<PAGE>
                     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 1934 For the fiscal year ended December 31, 2001
                                          ------------------

[ ] 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:

                                      None

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 $4,419,568.

The aggregate market value of the voting stock held by non-affiliates of the
Issuer as of March 15, 2002 was approximately $8,160,325 (which excludes 61,639
shares held by directors and executive officers). As of said date, the Issuer
had 388,052 shares of Common Stock issued and outstanding.

                      Documents incorporated by reference:

Parts I and II: Portions of Registrant's 2001 Annual Report to Shareholders
Part III:       Portions of Registrant's 2001 Proxy Statement for the Annual
                Meeting of Shareholders to be held April 24, 2002

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



                                  Page 1 of 70


<PAGE>


                                     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.

During 2000, the Company sold an additional 67,785 shares of common stock in an
intra-state offering exempt from the Securities Act of 1933 pursuant to Section
3(a)(11) and Rule 147 promulgated thereunder. A registration statement was filed
with the Ohio Division of Securities on Form 6(A)(1) on September 11, 2000. The
Offering resulted in proceeds, net of offering costs, of approximately
$1,577,000.

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, 2001, the Bank's
legal lending limit was approximately $1,191,000. The Board of Directors has
established an "in-house limit of $1,000,000. The Board may from time to time
raise or lower the "in-house" limit as it deems


                                  Page 2 of 70

<PAGE>


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.

The Bank's market area is competitive. There are at least twenty commercial
banks, savings institutions and credit unions with multiple offices in the
Bank's primary service area of Medina County. In recent years, 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 38 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, 2001, the Bank has 18 full-time-equivalent employees (15
full-time and 7 part-time). 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 "IRS"), 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.



                                  Page 3 of 70
<PAGE>


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
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.

The Gramm-Leach-Bliley Act (better known as the Financial Services Modernization
Act of 1999) which was 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.

In addition to repealing the historical restrictions on affiliations among
banks, securities firms, insurance companies and other financial service
providers, the Financial Services Modernization Act also operates to:



                                  Page 4 of 70
<PAGE>


         -     Provide a uniform framework for the functional regulation of the
               activities of financial institutions and their holding companies;

         -     Broaden the activities that may be conducted by national banks
               (and derivatively, state banks), banking subsidiaries of bank
               holding companies, and their financial subsidiaries;

         -     require all financial institutions to provide notice of their
               privacy policies at specified times to their retail customers and
               consumers of their financial products or services, and permit
               retail customers and consumers, under certain circumstances, to
               prohibit financial institutions from sharing their nonpublic
               personal information with other parties;

         -     establish guidelines for safeguarding the security,
               confidentiality and integrity of customer information;

         -     adopt a number of provisions related to the capitalization,
               membership, corporate governance, and other measures designed to
               modernize the Federal Home Loan Bank system;

         -     modify the laws governing the implementation of the Community
               Reinvestment Act of 1977; and

         -     address a variety of other legal and regulatory issues affecting
               both day-to-day operations and long-term activities of financial
               institutions.

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 -chartered member bank may not declare a dividend without the
approval of both the Division and the FRB if the total of dividends declared by
such bank in a calendar year exceeds the total of its net income for that year,
combined with its retained net income from 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



                                  Page 5 of 70
<PAGE>


maintain adequate capital (See "Capital" above.) Furthermore, as part of the
Bank's approval by regulatory agencies, it was prohibited from paying dividends
to the Company for a period of three years after inception without prior written
non-objection by the Federal Reserve Bank. The Bank does not expect to pay
dividends to the Company in the foreseeable future.

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.

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, 2001, Bank Insurance Fund ("BIF") assessments
ranged from 0% of deposits to 0.27% of deposits. For the semi-annual assessment
period beginning January 1, 2002, 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 continue 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,
2001 the FICO assessment rate for both BIF and SAIF members was approximately
0.01895% of deposits. During the year ended December 31, 2001 the Bank paid
approximately $8,300 in FICO assessments. For the first quarter of 2002, the
annualized FICO assessment rate will be 0.0182%%. Management expects the amounts
paid for FICO assessments will 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


                                  Page 6 of 70
<PAGE>


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.

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, 2001, the Bank exceeded its minimum regulatory capital
requirements with a total risk-based capital ratio of 12.3%, a Tier 1 risk-based
capital ratio of 8.8% and a leverage ratio of 9.2%. As a result of the
Corporation's equity offering in the second half of 2000, the Bank, on January
2, 2001, issued $1,500,000 of subordinated debt to the Corporation. This debt is
treated as Tier 2 capital (subject to certain limitations) for the Bank's
risk-based capital calculations. The Bank's Tier 1 risk-based capital and
leverage ratios are expected to continue to decrease to more normal levels as
the Bank increases its assets through normal banking operations in 2002 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 was required
to maintain its ratio of Tier 1 tangible capital to total assets at a minimum of
9.0% for its first three years of operation. At December 31, 2001, that ratio
was 9.12%. This requirement was in place until November 2001.

In addition to the minimum regulatory capital requirements discussed above,
provisions contained in the Federal Deposit Insurance Act ("FDIA") expressly
provide for certain supervisory actions which are directly keyed to the capital
levels of an insured depository institution. These "prompt corrective action"
provisions impose progressively more restrictive constraints on operations,
management and capital distributions of a particular institution as its
regulatory capital decreases. Using Tier 1 risk-based, total risk-based, and
Tier 1 leverage capital ratios as the relevant measures, FDIC insured depository
institutions are grouped into one of the following five prompt corrective action
capital categories: well capitalized, adequately capitalized; undercapitalized;
significantly undercapitalized; and critically undercapitalized. An institution
is considered well capitalized if it has a total risk-based capital ratio of at
least 10%, a Tier 1 risk-based capital ratio of at least 6% and a Tier 1
leverage capital ratio of at least 5%, provided, however, such institution is
not subject to a written advisement, order or capital directive to meet and
maintain a specific capital level for any particular capital measure. An
adequately capitalized institution must have a total risk-based capital ratio of
at least 8%, a Tier 1 risk-based capital ratio of at least 4% and a Tier 1
leverage capital ratio of at least 4% (3% if the institution has achieved the
highest composite rating in its most recent examination). At December 31, 2001,
the Bank satisfied all requirements for inclusion in the "well capitalized"
category.

DIVIDENDS. Ohio law and FRB provisions prohibit the Bank from paying dividends
in an amount greater than the total of its net income for that year, combined
with its retained net income from the preceding two years, without the prior
approval of both the Division and the FRB. 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



                                  Page 7 of 70
<PAGE>


prohibited from paying any dividends if, following payment thereof, the
institution would be under-capitalized. As described above, the Bank exceeded
its minimum capital requirements under applicable guidelines as of December 31,
2001. However, since the Bank has not, to date, recorded sufficient profits to
reverse its accumulated deficit, as of December 31, 2001, $-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 was prohibited from paying
dividends to the Corporation for a period of three (3) years from its opening
without prior written non-objection from the Board of Governors of the Federal
Reserve.

ADDITIONAL REGULATION. The Bank is also subject to federal regulation as to such
matters as the maintenance of required reserves against deposits, limitations in
connection with affiliate transactions, 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 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.

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.

The Bank has one limited-hours branch within The Oaks at Medina, a retirement
and lifetime care community located at 4931 Nettleton Road, Medina. The office
at The Oaks at Medina opened in July 2000.

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 8 of 70
<PAGE>


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>
                                                       ----------------------------2001--------------------------
                                                                                   ----
                                                          Average                                       Average
                                                          Balance                Interest                Rate
                                                          -------                --------                ----
<S>                                                  <C>                        <C>                       <C>
ASSETS
Interest-earning assets
     Federal funds sold                              $   4,769,723              $  189,255                3.97%
     Securities available for sale (at cost)             3,685,133                 205,978                5.59
     Federal Reserve Bank stock                            154,627                   9,272                6.00
     Federal Home Loan Bank stock                           92,650                   6,237                6.73
     Loans receivable (1)                               46,718,034               3,792,290                8.12
                                                     -------------              ----------
        Total interest-earning assets                   55,420,167               4,203,032                7.58
Noninterest-earning assets
     Cash and due from banks                             1,451,275
     Unrealized gain (loss) on available-
       for-sale securities                                   8,444
     Allowance for loan losses                            (609,116)
     Premises and equipment, net                           693,000
     Accrued interest receivable and
       other assets                                        620,965
                                                     -------------
                                                       $57,584,735

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
     Interest-bearing transaction accounts           $   2,875,675                  55,393                1.93%
     Savings and money market accounts                  28,200,672               1,056,876                3.75
     Certificates of deposit and IRAs                   12,598,750                 694,607                5.51
     Short-term funds                                      199,830                   6,468                3.24
                                                     -------------              ----------
        Total interest-bearing liabilities              43,874,927               1,813,344                4.13%
                                                                                ----------
Noninterest-bearing liabilities
     Demand deposits                                     6,406,081
     Accrued interest payable and
       other liabilities                                   212,616
                                                     -------------
                                                        50,493,624
Shareholders' equity                                     7,091,111
                                                     -------------
                                                       $57,584,735
                                                     =============
Net interest income/spread                                                      $2,389,688                3.45%
                                                                                ==========           =========

Net interest income as a percent
  of average interest earning assets                                                                      4.31%
                                                                                                     =========

Average interest earning assets to
  interest bearing liabilities                              126.3%
                                                            =====
</TABLE>

(1) Includes loan fees of $61,132.



                                  Page 9 of 70
<PAGE>


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

<TABLE>
<CAPTION>
                                                       ----------------------------2000--------------------------
                                                                                   ----
                                                          Average                                       Average
                                                          Balance                Interest                Rate
                                                          -------                --------                ----

<S>                                                  <C>                        <C>                       <C>
ASSETS
Interest-earning assets
     Federal funds sold                              $   2,924,549              $  183,902                6.29%
     Interest-bearing deposits in other
       financial institutions                                  644                      34                5.28
     Securities available for sale (at cost)             5,998,384                 350,948                5.85
     Federal Reserve Bank stock                            151,165                   9,081                6.00
     Federal Home Loan Bank stock                           69,386                   5,139                7.41
     Loans receivable (1)                               30,740,521               2,874,944                9.35
                                                     -------------              ----------
        Total interest-earning assets                   39,884,649               3,424,048                8.58
Noninterest-earning assets
     Cash and due from banks                             1,171,494
     Unrealized gain (loss) on available-
       for-sale securities                                (103,810)
     Allowance for loan losses                            (390,057)
     Premises and equipment, net                           737,173
     Accrued interest receivable and
       other assets                                        298,293
                                                     -------------
                                                     $  41,597,742
                                                     =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
     Interest-bearing transaction accounts           $   2,645,829                  52,422                1.98%
     Savings and money market accounts                  22,030,224               1,211,998                5.50
     Certificates of deposit and IRAs                    6,199,181                 356,497                5.75
     Short-term funds                                      261,874                  13,674                5.22
                                                     -------------              ----------
        Total interest-bearing liabilities              31,137,108               1,634,591                5.25%
                                                                                ----------
Noninterest-bearing liabilities
     Demand deposits                                     5,084,970
     Accrued interest payable and
       other liabilities                                    70,028
                                                     -------------
                                                         5,154,998
Shareholders' equity                                     5,305,636
                                                     -------------
                                                     $  41,597,742
                                                     =============
Net interest income/spread                                                      $1,789,457                3.33%
                                                                                ==========           =========

Net interest income as a percent
  of average interest earning assets                                                                      4.49%
                                                                                                     =========

Average interest earning assets to
  interest bearing liabilities                              128.1%
                                                            =====
</TABLE>

(1) Includes loan fees of $62,323.



                                 Page 10 of 70
<PAGE>


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.


                    Summary of Changes in Net Interest Income

<TABLE>
<CAPTION>
                                                   2001 vs. 2000                           2000 vs. 1999
                                            Increase (Decrease) Due to              Increase (Decrease) Due to
                                        ------------------------------------    ------------------------------------
                                         Volume       Rate          Net         Volume         Rate         Net
                                         ------       ----          ---         ------         ----         ---
<S>                                  <C>            <C>        <C>           <C>          <C>          <C>
Interest income:
    Loans receivable                 $1,339,370     $(422,024)  $ 917,346    $1,958,915   $   75,534   $2,034,449
    Federal funds sold                   89,013       (83,660)      5,353      (273,787)      85,551     (188,236)
    Interest-bearing deposits in
       financial institutions               (34)           --         (34)      (79,467)       7,970      (71,497)
    Securities available-for-sale      (129,926)      (15,044)   (144,970)      139,812        2,032      141,844
    Federal Reserve Bank stock              191            --         191        (1,362)          --       (1,362)
    Federal Home Loan Bank stock          1,600          (502)      1,098         5,139           --        5,139
                                     ----------     ---------   ---------    ----------   ----------   ----------
     Total interest-earning assets    1,300,214      (521,230)    778,984     1,749,237      171,100    1,920,337

Interest expense:
    Interest-bearing transaction
        accounts                          4,458        (1,487)      2,971        19,037        7,457       26,494
    Savings and money market            288,856      (443,980)   (155,124)      487,579      156,891      644,470
    Certificates of deposit and IRAs    356,813       (18,701)    338,112       251,218       29,127      280,345
     Short-term funds                    (2,976)       (4,230)     (7,206)       13,611           16       13,627
                                     ----------     ---------   ---------    ----------   ----------   ----------
     Total interest-bearing
        liabilities                     647,151      (468,398)    178,753       771,445      193,491      964,936
                                     ----------     ---------   ---------    ----------   ----------   ----------
Change in net interest income        $  653,063     $ (52,832)  $ 600,231    $  977,792    $ (22,391)  $  955,401
                                     ==========     =========   =========    ==========   ==========   ==========
</TABLE>






                                 Page 11 of 70
<PAGE>


II.    INVESTMENT PORTFOLIO

       The amortized cost and estimated fair values of securities available for
       sale at December 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                       Gross          Gross                       Weighted
                                      Amortized     Unrealized     Unrealized        Fair          Average
                                         Cost          Gains         Losses          Value          Yield
                                         ----          -----         ------          -----          -----
<S>                                  <C>           <C>            <C>            <C>                <C>
       2001
       ----
       U.S. Agencies                 $ 1,502,074      $  16,569   $        --    $ 1,518,643        5.66%

       Mortgage-backed                 1,500,993          9,245         (3,192)    1,507,046        4.84%
                                     -----------      ---------   ------------   -----------

                                     $ 3,003,067      $  25,814   $     (3,192)  $ 3,025,689        5.25%
                                     ===========      =========   ============   ===========

       2000
       ----
       U.S. Agencies                 $ 5,998,752      $      --   $    (20,587)  $ 5,978,165        5.85%
                                     ===========      =========   ============   ===========
</TABLE>


                       Maturities of Investment Securities

                                                     Weighted
                                        Fair         Average
                                        Value         Yield
                                        -----         -----

       U.S. Agencies
          Due in one year
            or less                    $      --
          Due in one to
            five years                  1,015,898      5.44%
          Due in five to
            ten years                     502,745      6.10%
       Mortgage-backed                  1,507,046      4.84%
                                      -----------
                                      $ 3,025,689      5.25%
                                      ===========

       Actual maturities may differ from contractual maturities because issuers
       may have the right to call or prepay obligations.


III.     LOAN PORTFOLIO

       A.  Types of Loans - Total loans on the balance sheet are comprised of
           the following classifications at December 31, 2001 and 2000.

<TABLE>
<CAPTION>
                                                                                    2001                  2000
                                                                                    ----                  ----
<S>                                                                             <C>                <C>
           Commercial                                                           $  45,058,966      $  30,209,223
           Home equity lines of credit                                              5,723,908          3,128,341
           Residential mortgage and construction                                    1,635,610          3,087,244
           Consumer installment                                                     2,576,416          1,996,033
           Credit card and other                                                      223,128            154,778
                                                                                -------------      -------------
                                                                                $  55,218,028      $  38,575,619
                                                                                =============      =============
</TABLE>



                                 Page 12 of 70
<PAGE>


III.     LOAN PORTFOLIO (CONTINUED)


           CONCENTRATIONS OF CREDIT RISK: Western Reserve Bank 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, 2001, commercial loans secured by real estate
           make up approximately 44.6% of the loan portfolio. Other commercial
           loans to businesses comprise 37.0% 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 10.4%
           of the loan portfolio and are collateralized by residential real
           estate. Residential mortgage and construction loans are 2.9% of the
           loan portfolio and are secured primarily by first mortgages on
           residential property. Installment and credit card loans to
           individuals make up approximately 5.1% 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,
           2001. 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.

          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                          $21,184,904     $ 23,437,697          $436,365     $ 45,058,966
          Home equity lines of credit           5,723,908               --                --        5,723,908
          Residential mortgage
             and construction                     756,210          699,622           179,778        1,635,610
          Consumer installment                  1,870,364          463,031           243,021        2,576,416
          Credit card and other                   223,128               --                --          223,128
                                            ---------------  ---------------   ---------------  ---------------
                                             $ 29,758,514     $ 24,600,350        $  859,164     $ 55,218,028
                                            ===============  ===============   ===============  ===============
</TABLE>

           Of the loans due after one year, approximately $19,770,000 have
           variable interest rates, and $5,689,000 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>
                                                                                        2001              2000
                                                                                        ----              ----
<S>                                                                                  <C>              <C>
                  (a)    Loans accounted for on a nonaccrual basis                   $  408,531       $   204,778
                  (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"                              143,841                --
                                                                                     ----------       -----------

                                                                                     $  552,372       $   204,778
                                                                                     ==========       ===========

                         Allowance to non-performing loans                                  137%              251%
                                                                                            ===               ===
</TABLE>



                                 Page 13 of 70
<PAGE>


III.     LOAN PORTFOLIO (CONTINUED)

                  Management believes the allowance for loan losses at December
                  31, 2001 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>
                                                                                             2001
                                                                                             ----

<S>                                                                                        <C>
                  Gross interest income that would have been recorded in 2001 on
                  nonaccrual loans outstanding at December 31, 2001 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                                $14,384

                  Interest income actually recorded on nonaccrual loans and included in
                  net income for the period                                                       0

                  Interest income not recognized during the period                         $ 14,384
                                                                                           ========
</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, 2001, in addition to the $552,372 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 14 of 70
<PAGE>


              4.  Loan Concentrations

                  As of December 31, 2001, commercial loans to entities
                  classified as real estate holding companies comprise
                  $10,347,000 of the total loan portfolio.

       D.  OTHER INTEREST-BEARING ASSETS

           There are no other interest-bearing assets as of December 31, 2001
           that 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>
                                                                                    2001                2000
                                                                                    ----                ----
<S>                                                                             <C>                 <C>
            LOANS
                 Loans outstanding at end of period                             $  55,218,028       $ 38,575,619
                                                                                =============       ============

                 Average loans outstanding during period                        $  46,718,034       $ 30,740,521
                                                                                =============       ============

           ALLOWANCE FOR LOAN LOSSES
                Balance at beginning of period                                  $     514,109       $    307,000

                Loans charged-off
                     Commercial                                                       188,547             14,745
                     Residential mortgage and construction                                 --                 --
                     Consumer installment                                              14,713                 --
                     Credit card                                                        9,490                 --
                                                                                -------------        -----------
                                                                                      212,750             14,745
                Recoveries of loans previously charged-off
                     Commercial                                                       110,842              2,054
                     Residential mortgage and construction                                 --                 --
                     Consumer installment                                               5,297                 --
                     Credit card                                                           --                 --
                                                                                -------------       ------------
                                                                                      116,139              2,054
                                                                                -------------       ------------
           Net loans charged-off                                                       96,611             12,691
           Provision for loan losses                                                  337,181            219,800
                                                                                -------------       ------------

           Balance at end of period                                             $     754,679       $    514,109
                                                                                =============       ============

           Ratio of net charge-offs during the period to
                average loans outstanding during the period                             0.21%               0.04%
                                                                                ============        ============
</TABLE>




                                 Page 15 of 70
<PAGE>


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 probable 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
                                                     ------------------------------     ------------------------------
                                                            2001              2000              2001        2000
                                                      -----------      ------------          --------     ------
<S>                                                  <C>               <C>                     <C>          <C>
            Commercial                               $    675,059      $    452,869            81.6%        78.3%
            Home equity lines of credit                    28,620            15,642            10.4          8.1
            Residential mortgage & construction             6,223            10,963             2.9          8.0
            Installment and credit card
                 loans to individuals                      44,726            34,563             5.1          5.6
            Unallocated                                        51                72             0.0          0.0
                                                     ------------      ------------       ---------     --------
            Total                                    $    754,679      $    514,109           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>
                                                                          2001                          2000
                                                                          ----                          ----
                                                                    Average    Average          Average    Average
                                                                    Amount      Rate            Amount      Rate
                                                                    ------      ----            ------      ----
<S>                                                           <C>              <C>        <C>              <C>
       Noninterest bearing demand deposits                    $   6,406,081    0.00%      $    5,084,970   0.00%
       Interest bearing demand deposits                           2,875,675    1.93            2,645,829   1.98
       Savings and money market accounts                         28,200,672    3.75           22,030,224   5.50
       Certificates of deposit and IRAs                          12,598,750    5.51            6,199,181   5.75
                                                              -------------               --------------
                                                              $  50,081,178    3.62       $   35,960,204   4.50
                                                              =============               ==============
</TABLE>

       At December 31, 2001, the Bank had $5,264,121 of time certificates of
       deposit of $100,000 or more outstanding. Remaining maturities of these
       time deposits are as follows:

       Three months or less                                   $   2,077,367
       Over three through six months                                717,297
       Over six through twelve months                               209,609
       Over twelve months                                         2,259,848
                                                              -------------
                                                              $   5,264,121
                                                              =============


                                 Page 16 of 70
<PAGE>


VI.      RETURN ON EQUITY AND ASSETS

       The ratio of net income to average shareholders' equity and average total
       assets and certain other ratios are as follows:

<TABLE>
<CAPTION>
                                                                    2001              2000
                                                                --------------    --------------

<S>                                                            <C>                <C>
         Average total assets                                  $    57,585,000    $   41,598,000
         Average shareholders' equity                          $     7,091,000    $    5,306,000
         Net income                                            $       692,133    $      159,222
         Return on average total assets                                   1.20%             0.38%
         Return on average shareholders' equity                           9.76%             3.00%
         Cash dividends declared                               $          0.00    $         0.00
         Dividend payout percentage                                        n/a               n/a
         Average shareholders' equity to average total assets            12.31%            12.76%
</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 was $112,004 for 2001 and
$107,734 for 2000, 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 14 of the Company's 2001 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. Management
expects that, as the Bank's activities and staffing needs continue to increase,
it will become necessary to rent additional space.

The Bank also leases a small office inside The Oaks at Medina retirement
community at 4931 Nettleton Road, Medina. The Bank operates a full-service,
limited-hours branch at that location. The branch opened in July 2000. Rent for
the office is de minimis.

ITEM 3.  LEGAL PROCEEDINGS

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





                                 Page 17 of 70
<PAGE>


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 2001.


                                     PART II


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

The Company's Common Stock was held by approximately 441 holders of record as of
December 31, 2001, 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.

During 2001, there were two transactions of the Company's common stock reported
by the market maker in the Company's stock. One transaction, in February 2001,
was at $25.00 per share, and the other was in November 2001, at $25.50 per
share. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission. 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 28-34 of the Company's 2001 Annual Report to
Shareholders under the caption "Management's Discussion and Analysis" is
incorporated by reference.





                                 Page 18 of 70
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

The following financial statements and related notes from the 2000 Annual Report
to Shareholders are incorporated by reference:


<TABLE>
<CAPTION>
                                                                                          Annual Report
                                                                                            Page No.
                                                                                            --------

<S>                                                                                        <C>
Report of Independent Auditors                                                                3
Consolidated Balance Sheets                                                                   4
Consolidated Statements of Income                                                             5
Consolidated Statements of Changes in Shareholders' Equity                                    6
Consolidated Statements of Cash Flows                                                         7
Notes to Consolidated Financial Statements                                                  8-26
</TABLE>


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

None.



                                 Page 19 of 70
<PAGE>


                                    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 2001 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 38, 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 41, 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 pages 11-12 of the 2001 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 5 of the 2001 Proxy Statement, under the caption
"Beneficial Ownership" in incorporated by reference.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information on page 13 of the 2001 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 2001.



                                 Page 20 of 70
<PAGE>


                                   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 29, 2002.

                                WESTERN RESERVE BANCORP, INC.

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

                                         /s/ Cynthia A. Mahl
                                By:
                                     -------------------------------------------
                                     Cynthia A. Mahl, Senior Vice President,
                                     Principal Financial 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 29, 2002.



   /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/ Roland H. Bauer                      /s/ Bijay K. Jayaswal
----------------------------------       ----------------------------------
 Roland H. Bauer, Director               Bijay K. Jayaswal, Director


   /s/ Ray E. Laribee                       /s/ C. Richard Lynham
----------------------------------       ----------------------------------
Ray E. Laribee, Director                 C. Richard Lynham, Director


   /s/ R. Hal Nichols                       /s/ Rory H. O'Neil
----------------------------------       ----------------------------------
R. Hal Nichols, Director                 Rory H. O'Neil, Director


   /s/ Michael R. Rose                      /s/ Glenn M. Smith
----------------------------------       ----------------------------------
Michael R. Rose, Director                Glenn M. Smith, Director


   /s/ Thomas A. Tubbs
----------------------------------
Thomas A. Tubbs, Director




                                 Page 21 of 70
<PAGE>


                          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.                                                 *

      4.1           Stock Certificate of Western Reserve Bancorp, Inc.                                      *

      10.1          Employment Agreement of Edward J. McKeon, Dated December 14, 2001                       23

      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, Amended and Restated as          *
                    of April 20, 2000

      13.1          2001 Annual  Report to  Shareholders  (Except  for  sections  incorporated  by          33
                    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 .                                            70

      99.1          Proxy  Statement and form of proxy for the Annual Meeting of  Shareholders  to          *
                    be held April 24, 2002. (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.



                                Page 22 of 70