1998 after remaining stable over the past five years.
These changes are predominantly due to the fluctuating interest rates by the
Federal Reserve and movement of savings to time deposits by the consumer in
order to obtain a better interest rate. At December 31, 1998 and 1997, 31.29%
and 28.86% of the total deposits were in demand deposits, while 23.96% and
27.09% were in savings and 44.74% and 44.02% were in time deposits,
respectively. The stable growth in deposits gives the Bank a firm deposit base
to meet the lending demand and market fluctuations.


                                       10

<PAGE>



     During 1998, 1997 and 1996, banks have been faced with a highly competitive
atmosphere in the sense of maintaining a continuity of growth. Logan County
BancShares, Inc. has maintained a community bank approach which enhances its
performance over those years. The merger of Bank of Chapmanville into Logan Bank
& Trust Company enabled the Company to operate more effeciently and thereby
capture a sizeable portion of the market for deposits in the fastest growing
area of Logan County, West Virginia. Also, with the addition of the Man Branch
of Logan Bank & Trust and Harts Bank of Logan Bank & Trust in 1996, the company
has expanded its current market. See Table I. for a five-year summary of
financial data.

     Capital planning is essentially the management process that allocates
capital resources in a manner that generates the highest income, while
maintaining sufficient liquidity, at the lowest degree of risk attainable.
Moreover, it is the philosophy of Logan County BancShares, Inc. to nurture that
growth by planning for steady, long-range profits rather than the high-risk,
high-exposure techniques. As noted in Table I. the ratio of net income to
average assets was 1.43%, 1.62%, and 1.52%, for the years ended December 31,
1998, 1997 and 1996, respectively. Through the periods presented, management has
allocated new funds into the higher-yielding loans and holding the investment
securities nearly constant. Although the improvement in the local economy had
been at a slow pace through 1996, 1997 and 1998 overall loan demand and deposit
growth show a marked increase due to marketing the community bank service
approach. 

     Table I.  represents a summary  of financial data for  the previous
five years.


                                       11
<PAGE>




                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

               TABLE I. - SUMMARY OF FINANCIAL DATA FOR FIVE YEARS
                            (In thousands of dollars)

<TABLE>
<CAPTION>

                                  1998          1997          1996          1995          1994
                              --------      --------      --------      --------      --------
<S>                           <C>           <C>           <C>           <C>           <C>     
Year End Balances:
  Total Assets                $139,278      $121,850      $107,380      $ 94,719      $ 89,871
  Total Earning Assets         130,454       113,088        99,542        91,968        84,025
  Total Deposits               124,420       108,107        95,233        83,717        79,709
  Stockholders' Equity          14,059        12,983        11,415        10,391         9,555

Income for the Year:
  Total Interest Income          9,964         8,693         7,359         6,664         6,040
  Total Interest Expense         4,260         3,605         2,988         2,686         2,243
  Net Interest Income            5,704         5,088         4,371         3,978         3,797
  Provision for Loan
    Losses                          90           107            40            59           271
  Non-Interest Income              989         1,264         1,000           731           529
  Non-interest expense           4,712         4,351         3,793         3,438         2,990
  Net Income                     1,891         1,893         1,538         1,212         1,065

Per Share Data
  Net Income                      3.96          4.04          3.29          2.59          2.28
  Stockholders' Equity           29.41         27.66         24.41         22.22         20.43
  Cash Dividends                  1.77          1.60          1.15         0.950         0.700

Key Ratios
  Net Income To:
    Average Assets                1.43%         1.62%         1.52%         1.32%         1.20%
    Average Stockholders'
      Equity                     13.99%        15.18%        14.00%        11.98%        11.38%
    Average Stockholders'
      Equity to Average
      Assets                     10.22%        10.66%        10.88%        10.99%        10.58%
</TABLE>



                                       12
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


 TABLE II. - RATE ANALYSIS OF INTEREST EARNING ASSETS AND INTEREST BEARING 
             LIABILITIES
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                     1998                            1997                          1996
                                        -----------------------------   ---------------------------    ---------------------------
                                        Average     Income    Average   Average     Income  Average    Average    Income   Average
                                        Balance   (Expense)   Yield     Balance   (Expense) Yield      Balance   (Expense)  Yield
                                        -------   --------    -------   -------   --------  -------    -------    -------- -------
<S>                                      <C>        <C>        <C>    <C>        <C>          <C>    <C>        <C>         <C>  
EARNING ASSETS:                          
  Loans (nst of Reserves & Discounts)
  (Net of Reserves & Discounts):
         Commercial                      $ 36,041   $  3,209   8.90%  $ 33,292   $  2,959     8.89%  $ 28,476   $  2,493    8.75%
         Real Estate                       43,454      3,704   8.52%    37,305      3,153     8.45%    31,897      2,681    8.41%
         Consumer                          10,394        937   9.01%     7,225        678     9.38%     5,521        525    9.51%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
           Total Net Loans                 89,889      7,850   8.73%    77,822      6,790     8.67%    65,894      5,699    8.65%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
  Investment Securities:
         Taxable                            3,245        187   5.76%     2,949        146     4.95%     8,337        567    6.80%
         Non-Taxable                            0          0   0.00%        59          4     6.78%        95          9    9.47%
         Available for Sale                18,763       1210   6.45%    19,463       1245     6.39%    10,206        559    5.48%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
           Total Investment
             Securities                    22,008      1,397   6.35%    22,471      1,395     6.21%    18,638      1,135    6.09%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
  FederaleraldFundsdSoldeandities
         Securities Purchased
         Under Option to Resell            13,203        717   5.43%     9,290        509     5.48%     9,827        525    5.34%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
           Total Earning Assets          $125,100   $  9,964   7.96%  $109,583   $  8,694     7.93%  $ 94,359   $  7,359    7.80%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
  IntereserestrBearingbLiabilities:
         Savings & Interest
           Bearing Demand                $ 50,133   $  1,345   2.68%  $ 48,523   $  1,334     2.75%  $ 46,952   $  1,286    2.74%
         Time Deposits                     52,055      2,915   5.61%    40,815      2,271     5.56%    31,006      1,694    5.46%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
           Total Interest Bearing
             Liabilities                 $102,188   $  4,260   4.17%  $ 89,338   $  3,605     4.03%  $ 77,958   $  2,980    3.82%
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
                                         --------   --------   -----  --------   --------     -----  --------   --------    -----
</TABLE>


                                       13
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


 TABLE III. - VOLUME ANALYSIS OF CHANGE IN INTEREST INCOME AND INTEREST EXPENSE
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                                               1998 Vs. 1997                  1997 Vs. 1996
                                                                       --------------------------       ---------------------------
                                        Interest Income Expense        Increase (Decrease) Due To       Increase (Decrease) Due To
                                                                                 Change In                          Change In
                                      1998        1997        1996     Volume     Rate      Total       Volume       Rate    Total
INTEREST INCOME ON                  --------    --------    --------   -------  ---------  ------       -------   --------- -------
<S>                                  <C>         <C>         <C>       <C>      <C>        <C>          <C>       <C>       <C>    
EARNING ASSETS:
  LOANS:
         Commercial                  $ 3,209     $ 2,959     $ 2,493   $   245  $     5    $   250      $   438   $    28   $   466
         Real Estate                   3,704       3,153       2,681       520       31        551          469         3       472
         Consumer                        937         678         525       297      (38)       259          178       (25)      153
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
           Total Loans                 7,850       6,790       5,699     1,062       (2)     1,060        1,085         6     1,091
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------

  SECURITIES:
         Taxable                         187         146         567        15       26         41         (366)      (55)     (421)
         Tax Exempt                        0           4           9        (4)       0         (4)          (4)       (1)       (5)
         Available for Sale            1,210       1,245         559       (45)      10        (35)         507       179       686
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
           Total Securities            1,397       1,395       1,135       (34)      36          2          137       123       260
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
  FEDERAL FUNDS SOLD AND
    SECURITIES PURCHASED:
         Under Agreement to
           Resell                        717         509         525       214       (6)       208          (29)       13       (16)
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
TOTAL INTEREST INCOME ON
         EARNING ASSETS                9,964       8,694       7,359     1,242       28      1,270        1,193       142     1,335
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
INTEREST EXPENSE ON
  INTEREST BEARING LIABILITIES:
    Savings and Interest Bearing
           Demand Deposits             1,345       1,334       1,286        41      (30)        11           43         5        48
         Time Deposits                 2,915       2,271       1,694       625       19        644          536        41       577
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
TOTAL INTEINTERESTEEXPENSE ON
    INTEREST BEARING LIABILITIES       4,260       3,605       2,980       666      (11)       655          579        46       625
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------

  NET INTEREST INCOME                $ 5,704     $ 5,089     $ 4,379   $   576  $    39    $   615      $   614   $    96   $   710
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
                                     -------     -------     -------   -------  -------    -------      -------   -------   -------
</TABLE>



                                       14
<PAGE>


                   Logan County BancShars, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                      Conditions and Results of Operations


                             LOAN PORTFOLIO
                             --------------

     The loan portfolio of Logan County BancShares, Inc. continues to represent
the largest component of earning assets. Loan activity has continued to increase
due to the Bank's emphasis on lending; as shown on Table IV, the Bank has
contributed substantially to liquidity by structuring the loan portfolio in such
a manner as to have approximately 23.88% of the total loans due within one year.
Further, the company has 10.68% of the loan portfolio in floating rates loans. 


          TABLE IV - REMAINING MATURITIES OF LOANS AT DECEMBER 31, 1998
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                  COMMERCIAL,
                                FINANCIAL AND  REAL ESTATE
                                 AGRICULTURAL   MORTGAGES  INSTALLMENTS    TOTAL
                                -------------  ----------- ------------    -----
 MATURITIES
 ----------
<S>                                  <C>         <C>         <C>          <C>   
Due Within One Year                  $ 9,824     $ 7,027     $ 5,872      22,723
Due One to Five Years                 11,543      19,769       4,976      36,288
Due After Five Years                  16,571      19,292         266      36,129
                                     -------     -------     -------     -------
         Total Loans                 $37,938     $46,088     $11,114     $95,140
                                     -------     -------     -------     -------
                                     -------     -------     -------     -------

Due After One Year at Fixed Rate     $24,061     $34,139     $ 4,055      62,255
Due After One Year at Floating
         Rate                          4,053       4,922       1,187      10,162
                                     -------     -------     -------     -------
         Total Loans Due After
           One Year                  $28,114     $39,061     $ 5,242     $72,417
                                     -------     -------     -------     -------
                                     -------     -------     -------     -------
</TABLE>



                                       15
<PAGE>






                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

                          LOAN LOSSES AND CREDIT RISKS

     The allowance for loan losses is established by charging expenses at an
amount which will maintain the allowance for loan losses at a level sufficient
to provide for potential loan losses. Loan losses are charged directly to the
allowance when they occur and recoveries are credited to the allowance. The
amount of the provision is based on past loan loss experience, management's
evaluation of the loan portfolio under current economic conditions, and such
other factors as in management's best judgement deserve current recognition in
estimating loan losses. Tables V. and VI. represent a summary of loan loss
experience for the years 1998, 1997, 1996, 1995 and 1994. 

                TABLE V. - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>

                                                                         Year Ended  Ended December 31,
                                              --------------------------------------------------------------------------
                                                        1998             1997            1996             1995            1994
Amount of Loans Outstanding                             ----             ----            ----             ----            ----
<S>                                                    <C>              <C>             <C>              <C>             <C>    
  at End of Period                                     $94,402          $84,225         $70,872          $63,685         $59,437
                                                       -------          -------         -------          -------         -------
                                                       -------          -------         -------          -------         -------
Monthly Average
  Amount of Loans                                      $89,182          $78,430         $65,894          $61,147         $57,205
                                                       -------          -------         -------          -------         -------
                                                       -------          -------         -------          -------         -------
Balance of Allowance for 
  Possible Loan Losses at 
  Beginning of Period                                  $   673          $   681         $   662          $   606         $   516
                                                       -------          -------         -------          -------         -------
                                                       -------          -------         -------          -------         -------
Loans Charged Off: 
  Commercial                    .                      $    14          $   103         $     3          $     0         $    72
  Real Estate                                                0                0              17                0               0
  Consumer                                                  51               13               5                8             111
                                                       -------          -------         -------          -------         -------
Total Loans Charged Off                                     65              116              25                8             183
                                                       -------          -------         -------          -------         -------
Recoveries of Loans Previously
  Charged Off:
  Commercial                                                 1                0               0                0               0
  Real Estate                                                0                0               1                0               0
  Consumer                                                   2                1               3                5               2
                                                       -------          -------         -------          -------         -------
Total Recoveries                                             3                1               4                5               2
                                                       -------          -------         -------          -------         -------
Net Loans Charged Off:                                      62              116              21                3             181
                                                       -------          -------         -------          -------         -------
Additionsions to Allowance:
  Charged to Expense                                        90              107              40               59             271
                                                       -------          -------         -------          -------         -------
Balancece at End of Period                             $   701          $   673         $   681          $   662         $   606
                                                       -------          -------         -------          -------         -------
                                                       -------          -------         -------          -------         -------
Ratio of Net Charge-Offs
  During Period to
  Average Loans                                          0.069%           0.148%          0.003%           0.005%          0.316%
                                                       -------          -------         -------          -------         -------
                                                       -------          -------         -------          -------         -------
</TABLE>



                                       16
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

     TABLE VI. - ALLOCATITABLE VI.O-AALLOCATIONAOF ALLOWANCE FOR LOAN LOSSES


<TABLE>
<CAPTION>

                 December 31, 1998   December 31, 1997     December 31, 1996     December 31, 1995     December 31, 1994
             ---------------------  -------------------- --------------------  --------------------- ---------------------
                           % Of                 % Of                  % Of                  % Of                  % Of
                       Outstanding           Outstanding          Outstanding            Outstanding           Outstanding
                           Loan                 Loan                  Loan                  Loan                  Loan
             Allowance    Balance   Allowance  Balance   Allowance   Balance   Allowance   Balance   Allowance   Balance
             --------- -----------  --------- ---------- --------- ----------  --------- ----------- --------- -----------

<S>             <C>         <C>      <C>         <C>       <C>         <C>      <C>         <C>       <C>         <C>  
Commercial      $463        1.22%    $422        1.03%     $435        1.41%    $423        1.51%     $358        1.47%

Real Estate      163        0.35%     144        0.40%      141        0.41%     137        0.44%      140        0.46%

Consumer          75        0.67%     107        1.27%      105        1.58%     102        1.85%      108        1.93%
                ----        ----     ----        ----      ----        ----     ----        ----      ----        ---- 

Total           $701        0.74%    $673        0.79%     $681        0.95%    $662        1.03%     $606        1.01%
                ----        ----     ----        ----      ----        ----     ----        ----      ----        ---- 
                ----        ----     ----        ----      ----        ----     ----        ----      ----        ---- 
</TABLE>



                                       17
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

             CONSOLIDATED SUMMARY OF LOANS AND NON-PERFORMING ASSETS

     Non-performing assets consist of (a) loans not accruing interest any longer
due to doubts about future collectability, (b) loans more than ninety days past
due for the last principal or interest payment, and (c) other real estate owned
by the Bank taken originally as loan collateral. Table VII. provides a five-year
summary of the components involved in non-performing assets as of year end. 

     Loans are determined to be nonaccruing when it has been determined that the
ability of the Bank to collect the unpaid balance of such loans is highly
unlikely due to the financial position of the borrower and general economic
conditions. The determination of such classification is made by bank management
on a case-by-case basis for problem loans. Generally, a review of each loan
ninety days or more past due is made monthly and such loans deemed uncollectable
become classified as nonaccrual.

     Loans are determined to be ninety days delinquent when such a period of
time has elapsed since the last payment of principal or interest was made. At
such a time, consideration as to whether to classify the loan as nonaccruing is
made. However, until such classification is made, interest will continue to be
accrued.

     Other real estate consists of real property that the Bank originally took
as collateral for loans but has since acquired title to when the borrowers
defaulted and the Bank bid on the property in question at public auction.

      TABLE VII. - CONSOLIDATED SUMMARY OF LOANS AND NON-PERFORMING ASSETS
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                      Year Ended December 31,
                                      -------------------------------------------------------
                                         1998        1997        1996        1995        1994
                                      -------     -------     -------     -------     -------

<S>                                   <C>         <C>         <C>         <C>         <C>    
Commercial Loans                      $37,938     $35,643     $30,974     $27,977     $24,312
Real Estate Loans                      46,088      40,858      34,100      30,848      30,122
Consumer Loans                         11,114       8,493       6,649       5,522       5,609
                                      -------     -------     -------     -------     -------
Subtotal                               95,140      84,994      71,723      64,347      60,043
Less: Unearned Income                      36          96         170           0           0
                                      -------     -------     -------     -------     -------
Subtotal                               95,104      84,898      71,553      64,347      60,043
Less: Reserve for Loan LossesLoan
      Losses                              701         673         681         662         606
                                      -------     -------     -------     -------     -------
Net Loans                             $94,403     $84,225     $70,872     $63,685     $59,437
                                      -------     -------     -------     -------     -------
                                      -------     -------     -------     -------     -------
Non-Performing Assets
  Non-Accruing Loans                  $   509     $   546     $   687     $ 1,700     $ 1,620
  Loans Past Due 90 Days                3,310       1,031         739       1,614         491
  Other Real Estate Owned                  94         172         260         181         186
                                      -------     -------     -------     -------     -------
Total Non-Performing Assets           $ 3,913     $ 1,749     $ 1,686     $ 3,495     $ 2,297
                                      -------     -------     -------     -------     -------
                                      -------     -------     -------     -------     -------
</TABLE>



                                       18
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                      Conditions and Results of Operations

                                   SECURITIES

     The securities portfolio of Logan County BancShares, Inc. is the second
largest area of resource allocation. Investments provide liquidity and serve as
a hedge offsetting the increased sensitivity of deposits caused by deregulation.
In the past, the Bank had been developing a large portfolio of tax-exempt
securities with extended maturities. This portfolio was used to offset the tax
effects of a large spread between asset yield and funds cost. However, due to
the combined effects of inflation, deregulation, and the costs of funds, that
portfolio has bee depleted. The Company has been shifting the concentration of
the portfolio from tax exempt securities into more profitable, higher-yielding
assets

     Securities include those classified as held to maturity and available for
sale. The change in securities in 1997 was under 10% of the portfolio and
represented minor shifting between categories. In 1998, all categories of
investment securities increased by $7,841,000. representing a 39.30% increase
from 1997. The components of this increase were U.S. agencies increasing by
$7,359,000. and U.S. governments increasing by $482,000. During 1996, investment
securities increased by $4,949,000. or 30.04%, consisting of decreases of U.S.
Government Securities at $2,431,000., offset by increase in U.S. Agencies of
$7,189,000.

     Logan County BancShares, Inc. adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" on January 1, 1994. Accordingly, all debt securities, that Logan
County BancShares does not have the ability or management does not have the
positive intent to hold to maturity, are classified as "securities available for
sale" and are carried at market value.


     TABLE VIII. - MATURITY DISTRIBUTION OF SECURITIES AT DECEMBER 31, 1998
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                           Over
                                                 Over      Five
                                  One        One Year      Years
                                  Year         Through    Through      Over
December 31, 1998                   or           Five       Ten        Ten                   Market
Dollars in thousands              Less          Years      Years       Years     Total        Value
                                  -----      ---------    -------      -----     -----       ------
<S>                               <C>         <C>         <C>          <C>       <C>         <C>
U.S. Government:
  Available for sale              1,982           0           0           0       1,982       1,981
  Held for maturity                   0           0           0           0           0           0

U.S. Federal Agency Security
  Available for sale                  0       2,995      20,250           0      23,245      23,317
  Held to maturity                1,500         996           0           0       2,496       2,525

Total securities:
  Available for sale              1,982       2,995      20,250           0      25,227      25,298
  Held to maturity                1,500         996           0           0       2,496       2,525
                                  -----       -----      ------        ----      ------      ------
Total                             3,482       3,991      20,250           0      27,723      27,823

Percent of total                  12.56%      14.38%      73.04%       0.00%     100.00%     100.03%

Weighted average yield**           6.31%       6.70%       6.21%       0.00%       6.35%       6.35%
</TABLE>


     ** The weighted average yields are based on carrying value and effective
yields are weighted for the scheduled maturity of each security.



                                       19
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                      Conditions and Results of Operations

                                  OTHER INCOME

     In 1998, the company adjusted their focus from increased collection of fees
to promoting a growth in deposits. As a result, the service fees declined
$298,000., a 24.35% decrease over 1997. Other income decreased by $274,000. or
21.69% as a result of these changes.
                         

                             TABLE IX - OTHER INCOME
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                               Increase (Decrease)
                                                   -------------------------------------------
                                                     1998 Over 1997          1997 Over 1996
                                                   -------------------     -------------------
                    1998       1997       1996     Amount      Percent     Amount      Percent
                  ------     ------     ------     ------      -------     ------      -------

<S>               <C>        <C>        <C>        <C>             <C>     <C>             <C>   
Service Fee       $  926     $1,224     $  948     ($ 298)         29.11%  $  276          29.11%

Other Fees            63         34         52         29         -34.62%    (18)         -34.62%

Securities:
  Gain (Loss)          0          5          0         (5)        100.00%       5         100.00%
                  ------     ------     ------     ------         ------   ------         ------ 

Total Other
  Income          $  989     $1,263     $1,000     ($ 274)         21.69%  $  263          26.30%
                  ------     ------     ------     ------          -----   ------          ----- 
                  ------     ------     ------     ------          -----   ------          ----- 
</TABLE>


                                       20
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                      Conditions and Results of Operations


                                 OTHER EXPENSES

     Other  expenses  continued to  increase  in  1998 by  $333,000.  to
$3,629,000.  This  growth was due to  the overall growth of  the company
and its expansion  of customer services.  The largest  components of the
increase was salaries  and benefits of $157,000. and  data porcessing of
$133,000.  While  both are related  to the subsidiary bank's  growth and
increased service, the data processing cost also reflect preliminary Y2K
cost incurred to  evaluate the systems used by the  company.  These cost
amount to $42,000. in 1998.  

     Other expenses increased by $328,000. to $3,965,000. in 1997.  This
increase was  generally due to activity  in all areas of  the subsidiary
bank.  Salaries and benefits increased $168,000. or 12.17% due to normal
salary adjustments while other  operating expenses increased slightly by
$19,386. or 4.29% due to overall efforts to control operating costs.

     In 1998 the increase in taxes were due to increased property taxes.
Depreciation expense increased throughout the period. This increase is
attributable to the opening of two branch facilities at Man and Harts, West
Virginia and updating bank equipment.

     Repairs and maintenance, directors' fees, equipment rental, and Bank
stationery expenses vary from year to year based on the Company's demand. These
types of expenses are not directly related to the income function and,
therefore, increase or decrease sporadically.

     FDIC and  Fidelity insurance  decreased $86,000.  in 1998  and 1997
decreasing $86,000. in 1996 due to reevaluation of liability by the FDIC
and lower rates attributable to such reevaluation.




                                       21
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                      Conditions and Results of Operations



                        TABLE X. - OTHER EXPENSES
                        (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                                       -------------------------------------------------
                                                                          1998 Over 1997               1997 Over 1996
                                                                       ---------------------        --------------------
                              1998          1997          1996          AMOUNT       PERCENT        AMOUNT       PERCENT
                              ----          ----          ----          ------       -------        ------       -------
Salaries and
<S>                         <C>           <C>           <C>              <C>              <C>        <C>           <C>  
 Benefits                   $1,858        $1,701        $1,549           $157             10.14%     $152          9.81%
Taxes                           78            70            71              8             11.43%       (1)        -0.14%
Depreciation                   165           153           144             11              7.19%        9          6.25%
Repairs and
 Maintenance                   181           176           120              5              2.84%       56         46.67%
Fees Paid to
 Directors                      69            66            98              3              4.54%      (32)       -32.65%
Equipment Rental                24            25            26             (1)            -4.00%       (1)        -3.85%
FDIC & Fidelity
 Insurance                      78            74            72              3              4.05%        2          2.78%
Data Processing                421           287           266            133             46.34%       21          7.89%
Bank Stationery                121           103           110             18             17.47%       (7)        -6.36%
Bank Operating
 Expenses                      634           638           509             (4)             0.63%      129         25.35%
                            -------       -------       -------         -------        --------     -------     --------
Total                       $3,629        $3,293        $2,965           $333             10.11%     $328         11.06%
                            -------       -------       -------         -------        --------     -------     --------
                            -------       -------       -------         -------        --------     -------     --------
</TABLE>




                                       22
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

                             EARNINGS AND DIVIDENDS

     As demonstrated in Table XI., Logan County BancShares, Inc. strives to
achieve a favorable dividend payout rate to the shareholders. In 1998 the
companies continued to grow in terms of total assets and equity by 14.30% and
8.29% respectively, net income per dividend by 1.98% due to overall market
changes. Dividends increased by 10.63% to reflect the companies desire to reward
the shareholder while maintaining an excellent capital base. In 1997, records
were set in terms of net income, total assets and dividends. The growth in
assets and utilization of them have produced a 22.80% increase in net income and
a 13.74% increase in equity for the year. In 1996, the company continued the
trend of growth in all areas presented. Net income grew 27.03% along with
dividends of 21.10%, assets increased 13.37% while equity increased 9.85%.


            TABLE XI. - THREE-YEAR SUMMARY OF EARNINGS AND DIVIDENDS

<TABLE>
<CAPTION>

                             Per Share                            Percent ChanteChangePOver Prior Year
                -------------------------------------       -----------------------------------------------
                Dividend         Net                          Net                       Total
                 Payout        Income       Dividends       Income       Dividends      Assets       Equity
                --------       ------       ---------       ------       ---------      ------       ------

<S>              <C>           <C>           <C>            <C>           <C>           <C>            <C>  
 1996            34.95%        $3.29         $1.15          27.03%        21.10%        13.37%         9.85%

 1997            39.60%        $4.04         $1.60          22.80%        39.13%        13.47%        13.74%

 1998            44.69%        $3.96         $1.77          -1.98%        10.63%        14.30%         8.29%
</TABLE>



                                       23
<PAGE>




                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations



                                 EARNING ASSETS

     Table  XII.  represents  analysis  of average  earning  assets  and
interest bearing liabilities for the years ended December 31, 1998, 1997
and 1996.

     In the period presented average earning assets grew by $15,517,000.
in  1998, $15,224,000.  in 1997  and $7,740,000.  in 1996.   This growth
represented increases  of 14.16% in  1998, 16.13%  in 1997 and  8.94% in
1996.  The loan portfolio is the major component of earning assets which
grew by $12,067,000.  15.51% in 1998, $11,928,000. or 18.10% in 1997 and
$4,748,000.  or  7.76% in  1996.   The  company  also allocated  to  the
investment portfolio  a portion  of the growth  to maintain  liquity and
fund future loan requirements.

                      INTEREST BEARING LIABILITIES

     Interest bearing liabilities include interest bearing demand deposits,
savings accounts, time deposits and borrowed funds. These are the prime sources
of funds for Logan County BancShares, Inc. to support earning assets. Total
average interest bearing liabilities increased $12,850,000. or 14.38% in 1998,
$11,380,000. or 14.59% in 1997 and $5,670,000. or 7.84% in 1996. In all years
the Company has maintained a stable net interest margin while experiencing
growth in the underlying deposits. These factors have lead to positive increases
in amounts of net interest margins. The company has been able to match earning
yields with costs of funds over the past three years to maintain a stable net
interest margin.



                                       24
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

  TABLE XII. - ANALYSIS OF EARNING ASSETS AND AND INTEREST BEARING LIABILITIES

                            (In Thousands of Dollars)


<TABLE>
<CAPTION>

                          Year Ended December 31, 1998         Year Ended December 31, 1997        Year Ended December 31, 1996
                          ----------------------------         ----------------------------        ----------------------------
                          Average                    Yield/    Average                    Yield/   Average                 Yield/
ASSETS:                   Balance     Interest       Rate      Balance     Interest       Rate     Balance     Interest    Rate
  EARNING ASSETS:         -------     --------       ------    -------     --------       ------   -------     --------    ------
<S>                        <C>          <C>             <C>    <C>          <C>             <C>    <C>          <C>         <C>  
         LOANS:
  Commercial               $ 36,041     $  3,209        8.90%  $ 33,292     $  2,959        8.89%  $ 28,476     $  2,493    8.75%
  Real Estate                43,453        3,704        8.52%    37,305        3,153        8.45%    31,897        2,681    8.41%
  Consumer                   10,395          937        9.01%     7,225          678        9.38%     5,521          525    9.51%
                           --------     --------        ----   --------     --------        ----   --------     --------    -----
    Total Loans              89,889        7,850        8.73%    77,822        6,790        8.67%    65,894        5,699    8.65%
                           --------     --------        ----   --------     --------        ----   --------     --------    -----

INVESTMENT SECURITIES:
  Taxable                     3,245          187        5.76%     2,949          146        4.95%     8,337          567    6.80%
  Tax Exempt *                    0            0        0.00%        59            4        6.78%        95           12   12.63%
  Available for Sale         18,763         1210        6.45%    19,463         1245        6.39%    10,206          559    5.48%
                           --------     --------        ----   --------     --------        ----   --------     --------   ------
     Total Securities        22,008        1,397        6.35%    22,471        1,395        6.21%    18,638        1,138    6.11%
                           --------     --------        ----   --------     --------        ----   --------     --------   ------
FEDERAL FUNDS SOLD           13,203          717        5.43%     9,290          509        5.48%     9,827          525    5.34%
                           --------     --------        ----   --------     --------        ----   --------     --------   ------
TOTAL EARNING ASSETS       $125,100     $  9,964        7.96%  $109,583     $  8,694        7.89%  $ 94,359     $  7,362    7.80%
                                        --------        ----                --------        ----                --------   ------
                                        --------        ----                --------        ----                --------   ------

NON-EARNING ASSETS:
  Cash and Due from Banks     4,168                               3,677                               3,546
  Bank Premises               2,113                               2,133                               1,942
  Other Assets                  901                               1,565                               1,128
                           --------                            --------                            --------
  TOTAL NON-EARNING ASSETS   $7,182                              $7,375                              $6,616
                           --------                            --------                            --------
TOTAL ASSETS               $132,282                            $116,958                            $100,975
                           --------                            --------                            --------
                           --------                            --------                            --------
</TABLE>





*  Shown at tax equivalent amount given statutory tax rate @ 34%



                                       25
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


           ANALYSIS OF EARNING ASSETS AND INTEREST BEARING LIABILITIES
                                   (CONTINUED)


<TABLE>
<CAPTION>

                                  Year Ended December 31, 1998    Year Ended December 31, 1997       Year Ended December 31, 1996
                                  ----------------------------    ----------------------------       ----------------------------
                                  Average              Yield/     Average                Yield/      Average             Yield/
                                  Balance   Interest   Rate       Balance     Interest   Rate        Balance  Interest   Rate
                                  -------    --------  ------     -------     --------   ------      -------  --------   ------



Savings Deposits and Interest
Bearing:
<S>                             <C>         <C>         <C>         <C>          <C>        <C>       <C>      <C>        <C>  
  DDA                           $50,133     $1,345      2.68%       $48,523      $1,334     2.75%     $46,952  $1,286     2.74%
  Time Deposits                  52,055      2,915      5.61%        40,815       2,271     5.56%      31,006   1,694     5.46%
                                -------     ------      -----       -------      ------     -----     -------  ------     -----
  Total Interest Bearing
    Liabilities                 102,188     $4,260      4.17%        89,338      $3,605     4.03%      77,958  $2,980     3.82%
                                -------     ------      -----       -------      ------     -----     -------  ------     -----
                                            ------      -----                    ------     -----              ------     -----

ND CAPITAL:

Demand Deposits                  15,253                              14,067                            11,037
Accrued Expenses                  1,014                               1,074                               995
Capital                          13,827                              12,479                            10,985
                               --------                            --------                          --------

  Total Non-Interest Bearing
    Liabilities and Capital      30,094                              27,620                            23,017
                               --------                            --------                          --------

  Total Liabilities and
    Stockholders' Equity       $132,282                            $116,958                          $100,975
                               --------                            --------                          --------

NTEREST MARGIN                 $125,100     $5,704      1.70%      $109,583      $5,089     4.60%     $94,359  $4,382     4.64%
                                -------     ------      -----       -------      ------     -----     -------  ------     -----
                                -------     ------      -----       -------      ------     -----     -------  ------     -----
</TABLE>



                                       26
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


                       INTEREST RATE SENSITIVITY ANALYSIS
                       ----------------------------------

     Asset and liability management is responsible for the planning,
implementation, and control process for determining asset mix and maturity
features relative to liability maturities in such a way that net interest margin
will be maximized. A major tool for such a process is gap management of the
Bank's interest sensitive assets to interest sensitive liabilities.
                       
     The negative gap position as presented in the following table for
maturities of one year or less is offset by the substantial positive gap
position for maturities greater than one year. The earnings of Logan County
BancShares, Inc. are sufficient to withstand the short term negative gap
position. Should a large fluctuation occur, increasing the cost of funds,
management would consider increasing service charges and non-interest fees which
management determines the market would bear in order to negate increased rate
costs. An additional response, at the option of management, would be liquidation
of certain long-term investments, and conversion of those funds into short-term
securities.

     Bank management recognized the concentration of large certificates of
deposit. The Bank's policy of asset-liability management matches both rates and
maturities so the Bank will not have a liquidity problem or allow income to be
affected by a change in rates.  
     All demand and savings deposits are considered highly volatile, although
experience has shown these accounts to be stable regardless of economic cycles.
Interest on savings and other transactional accounts have generally remained
constant over periods of interest rate changes. Therefore, deposits and savings
are classified as "over one year" to represent a more realistic rate sensitive
gap.



                                       27
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


                TABLE XIII. - INTEREST RATE SENSITIVITY ANALYSIS

                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                                                           Total           Over
                           0 - 90          91-180         181-365         One Year        One Year         Total
                           ------          ------         -------         --------        --------         -----
Earning Assets
<S>                       <C>             <C>             <C>             <C>             <C>            <C>      
  Loans                   $  16,469       $   2,129       $   4,125       $  22,723       $  72,417      $  95,140
  Investments                 1,982           1,500               0           3,482          24,241         27,723
  Fed. Funds Sold             7,520               0               0           7,520               0          7,520
                          ---------       ---------       ---------       ---------       ---------      ---------
Total Earning
  Assets                     25,971           3,629           4,125          33,725          96,658        130,383
                          ---------       ---------       ---------       ---------       ---------      ---------
Interest Bearing
  Liabilities:
  Demand Deposits            20,644               0          20,644               0          20,644
  Savings                    11,928           9,964           7,925          29,817               0         29,817
  CD's-$100,000OO,OOO
    and Over                  5,009           3,722           8,617          17,348           2,824         20,172
  Other Time                  8,991           6,152          17,445          32,588           2,907         35,495
                          ---------       ---------       ---------       ---------       ---------      ---------
Total Interest
 Bearing Liability           46,572          19,838          33,987         100,397           5,731        106,128
                          ---------       ---------       ---------       ---------       ---------      ---------

Interest
  Sensitivity Gap         ($ 20,601)      ($ 16,209)      ($ 29,862)      ($ 66,672)      $  93,927      $  27,255
                          ---------       ---------       ---------       ---------       ---------      ---------
                          ---------       ---------       ---------       ---------       ---------      ---------
Cumulative Gap            ($ 20,601)      ($ 36,810)      ($ 66,672)      ($ 66,672)      $  27,255      $  27,255
                          ---------       ---------       ---------       ---------       ---------      ---------
                          ---------       ---------       ---------       ---------       ---------      ---------
Rate Sensitive
Assets/Rate                                                                                                     te
Sensitive Lia-
Liabilities
(Cumulative
Percentage)                   55.76%          44.57%          33.59%          33.59%         122.85%        122.85%
                          ---------       ---------       ---------       ---------       ---------      ---------
                          ---------       ---------       ---------       ---------       ---------      ---------
</TABLE>



                                       28
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                      Management's Discussion and Analysis
                 of Financial Position and Results of Operations


                       TABLE XIV. - AVERAGE BALANCE SHEET
                            (In Thousands of Dollars)

<TABLE>
<CAPTION>

                                              1998           1997           1996           1995           1994
ASSETS:                                       ----           ----           ----           ----           ----
<S>                                      <C>            <C>            <C>            <C>            <C>      
         Cash and Due from Banks         $   4,168      $   3,677      $   3,546      $   2,989      $   3,166

         Investment Securities:
           Available for Sale               18,763         16,689         10,206          6,360          5,011
           Held to Maturity                  3,245          5,782          8,432         12,419         14,838
                                         ---------      ---------      ---------      ---------      ---------
              Total Investments             22,008         22,471         18,638         18,779         19,849
                                         ---------      ---------      ---------      ---------      ---------
         Federal Funds Sold                 13,203          9,290          9,827          6,693          5,942
         Loans
           Real Estates                     43,454         37,449         31,897         30,108         27,351
           Installment                      10,459          7,402          5,606          5,650          5,579
           Commercial & Other               36,041         33,714         29,144         26,020         24,837
                                         ---------      ---------      ---------      ---------      ---------
                                            89,954         78,565         66,647         61,778         57,767
           Less:  Unearned Discount             65            129             85              0              0
                                         ---------      ---------      ---------      ---------      ---------
                                            89,889         78,436         66,562         61,778         57,767
           Allowance For Loan Losses          (707)          (614)          (668)          (631)          (562)
                                         ---------      ---------      ---------      ---------      ---------
           Net Loans                        89,182         77,822         65,894         61,147         57,205
                                         ---------      ---------      ---------      ---------      ---------
         Banking Premises                    2,113          2,133          1,942          1,364          1,412
         Accrued Interest and
           Other Assets                      1,608          1,565          1,128          1,108            920
                                         ---------      ---------      ---------      ---------      ---------
TOTAL ASSETS                             $ 132,282      $ 116,958      $ 100,975      $  92,080      $  88,494
                                         ---------      ---------      ---------      ---------      ---------
                                         ---------      ---------      ---------      ---------      ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
         Deposits:
           Demand Deposits               $  35,332      $  31,007      $  27,940      $  26,287      $  25,402
           Savings Deposits                 30,054         31,582         30,049         29,685         35,401
           Time Deposits                    52,055         40,816         31,006         25,352         17,556
                                         ---------      ---------      ---------      ---------      ---------
             Total Deposits                117,441        103,405         88,995         81,324         78,359
         Other Liabilities                   1,014          1,074            995            636            775
                                         ---------      ---------      ---------      ---------      ---------
TOTAL LIABILITIES                          118,455        104,479         89,990         81,960         79,134

STOCKHOLDERS' EQUITY                        13,827         12,479         10,985         10,120          9,360
                                         ---------      ---------      ---------      ---------      ---------
TOTAL LIABLIABILITIES ANDCKHOLDERS'
         STOCKHOLDERS' EQUITY            $ 132,282      $ 116,958      $ 100,975      $  92,080      $  88,494
                                         ---------      ---------      ---------      ---------      ---------
                                         ---------      ---------      ---------      ---------      ---------
</TABLE>



                                       29

<PAGE>

                    Logan County BancShares, Inc. and Subsidiary
                 Management's Discussion and Analysis of Financial
                         Condition and Results of Operations


Year 2000 Assessment

     Management has initiated a Company-wide program to assess its data 
processing, information systems and customer service programs to ensure the 
Company's operating capabilities in the year 2000. Currently, the Company's 
subsidiary Bank, LB & T, uses EDS, a regional provider of financial 
institution data processing, as it's primary provider of computer services 
and data processing. EDS has certified it's hardware and software are Year 
2000, and beyond, complaint.

     As required by Regulatory guidelines, the company has contracted with 
EDS to perform Y2K testing. This testing will include Data Processing, ATM's, 
Debit Cards, Financial and Communications Systems. The estimated cost for 
this testing is approximately $55,000. The Company has also contracted to 
have their computer hardware evaluated for Year 2000 compliance and estimates 
additional computer hardware and software costs to be approximately 
$105,000. These cost will be capitalized and amortized over five years. It is 
the opinion of management that the cost of converting these systems and the 
annual amortization, thereof, will not materially impact the results of 
operation or its financial position.

     We anticipate having all testing completed by June, 1999 and upgrading 
completed by August, 1999. There are many factors involved in upgrading these 
systems, such as: conversion of data, employee training and implementation. 
There can be no assurances this process will not have a material effect on 
the company's operations.

     While management believes its planning efforts are adequate to address 
its Year 2000 concerns, there is no guarantee the systems of other companies 
on which the Company's systems and operations rely will function properly and 
not have an adverse effect on the 


                                       30

<PAGE>

                        LOGAN COUNTY BANCSHARES, INC.

              POST OFFICE BOX 597 - LOGAN, WEST VIRGINIA 25601 
                      (304) 752-0280  -  (304) 752-4648

To Our Stockholders, Customers and Friends:

     We are proud to present the 1998 annual report of Logan County 
BancShares, Inc. and its subsidiary, Logan Bank and Trust Company. In 1998 we 
were able to build on the strong foundation of growth that has been our 
trademark in the 90's. Total assets grew by $17,428,326, or 14.30%, to a 
record of $139,278,365. This growth was largely invested in the region by 
increasing loans by $10,146,160, showing a continued committment to our 
service area. Earnings of $1,891,113, or $3.96 per share, in 1998 not only 
strengthens our capital position but also provided to our shareholders a 
return of dividends of $846,059. The return on average assets of $1.43 and 
return on equity of 13.99% are high performance goals for any organization.

     Our foundation of being a positive force in meeting the financial needs 
of our customer, community and region has always been our philosophy. 
Building on this cornerstone, our subsidiary, Logan Bank and Trust Company, 
is preparing to face the challenge of the new millennium by being innovative, 
dedicated and committed. Our directors, management team and staff are 
involved community leaders who strive to help our customers reach their 
financial goals. This foundation of local involvement, committment to perform 
and dedication to provide up-to-date financial products has been our basis of 
past, current and future success. Our long tradition of customer service is 
reflected by our staff at our four conveniently located offices and planned 
fifth location off Corridor G. Our committment to making financial services 
available and easily accessible to our region continues to be a major focus 
in our planning. We are confident that trying to make a positive difference 
for our customers will make the future brighter for the region as a whole.

     To meet the challenge ahead we ask for the support of our customers and 
community. Working together, Logan County Bancshares, Inc. and its 
subsidiary, Logan Bank and Trust Company, are ready to provide our region 
financial services to meet its future needs.


                                            Respectfully,


        Harvey Oakley                         Eddie Canterbury
     Chairman/President                 Executive Vice President/CEO

Logan Bank & Trust   Chapmanville Bank Of      Man Bank Of       Harts Bank Of
   L B & T                   L B & T             L B & T          L B & T
 Logan, WV 25601    Chapmanville, WV 25508    Man, WV 25535    Harts, WV 25524

                                      31


<PAGE>


                               [Letterhead]



                       INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of Logan County BancShares, Inc. and Subsidiary

We have audited the accompanying consolidated statements of condition of 
Logan County BancShares, Inc., and Subsidiary as of December 31, 1998, and 
1997, and the related consolidated statements of income, changes in 
stockholders' equity and cash flows for each of the three years in the period 
ended December 31, 1998. These financial statements are the responsibility of 
the Company's management. Our responsibility is to express an opinion on 
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Logan County 
BancShares, Inc. and Subsidiary as of December 31, 1998, and 1997, and the 
consolidated results of its operations and their cash flows for each of the 
three years in the period ended December 31, 1998, in conformity with 
generally accepted accounting principles.


McNeal, Williamson & Co.

Logan, West Virginia
February 27, 198




    Members of American Institute of Certified Public Accountants and West 
               Virginia Society of Certified Public Accountants


                                       32


<PAGE>

                  Logan County BancShares, Inc. and Subsidiary
                       Consolidated Statement of Condition
                           December 31, 1998 and 1997

                                     ASSETS
                                     ------

<TABLE>
<CAPTION>

                                                           1998                         1997
                                                          ------                       ------

<S>                                                   <C>                          <C>         
CASH AND DUE FROM BANKS                               $  5,727,104                 $  5,267,333
                                                      ------------                 ------------
INVESTMENT SECURITIES:
           Available for sale                           25,298,347                   15,957,955
           Held to maturity                              2,496,108                    3,994,584
                                                      ------------                 ------------
           Total Investment Securities                  27,794,455                   19,952,539
                                                      ------------                 ------------
FEDERAL FUNDS SOLD                                       7,520,000                    8,910,000

LOANS:
           Mortgage Loans                               46,087,863                   40,857,352
           Installment Loans                            11,113,712                    8,493,116
           Commercial and Other Loans                   37,938,146                   35,643,093
                                                      ------------                 ------------
                                Total Loans             95,139,721                   84,993,561

           Less: Unearned Interest                          36,190                       95,849
                 Reserve for Loan Losses                   701,275                      672,563
                                                      ------------                 ------------
                   Net Loans                            94,402,256                   84,225,149
                                                      ------------                 ------------
BANK PREMISES AND EQUIPMENT                              2,085,318                    2,125,350

INTEREST RECEIVABLE                                      1,103,008                      828,979
OTHER ASSETS                                               646,224                      540,689
                                                      ------------                 ------------
                                                      $139,278,365                 $121,850,039
                                                      ------------                 ------------
                                                      ------------                 ------------
</TABLE>



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


                                       33
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                       Consolidated Statement of Condition
                           December 31, 1998 and 1997

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------


<TABLE>
<CAPTION>

                                                                   1998                          1997
                                                                   ----                          ----
DEPOSITS:
<S>                                                       <C>                            <C>            
           Non-Interest Bearing                           $    18,291,587                $    13,546,696
           Interest Bearing                                    20,644,421                     17,661,719
           Savings Deposits                                    29,816,897                     29,287,477
           Time Certificates                                   55,667,264                     47,610,875
                                                          ---------------                ---------------
           Total Deposits                                     124,420,169                    108,106,767

ACCRUED AND OTHER LIABILITIES                                     680,209                        723,042

INCOME TAXES PAYABLE:
           Current                                                 28,514                        (17,563)
           Deferred                                                90,523                         54,805
                                                          ---------------                ---------------
TOTAL LIABILITIES                                             125,219,415                    108,867,051
                                                          ---------------                ---------------

STOCKHOLDERS' EQUITY:
           Common Stock - $2.50 par value;
             Authorized - 520,000 share,
             Outstanding-478,000 shares
               in 1997 and 467,612 shares
               in 1996                                          1,300,000                      1,300,000
           Surplus                                              2,408,426                      2,408,426
           Retained Earnings                                   11,170,503                     10,125,449
           Net unrealized amortization
             on securities available for
             sale                                                  40,219                          9,311
           Treasury Stock                                        (860,198)                      (860,198)
                                                          ---------------                ---------------
TOTAL STOCKHOLDERS' EQUITY                                     14,058,950                     12,982,988
                                                          ---------------                ---------------
TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                           $   139,278,365                $   121,850,039
                                                          ---------------                ---------------
                                                          ---------------                ---------------
</TABLE>



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


                                       34
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                        Consolidated Statements of Income
              For the Years Ended December 31, 1998, 1997, and 1996

<TABLE>
<CAPTION>

                                               1998                      1997                             1996
                                               ----                      ----                             ----
INTEREST INCOME:
<S>                                      <C>                       <C>                              <C>          
           Loans, Including Fees         $   7,850,317             $   6,789,421                    $   5,699,356

           Investment Securities:
               Available for Sale            1,210,113                 1,047,951                          558,591
               Held to Maturity                187,046                   347,762                          576,290


           Federal Funds Sold                  716,608                   508,539                          524,878
                                             ---------                 ---------                        ---------
              Total Interest Income          9,964,084                 8,693,673                        7,359,115
                                             ---------                 ---------                        ---------

INTEREST EXPENSE:

           Deposits                          4,259,739                 3,605,404                        2,979,998
           Other Borrowings                          0                         0                            7,764
                                             ---------                 ---------                        ---------
              Total Interest Expense         4,259,739                 3,605,404                        2,987,762
                                             ---------                 ---------                        ---------
NET INTERESINTEREST INCOME                   5,704,345                 5,088,269                        4,371,353

PROVISION FOR LOAN LOSSES                       90,000                   107,000                           40,000
                                             ---------                 ---------                        ---------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES                  5,614,345                 4,981,269                        4,331,353
                                             ---------                 ---------                        ---------
OTHER INCOME:
           Service Fees                        925,644                 1,224,231                          948,377
           Other                                63,206                    33,697                           52,247
           Securities Gains (Losses)                 0                     5,457                             (176)
                                             ---------                 ---------                        ---------
                                               988,850                 1,263,385                        1,000,448
                                             ---------                 ---------                        ---------
</TABLE>





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


                                       35
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                        Consolidated Statement of Income
              For the Years Ended December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>

                                                                  1998                    1997                      1996
                                                                  ----                    ----                      ----
OTHER EXPENSES:
<S>                                                       <C>                       <C>                       <C>          
           Salaries and Benefits                          $    1,857,732            $   1,701,231             $   1,548,685
           Taxes Other Than Payroll & Income                      78,289                   70,208                    70,939
           Depreciation                                          164,474                  152,804                   144,671
           Repairs and Maintenance                               181,403                  176,049                   120,439
           Fees Paid to Directors                                 69,275                   66,275                    97,425
           Equipment Rental                                       24,377                   25,217                    25,664
           FDIC & Fidelity Insurance                              77,540                   74,187                    72,207
           Data Processing                                       420,897                  286,349                   265,726
           Bank Stationery and Printing                          121,268                  102,914                   110,207
           Professional Fees                                      81,145                   76,059                    73,389
           Other Operating Expenses                              553,053                  562,027                   435,803
                                                          --------------            -------------             -------------
                                                               3,629,453                3,293,320                 2,965,155
                                                          --------------            -------------             -------------

INCOME BEFORE INCOME TAXES                                     2,973,742                2,951,334                 2,366,646

INCOME TAXES:
           Current                                             1,079,990                1,030,248                   848,554
           Deferred                                                2,639                   26,963                   (19,977)
                                                          --------------            -------------             -------------
NET INCOME                                                $    1,891,113            $   1,894,123             $   1,538,069
                                                          --------------            -------------             -------------
                                                          --------------            -------------             -------------

PER SHARE OF COMMON STOCK:
           NET INCOME                                      $        3.96            $        4.04             $        3.29
                                                          --------------            -------------             -------------
                                                          --------------            -------------             -------------
</TABLE>



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


                                       36
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                 Consolidated Statement of Stockholders' Equity
              For the Years Ended December 31, 1998, 1997 and 1996



<TABLE>
<CAPTION>

                                                                                                    NET
                                                                                                    UNREALIZED
                                                                                                    APPRECIATION
                                                                                                    ON AVAILABLE
                                         COMMON                      RETAINED         TREASURY      FOR SALE
                                         STOCK         SURPLUS       EARNINGS          STOCK        SECURITIES        TOTAL
                                        ----------    ----------     -----------      --------      ------------     -----------

<S>                                     <C>           <C>              <C>            <C>            <C>           <C>        
Balance - December 31, 1995             $1,274,030    $2,070,816       $7,985,734     ($860,198)     ($79,162)     $10,391,220

Dividends on 467,612 shares
  Common Stock @ $ 1.15                                                  (537,753)                                    (537,753)

Net Income - 1995                                                       1,538,069                                    1,538,069

Net Change in Unrealized
  Appreciation Securities
  Available for Sale                                                                                   23,400           23,400
                                        ----------    ----------       ----------     ----------     ---------     ------------
Balance-December 31, 1996               $1,274,030    $2,070,816       $8,986,050     ($860,198)     ($55,762)     $11,414,936

Issuance of 10,388 Shares
 of Common Stock                            25,970       337,610                                                       363,580

Dividends on 467,612 shares
  Common Stock @ $1.60                                                   (754,724)                                    (754,724)

Net Income - 1997                                                       1,894,123                                    1,894,123

Net Change in Unrealized
  Appreciation Securities
  Available for Sale                                                                                   65,073           65,073
                                        ----------    ----------       ----------     ----------     ---------     ------------
Balance-December 31, 1997               $1,300,000    $2,408,426      $10,125,449     ($860,198)       $9,311      $12,982,988

Dividends on 478,000 shares
  Common Stock @ $1.77                                                   (846,059)                                    (846,059)

Net Income - 1998                                                       1,891,113                                    1,891,113

Net Change in Unrealized
  Appreciation Securities
  Available for Sale                                                                                   30,908           30,908
                                        ----------    ----------       ----------     ----------     ---------     ------------
Balance-December 31, 1998               $1,300,000    $2,408,426      $11,170,503     ($860,198)      $40,219      $14,058,950
                                        ----------    ----------       ----------     ----------     ---------     ------------
                                        ----------    ----------       ----------     ----------     ---------     ------------
</TABLE>



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


                                       37
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                 Consolidated Statement of Change in Cash Flows
              For the Years Ended December 31, 1998, 1997 and 1996

               INCREASES (DECREASES) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>

                                                            1998                          1997                           1996
CASH FLOWS FROM OPERATING ACTIVITIES:                       ----                          ----                           ----
<S>                                                  <C>                           <C>                             <C>           
   Net Income                                        $    1,891,113                $    1,894,123                  $    1,538,069
   Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Depreciation and Amortization                         164,474                       157,804                         144,671
      Provision For Loan Losses                              90,000                       107,000                          40,000
      Provision For Deferred Taxes                            2,639                        26,963                         (19,977)
      (Gain) Loss on Sale of Securities                           0                        (5,457)                            176
      Premium Amortization and Accre-
       tion on Investment Securities                         (8,666)                       (2,529)                         12,485
      Increases (Decreases) in Income
       Taxes Payable                                         46,077                       (56,772)                         24,750
      (Increases) Decreases in Interest
       Receivable and Other Assets                         (388,951)                     (107,229)                       (248,380)
      Increases (Decreases) in Interest
       Payable & Other Liabilities                          (33,071)                       34,288                          94,463
      Market Value Adjustment
       Amortization                                           4,028                         4,028                           4,028
                                                     --------------                --------------                  ---------------
Net Cash Provided by
  Operating Activities                                    1,767,643                     2,052,219                       1,590,285
                                                     --------------                --------------                  ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from Sale of Investment Sec:
    Available for Sale                                   15,750,000                     5,494,543                       1,500,000
    Held to Maturity                                              0                       500,000                          500000
   Proceeds from Maturities of Inv. Sec:
    Available for Sale                                    2,750,000                       500,000                       1,000,000
    Held to Maturity                                      1,500,000                     2,565,000                       3,810,000
   Purchase of Investment Securities:
    Available for Sale                                  (27,779,025)                   (7,500,000)                    (10,233,781)
    Held to Maturity                                              0                             0                      (1,491,328)
   Net (Increases) Decreases
    Federal Funds Sold                                    1,390,000                    (1,635,000)                        195,000
   Net (Increases) Decreases in
    Commercial Loans                                     (2,309,156)                   (4,785,088)                     (3,017,344)
   Net (Increases) Decreases in
    Real Estate Loans                                    (5,230,511)                   (6,757,195)                     (3,251,649)
   Net (Increases) Decreases in
    Installment Loans                                    (2,727,440)                   (1,918,130)                       (957,386)
   Purchase of Bank Premises
    and Equipment                                          (119,083)                     (166,758)                       (548,693)
                                                     --------------                --------------                  ---------------
Net Cash Used by
   Investing Activities                                 (16,775,215)                  (13,702,628)                    (12,495,181)
                                                     --------------                --------------                  ---------------
                                                     --------------                --------------                  ---------------
</TABLE>



         The accompanying notes are an integral part of these financial
                                   statements.


                                       38
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                 Consolidated Statement of Changes in Cash Flows
              For the Years Ended December 31, 1998, 1997 and 1996

               INCREASES (DECREASES) IN CASH AND CASH EQUIVALENTS


<TABLE>
<CAPTION>

                                                       1998                       1997                       1996
                                                       ----                       ----                       ----
<S>                                                   <C>                       <C>                        <C>          
CASH FLOWS FROM FINANCING ACTIVITIES:

   Net Increases (Decreases) in
    Demand Deposits                                   $   7,727,593             $    3,178,825             $     784,399
   Net Increases (Decreases) in
    Savings Deposits                                        529,420                 (1,272,829)                 2,111,565
   Net Increases (Decreases) in
    Time Deposits                                         8,056,389                 10,968,193                  8,619,996
   Proceeds from Issuance of Common
    Stock                                                         0                    363,580                          0
   Dividends Paid                                          (846,059)                  (754,724)                  (537,753)
                                                      -------------             --------------             --------------
Net Cash Provided by Financing
    Activities                                        $  15,467,343             $   12,483,045             $   10,978,207
                                                      -------------             --------------             --------------

Net Increase (Decrease) in Cash
    and Cash Equivalents                                    459,771                    832,636                     73,411

Cash and Cash Equivalents at
    Beginning of Year                                     5,267,333                  4,434,697                  4,361,286
                                                      -------------             --------------             --------------
Cash and Cash Equivalents at
   End of Year                                        $   5,727,104             $    5,267,333             $    4,434,697
                                                      -------------             --------------             --------------
                                                      -------------             --------------             --------------


Supplemental Disclosures of Cash
   Flow Information Cash Paid for:

          Interest                                    $   4,230,266             $    2,951,541             $    2,648,334
          Income Taxes                                $   1,033,913             $      817,985             $      691,982
</TABLE>




              The accompanying notes are an integral part of these
                              financial statements.



                                       39
<PAGE>



                  Logan County BancShares, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
                        December 31, 1998, 1997 and 1996


1.   Summary of Significant Accounting Policies:

     A.   Basis of Consolidation:

          The Consolidated Financial Statements of Logan County BancShares, Inc.
     and its subsidiaries include the accounts of Logan County BancShares, Inc.
     a bank holding company and its wholly owned subsidiaries, Logan Bank &
     Trust Company. As further discussed in Note 13, the Company's subsidiaries
     were merged into Logan Bank & Trust Company on May 28, 1996. The merger was
     accounted for under the pooling of Interest Method of accounting and no
     restatement was necessary. All material intercompany balances and
     transactions have been eliminated in consolidation. Certain prior year
     amounts have been reclassified to conform with 1997 presentations.

     B.   Nature of Operations:

               The Banks operate under State bank charters, and provide full
          banking services, including trust services. As state banks, the Banks
          are subject to regulation by the West Virginia State Banking
          Commission and the Federal Deposit Insurance Corporation. The Company
          is also subject to regulation by the Federal Reserve Bank.

     C.   Estimates in the Financial Statements:

               The presentation of the financial statements in conformity with
          generally accepted accounting principles requires management to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at
          the date of the financial statements and the reported amounts of
          revenues and expenses during the reporting period. Actual results
          could differ from those estimates.
            
     D.   Cash and Cash Equivalents:

               For purposes of reporting cash flows, cash and cash equivalents
          include cash on hand and amounts due from banks.
 
     E.  Investment Securities:

               Effective with the issuance of SFASB 115, (Accounting For Certain
          Investments in Debt and Equity Securities), the Banks' Investment
          securities are classified in two categories and accounted for as
          follows:

               Securities to be Held to Maturity: Bonds, notes and debentures
          for which the banks have the positive intent and ability to hold to
          maturity are reported at cost, adjusted for amortization of premiums
          and accretion of discounts which are recognized in interest income,
          using the Constant Yield Method, over the period to maturity.

               Securities Available for Sale: Securities available for sale
          consist of bonds, notes, debentures, and certain equity securities not
          classified as securities held to maturity. These securities are
          carried at their fair value. Unrealized gains and (losses), net of
          tax, are reported as a net amount in a separate component of
          Shareholders' Equity until realized. Gains and losses on sale of
          securities available for sale are determined using the
          Specific-Indentification Method.


                                       40
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
                        December 31, 1998, 1997 and 1996


1.   Summary of Significant Accounting Policies (Continued):

     F.   Loans:

               Loans are stated at the amount of unpaid principal, reduced by
          unearned income and an allowance for loan losses. Interest income on
          loans is recognized on the accrual basis except for those loans in a
          nonaccrual income status. The accrual of interest on impaired loans is
          discontinued when management believes, after consideration of economic
          and business conditions and collection efforts, that the borrowers'
          financial condition is such that collection of interest is doubtful.
          When interest accrual is discontinued, interest income is subsequently
          recognized only to the extent cash payments are received.

               The reserve for loan losses is established through a provision
          for loan losses charged to expense. The reserve is an amount that
          management believes will be adequate to absorb losses on existing
          loans that may become uncollectible based on evaluations of the
          collectibility of loans and prior loan loss experience. The
          evaluations take into consideration such factors as changes in the
          nature and volume of the loan portfolio, overall portfolio quality,
          review of specific problem loans, and current economic conditions that
          may affect the borrowers' ability to pay. Loans are charged against
          the allowance for loan losses when management believes that the
          collection of the principal is unlikely.

               The allowance for loan losses on impaired loans is determined
          using the present value of estimated future cash flows of the loan,
          discounted at the loan's effective interest rate or the fair value of
          the underlying collateral. A loan is considered to be impaired when it
          is probable that all principal and interest amounts will not be
          collected according to the loan contract. The entire change in present
          value of expected cash flows is reported as provision for loan losses
          in the same manner in which impairment initially was recognized or as
          a reduction in the amount of provision for loan losses that otherwise
          would be reported.

               Certain loan origination fees and direct origination costs are
          capitalized and recognized as an adjustment of the yield on the
          related loan.

     G. Bank Premises and Equipment:


               Bank premises and equipment are stated at cost, less accumulated
          depreciation. Depreciation is provided over the estimated useful lives
          of the assets as follows:

<TABLE>
<CAPTION>

                                            Methods        Range of Lives
                                            -------        --------------
<S>                                         <C>             <C>     
              Banking House                 S/L, ACRS       10 - 40 years

              Furniture, Fixtures and
                Equipment                   S/L, DDB,ACRS    3 - 20 years
</TABLE>


                                       41
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
                        December 31, 1998, 1997 and 1996


1.   Summary of Significant Accounting Policies (Continued):

     H.   Real Estate Acquired Through Foreclosure:

               Real estate acquired through foreclosure is carried at the lower
          of the recorded investment in the property or its fair value. The
          value of the underlying loan is written down to the fair value of the
          real estate to be acquired by a charge to the allowance for loan
          losses, if necessary. Any subsequent write-downs are charged to
          operating expenses.

     I.   Income Taxes:

               The Company and its subsidiaries file a consolidated federal
          income tax return. The Subsidiary's are charged or credited an amount
          equal to the income tax that would have been applicable on a separate
          return basis.

               The Company uses the liability method for computing deferred
          income taxes. Under the liability method, deferred income taxes are
          based on the change during the year in the deferred tax liability or
          asset established for the expected future tax consequences of
          differences in the financial reporting and tax bases of assets and
          liabilities. The differences relate principally to premises and
          equipment, unrealized gains and losses on investment securities
          available for sale, and the allowance for loan losses.
 
     J.   Per Share Information:

               Primary earnings per share is computed by dividing net income by
          the weighted average number of shares of common stock outstanding and
          the number of shares of common stock which would be assumed
          outstanding under the treasury-stock method.

     K.   Impact of New Accounting Standards:

               In June 1997, the Financial Accounting Standards Board issued
          SFAS No. 130, "Reporting Comprehensive Income". The Statement
          establishes standards for reporting the components of comprehensive
          income and requires that all items that are required to be recognized
          under accounting standards as components of comprehensive income be
          included in a financial statement that is displayed with the same
          prominence as other financial statements. Comprehensive income
          includes net income as well as certain items that are reposted
          directly within a separate component of stock- holders' equity and
          bypass net income. The provisions of this Statement are effective
          beginning with 1998 interim reporting. These disclosure requirements
          will have no impact on financial position or results of operations.

     L.     Marketing Expense:

               The Company charges all marketing expenses to operations when
          incurred. No amounts have been established for any future benefits
          relative to these expenditures.



                                       42
<PAGE>


                  Logan County BancShares, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
                        December 31, 1998, 1997 and 1996

2.   Investment Securities:

                     The carrying amounts of investment in securities as shown
                in the consolidated balance sheets of the bank and their
                approximate full values at December 31 were as follows:


<TABLE>
<CAPTION>

                                                                              Gross          Gross
                                      Amortized           Unrealized       Unrealized        Fair
                                         Cost               Gains             Loss           Value
                                        ------              ------           ------         ------
<S>                                      <C>                 <C>             <C>         <C>        
VALUES FOR THE YEAR
           ENDED DECEMBER 31, 1998:

Securities Available for Sale
           Federal Agency Securities     $15,691,620         $62,343         $46,008     $15,707,955

           Equity Securities                 250,000               0               0         250,000
                                         -----------         -------         -------     -----------
                                         $15,941,620         $62,343         $46,008     $15,957,955
                                         -----------         -------         -------     -----------
                                         -----------         -------         -------     -----------


Securities to be Held to Maturity

           Federal Agency Securities              $0         $62,343         $46,008     $15,707,955

           U.S. Treasury Securities                0               0               0         250,000

           State and Municipal
             Securities                            0               0               0               0
                                         -----------         -------         -------     -----------
                                                  $0         $62,343         $46,008     $15,957,955
                                         -----------         -------         -------     -----------
                                         -----------         -------         -------     -----------
           ENDED DECEMBER 31, 1997

Securities Available for Sale

           Federal Agency Securities     $15,691,620         $62,343         $46,008     $15,707,955

           Equity Securities                 250,000               0               0         250,000
                                         -----------         -------         -------     -----------
                                         $15,941,620         $62,343         $46,008     $15,957,955
                                         -----------         -------         -------     -----------
                                         -----------         -------         -------     -----------

Securities to be Held to Maturity

           Federal Agency Securities       2,494,352          33,143               0       2,527,495

           U.S. Treasury Securities        1,500,232               0           1,867       1,498,395

           State and Municipal
             Securities                            0               0               0               0
                                         -----------         -------         -------     -----------
                                          $3,994,584         $33,143          $1,867      $4,025,890
                                         -----------         -------         -------     -----------
                                         -----------         -------         -------     -----------
</TABLE>



                                       43
<PAGE>


                          Logan  County BancShares,  Inc. and  Subsidiary
                              Notes  to Consolidated Financial Statements
                                  December 31, 1998, 1997 and 1996

2.  Investment Securities: (continued)


               The par value of securities pledged to secure public deposits and
          for other purposes amounted to $6,638,406 in 1997 and $5,996,628 in
          1996.

               The amortized cost and estimated market value of investment in
          debt securities at December 31, 1997, by contractural maturity, are
          shown below. Expected maturities will differ from contractual
          maturities because borrowers may have the right to call or prepay
          obligations with or without call as prepayment penalties.


<TABLE>
<CAPTION>

                                                   Securities to be Held                  Securities Available
                                                   to Maturity                            For Sale
                                                   Amortized             Fair             Amortized                  Fair
                                                     Cost                Value              Cost                     Value
                                                 ---------             ------             ---------               ------

<S>                                           <C>                 <C>                  <C>                   <C>                
Due in one year or less                       $       1,500,232   $       1,498,365    $        2,700,000    $         2,665,390

Due from one year to five years                       2,494,352           2,527,495             8,991,620              9,026,470

Due from five years to ten years                              0                   0             4,250,000              4,266,095

Due after ten years                                           0                   0                     0                      0
                                              -----------------   -----------------    ------------------    -------------------
                                              $       3,994,584   $       4,025,860    $       15,941,620    $        15,957,955
                                              -----------------   -----------------    ------------------    -------------------
                                              -----------------   -----------------    ------------------    -------------------

</TABLE>


3.   Restriction on Cash and Due from Banks and Contingent Liabilities:

          The Bank is required to maintain average balances with the Federal
     Reserve Bank. The average required reserve balances were $655,000. and
     375,000. for 1997 and 1996 respectively. The Bank has various claims and
     suits pending at December 31, 1997 arising in the ordinary course of its
     business. It is the opinion of management and legal counsel that such
     litigation will not materially affect the Bank's financial position or
     earnings.


                                       44
<PAGE>


                         Logan County BancShares, Inc. and Subsidiary
                          Notes to Consolidated Financial Statement
                               December 31, 1998, 1997 and 1996

4.   Loans:

          Major classifications of loans at December 31, 1998 and 1997 are as
     follows:

<TABLE>
<CAPTION>

                                                                                          1997                          1997
                                                                                          ----                          ----

<S>                                                                              <C>                           <C>                 
           Mortgage Loans                                                        $         40,857,352          $         40,857,352
           Installment Loans                                                                8,493,116                     8,493,116
           Commercial and Other Loans                                                      35,643,093                    35,643,093

                                                                                           84,993,561                    84,993,561
           Less:  Unearned Interest                                                            95,849                        95,849
                  Reserve for Loan Loss                                                       672,563                       672,563
                                                                                 --------------------          --------------------
                                                                                 $         84,225,149          $         84,225,149
                                                                                 --------------------          --------------------
                                                                                 --------------------          --------------------
</TABLE>


          Loans on which accrual of interest has been discontinued or reduced
     amounted to $546,442. and $686,517. at December 31, 1997 and 1996
     respectively. Had the above loans not been placed on a non-accrual status,
     income for the Company would have increased approximately $34,488., and
     $56,537. for the two years.


          The Company's recorded investment in impaired loans was approximately
     $843,471. at December 31, 1997 and $838,000. at December 31, 1996. Of that
     amount in 1996, $548,000. represents loans for which an allowance for loan
     losses, amounting to $360,490., has been established under SFAS 114. The
     average recorded investment in impaired loans was approximately $840,736.
     for 1997 and $887,000. for the year ended, December 31, 1996. Interest
     income recognized on impaired loans was approximately $39,566. for the year
     ended December 31, 1997.

     Reserve for Loan Losses:

          Transactions in the reserve for loan losses for the years were as
     follows:
     

<TABLE>
<CAPTION>

                                    1998           1997           1996
                                    ----          -----           -----

<S>                               <C>            <C>            <C>     
Balance at Beginning of Year      $681,375       $681,375       $661,647
Provision Charged to
  Operating Expenses               107,000        107,000         40,000
Recoveries credited to
  Reserve                            1,138          1,138          4,662
Losses Charged to Reserve         (116,950)      (116,950)       (24,934)
                                  --------       --------       --------
Balance at End of Year            $672,563       $672,563       $681,375
                                  --------       --------       --------
                                  --------       --------       --------

</TABLE>

          The balance of the reserve for loan losses for income tax purposes was
     $281,723. at December 31, 1998 and 1997.




                                       45
<PAGE>



                         Logan County BancShares, Inc. and Subsidiary
                          Notes to Consolidated Financial Statements
                               December 31, 1998, 1997 and 1996



5.   Bank Premises and Equipment:~

          Bank premises and equipment are summarized as follows:~

<TABLE>
<CAPTION>


                                     1998           1997            1996
                                 
<S>                              <C>             <C>             <C>       
Land                             $  404,847      $  404,847      $  404,847
Banking House                     2,445,752       2,445,752       2,420,262
Furniture, Fixtures and
  Equipment                       1,568,611       1,568,611       1,454,091
                                 ----------      ----------      ----------
                                  4,419,210       4,419,210       4,279,200
Less:  Accumulated
        Depreciation              2,293,860       2,293,860       2,158,776
                                 ----------      ----------      ----------

Bank Premises and Equipment      $2,125,350      $2,125,350      $2,120,424
                                 ----------      ----------      ----------
                                 ----------      ----------      ----------
</TABLE>


          Depreciation expense amounted to $157,804., $144,671., and $117,273.
     in 1997, 1996 and 1995 respectively. Expenditures for maintenance and
     repairs are charged against operations as incurred.~


6.   Operating Lease Commitments:~

          The Company has entered into lease agreements for certain premises at
     two of its facility locations. Future minimum lease payments under the
     leases during the five years subsequent to December 31, 1997 are as
     follows:~

<TABLE>
<CAPTION>

                                  Year                   Amount
                                  ----                   ------

<S>                                    <C>                   <C>    
                                       1998                  $11,400
                                       1999                  $11,400
                                       2000                  $11,400
                                       2001                  $11,400
                                       2002                  $11,400
</TABLE>



                                       46
<PAGE>


                               Logan County BancShares, Inc. and Subsidiary
                                 Notes to Consolidated Financial Statements
                                      December 31, 1998, 1997 and 1996

7.  Federal Income Taxes:

          The provisions for Federal income taxes for the years ended December
     31, 1998, 1997, and 1996 were less than the respective amounts that would
     result from applying the statutory Federal and state income tax rates, due
     primarily to the Banks' investment income and expense accruals.

          A reconciliation of the difference between the U. S. statutory income
     tax rate and the effective tax rates with resulting dollar amounts are
     shown in the following table:

<TABLE>
<CAPTION>

                                             1998                             1997                             1996
                                -----------------------------      -------------------------       ---------------------------
                                Amount                Percent      Amount           Percent        Amount              Percent
                                ------                -------      ------           --------       ------              -------
<S>                          <C>                     <C>        <C>                   <C>        <C>                     <C>   
Tax Expense at
 Statutory Rate              $   975,261             34.00%     $   783,743           34.00%     $   630,651             34.00%
State income tax
 net of tax benefits              82,920              2.89%          61,520            2.67%          53,834              2.90%
                             -----------             -----      -----------           -----      -----------             ----- 
                               1,058,181             36.89%         845,263           36.67%         684,485             36.90%
Tax Exempt
 Interest                         (7,430)            -0.26%          (3,003)          -0.13%          (4,706)            -0.25%
Security Transactions                413              0.00%          (2,598)          -0.11%            (763)            -0.04%
Loan Loss
 Provision                        (2,996)            -0.01%           6,708            0.29%          18,700              1.01%
Pension Accruals                 (11,918)            -0.42%           3,680            0.16%         (20,454)            -1.10%
Other                             (6,002)            -0.21%          (1,496)          -0.06%          (9,141)            -0.49%
Deferred Income
 Tax                              26,963              0.94%         (19,977)          -0.87%          28,718              1.54%
                             -----------             -----      -----------           -----      -----------             ----- 
                             $ 1,057,211             36.93%     $   828,577           35.95%     $   696,839             37.57%
                             -----------             -----      -----------           -----      -----------             ----- 
                             -----------             -----      -----------           -----      -----------             ----- 
</TABLE>


          The tax effect of significant temporary differences which comprise
     non-current deferred tax assets and liabilities as of December 31, 1997 and
     1996 are as follows:



<TABLE>
<CAPTION>


                                                                   1997                                         1996
                                                                   -------                                    -------
<S>                                                                <C>                                        <C>    
Assets:
Market Value Allowance                                             $24,890                                    $42,066
Reserve for Loan Loss                                              132,885                                    135,958
Pension Cost                                                             0                                     15,318
                                                                   -------                                    -------
           Gross Deferred Tax Asset                                157,775                                    193,342
                                                                   -------                                    -------


Liabilities:
Allowance for Investments                                            5,880                                      3,896
Property and Equipment                                              69,713                                     38,235
                                                                   -------                                    -------
           Net Deferred Tax Asset                                  $82,182                                   $151,211
                                                                   -------                                    -------
                                                                   -------                                    -------
</TABLE>


                                       47
<PAGE>


                         Logan County BancShares, Inc. and Subsidiary
                          Notes to Consolidated Financial Statements
                               December 31, 1998, 1997 and 1996


8.  Employee Benefit Plans:

          During 1998 the Company terminated the qualified defined benefit
     pension plan. The Company's subsidiary adopted a qualified profit sharing
     and 401K employee benefit plan covering substantially all employees. The
     contributions to the plans are at the discretion of the plans' advisory
     boards and amounted to $85,264. in 1998.

          The Bank Holding Company had a qualified defined benefit pension plan
     which is available to employees meeting certain age and service
     requirements. The total pension expense for the years 1996 and 1995 was
     $71,101. and $35,482. respectively. The Company's policy was to fund
     pension costs at the maximum amount that can be deducted for Federal Income
     tax purposes.

          The following is a summary of the plan's funded status and amounts
     recognized in the Company's consolidated balance sheets at December 31,
     1996 and 1995.
   
<TABLE>
<CAPTION>

                                                                                              1996
                                                                                             -------
<S>                                                                                          <C>     
           Actuarial present value of
             accumulated benefit obligation                                                  $276,949
                                                                                             --------
                                                                                             --------

           Projected benefit obligation                                                      $703,635
           Plan assets at fair value                                                          625,279
                                                                                             --------
                Projected Benefit Obligation
                  Less Than Plan Assets                                                      ($78,356)

           Unrecognized net asset at transition,
              net of amortization                                                             (72,419)
           Unrecognized net loss from past
              experience different from that assumed                                          104,110
                                                                                             --------
                Accrued Pension Cost Included
                  In Other Liabilities                                                       ($46,665)
                                                                                             --------
                                                                                             --------


           Service cost - benefits earned during
              the period                                                                      $41,461
           Interest cost on projected benefit
              obligation                                                                       49,072
           Actual return on plan assets                                                       (49,495)
           Net amortization and deferral                                                       (3,108)
                                                                                             --------
                Net Periodic Pension Cost                                                     $37,930
                                                                                             --------
                                                                                             --------
</TABLE>


          At year end 1996 and 1995, an 8% weighted average discount rate and a
     5% rate of increase in future compensation levels was used to determine the
     actual present value of the projected benefit obligation. The projected
     long-term rate of return on plan assets was 8% in 1996 and 1995.



                                       48
<PAGE>


                         Logan County BancShares, Inc. and Subsidiary
                          Notes to Consolidated Financial Statements
                               December 31, 1998, 1997 and 1996


9.   Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments
     with Concentration of Credit Risk:

          The Bank is party to financial instruments with off-balance-sheet risk
     in the normal course of business to meet the financing needs of its
     customers. These financial instruments include loan commitments, unused
     credit loan limits, and standby letters of credit. The instruments involve,
     to varying degrees, elements of credit and interest rate risk in excess of
     the amount recognized in the financial statements.

          The Bank's exposure to credit loss in the event of nonperformance by
     the other party to the financial instrument for loan commitments and
     standby letters of credit is represented by the contractual amount of those
     instruments. The Bank uses the same credit policies in making commitments
     and conditional obligations as it does for on-balance-sheet instruments.

          Commitments to extend credit are agreements to lend to a customer as
     long as there is no violation of any condition established in the contract.
     Commitments generally have fixed expiration dates or other termination
     clauses and may require payment of a fee. Since many of the commitments are
     expected to expire without being drawn upon, the total commitment amounts
     do not necessarily represent future cash requirements. At December 31,
     1996, the Bank has $5,207,000. of loan commitments outstanding with
     $1,051,000. expiring in excess of one year. The exposure to credit loss in
     the event of nonperformance by the other party to the financial instrument
     for these commitments is represented by the contractual amount. The credit
     risk involved in issuing letters of credit is essentially the same as that
     involved in extending loan commitments to customers.


                                       49
<PAGE>


                         Logan County BancShares, Inc. and Subsidiary
                          Notes to Consolidated Financial Statements
                               December 31, 1998, 1997 and 1996

9.   Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments
     with Concentration of Credit Risk (Continued):

          The total amounts of off-balance-sheet financial instruments with
     credit risk are as follows:

<TABLE>
<CAPTION>

                                                              December 31,
                                                      1998                    1997
                                                      ----                    ----

<S>                                                <C>                     <C>       
           Loan commitments                        $6,678,000              $6,678,000
           Standby letters of credit                 $271,000                $271,000
</TABLE>


          The Bank subsidiaries grant retail, commercial and commercial real
     estate loans to customers located throughout West Virginia and Eastern
     Kentucky.

          The Bank evaluates each customer's creditworthiness on a case-by-case
     basis. The amount of collateral obtained, if deemed necessary by the Bank
     upon extension of credit, is based on management's credit evaluation of the
     customer. Collateral held varies but may include accounts receivable,
     inventory, property, plant and equipment, and income-producing commercial
     properties. Although the Bank has a diversified loan portfolio, a
     substantial portion of the debtors' ability to honor their contracts is
     dependent upon the economic conditions in each loan's respective location.

10.  Regulatory Matters:

          The various regulatory agencies having supervisory authority over
     financial institutions have adopted risk-based capital guidelines which
     define the adequacy of the capital levels of regulated institutions. These
     risk based capital guidelines require minimun levels of capital based upon
     the risk rating of assets and certain off-balance-sheet items. Assets and
     off-balance-sheet items are assigned regulatory risk-weights ranging from
     0% to 100% depending on their level of credit risk. The guidelines classify
     capital in two tiers, Tier I and Tier II, the sum of which is total
     capital. Tier I capital is essentially common equity, less intangible
     assets. Tier II capital is essentially qualifying long-term debt and a
     portion of the reserve for loan losses.

          The Company and Bank actual capital amounts and ratios are presented
     below in thousands of dollars:


<TABLE>
<CAPTION>

                                                                                          For Capital
                                                                                           Adequacy             To be Well
                                              Company                   Bank               Purposes             Capitalized
                                       --------------------    ------------------      -----------------     ----------------
As of December 31, 1998                     Amt.   Ratio            Amt.   Ratio          Amt.   Ratio         Amt.    Ratio
                                       --------------------    ------------------      -----------------     ----------------
<S>                                    <C>         <C>         <C>         <C>         <C>        <C>        <C>        <C>   
Total Capital (to Risk

  Weighted Assets)                     $   12,983  16.57%      $   12,650  16.23%      $   6,266  8.00%      $   7,833  10.00%

Tier I Capital (to Risk
  Weighted Assets)                     $   12,974  16.56%      $   12,641  16.22%      $   3,133  4.00%      $   4,700   6.00%

Tier I Capital (to Risk
  Average Assets)                      $   12,974  11.09%      $   12,641  10.85%      $   4,678  4.00%      $   5,848   5.00%


As of December 31, 1997

Total Capital (to Risk
  Weighted Assets)                     $   12,983  16.57%      $   12,650  16.23%      $   6,266  8.00%      $   7,833  10.00%

Tier I Capital (to Risk
  Weighted Assets)                     $   12,974  16.56%      $   12,641  16.22%      $   3,133  4.00%      $   4,700   6.00%

Tier I Capital (to Risk
  Average Assets)                      $   12,974  11.09%      $   12,641  10.85%      $   4,678  4.00%      $   5,848   5.00%


</TABLE>

                                      50

<PAGE>

                 Notes to Consolidated Financial Statements
                      December 31, 1998, 1997 and 1996

     The Company's principal source of funds for dividend payments is 
dividends received from the subsidiary Banks. Banking regulations limit the 
amount of dividends that may be paid without prior approval of regulatory 
agencies. Under these regulations, the amount of dividends that may be paid 
in any calendar year is limited to the current year's net profits, as 
defined, combined with the retained net profits of the preceding two years, 
subject to the capital requirements as defined above. During 1999, the Bank 
could, without prior approval, declare dividends of approximately $3,184,769, 
plus any 1999 net profits returned to the date of the dividend declaration.

11. Disclosures about fair value of financial instruments

     The following methods and assumptions were used to estimate the fair 
value of each class of financial instruments for which it is practicable to 
estimate that value:

     Cash and Cash Equivalents - For those short-term instruments, the 
     carrying amount is a reasonable estimate of fair value.

     Investment Securities - For investment securities, fair values are based 
     on quoted market prices or dealer quotes.

     Loans - Fair value is estimated by discounting the future cash flows 
     using the current rates at which similar loans would be made to 
     borrowers with similar credit ratings and for the same remaining 
     maturities.

     Deposit Liabilities -  The fair value of demand deposits, savings 
     accounts, and certain money market deposits is the amount payable on 
     demand at the reporting date. The fair value of fixed-maturity 
     certificates of deposit is estimated by discounting future cash flows 
     using the rates currently offered for deposits of similar remaining 
     maturities.

     Securities Sold Under Agreements to Repurchase - For these short-term 
     instruments, the carrying amount is a reasonable estimate of fair value.

     Federal Home Loan Bank Advances - Rates currently available to the 
     Company for advances with similar terms and remaining maturities are 
     used to estimate fair value of existing debt.

     Note Payable - The carrying value of variable rate borrowed funds is a 
     reasonable estimate of fair value.

     Commitments to Extend Credit and Standby Letters of Credit - Commitments 
     to extent credit and standby letters of credit represent agreements to 
     lend to a customer at the market rate when the loan is extended, thus 
     the commitments and letters of credit are not considered to have a fair 
     value.

     The fair values of the Company's financial instruments at December 31, 
     1998 are as follows:

<TABLE>
<CAPTION>

                                     Carrying                      Fair
                                      Amount                       Value
<S>                                  <C>                        <C>
Financial assets:
  Cash and cash equivalents          $  5,727,104               $  5,757,104
  Federal funds sold                    7,520,000                  7,520,000
  Investment securities                27,473,895                 27,823,036
  Loans                                95,103,531                 95,358,976
  Less: Res. for loan losses             (701,275)                  (701,275)
                                     ------------               ------------
                                     $135,123,255               $135,727,841
                                     ------------               ------------
                                     ------------               ------------
Financial liabilities:
  Deposits                           $124,420,169               $124,636,548
                                     ------------               ------------
                                     ------------               ------------
</TABLE>

                                      51

<PAGE>

                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1998, 1997 AND 1996


12.  Stockholders' Equity:

          In November 1997, the Company completed a sale of 10,388 shares of 
     common stock at a price of $35.00 per share. Total proceeds to the Company 
     were $363,580. Earnings per share has been computed using a weighted 
     average number of shares outstanding.

13.  Merger and Acquisition:

          On May 28, 1996 the Company and its subsidiaries, Logan Bank & 
     Trust Company and Bank of Chapmanville entered into a merger agreement 
     whereby the bank subsidiaries would merge into Logan Bank & Trust Company. 
     The merger was completed after proper approval by the directors,
     shareholders and regulatory agencies. Since surviving bank was still a 
     wholly owned subsidiary of the company, the transaction was accounted for 
     under the pooling of interest method and no restatement of prior periods 
     was necessary.

          In February, Logan Bank & Trust Company opened a branch located in 
     Man, West Virginia. This full service branch services the southern part of 
     Logan County and its neighboring counties. In November, Logan Bank & Trust 
     Company acquired a branch facility located in Harts, West Virginia from 
     another financial institution. Under the purchase agreement, the bank 
     acquired all the real and personal property and assumed the deposits 
     related to the branch. The income and expenses of operating these branch
     facilities are included in the consolidated statement of income from their
     opening dates.

14.  Parent Only Condensed Financial Information:

<TABLE>
<CAPTION>
                                                          December 31,     
                                           ----------------------------------------
     Condensed Balance Sheet:                 1998            1997            1996
                                              ----            ----            ----
     <S>                                 <C>              <C>            <C>

     Assets:
        Cash                                 $365,591        $455,124        $354,485
        Other Assets                          264,685         264,685         264,396
        Investment in Subsidiaries         13,679,457      12,575,912      11,379,008
                                          -----------     -----------     -----------
                                          $14,309,733     $13,295,721     $11,997,889
                                          -----------     -----------     -----------
                                          -----------     -----------     -----------

     Liabilities and Equity:
        Accrued Liabilities                  $250,783        $312,733        $582,953
        Common Stock                        1,300,000       1,300,000       1,274,030
        Surplus                             2,408,426       2,408,426       2,070,816
        Retained Earnings                  11,210,722      10,134,760       8,930,288
        Treasury Stock                       (860,198)       (860,198)       (860,198)
                                          -----------     -----------     -----------
                                          $14,309,733     $13,295,721     $11,997,889
                                          -----------     -----------     -----------
                                          -----------     -----------     -----------

     Condensed Statement of Income:
         Equity in Net Earnings of 
           Subsidiary                     $ 1,918,697     $ 1,886,554     $ 1,635,759
     Other Income                              18,750          18,757          37,414
     Operating Expenses                        46,334          11,188         135,104
                                          -----------     -----------     -----------
     Net Income                           $ 1,891,113     $ 1,894,123     $ 1,538,069
                                          -----------     -----------     -----------
                                          -----------     -----------     -----------
</TABLE>


                                       52
<PAGE>

                  Notes to Consolidated Financial Statements
                       December 31, 1998, 1997 and 1996


14. Parent Only Condensed Financial Information (Continued):

<TABLE>
<CAPTION>

                                                                 December 31,
                                                    ------------------------------------------
                                                        1998            1997            1996
                                                    ------------     -----------     ----------
<S>                                                 <C>              <C>             <C>
Condensed Statement of Changes
 in Cash Flow:
Cash Flows From Increases (Decreases)
in Cash and Cash Equivalents
 Operating Activities:
 Net Income                                         $ 1,891,113      $ 1,894,123     $1,538,069
 Net Change in Other Assets                                   0             (289)      (241,475)
 Net Change in Accrued Liabilities                      (61,950)        (270,220)       290,754
                                                    ------------     -----------     ----------
Net Cash Provided by Operating
 Activities                                           1,829,163        1,623,614      1,587,348
                                                    ------------     -----------     ----------
Cash Flows From Investing Activities:
 Net Change in Investment in
   Subsidiaries                                      (1,072,637)      (1,131,831)      (960,505)
                                                    ------------     -----------     ----------
 Net Cash Provided (Used) in
  Investing Activities                               (1,072,637)      (1,131,831)      (960,505)

Cash Flows From
 Financing Activities:
 Dividends                                             (846,059)        (754,724)      (537,753)
 Sale of Common Stock                                         0          363,580              0
                                                    ------------     -----------     ----------
 Net Cash Used in Financing
  Activities                                           (846,059)        (391,144)      (537,753)
                                                    ------------     -----------     ----------
 Net Change in Cash and Cash
  Equivalents During the Year                           (89,533)         100,639         89,090

Cash Account:
 Beginning of Year                                      455,124          354,485        265,395
                                                    ------------     -----------     ----------
 End of Year                                        $   365,591      $   455,124     $  354,485
                                                    ------------     -----------     ----------
                                                    ------------     -----------     ----------
</TABLE>



                                      53



<PAGE>

ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

                                       None.

                                      PART III


ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



The information appearing on Page     of the Corporation's Proxy Statement, 
dated April 7, 1999, is incorporated herein by reference in response to this 
item.


         Executive Officers of the Registrant:

<TABLE>
<CAPTION>

Name                    Age                      Position and Office
----                    ---                      -------------------
<S>                     <C>                      <C>
Harvey Oakley           78                       Chairman of the Board and 
                                                 President
                                                 Logan County BancShares, 
                                                 Inc. Mr. Oakley has been an 
                                                 officer and Director of 
                                                 Logan Bank & Trust Company 
                                                 since 1963, a attorney at 
                                                 law, and Circuit Judge, 
                                                 State of West Virginia.


Eddie D. Canterbury     50                       Executive Vice President and 
                                                 CEO of Logan County 
                                                 BancShares, Inc. Mr. 
                                                 Canterbeuty has been the 
                                                 Executive Vice President/CEO 
                                                 of Logan Bank & Trust 
                                                 Company since 1983 and Sr. 
                                                 Vice President since 1980. 
                                                 He is a Director of Logan 
                                                 Bank & Trust Company.


</TABLE>





                                        54

<PAGE>



    ITEM 11 - EXECUTIVE COMPENSATION



    The information appearing in the Corporation's Definitive Proxy 
Statement, dated April 7, 1999, is incorporated herein by reference in 
response to this item.


    ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL 
                    OWNERS AND MANAGEMENT


    The information appearing in the Corporation's Definitive Proxy 
Statement, dated April 7, 1999, is incorporated herein by reference in 
response to this item.


    ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


    The information appearing in the Corporation's Definitive Proxy 
Statement, dated April 7, 1999 is incorporated herein by reference in 
response to this item.


    ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                    AND REPORTS ON FORM 8-K



    None.








                              55


<PAGE>

                       NOTICE OF ANNUAL MEETING OF STOCKHOLDERS



                                    APRIL 7, 1999




     The Annual Meeting of Stockholders of Logan County BancShares, Inc. will 
be held at Logan Bank and Trust Company's lobby at 3:00 p.m. on April 27, 
1999, for the following purposes:

    1.  To elect Directors of the Corporation

    2.  To authorize the Board to approve a 3 for 2 stock split effective May 
        31, 1999.

    3.  To authorize the Board to change the date of the annual meeting from 
        the fourth Tuesday of April to the fourth Tuesday of May.

    4.  To transact such other business as may properly come before the 
        meeting.

    Only stockholders of record at the close of business on March 26, 1999, 
are entitled to notice of and to vote at the meeting.

                                      56
<PAGE>


                       LOGAN COUNTY BANCSHARES, INC.
               Proxy for the Annual Meeting of Shareholders
                         To be Held April 27, 1999


          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


     The undersigned hereby appoints Harvey Oakley and Eddie Canterbury, or 
any of them, proxies or proxy of the undersigned with full power of 
substitution to vote, as designated below, the shares of the undersigned at 
the Annual Meeting of the Shareholders of Logan County BancShares, Inc. to be 
held at Logan Bank and Trust Company's office, Corner of Washington Avenue 
and Main Street, Logan, West Virginia, on April 27, 1999 at 3:00 p.m. and at 
any and all adjournments thereof, with all of the powers the undersigned 
would possess if personally present.

     1. Proposal to approve the nominated Board of Directors.

         /  /  FOR         /  /  AGAINST         /  /  ABSTAIN

     2. In their discretion, the proxies are authorized to vote upon such 
        other business and on such other matters as may properly come before 
        the meeting or any adjournments thereof.

     The shares as represented by this Proxy will be voted as specified by 
the undersigned. If no specification is made, this Proxy will be cast FOR 
Proposal.


Number of Shares:                            Date:            , 1999
                  -------------------        -----------------

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

-------------------------------------        --------------------------------
      Certificate Name(s)                              Signature(s)

     Please sign in the manner in which your stock is registered. When 
signing as attorney, administrator, trustee or guardian, please give your 
full title as such. For joint accounts, each Joint Tenant should sign. If a 
corporation, please sign in full corporate name by President or other 
authorized officer. If a partnership, please sign in partnership name by 
authorized person.


                                     57

<PAGE>

                               LOGAN COUNTY BANCSHARES, INC.
                                       P.O. BOX 597
                                LOGAN, WEST VIRGINIA 25601

 
                                       APRIL 7, 1999


                                      PROXY STATEMENT


SOLICITATION AND REVOCABILITY OF PROCESS
----------------------------------------

         This Proxy Statement is furnished in connection with the 
solicitation by the Board of Directors of Logan County BancShares, Inc. 
(Corporation) of proxies for the Annual Meeting of Stockholders of the 
Corporation to be held April 27, 1999, and any adjournment thereof. Shares 
represented by properly executed proxies which are received in time and not 
revoked will be voted at the meeting in the manner described in the proxies. 
Any proxy may be revoked at any time before it is exercised.


INFORMATION AS TO VOTING SECURITIES
-----------------------------------

         The Board of Directors has fixed the close of business on March 26, 
1999, as the record date for the determination of stockholders entitled to 
notice of and to vote at the Annual Meeting. At the record date, 478,000 
shares of Common Stock of the Corporation were outstanding and entitled to be 
voted at the meeting. Each share of Common Stock is entitled to one vote.


ELECTION OF DIRECTORS
---------------------

         The Board of Directors of the Corporation has, in accordance with 
the bylaws, fixed the number of Directors of the Corporation at not less than 
three. Accordingly, ten Directors are proposed to be elected to serve until 
the next Annual Meeting of Stockholders and until their respective successors 
are duly elected and have qualified. It is intended that shares represented 
by proxies solicited by the Board of Directors will, unless contrary 
instructions are given, be voted in favor of the election as Directors of the 
nominees listed below. If any nominee is unavailable for election, the shares 
may be voted for a substitute nominee. The following nominees have 
been proposed to serve as Directors of the Corporation. They are:


                                                            COMMON STOCK
    NAME              AGE      PRINCIPAL OCCUPATION      BENEFICIALLY OWNED
    ----              ---      --------------------      ------------------

Frank H. Oakley        84      Chairman, Bray & Oakley         33,106
                               Insurance Agency, Inc.




                                        58
<PAGE>
 
<TABLE>
<CAPTION>
                                                                                             COMMON STOCK
            NAME              AGE                  PRINCIPAL OCCUPATION                   BENEFICIALLY OWNED
----------------------------  --- ------------------------------------------------------  ------------------
<S>                           <C> <C>                                                     <C>        <C>
Harvey Oakley                 78  President/Chairman of the Board, Logan County                 (A)   29,836
                                  BancShares, Inc.; Attorney at Law; President/Chairman
                                  of the Board of Logan Bank and Trust.

Clell Peyton                  62  Director, Logan Bank and Trust; Retired, Nationwide                  7,123
                                  Insurance Company.

Earle B. Queen                71  Director, Logan Bank and Trust; President, James              (B)   12,837
                                  Funeral Home

LaVeta Jean Ray               67  Retired Counselor, Chapmanville High School                   (C)    4,952

William W. Wagner             66  Director, Logan Bank and Trust; Director and Executive        (D)    8,356
                                  Committee, United Bancshares; Former Chairman Eagle
                                  Bancorp, Inc.

Eddie Canterbury              50  Director and Executive Vice President/CEO Logan County               3,302
                                  Bancshares, Inc.; Director and Executive Vice
                                  President/CEO, Logan Bank and Trust.

Walter D. Vance               48  Vice President, Logan County BancShares, Inc.; Vice           (E)    3,046
                                  President, Aracoma Drug Company.

Glenn T. Yost                 41  Director, Logan Bank and Trust; President, W. W.              (F)   19,309
                                  McDonald Land Co.; President, Triadelphia Land Co.;
                                  President, Bruce McDonald Holding Co.

David McCormick               51  Director, Logan Bank and Trust; President,                    (G)   25,372
                                  McCormick's, Inc.; President, Bodaco, Co.
</TABLE>

                                        59

<PAGE>

(A) Includes 4,470 shares jointly owned with spouse.

(B) Includes 12,000 shares owned by Earle B. Queen, Trust, 137 shares owned 
    by Funeral Services, Inc. and 150 shares owned by Queen Brothers, Inc.

(C) Includes 952 shares jointly owned with sister, Erma Ray Butcher.

(D) Includes 436 shares jointly owned with spouse.

(E) Includes 566 shares owned by Aracoma Drug Company.

(F) Includes 750 shares jointly owned with spouse; and 18,109 shares for 
    which voting and investment powers are deemed; 13,750 shares owned by 
    W. W. McDonald Land Company; 3,909 shares owned by Bruce McDonald Holding 
    Company; 450 shares owned by Triadelphia Land Company.

(G) Includes 25,272 shares owned by Bodaco, Co.

Executive Compensation
----------------------

    All Executive Officers of Logan County BancShares, Inc. were compensated 
$5,200.00 in Director's fees during 1998.

Other Matters
-------------

    As of the date of this Proxy Statement, the Board of Directors was not 
aware of any matters not referred to in the form proxy that would be 
presented for action at the meeting. If any other business comes before the 
meeting, the persons named in the proxy will have discretionary authority to 
vote the shares represented by them in accordance with their best judgement.

Date for Submission of Stockholder Proposals
--------------------------------------------

    All proposals must be submitted to the Board of Directors 30 days prior 
to the Annual Meeting of Stockholders.


                                      60


<PAGE>

                           NOTICE TO SHAREHOLDERS
                           ----------------------

The Annual Disclosure Statement, which contains certain financial 
information, of Logan Bank and Trust Company is available upon request.

Please contact the New Accounts Department at:

                 Logan Bank and Trust Company
                 43 Washington Avenue
                 PO Box 597
                 Logan, West Virginia 25601-0597
                 Phone: (304) 752-1166


                                      61