<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   FORM 10-K

[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities and
     Exchange Act of 1934 for the fiscal year ended December 31, 2000 or

[_]  Transition Report Pursuant to Section 13 or 15(d) of the Securities and
     Exchange Act of 1934 for the transition period from _______________ to
     ____________________________

Commission file number 0-12724
------------------------------

BELMONT BANCORP.
             (Exact name of registrant as specified in its charter)
             Ohio                                        34-1376776
----------------------------------          -----------------------------------
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
  incorporation or organization)

325 Main Street, Bridgeport, Ohio                           43912
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code: (740) 695-3323

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

                                           Name of each exchange on
               Title of each class             which registered
          -----------------------------    ------------------------
          Common stock, $0.25 par value    NASDAQ Small Cap Market

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [_]

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. Yes  X  No
                                       ---

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant at March 16, 2001:  $47,181,000

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:  11,101,403 shares

                      Documents Incorporated by Reference:
Documents Incorporated by Reference: Portions of the Registrant's proxy
statement to be filed by April 30, 2001 are incorporated herein by reference in
Items 10, 11, 12 and 13.
<PAGE>

                                    PART I


ITEM 1-BUSINESS

BELMONT BANCORP.

     Belmont Bancorp., (the "Company" or "Belmont"), is a bank holding company
which was organized under the laws of the State of Ohio in 1982.  On April 4,
1984, Belmont Bancorp. acquired all of the outstanding capital stock of Belmont
National Bank (the "Bank") (formerly Belmont County National Bank), a banking
corporation organized as a national banking association.  Belmont National Bank
provides a variety of financial services.  In addition to the Bank, the Company
owns Belmont Financial Network, Inc., a non-bank subsidiary ("BFN").

BELMONT NATIONAL BANK

     Belmont National Bank resulted from the merger on January 2, 1959, of the
First National Bank of St. Clairsville, and the First National Bank of
Bridgeport. Both banks were organized as national associations prior to 1900.
Belmont National Bank operates through a network of thirteen branches located in
Belmont, Harrison and Tuscarawas Counties in Ohio and Ohio County in West
Virginia. The main office is located in the Woodsdale section of Wheeling, West
Virginia. In addition to its main office in West Virginia, the Bank operates a
branch in the Elm Grove section of Wheeling. Branch locations in Belmont County,
Ohio include St. Clairsville, Bridgeport, Lansing, Shadyside, Ohio Valley Mall,
Bellaire and Plaza West, St. Clairsville. The Bank's St. Clairsville facility
serves as the location for the Company's and the Bank's executive,
administrative, finance and operations functions. The Harrison County branch is
located in Cadiz, Ohio. Branches in Tuscarawas County are located in New
Philadelphia, Ohio. The three New Philadelphia offices were acquired on October
2, 1992, when Belmont National Bank acquired the deposits and loans of these
offices from Diamond Savings and Loan.

     Belmont National Bank provides a wide range of retail banking services to
individuals and small to medium-sized businesses.  These services include
various deposit products, business and personal loans, credit cards, residential
mortgage loans, home equity loans, and other consumer oriented financial
services including IRA and Keogh accounts, safe deposit and night depository
facilities.  Belmont National Bank also owns automatic teller machines located
at branches in Bellaire, Bridgeport, Woodsdale, Elm Grove, Cadiz, the Ohio
Valley Mall, Plaza West and New Philadelphia providing 24 hour banking service
to our customers.  Belmont National Bank belongs to MAC, a nationwide ATM
network with thousands of locations nationwide.  Belmont National Bank offers a
wide variety of fiduciary services.  The trust department of the Bank
administers pension, profit-sharing, employee benefit plans, personal trusts and
estates.

BELMONT FINANCIAL NETWORK

     On July 1, 1985, Belmont  formed a subsidiary corporation, Belmont
Financial Network, Inc.  BFN serves as a community development corporation by
investing in low income housing projects that provide low income and historic
tax credits


SUPERVISION AND REGULATION

     Belmont  is supervised and examined by the Board of Governors of the
Federal Reserve system under the Bank Holding Company Act of 1956, as amended
(the "BHC Act").  The BHC Act requires the prior approval of the Federal Reserve
Board for a bank holding company to acquire or hold more than a 5% voting
interest in any bank, and restricts interstate banking activities.  The BHC Act
allows interstate branching by acquisitions anywhere in the country and
acquisition and consolidation in those states that had not opted out by January
1, 1997.

     The BHC Act restricts Belmont's nonbanking activities to those which are
determined by the Federal Reserve Board to be closely related to banking and a
proper incident thereto.  The BHC Act does not place territorial

                                       2
<PAGE>

restrictions on the activities of nonbank subsidiaries of bank holding
companies. Belmont's banking subsidiary is subject to limitations with respect
to transactions with affiliates.

     The enactment of the Graham-Leach-Bliley Act of 1999 (the "GLB Act")
represented a pivotal point in the history of the financial services industry.
The GLB Act swept away large parts of a regulatory framework that had its
origins in the Depression Era of the 1930s. Effective March 11, 2000, new
opportunities became available for banks, other depository institutions,
insurance companies and securities firms to enter into combinations that permit
a single financial services organization to offer customers a more complete
array of financial products and services. The GLB Act provides a new regulatory
framework for regulation through the financial holding company which has as its
umbrella regulator the Federal Reserve Board. Functional regulation of the
financial holding company's separately regulated subsidiaries will be conducted
by their primary functional regulator. The GLB Act requires "satisfactory" or
higher Community Reinvestment Act compliance for insured depository institutions
and their financial holding companies in order for them to engage in new
financial activities. The GLB Act provides a federal right to privacy of non-
public personal information of individual customers.

     The Bank's deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC").  As a national bank, Belmont National Bank is supervised
and examined by the Office of the Comptroller of the Currency.

     A substantial portion of the Company's cash revenue is derived from
dividends paid by its subsidiary bank.  These dividends are subject to various
legal and regulatory restrictions as summarized in Notes 16 and 20 of the
Company's Consolidated Financial Statements.

     A fundamental principle underlying the Federal Reserve's supervision and
regulation of bank holding companies is that bank holding companies should be a
source of managerial and financial strength to their subsidiary banks.
Subsidiary banks in turn are to be operated in a manner that protects the
overall soundness of the institution and the safety of deposits.  Bank
regulators can take various remedial measures to deal with banks and bank
holding companies that fail to meet legal and regulatory standards.

     The Financial Reform, Recovery and Enforcement Act of 1989 provides that a
holding company's controlled insured depository institutions are liable for any
loss incurred by the FDIC in connection with the default of any FDIC-assisted
transaction involving an affiliated insured bank or savings association.  The
Federal Deposit Insurance Corporation Improvement Act of 1991 created five
capital-based supervisory levels for banks and requires bank holding companies
to guarantee compliance with capital restoration plans of undercapitalized
insured depository affiliates.

     The monetary policies of regulatory authorities, including the Federal
Reserve Board and the FDIC, have a significant effect on the operating results
of banks and bank holding companies.  The nature and future monetary policies
and the effect of such policies on the future business and earnings of Belmont
and its subsidiary bank cannot be predicted.

     In August 1999, Belmont and the Bank entered into consent agreements with
the Federal Reserve Bank of Cleveland and the Office of the Comptroller of the
Currency under which Belmont and the Bank agreed to take specified actions and
adhere to specified operational procedures, as more fully described under Item
3.


FOREIGN OPERATIONS

  Belmont Bancorp. has no foreign operations.

ITEM 2-PROPERTIES

DESCRIPTION OF PROPERTIES

     In January 1996, the Bank relocated its headquarters to Wheeling, West
Virginia. The office is located at 980 National Road and consists of a 14,000
square foot, combination one and two story masonry block building.

                                       3
<PAGE>

Approximately half of the space is leased to a tenant. In addition, the Bank
transacts business in the following branch locations:

     St. Clairsville Office-This office consists of a two story brick building
     owned by the Bank with attached drive-in facilities.  The building consists
     of 9,216 square feet which houses the commercial bank operations and the
     executive and human resources offices.

     Ohio Valley Mall Office-This office is located at the Ohio Valley Mall, a
     major shopping mall located two miles east of St. Clairsville, Ohio.  The
     office consists of a 1,400 square foot office located along the perimeter
     of the Mall at the main entrance.  An automatic teller machine is located
     at the drive-in facility.

     Lansing Office-This 1,352 square foot office is located in Lansing, Ohio, a
     small community approximately six miles east of St. Clairsville on US.
     Route 40.  The facility is a masonry building with adjoining drive-in
     facilities.

     Bridgeport Office-This office is located in Bridgeport, Ohio, a community
     located on the Ohio/West Virginia border, approximately 10 miles east of
     St. Clairsville.  This 5,096 square foot facility is a masonry building
     with adjoining drive-in facilities and an ATM.

     Shadyside Office-This 1,792 square foot office is located in Shadyside, a
     village located on Ohio State Route 7.  The facility is a masonry building
     with accompanying drive-in facilities.

     Cadiz Office-This office is located in Cadiz, Ohio in Harrison County,
     approximately seventeen miles north of St. Clairsville at the intersection
     of State Routes 9 and 22.  The brick and tile building contains 1,800
     square feet with an accompanying drive-in facility and an ATM.

     New Philadelphia Office-This office, located at 152 North Broadway Avenue,
     is a 33,792 square foot site improved with two inter-connected, two story
     brick office buildings with a total building area of 13,234 square feet.
     Part of the office space is leased to other businesses.  This location also
     has a drive-in facility and an automatic teller machine.

     Schoenbrunn  Office-This office, located at 2300 East High Avenue, is
     comprised of a one story, 1,605 square foot brick structure with a 783
     square foot drive-thru canopy.

     Wabash Office-This office, located at 525 Wabash Avenue, is comprised of a
     14,250 square foot site with a 246 square foot drive-thru banking facility.

     Elm Grove Office-This office is located at 2066 National Road in Wheeling,
     WV, and includes a drive-thru facility and an ATM.

     Bellaire Office - This leased office, located in the Imperial Shopping
     Center, is comprised of approximately 1,750 square feet with an adjoining
     drive-thru facility and ATM.

     Plaza West Office - This office is located at the west end of St.
     Clairsville and includes a drive-thru facility and an ATM.

     All offices are owned by the Bank except for the Ohio Valley Mall and
Bellaire offices. The land for the Elm Grove office is also leased.  The Ohio
Valley Mall office lease expires in 2003 and contains a five year renewal
option.  The Bellaire office lease expires in 2007 and contains a ten year
renewal option.  The land lease for the Elm Grove office expires in 2005 and
provides for four, five year renewal options.

ITEM 3-LEGAL PROCEEDINGS

     The Company is a defendant in a suit for damages brought in the Court of
Common Pleas for Belmont County, Ohio in April 1999 by George Michael Riley and
others against the Bank and certain former officers, among others, alleging
torts to have occurred in connection with the Bank's denial of a loan to a third
party to

                                       4
<PAGE>

finance the sale of a business owned by plaintiffs. In another case filed in the
same Court in May 1999, Charles J. and Rebecca McKeegan, the beneficial owners
of the potential purchaser of the business in the same transaction claim damages
in excess of $500,000 based upon alleged tortuous conduct as to them by
defendants. In both cases it is claimed that a former loan officer of the Bank
later purchased the business at a lower price with financial assistance from the
Bank's former chief operating officer. Based on the advice of counsel, the
Company believes its exposure to liability, if any, is minimal in each case.

     In August 1999, the Company's directors unanimously approved and entered
into a consent order with the Office of the Comptroller of the Currency and
entered into a written agreement with the Federal Reserve Bank of Cleveland
under which the Company and the Bank agreed to meet specified conditions
relating to its future operations and capital requirements. The consent order
requires the Bank to, among other things, formulate new plans, policies,
procedures and programs relating to long-term strategy, organizational
structure, management, loans, loan loss reserves, overdrafts, loan interest
accrual and non-accrual loans, loan diversification, internal audit and periodic
loan review by certain dates.  Management believes that it has satisfied or is
in the process of satisfying all of the conditions of the order.  See also
"Liquidity and Capital Resources" in Item 7 of this Report.

     In August 1999, the Company also entered into an agreement with the Federal
Reserve Bank of Cleveland, under authority given it by the Board of Governors of
the Federal Reserve System, the federal regulatory agency for Belmont. As with
the consent order of the Comptroller of the Currency, the Federal Reserve Bank
agreement necessitates certain actions and restrictions. Without prior Federal
Reserve Bank approval, the agreement prohibits the Company from paying
dividends, incurring debt, redeeming stock, receiving dividends from the Bank,
imposing charges on the Bank, and engaging in any transaction with the Bank in
violation of federal law.  The Company is required to report quarterly on
progress in complying with the Federal Reserve Bank agreement. Management
believes that it has satisfied or is in the process of satisfying all of the
terms of the agreement.

     In August 1999, the Bank was named as a defendant in a lawsuit filed in the
Belmont County Common Pleas Court by Joseph C. Heinlein, Jr. against his former
secretary, the Bank, other financial institutions and individuals with whom the
secretary did business. The complaint alleges that the secretary embezzled funds
from the plaintiff's account over a period of several years by forging his
signature to checks and alleges negligence on the part of the Bank for honoring
such checks. The complaint has been amended to claim damages of $1,250,000.
This secretary has entered into a pleas agreement under which she has paid
$500,000 in restitution and received a prison sentence.  The Bank believes that
it has valid defenses against the claim and intends to defend it vigorously. The
Bank has also filed cross-claims against the secretary and a third party it
believes benefited from the misappropriation of funds.  In addition, the Company
believes that any liability on the Bank's part would be covered under its
insurance policy.  However, the insurance carrier, Progressive Casualty
Insurance Company, has filed a declaratory judgment and interpleader action
raising issues of coverage and indemnification on this claim, as more fully
discussed below.

     In October 1999, the Company filed suit in the Court of Common Pleas of
Tuscarawas County, Ohio, alleging that it had been the victim of an "elaborate
fraud" that has resulted in more than $15 million in losses to the Bank.
Following an extensive internal review of its loan portfolio, the Bank filed
claims against Steven D. Schwartz, President of Schwartz Homes, Inc., the now-
closed New Philadelphia retailer of manufactured homes. At the same time, the
Bank filed claims against three additional people: Linda Reese, Schwartz Homes'
Chief Financial Officer; William Wallace, the Bank's former Executive Vice-
President and Chief Operating Officer; and Christine Wallace, his wife. In
addition, as more fully discussed below, because of Mr. Wallace's alleged
conduct as a bank officer and director, the Bank is seeking to recover from its
indemnity bond insurance carrier, Progressive Casualty Insurance Company, the
full amount of its bond. The Wallaces have filed counterclaims in an
indeterminate amount upon various bases, including invasion of privacy,
defamation and failure to distribute moneys allegedly due them under a deferred
and certain other compensation plans. Steven Schwartz also requested leave to
file counterclaims.  The case has been scheduled for trial in May 2001.  The
Company intends to vigorously prosecute its case and defend against these
claims.

     In October 1999, James John Fleagane, a shareholder of the Company, filed
an action against the Company, the Bank and certain of the Company's and the
Bank's current and former officers and directors in the Circuit Court of Ohio
County, West Virginia. The plaintiff alleges, among other things, that the Bank
and its

                                       5
<PAGE>

directors and officers negligently transacted and administered various loans
with respect to Schwartz Homes, Inc. and customers of Schwartz. The plaintiff
seeks damages for the loss in value of his stock and other compensatory and
punitive damages in an unspecified amount and requests class action
certification for the common shareholders of the Company. The court denied the
Company's motion to dismiss this case in July 2000. In August 2000, the
plaintiff filed an amended complaint, as to which the Company has filed an
answer, affirmative defenses and cross-claims against the Company's former
accountants, S.R. Snodgrass, A.C. and a principal thereof, and against J.
Vincent Ciroli, Jr., formerly the Company's President and Chief Executive
Officer. In February 2000, the court granted leave to the plaintiff to file a
second amended complaint. The second amended complaint eliminates the direct
claims against the Company and the Bank and the request for class action
certification. Accordingly, as amended, this action constitutes a derivative
suit against current and former officers and directors of the Company and the
Bank, which is being defended by the Company and the Bank on their behalf. The
parties are currently in the discovery phase of this case. The Company intends
to vigorously defend this action.

     Progressive Casualty Insurance Company sold to the Company a directors and
officers liability policy providing for $3 million of coverage and a separate
financial institution fidelity bond in the face amount of $4.75 million. In May
1999, the Company filed a claim under the fidelity bond policy to recover the
losses incurred in connection with the Schwartz Homes loan relationship. The
Company has also claimed coverage under the directors and officers liability
policy.

     Progressive declined to honor these claims and, in December 1999, filed an
action in the United States District Court for the Southern District of Ohio,
Eastern Division asking the court to issue a declaratory judgment declaring that
Progressive is not liable under either the directors and officers liability
policy or the fidelity bond policy. In September 2000, the court granted the
Company's motion to dismiss the declaratory judgment action. Progressive had
also asked this court, if Progressive is found to be liable under these
policies, to determine whether the Bank or other parties who have sued the Bank
in separate actions are entitled to the insurance proceeds. Progressive has
deposited with the court bonds in the aggregate amount of $7.75 million, which
amount Progressive believes is sufficient to satisfy any liabilities under the
policies in respect of this interpleader claim. This interpleader claim remains
before the court. The Company intends to vigorously seek recoveries under the
insurance policies sold to the Company by Progressive.

     The Company is a defendant in litigation brought in October 1999 by Beall
Homes, Inc., John B. Beall, and Peggy F. Beall in the Court of Common Pleas,
Belmont County, Ohio.  Plaintiffs seek a declaratory judgment that certain
warrants of attorney which appear on promissory notes evidencing loans between
the Bank and Beall Homes, Inc. (and guaranteed by John B. Beall and Peggy F.
Beall) are invalid. Plaintiffs assert claims of breach of a duty of good faith
in connection with the Bank's grant of three loans to Beall Homes, fraud and
breach of fiduciary duty allegedly through floor plan financing, dominating and
controlling plaintiff's business, wrongful set-off and conversion of the Beall
Homes account, wrongful dishonor of certain customer checks of plaintiff,
wrongful set-off and conversion of the mortgage account of John B. Beall, and
intentional infliction of emotional distress. Plaintiffs seek compensatory and
punitive damages in an amount in excess of $25,000 and a declaration that they
are not in default of any of their loans, that the warrants of attorney are
invalid, that the Bank is required to provide plaintiffs with an accounting of
the manner in which payments made by plaintiffs have been applied by the Bank,
and other relief. The Bank has filed a counterclaim for monetary damages and
foreclosure of collateral securing indebtedness in the amount of $765,000 and
has filed a petition for involuntary bankruptcy against Beall Homes. In February
2001, the bankruptcy court lifted the stay it had placed on the Bank's
counterclaims against Beall Homes, thereby permitting the proceeding in the
Court of Common Pleas, Belmont County, Ohio to continue.  The Bank intends to
vigorously defend this action and prosecute its own claims.

     In September 1999, the Bank filed a lawsuit against Otterbacher
Manufacturing, Inc. ("Manufacturing") and Gary and Karen Otterbacher regarding
default by Manufacturing on a loan guaranteed by the Otterbachers. The
Otterbachers filed a counterclaim against the Bank for lender liability claims
relating to the Bank's declaration of default by Manufacturing and the Bank's
refusal to extend additional or renew existing credit to Manufacturing.  In
January 2001, the Bank entered into a settlement agreement with the Otterbachers
under which they agreed to pay $200,000 to the Bank, $100,000 of which was paid
in January 2001, $60,000 of which is required to be paid in 2001 and the balance
of which is required to be paid in five equal annual installments beginning in
2002.  Under the terms of settlement, the Otterbachers agreed to dismiss all
claims they had asserted against the Bank, including all lender liability
claims.

                                       6
<PAGE>

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

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.


                                    PART II

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

     The number of shareholders of record for the Company's stock as of February
28, 2001 was 3,380.   The closing price of Belmont stock on March 16, 2001 was
$4.25 per share.

     Belmont Bancorp.'s common stock has a par value of $0.25 and, since October
1994, has been traded on the Nasdaq SmallCap market.

     High and low market prices and dividend information for the past two years
for Belmont's common stock are depicted in the following tables.

<TABLE>
<CAPTION>
                           2000                                                                 1999
---------------------------------------------------------           ---------------------------------------------------------
                                         Dividend                                                             Dividend
Quarter        High         Low          per Share                    Quarter       High         Low          per Share
---------------------------------------------------------           ---------------------------------------------------------
<S>            <C>          <C>          <C>                        <C>             <C>          <C>          <C>
1st                 $6.500       $2.063            $0.000             1st                 $23.75       $17.00           $0.120
2nd                 $3.250       $1.625             0.000             2nd                  19.50         9.06            0.000
3rd                 $4.750       $2.250             0.000             3rd                  11.50         4.50            0.000
4th                 $6.000       $2.625             0.000             4th                  10.00         5.25            0.000
                                        -----------------                                                     ----------------
   Total                                           $0.000             Total                                             $0.120
                                        =================                                                     ================
</TABLE>


     Information regarding the limitations on dividends available to be paid can
be located in Footnote 16 of the Notes to the Consolidated Financial Statements
in the Company's financial statements beginning on page F-1 (Item 8).

     Treasury stock is accounted for using the cost method.  There were 51,792
shares held in treasury on December 31, 2000 and 1999.

                                       7
<PAGE>

ITEM 6 - SELECTED FINANCIAL DATA

     The data presented herein should be read in conjunction with the audited
Consolidated Financial Statements incorporated by reference.

Consolidated Five Year Summary of Operations
For the Years Ended December 31, 2000, 1999, 1998, 1997 and 1996
($000s except per share data)

<TABLE>
<CAPTION>
                                                                  2000           1999          1998          1997         1996
------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>            <C>           <C>          <C>
Interest income                                               $ 19,137      $  25,870      $ 30,787      $ 28,348     $ 25,501
Interest expense                                                10,702         15,609        16,480        14,004       12,127
------------------------------------------------------------------------------------------------------------------------------
Net interest income                                              8,435         10,261        14,307        14,344       13,374
Provision for loan losses                                          242         15,877        12,882         1,055          465
------------------------------------------------------------------------------------------------------------------------------
Net interest income after
  provision for loan losses                                      8,193         (5,616)        1,425        13,289       12,909
Securities gains (losses)                                            4           (880)        1,338           799          396
Trading gains (losses)                                               -            (10)           62             -            -
Gain on sale of real estate                                          -              -           383             -            -
Interest on federal tax refund                                     256              -             -             -            -
Other operating income                                           2,123          2,563         2,183         2,010        1,861
Operating expenses                                               9,870         12,642         9,496         8,732        8,388
------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                  706        (16,585)       (4,105)        7,366        6,778
Income taxes (benefit)                                            (680)        (5,554)       (2,186)        1,421        1,776
------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                             $  1,386       ($11,031)      ($1,919)     $  5,945     $  5,002
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------

Basic earnings (loss) per common share (1)                    $   0.16         ($2.11)       ($0.37)     $   1.13     $   0.94
------------------------------------------------------------------------------------------------------------------------------
Cash dividend declared per share (1)                                 -      $   0.120        $0.385      $  0.306     $  0.240
Book value per common share (1)                               $   2.31      $    1.83         $4.86      $   6.05     $   5.17
------------------------------------------------------------------------------------------------------------------------------
Total loans                                                   $129,876      $ 166,979      $208,186      $224,900     $188,783
Total assets                                                   281,788        315,767       438,283       388,713      333,903
Total deposits                                                 231,686        255,432       304,351       263,908      261,539
Long term borrowings                                            20,000         20,000        91,401        69,635       19,676
Total shareholders' equity                                      25,602         11,231        25,364        31,899       27,332
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 (1) Restated for stock dividends paid during 1997 and 1998.

                                       8
<PAGE>

ITEM 7-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The data presented in this discussion should be read in conjunction with
the audited consolidated financial statements.

RESULTS OF OPERATIONS

     The Year 2000 marked the beginning of the recovery of Belmont Bancorp. from
substantial loan losses incurred during 1999 and 1998. During 2000, the Company
successfully completed  equity offerings that began in November 1999 and
concluded in June 2000 with a total of $11 million in new capital and 5,039,869
shares of common stock issued.  Support from its shareholders and depositors has
enabled the Company to return to profitability and potentially allow for future
growth.

     The following table depicts the performance of the Company over the past
three years.

<TABLE>
       ($000s) except per share data                              2000               1999              1998
       ----------------------------------------------------------------------------------------------------------
<S>                                                               <C>                <C>               <C>
       Income (loss) before income taxes                              $  706           ($16,585)          ($4,105)
       Net income (loss)                                              $1,386           ($11,031)          ($1,919)

       Basic earnings (loss) per common share                         $ 0.16             ($2.11)           ($0.37)

       Return on average assets                                         0.49%             -2.79%            -0.46%
       Return on average total equity                                   7.77%            -56.92%            -5.76%
</TABLE>

     For the year ended 2000, the Company reported net income of $1,386,000, or
$0.16 per common share compared to a loss of $11,031,000 or a loss of $2.11 per
common share for the year ended 1999.  For 1998, the Company had reported a loss
of $1,919,000, or a loss of $0.37 per share.

     Income before federal income tax benefits was $706,000 for the year ended
2000 compared to pretax losses of $16,585,000 and $4,105,000 for the years ended
1999 and 1998, respectively.

     The financial results of 1999 and 1998 reflect a period when Belmont faced
one of the most serious challenges in its 154 year history.  The resignation of
the Bank's chief operating officer and senior lending officer in March 1999
followed by the closure in April 1999 and subsequent bankruptcy of Schwartz
Homes, Inc., formerly the Bank's largest commercial borrower, precipitated the
recognition of large loan losses.  In June 1999, Belmont's chief executive
officer resigned, and the Board of Directors engaged an interim management group
to provide executive management services and to assist in the recruitment of a
new chief executive officer.  Throughout 1999, the Bank's staff worked
diligently to assess the magnitude of the losses associated with Schwartz Homes,
Inc. and related consumer loans and to evaluate the entire commercial loan
portfolio.  The performance of the Company during 1999 was severely impacted by
loan losses and additional overhead costs associated with interim management,
legal services, and collection efforts. Loan charge-offs during 1999 totaled
$11,650,000 and the loan loss provision was $15,877,000.  New loan policies and
procedures were implemented to augment internal controls and strengthen
underwriting practices.   In December 1999, a new chief executive officer was
recruited and costs associated with interim executive management were
eliminated.

     In March 2000, a confirmation order was approved by the court in the
Schwartz Homes, Inc. bankruptcy.  For the year ended December 31, 2000, the Bank
received settlement proceeds of $3.2 million of which $1.2 million was applied
to the remaining credit exposure for the Schwartz homebuilder loans, $1.8
million was recorded as recoveries in the allowance for loan losses, and the
remaining funds were recorded as recovery of legal expenses.

     The Company continued to face unusually high operating expenses for the
year ended 2000.  In particular, large legal expenses, deposit insurance costs,
and other insurance costs hindered profitability.  Legal expenses were

                                       9
<PAGE>

in excess of $1.1 million for the year, and FDIC deposit insurance and other
insurance costs increased by over $600,000 from the previous year.

     For 1998, the Company recorded a loan loss provision of $12,882,000
resulting in a loss of $1,919,000, or a loss of $0.37 per common share. Of this
loan loss provision, $12,172,000 was recorded in the fourth quarter of 1998 and
related to consumer loans to customers of Schwartz Homes, Inc.

NET INTEREST REVENUE

     A major share of the Company's income results from the spread between
income on interest earning assets and interest expense on the liabilities used
to fund those assets, known as net interest income. Net interest income is
affected by changes in interest rates and amounts and distributions of interest
earning assets and interest bearing liabilities outstanding. Net interest margin
is net interest income divided by the average earning assets outstanding. A
third frequently used measure is net interest rate spread which is the
difference between the average rate earned on assets and the average rate
incurred on liabilities without regard to the amounts outstanding in either
category.

     The Consolidated Average Balance Sheets and Analysis of Net Interest Income
Changes compare interest revenue and interest earning assets outstanding with
interest cost and liabilities outstanding for the years ended December 31, 2000,
1999, and 1998, and compute net interest income, net interest margin and net
interest rate spread for each period. All three of these measures are reported
on a taxable equivalent basis.

                                       10
<PAGE>

Consolidated Average Balance Sheets
For the Years Ended December 31, 2000, 1999, and 1998 (Fully Taxable Equivalent
Basis) ($000's)

<TABLE>
<CAPTION>
                                                   2000                            1999                           1998
                                       ------------------------------------------------------------------------------------------
                                       Average              Average    Average              Average   Average             Average
                                         Out-    Revenue/    Yield/      Out-     Revenue/   Yield/     Out-    Revenue/   Yield/
                                       standing    Cost       Rate     standing     Cost      Rate    standing   Cost       Rate
---------------------------------------------------------------------------------------------------------------------------------
Assets
---------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>        <C>        <C>        <C>       <C>       <C>        <C>       <C>
Interest Earning Assets
  Loans and Leases                     $143,012   $12,240     8.56%     $193,295   $16,641    8.61%    $222,961   $21,321    9.56%
  Securities:
    Taxable                              66,038     4,479     6.78%      125,314     7,017    5.60%     134,337     8,053    5.99%
    Exempt from income tax               44,581     3,090     6.93%       41,276     2,893    7.01%      24,261     1,802    7.43%
  Trading account assets                      -         -     na           1,786        86    4.82%       1,193        68    5.70%
 Federal funds sold                       6,122       391     6.39%        5,277       269    5.10%       4,194       228    5.44%
---------------------------------------------------------------------------------------------------------------------------------
Total interest earning assets           259,753   $20,200     7.78%      366,948   $26,906    7.33%     386,946   $31,472    8.13%
---------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks                   9,483                           11,377                         10,972
Other assets                             26,255                           28,590                         20,100
Market value depreciation
  of securities available for sale       (7,382)                          (4,486)                          (597)
Allowance for loan loss                  (8,046)                          (7,204)                        (4,312)
---------------------------------------------------------------------------------------------------------------------------------
Total Assets                           $280,063                         $395,225                       $413,109
=================================================================================================================================
</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                   2000                            1999                           1998
                                       ------------------------------------------------------------------------------------------
                                       Average              Average    Average              Average   Average             Average
                                         Out-    Revenue/    Yield/      Out-     Revenue/   Yield/     Out-    Revenue/   Yield/
                                       standing    Cost       Rate     standing     Cost      Rate    standing   Cost       Rate
---------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>        <C>        <C>        <C>       <C>      <C>        <C>       <C>
Liabilities
Interest bearing liabilities
  Interest checking                     $ 24,464  $   623     2.55%      $ 40,649  $ 1,245     3.06%   $ 45,864  $ 1,524     3.32%
  Savings                                 68,652    2,231     3.25%        82,919    2,653     3.20%     82,196    2,709     3.30%
  Other time deposits                    112,605    6,311     5.60%       133,419    6,996     5.24%    134,485    7,438     5.53%
  Other borrowings                        29,682    1,537     5.18%        87,498    4,715     5.39%     86,084    4,809     5.59%
---------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities       235,403   10,702     4.55%       344,485   15,609     4.53%    348,629   16,480     4.73%
---------------------------------------------------------------------------------------------------------------------------------
Demand deposits                           24,749                           28,865                        29,910
Other liabilities                          2,084                            2,496                         1,256
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities                        262,236                          375,846                       379,795
---------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity                      17,827                           19,379                        33,314
---------------------------------------------------------------------------------------------------------------------------------
   Liabilities & Stockholders' Equity   $280,063                         $395,225                      $413,109
=================================================================================================================================
Net interest income
  margin on a taxable equivalent basis            $ 9,498     3.66%                $11,297     3.08%             $14,992     3.87%
=================================================================================================================================
Net interest rate spread                                      3.23%                            2.80%                         3.41%
=================================================================================================================================
Interest bearing liabilities
  to interest earning assets                                 90.63%                           93.88%                        90.10%
=================================================================================================================================
</TABLE>

Fully taxable equivalent basis computed at effective federal tax rate of 34%.
Average loan balances include nonperforming loans.

                                       12
<PAGE>

Analysis of Net Interest Income Changes
For the Years Ended December 31, 2000, 1999, and 1998 (Taxable Equivalent Basis)
($000's)

<TABLE>
<CAPTION>
                                                      2000 Compared to 1999                   1999 Compared to 1998
                                               -----------------------------------     -----------------------------------
                                               Volume    Yield     Mix     Total       Volume    Yield     Mix     Total
--------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>       <C>      <C>      <C>         <C>       <C>        <C>     <C>
Increase (decrease) in interest income:
  Loans and leases                            ($4,329)    ($97)  $   26   ($4,400)    ($2,837)  ($2,126)   $283    ($4,680)
  Securities:
    Taxable                                    (3,319)   1,482     (702)   (2,539)       (541)     (531)     36     (1,036)
    Exempt from income taxes                      232      (32)      (3)      197       1,264      (102)    (71)     1,091
  Trading account assets                          (86)     (86)      86       (86)         34       (11)     (5)        18
  Federal funds sold                               43       68       11       122          59       (14)     (4)        41
--------------------------------------------------------------------------------------------------------------------------
Total interest income change                   (7,459)   1,335     (582)   (6,706)     (2,021)   (2,784)    239     (4,566)
--------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in interest expense:
  Interest checking                              (496)    (210)      83      (623)       (173)     (119)     13       (279)
  Savings                                        (456)      42       (8)     (422)         24       (79)     (1)       (56)
  Other time deposits                          (1,091)     482      (75)     (684)        (59)     (386)      3       (442)
  Other borrowings                             (3,116)    (184)     122    (3,178)         79      (170)     (3)       (94)
--------------------------------------------------------------------------------------------------------------------------
Total interest expense change                  (5,159)     130      122    (4,907)       (129)     (754)     12       (871)
--------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net interest
Income on a taxable equivalent basis          ($2,300)  $1,205    ($704)  ($1,799)    ($1,892)  ($2,030)   $227    ($3,695)
(Increase) decrease in taxable equivalent
 adjustment                                                                   (27)                                    (351)
--------------------------------------------------------------------------------------------------------------------------
Net interest income change                                                ($1,826)                                 ($4,046)
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       13
<PAGE>

     The Company's net interest income declined by 15.9%, or $1,799,000, on a
taxable equivalent basis during 2000 compared to 1999. During 2000, the
Company's average interest-earning assets fell by approximately $107 million,
down 29.2% from 1999. Most of the downsizing of the Company occurred during the
fourth quarter of 1999 and the first half of 2000 as the Company reduced its
asset size as part of its strategy to achieve a 6% Tier 1 leverage ratio.

     The yield on interest earning assets was up 45 basis points (a basis point
is equal to .01%) from 7.33% in 1999 to 7.78% in 2000 due to an increase in
yield on taxable securities. The cost of interest bearing liabilities was nearly
unchanged from 1999 to 2000. The net interest rate spread improved from 2.80%
during 1999 to 3.23% during 2000. The taxable equivalent net interest margin was
3.66% during 2000 compared to 3.08% for 1999 and 3.87% during 1998.

     The Analysis of Net Interest Income Changes, separates the dollar change in
the Company's net interest income into three components: changes caused by (1)
an increase or decrease in the average assets and liability balances outstanding
(volume); (2) the changes in average yields on interest earning assets and
average rates for interest bearing liabilities (yield/rate); and (3) combined
volume and yield/rate effects (mix).

     This table shows that the decrease in the Company's net interest income
during the year-to-date periods presented from 1999 to 2000 was generated
primarily by a decline in the volume of earning assets which was partially
offset by an improvement in the yield of earning assets. The decrease in the
Company's net interest income during the year-to-date periods presented from
1998 to 1999 was principally due to a decline in yields and volume on earning
assets. This was partially offset by a decline in the cost of interest bearing
liabilities.

OTHER OPERATING INCOME

     Other operating income excluding securities transactions and a gain on sale
of real estate, decreased 6.8% and totaled $2,379,000 in 2000, compared to
$2,553,000 in 1999 and $2,245,000 in 1998. The table below shows the dollar
amounts and growth rates of the components of other operating income:

<TABLE>
<CAPTION>
                                             2000                           1999                          1998
(Expressed in thousands)                     Total          Change          Total          Change         Total
------------------------------------------------------------------------------------------------------------------
<S>                                          <C>            <C>             <C>            <C>            <C>
Trust income                                    $  419          -13.4%        $  484            4.5%        $  463
Service charges on deposits                        848           -7.9%           921           22.5%           752
Interest on federal tax refund                     256             na              -             na              -
Earnings on bank-owned life insurance              231           -1.7%           235          -14.2%           274
Gain (loss) on sale of loans and
   loans held for sale                             (40)        -111.7%           341          136.8%           144
Trading profits (losses)                             -          100.0%           (10)        -116.1%            62
Other income (individually less than
   1% of total income)                             665           14.3%           582            5.8%           550
                                                ------------------------------------------------------------------
   Subtotal                                      2,379           -6.8%         2,553           13.7%         2,245
Securities gains (losses)                            4          100.5%          (880)        -165.8%         1,338
Gain on sale of real estate                          -             na              -         -100.0%           383
                                                ------------------------------------------------------------------
   Total                                        $2,383           42.4%        $1,673          -57.8%        $3,966
                                                ==================================================================
</TABLE>

     Service charges on deposits declined 7.9% from $921,000 in 1999 to $848,000
in 2000. This decline is primarily the result of a reduction in the number of
deposit accounts. Service charges on deposits increased 22.5% from $752,000 in
1998 to $921,000 in 1999 due to higher overdrafts and return check fee income
and an increase in the fee schedule for commercial checking accounts.

     During the second quarter of 2000, the Company recorded $256,000 in
interest earned on federal tax refunds for taxes paid in previous years.

                                       14
<PAGE>

     A loss of $40,000 was recognized during 2000 for loans sold compared to a
$341,000 gain recorded during 1999 and a $144,000 gain in 1998.

     Securities losses were realized during the fourth quarter of 1999 as part
of a plan to reduce the asset size of the Bank. In October 1999, the Bank sold
approximately $38 million in investment securities for a loss of $788,000 and
used approximately $33 million of the proceeds to repay borrowings from the
Federal Home Loan Bank of Cincinnati. Prepayment penalties associated with the
repayment of borrowings totaled $342,000 and are included in operating expenses.

OPERATING EXPENSES

     The table below details the dollar amounts of and percentage changes in
various categories of expense for the three years ended 2000, 1999, and 1998:

<TABLE>
<CAPTION>
(Expressed in thousands)                                2000     % change        1999     % change        1998
---------------------------------------------------------------------------------------------------------------
<S>                                                    <C>       <C>            <C>       <C>            <C>
Taxes other than payroll and real estate               $   24        -90.6%     $  254        -48.8%     $  496
Supplies and printing                                     165        -29.2%        233        -22.1%        299
Insurance, including federal deposit insurance            774        358.0%        169         33.1%        127
Amortization of intangibles                                10        -97.7%        439        124.0%        196
Legal fees                                              1,153        -31.0%      1,671       3113.5%         52
Consulting expense                                        139        -90.4%      1,442       1199.1%        111
Examinations and audits                                   359         -6.8%        385         80.8%        213
Prepayment penalties on Federal Home Loan
  Bank advances                                             -       -100.0%        342           Na           -
Legal settlements                                          12        -95.9%        295           Na           -
Other (individually less than 1% of total income)       1,464        -18.6%      1,798         11.5%      1,612
                                                       ------                   ------                   ------
   Total                                               $4,100        -41.7%     $7,028        126.3%     $3,106
                                                       ======                   ======                   ======
</TABLE>

     Taxes (other than payroll and real estate taxes) were down $230,000 from
1999 to 2000 largely due to lower state franchise tax expense. Taxes were also
lower by $242,000 from 1998 to 1999. This reduction was primarily the result of
refunds for state corporate net income and franchise taxes previously paid which
totaled $225,000 due to reductions in income and equity.

     Insurance expense was impacted by higher premium rates for federal deposit
insurance from the FDIC. FDIC deposit premiums for the year 2000 were $667,000
compared to $110,000 for 1999 and $65,000 for 1998. FDIC costs are expected to
decline during 2001 based on the improvement in the Bank's capital ratios as of
September 30, 2000, the measurement date for FDIC assessments for the first half
of 2001. Fidelity bond and director and officer liability insurance costs also
increased by $49,000 from 1999 to 2000 based on new policies obtained during
July 2000.

     Amortization of intangible assets during 2000 was related to mortgage
servicing rights. The estimated value of mortgage servicing rights at the end of
2000 was $320,000 for a mortgage servicing porfolio of $38 million. The balance
of core deposit intangible assets associated with branches acquired in the early
1990's were written off during the fourth quarter of 1999. The write-off
resulted in the recognition of an additional $300,000 in amortization expense
for the period. These intangible assets were primarily associated with the
deposits acquired in the New Philadelphia market. Given the negative publicity
surrounding the Schwartz commercial and consumer loans centered in this
marketplace and the resulting decline in deposits, the Bank reevaluated the
remaining intangible assets and determined that it would write-off the balance.
Amortization of core deposit intangibles for 1998 was $196,000.

     Legal expenses were for costs related to lending and loan collection
efforts, civil litigation against Progressive Insurance and others related to
the Schwartz Homes, Inc. matters, regulatory matters, and a shareholder action
against the Company, the Board of Directors and several current and former
officers of the Bank. Legal

                                       15
<PAGE>

expenses for 2000 totaled $1,153,000, down from $1,671,000 for 1999. Significant
legal expenses are expected during 2001 as well.

     Consulting expenses of $139,000 for 2000 and $111,000 for 1998 were
significantly less than the $1,442,000 in consulting expense recorded for 1999.
During 1999, the cost of interim management services charged to consulting
expenses totaled $1,180,000, and consulting expenses of $194,000 were related to
accounting and other services associated with the Schwartz Homes, Inc. loan
collection.

     Examination and audit expense declined slightly during 2000 compared to
1999. This cost had increased 80.8% from 1998 to 1999 primarily as the result of
a change in external auditors, the contract internal auditor, and the additional
loan review and extended scopes of the engagements as a result of lending
related issues.

     Prepayment penalties associated with the repayment of borrowings at the
Federal Home Loan Bank totaled $342,000 during 1999. These costs were incurred
as part of the plan to reduce the asset size of the Company thereby improving
the Bank's capital ratios. No repayment penalties were incurred during 2000.

     Legal settlement expense for 2000 totaled $12,000 compared to $295,000 for
1999. This expense was related to the Schwartz Homes, Inc. litigation.

     Other expenses incurred in 2000 and 1998 were significantly less than the
expense incurred in 1999, principally due to expenses associated with interim
management services retained during the last half of 1999.

FINANCIAL CONDITION

SECURITIES

     The Company uses securities to generate interest and dividend revenue, to
manage interest rate risk and to provide liquidity to meet operating cash needs.
The securities portfolio yield at December 31, 2000 was 7.24%. Net unrealized
losses in the securities portfolio at December 31, 2000 totaled $2,947,000,
compared to net unrealized losses of $8,489,000 at December 31, 1999. The
decline in unrealized losses was the result of a lower interest rate environment
at December 31, 2000 compared to December 31, 1999. Bond prices rise as interest
rates decline. Management believes the current declines in fair value are
temporary.

                                       16
<PAGE>

     The maturities and yields of securities available for sale (excluding
equity securities) are detailed in the following table:

<TABLE>
<CAPTION>
Securities Available for Sale
(excluding Equity Securities)
December 31, 2000
                                                                                                                Over 10 Year
                              Maturity * 1 year          1-5 Year Maturity          6-10 Year Maturity          Maturity
($000s)                            Amount        Yield        Amount        Yield         Amount        Yield     Amount      Yield
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                <C>     <C>                <C>     <C>                 <C>     <C>           <C>
U. S. Treasury securities     $             100   5.04%  $                      -   $                           $                 -
U.S. Government agencies
 and corporations/(b)/                        -      -               2,310   7.79%               3,001   7.01%             -      -
States and political
 subdivisions/(a)/                           47  10.14%                 96  10.30%                 408  10.65%        41,037   7.31%
Corporate debt                                -      -                   -      -                    -      -          2,745   9.13%
Agency mortgage-backed
 securities/(b)/                            171   4.11%             17,198   6.87%              11,899   7.49%         5,423   7.94%
Collateralized mortgage
 obligations                              4,264   7.31%              8,232   7.05%                 920   8.29%         7,685   6.46%
-----------------------------------------------------------------------------------------------------------------------------------
 Total fair value             $           4,582   7.17%  $          27,836   7.01%  $           16,228   7.51%  $     56,890   7.29%
-----------------------------------------------------------------------------------------------------------------------------------
 Amortized cost               $           4,582          $          28,159          $           16,357          $     59,330
-----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                              Total
($000s)                                         Amount     Yield
----------------------------------------------------------------
<S>                                           <C>          <C>
U. S. Treasury securities                     $      100   5.04%
U.S. Government agencies
 and corporations/(b)/                             5,311   7.35%
States and political
 subdivisions/(a)/                                41,588   7.35%
Corporate debt                                     2,745   9.13%
Agency mortgage-backed
 securities/(b)/                                  34,691   7.24%
Collateralized mortgage
 obligations                                      21,101   6.94%
----------------------------------------------------------------
 Total fair value                             $  105,536   7.24%
----------------------------------------------------------------
 Amortized cost                               $  108,428
----------------------------------------------------------------
</TABLE>

/(a)/  Taxable equivalent yields
/(b)/  Maturities of mortgage-backed securities and agency loan pools are based
       on estimated average life.

* less than

                                       17
<PAGE>

     The Company elected to transfer the balance of securities previously
classified as Held to Maturity to the Available for Sale portfolio effective
April 1, 1999 in accordance with Statement of Financial Accounting Standard No.
133, Accounting for Derivative Instruments and Hedging Activities.

     Privately issued collateralized mortgage obligations included in the table
above have a book value of $7,231,000 and an estimated fair value of $7,137,000.
Credit risk on privately issued bonds is evaluated based upon independent rating
agencies and on the underlying collateral of the obligation.

     At December 31, 2000, the Company owned various investments in a single
issuer, the book value of which exceeded 10% of total shareholders' equity.
These concentrations occurred primarily as a result of the decline in the
Company's shareholders' equity subsequent to purchase.  The following table
details the issuer, book value and market value of these investments.

<TABLE>
<CAPTION>
(Expressed in thousands)
                                                                                        Estimated
                        Issuer                                  Amortized Cost          Fair Value
--------------------------------------------------------------------------------------------------
<S>                                                             <C>                     <C>
Privately Issued Collateralized Mortgage Obligations:
Norwest Asset Securities Corporation                                 $ 3,438               $ 3,396

General Obligations:
Hampton Township, PA School District                                   4,337                 4,225

Revenue Bonds:
Suburban Lancaster PA Sewer Authority                                  2,835                 2,600

Equity Securities:
Federal Home Loan Bank stock                                           3,086                 3,086
                                                      --------------------------------------------

     Total                                                           $13,696               $13,307
                                                      ============================================
</TABLE>

LOANS AND LEASES

     The following table shows the history of commercial and consumer loans and
leases, including loans held for sale, by major category at December 31:

<TABLE>
<CAPTION>

(Expressed in thousands)                        2000             1999             1998             1997             1996
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>              <C>              <C>              <C>              <C>
Commercial loans (a):
Real estate construction                    $ 12,856         $  9,732         $    135         $  1,418         $  1,327
Real estate mortgage                          22,738           17,478           14,719           19,984           25,954
Commercial, financial
     and agricultural                         48,789           81,842          119,730          109,618           80,554
                                        --------------------------------------------------------------------------------
     Total commercial loans                 $ 84,383         $109,052         $134,584         $131,020         $107,835
                                        --------------------------------------------------------------------------------

Consumer loans:
Residential mortgage                        $ 40,794         $ 47,789         $ 58,099         $ 77,995         $ 71,715
Installment loans                              3,832            9,315           14,483           14,435            7,626
Credit card and other consumer                   867              823            1,020            1,450            1,607
                                        --------------------------------------------------------------------------------
     Total consumer loans                   $ 45,493         $ 57,927         $ 73,602         $ 93,880         $ 80,948
                                        --------------------------------------------------------------------------------

Total loans and leases                      $129,876         $166,979         $208,186         $224,900         $188,783
                                  ======================================================================================
</TABLE>

                                       18
<PAGE>

(a) Certain prior year amounts have been reclassified to conform to current year
presentation.

An analysis of maturity and interest rate sensitivity of business loans at the
end of 2000 follows:

<TABLE>
<CAPTION>
                                                              Under            1 to 5            Over 5
(Expressed in thousands)                                      1 year           Years             Years           Total
------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>              <C>               <C>             <C>
Domestic loans:
Real estate construction                                      $ 3,809          $ 6,010           $1,192          $11,011
Real estate mortgage                                           12,832            4,933            3,113           20,878
Commercial, financial
     and agricultural                                          27,302           12,102            5,164           44,568
                                                    --------------------------------------------------------------------
     Total business loans (b)                                 $43,943          $23,045           $9,469          $76,457
                                                    ====================================================================

Rate sensitivity:
Predetermined rate                                            $ 1,935          $ 5,771           $8,823          $16,529
Floating or adjustable rate                                    42,008           17,274              646           59,928
                                                    --------------------------------------------------------------------
Total domestic business loans                                 $43,943          $23,045           $9,469          $76,457
                                                    ====================================================================

Foreign loans                                                       0                0                0                0
                                                    ====================================================================
</TABLE>

(b) does not include nonaccrual loans

PROVISION AND ALLOWANCE FOR LOAN LOSSES

     The Company, as part of its philosophy of risk management, has established
various credit policies and procedures intended to minimize the Company's
exposure to undue credit risk.  Credit evaluations of borrowers are performed to
ensure that loans are granted on a sound basis.  In addition, care is taken to
minimize risk by diversifying specific industry.  The Bank has certain
concentrations of credit, which are more fully described in Footnote 15 of the
Company's financial statements beginning on page F-1.  Management regularly
monitors credit risk through the periodic review of individual credits to ensure
compliance with policies and procedures.  Adequate collateralization,
contractual guarantees, and compensating balances are also utilized by
Management to mitigate risk.

     Management determines the appropriate level of the allowance for loan
losses by regularly evaluating the quality of the loan portfolio.  The reserve
is allocated to specific loans that exhibit above average credit loss potential
based upon their payment history and the borrowers' financial conditions.  The
adequacy of the allowance for loan losses is evaluated based on an assessment of
the losses inherent in the loan portfolio.  This assessment results in an
allowance consisting of two components, allocated and unallocated.  The
allocations are made for analytical purposes.  The total allowance is available
to absorb losses from any segment of the portfolio.  Management maintains a
watch list of substandard loans for monthly review.  Although these loans may
not be delinquent and may be adequately secured, management believes that due to
location, size, or past payment history, it is necessary to monitor these loans
monthly.

     The allowance for loan losses totaled $7,667,000, or 5.9% of total loans
and leases at December 31, 2000.  At the end of the previous year, the allowance
for loan losses was $9,702,000, or 5.8% of total loans and leases.  The
provision for loan losses charged to expense during 2000 was $242,000 compared
to $15,877,000 in the year ago period.

     As previously disclosed, the Bank has taken charge-offs beginning with the
fourth quarter of 1998 due principally to its relationship with Schwartz Homes,
Inc., a defunct retailer of mobile homes formerly based in New Philadelphia,
Ohio and retail customers of Schwartz Homes.  The Bank made loans to Schwartz
Home's retail customers under recourse agreements with Schwartz Homes.  Under
these recourse agreements, Schwartz Homes

                                       19
<PAGE>

agreed to repay any loans not repaid by retail customers. Schwartz Homes
apparently used the funds advanced by the Bank to fund its own operations or for
other improper purposes, without the knowledge of the Bank's board. In many
instances, Schwartz Homes failed to perform on the retail sales contracts it
entered into with its customers even though the Bank had provided the funds to
Schwartz Homes for this purpose. In addition, Schwartz Homes often failed to
repay the floor-plan lenders on homes purchased, which further impacted the
Bank's collateral position with respect to the homes. In April 1999, Schwartz
Homes unexpectedly ceased operations and in June 1999 other creditors of
Schwartz Homes placed it in involuntary bankruptcy.

     In March 2000, a confirmation order was approved by the court in the
Schwartz Homes, Inc. bankruptcy.  For the year ended December 31, 2000, the Bank
received settlement proceeds of $3.2 million of which $1.2 million was applied
to the remaining credit exposure for the Schwartz homebuilder loans, $1.8
million was recorded as recoveries in the allowance for loan losses, and the
remaining funds were recorded as recovery of legal expenses.  Of the $2.3
million in net charge-offs for the year ended December 31, 2000, $1.5 were
related to the Schwartz Homes loan relationship.  There are no remaining loans
outstanding related to Schwartz Homes or its customers at December 31, 2000.

     Of the $11.6 million in net charge-offs for the year ended December 31,
1999, $7.5 million were related to Schwartz Homes loans.  Of this $7.5 million
amount, $3.4 million in net charge-offs were related to the indirect consumer
loans to Schwartz Homes customers, and $4.1 million in net charge-offs were
related to commercial loans made directly to Schwartz Homes.

     Of the $11.5 million in net charge-offs for the year ended December 31,
1998, $11.2 million were related to the Schwartz Homes consumer loans.

     Management's allocation of the allowance for loan losses based on estimates
of incurred loan losses is set forth in the table below:

<TABLE>
<CAPTION>
Allocation of the Allowance for Loan Losses
(Expressed in thousands)                                   2000       1999        1998        1997        1996
--------------------------------------------------------------------------------------------------------------
<S>                                                      <C>         <C>         <C>         <C>         <C>
Domestic:
Commercial, financial and agricultural                   $4,096      $4,692      $2,254      $2,564      $1,823
Commercial real estate                                    2,207       1,154         507         313         269
Residential mortgage                                        301         371         295         358         338
Consumer                                                     94       3,485       2,329         370         313
Foreign                                                       -           -           -           -           -
Unallocated                                                 969           -          90         529         410
                                                       --------------------------------------------------------
   Total                                                 $7,667      $9,702      $5,475      $4,134      $3,153
                                                       ========================================================
</TABLE>

Loans outstanding as a percentage of each loan category are depicted in the
following table:

<TABLE>
<CAPTION>
                                                              2000         1999         1998         1997         1996
                                                       ---------------------------------------------------------------
<S>                                                          <C>          <C>          <C>          <C>          <C>
  Commercial, financial and agricultural                      35.3%        58.6%        56.5%        47.6%        40.3%
   Real estate-construction                                    9.9%         0.1%         0.1%         0.6%         0.7%
   Real estate-mortgage                                       31.4%        27.8%        27.3%        34.4%        38.0%
   Commercial real estate                                     17.5%         5.5%         7.1%         8.9%        13.7%
   Installment loans to individuals                            3.6%         6.1%         7.5%         7.1%         4.9%
   Obligations of political subdivisions in the U.S.           2.3%         1.9%         1.5%         1.4%         2.4%
   Lease financing                                             0.0%         0.0%         0.0%         0.0%         0.0%
                                                       ---------------------------------------------------------------
     Total                                                   100.0%       100.0%       100.0%       100.0%       100.0%
                                                       ===============================================================
</TABLE>

                                       20
<PAGE>

The following tables set forth the five-year historical and statistical
information on the allowance for loan losses:

<TABLE>
<CAPTION>
(Expressed in thousands)                     2000       1999       1998       1997       1996
---------------------------------------------------------------------------------------------
<S>                                      <C>        <C>        <C>        <C>        <C>
Balance as of January 1                  $  9,702   $  5,475   $  4,134   $  3,153   $  2,703
Provision for loan losses                     242     15,877     12,882      1,055        465
Adjustment incident to acquisition              0          0          0          0          0
Loans charged off:
  Real estate                                 119        151        133         24         30
  Commercial                                  812      8,435        178         23          0
  Consumer                                  3,369      3,831     11,245         43         32
  Direct financing leases                       0          0          0          0          0
                                        -----------------------------------------------------
Total loans charged-off                     4,300     12,417     11,556         90         62

Recoveries of loans previously
charged-off:
  Real estate                                   6        282         11          2          2
  Commercial                                  136         73          1          1          0
  Consumer                                  1,881        412          3         13         45
  Direct financing leases                       0          0          0          0          0
                                        -----------------------------------------------------
Total recoveries                            2,023        767         15         16         47
                                        -----------------------------------------------------
Net charge-offs                             2,277     11,650     11,541         74         15
                                        -----------------------------------------------------
Balance at December 31                   $  7,667   $  9,702   $  5,475   $  4,134   $  3,153
                                        =====================================================

(Expressed in thousands)                     2000       1999       1998       1997       1996
---------------------------------------------------------------------------------------------
Loans and leases outstanding
   at December 31                        $129,876   $166,979   $208,186   $224,899   $188,783
Allowance as a percent of loans
   and leases outstanding                    5.90%      5.81%      2.63%      1.84%      1.67%
Average loans and leases                 $143,012   $193,295   $222,961   $208,265   $174,445
Net charge-offs as a percent of
   average loans and leases                  1.59%      6.03%      5.18%      0.04%      0.01%
</TABLE>


     The following schedule depicts the five-year history of non-performing
assets.

<TABLE>
<S>                                   <C>     <C>      <C>     <C>     <C>
(Expressed in thousands)                2000     1999    1998    1997   1996
----------------------------------------------------------------------------
Nonaccrual loans and leases           $8,518  $13,769  $8,569  $1,515  $ 143
Loans 90 days or more past due
   but accruing interest                   2      541       4      44     74
Other real estate owned                  766        -       -      20     66
                                    ----------------------------------------
   Total                              $9,286  $14,310  $8,573  $1,579  $ 283
                                    ========================================
</TABLE>

     Restructured loans in compliance with modified terms totaled $230,000 and
$1,046,000 at December 31, 2000 and 1999, respectively.

     In addition to the above schedule of non-performing assets, Management
prepares a watch list consisting of loans which management has determined
require closer monitoring to further protect the Company against loss.  The

                                       21
<PAGE>

balance of loans classified by management as substandard due to delinquency and
a change in financial position and not included in non-performing assets was
$14,687,000 and $19,246,000 at the December 31, 2000 and 1999, respectively.
Loan classified as doubtful and not included in non-performing assets totaled
$224,000 at December 31, 2000.  There were no loans classified as doubtful at
December 31, 1999.

DEPOSITS

     Primarily, core deposits are used to fund interest-earning assets.  The
accompanying tables show the relative composition of the Company's average
deposits and the change in average deposit sources during the last three years:

<TABLE>
<CAPTION>
(Expressed in thousands)
Average Deposits                                        2000            1999           1998
-------------------------------------------------------------------------------------------
<S>                                                <C>              <C>             <C>
Demand                                             $  24,749        $ 28,865       $ 29,910
Interest bearing checking                             24,464          40,649         45,864
Savings                                               68,652          82,919         82,196
Other time                                            95,608         106,599        107,398
Certificates-$100,000 and over                        16,997          26,820         27,087
                                             ----------------------------------------------
   Total average deposits                          $ 230,470        $285,852       $292,455
                                             ==============================================

Distribution of Average Deposits                        2000            1999           1998
-------------------------------------------------------------------------------------------
Demand                                                  10.7%           10.1%          10.2%
Interest bearing checking                               10.6%           14.2%          15.7%
Savings                                                 29.8%           29.0%          28.1%
Other time                                              41.5%           37.3%          36.7%
Certificates-$100,000 and over                           7.4%            9.4%           9.3%
                                             ----------------------------------------------
   Total                                               100.0%          100.0%         100.0%
                                            ===============================================

Change in Average                                       1999            1998           1997
   Deposit Sources                               to 2000          to 1999        to 1998
-------------------------------------------------------------------------------------------
Demand                                               ($4,116)        ($1,045)      $     32
Interest bearing checking                            (16,185)         (5,215)         2,388
Savings                                              (14,267)            723          3,560
Other time                                           (10,991)           (799)         5,993
Certificates-$100,000 and over                        (9,823)           (267)        13,188
                                             ----------------------------------------------
   Total                                            ($55,382)        ($6,603)      $ 25,161
                                            ===============================================
</TABLE>

     The decline in average deposits during 1999 and 2000 is attributable to a
number of factors.  The negative publicity resulting from the Bank's loan losses
had an adverse impact on bank deposits.  In addition, the Bank actively reduced
deposits to shrink its asset size thereby reducing the amount of capital
required to meet the terms of its regulatory agreements.  There was also a sale
of $10 million in deposits during January of 1999.

     Deposit trends have increased during the last half of 2000.  Average
deposits for the fourth quarter of 2000 were $229 million, up $4 million from
the third quarter of 2000.

BORROWINGS

     Other sources of funds for the Company include short-term repurchase
agreements and Federal Home Loan Bank borrowings.

                                       22
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

      The Company meets its liability-based needs through the operation of the
Bank's branch banking network that gathers demand and retail time deposits. The
Bank also acquires funds through repurchase agreements and overnight federal
funds that provide additional sources of liquidity. Total deposits decreased by
$23.7 million, or 9.3%, from the end of 1999 to 2000 and $48.9 million, or
16.1%, from the end of 1998 to 1999. As discussed above, these trends were the
result of adverse publicity surrounding the Bank's financial condition, planned
reductions in deposit levels to facilitate capital restoration and a branch
sale. Average deposits decreased $55.4 million, or 19.4%, during 2000 compared
to 1999. Average deposits decreased $6.6 million, or 2.3%, during 1999 compared
to 1998. Deposit trends stabilized midyear during 2000 and increased during the
third and fourth quarters of 2000.

      The Bank also has lines of credit with various correspondent banks
totaling $5,100,000 that may be used as an alternative funding source; none of
these lines were drawn upon at December 31, 2000. The Bank has an unused credit
line with the Federal Home Loan Bank for $20 million. All borrowings at the
Federal Home Loan Bank are subject to eligible collateral requirements.

      Liquidity may be impacted by the ability of the Company to generate future
earnings.

      At December 31, 2000, shareholders' equity was $25.6 million compared to
$11.2 million at December 31, 1999, an increase of $14.4 million. The increase
in capital occurred as a result of the sale of common stock during 2000 and an
improvement in the market value of securities classified as available for sale.

      The Federal Reserve Board has adopted risk-based capital guidelines that
assign risk weightings to assets and off-balance sheet items. The guidelines
also define and set minimum capital requirements (risk-based capital ratios).
Bank holding companies are required to have core capital (Tier 1) of at least
4.0% of risk-weighted assets and total capital of 8.0% of risk-weighted assets.
Tier 1 capital consists principally of shareholders' equity less goodwill, and
may include a portion of deferred tax assets. However, presently none of the
Company's deferred tax assets are included as Tier 1 capital. Total capital
consists of Tier I capital, plus certain debt instruments and a portion of the
allowance for loan losses.

      The following table shows several capital and liquidity ratios for the
Company for the last two years:


December 31                                      2000              1999
--------------------------------------------------------------------------
Average shareholders' equity to:
 Average assets                                      6.4%              4.9%
 Average deposits                                    7.7%              6.8%
 Average loans and leases                           12.5%             10.0%
Primary capital                                     11.8%              6.6%
Risk-based capital ratio:
 Tier 1                                             12.7%              5.6%
 Total                                              13.9%              6.9%
Tier 1 leverage ratio                                7.8%              3.5%



The Bank's capital ratios are detailed in Footnote 20 of the Notes to the
Consolidated Statements in the Company's financial statements beginning on page
F-1.

      As previously described under Item 3, the Bank entered into an agreement
with the Office of the Comptroller of the Currency to maintain a Tier 1 leverage
ratio of at least 6.0%. As a result of its recapitalization efforts, the Bank
was formally notified that it had achieved an adequately capitalized designation
under Prompt Corrective Action regulations as of June 30, 2000 in a letter


                                       23
<PAGE>

from the Office of the Comptroller of the Currency dated July 27, 2000. There
are no conditions or events since that notification that management believes has
changed the Bank's capital category.

      See also Notes 2 and 20 to the Company's consolidated financial
 statements.

DIVIDENDS

      The following table presents dividend payout ratios for the past three
years:


                                                2000        1999          1998
Total dividends declared
 as a percentage of net income                     0.00%      *             *
Common dividends declared
 as a percentage of earnings per
 common share                                      0.00%      *             *

      * not applicable because the Company reported losses for 1999 and 1998.

Cash dividends were declared and paid in the amount of $0.12 per share in 1999
prior to the Company's determination that it would not realize positive earnings
for the year. Dividends of $0.385 per share were paid in 1998. Future dividends
will require approval of the Company's regulators.

      The subsidiary Bank is the primary source of funds to pay dividends to the
shareholders of the Company. The approval of the Comptroller of the Currency
will be required for future dividends from the Bank to the Company because
previously paid dividends have exceeded the total of the Bank's retained net
profits for the current and preceding two years. The Board of Governors of the
Federal Reserve Bank has issued a policy statement stating that a bank holding
company generally should not maintain its existing rate of cash dividends on
common stock unless (1) the organization's net income available to common
shareholders over the past year has been sufficient to fully fund the dividends
and (2) the prospective rate of earnings retention appears consistent with the
organization's capital needs, asset quality, and overall financial condition.

RECENT ACCOUNTING PRONOUNCEMENTS

      Currently, there are no recent accounting pronouncements that, if adopted,
would have a material effect on the Company's financial position.

FORWARD-LOOKING STATEMENTS

      Various statements made in this Report concerning the manner in which
Belmont intends to conduct its future operations, and potential trends that may
impact future results of operations, are forward-looking statements. Belmont may
be unable to realize its plans and objectives due to various important factors,
including, but not limited to, the factors described below. These and other
factors are more fully discussed elsewhere in this Report.

   .  Belmont has entered into consent agreements with the Federal Reserve Bank
      of Cleveland and the Office of the Comptroller of the Currency that
      require it to take various actions and meet various requirements. If
      Belmont fails to satisfy all of these requirements, the Comptroller of the
      Currency and Federal Reserve Bank could potentially assume complete or
      significantly greater control of Belmont's operations.

   .  Belmont has recognized substantial loan losses in recent years,
      principally related to loans made under the direction of prior management.
      While Belmont has created what it believes are appropriate loan loss
      reserves, Belmont could incur significant additional loan losses in future
      periods, particularly if general economic conditions or conditions in
      particular industries in which its loans are concentrated deteriorate.

                                       24
<PAGE>

   .  Belmont is subject to increasingly vigorous and intense competition from
      other banking institutions and from various financial institutions and
      other nonbank or non-regulated companies or firms that engage in similar
      activities. Many of these institutions have significantly greater
      resources than Belmont.

   .  Belmont is currently engaged in certain significant lawsuits. In addition
      to making significant expenditures for legal fees, adverse judgments in
      one or more of these lawsuits could have a materially adverse impact on
      Belmont's financial condition.

ITEM 7A-QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Market risk is the risk of loss arising from adverse changes in the fair
value of financial instruments due to changes in interest rates, exchange rates
and equity prices. The Company's market risk is composed primarily of interest
rate risk. Interest rate risk results from timing differences in the repricing
of assets, liabilities and off-balance sheet instruments, changes in
relationships between rate indices and the potential exercise of explicit or
embedded options. The Asset/Liability Management Committee ("ALCO") meets
regularly to review the interest rate sensitivity position of the Company and to
monitor and limit exposure to interest rate risk. The goal of asset/liability
management is to maximize net interest income and the net value of the Company's
future cash flows within the interest rate risk limits established by the Board
of Directors.

      Interest rate risk is monitored primarily through the use of two
complementary measures: earnings simulation modeling and net present value
estimation. While each of these interest rate risk measurements has limitations,
taken together they represent a reasonably comprehensive view of the magnitude
of interest rate risk in the Company. The key assumptions underlying these
measures are periodically reviewed by ALCO.

      The earnings simulation model forecasts the effects on income under a
variety of scenarios. This model includes assumptions about how the balance
sheet is likely to evolve through time in different interest rate environments.
Loan and deposit growth rate assumptions are derived from historical analysis
and management's outlook, as are the assumptions used to project yields and
rates for new loans and deposits. Securities portfolio maturities and
prepayments are assumed to be reinvested in similar instruments. Mortgage loan
prepayment assumptions are developed from industry median estimates of
prepayment speeds.

      Based on the earnings simulation model at December 31, 2000, changes in
net interest income were projected as follows given a parallel shift in the
yield curve:


                                                  Change in         % Change
                                                 Net Interest   in Net Interest
             (Expressed in thousands)               Income           Income
             -----------------------------------------------------------------
             Down 200 basis points                      ($654)           -7.1%
             Down 100 basis points                       (170)           -1.8%

             Up 100 basis points                          163             1.8%
             Up 200 basis points                          210             2.3%

      Based on the earnings simulation model at December 31, 1999, changes in
net interest income were projected as follows given a parallel shift in the
yield curve:


                                                  Change in         % Change
                                                 Net Interest   in Net Interest
             (Expressed in thousands)               Income           Income
             -------------------------------------------------------------------
             Down 200 basis points                      ($173)           -1.9%
             Down 100 basis points                          7             0.1%

             Up 100 basis points                          (70)           -0.8%
             Up 200 basis points                         (153)           -1.7%

                                       25
<PAGE>

     The net present value estimation ("NPV") measure is used for discerning
levels of risk present in the balance sheet that might not be taken into account
in the earnings simulation model due to the shorter time horizon used by that
model. The NPV of the balance sheet, at a point in time, is defined as the
discounted present value of asset cash flows minus the discounted value of
liability cash flows. The NPV measure also assumes a static balance sheet,
versus the growth assumptions that are incorporated into the earnings simulation
measure and an unlimited time horizon instead of the one-year horizon applied in
the earnings simulation. As with earnings simulation modeling, assumptions about
the timing and variability of balance sheet cash flows are important to NPV
analysis. The estimated decline in the present value of equity as a percentage
of the total market value of equity at December 31, 2000 would be 21% given a
200 basis point increase in interest rates.

ITEM 8 - FINANCIAL STATEMENTS & SUPPLEMENTARY DATA

     The financial statements and schedules are set forth beginning on page F-1.



Supplementary Data

Summarized Quarterly Financial Information
($000's except per share data)

<TABLE>
<CAPTION>
                                               First         Second       Third         Fourth
                                              Quarter        Quarter     Quarter        Quarter
--------------------------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>         <C>            <C>

Interest income                                   $  4,815       $ 4,614   $  4,921       $  4,787
Interest expense                                     2,831         2,632      2,560          2,679
--------------------------------------------------------------------------------------------------
Net interest income                                  1,984         1,982      2,361          2,108
Provision for loan losses                              242             -          -              -
Securities gains (losses)                               (1)            1          -              4
Net overhead (1)                                     1,983         1,523      1,908          2,077
--------------------------------------------------------------------------------------------------
Income (loss) before income taxes                     (242)          460        453             35
Income tax benefit                                    (302)          (66)       (57)          (255)
--------------------------------------------------------------------------------------------------
Net income                                        $     60       $   526   $    510       $    290
Basic earnings per common share                   $   0.01       $  0.07   $   0.05       $   0.03


--------------------------------------------------------------------------------------------------
1999
--------------------------------------------------------------------------------------------------
Interest income                                   $  7,468       $ 6,621       $  6,274   $  5,507
Interest expense                                     4,247         4,099          3,966      3,297
--------------------------------------------------------------------------------------------------
Net interest income                                  3,221         2,522          2,308      2,210
Provision for loan losses                            5,735         1,871          5,784      2,487
Securities gains (losses)                               40           (57)           (65)      (798)
Net overhead (1)                                     1,792         2,038          2,527      3,732
--------------------------------------------------------------------------------------------------
Loss before income taxes                            (4,266)       (1,444)        (6,068)    (4,807)
Income tax benefit                                  (1,657)         (499)        (2,202)    (1,196)
--------------------------------------------------------------------------------------------------
Net income                                         ($2,609)        ($945)       ($3,866)   ($3,611)
Basic loss per common share                         ($0.50)        ($0.18)       ($0.74)    ($0.69)
</TABLE>

(1)  Noninterest income exclusive of securities gains (losses) less noninterest
     expense.

                                       26
<PAGE>

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      On October 18, 1999, the Company filed a current report on Form 8-K to
disclose its dismissal of S.R. Snodgrass A.C. as its independent auditors and
its appointment of Crowe, Chizek and Company, LLP to serve as its new
independent auditors. On October 20, 1999, the Company filed an amendment to
this report to disclose that S.R. Snodgrass A.C. had advised the Company that it
agreed with the Company's disclosure in such 8-K concerning the dismissal of
S.R. Snodgrass A.C.

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information required by this section will be included in the Company's
Proxy Statement to be filed with the Securities and Exchange Commission on or
before April 30, 2001. Such information is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

      The information required by this section will be included in the Company's
Proxy Statement to be filed with the Securities and Exchange Commission on or
before April 30, 2001. Such information is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
  MANAGEMENT

      The information required by this section will be included in the Company's
Proxy Statement to be filed with the Securities and Exchange Commission on or
before April 30, 2001. Such information is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by this section will be included in the Company's
Proxy Statement to be filed with the Securities and Exchange Commission on or
before April 30, 2001.  Such information is incorporated herein by reference.

                                    PART IV

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

(a)   1.   Financial Statements as listed on page 29.
      2.   Financial Statement Schedules as listed on page 29.
      3.   Exhibits as listed on page E-1.

(b)   Reports on Form 8-K.

      None.


                                       27
<PAGE>

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on March 19, 2001.

By /s/ Wilbur R. Roat                      BELMONT BANCORP.
   --------------------------------
   President & Chief Executive Officer     (Registrant)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the date indicated.

<TABLE>
<CAPTION>
          SIGNATURE                                         TITLE                                    DATE
--------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                                       <C>
/s/ W. Quay Mull, II                Chairman of the Board and Director                        March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Wilbur R. Roat                  Director, President & Chief Executive Officer             March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Jane R. Marsh                   Secretary (principal financial and accounting officer)    March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Joseph F. Banco                 Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Jay A. Beck                     Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ David R. Giffin                 Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ John H. Goodman, II             Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Charles J. Kaiser, Jr.          Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Terrence A. Lee                 Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Tom Olszowy                     Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Keith A. Sommer                 Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Robert W. Whiteside             Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
/s/ Charles A. Wilson, Jr.          Director                                                  March 19, 2001
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       28
<PAGE>

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets at December 31, 2000 and 1999              F-1

Consolidated Statements of Income for the years ended
   December 31, 2000, 1999 and 1998                                    F-2

Consolidated Statements of Shareholders' Equity for the years ended
   December 31, 2000, 1999 and 1998                                    F-3

Consolidated Statements of Cash Flows for the years ended
   December 31, 2000, 1999 and 1998                                    F-4

Notes to Financial Statements                                          F-5

Report on Management's Responsibilities                                F-19
Report of Crowe, Chizek and Company, LLP                               F-20
Report of S.R. Snodgrass A.C.                                          F-20


                                       29
<PAGE>

Belmont Bancorp. and Subsidiaries
Consolidated Balance Sheets
($000's)
-------------------------------------------------------------------------------
                                                               December 31,
Assets                                                     2000           1999
                                                    ---------------------------
Cash and due from banks                              $   11,270     $   15,439
Federal funds sold                                       14,730          2,025
Loans held for sale                                          --          1,845
Securities available for sale at fair value             109,684        110,692
Loans                                                   129,876        165,134
Less allowance for loan losses                           (7,667)        (9,702)
                                                    ---------------------------
   Net loans                                            122,209        155,432
Premises and equipment, net                               6,792          7,263
Deferred federal tax assets                               7,346          8,551
Cash surrender value of life insurance                    4,419          4,196
Federal taxes receivable                                     --          5,696
Accrued income receivable                                 1,658          1,751
Other assets                                              3,680          2,877
                                                    ---------------------------
   Total Assets                                      $  281,788     $  315,767
                                                    ===========================
Liabilities and Shareholders' Equity
Liabilities
Noninterest bearing deposits:
 Demand                                              $   25,123     $   28,685
Interest bearing deposits:
 Demand                                                  26,136         28,456
 Savings                                                 66,857         77,403
 Time                                                   113,570        120,888
                                                    ---------------------------
   Total deposits                                       231,686        255,432
Securities sold under repurchase agreements               1,204          6,093
Federal funds purchased and other short-term
 borrowings                                                  --         19,740
Long-term borrowings                                     20,000         20,000
Accrued interest on deposits and other borrowings           820            747
Other liabilities                                         2,476          2,524
                                                    ---------------------------
   Total liabilities                                    256,186        304,536
                                                    ---------------------------
Shareholders' Equity
Preferred stock - authorized 90,000 shares with
 no par value; issued and outstanding, 16,500 shares
 of Series A convertible preferred stock at 12/31/99         --          1,650
Common stock - $0.25 par value, 17,800,000 shares
 authorized; 11,153,195 shares issued at 12/31/00,
 5,288,326 shares issued at 12/31/99                      2,788          1,321
Additional paid-in capital                               17,414          7,904
Treasury stock at cost (51,792 shares)                   (1,170)        (1,170)
Retained earnings                                         8,515          7,129
Accumulated other comprehensive loss                     (1,945)        (5,603)
                                                    ---------------------------
   Total shareholders' equity                            25,602         11,231
                                                    ---------------------------
   Total liabilities and shareholders' equity        $  281,788     $  315,767
                                                    ===========================


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

                                      F-1
<PAGE>

Belmont Bancorp. and Subsidiaries
Consolidated Statements of Income
For the Years Ended December 31, 2000, 1999 and 1998 ($000's)
-------------------------------------------------------------------------------


Interest Income                            2000           1999         1998
                                     ---------------------------------------
Loans:
  Taxable                             $  11,867      $  16,223    $  20,923
  Tax-exempt                                255            284          271
Securities:
  Taxable                                 4,254          6,642        7,720
  Tax-exempt                              2,139          1,985        1,241
Dividends                                   231            381          336
Interest on trading securities               --             86           68
Interest on federal funds sold              391            269          228
                                     ---------------------------------------
   Total interest income                 19,137         25,870       30,787
                                     ---------------------------------------
Interest Expense
Deposits                                  9,165         10,894       11,671
Other borrowings                          1,537          4,715        4,809
                                     ---------------------------------------
   Total interest expense                10,702         15,609       16,480
                                     ---------------------------------------
   Net interest income                    8,435         10,261       14,307
Provision for Loan Losses                   242         15,877       12,882
                                     ---------------------------------------
   Net interest income (loss) after
     provision for loan losses            8,193         (5,616)       1,425
                                     ---------------------------------------
Noninterest Income
Trust fees                                  419            484          463
Service charges on deposits                 848            921          752
Interest on federal tax refund              256             --           --
Other operating income                      896            817          824
Trading gains (losses)                       --            (10)          62
Securities gains (losses)                     4           (880)       1,338
Gain (loss) on sale of
 loans and loans held for sale              (40)           341          144
Gain on sale of real estate                  --             --          383
                                     ---------------------------------------
   Total noninterest income               2,383          1,673        3,966
                                     ---------------------------------------
Noninterest Expense
Salary and employee benefits              4,066          3,826        4,633
Net occupancy expense of premises           839            898          824
Equipment expenses                          865            891          933
Other operating expenses                  4,100          7,027        3,106
                                     ---------------------------------------
   Total noninterest expense              9,870         12,642        9,496
                                     ---------------------------------------
   Income (loss) before income taxes        706        (16,585)      (4,105)
Income Tax Benefit                         (680)        (5,554)      (2,186)
                                     ---------------------------------------
   Net income (loss)                  $   1,386      $ (11,031)   $  (1,919)
                                     =======================================
Weighted Average Number of
 Shares Outstanding                   8,778,621      5,235,431    5,252,161
                                     =======================================
Basic Earnings (loss)
 Per Common Share                     $    0.16      $   (2.11)   $   (0.37)
                                     =======================================




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

                                      F-2
<PAGE>

Belmont Bancorp. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
For the Years Ended December 31, 2000, 1999 and 1998 ($000's)
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                        Accumulated
                                                                                                           Other
                                                                      Additional                          Compre-        Compre-
                                                Preferred    Common    Paid-in-   Retained   Treasury     hensive        hensive
                                      Total       Stock       Stock    Capital    Earnings    Stock    Income (Loss)   Income (Loss)
                                  --------------------------------------------------------------------------------------------------
<S>                               <C>           <C>        <C>         <C>       <C>         <C>       <C>             <C>
Balance, December 31, 1997        $   31,899    $     --   $  1,321    $ 7,781    $22,729    $  (131)     $   199
Comprehensive income
 Net loss                             (1,919)                                      (1,919)                             $   (1,919)
 Other comprehensive
  income, net of tax
  Unrealized loss on securities
   net of reclassification
   adjustment                         (1,398)                                                              (1,398)         (1,398)
                                                                                                                       ----------
   Comprehensive income (loss)                                                                                         $   (3,317)
                                                                                                                       ==========
Cash dividends declared:
 Common stock ($.385 per share)       (2,022)                                      (2,022)
Purchase of treasury stock            (1,308)                                                 (1,308)
Issuance of treasury stock               112                                73                    39
                                  -------------------------------------------------------------------------------
Balance, December 31, 1998        $   25,364          --   $  1,321    $ 7,854    $18,788    $(1,400)     $(1,199)
Comprehensive income
 Net loss                            (11,031)                                     (11,031)                             $  (11,031)
 Other comprehensive
  income, net of tax
  Unrealized loss on
   securities net of
   reclassification
   adjustment                         (4,404)                                                              (4,404)         (4,404)
                                                                                                                       ----------
   Comprehensive income (loss)                                                                                         $  (15,435)
                                                                                                                       ==========
Cash dividends declared:
 Common stock ($.12 per share)          (628)                                        (628)
Issuance of Series A
 convertible preferred stock           1,650       1,650
Issuance of treasury stock               280                                50                   230
                                  -------------------------------------------------------------------------------
Balance, December 31, 1999        $   11,231  $    1,650   $  1,321    $ 7,904    $ 7,129    $(1,170)      (5,603)
Comprehensive income
 Net income                            1,386                                        1,386                              $    1,386
 Other comprehensive income,
  net of tax
  Unrealized gain on securities
   net of reclassification
   adjustment                          3,658                                                                3,658           3,658
                                                                                                                       ----------
   Comprehensive income                                                                                                $    5,044
                                                                                                                       ==========
Conversion of Series A preferred
 stock to common stock                    --      (1,650)       206      1,444
Issuance of common stock               9,327                  1,261      8,066
                                  -------------------------------------------------------------------------------
Balance, December 31, 2000        $   25,602  $       --   $  2,788    $17,414    $ 8,515    $(1,170)     $(1,945)
                                  ===============================================================================

</TABLE>

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

                                      F-3
<PAGE>

Belmont Bancorp. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2000, 1999 and 1998 ($000's)
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                     2000             1999         1998
                                   --------------------------------------
<S>                                <C>           <C>          <C>
Operating Activities
 Net income (loss)                 $   1,386     $  (11,031)  $   (1,919)
 Adjustments to reconcile
  net income (loss) to net
  cash flows from
  operating activities:
   Provision for loan
    losses                               242         15,877       12,882
   Depreciation and
    amortization expense                 675            710          743
   Amortization of
    investment security
    premiums                             593          2,419        2,403
   Accretion of investment
    security discounts                  (610)          (648)        (302)
   Amortization of
    intangibles                           10            439          196
   Securities (gains)
    losses                                (4)           880       (1,338)
   Trading (gains) losses                 --             10          (63)
   Deferred taxes                       (680)        (4,668)          83
   Proceeds from sale of
    trading securities                    --         13,592       12,893
   Purchase of securities
    for trading account                   --        (15,516)     (14,865)
   Gain (loss) on sale of
    fixed assets                          (4)            --         (384)
   Gain (loss) on sale of
    loans                                 40           (341)        (144)
   Changes in:
    Interest receivable                   93            980         (144)
    Interest payable                      73           (149)         165
    Loans held for sale                1,805           (111)        (850)
    Federal tax refund                 5,696             --           --
    Others, net                         (280)        (3,478)      (1,382)
                                   --------------------------------------
    Cash from operating
     activities                        9,035         (1,035)       7,974
                                   --------------------------------------


Investing Activities
 Proceeds from:
  Maturities and calls of
   securities                          4,557          6,237        4,370
  Sale of securities
   available for sale                  5,667         73,846       87,580
  Principal collected on
   mortgage-backed securities         11,046         40,897       37,964
  Sale of loans                        2,178          9,008       20,144
  Redemption of life
   insurance contracts                    --          1,741           --
  Sales of other real
   estate owned                           97            155           39
  Sales of premises and
   equipment                               9             --          612
 Purchases of:
  Securities available for sale      (14,698)       (39,289)    (193,441)
  Life insurance contracts                --            (81)        (413)
  Premises and equipment                (209)          (596)        (947)
 Changes in:
  Federal funds sold                 (12,705)        (2,025)          --
  Loans, net                          29,902         20,516      (13,998)
                                   --------------------------------------
  Cash from investing
   activities                         25,844        110,409      (58,090)
                                   --------------------------------------
Financing Activities
 Proceeds from:
  Advances of long-term
   debt                                   --             --       35,000
  Issuance of preferred
   stock                                  --          1,650           --
  Issuance of common stock             9,327             --           --
  Issuance of treasury
   stock                                  --            280          112
 Payments on long-term debt               --        (71,401)     (13,233)
 Dividends paid on common stock           --           (628)      (2,022)
 Purchase of treasury stock               --             --       (1,308)
 Sale of branch deposits                  --        (10,311)          --
 Changes in:
  Deposits                           (23,746)       (38,608)      40,443
  Repurchase agreements               (4,889)          (146)         983
  Short-term borrowings              (19,740)        15,790      (10,685)
                                   --------------------------------------
  Cash from financing activities     (39,048)      (103,374)      49,290
                                   --------------------------------------
Increase (Decrease) in
 Cash and Cash Equivalents            (4,169)         6,000         (826)
Cash and Cash Equivalents,
 Beginning of Year                    15,439          9,439       10,265
                                   --------------------------------------
Cash and Cash Equivalents,
 End of Year                       $  11,270     $   15,439   $    9,439
                                   ======================================
</TABLE>

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

                                      F-4
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

1.  Summary of Significant Accounting Policies

The accounting and reporting policies and practices of Belmont Bancorp. (the
"Company") and its subsidiaries are in accordance with generally accepted
accounting principles and conform to general practices within the banking
industry.  The more significant of these policies and practices are summarized
below.

Nature of Operations:  Belmont Bancorp. provides a variety of banking services
to individuals and businesses through the branch network of its wholly-owned
subsidiary, Belmont National Bank (BNB).  BNB operates twelve full-service
banking facilities located in Belmont, Harrison, and Tuscarawas Counties in
Ohio, and Wheeling, West Virginia.

Principles of Consolidation:  The consolidated financial statements include the
accounts of Belmont Bancorp. and its wholly-owned subsidiaries, Belmont National
Bank and Belmont Financial Network, Inc.  Material intercompany accounts and
transactions have been eliminated.

Use of Estimates:  The preparation of 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
disclosures 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.  Estimates
particularly subject to change would include the allowance for loan losses,
deferred taxes, fair values of financial instruments, and loss contingencies.

Securities Held to Maturity:  These securities are purchased with the original
intent to hold to maturity.  Events which may be reasonably anticipated are
considered when determining the Company's intent and ability to hold to
maturity.  Securities meeting such criteria at date of purchase and as of the
balance sheet date are carried at cost, adjusted for amortization of premiums
and accretion of discounts.

Securities Available for Sale:  Debt and equity securities to be held for
indefinite periods of time and not intended to be held to maturity are
classified as available for sale and carried at fair value with net unrealized
gains and losses, net of tax, reflected as a component of other comprehensive
income until realized.  Securities held for indefinite periods of time include
securities that may be sold to meet liquidity needs or in response to
significant changes in interest rates or prepayment risks as part of the
Company's overall asset/liability management strategy.

Trading Securities:  Trading  securities are held for resale within a short
period of time and are stated at fair value.  Trading gains and losses include
the net realized gain or loss and market value adjustments of the trading
account portfolio.  These gains and losses are reported in current earnings.
Securities with a fair value of $3,998,000 were transferred from the Trading
portfolio to the Available for Sale portfolio during 1999.  There were no
transfers of securities between classifications in 2000 or 1998.

The Financial Accounting Standards Board (FASB) issued the Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities in June 1998.  The Company adopted SFAS No.
133 as of April 1, 1999.  As permitted in SFAS No. 133, on April 1 1999, the
Company transferred securities with an amortized cost of $11,861,000 and a fair
value of $12,085,000 from the Held to Maturity portfolio to the Available for
Sale portfolio.  The Company does not have any derivative instruments nor does
the Company have any hedging activities.

Loans Held for Sale:  Residential mortgage loans which management does not
intend to hold to maturity or for which sales are pending are reported as loans
held for sale.  Such loans are carried at the lower of aggregate cost or market.

Income Recognition:   Income earned by the Company and its subsidiaries is
recognized principally on the accrual basis of accounting.  Certain fees,
principally service, are recognized as income when billed.  The subsidiary bank
suspends the accrual of interest on loans when, in management's opinion, the
collection of all or a portion of interest has become doubtful.  Generally, when
a loan is placed on nonaccrual, the Bank charges all previously accrued and
unpaid interest against income. In future periods, interest will be included in
income to the extent received only if complete principal recovery is reasonably
assured.

The Company adopted the provisions of Statement of Financial Accounting
Standards No. 114 and No. 118, "Accounting for Creditors for Impairment of a
Loan."  It is the Company's policy not to recognize interest income on specific
impaired loans unless the likelihood of future loss is remote.  Interest
payments received on such loans are applied as a reduction of the loan principal
balance.

The Company defers and amortizes loan fees and related origination costs.  These
fees and costs are amortized into interest or other income over the estimated
life of the loan using a method which approximates the interest method.

For securities, interest income includes amortization of purchase premium or
discount.  Gains and losses on sales are based on the amortized cost of the
security sold.  Securities are written down to fair value when a decline in fair
value is not temporary.

Allowance For Loan Losses:  The allowance for loan losses is maintained at a
level which, in management's judgment, is adequate to absorb credit losses
incurred in the loan portfolio.  The amount of the allowance is based on
management's evaluation of the collectibility of the loan portfolio, including
the nature of the portfolio, credit concentrations, trends in historical loss
experience, specific impaired loans, and economic conditions.

                                      F-5
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

1. Summary of Significant Accounting Policies (continued)

Allowances for impaired loans are generally determined based on collateral
values or the present value of estimated cash flows.

A loan is impaired when, based on current information and events, it is probable
that all scheduled payments of principal and interest will not be collected
according to the loan agreement.  Factors in determining impairment include
payment status, collateral value, and the probability of collecting scheduled
payments.  Insignificant payment delays and payment shortfalls generally do not
result in impairment.  Impairment for individual commercial and construction
loans is measured by either the present value of expected future cash flows
discounted at the loan's effective rate or the fair value of the collateral if
repayment is expected solely from the collateral.  Large groups of smaller
balance homogeneous loans, such as residential mortgage, credit card, and
consumer loans, are collectively evaluated for impairment.

The allowance is increased by a provision for loan losses, which is charged to
expense and reduced by charge-offs, net of recoveries.  Changes in the allowance
relating to impaired loans are charged or credited to the provision for loan
losses.  Because of uncertainties inherent in the estimation process,
management's estimate of credit losses inherent in the loan portfolio and the
related allowance may change in the near term.

Premises and Equipment:  Premises and equipment are stated at cost, less
accumulated depreciation and amortization.  Provisions for depreciation and
amortization are computed generally using the straight line method over the
estimated useful lives of the assets.  Leasehold improvements are amortized on
the straight line basis over the lease period.

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

Foreclosed Assets:  Assets acquired through or instead of loan foreclosure are
initially recorded at fair value when acquired, establishing a new cost basis.
If fair value declines, a valuation allowance is recorded through expense.
Costs after acquisition are expensed.

Servicing Rights:  Servicing rights are recognized as assets for purchased
rights and for the allocated value of retained servicing rights on loans sold.
Servicing rights are expensed in proportion to, and over the period of,
estimated net servicing revenues.  Impairment is evaluated based on the fair
value of the rights, using groupings of the underlying loans as to interest
rates and then, secondarily, as to geographic and prepayment characteristics.
Fair value is determined using prices for similar assets with similar
characteristics, when available, or based upon discounted cash flows using
market-based assumptions.  Any impairment of a grouping is reported as a
valuation allowance.

Long-term Assets:  Premises and equipment and other long-term assets are
reviewed for impairment when events indicate their carrying amount may not be
recoverable from future undiscounted cash flows.  If impaired, the assets are
recorded at discounted amounts.

Repurchase Agreements:  Substantially all repurchase agreement liabilities
represent amounts advanced by various customers.  Securities are pledged to
cover these liabilities, which are not covered by federal deposit insurance.

Benefit Plans:  Profit-sharing and 401k plan expense is the amount contributed
determined by formula and by board decision.  Deferred compensation plan expense
allocates the benefits over years of service.

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

Financial Instruments:  Financial instruments include off-balance sheet credit
instruments, such as commitments to make loans and standby letters of credit,
issued to meet customer financing needs.  The face amount for these items
represents the exposure to loss, before considering customer collateral or
ability to repay.  Such financial instruments are recorded when they are funded.

Loss Contingencies:  Loss contingencies, including claims and legal actions
arising in the ordinary course of business, are recorded as liabilities when the
likelihood of loss is probable and an amount or range of loss can be reasonably
estimated.

Dividend Restriction:  Banking regulations require maintaining certain capital
levels and may limit the dividends paid by the Bank to the holding company or by
the holding company to shareholders.  Neither the Company nor the Bank can
currently pay dividends without regulatory approval.  See notes 16 and 20.

Fair Value of Financial Instruments:  Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate note.  Fair value estimates involve uncertainties and
matters of significant judgement regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items.  Changes in assumptions or in market conditions could
significantly affect the estimates.

                                      F-6
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

1. Summary of Significant Accounting Policies (continued)

Business Segments:  Internal financial information is primarily reported and
aggregated in the banking line of business.

Earnings Per Common Share:  Earnings per common share are calculated based on
net income after preferred dividend requirements and the weighted average number
of shares of common stock outstanding during the year.  The Company's preferred
stock was not dilutive for 1999.  The preferred stock was converted to common
stock during 2000.  Diluted earnings per common share includes the dilutive
effect of additional potential common shares issuable under stock options.
These options were anti-dilutive in 1999 and 2000.

Excess of Cost Over Net Assets Acquired:  In 1999, the Company wrote off the
remaining balance of intangible assets associated with branches purchased in
1991 and 1992 due to the sale of one of the branches and an evaluation of the
Bank's position within the marketplace for the remaining branches.  Amortization
charged to expense was $439,000 in the period ended December 31, 1999 and
$196,000 in the period ended December 31, 1998.

Reclassifications:  Certain prior year amounts have been reclassified to conform
with current year presentation.

2.  Financial Results and Management's Plan

For the five years ending December 31, 1997, the Company's reported average
return on assets was 1.31%, resulting in average net income of $4.2 million.
During this same period, the reported provision for loan losses averaged
$810,000 per year.  During 1998 and 1999, the Corporation recorded provisions
for loan losses of $12.9 million and $15.9 million respectively, resulting in a
net loss of $1.9 million in 1998 and $11.0 million in 1999.

These recent results were in large part the result of substantial loan losses
relating to the bankruptcy of a large commercial borrower of the Bank, an
indirect consumer lending program through the now-bankrupt borrower, other loan
losses including loans to companies in the amusement industry, and the legal and
collection expenses associated with such losses.  In addition, the Company
incurred additional expenses associated with the retention of interim senior
management, consulting work performed in connection with detailed loan analyses,
increased federal deposit insurance premiums and other expenses.

Management believes that it has made significant progress in identifying the
losses in the loan portfolio and taking appropriate action to improve future
credit quality.  During 1999, management initiated a process of loan review
which covers all commercial loans greater than $50,000.  This process is an
ongoing activity and continued throughout 2000.  Some loans which had been
considered performing credits were adversely classified as part of this process.
In addition, certain loans were found to have incomplete underwriting
documentation.  Addressing these problems has been a high priority for Bank
management.

The Company continues to meet its obligations on a continuing basis, and there
remains available credit in the event that additional funding is needed.  As of
December 31, 2000, the Bank has unused short-term lines of credit with the
Federal Home Loan Bank and other correspondent banks of approximately $24
million to meet its liquidity requirements.

As more fully described in Note 20, formal regulatory action by the Federal
Reserve Bank and the Office of the Comptroller of the Currency (OCC) have
required the Company and Bank to meet minimum capital requirements including
improving and maintaining its Tier 1 capital as a percent of average assets (or
Tier 1 leverage ratio) at 6% so long as the regulatory agreements remain in
place. The Bank achieved this requirement by June 30, 2000.

3.  Shareholders' Equity

On June 30, 2000, the Company completed a recapitalization plan it began in
November 1999 with the sale of $1.65 million of convertible preferred stock to
its Board of Directors, which stock was subsequently converted into 825,000
shares of the Company's common stock based on a common stock price of $2.00 per
share.  The shares of common stock issued in the conversion are "restricted
securities" as that term is defined in Rule 144 under the Securities Act of
1933.

In February 2000, the Company commenced the first of two successive public
offerings.  In the initial offering, which closed in April 2000, the Company
sold 2,039,869 shares of common stock at $2.00 per share and received $4.1
million in gross offering proceeds.  In the second offering, which began in May
2000 and closed in June 2000, the Company sold 3,000,000 shares of common stock,
also at $2.00 per share.  The Company received $6.0 million in gross offering
proceeds in this fully subscribed follow-on offering.

In this recapitalization, the Company issued a total of 5,864,869 shares of its
common stock and received $11.7 million in aggregate gross offering proceeds.
After payment of aggregate offering costs of approximately $700,000, the Company
applied the net offering proceeds of $11.0 million to increase the Bank's
capital.

The following table represents the change in the Company's outstanding shares:
<TABLE>
<CAPTION>
                                              Preferred      Common
                                                Stock         Stock
                                             ---------------------------
<S>                                          <C>           <C>
Shares outstanding, December 31, 1998              --       5,222,152
Shares issued                                  16,500              --
Treasury shares reissued                           --          14,382
                                             ------------------------
Shares outstanding, December 31, 1999          16,500       5,236,534
Preferred shares converted into common stock  (16,500)        825,000
Shares issued                                      --       5,039,869
                                              -----------------------
Shares outstanding, December 31, 2000              --      11,101,403
                                              =======================

</TABLE>

                                      F-7
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

4.  Securities

At December 31, 2000 and 1999, all securities were classified as available for
sale.  The estimated fair value of securities as of December 31 are depicted in
the following tables:

<TABLE>
<CAPTION>
                                                                2000
                                       ----------------------------------------------------
                                                          Gross        Gross     Estimated
                                        Amortized      Unrealized    Unrealized     Fair
(Expressed in thousands)                  Cost           Gains         Losses      Value
                                       ----------------------------------------------------
<S>                                    <C>             <C>           <C>        <C>
U.S. Treasury securities and
 obligations of U.S. Government
 corporations and agencies               $  5,632        $ --        $  (221)   $  5,411
Obligations of states and
 political subdivisions                    43,398         120         (1,930)     41,588
Mortgage-backed securities                 35,130          51           (490)     34,691
Collateralized mortgage obligations        21,166         101           (166)     21,101
Corporate debt                              3,102          --           (357)      2,745
                                       ---------------------------------------------------
 Total debt securities                    108,428         272         (3,164)    105,536
Marketable equity securities                4,203          83           (138)      4,148
                                       ---------------------------------------------------
 Total available for sale                $112,631        $355        $(3,302)   $109,684
                                       ===================================================

<CAPTION>

                                                                1999
                                       ----------------------------------------------------
                                                          Gross        Gross     Estimated
                                        Amortized      Unrealized    Unrealized     Fair
(Expressed in thousands)                  Cost           Gains         Losses      Value
                                       ----------------------------------------------------
<S>                                    <C>             <C>           <C>        <C>
U.S. Treasury securities and
 obligations of U.S. Government
 corporations and agencies               $ 12,130        $ --        $  (790)   $ 11,340
Obligations of states and
 political subdivisions                    44,246          54         (6,132)     38,168
Mortgage-backed securities                 37,403          52           (860)     36,595
Collateralized mortgage obligations        16,130          32           (562)     15,600
Corporate debt                              3,107          --           (244)      2,863
                                       ----------------------------------------------------
 Total debt securities                    113,016         138         (8,588)    104,566
Marketable equity securities                6,165         101           (140)      6,126
                                       ----------------------------------------------------
 Total available for sale                $119,181        $239        $(8,728)   $110,692
                                       ====================================================
</TABLE>

The amortized cost and estimated fair value of securities at December 31, 2000,
by contractual maturity, follow.  Expected maturities may differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                                                       Estimated
                                                                   Amortized              Fair
(Expressed in thousands)                                             Cost                 Value
                                                                  -------------------------------
<S>                                                               <C>                  <C>
Due in one year or less                                           $    147             $     147
Due after one year
 through five years                                                  2,515                 2,406
Due after five years
 through ten years                                                   3,464                 3,409
Due after ten years                                                 46,006                43,782
Mortgage-backed securities                                          35,130                34,691
Collateralized mortgage obligations                                 21,166                21,101
Equity securities                                                    4,203                 4,148
                                                                  ------------------------------
Total                                                             $112,631             $ 109,684
                                                                  ==============================

</TABLE>

Sales and write-downs of securities resulted in the following:


<TABLE>
<CAPTION>

(Expressed in thousands)                                              2000      1999        1998
                                                                  --------------------------------
<S>                                                               <C>        <C>         <C>
Proceeds from sales                                               $  5,667   $73,846     $87,580
Gross gains                                                             78       118       1,355
Gross losses                                                           (18)     (992)        (18)
Realized losses on market declines                                     (56)       --          --
Losses on securities called                                             --        (7)         (1)
Gains on securities called                                              --         1           1
Gross trading gains                                                     --        69         101
Gross trading losses                                                    --       (79)        (39)
</TABLE>

Assets carried at $26,078,000 and $20,654,000 at December 31, 2000 and 1999,
respectively, were pledged to secure United States Government and other public
funds, and for other purposes as required or permitted by law.  Certain other
securities were pledged to secure Federal Home Loan Bank advances as disclosed
below under the caption "Borrowings."

5.  Loans and Allowance for Loan Losses

Loans outstanding at December 31 are as follows:

<TABLE>
<CAPTION>

(Expressed in thousands)                                2000      1999
                                                    -------------------
<S>                                                 <C>       <C>
Real estate-construction                            $ 12,856  $  9,732
Real estate-mortgage                                  40,794    45,944
Real estate-secured by nonfarm,
 nonresidential property                              22,738    17,478
Commercial, financial and agricultural                45,838    78,661
Obligations of political subdivisions in the U.S       2,951     3,181
Installment and credit card loans to individuals       4,699    10,138
                                                    -------------------
Loans receivable                                    $129,876  $165,134
                                                    ===================
</TABLE>
Mortgage loans serviced for others approximated $38,097,000 and $38,558,000,
at December 31, 2000 and 1999, respectively.

Non-accruing loans and leases amounted to $8,518,000 and $13,769,000 at December
31, 2000 and 1999, respectively.  The after-tax effect of the interest that
would have been accrued on these loans was $533,000 in 2000 and $992,000 in
1999.  Loans past due 90 days and still accruing interest were $2,000 and
$541,000 at year-end 2000 and 1999.


                                      F-8
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

5. Loans and Allowance for Loan Losses (continued)

At December 31, impaired loans were as follows:

<TABLE>
<CAPTION>
(Expressed in thousands)                                  2000          1999
                                                        ----------------------
<S>                                                     <C>           <C>
Year-end loans with no allocated
 allowance for loan losses                              $      2      $    352
Year-end loans with allocated
 allowance for loan losses                                 9,020        13,930
                                                        ----------------------
 Total                                                  $  9,022      $ 14,282
Amount of the allowance
 for loan losses allocated                              $  2,673      $  5,157
Average impaired loans                                  $ 11,545      $ 12,839
Interest income recognized during impairment                  --            --
Cash-basis interest income recognized                         --            --


</TABLE>

Management believed there were no impaired loans during 1998.

Activity in the allowance for loan losses is summarized as follows:
<TABLE>
<CAPTION>

                                                        December 31
(Expressed in thousands)                      2000          1999         1998
                                          -------------------------------------
<S>                                       <C>           <C>           <C>
Balance at beginning of year              $  9,702      $  5,475      $  4,134
Additions charged to operating expense         242        15,877        12,882
Recoveries on loans previously
 charged-off                                 2,023           767            15
Loans charged-off                           (4,300)      (12,417)      (11,556)
                                          -------------------------------------
Balance at end of year                    $  7,667      $  9,702      $  5,475
                                          =====================================

</TABLE>


The entire allowance represents a valuation reserve which is available for
future charge-offs.

6. Premises and Equipment

Premises and equipment are as follows:

<TABLE>
<CAPTION>
                                                                     Original
                                                December 31        Useful Life
(Expressed in thousands)                    2000          1999         Years
                                        --------------------------------------
<S>                                      <C>           <C>          <C>
Land and land improvements               $  1,189      $  1,187
Buildings                                   5,864         5,855       30 - 50
Furniture, fixtures and equipment           6,436         6,260        5 - 12
Leasehold improvements                        787           787        5 - 20
                                        --------------------------------------
 Total                                     14,276        14,089
Less accumulated depreciation
 and amortization                           7,484         6,826
                                        --------------------------------------
Premises and equipment, net              $  6,792      $  7,263
                                        ======================================

</TABLE>

7. Deposits

At December 31, 2000, the aggregate maturities of time deposits are
summarized as follows:


(Expressed in thousands)

          2001             $ 72,513
          2002               17,888
          2003                5,260
          2004                1,735
          2005                6,107
          Thereafter         10,067
                           --------
           Total           $113,570
                           ========

Time deposits include certificates of deposit issued in denominations of
$100,000 or more which amounted to $17,378,000 at December 31, 2000, and
$20,794,000 at December 31, 1999.  A maturity distribution of time certificates
of deposit of $100,000 or more follows:

<TABLE>
<CAPTION>

(Expressed in thousands)                                       2000                   1999
                                                           --------------------------------
<S>                                                        <C>                    <C>
Due in three months or less                                 $ 4,397                $ 6,677
Due after three months through six months                     4,592                  6,135
Due after six months through twelve months                    3,017                  2,791
Due after one year through five years                         3,597                  2,127
Due after five years                                          1,775                  3,064
                                                            ------------------------------
  Total                                                     $17,378                $20,794
                                                            ==============================


</TABLE>

8.  Securities Sold Under Repurchase Agreements

Securities sold under agreements to repurchase represent primarily overnight
borrowings except for one agreement for $2,200,000 that matured in March 2000.
For all repurchase agreements, the securities underlying the agreements were
under the subsidiary bank's control.  Information related to these borrowings is
summarized below:

(Expressed in thousands)                      2000     1999
                                            ------------------
Balance at year-end                          $1,204   $6,093
Average during the year                      $2,463   $5,877
Maximum month-end balance                    $4,308   $6,093
Weighted average rate during the year          5.38%    5.00%
Weighted average rate at December 31           4.89%    4.77%


                                      F-9
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

9. Borrowings

The Company uses both short and long-term borrowings to meet its liquidity and
funding needs consisting primarily of federal funds purchased and advances from
the Federal Home Loan Bank (FHLB). All FHLB advances, including short and long-
term borrowings, are secured by collateral consisting of a blanket pledge of
residential mortgage loans, securities, and shares of stock of the FHLB.  The
carrying value of residential mortgage loans available as collateral for FHLB
advances was $22,206,000 and $34,613,000 at December 31, 2000 and 1999,
respectively.  The carrying value of FHLB stock and securities that secure the
FHLB debt was $27,391,000 and $34,859,000 at December 31, 2000 and 1999,
respectively.  FHLB advances are made under agreements which allow for maximum
borrowings of $40 million subject to collateral requirements.  Advances can be
made at fixed or variable rates of interest.

Information related to these borrowings at December 31, 2000 and 1999, is
summarized below.


Short-term borrowings
(Expressed in thousands)


FHLB Advances                               2000      1999
-------------                            ------------------
Balance at year-end                      $    --   $19,740
Average balance during the year          $ 6,421   $ 1,712
Maximum month-end balance                $19,155   $19,740
Weighted average rate during the year       6.20%     5.41%
Interest rate at December 31                 N/A      5.24%

Federal Funds Purchased                     2000      1999
-----------------------                  ------------------
Balance at year-end                      $    --   $    --
Average during the year                  $    16   $   693
Maximum month-end balance                $    --   $ 4,200
Weighted average rate during the year       6.29%     5.15%
Weighted average rate at December 31         N/A       N/A


Long-term borrowings

Long term borrowings consist of two $10 million advances from the Federal Home
Loan Bank of Cincinnati (the "FHLB") with initial fixed interest rates of 4.78%
and 4.54% for three years.  These advances have a ten year final maturity and
are due in 2008.  The FHLB has the option at the end of the first three year
term and every quarter thereafter to convert the advances to a floating rate
based on the 3 month LIBOR rate.  If this option is exercised by the FHLB, the
Bank may repay the advance without penalty in full or in part.  During 1999,
$60,000,000 of long term debt was paid off prior to the scheduled maturity date,
and  penalties of $342,000 were required to be paid.

Scheduled principal payments on long-term debt in each of the five years
subsequent to December 31, 2000, are as follows:

(Expressed in thousands)
          2001              $     0
          2002                    0
          2003                    0
          2004                    0
          2005                    0
          Thereafter         20,000

10. Income Tax

The components of income taxes are as follows:

<TABLE>
<CAPTION>

(Expressed in thousands)                             2000     1999      1998
                                                   --------------------------
<S>                                                <C>     <C>       <C>
Current payable (refundable)                       $  --   $  (886)  $(2,269)
Deferred                                            (680)   (5,668)       83
Change in valuation allowance                         --     1,000        --
                                                   --------------------------
 Income tax (benefit)                              $(680)  $(5,554)  $(2,186)
                                                   ==========================

</TABLE>

The following temporary differences gave rise to the deferred tax asset at
December 31, 2000 and 1999:

<TABLE>
<CAPTION>

(Expressed in thousands)                                      2000      1999
                                                           ------------------
<S>                                                         <C>      <C>
Deferred tax assets:
 Allowance for loan losses                                  $ 1,264   $ 1,792
 Interest on non-accrual loans                                  104       511
 Deferred compensation liability
  for employees' future benefits                                283       323
 Intangible assets                                              368       422
 Unrealized losses on investments                             1,002     2,887
 Other deferred tax assets                                       72        97
 Net operating loss carryforward                              4,857     3,179
 Tax credit carryforwards                                     1,460     1,263
                                                            -----------------
  Total deferred tax assets                                   9,410    10,474
Valuation allowance                                          (1,000)   (1,000)
                                                            -----------------
  Total deferred tax assets,
   net of valuation allowance                                 8,410     9,474
                                                            -----------------
Deferred tax liabilities:
 Federal Home Loan Bank stock dividends                        (546)     (471)
 Other deferred tax liabilities                                (518)     (452)
                                                            -----------------
  Total deferred tax liabilities                             (1,064)     (923)
                                                            -----------------
   Net deferred tax asset                                   $ 7,346   $ 8,551
                                                            =================
</TABLE>

A reconciliation between the amount of reported income tax expense and the
amount computed by applying the statutory federal income tax rate to income
before income taxes is as follows:

<TABLE>
<CAPTION>

                                       2000               1999                1998
                                ---------------------------------------------------------
(Expressed in thousands)         Amount   Percent   Amount    Percent   Amount    Percent
                                ---------------------------------------------------------
<S>                             <C>       <C>       <C>       <C>      <C>        <C>
Tax at statutory rate             $ 240      34.0   $(5,639)    (34.0)  $(1,396)    (34.0)
Tax exempt interest
 on investments
 and loans                         (684)    (96.9)     (794)     (4.8)     (450)    (11.0)
Tax credits                        (197)    (27.9)     (169)     (1.0)      (74)     (1.8)
Earnings on life
insurance policies                  (79)    (11.2)      (24)       --       (93)     (2.3)
Others - net                         40       5.7        72        --      (173)     (4.1)
Change in valuation
allowance                            --        --     1,000       6.3        --        --
                                ---------------------------------------------------------
 Actual tax expense (benefit)     $(680)    (96.3)  $(5,554)    (33.5)  $(2,186)    (53.2)
                                =========================================================
</TABLE>

                                      F-10
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

10. Income Tax (continued)

During 1998 and 1999, the Company generated taxable losses aggregating
approximately $22,063,000 which were carried back to prior years.  The taxable
income in all open taxable years has been eliminated and the remaining net
operating loss of approximately $9,349,000 is being carried forward.  The
carryforward expires in 2019.  During 2000, the Company generated additional
taxable losses of $4,758,000 which can be carried forward through 2020.  The
Company also has a low income housing credit carryforward of $950,000 and an
alternative minimum tax carryforward of $509,000.  The low income housing credit
expires $485,000 in 2017, $99,000 in 2018, $169,000 in 2019, and $197,000 in
2020.  The alternative minimum tax credit can be carried forward indefinitely.
A valuation allowance has been established reducing the Company's deferred tax
asset to reflect management's estimate of that portion of the asset that may not
be realized.

Tax expense (benefit) related to securities gains and losses were $1,000,
$(303,000) and $476,000 for 2000, 1999 and 1998, respectively.

11.  Employee Benefit Plans

The Company has a profit-sharing retirement plan which includes all full-time
employees who have reached the age of twenty-one and have completed at least one
year of service.  Each participant can elect to contribute to the plan an amount
not to exceed 10% of their salary.  The plan provides for an employer matching
contribution on the first 4% of the participant's elective contribution.  In
addition to the matching contribution, the plan provides for a discretionary
contribution to be determined by the Bank's Board of Directors.

Total profit-sharing expense for 2000, 1999, and 1998 was $52,000, $55,000, and
$295,000, respectively.

In addition to providing the profit-sharing plan, the Company sponsors two
defined benefit post-retirement plans that cover both salaried and nonsalaried
employees.  Employees must be fifty-five years old and have ten years of service
to qualify for the plans.  One plan provides medical and dental benefits, and
the other provides life insurance benefits.  The post-retirement health care
plan is contributory, with retiree contributions adjusted annually; the life
insurance plan is noncontributory.   The expense, liability, and contributions
under the plans are not material in any period presented.

12.  Leases

The subsidiary bank utilized certain bank premises and equipment under long-term
leases expiring at various dates.  In certain cases, these leases contain
renewal options and generally provide that the Company will pay for insurance,
taxes and maintenance.

As of December 31, 2000 the future minimum rental payments required under
noncancelable operating leases with initial terms in excess of one year are as
follows:

                                         (Expressed in thousands)
                                            Operating Leases
                                         -------------------------
 Year ending December 31,
  2001                                            $123
  2002                                             124
  2003                                             121
  2004                                              70
  2005                                              58
 Thereafter                                         36
                                                  ----
   Total minimum lease payments                   $532
                                                  ====

Rental expense under operating leases approximated $119,000 in 2000, $139,000
in 1999, and $139,000 in 1998.

13.  Related Party Transactions

Certain directors and executive officers and their associates were customers of,
and had other transactions with, the subsidiary bank in the ordinary course of
business in 2000 and 1999.

The following is an analysis of loan activity to directors, executive officers,
and their associates:

(Expressed in thousands)                     2000      1999
                                           ------------------
Balance previously reported                $ 5,459   $ 6,235
New loans during the year                       34       877
                                           ------------------
 Total                                       5,493     7,112
Less repayments during the year               (486)   (1,575)
Effect of changes in related parties        (1,023)      (78)
                                           ------------------
Balance, December 31                       $ 3,984   $ 5,459
                                           ==================

Related party deposits totaled $2,018,000 and $579,000 at December 31, 2000 and
1999, respectively.


                                      F-11
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

14.  Commitments and Contingencies

The subsidiary bank is a 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 commitments to extend credit and
standby letters of credit.  These instruments involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the balance sheet.
The contract amounts of those instruments reflect the extent of involvement the
Company has in particular classes of financial instruments.

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

The following represents financial instruments whose contract amounts represent
credit risk at December 31:

                                 Contract  Amount
                                 ----------------
(Expressed in thousands)            2000    1999
                                 ----------------
 Commitments to extend credit    $15,389  $16,444
 Standby letters of credit           466      686

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.  The Company evaluates each customer's
creditworthiness on a case-by-case basis.  The amount of collateral obtained, if
deemed necessary by the Company upon extension of credit, is based on
management's credit evaluation of the counter party.  Collateral held varies,
but may include accounts receivable, inventory, property, plant, and equipment,
and income-producing properties. At December 31, 2000, $11,252,000 in
commitments to extend credit were issued at an adjustable rate of interest; the
remaining $4,137,000 in commitments were issued at fixed rates.

Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party.  Those guarantees are
primarily issued to support public and private borrowing arrangements.  Of the
standby letters of credit, $406,000 expire in 2001, while the remaining $60,000
expire in  2002.  The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers.

15.  Concentrations of Credit Risk

The subsidiary bank extends commercial, consumer, and real estate loans to
customers primarily located in Belmont, Harrison, Jefferson, and Tuscarawas
Counties in Ohio and Ohio and Marshall Counties in West Virginia.  While the
loan portfolios are diversified, the ability of the borrowers to meet their
contractual obligations partially depends upon the general economic condition of
Southeastern Ohio and the Northern Panhandle of West Virginia.

The subsidiary bank measures concentration of credit based on categorizing loans
by the Standard Industry Classification codes.  Loans and commitments equal to
or exceeding 25% of Tier 1 capital are considered concentrations of credit.  At
year end, the bank had concentrations of credit in the following industries:

(Expressed in thousands)                                   2000
                                           Loan balance and        Percent of
Industry                                   available credit      Tier 1 Capital
-------------------------------------------------------------------------------
Amusement industry                                $ 6,864            35.8%
Services-hotel/motel                                5,549            29.0%

(Expressed in thousands)                                   1999
                                           ------------------------------------
                                           Loan balance and        Percent of
Industry                                   available credit      Tier 1 Capital
-------------------------------------------------------------------------------
Amusement industry                                $14,551           159.6%
Commercial apartments and rentals                   6,582            72.2%
Commercial office buildings and rentals             5,466            60.0%
Contracting-general building                        5,324            58.4%
Contractors-commercial construction                 4,908            53.8%
Services-hotel/motel                                4,448            48.8%
Miscellaneous fabricated metal products             3,695            40.5%
Services-physicians                                 3,422            37.5%
Bituminous coal mining                              3,419            37.5%
Services-car washes                                 3,200            35.1%
Tire recycling                                      2,480            27.2%
Retailers-fast food                                 2,396            26.3%



16.  Limitations on Dividends

The approval of the Comptroller of the Currency is required to pay dividends if
the total of all dividends declared by a national bank in any calendar year
exceeds the total of its retained net profits for the current year plus the two
preceding years.  Under this formula, the bank cannot declare dividends in 2001
without approval of the Comptroller of the Currency.  The subsidiary bank is the
primary source of funds to pay dividends to the shareholders of Belmont Bancorp.
As discussed later, the Company is prohibited from paying dividends without
regulatory approval.

                                      F-12
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

17.  Other Operating Expenses

Other operating expenses include the following:

(Expressed in thousands)                           2000    1999    1998
                                                 -----------------------
Taxes other than payroll
 and real estate                                 $   24  $  254  $  496
Supplies and printing                               165     233     299
Insurance, including
 federal deposit insurance                          774     169     127
Amortization of intangibles                          10     439     196
Legal fees                                        1,153   1,671      52
Consulting expense                                  139   1,442     111
Examinations and audits                             359     385     213
Prepayment penalties on Federal
 Home Loan Bank advances                             --     342      --
Legal settlements                                    12     295      --
Other (individually less than
 1% of total income)                              1,464   1,797   1,612
                                                 -----------------------
Total                                            $4,100  $7,027  $3,106
                                                 =======================

18.  Restrictions on Cash

The subsidiary bank is required to maintain a reserve balance with the Federal
Reserve Bank.  The amounts of the reserve balance at December 31, 2000 and 1999,
were $2,162,000 and $3,290,000, respectively.

19.  Cash Flows Information

The Company's policy is to include cash on hand and amounts due from banks in
the definition of cash and cash equivalents.

Cash payments for interest in 2000, 1999, and 1998 were $10,629,000,
$15,758,000, and $16,316,000, respectively.  Cash payments for income taxes for
2000, 1999, and 1998, were  $0, $383,000, and $2,168,000, respectively.  In
2000, the Company received a tax refund of $5,696,000.

Non-cash transfers during 2000 involved the conversion of preferred stock to
common stock for $1,650,000 and the transfer of loans to other real estate of
$901,000.

20.  Regulatory Matters

The Company and Bank are subject to various regulatory capital requirements
administered by the federal banking agencies.  Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Company's and Bank's financial statements.  Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company and Bank must meet specific capital guidelines that involve
quantitative measures of the Company's and Bank's assets, liabilities, and
certain off-balance-sheet items as calculated under regulatory accounting
practices.  The Company's and Bank's capital amounts and classifications are
also subject to qualitative judgments by the regulators about components, risk,
weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and Bank to maintain minimum amounts and ratios (set forth
in the table below) of total and Tier I capital (as defined in the regulations)
to risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined).

Under the Federal Deposit Insurance Corporation (FDIC) Improvement Act of 1991,
the federal banking regulators are required to take prompt corrective action if
an insured depository institution fails to satisfy certain minimum capital
requirements.  An institution that fails to meet the minimum level to be
considered adequately capitalized (an "undercapitalized institution") may be:
(i) subject to increased monitoring by the appropriate federal banking
regulator; (ii) required to submit an acceptable capital restoration plan within
45 days; (iii) subject to asset growth limits; and (iv) required to obtain prior
regulatory approval for acquisitions, branching and new lines of businesses.  In
addition, the federal banking regulators may impose discretionary actions
including, but not limited to, requiring recapitalization, restricting
transactions with affiliates, restricting asset growth and interest rates paid,
and divestiture of the insured institution by any company having control of the
institution.

The capital restoration plan required in item (ii) above must include a
guarantee by the institution's holding company that the institution will comply
with the plan until it has been adequately capitalized on average for four
consecutive quarters, under which the holding company would be liable up to the
lesser of 5% of the institution's total assets or the amount necessary to bring
the institution into capital compliance as of the date it failed to comply with
its capital restoration plan.

The capital ratios and the regulatory framework for adequately
capitalized institutions are depicted as set forth in the following table:


                                                       For Capital
                                        Actual      Adequacy Purposes (1)
(Expressed in thousands)            Amount   Ratio    Amount    Ratio
                                   ---------------------------------------
As of December 31, 2000:
Total risk based capital
 to risk weighted assets:
 Consolidated                      $23,327   13.9%   $13,360     8.0%
 Bank                               21,277   12.9%    13,196     8.0%
Tier I capital
 to risk weighted assets:
 Consolidated                       21,171   12.7%     6.680     4.0%
 Bank                               19,146   11.6%     6,598     4.0%
Tier I capital
 to average assets:
 Consolidated                       21,171    7.8%    10,898     4.0%
 Bank                               19,146    7.1%    10,820     4.0% (2)


                                      F-13
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

20.  Regulatory Matters (continued)


                                                       For Capital
                                        Actual      Adequacy Purposes (1)
(Expressed in thousands)            Amount   Ratio    Amount    Ratio
                                   ---------------------------------------
As of December 31, 1999:
Total risk based capital
 to risk weighted assets:
 Consolidated                      $14,090    6.9%   $16,428     8.0%
 Bank                               11,738    5.8%    16,220     8.0%
Tier I capital
 to risk weighted assets:
 Consolidated                       11,435    5.6%     8,214     4.0%
 Bank                                9,115    4.5%     8,110     4.0%
Tier I capital
 to average assets:
 Consolidated                       11,435    3.5%    13,118     4.0%
 Bank                                9,115    2.8%    13,012     4.0% (2)


(1) These are also the standards to be "adequately capitalized" under Prompt
    Corrective Action Provisions.

(2) The Consent Order requires a 6% Tier 1 leverage ratio.


Consent Order:  In August, 1999, the Bank received the written report of an
examination of the Bank by the OCC, the Bank's principal federal regulatory
agency.  At the same time, the Bank entered into a consent order with the OCC
relating to the results of the examination, which contains certain required
actions and certain restrictions.

The consent order requires the bank to formulate new plans, policies, procedures
and programs relating to long-term strategy, organizational structure,
management, loans, loan loss reserves, overdrafts, loan interest accrual and
non-accrual loans, loan diversification, internal audit and periodic loan review
by certain dates and then to implement and follow those plans, policies, and
procedures and programs.  The Bank is also required to review and evaluate
certain groups of loans and correct deficiencies, and going forward to properly
document commercial extensions of credit and comply with law and regulations
relating to lending.

In addition, the consent order mandates that the Bank must achieve and maintain
a 6% Tier 1 leverage ratio.  Through its recapitalization efforts, the Company
and the Bank achieved the minimum Tier 1 leverage ratio mandated by the consent
order by June 30, 2000.

Under the terms of the consent order, the board of directors of the Bank is
responsible for the proper and sound management of the Bank, must appoint a
compliance committee from among their independent members, and report monthly to
the OCC on progress in complying with the consent order.  The board has
appointed a compliance committee and has filed its monthly reports with the OCC.

Federal Reserve Bank Agreement:   In August 1999, the board of directors also
entered into an agreement with the Federal Reserve Bank of Cleveland, under
authority given it by the Board of Governors of the Federal Reserve System, the
federal regulatory agency for the Company.  As with the consent agreement of the
OCC, the Federal Reserve agreement necessitates certain actions and
restrictions.

Without prior Federal Reserve approval,  the agreement prohibits the Company
from paying dividends, incurring debt, redeeming stock, receiving dividends from
the Bank, imposing charges on the Bank, and engaging in any transaction with the
bank in violation of federal law.  To date, the Company has taken, and intends
to continue to take, all appropriate steps to comply with the Federal Reserve
requirements.

Subsequent Notification:  In February 2000, the Bank was notified by the OCC
that its capital category at December 31, 1999 under Prompt Corrective Action
regulations was significantly undercapitalized.  As a result of its
recapitalization efforts described in Note 3, the Bank was formally notified
that it had achieved an adequately capitalized designation under Prompt
Corrective Action regulations as of June 30, 2000 in a letter from the OCC dated
July 27, 2000.  There are no conditions or events since that notification that
management believes has changed the Bank's capital category.


21.  Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments, whether or not recognized in the balance sheet.  In
cases where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques.  Those techniques
are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows.  In that regard, the derived fair value
estimates cannot be substantiated by comparison to independent markets and, in
many cases, could not be realized in immediate settlements of the instruments.
Statement 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements.  The fair value of off-balance
sheet instruments is not considered material.  In addition, the value of long-
term relationships with depositors and other customers is not reflected.  The
value of these items is significant.  Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the Company.

The following methods and assumptions were used in estimating fair values of
financial instruments as disclosed herein:

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

                                      F-14
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

21.  Fair Value of Financial Instruments (continued)

Securities:  For debt securities and marketable equity securities, fair values
are based on quoted market prices or dealer quotes.  If a quoted market price is
not available, fair value is estimated using quoted market prices for similar
securities.

Loans:  For certain homogeneous categories of loans, such as some residential
mortgages, fair value is estimated using the quoted market prices for securities
backed by similar loans.  The fair value of other types of loans 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.  The fair value of impaired loans was estimated at book
value, net of related reserves.

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
using the rates currently offered for deposits of similar remaining maturities.

Short-Term Borrowings:  These liabilities represent primarily overnight
borrowings and debt maturing within ninety days of issuance with interest rates
adjusted daily or weekly.  Accordingly, the carrying amount is a reasonable
estimate of fair value.

Long-Term Borrowings:  The fair values of long-term borrowings are estimated
using discounted cash flow analyses based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements.

The estimated fair values of the Company's financial instruments are as follows:


<TABLE>
<CAPTION>
                                                2000                         1999
                                   ----------------------------------------------------------
                                      Carrying        Estimated       Carrying      Estimated
(Expressed in thousands)               Amount        Fair Value        Amount      Fair Value
                                  ------------------------------------------------------------
<S>                               <C>               <C>               <C>         <C>
Financial assets:
-----------------
Cash due from banks                   $ 11,270         $ 11,270       $ 15,439      $ 15,439
Federal funds sold                      14,730           14,730          2,025         2,025
Securities available for sale          109,684          109,684        110,692       110,692
Loans, net                             122,209          123,836        157,277       157,004
Accrued interest receivable              1,658            1,658          1,751         1,751

Financial liabilities:
----------------------
Deposits                               231,686          226,514        255,432       257,184
Repurchase agreements                    1,204            1,204          6,093         6,096
Accrued interest payable                   820              820            747           747
Short-term borrowings                       --               --         19,740        19,740
Long-term borrowings                    20,000           19,780         20,000        19,445

</TABLE>

22.  Condensed Parent Company Financial Statements

Presented below are the condensed balance sheets, statements of income, and
statements of cash flows for Belmont Bancorp.

Balance Sheets                                       (Expressed in thousands)
                                                           December 31,
                                                       2000           1999
                                                     ------------------------
Assets
 Cash                                                $  1,402       $  1,141
 Investment in subsidiaries
  (at equity in net assets)                            23,418          8,950
 Equity securities                                        400            473
 Advances to subsidiaries                                 447            271
 Prepaid expenses                                          --            509
 Other assets                                           1,062            762
                                                     ------------------------
  Total assets                                       $ 26,729       $ 12,106
                                                     ========================
Liabilities
 Payable to subsidiary                               $    560       $    348
 Deferred compensation                                    567            527
                                                     ------------------------
  Total liabilities                                     1,127            875
Shareholders' Equity                                   25,602         11,231
                                                     ------------------------
  Total liabilities and shareholder's equity         $ 26,729       $ 12,106
                                                     ========================

Statements of Income

                                                  2000      1999       1998
                                               -------------------------------
Operating income
 Dividends from subsidiaries                   $     --   $    628   $ 3,921
 Realized loss in market decline
  on equity securities                              (56)        --        --
 Other income                                        71         51       108
                                               -------------------------------
  Total income                                       15        679     4,029
Operating expenses                                  141         79       143
                                               -------------------------------
 Income (loss) before income tax
  and equity in undistributed
  income of subsidiaries                           (126)       600     3,886
Income tax (benefit)                                (43)       (57)      (41)
Equity in undistributed income (loss)
 of subsidiaries                                  1,469    (11,688)   (5,846)
                                               -------------------------------
 Net income (loss)                             $  1,386   $(11,031)  $(1,919)
                                               ===============================

                                      F-15
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

Statements of Cash Flows
                                                    2000       1999      1998
                                                  -----------------------------
Operating activities
 Net income (loss)                                $ 1,386   $(11,031)  $(1,919)
 Adjustments to reconcile net income to
  net cash provided by operating activities:
  Realized loss in market decline
   on equity securities                                56         --        --
 Undistributed (earnings) loss of affiliates       (1,469)    11,688     5,846
  Changes in operating assets and liabilities:
   Prepaid expenses                                   508       (354)       92
   Accrued expenses and dividends                      40         33        94
   Other                                             (295)       (88)      (95)
                                                  -----------------------------
   Cash from operating activities                     226        248     4,018
                                                  -----------------------------
Investing activities
 Payments from subsidiaries                           212      1,083        --
 Payments to subsidiaries                            (175)      (149)     (274)
 Additional investment in subsidiary               (9,329)    (1,650)       --
 Investment purchases                                  --         --      (446)
                                                  -----------------------------
   Cash from investing activities                  (9,292)      (716)     (720)
                                                  -----------------------------
Financing activities
 Issuance of preferred stock                           --      1,650        --
 Issuance of common stock                           9,327         --        --
 Purchase of treasury stock                            --         --    (1,308)
 Issuance of treasury stock                            --        280       112
 Dividends                                             --       (628)   (2,022)
                                                  -----------------------------
   Cash from financing activities                   9,327      1,302    (3,218)
                                                  -----------------------------
Increase (decrease) in cash & cash equivalents        261        834        80
Cash and cash equivalents at beginning of year      1,141        307       227
                                                  -----------------------------
Cash and cash equivalents at end of year          $ 1,402   $  1,141   $   307
                                                  =============================


23.  Comprehensive Income

The components of other comprehensive income were as follows:

(Expressed in thousands)                          2000       1999      1998
                                                ------------------------------
Unrealized holding gains/losses
 arising during the period                      $ 5,546   $ (7,776)  $  (780)
Adoption of SFAS No. 133                             --        224        --
Reclassification adjustment                          (4)       880    (1,338)
                                                ------------------------------
 Net gains/losses
  arising during the period                       5,542     (6,672)   (2,118)
Tax effect                                       (1,884)     2,268       720
                                                ------------------------------
Other comprehensive income (loss)               $ 3,658   $ (4,404)  $(1,398)
                                                ==============================

24.   Litigation

The Company and its subsidiaries have been named as defendants in legal actions.
Management believes, based on the advice of counsel, that no accrual for loss is
necessary.

The Company is a defendant in a suit for damages brought in the Court of Common
Pleas for Belmont County, Ohio in April 1999 by George Michael Riley and others
against the Bank and certain former officers, among others, alleging torts to
have occurred in connection with the Bank's denial of a loan to a third party to
finance the sale of a business owned by plaintiffs. In another case filed in the
same Court in May 1999, Charles J. and Rebecca McKeegan, the beneficial owners
of the potential purchaser of the business in the same transaction claim damages
in excess of $500,000 based upon alleged tortuous conduct as to them by
defendants. In both cases it is claimed that a former loan officer of the Bank
later purchased the business at a lower price with financial assistance from the
Bank's former chief operating officer. Based on the advice of counsel, the
Company believes its exposure to liability, if any, is minimal in each case.

In August 1999, the Company's directors unanimously approved and entered into a
consent order with the Office of the Comptroller of the Currency and entered
into a written agreement with the Federal Reserve Bank of Cleveland under which
the Company and the Bank agreed to meet specified conditions relating to its
future operations and capital requirements. The consent order requires the Bank
to, among other things, formulate new plans, policies, procedures and programs
relating to long-term strategy, organizational structure, management, loans,
loan loss reserves, overdrafts, loan interest accrual and non-accrual loans,
loan diversification, internal audit and periodic loan review by certain dates.
Management believes that it has satisfied or is in the process of satisfying all
of the conditions of the order.

In August 1999, the Company also entered into an agreement with the Federal
Reserve Bank of Cleveland, under authority given it by the Board of Governors of
the Federal Reserve System, the federal regulatory agency for Belmont. As with
the consent order of the Comptroller of the Currency, the Federal Reserve Bank
agreement necessitates certain actions and restrictions. Without prior Federal
Reserve Bank approval, the agreement prohibits the Company from paying
dividends, incurring debt, redeeming stock, receiving dividends from the Bank,
imposing charges on the Bank, and engaging in any transaction with the Bank in
violation of federal law.  The Company is required to report quarterly on
progress in complying with the Federal Reserve Bank agreement. Management
believes that it has satisfied or is in the process of satisfying all of the
terms of the agreement.

                                      F-16
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

24.  Litigation (continued)

In August 1999, the Bank was named as a defendant in a lawsuit filed in the
Belmont County Common Pleas Court by Joseph C. Heinlein, Jr. against his former
secretary, the Bank, other financial institutions and individuals with whom the
secretary did business. The complaint alleges that the secretary embezzled funds
from the plaintiff's account over a period of several years by forging his
signature to checks and alleges negligence on the part of the Bank for honoring
such checks. The complaint has been amended to claim damages of $1,250,000.
This secretary has entered into a pleas agreement under which she has paid
$500,000 in restitution and received a prison sentence.  The Bank believes that
it has valid defenses against the claim and intends to defend it vigorously. The
Bank has also filed cross-claims against the secretary and a third party it
believes benefited from the misappropriation of funds.  In addition, the Company
believes that any liability on the Bank's part would be covered under its
insurance policy.  However, the insurance carrier, Progressive Casualty
Insurance Company, has filed a declaratory judgment and interpleader action
raising issues of coverage and indemnification on this claim, as more fully
discussed below.

In October 1999, the Company filed suit in the Court of Common Pleas of
Tuscarawas County, Ohio, alleging that it had been the victim of an "elaborate
fraud" that has resulted in more than $15 million in losses to the Bank.
Following an extensive internal review of its loan portfolio, the Bank filed
claims against Steven D. Schwartz, President of Schwartz Homes, Inc., the now-
closed New Philadelphia retailer of manufactured homes. At the same time, the
Bank filed claims against three additional people: Linda Reese, Schwartz Homes'
Chief Financial Officer; William Wallace, the Bank's former Executive Vice-
President and Chief Operating Officer; and Christine Wallace, his wife. In
addition, as more fully discussed below, because of Mr. Wallace's alleged
conduct as a bank officer and director, the Bank is seeking to recover from its
indemnity bond insurance carrier, Progressive Casualty Insurance Company, the
full amount of its bond. The Wallaces have filed counterclaims in an
indeterminate amount upon various bases, including invasion of privacy,
defamation and failure to distribute moneys allegedly due them under a deferred
and certain other compensation plans. Steven Schwartz also requested leave to
file counterclaims.  The case has been scheduled for trial in May 2001.  The
Company intends to vigorously prosecute its case and defend against these
claims.

In October 1999, James John Fleagane, a shareholder of the Company, filed an
action against the Company, the Bank and certain of the Company's and the Bank's
current and former officers and directors in the Circuit Court of Ohio County,
West Virginia. The plaintiff alleges, among other things, that the Bank and its
directors and officers negligently transacted and administered various loans
with respect to Schwartz Homes, Inc. and customers of Schwartz. The plaintiff
seeks damages for the loss in value of his stock and other compensatory and
punitive damages in an unspecified amount and requests class action
certification for the common shareholders of the Company. The court denied the
Company's motion to dismiss this case in July 2000. In August 2000, the
plaintiff filed an amended complaint, as to which the Company has filed an
answer, affirmative defenses and cross-claims against the Company's former
accountants, S.R. Snodgrass, A.C. and a principal thereof, and against J.
Vincent Ciroli, Jr., formerly the Company's President and Chief Executive
Officer. In February 2000, the court granted leave to the plaintiff to file a
second amended complaint.  The second amended complaint eliminates the direct
claims against the Company and the Bank and the request for class action
certification.  Accordingly, as amended, this action constitutes a derivative
suit against current and former officers and directors of the Company and the
Bank, which is being defended by the Company and the Bank on their behalf.  The
parties are currently in the discovery phase of this case. The Company intends
to vigorously defend this action.

Progressive Casualty Insurance Company sold to the Company a directors and
officers liability policy providing for $3 million of coverage and a separate
financial institution fidelity bond in the face amount of $4.75 million. In May
1999, the Company filed a claim under the fidelity bond policy to recover the
losses incurred in connection with the Schwartz Homes loan relationship. The
Company has also claimed coverage under the directors and officers liability
policy.

Progressive declined to honor these claims and, in December 1999, filed an
action in the United States District Court for the Southern District of Ohio,
Eastern Division asking the court to issue a declaratory judgment declaring that
Progressive is not liable under either the directors and officers liability
policy or the fidelity bond policy. In September 2000, the court granted the
Company's motion to dismiss the declaratory judgment action. Progressive had
also asked this court, if Progressive is found to be liable under these
policies, to determine whether the Bank or other parties who have sued the Bank
in separate actions are entitled to the insurance proceeds. Progressive has
deposited with the court bonds in the aggregate amount of $7.75 million, which
amount Progressive believes is sufficient to satisfy any liabilities under the
policies in respect of this interpleader claim. This interpleader claim remains
before the court. The Company intends to vigorously seek recoveries under the
insurance policies sold to the Company by Progressive.

                                      F-17
<PAGE>

Belmont Bancorp. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2000, 1999 and 1998
-------------------------------------------------------------------------------

24.  Litigation (continued)

The Company is a defendant in litigation brought in October 1999 by Beall Homes,
Inc., John B. Beall, and Peggy F. Beall in the Court of Common Pleas, Belmont
County, Ohio.  Plaintiffs seek a declaratory judgment that certain warrants of
attorney which appear on promissory notes evidencing loans between the Bank and
Beall Homes, Inc. (and guaranteed by John B. Beall and Peggy F. Beall) are
invalid. Plaintiffs assert claims of breach of a duty of good faith in
connection with the Bank's grant of three loans to Beall Homes, fraud and breach
of fiduciary duty allegedly through floor plan financing, dominating and
controlling plaintiff's business, wrongful set-off and conversion of the Beall
Homes account, wrongful dishonor of certain customer checks of plaintiff,
wrongful set-off and conversion of the mortgage account of John B. Beall, and
intentional infliction of emotional distress. Plaintiffs seek compensatory and
punitive damages in an amount in excess of $25,000 and a declaration that they
are not in default of any of their loans, that the warrants of attorney are
invalid, that the Bank is required to provide plaintiffs with an accounting of
the manner in which payments made by plaintiffs have been applied by the Bank,
and other relief. The Bank has filed a counterclaim for monetary damages and
foreclosure of collateral securing indebtedness in the amount of $765,000 and
has filed a petition for involuntary bankruptcy against Beall Homes. In February
2001, the bankruptcy court lifted the stay it had placed on the Bank's
counterclaims against Beall Homes, thereby permitting the proceeding in the
Court of Common Pleas, Belmont County, Ohio to continue.  The Bank intends to
vigorously defend this action and prosecute its own claims.

In September 1999, the Bank filed a lawsuit against Otterbacher Manufacturing,
Inc. ("Manufacturing") and Gary and Karen Otterbacher regarding default by
Manufacturing on a loan guaranteed by the Otterbachers. The Otterbachers filed a
counterclaim against the Bank for lender liability claims relating to the Bank's
declaration of default by Manufacturing and the Bank's refusal to extend
additional or renew existing credit to Manufacturing.  In January 2001, the Bank
entered into a settlement agreement with the Otterbachers under which they
agreed to pay $200,000 to the Bank, $100,000 of which was paid in January 2001,
$60,000 of which is required to be paid in 2001 and the balance of which is
required to be paid in five equal annual installments beginning in 2002.  Under
the terms of settlement, the Otterbachers agreed to dismiss all claims they had
asserted against the Bank, including all lender liability claims.

                                      F-18
<PAGE>

Belmont Bancorp. and Subsidiaries

Management's Report
-------------------------------------------------------------------------------

Management of Belmont Bancorp. is responsible for the accurate and objective
preparation of the consolidated financial statements and the estimates and
judgements upon which certain financial statements are based.  Management is
also responsible for preparing the other financial information included in this
annual report.  In our opinion, the financial statements on the preceding pages
have been prepared in conformity with generally accepted accounting principles
and other financial information in this annual report is consistent with the
financial statements.

Management is also responsible for establishing and maintaining an adequate
internal control system which encompasses policies, procedures and controls
directly related to, and designed to provide reasonable assurance as to the
integrity and reliability of the financial reporting process and the financial
statements generated therefrom.  The concept of reasonable assurance is based on
the recognition that there are inherent limitations in all systems of internal
control, and that the cost of such systems should not exceed the benefits to be
derived therefrom.  The systems and controls and compliance therewith are
reviewed by an extensive program of internal audits and by our independent
auditors.  Their activities are coordinated to obtain maximum audit coverage
with a minimum of duplicate effort and cost.  Management believes the system of
internal control effectively meets its objectives of reliable financial
reporting.

The Board of Directors pursues its responsibility for the quality of the
Company's financial reporting primarily through its Audit Committee which is
comprised solely of outside directors.  The Audit Committee meets regularly with
management, personnel responsible for the contract internal audit function, and
the independent auditors to ensure that each is meeting its responsibilities and
to discuss matters concerning internal controls, accounting and financial
reporting.  The above parties have full and free access to the Audit Committee.


/s/ W. Quay Mull, II                              /s/ W. R. Roat
W. Quay Mull, II                                  Wilbur R. Roat
Chairman                                          President and
Belmont Bancorp.                                  Chief Executive Officer
Belmont National Bank                             Belmont Bancorp.
                                                  Belmont National Bank

                                 /s/ Jane R. Marsh
                                 Jane R. Marsh
                                 Secretary, Belmont Bancorp.
                                 Senior Vice President,
                                 Controller and Cashier
                                 Belmont National Bank


                                      F-19
<PAGE>

Belmont Bancorp. and Subsidiaries

Opinion of Independent
Certified Public Accountants
-----------------------------------------------------------------------------

Board of Directors
Belmont Bancorp.
St. Clairsville, Ohio

We have audited the accompanying consolidated statements of income, changes in
shareholders' equity, and cash flows of Belmont Bancorp. for the year 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 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 results of  operations and cash flows of
Belmont Bancorp., for the year ended December 31, 1998, in conformity with
generally accepted accounting principles.


/s/ S.R. Snodgrass A.C.
S.R. Snodgrass A.C.
Wheeling, West Virginia
May 19, 1999


Independent Auditor's Report
-------------------------------------------------------------------------------

To the Shareholders and Board of Directors of
Belmont Bancorp.

We have audited the accompanying consolidated balance sheets of Belmont Bancorp.
and subsidiaries as of December 31, 2000 and 1999, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for the
years then ended.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.  The financial statements of Belmont
Bancorp. and subsidiaries for the year ended December 31, 1998 were audited by
other auditors whose report dated May 19, 1999, expressed an unqualified opinion
on those statements.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Belmont Bancorp. and
subsidiaries at December 31, 2000 and 1999, and the results of its operations
and its cash flows, for the years then ended in conformity with generally
accepted accounting principles.

/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP

Columbus, Ohio
January 30, 2001

                                      F-20
<PAGE>


                                 EXHIBIT INDEX


Exhibit
Number                                 Description
------                                 -----------

4.1    --  Charter (1)
4.2    --  Charter Amendment regarding Series A Preferred Stock (2)
4.3    --  Bylaws as currently in effect (1)
10.1   --  Employment Agreement dated December 15, 1999 between Wilbur
           R. Roat, Belmont Bancorp. and Belmont National Bank (3)
10.2   --  Belmont Bancorp. 2001 Stock Option Plan (4)
21.1   --  List of Subsidiaries (4)
23.1   --  Consent of Crowe, Chizek and Company LLP (4)
23.2   --  Consent of S.R. Snodgrass A.C. (4)


______________________
(1)    Filed as an exhibit to the Company's Registration Statement on Form S-2
       filed with the Securities and Exchange Commission (Registration No. 333-
       91035) on November 16, 1999 and incorporated herein by reference.
(2)    Filed as an exhibit to Amendment No. 1 to the Company's Registration
       Statement on Form S-2 filed with the Securities and Exchange Commission
       (Registration No. 333-91035) on January 12, 2000 and incorporated herein
       by reference.
(3)    Filed as an exhibit to the Company's Annual Report on Form 10-K for the
       year ended December 31, 1999 (Registration No. 0-12724) and incorporated
       herein by reference.
(4)    Filed herewith.


                                      E-1