<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

[x] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
    For the fiscal year ended December 31, 1999
                              -----------------

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
    Act of 1934
    For the transition period from                to
                                  ----------------  -------------------------

Commission file number   333-43361
                       -------------

                          WESTERN RESERVE BANCORP, INC.
                          -----------------------------
                 (Name of Small Business Issuer in Its Charter)

             Ohio                                        31-1566623
-----------------------------------------   -----------------------------------
(State or Other Jurisdiction                (I.R.S. Employer Identification No.)
of Incorporation or Organization)


4015 Medina Road, Suite 100, Medina, Ohio                     44256
-----------------------------------------   -----------------------------------
(Address of Principal Executive Offices)                     (Zip Code)

                                 (330) 764-3131
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                                      None.

         Securities registered under Section 12(g) of the Exchange Act:

                 Common Stock, no par value, $1.00 stated value
--------------------------------------------------------------------------------
                                (Title of Class)

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the Issuer was required to file such reports), and
(2) has been subject to such filing requirements for past 90 days.

                            Yes [ x ] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
regulation S-B contained in this form, and no disclosure will be contained, to
the best of Issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ x ]

The Issuer's gross revenues for its most recent fiscal year were $1,565,648.

The aggregate market value of the voting stock held by non-affiliates of the
Issuer as of March 24, 2000 was approximately $5,633,607 (which excludes 52,000
shares held by directors and executive officers). As of said date, the Issuer
had 320,267 shares of Common Stock issued and outstanding.

                      Documents incorporated by reference:

Parts I and II:   Portions of Registrant's 1999 Annual Report to Shareholders

Part III:         Portions of Registrant's 1999 Proxy Statement for the Annual
                  Meeting of Shareholders to be held April 26, 2000

                  Transitional Small Business Disclosure Format (check one):
                  Yes [ ] No [ x ]

                                  Page 1 of 24

<PAGE>   2


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

The Company, an Ohio corporation incorporated on February 25, 1997, is a bank
holding company that owns all of the capital stock of the Western Reserve Bank,
an Ohio state-chartered bank located in Medina, Ohio (the "Bank"). From the date
of the Company's inception through October 1998, the Company and the Bank
conducted no business other than matters incidental to their organization and
opening for business. On February 24, 1998, the Company commenced an initial
public offering (the "Offering") of up to 500,000 shares of its Common Stock
pursuant to a Registration Statement on Form SB-2 filed with the Securities and
Exchange Commission ("SEC") on February 12, 1998, as amended. The Offering was
concluded on July 1, 1998. A total of 320,267 shares of the Company's common
stock were sold, with proceeds, net of offering costs, of $6,368,499.
Approximately $5,800,000 of the proceeds was used to provide initial
capitalization for the Bank. The Bank commenced business on November 6, 1998.
The Company and the Bank currently maintain their offices at 4015 Medina Road,
Suite 100, Medina, Ohio 44256. The Company's telephone number is (330) 764-3131.

BUSINESS STRATEGY

In the past few years, many of the financial institutions in the Medina County
market area have been acquired by large regional organizations headquartered
outside of the area. As a result, the organizers believed that the competitive
and economic environment was right for a new, independent, locally owned and
managed bank to serve the financial needs of the residents and businesses in the
Medina area. The Company is a bank holding company within the meaning of the
Bank Holding Company Act of 1956, as amended. Currently, the only business the
Company is engaged in is the ownership of its wholly owned bank subsidiary,
Western Reserve Bank. However, in the future, the holding company structure
could provide flexibility for the expansion of the Company's business through
additional banking-related services which commercial banks are currently unable
to provide under current law.

The Bank offers a broad range of deposit services for consumers and businesses,
including noninterest-bearing and interest-bearing checking accounts, savings
and money market accounts, time certificates of deposit and individual
retirement accounts. The Bank engages in a full line of lending activities,
including all types of commercial loans to businesses, consumer loans to
individuals for household, family and other personal expenditures, and real
estate loans including first mortgage loans, home equity loans and construction
loans. The Bank makes both fixed rate and variable rate residential mortgage
loans. Generally, the Bank keeps the variable rate and short-term fixed rate
mortgages in its portfolio, but sell substantially all of the long-term
fixed-rate loans (with servicing released) to a bank that specializes in serving
the community bank mortgage market. The Bank also offers other services,
including credit, debit and ATM cards with access to regional and national
automated teller networks, a courier service for business deposits, cash
management services, safe deposit boxes, cashiers checks, traveler's checks and
an ATM.

Under applicable law, the Bank is permitted to make loans to individual
borrowers in aggregate amounts of up to 15 percent of the sum of the Bank's
total capital and allowance for loan losses. At December 31, 1999, the Bank's
legal lending limit was approximately $767,000. The Board of Directors has
established an "in-house" limit of $750,000. The Board may from time to time
raise or lower the "in-house" limit as it deems appropriate to comply with safe
and sound banking practices and respond to overall economic conditions. The
Company believes that the Bank's legal lending limit is adequate to satisfy the
credit needs of most of its clients. For credit needs that exceed the Bank's
legal lending limit, the Bank has the ability to participate with other banks to
meet the credit need. In such instances, the Bank intends to be the lead bank in
the loan arrangement.

                                  Page 2 of 24

<PAGE>   3


The Bank's market area is competitive. There are many commercial banks, savings
institutions and credit unions with multiple offices in the Bank's primary
service area of Medina County. Also, during 1999, several banks and savings
institutions headquartered outside of Medina County acquired or opened new
branches in the Medina area. However, in the past few years, many of the area's
financial institutions have been acquired by large regional organizations
headquartered outside of the Medina area. As a result of such consolidation, the
organizers of the Company believed that the competitive and economic environment
was right for a new, independent, locally owned and managed bank such as Western
Reserve Bank to serve the financial needs of Medina area residents and
businesses. The rapid growth of the Bank in the 14 months since it opened has
confirmed that belief. The Bank also faces competition from finance companies,
insurance companies, mortgage companies, securities brokerage firms, money
market funds, loan production offices and other providers of financial services.

EMPLOYEES

At December 31, 1999, the Bank has 12 full-time and 4 part-time employees. None
of its employees are covered by a collective bargaining agreement. The Company
considers its employee relations to be excellent.

SUPERVISION AND REGULATION

GENERAL

Financial institutions and their holding companies are extensively regulated
under federal and state law. As a result, the growth and earnings performance of
the Company can be affected not only by management decisions and general
economic conditions, but also by the requirements of applicable state and
federal statutes and regulations and the policies of various governmental
regulatory authorities including, but not limited to, the Board of Governors of
the Federal Reserve System (the "FRB"), the Federal Deposit Insurance
Corporation (the "FDIC"), the Ohio Division of Financial Institutions (the
"Division"), the Internal Revenue Service, the state taxing authorities and the
Securities and Exchange Commission (the "SEC"). The effect of such statutes,
regulations and policies can be significant, and cannot be predicted with a high
degree of certainty.

Federal and state laws and regulations generally applicable to financial
institutions such as the Company and the Bank regulate, among other things, the
scope of business, investments, reserves against deposits, capital levels
relative to operations, the nature and amount of collateral for loans, the
establishment of branches, mergers, consolidations and dividends. The system of
supervision and regulation applicable to the Company and the Bank establishes a
comprehensive framework for their respective operations and is intended
primarily for the protection of the FDIC's deposit insurance funds and the
depositors, rather than the shareholders, of financial institutions.

The following references to material statutes and regulations affecting the
Company and the Bank are brief summaries thereof and do not purport to be
complete. As such, they are qualified in their entirety by reference to such
statutes and regulations. Any change in applicable law or regulations may have a
material effect on the business of the Company and the Bank.

THE COMPANY

GENERAL. The Company, as the sole stockholder of the Bank, is a bank holding
company. As a bank holding company, the Company is registered with, and is
subject to regulation by, the FRB under the Bank Holding Company Act of 1956
(the "BHCA") as amended. In accordance with FRB policy, the Company is expected
to act as a source of financial strength to the Bank and to commit resources to




                                  Page 3 of 24
<PAGE>   4



support the Bank. Under the BHCA, the Company is subject to periodic examination
by the FRB and is required to file with the FRB periodic reports of its
operations and such additional information as the FRB may require. The Company
is also subject to regulation by the Division under Ohio law.

INVESTMENTS AND ACTIVITIES. Under the BHCA, a bank holding company must obtain
FRB approval before acquiring substantially all the assets of any bank or bank
holding company or ownership or control of any voting shares of any bank or bank
holding company if, after such acquisition, it would own or control, directly or
indirectly, more than five percent (5%) of the voting shares of such bank or
bank holding company.

The BHCA also prohibits the Company, with certain limited exceptions, from
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any company which is not a bank or bank holding company, and from
engaging in any business other than that of banking, managing and controlling
banks or furnishing services to banks and their subsidiaries. The principal
exception to this prohibition allows bank holding companies to engage in, and to
own shares of companies engaged in, certain businesses found by the FRB to be
"so closely related to banking ... as to be a proper incident thereto." Under
current regulations of the FRB, the Company is permitted to engage in, among
other activities, such banking-related activities as making or servicing loans
or certain types of leases; engaging in certain insurance and discount brokerage
activities; performing certain data processing services; acting in certain
circumstances as a fiduciary or investment or financial advisor; and making
investments in certain corporations or projects designed primarily to promote
community welfare. The Company has no present plans to engage in such
activities.

Bank holding companies are restricted in, and subject to, limitations regarding
transactions with subsidiaries and other affiliates. In addition, bank holding
companies and their subsidiaries are prohibited from engaging in certain
"tie-in" arrangements in connection with any extensions of credit, leases, sales
of property or furnishing of services.

On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley
Act (better known as the Financial Services Modernization Act of 1999) which,
effective March 11, 2000, permits bank holding companies to become financial
holding companies and thereby affiliate with securities firms and insurance
companies and engage in other activities that are financial in nature. A bank
holding company may become a financial holding company if each of its subsidiary
banks is well capitalized under the Federal Deposit Insurance Corporation Act of
1999 prompt corrective action provisions, is well managed, and has at least a
satisfactory rating under the Community Reinvestment Act, by filing a
declaration that the bank holding company wishes to become a financial holding
company. No regulatory approval will be required for a financial holding company
to acquire a company, other than a bank or savings association, engaged in
activities that are financial in nature or incidental to activities that are
financial in nature, as determined by the Federal Reserve Board. The Financial
Services Modernization Act defines "financial in nature" to include securities
underwriting, dealing and market making; sponsoring mutual funds and investment
companies; insurance underwriting and agency; merchant banking activities; and
activities that the Federal Reserve Board has determined to be closely related
to banking. The specific effects of the enactment of the Financial Services
Modernization Act on the banking industry in general and on Western Reserve
Bancorp, Inc. and Western Reserve Bank in particular have yet to be determined
due to the fact that the Financial Services Modernization Act was only recently
adopted.

Subject to certain restrictions, the Company will be able to borrow money to
make a capital contribution to the Bank and for other proper corporate purposes,
and such loans can be repaid from dividends paid by the Bank to the company.
There are no plans at the present time for the Company to borrow money under
such circumstances. The Company may also raise capital for the Bank and for
other purposes by selling securities, as it did in its Offering.



                                  Page 4 of 24
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CAPITAL REQUIREMENTS. Bank holding companies are required to maintain minimum
levels of capital in accordance with FRB capital adequacy guidelines. If capital
falls below minimum guideline levels, a bank holding company, among other
things, may be denied approval to acquire or establish additional banks or
non-bank businesses.

The FRB's capital guidelines establish the following minimum regulatory capital
requirements for bank holding companies: a risk-based requirement expressed as a
percentage of total risk-weighted assets, and a leverage requirement expressed
as a percentage of total assets. The risk-based requirement consists of a
minimum ratio of total capital to total risk-weighted assets of 8%, at least
one-half of which must be Tier 1 capital. The leverage requirement consists of a
minimum ratio of Tier 1 capital to total assets of 3% for the most highly rated
companies, with minimum requirements of 4% to 5% for all others. For purposes of
these capital standards, Tier 1 capital consists primarily of permanent
stockholders' equity less intangible assets (other than certain mortgage
servicing rights and purchased credit card relationships) and total capital
means Tier 1 capital plus certain other debt and equity instruments which do not
qualify as Tier 1 capital and a portion of the Bank's allowance for loan and
lease losses.

The risk-based and leverage standards described above are minimum requirements,
and higher capital levels will be required if warranted by the particular
circumstances or risk profiles of individual banking organizations. For example,
the FRB's capital guidelines contemplate that additional capital may be required
to take adequate account of, among other things, interest rate risk, or the
risks posed by concentrations of credit, nontraditional activities or securities
trading activities. Further, any banking organization experiencing or
anticipating significant growth would be expected to maintain capital ratios,
including tangible capital positions (i.e., Tier 1 capital less all intangible
assets), well above the minimum levels.

Under the FRB's guidelines, the capital standards described above apply on a
consolidated basis to bank holding companies that have more than $150 million in
total consolidated assets, but generally apply on a bank-only basis to bank
holding companies, like the Company, that have less than $150 million in total
consolidated assets.

DIVIDENDS. The ability of the Company to obtain funds for the payment of
dividends and for other cash requirements will be largely dependent on the
amount of dividends which may be declared by its subsidiary, the Bank.
Generally, an Ohio state-chartered bank may not declare a dividend without the
approval of the Division, if the total of dividends declared by such bank in a
calendar year exceeds the total of its net profits for that year, combined with
its retained profits of the preceding two years. In addition, state-chartered
banks are subject to dividend regulation by the primary federal bank regulatory
agency in connection with general supervisory authority as it relates to a
bank's requirement to maintain adequate capital (See "Capital" above.)

THE BANK

GENERAL. The Bank is an Ohio-chartered bank and member of the Federal Reserve
System. The Bank is therefore regulated by the Division as well as the Board of
Governors of the Federal Reserve System. The regulatory agencies have the
authority to regularly examine the Bank and the Bank will be subject to the
regulations promulgated by its supervisory agencies. In addition, the deposits
of the Bank are insured by the FDIC to the fullest extent permitted by law and,
therefore, the Bank is subject to FDIC regulations.



                                  Page 5 of 24
<PAGE>   6


DEPOSIT INSURANCE. As an FDIC-insured institution, the Bank is required to pay
deposit insurance premium assessments to the FDIC. The FDIC has adopted a
risk-based assessment system under which all insured depository institutions are
placed into one of nine categories and assessed insurance premiums based upon
their respective levels of capital and results of supervisory evaluations.
Institutions classified as well-capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial
supervisory concern pay the highest premium. Risk classification of all insured
institutions is made by the FDIC for each semi-annual assessment period.

For the year ended December 31, 1999, Bank Insurance Fund ("BIF") assessments
ranged from 0% of deposits to 0.27% of deposits. For the semi-annual assessment
period beginning January 1, 2000, BIF assessment rates will continue to range
from 0% of deposits to 0.27% of deposits. Because the bank is "well capitalized"
for purposes of its deposit insurance premiums, it expects its FDIC BIF premium
to be the statutory minimum.

The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution has
engaged or is engaging in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, order, or any condition imposed in writing by, or written agreement
with, the FDIC. The FDIC may also suspend deposit insurance temporarily during
the hearing process for a permanent termination of insurance if the institution
has no tangible capital. Management of the Company is not aware of any activity
or condition that could result in termination of the deposit insurance of the
Bank.

FICO ASSESSMENTS. Since 1987, a portion of the deposit insurance assessments
paid by SAIF members has been used to cover interest payments due on the
outstanding obligations of the FICO, the entity created to finance the
recapitalization of the Federal Savings and Loan Insurance Corporation, the
SAIF's predecessor insurance fund. Pursuant to federal legislation enacted
September 30, 1996, commencing January 1, 1997, both SAIF members and BIF
members became subject to assessments to cover the interest payments on
outstanding FICO obligations. Such FICO assessments are in addition to amounts
assessed by the FDIC for deposit insurance. During the year ended December 31,
1999 the FICO assessment rate for SAIF members was approximately 0.05925% of
deposits while the FICO assessment rate for BIF members was approximately
0.01174% of deposits. During the year ended December 31, 1999 the Bank paid
approximately $1,350 in FICO assessments. Beginning with assessments paid for
the period starting January 1, 2000, insured institutions will be assessed at
the same FICO rate for both BIF- and SAIF-insured deposits. As a result, BIF
FICO assessments will be higher than in previous periods while SAIF FICO
assessments will be lower. For the first quarter of 2000, the annualized FICO
assessment rate will be 0.0212%. Management expects the amounts paid for FICO
assessments to increase as the Bank's deposits continue to increase.

CAPITAL REQUIREMENTS. The Federal Reserve, Division and FDIC require banks and
holding companies to maintain minimum capital ratios. The "risk-adjusted"
capital guidelines for the Bank and the Company involve a mathematical process
of assigning various risk weights to different classes of assets, then
evaluating the sum of the risk-weighted balance sheet structure against the
Bank's and Company's capital base. The rules set the minimum guidelines for the
ratio of capital to risk-weighted assets (including certain off-balance sheet
activities, such as standby letters of credit) at 8%. Tier 1 Capital is
comprised of common equity, retained earnings, and a limited amount of perpetual
preferred stock less certain intangible items. At least half of the total
capital is to be Tier 1 Capital. The remainder may consist of a limited amount
of subordinated debt, other preferred stock, and a portion of the loan loss
reserves (not to exceed 1.25% of risk-weighted assets). The Bank anticipates
maintaining capital at a level sufficient to be classified as "well capitalized"
pursuant to the Federal Reserve guidelines.



                                  Page 6 of 24
<PAGE>   7


In addition, the federal banking regulatory agencies have adopted leverage
capital guidelines for banks and bank holding companies. Under these guidelines,
banks and bank holding companies must maintain a minimum ratio of three percent
(3%) Tier 1 Capital to total assets. However, most banking organizations are
expected to maintain capital ratios well in excess of the minimum level and
generally must keep their Tier 1 ratio at or above 5%. The Bank intends to
maintain capital well above the regulatory minimum.

The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions. For example, the regulations of the
FDIC provide that additional capital may be required to take adequate account
of, among other things, interest rate risk or the risks posed by concentrations
of credit, nontraditional activities or securities trading activities.

As of December 31, 1999, the Bank exceeded its minimum regulatory capital
requirements with a total risk-based capital ratio of 18.7%, a Tier 1 risk-based
capital ratio of 17.6% and a leverage ratio of 16.0%. These ratios are expected
to continue to decrease to more normal levels as the Bank increases its assets
through normal banking operations in 2000 and beyond.

Pursuant to the Federal Reserve Bank's approval of Western Reserve Bank's
application for membership in the Federal Reserve System, the Bank is required
to maintain its Tier 1 tangible capital ratios at a minimum of 9.0% for its
first three years of operation. Management anticipates that, due to the Bank's
rapid growth which is exceeding projections, additional capital will be required
in late-2000. It is expected that the Company will initiate a second equity
offering of the Company's stock this year.

Federal law provides the federal banking regulators with broad power to take
prompt corrective action to resolve the problems of undercapitalized
institutions. The extent of the regulators' powers depends on whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Depending upon the capital category to which an institution
is assigned, the regulators' corrective powers include: requiring the submission
of a capital restoration plan; placing limits on asset growth and restrictions
on activities; requiring the institution to issue additional capital stock
(including additional voting stock) or to be acquired; restricting transactions
with affiliates; restricting the interest rate the institution may pay on
deposits; ordering a new election of directors of the institution; requiring
that senior executive officers or directors be dismissed; prohibiting the
institution from accepting deposits from correspondent banks; requiring the
institution to divest certain subsidiaries; prohibiting the payment of principal
or interest on subordinated debt; and ultimately, appointing a receiver for the
institution. Management of the Company is not aware of any activity or condition
that could result in the aforementioned sanctions.

DIVIDENDS. Ohio law prohibits the Bank from paying dividends in an amount
greater than the total of its net profits for that year, combined with its
retained profits of the preceding two years without the prior approval of the
Division. The payment of dividends by any financial institution or its holding
company is also affected by the requirement to maintain adequate capital
pursuant to applicable capital adequacy guidelines and regulations, and a
financial institution generally is prohibited from paying any dividends if,
following payment thereof, the institution would be undercapitalized. As
described above, the Bank exceeded its minimum capital requirements under
applicable guidelines as of December 31, 1999. However, since the Bank has not,
to date, recorded a profit, as of December 31, 1999, $-0- was available to be
paid as dividends to the Company by the Bank. Additionally, as a condition of
its approval to commence operations, the Bank is prohibited from paying
dividends to the Corporation for a period of three (3) years without prior
written non-objection from the Board of Governors of the Federal Reserve.



                                  Page 7 of 24
<PAGE>   8


ADDITIONAL REGULATION. The Bank is also subject to federal regulation as to such
matters as required reserves, limitations as to the nature and amount of its
loans and investments, regulatory approval of any merger or consolidation,
issuance or retirement by the Bank of its own securities, limitations upon the
payment of dividends and other aspects of banking operations. In addition, the
activities and operations of the Bank are subject to a number of additional
detailed, complex and sometimes overlapping laws and regulations. These include
state usury and consumer credit laws, state laws relating to fiduciaries, the
Federal Truth-in-Lending Act and Regulation Z, the Federal Equal Credit
Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Truth in
Savings Act, the Community Reinvestment Act, antiredlining legislation and
antitrust laws.

INSIDER TRANSACTIONS. The Bank is subject to certain restrictions imposed by the
Federal Reserve Act on extensions of credit by the Company and its subsidiary,
on investments in the stock or other securities of the Company and its
subsidiary and the acceptance of the stock or other securities of the Company or
its subsidiary as collateral for loans. Certain limitations and reporting
requirements are also placed on extensions of credit by the Bank to its
directors and officers, to directors and officers of the Company and its
subsidiary, to principal stockholders of the Company, and to "related interests"
of such directors, officers and principal stockholders. In addition, federal law
and regulations may affect the terms upon which any director or officer of the
Company or its subsidiary or a principal stockholder of the Company may obtain
credit from banks with which the Bank maintains a correspondent relationship.

SAFETY AND SOUNDNESS STANDARDS. The federal banking agencies have adopted
guidelines that establish operational and managerial standards to promote the
safety and soundness of federally insured depository institutions. The
guidelines set forth standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits, asset quality and
earnings. In general, the guidelines prescribe the goals to be achieved in each
area, and each institution is responsible for establishing its own procedures to
achieve those goals. If an institution fails to comply with any of the standards
set forth in the guidelines, the institution's primary federal regulator may
require the institution to submit a plan for achieving and maintaining
compliance. The preamble to the guidelines states that the agencies expect to
require a compliance plan from an institution whose failure to meet one or more
of the guidelines is of such severity that it could threaten the safety and
soundness of the institution. Failure to submit an acceptable plan, or failure
to comply with a plan that has been accepted by the appropriate federal
regulator, would constitute grounds for further enforcement action. The Company
and the Bank are currently not under any such actions or plans.

BRANCHING AUTHORITY. Ohio banks, such as the Bank, have the authority under Ohio
law to establish branches anywhere in the State of Ohio, subject to receipt of
all required regulatory approvals.

In May 1997 Ohio adopted the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") which allows banks to establish
interstate branch networks through acquisitions of other banks, subject to
certain conditions, including certain limitations on the aggregate amount of
deposits that may be held by the surviving bank and all of its insured
depository institution affiliates. The establishment of de novo interstate
branches or the acquisition of individual branches of a bank in another state
(rather than the acquisition of an out-of-state bank in its entirety) is allowed
by the Riegle-Neal Act and authorized by Ohio law.

In February 2000, management filed an application with the State of Ohio to
establish a branch within The Oaks at Medina, a retirement and lifetime care
community located at 4931 Nettleton Road, Medina. Management currently has no
other plans to establish branch offices.



                                  Page 8 of 24
<PAGE>   9


FEDERAL RESERVE SYSTEM. FRB regulations, as presently in effect, require
depository institutions to maintain noninterest earning reserves against their
transaction accounts (primarily regular and interest-bearing checking accounts),
as follows: for transaction accounts aggregating $47.8 million or less, the
reserve requirement is 3% of total transaction accounts; and for transaction
accounts aggregating in excess of $47.8 million, the reserve requirement is
$1.434 million plus 10% of the aggregate amount of total transaction accounts in
excess of $47.8 million. The first $4.7 million of otherwise reservable balances
are exempted from the reserve requirements. These reserve requirements are
subject to annual adjustment by the FRB. In 1998 and 1999, the Bank was not yet
subject to the foregoing requirements. However, management expects the Bank's
deposits to be at such a level that the Bank will become subject to maintaining
required reserves with the FRB.

PENDING LEGISLATION. Congress regularly considers legislation that may have an
impact upon the operation of the Company and the Bank. At this time, the Company
is unable to predict whether any proposed legislation will be enacted and,
therefore, is unable to predict the impact such legislation may have on the
operations of the Company and the Bank.



                                  Page 9 of 24
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ITEM 1.  BUSINESS-STATISTICAL DISCLOSURE

I.    DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY; INTEREST
      RATES AND INTEREST DIFFERENTIAL

      A. The following are the average balance sheets for the years ending
      December 31:
<TABLE>
<CAPTION>

                                                          -------------------------1999------------------------
                                                                                   ----
                                                          Average                                       Average
                                                          Balance                Interest                Rate
                                                          -------                --------               -------
<S>                                                  <C>                        <C>                       <C>
ASSETS
Interest-earning assets
     Federal funds sold                              $   7,608,273              $  372,138                4.89%
     Interest-bearing deposits in other
       financial institutions                            1,524,766                  71,531                4.69
     Securities available for sale                       3,608,398                 209,104                5.79
     Federal Reserve Bank stock                            174,050                  10,443                6.00
     Loans receivable (1)                                9,720,768                 802,327                8.25
                                                     -------------              ----------
        Total interest-earning assets                   22,636,255               1,465,543                6.47
Noninterest-earning assets
     Cash and due from banks                             1,052,311
     Unrealized gain (loss) on available-
       for-sale securities                                 (38,797)
     Allowance for loan losses                            (118,594)
     Premises and equipment, net                           797,518
     Accrued interest receivable and
       other assets                                        144,117
                                                     -------------
                                                       $24,472,810
                                                     =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
     Interest-bearing transaction accounts           $   1,628,717                  25,928                1.59%
     Savings and money market accounts                  12,737,525                 567,530                4.46
     Certificates of deposit and IRAs                    1,693,075                  76,149                4.50
     Federal funds purchased                                 1,052                      48                4.56
                                                     -------------              ----------
        Total interest-bearing liabilities              16,060,369                 669,655                4.17%
                                                                                ----------
Noninterest-bearing liabilities
     Demand deposits                                     3,018,604
     Accrued interest payable and
       other liabilities                                   137,661
                                                     -------------
                                                         3,156,265
Shareholders' equity                                     5,256,176
                                                     -------------
                                                       $24,472,810
                                                     =============
Net interest income/spread                                                      $  795,888                2.30%
                                                                                ==========           =========
Net interest income as a percent
  of average interest earning assets                                                                      3.52%
                                                                                                     =========
Average interest earning assets to
  interest bearing liabilities                               40.94%
                                                             -----
</TABLE>

(1) Loan fees of $38,168 were excluded from the computation.



                                 Page 10 of 24
<PAGE>   11


I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY; INTEREST RATES
   AND INTEREST DIFFERENTIAL (Continued)

<TABLE>
<CAPTION>

                                                       ---------------------------1998--------------------------
                                                                                  ----
                                                         Average                                       Average
                                                         Balance                Interest                Rate
                                                         -------                --------                ----
<S>                                                  <C>                        <C>                       <C>
ASSETS
Interest-earning assets
     Federal funds sold                              $      76,096              $    3,709                4.87%
     Interest-bearing deposits in other
       financial institutions                            3,601,472                 187,234                5.20
     Federal Reserve Bank stock                             25,273                   1,566                6.20
     Loans receivable (1)                                   54,100                   4,360                8.06
                                                     -------------              ----------
        Total interest-earning assets                    3,756,941                 196,869                5.24
Noninterest-earning assets
     Cash and due from banks                                81,219
     Allowance for loan losses                                (213)
     Premises and equipment, net                            77,369
     Accrued interest receivable and
       other assets                                        134,841
                                                     -------------
                                                     $   4,050,157
                                                     =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
     Savings, NOW and money markets                  $     386,257              $   16,509                4.27%
     Certificates of deposits                               37,573                   1,706                4.54
                                                     -------------              ----------
        Total interest-bearing liabilities                 423,830                  18,215                4.30%
                                                                                ----------
Noninterest-bearing liabilities
     Demand deposits                                        73,375
     Accrued interest payable and
       other liabilities                                   559,355
                                                     -------------
                                                         1,056,560
Shareholders' equity                                     2,993,597
                                                     -------------
                                                     $   4,050,157
                                                     =============
Net interest income/spread                                                      $  178,654                0.94%
                                                                                ==========           =========
Net interest income as a percent
  of average interest earning assets                                                                      4.76%
                                                                                                     =========
Average interest earning assets to
  interest bearing liabilities                               786.43%
                                                             ======
</TABLE>

(1) Loan fees of $2,025 were excluded from the computation.




                                 Page 11 of 24
<PAGE>   12


I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY; INTEREST
   RATES AND INTEREST DIFFERENTIAL (Continued)

       B.  The following tables set forth the effect of volume and rate changes
           on interest income and expense for the periods indicated. For
           purposes of these tables, changes in interest due to volume and rate
           were determined as follows:

           Volume Variance - change in volume multiplied by the previous year's
           rate.

           Rate Variance - change in rate multiplied by the previous year's
           volume.

           Rate/Volume Variance - change in volume multiplied by the change in
           rate. This variance was allocated to volume variance and rate
           variance in proportion to the relationship of the absolute dollar
           amount of the change in each.

<TABLE>
<CAPTION>
                                 Summary of Changes in Net Interest Income

                                                   1999 vs. 1998                           1998 vs. 1997
                                            Increase (Decrease) Due to              Increase (Decrease) Due to
                                        ------------------------------------    --------------------------------
                                         Volume       Rate          Net         Volume      Rate          Net
                                         ------       ----          ---         ------      ----          ---
<S>                                   <C>         <C>            <C>         <C>         <C>
Interest income:
     Loans receivable                 $ 797,873   $       94    $  797,967   $   4,360   $        --   $   4,360
     Federal funds sold                 368,416           13       368,429       3,709            --       3,709
     Interest-bearing deposits in
        financial institutions          (98,950)     (16,753)     (115,703)    185,581           540     186,120
     Securities available-for-sale      209,104           --       209,104          --            --          --
     Federal Reserve Bank stock           8,929          (52)        8,877       1,566            --       1,566
                                    ------------- ------------ ------------ ------------ --------------------------
     Total interest-earning assets    1,285,372      (16,698)    1,268,674     195,215           540     195,755

Interest expense:
     Interest-bearing transaction
        accounts                         25,459           (4)       25,455         471            --         471
     Savings and money market           551,631         (137)      551,494      16,038            --      16,038
     Certificates of deposit
       and IRAs                          74,435            8        74,443       1,706            --       1,706
     Federal funds purchased                 48           --            48          --            --          --
                                      ---------   -----------    ---------   ---------   -----------   ---------
     Total interest-bearing
       liabilities                      651,573         (133)      651,440      18,215            --      18,215
                                      ---------   -----------    ---------   ---------   -----------   ---------
Change in net interest income         $ 633,799   $  (16,565)   $  617,234   $ 177,000    $      540   $ 177,540
                                      =========   ===========   ==========   =========    ==========   =========
</TABLE>






                                 Page 12 of 24
<PAGE>   13


II.    INVESTMENT PORTFOLIO

       The amortized cost and estimated fair values of securities available for
       sale at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
                                                       Gross          Gross                       Weighted
                                      Amortized     Unrealized     Unrealized        Fair          Average
                                         Cost          Gains         Losses          Value          Yield
                                         ----          -----         ------          -----          -----
<S>                                <C>           <C>            <C>            <C>                <C>
       U.S. Agency Securities        $ 5,998,054   $      --      $  (105,714)   $ 5,892,340        5.79%
                                     ===========   ==========     ===========    ===========
</TABLE>

       At December 31, 1999, all securities available for sale were scheduled to
       mature within one to three years. Actual maturities may differ from
       contractual maturities because issuers may have the right to call or
       prepay obligations.

       Neither the Company nor the Bank had any investment securities at
       December 31, 1998.

III.   LOAN PORTFOLIO

       A. Types of Loans - Total loans on the balance sheet are comprised of
          the following classifications at December 31, 1999 and 1998.
<TABLE>
<CAPTION>
                                                                                    1999                  1998
                                                                                    ----                  ----
<S>                                                                            <C>                 <C>
           Commercial                                                           $  18,459,745       $    481,609
           Home equity lines of credit                                              2,091,354            122,311
           Residential mortgage and construction                                    1,563,911                 --
           Consumer installment                                                     1,184,246            260,852
           Credit card and other                                                       71,963                325
                                                                                -------------       ------------
                                                                                $  23,371,219       $    865,097
                                                                                =============       ============
</TABLE>

           CONCENTRATIONS OF CREDIT RISK: The Company grants commercial,
           residential real estate mortgage and installment loans to businesses
           and individuals mainly in Medina and contiguous counties in Ohio.
           Commercial loans include loans collateralized by business assets. At
           December 31, 1999, commercial loans secured by real estate make up
           approximately 36.0% of the loan portfolio. Other commercial loans to
           businesses comprise 43.0% of total loans, and are expected to be
           repaid from cash flows from operations of the businesses. Variable
           rate home equity lines of credit make up approximately 8.9% of the
           loan portfolio and are collateralized by residential real estate.
           Residential mortgage and construction loans are 6.7% of the loan
           portfolio and are secured primarily by first mortgages on residential
           property. Installment and credit card loans to individuals make up
           approximately 5.4% of the loan portfolio and are primarily
           collateralized by consumer assets.

       B.  Maturities and Sensitivities of Loans to Changes in Interest Rates -
           The following table shows the maturity distribution and sensitivity
           to changes in interest rates of loans outstanding as of December 31,
           1999. Fixed rate loans are presented based on their maturity date,
           and variable rate loans with floating or adjustable interest rates
           are included based on their earliest repricing opportunity.



                                 Page 13 of 24
<PAGE>   14


III.     LOAN PORTFOLIO (CONTINUED)


              Loan Maturities and Sensitivity to Changes in Interest Rates
<TABLE>
<CAPTION>
                                                Within            1-5              After
                                                1 year           years            5 years           Total
                                                ------           -----            -------           -----
<S>                                          <C>              <C>              <C>               <C>
          Commercial                         $  8,433,771     $  9,588,219     $     437,755     $ 18,459,745
          Residential mortgage
             and construction                     814,600          653,751            95,560        1,563,911
          Home equity lines
             of credit                          2,091,354               --                --        2,091,354
          Consumer installment                    781,170          259,457           143,619        1,184,246
          Credit card and other                    71,963               --                --           71,963
                                            ---------------  ---------------   ---------------  -------------
                                             $ 12,192,858     $ 10,501,427      $    676,934     $ 23,371,219
                                            ===============  ===============   ===============  =============
</TABLE>

          Of the loans due after one year, approximately $6,505,402 have
          variable interest rates, and $4,672,959 have fixed interest rates.

      C.  RISK ELEMENTS

              1.  Nonaccrual, Past Due, Restructured and Impaired Loans - The
                  following schedule summarizes nonaccrual, past due,
                  restructured and impaired loans at December 31.
<TABLE>
<CAPTION>
                                                                                        1999              1998
                                                                                        ----              ----
<S>                                                                                  <C>              <C>
                  (a)    Loans accounted for on a nonaccrual basis                   $        0       $         0

                  (b)    Accruing loans which are contractually past due 90
                           days or more as to interest or principal payments                 --                --

                  (c)    Loans not included in (a) or (b) which are
                           "Troubled Debt Restructurings" as defined by
                           Statement of Financial Accounting Standards No. 15                --                --

                  (d)    Other loans defined as "impaired"                                   --                --
                                                                                     ----------       -----------

                                                                                     $        0       $         0
                                                                                     ==========       ===========
</TABLE>



                                 Page 14 of 24
<PAGE>   15


III.     LOAN PORTFOLIO (CONTINUED)

                  Management believes the allowance for loan losses at December
                  31, 1999 is adequate to absorb any losses on nonperforming
                  loans, as the allowance balance is maintained by management at
                  a level considered adequate to cover losses that are currently
                  anticipated based on loss experience of comparable companies,
                  general economic conditions, information about specific
                  borrower situations including their financial position and
                  collateral values, and other factors and estimates which are
                  subject to change over time.
<TABLE>
<CAPTION>
                                                                                           1999
                                                                                           ----
<S>                                                                                    <C>
                  Gross interest income that would have been recorded in 1999 on
                  nonaccrual loans outstanding at December 31, 1999 if the loans
                  had been current, in accordance with their original terms and
                  had been outstanding throughout the period or since
                  origination if held for part of the period                            $      -

                  Interest  income  actually  recorded on  nonaccrual  loans and
                  included in net income for the period                                        -
                                                                                        --------
                  Interest income not recognized during the period                      $      -
                                                                                        =========
</TABLE>

                  Discussion of the Nonaccrual Policy

                  The accrual of interest income is discontinued when the
                  collection of a loan or interest, in whole or in part, is
                  doubtful. When interest accruals are discontinued, interest
                  income accrued in the current period is reversed. In general,
                  while loans which are past due 90 days or more as to interest
                  or principal payments are considered for nonaccrual status,
                  management may elect to continue the accrual of interest when
                  the estimated net realizable value of collateral, in
                  management's judgment, is sufficient to cover the principal
                  balance and accrued interest.

              2.  Potential Problem Loans

                  As of December 31, 1999, in addition to the $-0- of loans
                  reported under Item III, C.1., there are $-0- in other
                  outstanding loans where known information about possible
                  credit problems of the borrowers causes management to have
                  serious doubts as to the ability of such borrowers to comply
                  with the present loan repayment terms and which may result in
                  disclosure of such loans pursuant to Item III. C.1 at some
                  future date. There were no loans classified for regulatory
                  purposes as loss, doubtful, substandard, or special mention
                  that have not been disclosed in Section 1 above.

              3.  Foreign Outstandings

                  None



                                 Page 15 of 24
<PAGE>   16


              4.  Loan Concentrations

                  As of December 31, 1999, commercial loans to entities
                  classified as real estate holding companies comprise
                  $4,675,000 of the total loan portfolio. However, approximately
                  $1,756,000 of this is to three separate single-purpose real
                  estate holding companies that hold property for their related
                  entities. Commercial loans to real estate development
                  companies total $2,453,000.

       D.  OTHER INTEREST-BEARING ASSETS

           There are no other interest-bearing assets as of December 31, 1999
           which would be required to be disclosed under Item III. C.1 or 2 if
           such assets were loans.

IV.   SUMMARY OF LOAN LOSS EXPERIENCE

       A. The following schedule presents an analysis of the allowance for loan
          losses, average loan data and related ratios for the years ended
          December 31:
<TABLE>
<CAPTION>

                                                                                    1999                1998
                                                                                    ----                ----
<S>                                                                             <C>                 <C>
            LOANS
                 Loans outstanding at end of period                             $  23,371,219       $    865,097
                                                                                =============       ============
                 Average loans outstanding during period                        $   9,720,768       $     54,100
                                                                                =============       ============
           ALLOWANCE FOR LOAN LOSSES
                Balance at beginning of period                                  $      11,700       $          0

                Loans charged-off
                     Commercial                                                            --                 --
                     Residential mortgage and construction                                 --                 --
                     Consumer installment                                                  --                 --
                                                                                -------------       ------------
                                                                                           --                 --
                Recoveries of loans previously charged-off
                     Commercial                                                            --                 --
                     Residential mortgage and construction                                 --                 --
                     Consumer installment                                                  --                 --
                                                                                -------------       ------------
                                                                                           --                 --
                                                                                -------------       ------------
           Net loans charged-off                                                           --                 --
           Provision for loan losses                                                  295,300             11,700
                                                                                -------------       ------------
           Balance at end of period                                             $     307,000       $     11,700
                                                                                =============       ============
           Ratio of net charge-offs during the period to
                average loans outstanding during the period                                 0%                 0%
                                                                                =============       ============
</TABLE>




                                 Page 16 of 24
<PAGE>   17


IV.    SUMMARY OF LOAN LOSS EXPERIENCE (Continued)

           The allowance for loan losses balance and the provision for loan
           losses are judgmentally determined by management based upon periodic
           reviews of the loan portfolio. In addition, management considered the
           level of charge-offs on loans as well as the fluctuations of
           charge-offs and recoveries on loans including the factors which
           caused these changes. Estimating the risk of loss and the amount of
           loss is necessarily subjective. Accordingly, the allowance is
           maintained by management at a level considered adequate to cover
           losses that are currently anticipated based on past loss experience,
           general economic conditions, information about specific borrower
           situations including their financial position and collateral values
           and other factors and estimates which are subject to change over
           time.

       B.  The following  schedule is a breakdown of the  allowance  for loan
           losses  allocated by type of loan and related ratios.
<TABLE>
<CAPTION>

                                                                                        Percentage of Loans in
                                                                                            Each Category to
                                                           Allowance Amount                    Total Loans
                                                     ------------------------------     -------------------------
                                                            1999              1998           1999         1998
                                                      -----------      ------------       ---------     --------
<S>                                                  <C>               <C>                <C>          <C>
            Commercial                               $    267,876      $      6,983            79.0%        55.7%
            Residential mortgage & construction             5,992                --             6.7          0.0
            Home equity lines of credit                    10,457               612             8.9         14.1
            Installment and credit card
                 loans to individuals                      19,912             3,922             5.4         30.2
            Unallocated                                     2,763               183             0.0          0.0
                                                     ------------      ------------       ---------     --------
            Total                                    $    307,000      $     11,700           100.0%       100.0%
                                                     ============      ============       =========     ========
</TABLE>

           While management's periodic analysis of the adequacy of the allowance
           for loan losses may allocate portions of the allowance for specific
           problem loan situations, the entire allowance is available for any
           loan charge-offs that occur.

V.     DEPOSITS

       The average amount of deposits and average rates paid are
       summarized as follows for the year ended December 31:
<TABLE>
<CAPTION>

                                                                        1999                          1998
                                                                        ----                          ----
                                                                 Average      Average          Average    Average
                                                                 Amount         Rate            Amount      Rate
                                                                 ------         ----            ------      ----
<S>                                                           <C>              <C>           <C>          <C>
       Noninterest bearing demand deposits                    $   3,018,604    0.00%         $    73,375   0.00%
       Interest bearing demand deposits                           1,628,717    1.59               29,359   1.60
       Savings and money market accounts                         12,737,524    4.46              356,897   4.49
       Certificates of deposit and IRAs                           1,693,075    4.50               37,573   4.54
                                                              -------------                  -----------
                                                              $  19,077,920                  $   497,204
                                                              =============                  ===========
</TABLE>

       At December 31, 1999, the Bank had $1,141,407 of time
       certificates of deposit of $100,000 or more outstanding. Remaining
       maturities of these time deposits are as follows:
<TABLE>
<CAPTION>
<S>                                                           <C>
       Three months or less                                   $     464,773
       Over three through six months                                120,000
       Over six through twelve months                               105,171
       Over twelve months                                           451,463
                                                              -------------
             Total                                            $   1,141,407
                                                              =============
</TABLE>




                                 Page 17 of 24
<PAGE>   18


VI.      RETURN ON EQUITY AND ASSETS

       The ratio of net income (loss) to average shareholders' equity and
       average total assets and certain other ratios are as follows:
<TABLE>
<CAPTION>
                                                                                1999                  1998
                                                                                ----                  ----
<S>                                                                      <C>                      <C>
        Average total assets                                             $    24,472,810          $    4,050,157
        Average shareholders' equity                                     $     5,256,176          $    2,993,597
        Net loss                                                         $      (717,921)         $     (620,952)
        Return on average total assets                                             (2.93)%                (15.30)%
        Return on average shareholders' equity                                    (13.66)%                (20.70)%
        Cash dividends declared                                                   $ 0.00                  $ 0.00
        Dividend payout percentage                                                   n/a                  n/a
        Average shareholders' equity to average total assets                       21.48%                  73.93%
</TABLE>

VII.    SHORT-TERM BORROWINGS

        The Company did not have any reportable categories of short-term
        borrowings during or at the end of the reported periods.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company leases premises for the Bank's main office at 4015 Medina Road,
Suite 100, Medina, Ohio, which also serve as the Company's corporate
headquarters. The leased premises consist of approximately 7,884 square feet of
a three-story multi-tenant brick building constructed in 1998 with ample
parking. The building is located on State Route 18, a major thoroughfare in
Medina, approximately 1.5 miles west of Interstate 71 and 1 mile east of
downtown Medina.

The lease for the building has a primary term of ten years with options for two
five-year extensions. The annual lease payment for 1999 was $105,120 and $17,411
for the last two months in 1998 and is subject to increases each subsequent
year. The facility is leased under an operating lease from a member of the Board
of Directors. Refer to Note 5 on page 12 of the Company's 1999 Annual Report to
Shareholders (incorporated herein by reference) for additional discussion about
the lease.

The Bank has five interior teller stations (two of which are sit-down teller
desks, and three of which are traditional stand-up teller counters), a two-lane
drive-through, a drive-up ATM and a night depository facility. The Company
believes the facility will be adequate to meet the needs of the Company and the
Bank for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not aware of any legal proceedings against it or the Bank.

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

No matters were submitted to a vote of the Company's security holders during the
fourth quarter of 1999.



                                 Page 18 of 24
<PAGE>   19


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock was held by approximately 400 holders of record as of
March 24, 2000, and is quoted on the OTC Bulletin Board. It has not yet been
assigned a symbol. To date there has been no regular and liquid market for the
common stock, and there can be no assurance that a regular and liquid trading
market will develop in the foreseeable future.

In the fourth quarter of 1999, there was one transaction of 1,000 shares at
$21.00 (bid price) of the Company's common stock reported by the market maker in
the Company's stock. The Company is not aware of any other public transactions
in its common stock since its stock offering which closed on July 1, 1998. All
shares were sold at $20.00 per share in the Offering. Certain other private
transactions may have occurred during the periods indicated of which the Company
has no knowledge.

No cash or other dividends were declared or paid since the Company's inception
on February 25, 1997. The Company expects that all Company and Bank earnings, if
any, will be retained to finance the growth of the Company and the Bank and that
no cash dividends will be paid for the foreseeable future. If and when dividends
are declared, the Company will probably be largely dependent upon dividends paid
by the Bank for funds to pay dividends on the Common Stock. It is also possible,
however, that the Company could pay dividends in the future generated from
investment income and other activities of the Company.

Under Ohio law, the Bank will be restricted as to the maximum amount of
dividends it may pay on its Common Stock. For additional discussion regarding
dividend restrictions, please refer to the discussion regarding Supervision and
Regulation in Part I of this Form 10-KSB.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
         OPERATION

The information on pages 24-29 of the Company's 1999 Annual Report to
Shareholders under the caption "Management's Discussion and Analysis" is
incorporated by reference.

ITEM 7.  FINANCIAL STATEMENTS

The following financial statements and related notes from the 1999 Annual Report
to Shareholders are incorporated by reference:
<TABLE>
<CAPTION>

                                                                                       Annual Report
                                                                                          Page No.
                                                                                       -------------
<S>                                                                                    <C>
Report of Independent Auditors                                                                2
Consolidated Balance Sheets                                                                   3
Consolidated Statements of Income                                                             4
Consolidated Statements of Changes in Shareholders' Equity                                    5
Consolidated Statements of Cash Flows                                                         6
Notes to Consolidated Financial Statements                                                 7-22
</TABLE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.



                                 Page 19 of 24
<PAGE>   20


                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

A.     Directors. The information on pages 5-7 of the Company's 1999 Proxy
       Statement under the caption "Election of Directors" is incorporated by
       reference.

B.     Executive Officers. The Company's executive officers who are not also
       directors are as follows:

Brian K. Harr, age 36, Senior Vice President of the Company and Senior Vice
President, Senior Lender of the Bank, served as Vice President, Business Banking
Manager of Bank One, Charleston, West Virginia from October, 1997 until joining
the company in September 1998. Prior to that assignment, Mr. Harr served as
Assistant Vice President, Relationship Manager for Bank One, Columbus, Ohio from
October 1994 until October 1997.

Cynthia A. Mahl, age 39, Senior Vice President, Secretary and Treasurer of the
Company and Senior Vice President, Secretary, Treasurer, Chief Financial Officer
and Senior Operations Officer of the Bank, was employed by PremierBank & Trust
located in Elyria, Ohio since 1985. From 1993 she served as its Vice President
and Controller until joining the Company in June 1998.

ITEM 10.  EXECUTIVE COMPENSATION

The information on page 9 of the 1999 Proxy Statement under the caption
"Compensation of Executive Officers" is incorporated by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information on page 4 of the 1999 Proxy Statement, under the caption
"Beneficial Ownership" in incorporated by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information on page 10 of the 1999 Proxy Statement under the caption
"Transactions with Management and Others" is incorporated by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1)   Index to Financial Statements--See Part II, Item 7, Financial
         Statements

(a)(2)   Schedule of Exhibits--The Exhibit Index that immediately follows the
         signature page to this Form 10-KSB is incorporated by reference. The
         exhibits required to be filed with this Form 10-KSB are included with
         this Form 10-KSB and are located immediately following the Exhibit
         Index to this Form 10-KSB.

(b)      Reports on Form 8-K--The Company did not file any Current Reports on
         Form 8-K during the fourth quarter of 1999.



                                 Page 20 of 24
<PAGE>   21


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, as amended, the
Issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on March 30, 2000.

                           WESTERN RESERVE BANCORP, INC.

                           By:  /s/ Edward J. McKeon
                                --------------------------------------------
                                Edward J. McKeon, President, Chief
                                Executive Officer and Director

                           By:  /s/ Cynthia A. Mahl
                                --------------------------------------------
                                Cynthia A. Mahl, Principal Financial Officer
                                and Accounting Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Issuer and in the capacities noted below and
on March 30, 2000.
<TABLE>
<CAPTION>
<S>                                                               <C>
         /s/ P.M. Jones                                           /s/ Edward J. McKeon
         ----------------------------------                       ----------------------------------
         P.M. Jones, Chairman of the Board                        Edward J. McKeon, President, Chief
                                                                  Executive Officer and Director


         /s/ Glenn Smith                                          /s/ Rory O'Neil
         ----------------------------------                       ----------------------------------
         Glenn Smith, Director                                    Rory O'Neil, Director

         /s/ R. Hal Nichols                                       /s/ Ray E. Laribee
         ----------------------------------                       ----------------------------------
         R. Hal Nichols, Director                                 Ray E. Laribee, Director


</TABLE>





                                 Page 21 of 24
<PAGE>   22



                            WESTERN RESERVE BANCORP, INC.
                                    EXHIBIT INDEX
<TABLE>
<CAPTION>

                                                                                                        Sequential
  Exhibit No.                                 Description of Exhibits                                  Page Number
<S>                <C>                                                                                 <C>
      3.1           Certificate of Incorporation of Western Reserve Bancorp, Inc.                           *

      3.2           Bylaws of Western Reserve Bancorp, Inc.                                                 *

      4.0           Stock Certificate of Western Reserve Bancorp, Inc.                                      *

      10.1          Employment Contract of Edward J. McKeon                                                 *

      10.2          Lease  Agreement by and between  Michael Rose DBA  Washington                           *
                    Properties and Western Reserve Bancorp, Inc.

      10.3          Western Reserve Bancorp, Inc. 1998 Stock Option Plan                                    *

      13.1          Annual Report to Shareholders  (Except for sections  incorporated by
                    reference into this Form 10-KSB, the Annual Report to Shareholders
                    shall not be deemed to be "filed" with the Commission.)

      21.1          Subsidiary of Western Reserve Bancorp, Inc .

      27.1          Financial Data Schedule                                                                 **

      99.1          Proxy  Statement and form of proxy for the Annual Meeting of                            *
                    Shareholders to be held April 26, 2000. (Except for sections
                    incorporated by reference into this Form 10-KSB, the proxy
                    materials shall not be deemed to be "filed" with the Commission.)
</TABLE>

*  Previously filed and incorporated herein by reference.

** Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
   S-K.



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