##### 



Exhibit 13
 WESTERN RESERVE BANCORP, INC.
 ANNUAL REPORT




---



##### 



WESTERN RESERVE BANCORP, INC.
Medina, Ohio
 ANNUAL REPORT
December 31, 2006
 CONTENTS
 LETTER TO SHAREHOLDERS
    
    
    1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    3CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS
    
    
    4CONSOLIDATED STATEMENTS OF INCOME
    
    
    5CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS EQUITY
    
    
    6CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    7NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    8COMPARATIVE SUMMARY OF SELECTED FINANCIAL DATA
    
    
    33MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    34
 Cover design by Renée W. Gareau, Zinnias Design Studio, Berea, Ohio 440-239-2437.




---



##### 




    
    We took a different route in the past few years with regard to interest rate management
and during 2006 that was successful, as our interest rate margin remained strong while a
great portion of banks struggled with compressed margins.
    
    With regard to our large loan loss in 2004, we again diverged from the direction taken
by the other banks involved in that situation. The results were well beyond expectations.
While we see no evidence that the other banks have encountered much success in the
collection process, we have collected 44% of our direct loan.
    
    The entrance of large banks into the small business lending arena reached a crescendo
during 2006 with many banks using imprudent pricing and structure to attract loan business.
We believe that the approach taken by the banks using these tactics is short-sighted. It
is an effort to show present day growth at the risk of future negative ramifications. The
problem comes down to economic growth being a fraction of the projected loan growth of
banks. Let me put it another way. If the areas economy is projected to grow at 2% and
all the banks are projecting 10% in loan growth, there will be problems as a result of the
competitive frenzy. We did not participate in that scenario which helped maintain our
margin and we believe protected us from future financial damage. While our strategy slowed
our loan growth to a standstill, we do not believe in growing today just to pay dearly
tomorrow.
    
    We aggressively pursued a new concept called Remote Deposit Capture. We first applied
this process at our bank and are now rolling it out to our business customers. This
product allows our business customers, instead of driving to the bank to make check
deposits, to run the checks through a sorter/reader which transmits images of the checks to
Western Reserve Bank. We hope that this new product will allow our customers situated
remotely from us to make deposits right into our bank without leaving their office. Since
we are never going to have a large branch network, this allows us to serve customers
without normal geographic limitations.
  1.




---



##### 



TOWARD THAT END, PLEASE NOTE THAT IN ORDER TO MAKE THE ANNUAL MEETING ACCESSIBLE TO MORE OF OUR
SHAREHOLDERS WE ARE HOLDING IT IN THE EVENING. THE DETAILS ARE BELOW:
 DATE:
    
    Wednesday, April 25, 2007TIME:
    
    Hors doeuvres and beverages will be available at 6:00 p.m.The meeting will begin at 6:30 p.m.Hors doeuvres and beverages will also be available after the meeting if
shareholders wish to converse with directors, officers or employees of the bank.LOCATION:
    
    Blue Heron Banquet & Conference Center *3227 Blue Heron TraceMedina, OhioGUESTS:
    
    If your stock is in your name only, please feel free to bring a
guest. We only ask that you RSVP to Karen at 330-764-3131 and
let us know so that we can prepare sufficient refreshments for
all.
  
 
 * Directions: 1 2
 2.




---



##### 



3.




---



##### 



2006
    
    
    2005ASSETSCash and due from financial institutions
    
    $
    2,923,863
    
    
    $
    2,228,258Federal funds sold and other short-term funds
    
    
    15,172,614
    
    
    
    5,114,748Cash and cash equivalents
    
    
    18,096,477
    
    
    
    7,343,006Interest-bearing deposits in other banks
    
    
    2,200,000
    
    
    
    Securities available for sale
    
    
    10,964,783
    
    
    
    7,301,377Restricted stock
    
    
    568,800
    
    
    
    537,200Loans
    
    
    110,149,244
    
    
    
    111,189,355Allowance for loan losses
    
    
    (1,588,217
    )
    
    
    (1,541,654
    )Loans, net
    
    
    108,561,027
    
    
    
    109,647,701Premises and equipment, net
    
    
    1,237,761
    
    
    
    1,303,921Bank owned life insurance
    
    
    1,092,473
    
    
    
    559,555Foreclosed assets
    
    
    265,000
    
    
    
    Accrued interest receivable and other assets
    
    
    1,129,092
    
    
    
    1,091,243$
    144,115,413
    
    
    $
    127,784,003LIABILITIES AND SHAREHOLDERS EQUITYDepositsNoninterest-bearing
    
    $
    16,115,340
    
    
    $
    12,899,265Interest-bearing
    
    
    111,143,783
    
    
    
    99,388,145Total deposits
    
    
    127,259,123
    
    
    
    112,287,410Federal Home Loan Bank advances
    
    
    3,500,000
    
    
    
    3,500,000Accrued interest payable and other liabilities
    
    
    424,897
    
    
    
    398,254Total liabilities
    
    
    131,184,020
    
    
    
    116,185,664Shareholders equityCommon stock, no par value, $1 stated value
750,000 shares authorized, 573,277 and
571,523 shares issued and outstanding as of
December 31, 2006 and December 31, 2005
    
    
    573,277
    
    
    
    457,331Additional paid-in capital
    
    
    9,572,861
    
    
    
    9,528,376Retained earnings
    
    
    2,770,693
    
    
    
    1,639,369Accumulated other comprehensive income (loss)
    
    
    14,562
    
    
    
    (26,737
    )Total shareholders equity
    
    
    12,931,393
    
    
    
    11,598,339$
    144,115,413
    
    
    $
    127,784,003
  4.




---



##### 



2006
    
    
    2005Interest and dividend incomeLoans, including fees
    
    $
    8,944,929
    
    
    $
    7,633,389Securities:Taxable
    
    
    209,046
    
    
    
    52,388Tax exempt
    
    
    56,411
    
    
    
    13,750Dividends on restricted stock
    
    
    32,007
    
    
    
    27,007Federal funds sold and other short-term funds
    
    
    589,873
    
    
    
    201,9779,832,266
    
    
    
    7,928,511Interest expenseDeposits
    
    
    4,150,145
    
    
    
    2,821,865Federal Home Loan Bank advances and other debt
    
    
    126,950
    
    
    
    111,6754,277,095
    
    
    
    2,933,540Net interest income
    
    
    5,555,171
    
    
    
    4,994,971Provision (credit) for loan losses
    
    
    (40,230
    )
    
    
    17,811Net interest income after provision (credit) for loan losses
    
    
    5,595,401
    
    
    
    4,977,160Noninterest incomeService charges on deposit accounts
    
    
    173,339
    
    
    
    141,814Net gains on sales of loans
    
    
    20,085
    
    
    
    160,927Gain on sale of credit card portfolio
    
    
    28,500
    
    
    
    Other
    
    
    174,283
    
    
    
    154,321396,207
    
    
    
    457,062Noninterest expenseSalaries and employee benefits
    
    
    2,108,212
    
    
    
    1,908,367Premises and equipment
    
    
    833,504
    
    
    
    793,822Marketing and advertising
    
    
    132,448
    
    
    
    106,009Data processing
    
    
    324,282
    
    
    
    304,966Professional fees
    
    
    299,595
    
    
    
    359,562Taxes other than income and payroll
    
    
    117,951
    
    
    
    100,384Supplies, printing and postage
    
    
    77,575
    
    
    
    78,303Community relations and contributions
    
    
    88,674
    
    
    
    67,452Other
    
    
    295,956
    
    
    
    269,5484,278,197
    
    
    
    3,988,413Income before income taxes
    
    
    1,713,411
    
    
    
    1,445,809Income tax expense
    
    
    562,245
    
    
    
    485,091Net income
    
    $
    1,151,166
    
    
    $
    960,718Earnings per share:Basic
    
    $
    2.01
    
    
    $
    1.68Diluted
    
    $
    1.93
    
    
    $
    1.63
  5.




---



##### 



AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalance, January 1, 2005
    
    $
    455,624
    
    
    $
    9,484,470
    
    
    $
    678,651
    
    
    $
    (2,816
    )
    
    $
    10,615,929Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    960,718
    
    
    
    
    
    
    
    960,718Change in unrealized net gain
(loss) on securities available
for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,921
    )
    
    
    (23,921
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    936,797Exercise of stock options (1,100 shares)
    
    
    1,100
    
    
    
    22,900
    
    
    
    
    
    
    
    
    
    
    
    24,000Tax benefit related to exercise of stock
options
    
    
    
    
    
    
    3,060
    
    
    
    
    
    
    
    
    
    
    
    3,060Common stock issued (607 shares)
under Employee Stock Purchase
Plan
    
    
    607
    
    
    
    17,946
    
    
    
    
    
    
    
    
    
    
    
    18,553Balance, December 31, 2005
    
    
    457,331
    
    
    
    9,528,376
    
    
    
    1,639,369
    
    
    
    (26,737
    )
    
    
    11,598,339Cumulative adjustment related to
SAB 108 adoption
    
    
    
    
    
    
    
    
    
    
    99,231
    
    
    
    
    
    
    
    99,231Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    1,151,166
    
    
    
    
    
    
    
    1,151,166Change in unrealized net gain
(loss) on securities available
for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,299
    
    
    
    41,299Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,192,465Five-for-four stock split
    
    
    114,270
    
    
    
    
    
    
    
    (114,270
    )
    
    
    
    
    
    
    Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (4,803
    )
    
    
    
    
    
    
    (4,803
    )Stock-based compensation expense
    
    
    
    
    
    
    2,933
    
    
    
    
    
    
    
    
    
    
    
    2,933Exercise of stock options (1,000 shares)
    
    
    1,000
    
    
    
    16,600
    
    
    
    
    
    
    
    
    
    
    
    17,600Tax benefit related to exercise of stock
options
    
    
    
    
    
    
    4,556
    
    
    
    
    
    
    
    
    
    
    
    4,556Common stock issued (676 shares)
under Employee Stock Purchase
Plan
    
    
    676
    
    
    
    20,396
    
    
    
    
    
    
    
    
    
    
    
    21,072Balance, December 31, 2006
    
    $
    573,277
    
    
    $
    9,572,861
    
    
    $
    2,770,693
    
    
    $
    14,562
    
    
    $
    12,931,393
  6.




---



##### 



2006
    
    
    2005Cash flows from operating activitiesNet income
    
    $
    1,151,166
    
    
    $
    960,718Adjustments to reconcile net income to net cash
from operating activities:Provision (credit) for loan losses
    
    
    (40,230
    )
    
    
    17,811Depreciation
    
    
    172,384
    
    
    
    176,162Net amortization of securities
    
    
    (103,956
    )
    
    
    1,010Stock-based compensation
    
    
    2,933
    
    
    
    Loans originated for sale
    
    
    (1,131,200
    )
    
    
    (2,895,284
    )Proceeds from sales of loan originations
    
    
    1,151,285
    
    
    
    2,438,053Gains on sales of loans and credit card sale
    
    
    (48,585
    )
    
    
    (160,927
    )Loss on disposal of fixed assets
    
    
    1,594
    
    
    
    Federal Home Loan Bank stock dividends
    
    
    (17,800
    )
    
    
    (14,000
    )Increase in cash surrender value of bank owned life insurance
    
    
    (32,918
    )
    
    
    (22,534
    )Net change in other assets and other liabilities
    
    
    (83,601
    )
    
    
    355,801Net cash from operating activities
    
    
    1,021,072
    
    
    
    856,810Cash flows from investing activitiesAvailable for sale securities:Purchases
    
    
    (9,010,094
    )
    
    
    (6,796,807
    )Maturities, prepayments and calls
    
    
    5,513,219
    
    
    
    662,862Purchase of restricted stock
    
    
    (13,800
    )
    
    
    (46,000
    )Net increase in interest-bearing deposits in other banks
    
    
    (2,200,000
    )
    
    
    Net decrease (increase) in loans
    
    
    862,257
    
    
    
    (5,667,197
    )Purchases of premises and equipment
    
    
    (107,818
    )
    
    
    (108,835
    )Acquisition of other real estate owned
    
    
    (135,000
    )
    
    
    Proceeds from sale of credit card portfolio
    
    
    313,497
    
    
    
    Purchases of bank owned life insurance
    
    
    (500,000
    )
    
    
    Net cash from investing activities
    
    
    (5,277,739
    )
    
    
    (11,955,977
    )Cash flows from financing activitiesNet increase in deposits
    
    
    14,971,713
    
    
    
    10,460,441Proceeds from Federal Home Loan Bank advances
    
    
    
    
    
    
    1,000,000Proceeds from issuance of common stock
under Employee Stock Purchase Plan
    
    
    21,072
    
    
    
    18,553Proceeds and income tax benefit from exercise of stock options
    
    
    22,156
    
    
    
    27,060Cash paid for fractional shares
    
    
    (4,803
    )
    
    
    Net cash from financing activities
    
    
    15,010,138
    
    
    
    11,506,054Change in cash and cash equivalents
    
    
    10,753,471
    
    
    
    406,887Cash and cash equivalents at beginning of period
    
    
    7,343,006
    
    
    
    6,936,119Cash and cash equivalents at end of period
    
    $
    18,096,477
    
    
    $
    7,343,006Supplemental cash flow information:Interest paid
    
    $
    4,278,651
    
    
    $
    2,897,289Income taxes paid (refunded)
    
    
    617,000
    
    
    
    (26,090
    )Supplemental disclosure of noncash investing activities:Non cash transfer from loans to other real estate owned
    
    $
    130,000
    
    
    $
    Non cash transfer from loans originated for sale to loans
    
    
    
    
    
    
    868,993
  7.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation
 Nature of Operations
 Use of Estimates
 Cash and Cash Equivalents
 Securities
  
  8.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Concentrations of Credit Risk
 Loans
  Loans Held for Sale
 Allowance for Loan Losses
   9.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Transfers of Financial Assets
 Foreclosed Assets
 Premises and Equipment
 Restricted Stock
 Company-Owned Life Insurance
 Long-Term Assets
 Loan Commitments and Related Financial Instruments
  10.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Income Taxes
 Retirement Plans
 Earnings per Common Share
 Stock Split
 Stock Compensation Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation.
 Share-based Payment, Statement of Cash
Flows,
   11.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 December 31, 2006UsingPrevious
    
    
    FAS 123(R)
    
    
    AsAccounting
    
    
    Adjustments
    
    
    ReportedIncome before income taxes
    
    $
    1,716,344
    
    
    $
    (2,933
    )
    
    $
    1,713,411Income taxes
    
    
    563,242
    
    
    
    997
    
    
    
    562,245Net income
    
    $
    1,153,102
    
    
    $
    (1,936
    )
    
    $
    1,151,166Basic earnings per share
    
    $
    2.02
    
    
    $
    (0.01
    )
    
    $
    2.01Diluted earnings per share
    
    $
    1.93
    
    
    $
    
    
    
    $
    1.93
 Accounting for Stock-Based Compensation.
 December 31, 2005Pro Forma asAs
    
    
    Pro Forma
    
    
    if underReported
    
    
    Adjustments
    
    
    FAS 123Income before income taxes
    
    $
    1,445,809
    
    
    $
    (3,293
    )
    
    $
    1,442,516Income taxes
    
    
    485,091
    
    
    
    1,120
    
    
    
    483,971Net income
    
    $
    960,718
    
    
    $
    (2,173
    )
    
    $
    958,545Basic earnings per share
    
    $
    1.68
    
    
    $
    
    
    
    $
    1.68Diluted earnings per share
    
    $
    1.63
    
    
    $
    (0.01
    )
    
    $
    1.62
 Comprehensive Income
 Adoption of New Accounting Standards Share-based Payment
 Accounting Changes and
Error Correctionsa replacement of APB Opinion No. 20 and FASB Statement No. 3.
  12.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements
in Current Year Financial Statements
 Effect of Newly Issued But Not Yet Effective Accounting Standards: Accounting for Certain Hybrid Financial Instrumentsan amendment of FASB
Statements No. 133 and 140.
 Accounting for Servicing of Financial Assets  an
amendment of FASB Statement No. 140,
  13.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Accounting for Uncertainty in Income Taxes. Accounting
for Income Taxes.
 Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance Arrangement. Employers Accounting for Postretirement Benefits Other Than Pensions.
 Fair Value Measurements.
 Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 07,
08, 106 and 132(R).
  14.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Accounting for
Purchases of Life Insurance  Determining the Amount That Could Be Realized in Accordance with FASB
Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance).
 Loss Contingencies
 Restrictions on Cash
 Dividend Restriction
  15.




---



##### 



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Fair Values of Financial Instruments
 Operating Segments
 Reclassifications
 NOTE 2  ORGANIZATION
    16.




---



##### 



NOTE 3  SECURITIES
  Gross
    
    
    GrossFair
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Losses2006U.S. Government-sponsored enterprises
    
    $
    2,018,404
    
    
    $
    
    
    
    $
    (6,596
    )Mortgage-backed
    
    
    4,470,140
    
    
    
    22,847
    
    
    
    (10,163
    )Municipal
    
    
    4,476,239
    
    
    
    25,787
    
    
    
    (9,811
    )$
    10,964,783
    
    
    $
    48,634
    
    
    $
    (26,570
    )2005U.S. Government-sponsored enterprises
    
    $
    1,012,221
    
    
    $
    
    
    
    $
    (10,954
    )U.S. Treasury
    
    
    4,901,067
    
    
    
    
    
    
    
    Mortgage-backed
    
    
    772,822
    
    
    
    620
    
    
    
    (12,564
    )Municipal
    
    
    615,267
    
    
    
    
    
    
    
    (17,613
    )$
    7,301,377
    
    
    $
    620
    
    
    $
    (41,131
    )
  Due in one year or less
    
    $
    520,910Due from one to five years
    
    
    1,200,274Due from five to ten years
    
    
    1,697,133Due from ten to fifteen years
    
    
    3,076,326Mortgage-backed
    
    
    4,470,140$
    10,964,783
   Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. Government-sponsored enterprises
    
    $
    
    
    
    $
    
    
    
    $
    768,404
    
    
    $
    (6,596
    )
    
    $
    768,404
    
    
    $
    (6,596
    )Mortgage-backed
    
    
    225,859
    
    
    
    (1,086
    )
    
    
    349,085
    
    
    
    (9,077
    )
    
    
    574,944
    
    
    
    (10,163
    )Municipal
    
    
    
    
    
    
    
    
    
    
    625,301
    
    
    
    (9,811
    )
    
    
    625,301
    
    
    
    (9,811
    )Total
    
    $
    225,859
    
    
    $
    (1,086
    )
    
    $
    1,742,790
    
    
    $
    (25,484
    )
    
    $
    1,968,649
    
    
    $
    (26,570
    )
  17.




---



##### 



NOTE 3  SECURITIES
   NOTE 4  LOANS
  2006
    
    
    2005Commercial business
    
    $
    28,987,234
    
    
    $
    28,392,851Commercial real estate
    
    
    66,570,136
    
    
    
    65,367,133Commercial construction
    
    
    2,214,763
    
    
    
    4,465,089Home equity
    
    
    7,860,647
    
    
    
    9,589,660Residential mortgage
and construction
    
    
    1,226,016
    
    
    
    917,565Consumer installment
    
    
    3,261,615
    
    
    
    2,108,230Credit card and other
    
    
    28,833
    
    
    
    348,827$
    110,149,244
    
    
    $
    111,189,355
  2006
    
    
    2005Beginning balance
    
    $
    1,541,654
    
    
    $
    1,605,933Provision (credit) for loan losses
    
    
    (40,230
    )
    
    
    17,811Loans charged off
    
    
    (148,881
    )
    
    
    (83,971
    )Recoveries
    
    
    235,674
    
    
    
    1,881Ending balance
    
    $
    1,588,217
    
    
    $
    1,541,654
   18.




---



##### 



NOTE 4  LOANS
  2006
    
    
    2005Year-end loans with no allocated
allowance for loan losses
    
    $
    1,336,886
    
    
    $
    945,029Year-end loans with allocated
allowance for loan losses
    
    
    361,491
    
    
    
    66,850$
    1,698,377
    
    
    $
    1,011,879
 2006
    
    2005Amount of the allowance for
loan losses allocated
    
    $
    136,490
    
    
    $
    40,961Average of impaired loans
during the year
    
    
    1,324,280
    
    
    
    1,088,110Interest income recognized
during impairment
    
    
    
    
    
    
    Cash-basis interest income
recognized
    
    
    32,584
    
    
    
    
  Beginning balance
    
    $
    907,687New loans
    
    
    870,675Repayments
    
    
    (908,273
    )Ending balance
    
    $
    870,089
 NOTE 5  PREMISES AND EQUIPMENT, NET
  2006
    
    
    2005Leasehold improvements
    
    $
    1,198,353
    
    
    $
    1,198,353Furniture and equipment
    
    
    969,757
    
    
    
    947,318Construction in process
    
    
    5,625
    
    
    
    2,173,735
    
    
    
    2,145,671Less accumulated depreciation
    
    
    (935,974
    )
    
    
    (841,750
    )$
    1,237,761
    
    
    $
    1,303,921
   19.




---



##### 



NOTE 5  PREMISES AND EQUIPMENT, NET
    2007
    
    $
    413,0532008
    
    
    377,2132009
    
    
    164,1812010
    
    
    167,4652011
    
    
    170,814Thereafter
    
    
    487,222$
    1,779,948
 NOTE 6  DEPOSITS
  2006
    
    
    2005Interest-bearing demand
    
    $
    7,859,550
    
    
    $
    6,300,341Savings
    
    
    35,655,449
    
    
    
    28,009,939Money market
    
    
    22,872,733
    
    
    
    17,920,336Time under $100,000
    
    
    26,049,710
    
    
    
    28,241,158Time $100,000 and over
    
    
    18,706,341
    
    
    
    18,916,371$
    111,143,783
    
    
    $
    99,388,145
   2007
    
    $
    25,899,1022008
    
    
    9,434,1182009
    
    
    2,635,2362010
    
    
    5,197,5562011
    
    
    1,483,542Thereafter
    
    
    106,497$
    44,756,051
  20.




---



##### 



NOTE 6  DEPOSITS
   NOTE 7  FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS
  December 31,
    
    
    December 31,2006
    
    
    2005Maturing March 2009, fixed rate advance at 3.25%
    
    $
    2,500,000
    
    
    $
    2,500,000Maturing April 2010, fixed rate advance at 4.57%
    
    
    1,000,000
    
    
    
    1,000,000$
    3,500,000
    
    
    $
    3,500,000
      21.




---



##### 



NOTE 8  EMPLOYEE BENEFITS
   
    22.




---



##### 



NOTE 9  INCOME TAXES
  2006
    
    
    2005Current
    
    $
    574,743
    
    
    $
    442,368Deferred
    
    
    (12,498
    )
    
    
    42,723Total income tax expense
    
    $
    562,245
    
    
    $
    485,091
  2006
    
    
    2005Income tax expense
at statutory rate
    
    $
    582,560
    
    
    $
    491,575Income from life insurance contracts
    
    
    (11,192
    )
    
    
    (7,662
    )Other, net
    
    
    (9,123
    )
    
    
    1,178Total income tax expense
    
    $
    562,245
    
    
    $
    485,091
  2006
    
    
    2005Deferred tax assets:Bad debt deduction
    
    $
    401,654
    
    
    $
    415,332Deferred loan fees and costs
    
    
    6,441
    
    
    
    51,136Unrealized loss on securities
available for sale
    
    
    
    
    
    
    13,774Deferred compensation
    
    
    43,138
    
    
    
    28,378NQ stock option expense
    
    
    997452,230
    
    
    
    508,620Deferred tax liabilities:Discount accretion
    
    
    
    
    
    
    (1,791
    )Accrual to cash adjustment
    
    
    (5,225
    )
    
    
    (10,451
    )Unrealized gain on securities
available for sale
    
    
    (7,502
    )
    
    
    Prepaid expenses
    
    
    (36,409
    )
    
    
    (35,669
    )Depreciation
    
    
    (60,062
    )
    
    
    (63,832
    )FHLB stock dividends
    
    
    (22,780
    )
    
    
    (16,728
    )(170,603
    )
    
    
    (128,471
    )Net deferred tax asset
    
    $
    320,252
    
    
    $
    380,149
  23.




---



##### 



NOTE 10  STOCK OPTIONS
   2006
    
    2005Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceOptions outstanding
at beginning of year
    
    
    114,136
    
    
    $
    18.52
    
    
    
    115,199
    
    
    $
    18.47Granted
    
    
    
    
    
    
    
    
    
    
    937
    
    
    
    24.60Exercised
    
    
    (1,000
    )
    
    
    17.60
    
    
    
    (1,375
    )
    
    
    17.46Forfeited
    
    
    
    
    
    
    
    
    
    
    (625
    )
    
    
    20.80Options outstanding
at end of year
    
    
    113,136
    
    
    $
    18.53
    
    
    
    114,136
    
    
    $
    18.52Options available for
grant at year-end
    
    
    9,172
    
    
    
    
    
    
    
    9,172Options exercisable
at year-end
    
    
    112,277
    
    
    
    
    
    
    
    112,577
   24.




---



##### 



NOTE 10  STOCK OPTIONS
  Outstanding
    
    ExercisableWeightedAverage
    
    
    
    
    
    WeightedRemaining
    
    
    
    
    
    AverageContractual
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Number
    
    Life (years)
    
    Number
    
    Price$16.00-$19.99
    
    
    87,366
    
    
    
    2.6
    
    
    
    87,366
    
    
    $
    16.82$20.00-$23.99
    
    
    12,812
    
    
    
    4.5
    
    
    
    12,812
    
    
    
    20.01$24.00-$31.99
    
    
    8,951
    
    
    
    2.6
    
    
    
    8,092
    
    
    
    27.17$32.00
    
    
    4,007
    
    
    
    1.8
    
    
    
    4,007
    
    
    
    32.00Outstanding at year-end
    
    
    113,136
    
    
    
    2.8
    
    
    
    112,277
    
    
    $
    18.48
   2005Risk-free interest rate
    
    
    4.27
    %Expected option life (years)
    
    
    7Expected stock price volatility
    
    
    7.09
    %Dividend yield
    
    
    0.00
    %
   December 31,2006
    
    2005Proceeds of options exercised
    
    $
    17,600
    
    
    $
    24,000Related tax benefit recognized
    
    
    4,556
    
    
    
    3,060Intrinsic value of options exercised
    
    
    13,400
    
    
    
    9,000
  25.




---



##### 



NOTE 10  STOCK OPTIONS
  CompensationCosts2007
    
    $
    1,4582008
    
    
    1,1862009
    
    
    8362010
    
    
    697Total
    
    $
    4,177
 NOTE 11  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
   2006
    
    2005Fixed
    
    Variable
    
    Fixed
    
    VariableRate
    
    Rate
    
    Rate
    
    RateCommitments to extend credit
(net of participations)
    
    $
    106,000
    
    
    $
    7,517,000
    
    
    $
    336,000
    
    
    $
    3,526,000Unused credit card, home
equity and overdraft
lines of credit
    
    
    
    
    
    
    10,348,000
    
    
    
    
    
    
    
    10,790,000Unused commercial lines
of credit
    
    
    
    
    
    
    16,141,000
    
    
    
    248,000
    
    
    
    17,380,000
   26.




---



##### 



NOTE 11  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
   NOTE 12  FAIR VALUES OF FINANCIAL INSTRUMENTS
  2006
    
    2005Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueCash and cash equivalents
    
    $
    20,296,477
    
    
    $
    20,296,000
    
    
    $
    7,343,006
    
    
    $
    7,343,000Securities available for sale
    
    
    10,964,783
    
    
    
    10,965,000
    
    
    
    7,301,377
    
    
    
    7,301,000Loans, net of allowance
    
    
    108,561,027
    
    
    
    108,660,000
    
    
    
    109,647,701
    
    
    
    109,249,000Restricted stock
    
    
    568,800
    
    
    
    569,000
    
    
    
    537,200
    
    
    
    537,000Accrued interest receivable
    
    
    615,801
    
    
    
    616,000
    
    
    
    458,614
    
    
    
    459,000Demand and savings deposits
    
    
    (82,503,072
    )
    
    
    (82,503,000
    )
    
    
    (65,139,137
    )
    
    
    (65,139,000
    )Time deposits
    
    
    (44,756,051
    )
    
    
    (44,756,000
    )
    
    
    (47,148,273
    )
    
    
    (47,011,000
    )Federal Home Loan Bank
advances
    
    
    (3,500,000
    )
    
    
    (3,505,000
    )
    
    
    (3,500,000
    )
    
    
    (3,463,000
    )Accrued interest payable
    
    
    (146,417
    )
    
    
    (146,000
    )
    
    
    (147,973
    )
    
    
    (148,000
    )
   27.




---



##### 



NOTE 12  FAIR VALUES OF FINANCIAL INSTRUMENTS
    NOTE 13  CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS
     28.




---



##### 



NOTE 13  CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS
  Minimum To BeMinimum
    
    Well-CapitalizedRequired For
    
    Under PromptWestern Reserve
    
    Capital Adequacy
    
    Corrective ActionBank
    
    Purposes
    
    Provisions($ thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio2006Total Capital to
risk-weighted assets
    
    $
    13,341
    
    
    
    11.3
    %
    
    $
    9,448
    
    
    
    8.0
    %
    
    $
    11,810
    
    
    
    10.0
    %Tier 1 (Core) Capital to
risk-weighted assets
    
    
    10,663
    
    
    
    9.0
    %
    
    
    4,724
    
    
    
    4.0
    %
    
    
    7,086
    
    
    
    6.0
    %Tier 1 (Core) Capital to
average assets
    
    
    10,663
    
    
    
    7.5
    %
    
    
    5,658
    
    
    
    4.0
    %
    
    
    7,073
    
    
    
    5.0
    %2005Total Capital to
risk-weighted assets
    
    $
    12,325
    
    
    
    11.0
    %
    
    $
    8,959
    
    
    
    8.0
    %
    
    $
    11,199
    
    
    
    10.0
    %Tier 1 (Core) Capital to
risk-weighted assets
    
    
    9,423
    
    
    
    8.4
    %
    
    
    4,479
    
    
    
    4.0
    %
    
    
    6,719
    
    
    
    6.0
    %Tier 1 (Core) Capital to
average assets
    
    
    9,423
    
    
    
    7.4
    %
    
    
    5,115
    
    
    
    4.0
    %
    
    
    6,394
    
    
    
    5.0
    %
 NOTE 14  OTHER NON-INTEREST EXPENSE
  2006
    
    
    2005Insurance
    
    $
    51,850
    
    
    $
    56,397Loan expenses
    
    
    28,410
    
    
    
    25,435Collection/repo/OREO expenses
    
    
    66,914
    
    
    
    50,285Telephone
    
    
    24,927
    
    
    
    26,395Travel and entertainment
    
    
    45,953
    
    
    
    41,493Other
    
    
    77,902
    
    
    
    69,543Total
    
    $
    295,956
    
    
    $
    269,548
  29.




---



##### 



NOTE 15  PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS
  
 2006
    
    
    2005ASSETSCash and cash equivalents
    
    $
    726,353
    
    
    $
    675,712Investment in bank subsidiary
    
    
    10,677,627
    
    
    
    9,396,376Restricted stock
    
    
    25,000
    
    
    
    25,000Subordinated debt due from bank subsidiary
    
    
    1,500,000
    
    
    
    1,500,000Other assets
    
    
    2,413
    
    
    
    15,831Total assets
    
    $
    12,931,393
    
    
    $
    11,612,919LIABILITIES AND SHAREHOLDERS EQUITYOther liabilities
    
    $
    
    
    
    $
    14,580Shareholders equity
    
    
    12,931,393
    
    
    
    11,598,339Total liabilities and shareholders equity
    
    $
    12,931,393
    
    
    $
    11,612,919
 
 2006
    
    
    2005Interest and dividend income
    
    $
    75,221
    
    
    $
    48,359Operating expenses
    
    
    59,395
    
    
    
    59,714Income (loss) before income tax and undistributed
income of bank subsidiary
    
    
    15,826
    
    
    
    (11,355
    )Income tax (expense) benefit
    
    
    (5,381
    )
    
    
    3,861Equity in undistributed income of bank subsidiary
    
    
    1,140,721
    
    
    
    968,212Net Income
    
    $
    1,151,166
    
    
    $
    960,718
  30.




---



##### 



NOTE 15  PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS
 
 2006
    
    
    2005Cash flow from operating activitiesNet income
    
    $
    1,151,166
    
    
    $
    960,718Stock based compensation
    
    
    2,933
    
    
    
    Equity in undistributed
income of bank subsidiary
    
    
    (1,140,721
    )
    
    
    (968,212
    )Change in other assets and liabilities
    
    
    (1,172
    )
    
    
    (283,686
    )Net cash from operating activities
    
    
    12,206
    
    
    
    (291,180
    )Cash flows from investing activitiesInvestment in bank subsidiary
    
    
    
    
    
    
    (400,000
    )Purchase of restricted stock
    
    
    
    
    
    
    (25,000
    )Net cash from investing activities
    
    
    
    
    
    
    (425,000
    )Cash flows from financing activitiesProceeds and income tax benefit from
exercise of stock options
    
    
    22,166
    
    
    
    24,000Proceeds from issuance of common stock
under Employee Stock Purchase Plan
    
    
    21,072
    
    
    
    18,553Cash paid for fractional shares
    
    
    (4,803
    )
    
    
    Net cash from financing activities
    
    
    38,435
    
    
    
    42,553Change in cash and cash equivalents
    
    
    50,641
    
    
    
    (673,627
    )Cash and cash equivalents at beginning of year
    
    
    675,712
    
    
    
    1,349,339Cash and cash equivalents at end of year
    
    $
    726,353
    
    
    $
    675,712
 NOTE 16  OTHER COMPREHENSIVE INCOME
  2006
    
    
    2005Unrealized holding gains (losses)
on available for sale securities
    
    $
    62,575
    
    
    $
    (36,244
    )Tax effect
    
    
    (21,276
    )
    
    
    12,323Net-of-tax amount
    
    $
    41,299
    
    
    $
    (23,921
    )
  31.




---



##### 



NOTE
17  EARNINGS PER SHARE
   2006
    
    
    2005BasicNet income
    
    $
    1,151,166
    
    
    $
    960,718Weighted average common
shares outstanding
    
    
    571,853
    
    
    
    570,795Basic earnings per
common share
    
    $
    2.01
    
    
    $
    1.68DilutedNet income
    
    $
    1,151,166
    
    
    $
    960,718Weighted average common
shares outstanding for basic
earnings per common share
    
    
    571,853
    
    
    
    570,795Add: Dilutive effects of assumed
exercises of stock options
    
    
    25,089
    
    
    
    19,256Average shares and dilutive
potential common shares
    
    
    596,942
    
    
    
    590,051Diluted earnings per
common share
    
    $
    1.93
    
    
    $
    1.63
  32.




---



##### 



($000s except per share data)
    
    2006
    
    
    2005Balance Sheet Data:Total assets
    
    $
    144,115
    
    
    $
    127,784Securities available for sale
    
    
    10,965
    
    
    
    7,301Total loans
    
    
    110,149
    
    
    
    111,189Allowance for loan losses
    
    
    1,588
    
    
    
    1,542Total deposits
    
    
    127,259
    
    
    
    112,287Shareholders equity
    
    
    12,931
    
    
    
    11,598Income Statement Data:Total interest income
    
    $
    9,832
    
    
    $
    7,928Total interest expense
    
    
    4,277
    
    
    
    2,933Net interest income
    
    
    5,555
    
    
    
    4,995Provision (credit) for loan losses
    
    
    (40
    )
    
    
    18Net interest income after provision (credit) for loan losses
    
    
    5,595
    
    
    
    4,977Noninterest income
    
    
    396
    
    
    
    457Noninterest expense
    
    
    4,278
    
    
    
    3,988Income before income tax
    
    
    1,713
    
    
    
    1,446Income tax expense
    
    
    562
    
    
    
    485Net income
    
    $
    1,151
    
    
    $
    961Per Share Data:*Basic income per common share
    
    $
    2.01
    
    
    $
    1.68Diluted income per common share
    
    
    1.93
    
    
    
    1.63Book value per share at year-end
    
    
    22.56
    
    
    
    20.29Cash dividends per share
    
    
    n/a
    
    
    
    n/aAverage shares used in basic income per share calculations
    
    
    571,853
    
    
    
    570,795Average shares used in diluted income per share calculations
    
    
    596,942
    
    
    
    590,051Operating Ratios:Total loans to total deposits
    
    
    86.56
    %
    
    
    99.02
    %Total shareholders equity to total assets
    
    
    8.97
    %
    
    
    9.07
    %Average shareholders equity to average assets
    
    
    9.07
    %
    
    
    9.04
    %Return on average equity
    
    
    9.42
    %
    
    
    8.68
    %Return on average assets
    
    
    0.85
    %
    
    
    0.78
    %Dividend payout ratio
    
    
    n/a
    
    
    
    n/aAllowance for loan losses to total loans
    
    
    1.44
    %
    
    
    1.39
    %Average assets
    
    $
    134,805
    
    
    $
    122,439Average shareholders equity
    
    
    12,223
    
    
    
    11,072
 
 *
    
    Amounts adjusted to reflect a five-for-four stock split in September 2006. 33.




---



##### 



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
 OVERVIEW
      34.




---



##### 



FINANCIAL CONDITION
   SECURITIES
  LOANS
   35.




---



##### 



Accounting for Nonrefundable Fees and Costs Associated with
Originating or Acquiring Loans and Initial Direct Costs of Leases,
 36.




---



##### 



DEPOSITS AND OTHER FUNDING SOURCES
       37.




---



##### 



RESULTS OF OPERATIONS
      NET INTEREST INCOME
  38.




---



##### 



Year ended
    
    
    Year endedDecember 31, 2006
    
    
    December 31, 2005Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average($ thousands)
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Federal funds sold and
other short-term funds
    
    $
    11,549
    
    
    $
    590
    
    
    
    5.11
    %
    
    $
    6,055
    
    
    $
    202
    
    
    
    3.34
    %Securities  taxable
    
    
    4,654
    
    
    
    208
    
    
    
    4.47
    
    
    
    1,318
    
    
    
    52
    
    
    
    3.98Securities  tax exempt
    
    
    1,511
    
    
    
    76
    
    
    
    5.03
    
    
    
    422
    
    
    
    19
    
    
    
    4.45Restricted stock
    
    
    554
    
    
    
    32
    
    
    
    5.78
    
    
    
    505
    
    
    
    27
    
    
    
    5.34Loans
    
    
    112,385
    
    
    
    8,945
    
    
    
    7.97
    
    
    
    110,273
    
    
    
    7,633
    
    
    
    6.92Total interest-earning assets
    
    
    130,653
    
    
    
    9,851
    
    
    
    7.54
    
    
    
    118,573
    
    
    
    7,933
    
    
    
    6.69Noninterest earning assets
    
    
    4,152
    
    
    
    
    
    
    
    
    
    
    
    3,866Total Assets
    
    $
    134,805
    
    
    
    
    
    
    
    
    
    
    $
    122,439Interest-bearing liabilitiesTransaction accounts (NOW)
    
    
    7,012
    
    
    
    70
    
    
    
    1.00
    
    
    
    6,559
    
    
    
    51
    
    
    
    0.78Market rate savings accounts
    
    
    52,890
    
    
    
    2,277
    
    
    
    4.31
    
    
    
    39,882
    
    
    
    1,106
    
    
    
    2.77Time deposits
    
    
    44,604
    
    
    
    1,803
    
    
    
    4.04
    
    
    
    48,675
    
    
    
    1,665
    
    
    
    3.42Federal Home Loan Bank advances
    
    
    3,500
    
    
    
    127
    
    
    
    3.63
    
    
    
    3,168
    
    
    
    112
    
    
    
    3.52Total interest-bearing liabilities
    
    
    108,006
    
    
    
    4,277
    
    
    
    3.96
    
    
    
    98,284
    
    
    
    2,934
    
    
    
    2.98Noninterest bearing liabilities
    
    
    14,576
    
    
    
    
    
    
    
    
    
    
    
    13,083Shareholders equity
    
    
    12,223
    
    
    
    
    
    
    
    
    
    
    
    11,072Total Liabilities and
Shareholders Equity
    
    $
    134,805
    
    
    
    
    
    
    
    
    
    
    $
    122,439Net interest income
    
    
    
    
    
    
    5,574
    
    
    
    
    
    
    
    
    
    
    
    4,999Tax equivalent adjustment
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    (4
    )Net interest income per financial
statements
    
    
    
    
    
    $
    5,555
    
    
    
    
    
    
    
    
    
    
    $
    4,995Net interest margin
(Net yield on average earning assets)
    
    
    
    
    
    
    
    
    
    
    4.27
    %
    
    
    
    
    
    
    
    
    
    
    4.22
    %
  
 39.




---



##### 



Summary of Changes in Net Interest Income
 2006 vs. 2005
    
    
    2005 vs. 2004Increase (Decrease) Due to
    
    
    Increase (Decrease) Due to($ thousands)
    
    Volume
    
    
    Rate
    
    
    Net
    
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Federal funds sold and other
short-term funds
    
    $
    245
    
    
    $
    143
    
    
    $
    388
    
    
    $
    17
    
    
    $
    122
    
    
    $
    139Securities available-for-sale-taxable
    
    
    148
    
    
    
    8
    
    
    
    156
    
    
    
    (10
    )
    
    
    3
    
    
    
    (7
    )Securities available-for-sale-tax-exempt
    
    
    54
    
    
    
    3
    
    
    
    57
    
    
    
    19
    
    
    
    
    
    
    
    19Restricted stock
    
    
    3
    
    
    
    2
    
    
    
    5
    
    
    
    2
    
    
    
    2
    
    
    
    4Loans receivable
    
    
    111
    
    
    
    1,201
    
    
    
    1,312
    
    
    
    434
    
    
    
    1,240
    
    
    
    1,674Total interest-earning assets
    
    
    561
    
    
    
    1,357
    
    
    
    1,918
    
    
    
    462
    
    
    
    1,367
    
    
    
    1,829Interest expense:Transaction accounts (NOW)
    
    
    (4
    )
    
    
    (15
    )
    
    
    (19
    )
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Market rate savings accounts
    
    
    (435
    )
    
    
    (736
    )
    
    
    (1,171
    )
    
    
    (158
    )
    
    
    (613
    )
    
    
    (771
    )Time deposits
    
    
    145
    
    
    
    (283
    )
    
    
    (138
    )
    
    
    76
    
    
    
    (262
    )
    
    
    (186
    )Other borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    19FHLB borrowings
    
    
    (12
    )
    
    
    (3
    )
    
    
    (15
    )
    
    
    33
    
    
    
    8
    
    
    
    41Total interest-bearing
liabilities
    
    
    (306
    )
    
    
    (1,037
    )
    
    
    (1,343
    )
    
    
    (30
    )
    
    
    (879
    )
    
    
    (909
    )Change in net interest income
    
    $
    255
    
    
    $
    320
    
    
    $
    575
    
    
    $
    432
    
    
    $
    488
    
    
    $
    920
    40.




---



##### 



NONINTEREST INCOME
     NONINTEREST EXPENSE
  41.




---



##### 



PROVISION AND ALLOWANCE FOR LOAN LOSSES
   42.




---



##### 



LIQUIDITY
  .
 INTEREST RATE SENSITIVITY/GAP
     43.




---



##### 



CAPITAL RESOURCES
       44.




---



##### 



CRITICAL ACCOUNTING POLICIES
  CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
   Note(Dollars in thousands)
    
    Reference
    
    2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    ThereafterDeposits without maturity
    
    
    6
    
    
    $
    66,388Time deposits
    
    
    6
    
    
    
    25,899
    
    
    $
    9,434
    
    
    $
    2,635
    
    
    $
    5,198
    
    
    $
    1,484
    
    
    $
    106FHLB advances and other
borrowings
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    2,500
    
    
    
    1,000
    
    
    
    
    
    
    
    Operating leases
    
    
    5
    
    
    
    413
    
    
    
    377
    
    
    
    164
    
    
    
    168
    
    
    
    171
    
    
    
    487
  
 45.




---



##### 



IMPACT OF INFLATION AND CHANGING PRICES
  SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002
  FORWARD LOOKING STATEMENTS
  46.




---



##### 



BOARD OF DIRECTORS (1)
 P.M. Jones
    
    Edward J. McKeonChairman
    
    President and Chief Executive OfficerWestern Reserve Bancorp, Inc. and
    
    Western Reserve Bancorp, Inc. andWestern Reserve Bank
    
    Western Reserve BankMedina, Ohio
    
    Medina, OhioRoland H. Bauer
    
    Rory H. ONeilPresident and Chief Executive Officer
    
    PresidentThe Cypress Companies
    
    Quetzal Corp.Akron, Ohio
    
    Westfield Center, OhioBijay K. Jayaswal, M.D.
    
    Michael R. RosePhysician, Cardiology
    
    C.E.O.Medina, Ohio
    
    Washington Properties, Inc.Medina, OhioRay E. Laribee
    
    Glenn M. SmithAttorney
    
    Retired PresidentLaribee & Hertrick
    
    Smith Bros., Inc.Medina, Ohio
    
    Medina, OhioC. Richard Lynham
    
    Thomas A. TubbsPresident and Owner
    
    C.E.O.Harbor Castings, Inc.
    
    Tubbs FinancialNorth Canton, Ohio
    
    Akron, OhioR. Hal NicholsChairman and ManagerAustin Associates, LLCToledo, Ohio
 
 (1)
    
    All are Directors of Western Reserve Bancorp, Inc. and Western Reserve Bank BRECKSVILLE ADVISORY BOARD
 Victoria J. Burns
    
    Brendan RoseReal Estate Broker, Realty One Real Living
    
    C.F.O., Industrial First Inc.Joe Carollo
    
    ReJean Schulte, Ph.D.President, Jani-King of Cleveland
    
    Professor, Cuyahoga Community CollegeLouis N. Carouse, Jr.
    
    Greg SkaljacMember, Brecksville City Council
    
    Vice President, Luce, Smith & Scott Inc.Member, Brecksville City CouncilSteve Karas, Retired
    
    Michael R. TorchiaArea President, Republic Waste Services
    
    President & Owner, The Realty Store, LLC




---



##### 



EXECUTIVE OFFICERSWESTERN RESERVE BANCORP, INC.
 
 EXECUTIVE OFFICERSWESTERN RESERVE BANK
 
 TRANSFER AGENT, REGISTRAR & DIVIDEND AGENT
 
 STOCK INFORMATION
  ANNUAL REPORT ON FORM 10-KSB
 www.sec.gov www.westernreservebank.com
 ANNUAL MEETING