Exhibit 13

CONSOLIDATED FINANCIAL STATEMENTS








Table of Contents

Report of Independent Registered Public Accounting Firm
     on Consolidated Financial Statements .................................39
Consolidated Statements of Financial Condition ............................40
Consolidated Statements of Earnings .......................................41
Consolidated Statements of Stockholders' Equity ...........................42
Consolidated Statements of Comprehensive Income ...........................42
Consolidated Statements of Cash Flows .....................................43
Notes to Consolidated Financial Statements ................................45

                                       38
<PAGE>

Report of Independent Registered Public Accounting Firm

                                                        [LOGO OF GRANT THORNTON]

Board of Directors and Shareholders of Oak Hill Financial, Inc.

         We have audited the accompanying  consolidated  statements of financial
condition of Oak Hill  Financial,  Inc. ("Oak Hill") as of December 31, 2005 and
2004 and the related consolidated statements of earnings,  stockholders' equity,
comprehensive  income  and cash flows for the three  years in the  period  ended
December  31,   2005.   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the consolidated  financial  position of Oak
Hill  Financial,  Inc. as of December  31, 2005 and 2004,  and the  consolidated
results of its  operations and its cash flows for each of the three years in the
period  ended  December 31,  2005,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

         We have also audited,  in  accordance  with the standards of the Public
Company Accounting  Oversight Board (United States),  the effectiveness Oak Hill
Financial,  Inc.'s internal control over financial  reporting as of December 31,
2005,  based on the  criteria  established  in  Internal  Control  -  Integrated
                                                --------------------------------
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
---------
Commission and our report dated March 9, 2006  expressed an unqualified  opinion
on management's  assessment of the  effectiveness of Oak Hill Financial,  Inc.'s
internal  control over  financial  reporting and an  unqualified  opinion on the
effectiveness  of Oak Hill  Financial'  Inc.'s  internal  control over financial
reporting.

GRANT THORNTON LLP

/s/ Grant Thornton LLP

Cincinnati, Ohio
March 9, 2006


                                       39
<PAGE>
<TABLE>
<CAPTION>

Consolidated Statements of Financial Condition

                                                                                                    December 31,
                                                                                             --------------------------
(In thousands, except share data)                                                              2005              2004
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                              <C>             <C>
ASSETS
Cash and due from banks                                                                      $    24,786    $    31,009
Federal funds sold                                                                                 1,614            988
Investment securities designated as available for sale - at market                               131,193         88,383
Investment securities held to maturity - at cost (approximate market value
     of $3,851 and $3,853 at December 31, 2005 and 2004, respectively)                             3,619          3,640
Loans receivable - net                                                                         1,014,673        912,282
Loans held for sale - at lower of cost or market                                                     410            256
Office premises and equipment - net                                                               22,736         15,489
Federal Home Loan Bank stock - at cost                                                             7,626          6,590
Real estate acquired through foreclosure                                                             376          1,614
Accrued interest receivable on loans                                                               4,156          3,407
Accrued interest receivable on investment securities                                                 875            527
Goodwill - net                                                                                     7,935          1,674
Core deposit intangible - net                                                                      4,068          1,270
Bank owned life insurance                                                                         12,948         10,118
Prepaid expenses and other assets                                                                  1,561          2,505
Prepaid federal income taxes                                                                       1,178          2,929
Deferred federal income taxes                                                                      1,304            359
-----------------------------------------------------------------------------------------------------------------------
                    TOTAL ASSETS                                                             $ 1,241,058    $ 1,083,040
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
     Demand                                                                                  $    97,575    $    88,712
     Savings and time deposits                                                                   880,821        773,384
-----------------------------------------------------------------------------------------------------------------------
                    Total deposits                                                               978,396        862,096
Securities sold under agreement to repurchase                                                     18,263          5,359
Advances from the Federal Home Loan Bank                                                         123,119        105,601
Notes payable                                                                                         --          2,700
Subordinated debentures                                                                           23,000         18,000
Accrued interest payable and other liabilities                                                     4,199          4,241
-----------------------------------------------------------------------------------------------------------------------
                    Total liabilities                                                          1,146,977        997,997
Stockholders' equity
     Common stock - $.50 stated value; authorized 15,000,000 shares,
         5,874,634 and 5,653,583 shares issued at December 31, 2005 and 2004, respectively         2,937          2,827
     Additional paid-in capital                                                                   13,952          6,658
     Retained earnings                                                                            85,505         78,071
     Treasury stock (270,420 and 96,302 shares at December 31, 2005 and
          2004, respectively - at cost)                                                           (7,972)        (3,118)
     Accumulated comprehensive income (loss):
          Unrealized gain (loss) on securities designated as available for sale,
               net of related tax effects                                                           (341)           605
-----------------------------------------------------------------------------------------------------------------------
                    Total stockholders' equity                                                    94,081         85,043
-----------------------------------------------------------------------------------------------------------------------
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 1,241,058    $ 1,083,040
=======================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       40
<PAGE>

Consolidated Statements of Earnings

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                         --------------------------------
(In thousands, except share data)                                          2005        2004        2003
---------------------------------------------------------------------------------------------------------
<S>                                                                         <C>         <C>         <C>
INTEREST INCOME
     Loans                                                               $ 64,327    $ 55,540    $ 52,009
     Investments
          U.S. Government and agency securities                             2,678       2,295       1,862
          Obligations of state and political subdivisions                   1,979         838         771
          Other securities                                                    642         535         503
          Federal funds sold                                                   20          15           7
          Interest-bearing deposits                                            74          28          18
---------------------------------------------------------------------------------------------------------
               Total interest income                                       69,720      59,251      55,170
INTEREST EXPENSE
     Deposits                                                              22,944      15,923      15,577
     Borrowings                                                             6,492       4,915       4,891
---------------------------------------------------------------------------------------------------------
               Total interest expense                                      29,436      20,838      20,468
---------------------------------------------------------------------------------------------------------
               Net interest income                                         40,284      38,413      34,702
Less provision for losses on loans                                          6,341       3,136       3,347
---------------------------------------------------------------------------------------------------------
               Net interest income after provision for losses on loans     33,943      35,277      31,355
OTHER INCOME
     Service fees, charges and other operating                              6,950       5,252       3,889
     Insurance commissions                                                  2,781       3,050       2,827
     Bank owned life insurance                                                436         118
     Gain on sale of loans                                                  1,085       1,882       4,489
     Gain on sale of securities                                               498         276         314
     Gain on sale of branch premises                                          204
     Gain (loss) on sale of other real estate owned                            --        (316)       (323)
                                                                                                       19
     Loss on sale of consumer finance loan portfolio                           --      (3,585)         --
---------------------------------------------------------------------------------------------------------
               Total other income                                          11,638       6,670      11,538
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
     Employee compensation and benefits                                    16,107      14,519      14,201
     Occupancy and equipment                                                4,067       3,400       2,910
     Federal deposit insurance premiums                                       124         132         104
     Franchise taxes                                                          189         988          69
     Other operating                                                        9,059       7,673       6,765
     Amortization of core deposit intangible                                  953          72          --
     Merger-related expenses                                                  546         160          --
---------------------------------------------------------------------------------------------------------
               Total general, administrative and other expense             31,045      26,944      24,049
---------------------------------------------------------------------------------------------------------
               Earnings before federal income taxes                        14,536      15,003      18,844
FEDERAL INCOME TAXES
     Current                                                                4,346       4,486       6,166
     Deferred                                                              (1,189)       (145)        100
---------------------------------------------------------------------------------------------------------
               Total federal income taxes                                   3,157       4,341       6,266
---------------------------------------------------------------------------------------------------------
               NET EARNINGS                                              $ 11,379    $ 10,662    $ 12,578
=========================================================================================================

               EARNINGS PER SHARE
                    Basic                                                $   2.01    $   1.92    $   2.29
=========================================================================================================
                    Diluted                                              $   1.97    $   1.87    $   2.23
=========================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       41
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity

                                               For the Years Ended December 31, 2005, 2004 and 2003
                                         --------------------------------------------------------------------
                                                                                        Unrealized
                                                                                      gains (losses)
                                                                                      on securities
                                                   Additional                           designated
                                           Common    paid-in    Retained   Treasury    as available
(In thousands, except share data)           stock    capital    earnings     stock       for sale     Total
-------------------------------------------------------------------------------------------------------------
<S>                                     <C>        <C>         <C>         <C>         <C>         <C>
BALANCE AT JANUARY 1, 2003               $  2,797   $  5,113    $ 61,236    $ (3,471)   $  1,206    $ 66,881
Issuance of 203,478 shares under
     stock option plan                         --        591          --       3,139          --       3,730
Dividends declared of $.542 per share          --         --      (2,970)         --          --      (2,970)
Unrealized losses on securities
     designated as available for sale,
     net of related tax effects                --         --          --          --        (291)       (291)
Net earnings for the year                      --         --      12,578          --          --      12,578
-------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2003                2,797      5,704      70,844        (332)        915      79,928
Issuance of 118,131 shares under
     stock option plan                         30        954          --       1,583          --       2,567
Repurchase of 134,936 shares                   --         --          --      (4,369)         --      (4,369)
Dividends declared of $.618 per share          --         --      (3,435)         --          --      (3,435)
Unrealized losses on securities
     designated as available for sale,
     net of related tax effects                --         --          --          --        (310)       (310)
Net earnings for the year                      --         --      10,662          --          --      10,662
-------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2004             $  2,827   $  6,658    $ 78,071    $ (3,118)   $    605    $ 85,043
Lawrence Financial acquisition                110      8,146          --          --          --       8,256
Issuance of 92,800 shares under
     stock option plan                         --       (852)         --       2,963          --       2,111
Repurchase of 269,945 shares                   --         --          --      (7,817)         --      (7,817)
Dividends declared of $.704 per share          --         --      (3,945)         --          --      (3,945)
Unrealized losses on securities
     designated as available for sale,
     net of related tax effects                --         --          --          --        (946)       (946)
Net earnings for the year                      --         --      11,379          --          --      11,379
-------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2005             $  2,937   $ 13,952    $ 85,505    $ (7,972)   $   (341)   $ 94,081
=============================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

Consolidated Statements of Comprehensive Income

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                       --------------------------------
(In thousands)                                                            2005       2004        2003
-------------------------------------------------------------------------------------------------------
<S>                                                                    <C>         <C>         <C>
Net earnings                                                           $ 11,379    $ 10,662    $ 12,578
Other comprehensive income, net of tax:
     Unrealized losses on securities  designated  as available for
          sale,  net of benefits of $(335), $(71) and $(47) in 2005,
          2004 and 2003, respectively                                      (623)       (131)        (87)
     Reclassification adjustment for realized gains included in
          net earnings, net of taxes of $175, $97 and $110 in
          2005, 2004 and 2003, respectively                                (323)       (179)       (204)
-------------------------------------------------------------------------------------------------------
Comprehensive income                                                   $ 10,433    $ 10,352    $ 12,287
=======================================================================================================
Accumulated comprehensive income (loss)                                $   (341)   $    605    $    915
=======================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       42
<PAGE>

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                              -----------------------------------
(In thousands)                                                                  2005          2004         2003
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings                                                                  $  11,379    $  10,662    $  12,578
Adjustments to reconcile net earnings to net cash provided by
      operating activities:
      Depreciation and amortization                                               1,822        1,165          985
      Amortization of core deposit intangible                                       953           72           --
      Gain on sale of securities                                                   (498)        (276)        (314)
      Amortization of premiums and discounts on investment
           securities - net                                                         805          836        1,310
      Amortization of mortgage servicing rights                                     294          624        1,222
      Proceeds from sale of loans in secondary market                            35,996       59,428      178,542
      Loans disbursed for sale in secondary market                              (35,540)     (55,614)    (175,411)
      Gain on sale of loans                                                        (610)      (1,132)      (2,080)
      Loss on disposition of assets                                                (204)         (15)
      Loss on sale of consumer finance loan portfolio                             3,585
      Amortization (accretion) of deferred loan origination costs (fees)           (483)        (155)           1
      Proceeds from disposal of other real estate owned                           1,294        1,163           --
      Loss on sale of other real estate owned                                       316          323           --
      Purchase of loans                                                              --         (282)          --
      Federal Home Loan Bank stock dividends                                       (363)        (255)        (234)
      Provision for losses on loans                                               6,341        3,136        3,347
      Tax benefit of stock options exercised                                        447          693          802
      Bank owned life insurance income                                             (436)        (118)
      Increase (decrease) in cash due to changes in:
           Prepaid expenses and other assets                                      1,768           41         (225)
           Accrued interest receivable                                             (614)        (121)         189
           Accrued interest payable and other liabilities                          (353)      (1,371)       1,603
           Federal income taxes
                Current                                                           1,751       (1,116)      (1,133)
                Deferred                                                         (1,189)        (145)         100
-----------------------------------------------------------------------------------------------------------------
                     Net cash provided by operating activities                   22,876       21,143       21,267

CASH FLOWS USED IN INVESTING ACTIVITIES:
    Loan disbursements                                                         (344,834)    (409,234)    (445,612)
    Principal repayments on loans                                               311,778      338,646      330,329
    Principal repayments on mortgage-backed securities designated
         as available for sale                                                   16,905       19,095       31,230
    Proceeds from sale of investment securities designated
         as available for sale                                                   35,234       14,192        7,573
    Proceeds from maturity of investment securities                               1,405        4,342          780
    Proceeds from disposition of assets                                              89           --           64
    Proceeds from sale of consumer finance loan portfolio                            --        5,143           --
    Loans sold from consumer finance loan portfolio                                  --       (8,728)          --
    Purchase of investment securities designated as available for sale          (82,635)     (45,713)     (35,678)
    Purchase of investment securities designated as held-to-maturity             (1,098)
    Purchase of insurance agency                                                    (12)          --           --

    (Increase) decrease in federal funds sold - net                                (626)       5,241        5,417
    Purchase of bank owned life insurance                                            --      (10,000)          --
    Purchase of office premises and equipment                                    (5,939)      (2,583)      (2,960)
    Ripley acquisition - net of cash received                                        --       (2,927)          --
    Lawrence acquisition - net of cash received                                   8,228           --           --
-----------------------------------------------------------------------------------------------------------------
                        Net cash used in investing activities                   (59,601)     (92,526)    (109,955)
-----------------------------------------------------------------------------------------------------------------
                        Net cash used in operating and investing activities
                             (balance carried forward)                          (36,725)     (71,383)     (88,688)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       43
<PAGE>

Consolidated Statements of Cash Flows (continued)

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                             -----------------------------------
(In thousands)                                                                  2005         2004         2003
----------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>          <C>          <C>
                   Net cash used in operating and investing activities
                        (balance brought forward)                            $ (36,725)   $ (71,383)   $ (88,688)

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
    Proceeds (repayments) from securities sold under agreement
       to repurchase                                                            12,904          994       (1,188)
    Net increase in deposit accounts                                            10,378       92,706       54,008
    Proceeds from Federal Home Loan Bank advances                               28,200           --       50,301
    Repayment of Federal Home Loan Bank advances                               (13,182)     (18,368)     (13,469)
    Proceeds from notes payable                                                     --           --        3,050
    Repayment of notes payable                                                  (2,700)        (400)      (2,700)
    Proceeds from issuance of subordinated debentures                            5,000       13,000           --
    Dividends on common shares                                                  (3,945)      (3,435)      (2,970)
    Purchase of treasury stock                                                  (7,820)      (4,369)          --
    Proceeds from issuance of shares under stock option plan                     1,667        1,874        2,928
----------------------------------------------------------------------------------------------------------------
                        Net cash provided by financing activities               30,502       82,002       89,960
----------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                       (6,223)      10,619        1,272
Cash and cash equivalents at beginning of year                                  31,009       20,390       19,118
----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                     $  24,786    $  31,009    $  20,390
================================================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the year for:
         Federal income taxes                                                $   3,124    $   5,417    $   6,474
================================================================================================================
          Interest on deposits and borrowings                                $  29,129    $  20,552    $  20,463
================================================================================================================

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
    Unrealized gains (losses) on securities designated as
         available for sale, net of related tax benefits                     $  (1,278)   $    (310)   $    (291)
================================================================================================================
    Recognition of mortgage servicing rights in
         accordance with SFAS No. 140                                        $     475    $     750    $   2,409
================================================================================================================
    Transfer from loans to real estate acquired through foreclosure          $     107    $   2,564    $   1,447
================================================================================================================
    Issuance of loans upon sale of real estate acquired
         through foreclosure                                                 $      --    $     738    $     862
================================================================================================================
    Fair value of assets acquired in acquisition of Ripley National Bank     $      --    $  58,611    $      --
================================================================================================================
    Fair value of assets acquired in acquisition of Lawrence Financial       $ 125,121    $      --    $      --
================================================================================================================
    Common stock issued in acquisition of Lawrence Financial                 $   8,256    $      --    $      --
================================================================================================================
    Goodwill and other intangible assets arising from acquisitions-net       $   6,741    $   2,351    $      --
================================================================================================================

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
    Acquisition of treasury stock in exchange for stock options              $      --    $      --    $     165
================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       44
<PAGE>

Notes to Consolidated Financial Statements
For Years Ended December 31, 2005, 2004 and 2003

NOTE A -- SUMMARY OF ACCOUNTING POLICIES
         Oak  Hill  Financial,  Inc.  (the  "Company")  is a  financial  holding
company,  the principal assets of which are the Company's  ownership of Oak Hill
Banks ("Oak Hill") and Oak Hill Financial Insurance  ("OHFI").  The Company also
owns 49% of Oak Hill  Title  Agency,  LLC  ("Oak  Hill  Title").  The  Company's
operations are primarily  dependent upon its financial services subsidiary which
is  collectively  viewed  herein as a single  operating  segment  for  financial
statement purposes.

         Oak Hill conducts a general commercial banking business in southern and
central Ohio which  consists of attracting  deposits from the general public and
applying those funds to the  origination of loans for  commercial,  consumer and
residential  purposes.  Action was a consumer  finance  company that  originated
installment and home equity loans.  Oak Hill's  profitability  is  significantly
dependent on net  interest  income,  which is the  difference  between  interest
income generated from interest-earning  assets (i.e., loans and investments) and
the  interest  expense  paid on  interest-bearing  liabilities  (i.e.,  customer
deposits and borrowed  funds).  Net interest  income is affected by the relative
amount of  interest-earning  assets  and  interest-bearing  liabilities  and the
interest received or paid on these balances. The level of interest rates paid or
received by Oak Hill can be significantly  influenced by a number of competitive
factors,  such as governmental monetary policy, that are outside of management's
control.

         In October 2004, the Company  acquired  Ripley National Bank ("Ripley")
for $5.3  million in cash.  As part of the  transaction,  the  Company  acquired
full-service  offices in Ripley and Georgetown,  Ohio,  involving total loans of
$39.1 million, $51.6 million in deposits and $58.6 million in total assets.

         In December  2004,  the Company  sold the  consumer  loan  portfolio of
Action Finance Company ("Action"), a consumer finance subsidiary. The portfolio,
which was comprised of small consumer and second  mortgage  loans,  totaled $8.7
million.  Concurrent  with the sale,  the Company closed its five retail lending
offices in southern Ohio.

         In 2005, the Company  acquired  Lawrence  Financial and its subsidiary,
for $15.2  million,  of which $7.7 million was paid in cash.  In  addition,  the
Company   issued   221,051   shares  of  common  stock  to  Lawrence   Financial
shareholders.  As part of the  transaction,  the  Company  acquired  a net three
full-service  offices in southern Ohio,  involving total loans of $76.5 million,
$104.2 million in deposits and $116.9 million in assets.

         The  consolidated  financial  information  presented  herein  has  been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America ("U.S.  GAAP") and general accounting  practices within
the financial services industry. In preparing  consolidated financial statements
in  accordance  with U.S.  GAAP,  management  is required to make  estimates and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and revenues and expenses during the reporting period. Actual results
could differ from such estimates.

         The  following  is a summary of the  Company's  significant  accounting
policies  which  have  been  consistently  applied  in  the  preparation  of the
accompanying consolidated financial statements.

1.   Principles of Consolidation
         The  consolidated  financial  statements  include  the  accounts of the
Company  and its  wholly-owned  subsidiaries,  Oak  Hill  and  its  wholly-owned
subsidiaries Oak Hill Banks Community  Development  Corp. and Oak Hill Financial
Services  Company,  OHFI and Oak  Hill  Title.  All  intercompany  balances  and
transactions have been eliminated.

2.   Investment Securities
         The Company  accounts for  investment  securities  in  accordance  with
Statement of Financial  Accounting  Standards ("SFAS") No. 115,  "Accounting for
Certain  Investments in Debt and Equity  Securities." SFAS No. 115 requires that
investments be categorized as held to maturity,  trading, or available for sale.
Securities  classified  as held to  maturity  are  carried  at cost  only if the
Company  has the  positive  intent  and  ability  to hold  these  securities  to
maturity. Securities available for sale are carried at fair value with resulting
unrealized gains or losses recorded to stockholders' equity.

         Realized gains and losses on sales of securities  are recognized  using
the specific identification method.

                                       45
<PAGE>

3.   Loans Receivable
         Loans held in portfolio are stated at the principal amount outstanding,
adjusted  for  premiums  and  discounts  on  loans  purchased  and  sold and the
allowance for loan losses.  Premiums and  discounts on loans  purchased and sold
are  amortized  and accreted to  operations  using the interest  method over the
average life of the underlying loans.

         Interest is accrued as earned unless the  collectibility of the loan is
in doubt.  Uncollectible  interest on loans that are  contractually  past due is
charged off, or an  allowance  is  established  based on  management's  periodic
evaluation. The allowance is established by a charge to interest income equal to
all interest previously accrued,  and income is subsequently  recognized only to
the extent that cash payments are received until, in management's  judgment, the
borrower's ability to make periodic interest and principal payments has returned
to normal, in which case the loan is returned to accrual status.

         Loans  held for  sale  are  carried  at the  lower  of cost or  market,
determined in the aggregate.  Loans held for sale are identified at the point of
origination.  In computing  lower of cost or market,  deferred loan  origination
fees are deducted from the principal balance of the related loan. All loan sales
are made without  further  recourse to Oak Hill.  At December 31, 2005 and 2004,
loans held for sale were carried at cost.

         Oak Hill generally  retains servicing on loans sold and agrees to remit
to the investor  loan  principal  and interest at  agreed-upon  rates.  Mortgage
servicing  rights are accounted for pursuant to the  provisions of SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities,"  which  requires that Oak Hill  recognize as separate  assets,
rights to service  mortgage loans for others,  regardless of how those servicing
rights are acquired.  An institution  that acquires  mortgage  servicing  rights
through  either the purchase or  origination  of mortgage  loans and sells those
loans with servicing rights retained must allocate some of the cost of the loans
to the mortgage servicing rights.

         The  mortgage  servicing  rights  recorded by Oak Hill,  calculated  in
accordance  with the provisions of SFAS No. 140, were  segregated into pools for
valuation  purposes,  using as pooling  criteria  the loan term and coupon rate.
Once pooled, each grouping of loans was evaluated on a discounted earnings basis
to determine the present value of future  earnings that a purchaser could expect
to  realize  from each  portfolio.  Earnings  were  projected  from a variety of
sources  including loan servicing fees,  interest earned on float,  net interest
earned on escrows,  miscellaneous  income,  and costs to service the loans.  The
present value of future earnings is the "economic"  value of the pool, i.e., the
net realizable present value to an acquirer of the acquired servicing.

         SFAS No. 140 requires that  capitalized  mortgage  servicing rights and
capitalized excess servicing  receivables be amortized in proportion to and over
the period of  estimated  net  servicing  income and  assessed  for  impairment.
Impairment is measured based on fair value. The valuation of mortgage  servicing
rights is influenced by market factors,  including  servicing volumes and market
prices, as well as management's assumptions regarding mortgage prepayment speeds
and interest  rates.  Management  utilizes  periodic  third-party  valuations by
qualified  market  professionals  to evaluate the fair value of its  capitalized
mortgage servicing assets.

         Oak Hill recorded  amortization  related to mortgage  servicing  rights
totaling approximately  $294,000,  $624,000 and $1.2 million for the years ended
December 31, 2005, 2004 and 2003,  respectively.  At December 31, 2005 and 2004,
the carrying value of Oak Hill's mortgage  servicing rights,  which approximated
their fair value, totaled $3.3 million and $3.1 million, respectively.

4.   Loan Origination and Commitment Fees
         The Company  accounts for loan origination fees and costs in accordance
with SFAS No. 91,  "Accounting for Nonrefundable  Fees and Costs Associated with
Originating or Acquiring Loans and Initial Direct Costs of Leases."  Pursuant to
the  provisions  of SFAS No.  91, all loan  origination  fees  received,  net of
certain  direct  origination  costs,  are deferred on a  loan-by-loan  basis and
amortized to interest income using the interest method,  giving effect to actual
loan prepayments.  Additionally,  SFAS No. 91 generally limits the definition of
loan origination  costs to the direct costs  attributable to originating a loan,
i.e., principally actual personnel costs.

         Fees received for loan  commitments are deferred and amortized over the
life of the related loan using the interest method.

5.   Allowance for Loan Losses
         It  is  the  Company's  policy  to  provide  valuation  allowances  for
estimated losses on loans based upon past loss experience,  adjusted for changes
in trends and  conditions  in certain items  including,  but not limited to, the
level of delinquent and specific  problem  loans,  adverse  situations  that may
affect the borrower's  ability to repay,  the estimated  value of any underlying
collateral and current  economic  conditions in Oak Hill's primary market areas.
When the  collection  of a loan becomes  doubtful,  or otherwise  troubled,  the
Company records a loan loss provision  equal to the difference  between the fair
value of the property  securing the loan and the loan's  carrying  value.  Major
loans and major lending areas are reviewed  periodically to determine  potential
problems at an early date. The allowance for loan losses is increased by charges
to earnings and decreased by charge-offs (net of recoveries).

         The Company  maintains its allowance for loan losses in accordance with
SFAS No. 5,  "Accounting for  Contingencies,"  and SFAS No. 114,  "Accounting by
Creditors  for  Impairment  of a Loan." Both  statements  require the Company to
evaluate the collectibility of interest and principal loan payments.  SFAS No. 5
requires the accrual of a loss when it is probable that a loan has

                                       46
<PAGE>

been  impaired and the amount of the loss can be reasonably  estimated  SFAS No.
114 requires  that  impaired  loans be measured  based upon the present value of
expected future cash flows discounted at the loan's effective  interest rate or,
as an alternative,  at the loans'  observable  market price or fair value of the
collateral.

         A loan is defined under SFAS No. 114 as impaired when, based on current
information and events, it is probable that a creditor will be unable to collect
all amounts due according to the  contractual  terms of the loan  agreement.  In
applying the provisions of SFAS No. 114, the Company considers its investment in
one-to-four family residential loans, consumer installment loans and credit card
loans to be homogeneous and therefore excluded from separate  identification for
evaluation  of  impairment.  These  homogeneous  loan groups are  evaluated  for
impairment on a collective  basis.  With respect to the Company's  investment in
commercial and other loans, and its evaluation of impairment thereof, management
believes such loans are adequately collateralized and as a result impaired loans
are carried as a practical expedient at the lower of cost or fair value.

         It is the  Company's  policy to charge off  unsecured  credits that are
more than ninety days delinquent.  Similarly,  collateral  dependent loans which
are more than ninety days  delinquent are  considered to constitute  more than a
minimum delay in repayment and are evaluated for  impairment  under SFAS No. 114
at that time.

6.   Office Premises and Equipment
         Depreciation  and amortization  are provided on the  straight-line  and
accelerated methods over the estimated useful lives of the assets,  estimated to
be ten to fifty years for buildings and  improvements  and three to  twenty-five
years  for  furniture,   fixtures  and  equipment.   Amortization  of  leasehold
improvements  is provided  over the  shorter of the lease term or the  estimated
useful life of the related asset.

7.   Real Estate Acquired Through Foreclosure
         Real estate acquired through foreclosure is carried at the lower of the
loan's unpaid  principal  balance  (cost) or fair value less  estimated  selling
expenses at the date of acquisition.  The loan loss allowance is charged for any
write  down  in  the  loan's  carrying  value  to  fair  value  at the  date  of
acquisition.  Real estate loss provisions are recorded if the  properties'  fair
value subsequently declines below the value determined at the recording date. In
determining  the lower of cost or fair value at  acquisition,  costs relating to
development  and  improvement  of property  are  considered.  Costs  relating to
holding real estate  acquired  through  foreclosure,  net of rental income,  are
charged against earnings as incurred.

8.   Federal Income Taxes
         The Company accounts for federal income taxes pursuant to SFAS No. 109,
"Accounting  for Income  Taxes."  Pursuant to the  provisions of SFAS No. 109, a
deferred tax liability or deferred tax asset is computed by applying the current
statutory tax rates to net taxable or deductible  temporary  differences between
the  tax  basis  of an  asset  or  liability  and  its  reported  amount  in the
consolidated  financial  statements  that will  result in taxable or  deductible
amounts in future  periods.  Deferred tax assets are recorded only to the extent
that  the  amount  of  net  deductible  temporary  differences  or  carryforward
attributes may be utilized against current period earnings, carried back against
prior years earnings,  offset against taxable temporary differences reversing in
future  periods,  or utilized to the extent of  management's  estimate of future
taxable income. A valuation allowance is provided for deferred tax assets to the
extent that the value of net deductible  temporary  differences and carryforward
attributes  exceeds  management's  estimates of taxes payable on future  taxable
income.  Deferred  tax  liabilities  are  provided  on the  total  amount of net
temporary differences taxable in the future.

         The Company's principal temporary  differences between pretax financial
income  and  taxable  income  result  primarily  from the  different  methods of
accounting for deferred loan origination fees and costs,  Federal Home Loan Bank
stock dividends,  capitalized  mortgage servicing rights,  certain components of
retirement expense and the allowance for loan losses. A temporary  difference is
also recognized for depreciation  expense computed using accelerated methods for
federal income tax purposes.

9.   Goodwill and Core Deposit Intangible
         In  April  2005,  the  Company  acquired  Lawrence  Financial  and  its
subsidiary  for  $15.2  million,  of which  $7.7  million  was paid in cash.  In
addition,  the  Company  issued  221,051  shares  of  common  stock to  Lawrence
Financial  shareholders.  The acquisition resulted in a $6.2 million increase in
goodwill.  Also,  as a result of the  acquisition,  a $3.8  million core deposit
intangible was recorded.

         In October 2004, the Company  acquired Ripley for $5.3 million in cash.
The  acquisition  resulted in a $1.3 million  increase in goodwill.  Also,  as a
result of the acquisition, a $1.3 million core deposit intangible was recorded.

         In January 2002,  OHFI  purchased  McNelly  Insurance  Agency,  a local
property and casualty  insurance  agency,  for consideration of $100,000 in cash
and a $100,000  note  payable.  This  purchase  resulted  in  goodwill  totaling
$197,000.

         Pursuant  to SFAS No.  142  "Goodwill  and  Intangible  Assets,"  which
prescribes accounting for all purchased goodwill and intangible assets. Pursuant
to  SFAS  No.  142,  acquired  goodwill  is not  amortized,  but is  tested  for
impairment  at the  reporting  unit level  annually or  whenever  an  impairment
indicator  arises.  Goodwill  has  been  assigned  to Oak  Hill  and OHFI as the
reporting units that are expected to benefit from the goodwill.

                                       47
<PAGE>

         Based  on the  Company's  periodic  test  of  goodwill,  there  were no
impairment  charges  required for the years ended  December  31, 2005,  2004 and
2003.

         The  core  deposit  intangibles  recorded  as  part of the  Ripley  and
Lawrence Financial  acquisitions are being amortized over their estimated useful
lives of 9.3 and 8.3 years, respectively.  Oak Hill recorded amortization of the
core deposit  intangibles  of $953,000 and $72,000 for the years ended  December
31, 2005 and 2004.

10.   Interest Rate Swap
         The  Company  entered  into an  interest  rate swap in  August  2004 to
convert  $5.0  million  of its Oak  Hill  Capital  Trust 1  junior  subordinated
debentures  from fixed rate to variable rate.  Under the agreement,  the Company
has agreed to pay  interest to the  counterparty  on the $5.0  million  notional
amount at a floating rate of three-month  LIBOR plus 5.35% which at December 31,
2005 was 9.89%, and to receive interest at a fixed rate of 10.875%. The interest
rate swap met the  criteria  required  to  qualify  for the  shortcut  method of
accounting for fair value hedges under SFAS No. 133,  "Accounting for Derivative
Instruments and Hedging  Activities," as amended.  Based on this shortcut method
of accounting,  no ineffectiveness  in the hedging  relationship was assumed and
any fair value change in the interest  rate swap was also offset by a fair value
change in the junior subordinated  debentures during the year ended December 31,
2005 and 2004.

11.   Fair Value of Financial Instruments
         SFAS No. 107, "Disclosures about Fair Value of Financial  Instruments,"
requires  disclosure  of fair value of  financial  instruments,  both assets and
liabilities whether or not recognized in the consolidated statement of financial
condition,  for which it is  practicable  to estimate that value.  For financial
instruments where quoted market prices are not available,  fair values are based
on estimates using present value and other valuation methods.

         The methods  used are  greatly  affected  by the  assumptions  applied,
including the discount rate and estimates of future cash flows.  Therefore,  the
fair values  presented  may not  represent  amounts that could be realized in an
exchange  for  certain   financial   instruments.   The  following  methods  and
assumptions  were used by the Company in estimating  its fair value  disclosures
for financial instruments at December 31, 2005 and 2004.

         Cash  and  due  from  banks.  The  carrying  amounts  presented  in the
consolidated  statements of financial  condition for cash and due from banks are
deemed to approximate fair value.

         Federal funds sold. The carrying amounts  presented in the consolidated
statements  of  financial  condition  for  federal  funds  sold  are  deemed  to
approximate fair value due to daily repricing.

         Investment securities. For investment securities,  fair value is deemed
to equal quoted market price.

         Loans   receivable.   The  loan  portfolio  has  been  segregated  into
categories with similar characteristics,  such as one-to-four family residential
real estate,  multi-family residential real estate, commercial,  installment and
other.  These loan  categories  were  further  delineated  into  fixed-rate  and
adjustable-rate  loans.  The fair values for the resultant loan  categories were
computed via discounted cash flow analysis, using current interest rates offered
for loans with similar terms to borrowers of similar credit quality.

         Federal  Home Loan Bank stock.  The  carrying  amount  presented in the
consolidated  statements of financial  condition is deemed to  approximate  fair
value.

         Deposits.  The fair value of NOW  accounts,  savings  accounts,  demand
deposits,  money  market  deposits and other  transaction  accounts is deemed to
approximate  the amount  payable on demand at December  31, 2005 and 2004.  Fair
values for  fixed-rate  certificates  of  deposit  have been  estimated  using a
discounted cash flow calculation  using the interest rates currently offered for
deposits of similar remaining maturities.

         Advances  from the Federal  Home Loan Bank.  The fair value of advances
from the Federal Home Loan Bank has been estimated  using  discounted  cash flow
analysis,  based on the interest rates currently offered for advances of similar
remaining maturities.

         Securities sold under agreement to repurchase.  The carrying amounts of
securities  sold under  agreements to repurchase are deemed to approximate  fair
value.

         Subordinated   debentures.   The  fair   value  of  the   Corporation's
subordinated  debentures has been estimated using discounted cash flow analysis,
based on the  interest  rates  currently  offered  for  instruments  of  similar
remaining maturities. The fair value of the subordinated debentures includes the
effects of hedging.

         Notes payable. The fair value of notes payable has been estimated using
discounted cash flow analysis, based on the interest rates currently offered for
notes of similar remaining maturities.

         Commitments to extend credit. For fixed-rate and  adjustable-rate  loan
commitments,  the fair value estimate  considers the difference  between current
levels of interest rates and committed  rates.  The difference  between the fair
value of  outstanding  loan  commitments  at December  31, 2005 and 2004 was not
material.

                                       48
<PAGE>

         Based on the foregoing methods and assumptions,  the carrying value and
fair value of the Company's financial instruments are as follows:

<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                ----------------------------------------------------------------
                                                                              2005                               2004
                                                                -----------------------------      -----------------------------
                                                                   Carrying           Fair            Carrying           Fair
(In thousands)                                                       value            value             value            value
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>                <C>               <C>
Financial assets
     Cash and due from banks                                   $     24,786      $     24,786      $    31,009       $    31,009
     Federal funds sold                                               1,614             1,614              988               988
     Investment securities                                          134,812           135,044           92,023            92,236
     Loans receivable                                             1,015,083         1,011,480          912,538           915,674
     Federal Home Loan Bank stock                                     7,626             7,626            6,590             6,590
--------------------------------------------------------------------------------------------------------------------------------
                                                                 $1,183,921        $1,180,550       $1,043,148        $1,046,497
================================================================================================================================
Financial liabilities
     Deposits                                                   $   978,396       $   970,278       $  862,096        $  857,213
     Advances from the Federal Home Loan Bank                       123,119           124,047          105,601           108,827
     Securities sold under agreement to repurchase                   18,263            18,318            5,359             5,359
     Notes payable                                                                                       2,700             2,700
     Subordinated debentures                                         23,000            23,187           18,000            18,131
--------------------------------------------------------------------------------------------------------------------------------
                                                                 $1,142,778        $1,135,830       $  993,756        $  992,230
================================================================================================================================
</TABLE>

12.   Earnings per Share

         Basic   earnings   per  common   share  is  computed   based  upon  the
weighted-average  number of common shares  outstanding  during the year. Diluted
earnings  per  common  share  is  computed  including  the  dilutive  effect  of
additional potential common shares issuable under stock option.

         The computations were as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                                                      2005              2004             2003
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>               <C>
Weighted-average common shares outstanding (basic)                                  5,667,522        5,549,855         5,487,436
Dilutive effect of assumed exercise of stock options                                  121,817          142,613           139,855
--------------------------------------------------------------------------------------------------------------------------------

Weighted-average common shares outstanding (diluted)                                5,789,339        5,692,468         5,627,291
================================================================================================================================
</TABLE>

         Options to purchase  123,550 and 68,000  shares of common  stock with a
respective weighted-average exercise price of $37.12 and $30.46 were outstanding
at  December  31,  2005  and  2003,  respectively,  but were  excluded  from the
computation of common share equivalents for those respective years because their
exercise prices were greater than the average market price of the common shares.

                                       49
<PAGE>

13.    Stock Incentive Plan
         The  Company has a stock  incentive  plan that  provides  for grants of
options,  restricted stock and other equity-based instruments of up to 1,200,000
authorized,  but unissued shares of its common stock.  The Company  accounts for
its  stock  option  plan in  accordance  with  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation," which contains a fair value-based method for valuing
stock-based compensation that entities may use, which measures compensation cost
at the grant date based on the fair  value of the  award.  Compensation  is then
recognized  over the  service  period,  which is  usually  the  vesting  period.
Alternatively,  SFAS No. 123  permits  entities to continue to account for stock
options and similar equity instruments under Accounting Principles Board ("APB")
Opinion  No. 25,  "Accounting  for Stock  Issued to  Employees."  Entities  that
continue to account for stock  options  using APB Opinion No. 25 are required to
make pro forma  disclosures  of net earnings  and earnings per share,  as if the
fair value-based method of accounting defined in SFAS No. 123 had been applied.

         The Company applies APB Opinion No. 25 and related  Interpretations  in
accounting for its stock option plan. Accordingly, no compensation cost has been
recognized for the plan. Had  compensation  cost for the Company's  stock option
plan been determined based on the fair value at the grant dates for awards under
the plan  consistent  with the accounting  method  utilized in SFAS No. 123, the
Company's net earnings and earnings per share would have been reduced to the pro
forma amounts indicated below:

(In thousands)                   2005         2004           2003
-------------------------------------------------------------------
Net earnings
     As reported             $   11,379    $   10,662    $   12,578
     Stock-based
       compensation, net
       of tax                      (997)         (399)         (114)
====================================================================
     Pro forma               $   10,382    $   10,263    $   12,464
====================================================================

Basic earnings per share
     As reported             $     2.01    $     1.92    $     2.29
     Stock-based
       compensation, net
       of tax                     (0.18)        (0.07)        (0.02)
====================================================================
     Pro forma               $     1.83    $     1.85    $     2.27
====================================================================

Diluted earnings per share
     As reported             $     1.97    $     1.87    $     2.23
     Stock-based
       compensation, net
       of tax                     (0.18)        (0.07)        (0.02)
====================================================================
     Pro forma               $     1.79    $     1.80    $     2.21
====================================================================

     The fair value of each  option  granted is  estimated  on the date of grant
using  the  modified  Black-Scholes  options-pricing  model  with the  following
weighted-average  assumptions  used for grants in 2005, 2004 and 2003:  dividend
yield of 2.4%,  1.6% and 2.3% for  2005,  2004 and 2003,  repectively;  expected
volatility  of 38.4%,  39.8% and  41.5% for 2005,  2004 and 2003,  respectively;
risk-free  interest  rates of 4.25%,  3.65%  and 3.38% for 2005,  2004 and 2003,
respectively and expected lives of 4 years for 2005, 2004 and 2003.


                                       50
<PAGE>

         A  summary  of the  status of the  Company's  Stock  Option  Plan as of
December  31,  2005,  2004 and 2003 and changes  during the years ended on those
dates is presented below:

<TABLE>
<CAPTION>
                                                              2005                      2004                       2003
                                                     ------------------------   ------------------------  ------------------------
                                                                   Weighted-                 Weighted-                 Weighted-
                                                                    average                   average                   average
                                                                   exercise                  exercise                  exercise
                                                       Shares        price       Shares        price       Shares        price
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>          <C>           <C>         <C>
Outstanding at beginning of year                       582,466      $22.21       572,397      $17.36        718,717     $15.35
Granted                                                  8,000      $32.76       130,500       37.19         68,000      30.46
Exercised                                              (92,800)     $16.60      (118,131)      15.87       (210,820)     14.77
Forfeited                                              (13,433)     $33.89        (2,300)      28.45         (3,500)     15.05
----------------------------------------------------------------------------------------------------------------------------------
Outstanding at end of year                             484,233      $23.14       582,466      $22.21        572,397     $17.36
==================================================================================================================================
Options exercisable at year-end                        475,983                   451,633                    503,730
==================================================================================================================================
Weighted-average fair value of
     options granted during the year                                $10.04                    $12.91                    $ 9.31
==================================================================================================================================
</TABLE>

The following information applies to options outstanding at December 31, 2005:

Range of                                             Number
exercise prices                                   outstanding
-------------------------------------------------------------
$ 6.67 - $10.01                                       12,975
$10.02 - $15.03                                       36,600
$15.04 - $22.56                                      249,808
$22.57 - $33.86                                       64,300
$33.87 - $37.21                                      120,550
-------------------------------------------------------------
Total                                                484,233
============================================================
Weighted-average exercise price                     $  23.14
============================================================
Weighted-average remaining contractual life        7.3 years
============================================================


14.   Capitalization
         The Company's  authorized  capital stock includes  1,500,000  shares of
$.01 per share par value voting preferred stock and 1,500,000 shares of $.01 per
share par value non-voting preferred stock. No preferred shares have been issued
at December 31, 2005 and 2004.

15.   Advertising
         Advertising costs are expensed when incurred. The Company's advertising
expense totaled  $737,000,  $421,000,  and $437,000 for the years ended December
31, 2005, 2004 and 2003, respectively.

16.   Cash and Cash Equivalents
         For purposes of reporting  cash flows,  cash and cash  equivalents  are
comprised of cash and due from banks.

17.   Reclassifications
         Certain  prior year  amounts have been  reclassified  to conform to the
2005 consolidated financial statement presentation.

18.   Effects of Recent Accounting Pronouncements
         In December 2004, the Financial Accounting Standards Board (the "FASB")
issued a revision of SFAS No. 123(R)  "Share-Based  Payment"  which  establishes
standards for the accounting for  transactions in which an entity  exchanges its
equity  instruments  for  goods  and  services,   primarily  on  accounting  for
transactions  in  which an  entity  obtains  employee  services  in  share-based
transactions.  This  statement  requires a public  entity to measure the cost of
employee services received in exchange for an award of equity  instruments based
on the grant-date fair value of the award,  with limited  exceptions.  That cost
will  recognized over the period during which an employee is required to provide
services  in  exchange  for the  awarded  - the  requisite  service  period.  No
compensation  cost is recognized for equity  instruments  for which employees do
not render the requisite service.  Employee share purchase plans will not result
in recognition of compensation cost if certain conditions are met.

                                       51
<PAGE>

         Initially,  the cost of employee  services  received in exchange for an
award of liability instruments will be measured based on current fair value; the
fair value of the award that will be remeasured  subsequently  at each reporting
date through the  settlement  date.  Changes in fair value during the  requisite
service period will be recognized as  compensation  costs over that period.  The
grant-date fair value of employee share options and similar  instruments will be
estimated using option-pricing models adjusted for the unique characteristics of
those  instruments  (unless  observable  market  prices  for the same or similar
instruments are available). If an equity award is modified after the grant date,
incremental  compensation  cost will be  recognized  in an  amount  equal to the
excess  of the  fair  value of the  modified  award  over the fair  value of the
original award immediately before the modification.

         Excess tax benefits,  as defined by SFAS 123(R),  will be recognized as
an addition to  additional  paid in capital.  Cash retained as a result of those
excess  tax  benefits  will be  presented  in the  statement  of cash  flows  as
financing  cash  inflows.  The  write-off  of  deferred  tax assets  relating to
unrealized tax benefits  associated  with recognized  compensation  cost will be
recognized  as income tax  expense  unless  there are excess tax  benefits  from
previous  awards  remaining  in  additional  paid in  capital to which it can be
offset.

         Compensation  cost is required to be recognized in the first interim or
annual period that begins after  December 15, 2005, or January 1, 2006 as to the
Company.  Based on existing grants subject to vesting,  management  believes the
annual  compensation  cost,  net of  tax,  will  approximate  the  2005  amounts
disclosed in footnote A-13.


NOTE B - INVESTMENT SECURITIES
         The amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair value of investment securities at December 31 are shown below.

<TABLE>
<CAPTION>
                                                                          2005
                                                       ------------------------------------------
                                                                    Gross      Gross   Estimated
                                                       Amortized  unrealized unrealized   fair
(In thousands)                                           cost       gains      losses     value
-------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>        <C>        <C>
Held to maturity:
     Trust preferred securities due after ten years    $  3,619   $    232   $     --   $  3,851
=================================================================================================
Available for sale:
     U.S. Government and agency obligations            $ 73,599   $     43   $  1,037  $ 72,605
     Obligations of state and political subdivisions     58,196        673        529     58,340
     Other securities                                       144        124         20        248
-------------------------------------------------------------------------------------------------
          Total securities available for sale          $131,939   $    840   $  1,586   $131,193
=================================================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                                          2004
                                                       ------------------------------------------
                                                                    Gross      Gross   Estimated
                                                       Amortized  unrealized unrealized   fair
(In thousands)                                           cost       gains      losses     value
-------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>        <C>        <C>
Held to maturity:
     Trust preferred securities due after ten years    $  3,640   $    213   $     --   $  3,853
=================================================================================================

Available for sale:
     U.S. Government and agency obligations            $ 61,594   $    229   $    415   $ 61,408
     Obligations of state and political subdivisions     25,743      1,090         64     26,769
     Other securities                                       126         99         19        206
-------------------------------------------------------------------------------------------------
          Total securities available for sale          $ 87,463   $  1,418   $    498   $ 88,383
=================================================================================================
</TABLE>

                                       52
<PAGE>

         The amortized  cost and estimated  fair value of investment  securities
designated  as available  for sale, by term to maturity at December 31 are shown
below.

<TABLE>
<CAPTION>
                                                                              2005                               2004
                                                                -------------------------------    -------------------------------
                                                                                    Estimated                          Estimated
                                                                   Amortized          fair            Amortized          fair
(In thousands)                                                       cost             value             cost             value
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>               <C>               <C>
Due in three years or less                                         $ 11,141          $ 10,870          $ 8,111           $ 8,120
Due after three years through five years                              4,250             4,197            5,787             5,729
Due after five years through ten years                               23,646            23,362            9,252             9,302
Due after ten years                                                  92,902            92,764           64,313            65,232
----------------------------------------------------------------------------------------------------------------------------------
                                                                   $131,939          $131,193          $87,463           $88,383
==================================================================================================================================
</TABLE>

         The table below indicates the length of time individual securities have
been in a continuous unrealized loss position at December 31, 2005.
<TABLE>
<CAPTION>
                                                                            Less than                          More than
                                                                          twelve months                      twelve months
                                                                -------------------------------    -------------------------------
                                                                   Estimated                          Estimated
fair                                                              Unrealized                   fair  Unrealized
(In thousands)                                                       value            loss              value            loss
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                  <C>             <C>              <C>
Available for sale:
     U.S. Government and agency obligations                      $ 48,176             $  495          $ 20,647         $   542
     Obligations of state and political subdivisions               32,010                480             2,701              49
     Other securities                                                  --                 --                49              20
----------------------------------------------------------------------------------------------------------------------------------
          Total temporarily impaired securities                  $ 80,186             $  975          $ 23,397         $   611
==================================================================================================================================
</TABLE>

         The table below indicates the length of time individual securities have
been in a continuous unrealized loss position at December 31, 2004.
<TABLE>
<CAPTION>
                                                                            Less than                          More than
                                                                          twelve months                      twelve months
                                                                -------------------------------    -------------------------------
                                                                   Estimated                          Estimated
fair                                                              Unrealized                   fair  Unrealized
(In thousands)                                                       value            loss              value            loss
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                   <C>            <C>               <C>
Available for sale:
     U.S. Government and agency obligations                      $ 31,670              $ 306          $  7,603          $  109
     Obligations of state and political subdivisions                3,109                 33             2,618              31
     Other securities                                                  --                 --                33              19
----------------------------------------------------------------------------------------------------------------------------------
          Total temporarily impaired securities                  $ 34,779              $ 339          $ 10,254          $  159
==================================================================================================================================
</TABLE>

         Management  has  the  ability  to  hold  these   temporarily   impaired
securities  for the  foreseeable  future.  The  decline  in the  fair  value  is
primarily  due to an  increase  in market  interest  rates.  The fair values are
expected to recover as the securities approach maturity dates.

         Proceeds  from sales of investment  securities  designated as available
for sale  during  the year ended  December  31,  2005,  totaled  $35.2  million,
resulting in gross realized gains of $498,000 on such sales.

         Proceeds  from sales of investment  securities  designated as available
for sale  during  the year ended  December  31,  2004,  totaled  $14.2  million,
resulting in gross realized gains of $276,000 on such sales.

         Proceeds  from sales of investment  securities  designated as available
for sale  during  the year  ended  December  31,  2003,  totaled  $7.6  million,
resulting in gross realized gains of $314,000 on such sales.

         At December 31, 2005 and 2004,  investment securities with an aggregate
book value of $86.5  million and $70.0  million,  respectively,  were pledged as
collateral for public deposits.

                                       53
<PAGE>

         The Company enters into purchases of  mortgage-backed  securities under
agreements to resell substantially identical securities on behalf of its deposit
customers. Securities purchased under agreements to resell totaled $18.3 million
and $5.4  million at December 31, 2005 and 2004,  respectively.  At December 31,
2005 and 2004, the agreements were generally  scheduled to mature within 90 days
with the exception of a $10.0 million reverse  repurchase  agreement incepted in
March 2005 which matures in March 2010.  Securities purchased under agreement to
resell averaged  approximately  $16.5 million during 2005 and the maximum amount
outstanding at any month-end during 2005 was $20.5 million.


NOTE C - LOANS RECEIVABLE
         The composition of the loan  portfolio,  including loans held for sale,
is as follows at December 31:

(In thousands)                        2005              2004
--------------------------------------------------------------
Real estate mortgage
     (primarily residential)      $  320,674        $  270,092
Installment, net of unearned
     interest of $1,000
     and $2,000 at
     December 31, 2005 and
     2004, respectively              106,774            68,072
Commercial and other                 599,105           584,201
Credit card                            2,183             2,020
--------------------------------------------------------------
          Gross loans              1,028,736           924,385
Less:
     Allowance for loan losses        13,653            11,847
--------------------------------------------------------------
          Loans receivable - net  $1,015,083        $  912,538
==============================================================

         The Company's lending efforts have historically  focused on real estate
mortgages and consumer  installment loans, which comprised  approximately $427.4
million,  or 42%,  of the  total  loan  portfolio  at  December  31,  2005,  and
approximately  $338.2  million,  or 37%, of the total loan portfolio at December
31,  2004.  In recent  years,  lending  efforts  have  increasingly  focused  on
commercial  loans,  generally  secured by commercial  real estate and equipment,
which comprise approximately $599.1 million, or 58%, of the total loan portfolio
at December 31, 2005, and  approximately  $584.2  million,  or 63%, of the total
loan  portfolio  at  December  31,  2004.   Generally,   such  loans  have  been
underwritten  with  sufficient  collateral  or cash down payments to provide the
Company with adequate collateral coverage in the event of default. Nevertheless,
the Company, as with any lending  institution,  is subject to the risk that real
estate values or economic  conditions  could  deteriorate in its primary lending
areas within Ohio, thereby impairing collateral values.  However,  management is
of the belief that real estate  values and economic  conditions in the Company's
primary lending areas are presently stable.

         As  stated   previously,   the   Company   has  sold  whole  loans  and
participating interests in loans in the secondary market, retaining servicing on
the loans sold. Loans sold and serviced for others totaled  approximately $256.5
million,  $275.9 million and $271.4 million at December 31, 2005, 2004 and 2003,
respectively.

         At December 31, 2005,  2004 and 2003,  the Company had  nonaccrual  and
nonperforming loans totaling  approximately $17.7 million, $6.3 million and $8.1
million,  respectively.  Interest  income  that would have been  recognized  had
nonaccrual loans performed  pursuant to contractual terms totaled  approximately
$1.1 million,  $406,000 and $508,000 for the years ended December 31, 2005, 2004
and 2003, respectively.

         The activity in the  allowance for loan losses is summarized as follows
for the years ended December 31:

(In thousands)               2005         2004          2003
--------------------------------------------------------------
Balance at beginning
     of year                $11,847      $10,836      $ 9,142
Provision charged to
     operations               6,341        3,136        3,347
Charge-offs                  (7,747)      (3,545)      (2,152)
Recoveries                    2,755        1,291          499
Allowance of acquired
     institutions               457          129           --
--------------------------------------------------------------
Balance at end of year      $13,653      $11,847      $10,836
==============================================================

                                       54
<PAGE>

         Impaired  loans and the allowance for loan losses on impaired loans are
summarized at December 31 below:

<TABLE>
<CAPTION>
(In thousands)                                                     2005             2004              2003
------------------------------------------------------------------------------------------------------------
<S>                                                               <C>              <C>               <C>
Impaired loans:
     With allowances assigned to the loan balances                $13,100          $ 3,826           $ 3,984
     With no allowances assigned to the loan balances                  --               --                --
------------------------------------------------------------------------------------------------------------
Totals                                                            $13,100          $ 3,826           $ 3,984
============================================================================================================
Average balance of impaired loans                                 $ 8,463          $ 3,905           $ 1,992
============================================================================================================
Allowance for loan losses on impaired loans                       $ 1,625          $ 1,328           $   982
============================================================================================================
</TABLE>

         A loan is impaired  when it is probable that the Company will be unable
to collect  all  amounts  due  according  to the  contractual  terms of the loan
agreement.  Impaired loans are included in nonperforming  assets.  The amount of
interest recognized for the year ended December 31, 2005 on impaired loans while
they were considered impaired was $71,000.  There was no interest recognized for
the years ended  December  31,  2004 and 2003 on impaired  loans while they were
considered impaired.


NOTE D - OFFICE PREMISES AND EQUIPMENT
         Office premises and equipment are summarized at December 31 as follows:

(In thousands)                            2005          2004
--------------------------------------------------------------
Land and buildings                       $25,289      $16,048
Furniture and equipment                   11,095        9,181
Leasehold improvements                     1,240        1,117
--------------------------------------------------------------

                                          37,624       26,346
     Less accumulated depreciation
          and amortization               (14,888)     (10,857)
--------------------------------------------------------------
                                         $22,736      $15,489
==============================================================

         The Company has  entered  into  commitments  to purchase  premises  and
equipment that total $2.9 million over the next three years.


NOTE E - DEPOSITS
         Deposit balances at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                            2005                               2004
                                                ---------------------------        ---------------------------
(Dollars in thousands)                            Amount            Rate             Amount            Rate
--------------------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>              <C>               <C>
Deposit type and interest rate range
Demand deposit accounts                         $  97,575              --           $ 88,712              --
Savings accounts                                   64,128            0.53%            58,978            0.45%
NOW accounts                                       79,329            1.43%            65,395            1.06%
Money market deposit accounts                       8,191            0.40%             9,249            0.41%
Premium investment accounts                       131,014            3.80%            53,093            2.17%
Select investment accounts                         19,856            3.31%            27,197            1.77%

Total transaction accounts                        400,093                            302,624
Certificates of deposit
     1.00 - 2.99%                                  93,754                            344,757
     3.00 - 4.99%                                 475,987                            203,406
     5.00 - 6.99%                                   8,506                             10,909
     7.00 - 10.00%                                     56                                400
--------------------------------------------------------------------------------------------------------------
Total certificates of deposit                     578,303            3.54%           559,472            2.82%
--------------------------------------------------------------------------------------------------------------
Total deposits                                   $978,396            3.43%          $862,096            2.14%
==============================================================================================================
</TABLE>

         The Company had deposit  accounts  with  balances in excess of $100,000
totaling  $367.4  million  and $371.1  million at  December  31,  2005 and 2004,
respectively.

                                       55
<PAGE>

         Interest  expense on  deposits is  summarized  as follows for the years
ended December 31:

(In thousands)                             2005             2004           2003
--------------------------------------------------------------------------------
NOW accounts                           $   1,017        $     804      $     839
Savings accounts                             365              195            295
Money market deposit accounts                 36               31             56
Premium investment accounts                2,853              548            411
Select investment accounts                   539              419            401
Certificates of deposit                   18,134           13,926         13,575
--------------------------------------------------------------------------------
                                         $22,944          $15,923        $15,577
================================================================================


         The contractual  maturities of outstanding  certificates of deposit are
summarized as follows at December 31:

(In thousands)                        2005             2004
--------------------------------------------------------------
Less than one year                  $298,420         $239,199
One year through
     three years                     258,282          259,816
More than three years                 21,601           60,457
--------------------------------------------------------------
                                    $578,303         $559,472
==============================================================

NOTE F - ADVANCES FROM THE FEDERAL HOME LOAN BANK
         Advances  from the Federal Home Loan Bank,  collateralized  at December
31,  2005 and 2004 by pledges of certain  residential  mortgage  loans  totaling
$209.3 million and $142.6 million,  respectively,  and Oak Hill's  investment in
Federal Home Loan Bank stock, are summarized as follows:

                           Maturing
                         in year ended        December 31,
                                          --------------------
Interest rate range      December 31,     2005          2004
--------------------------------------------------------------
                                         (Dollars in thousands)
1.85% to 8.10%               2005       $      --    $  43,426
3.77% to 6.50%               2006          39,070        2,401
4.14% to 7.30%               2007          31,501        5,501
4.29% to 5.30%               2009             281          333
5.15% to 8.02%               2010           6,140        6,158
3.94% to 6.95%               2011          39,619       40,063
     3.09%                   2013           2,922        3,819
     7.62%                   2015             850          850
     6.25%                   2016             265          283
     6.70%                   2017             749          790
     5.15%                   2018           1,445        1,691
     3.50%                   2025              45           47
     3.50%                   2029             162          167
     3.50%                   2030              70           72
--------------------------------------------------------------
                                         $123,119     $105,601
==============================================================
Weighted-average
 interest rate                               4.43%        3.95%
==============================================================

NOTE G - OTHER BORROWINGS
         At December  31, 2004,  Action had a note payable to another  financial
institution  totaling $2.7 million. The note was collateralized by a pledge of a
portion  of the  Company's  shares of Oak Hill.  The note was  repaid in January
2005.

NOTE H - SUBORDINATED DEBENTURES
         In 2000, a Delaware trust owned by the Company ("Trust 1"), issued $5.0
million  of  mandatorily  redeemable  debt  securities.  The  amount of the debt
securities issued by Trust 1 are included in the Company's  regulatory  capital,
specifically as a component of Tier 1 capital.  The subordinated  debentures are
the sole assets of Trust 1, and the Company owns all of the common securities of
Trust

                                       56
<PAGE>

1. Interest payments on the debt securities are made  semi-annually at an annual
fixed  interest  rate of 10.875% and are  reported  as a  component  of interest
expense on borrowings.

         During 2004, a Delaware  statutory business trust owned by the Company,
Oak Hill  Capital  Trust 2 ( "Trust  2"),  issued  $5.0  million of  mandatorily
redeemable debt securities.  The amount of the debt securities issued by Trust 2
are included in the Company's regulatory capital, specifically as a component of
Tier 1 capital.  The proceeds from the issuance of the  subordinated  debentures
and common  securities  were used by Trust 2 to purchase  from the Company  $5.0
million  of   subordinated   debentures   maturing  on  October  18,  2034.  The
subordinated  debentures are the sole asset of Trust 2, and the Company owns all
of the common  securities of Trust 2. Interest  payments on the debt  securities
are to be made  quarterly at an annual  fixed rate of interest of 6.24%  through
October 18, 2009 and at a floating rate of interest,  reset quarterly,  equal to
3-month  LIBOR  plus 2.40%  thereafter.  Interest  payments  are  reported  as a
component of interest  expense on borrowings.  The net proceeds  received by the
Company were contributed to the capital of Oak Hill during 2004.

          Also during 2004,  a Delaware  statutory  business  trust owned by the
Company,  Oak  Hill  Capital  Trust  3  ("Trust  3"),  issued  $8.0  million  of
mandatorily redeemable debt securities. The amount of the debt securities issued
by Trust 3 are included in the Company's  regulatory capital,  specifically as a
component of Tier 1 capital.  The proceeds from the issuance of the subordinated
debentures  and  common  securities  were used by Trust 3 to  purchase  from the
Company $8.0 million of  subordinated  debentures  maturing on October 18, 2034.
The subordinated  debentures are the sole asset of Trust 3, and the Company owns
all of  the  common  securities  of  Trust  3.  Interest  payments  on the  debt
securities  are to be made  quarterly  at a  floating  rate of  interest,  reset
quarterly,  equal to 3-month LIBOR plus 2.30%. Interest payments are reported as
a component of interest expense on borrowings.  The net proceeds received by the
Company was used to partially fund the acquisition of Lawrence Financial.

         During 2005, a Delaware  statutory business trust owned by the Company,
Oak Hill  Capital  Trust 4 ("Trust  4"),  issued  $5.0  million  of  mandatorily
redeemable debt securities.  The amount of the debt securities issued by Trust 4
are included in the Company's regulatory capital, specifically as a component of
Tier 1 capital.  The proceeds from the issuance of the  subordinated  debentures
and common  securities  were used by Trust 4 to purchase  from the Company  $5.0
million of subordinated  debentures  maturing on June 30, 2035. The subordinated
debentures are the sole asset of Trust 4, and the Company owns all of the common
securities of Trust 4. Interest  payments on the debt  securities are to be made
quarterly at an annual fixed rate of interest of 5.96% through June 30, 2015 and
at a floating  rate of interest,  reset  quarterly,  equal to 3-month LIBOR plus
1.60%  thereafter.  Interest  payments  are  reported as a component of interest
expense on borrowings. The net proceeds received by the Company were contributed
to the capital of Oak Hill during 2005.

         Trusts  1  through  4 are  not  consolidated  herein  pursuant  to  the
provisions of FIN 46.

NOTE I - FEDERAL INCOME TAXES
         The  provision  for federal  income taxes differs from that computed at
the statutory corporate tax rate for the years ended December 31 as follows:

<TABLE>
<CAPTION>
(In thousands)                                                            2005         2004        2003
----------------------------------------------------------------------------------------------------------
<S>                                                                      <C>          <C>         <C>
Federal income taxes computed at the statutory rate                      $4,988       $5,251      $6,611
Increase (decrease) in taxes resulting from:
     Interest income on municipal loans and obligations of state
          and political subdivisions                                       (807)        (419)       (354)
     New Markets Tax Credits                                             (1,000)        (500)         --
     Other                                                                  (24)           9           9
----------------------------------------------------------------------------------------------------------

Federal income tax provision per consolidated financial statements       $3,157       $4,341      $6,266
==========================================================================================================
</TABLE>

                                       57
<PAGE>

         The  computation of the Company's net deferred tax asset at December 31
is as follows:

<TABLE>
<CAPTION>
(In thousands)                                                                         2005        2004
--------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>        <C>
Taxes (payable) refundable on temporary  differences at statutory rate: Deferred
tax assets:
   Book/tax difference of allowance for loan losses                                   $4,778     $ 4,155
   Deferred compensation benefits                                                        105          89
   Net operating loss carryforwards                                                    2,213          --
   Unrealized losses on securities designated as available for sale                      363          --
     Other                                                                                51          10
--------------------------------------------------------------------------------------------------------
          Total deferred tax assets                                                    7,510       4,254
Deferred tax liabilities:
     Deferred loan origination costs                                                  (1,635)       (753)
     Federal Home Loan Bank stock dividends                                           (1,240)       (959)
     Unrealized gains on securities designated as available for sale                      --        (321)
     Book/tax difference of depreciation                                                (484)       (235)
     Mortgage servicing rights                                                        (1,165)     (1,101)
     Purchase price adjustments                                                       (1,667)       (499)
     Other                                                                               (15)        (27)
--------------------------------------------------------------------------------------------------------
          Total deferred tax liabilities                                              (6,206)     (3,895)
--------------------------------------------------------------------------------------------------------
Net deferred tax asset                                                                $1,304      $  359
========================================================================================================
</TABLE>

         The Company's  ability to utilize the net operating loss and tax credit
carryforward  amounts are subject to statutory  limitation  over a  carryforward
period which the Company expects will not exceed eight years.

         The Company has not recorded a valuation  allowance  for any portion of
the net deferred tax asset at December 31, 2005 and 2004, based on the amount of
income taxes subject to recovery in carryback years.

         Retained  earnings  at  December  31,  2005  include  $1.5  million  in
allocation of earnings for bad debt deductions of acquired savings  associations
for which no income tax has been  provided.  If these bad debt reserves are used
for  purposes  other than to absorb  bad debt  losses,  the amount  used will be
subject to Federal income tax at the current corporate tax rate.

NOTE J -- RELATED PARTY TRANSACTIONS
         In the normal  course of  business,  the  Company has made loans to its
directors,  officers,  and their related business  interests.  In the opinion of
management,  such loans are  consistent  with sound  banking  practices  and are
within  applicable  regulatory  lending  limitations.  The balance of such loans
outstanding  at December 31, 2005,  2004 and 2003  totaled  approximately  $12.7
million, $7.3 million and $5.2 million, respectively.

         The Company had also received  demand and time deposits from directors,
officers and their related business  interests of  approximately  $15.6 million,
$14.7  million  and  $10.5  million  at  December  31,  2005,   2004  and  2003,
respectively.

         In addition, the Company paid $435,000 and $512,000 for the years ended
December 31, 2005 and 2004,  respectively,  to a law firm in which a director of
the Company is a partner.  The director has been  determined  to be  independent
based upon annual review by the Company's Board of Directors.

NOTE K -- EMPLOYEE BENEFIT PLANS
         The Company has a profit-sharing and 401(k) plan covering all employees
who have attained the age of twenty-one and completed three months of continuous
service.  The profit-sharing plan is  non-contributory  and contributions to the
plan  are  made  at the  discretion  of the  Board  of  Directors.  The  Company
contributed  $225,000 and $300,000 to the plan for the years ended  December 31,
2004 and 2003, respectively.  The Company did not contribute to the plan for the
year ended December 31, 2005.

         The  401(k)  plan  allows  employees  to make  voluntary,  tax-deferred
contributions  of up to 15% of  their  base  annual  compensation.  The  Company
provides,  at its  discretion,  a 50%  matching of funds for each  participant's
contribution,  subject to a maximum of 6% of base  compensation.  The  Company's
matching  contributions  under the 401(k) plan  totaled  $257,000,  $327,000 and
$285,000 for the years ended December 31, 2005, 2004 and 2003, respectively.

                                       58
<PAGE>

NOTE L -- COMMITMENTS
         The Company is a party to financial  instruments with off-balance sheet
risk in the  normal  course  of  business  to meet  the  financing  needs of its
customers,  including commitments to extend credit. Such commitments involve, to
varying  degrees,  elements  of credit and  interest-rate  risk in excess of the
amount  recognized  in the  statements of financial  condition.  The contract or
notional  amounts  of the  commitments  reflect  the  extent  of  the  Company's
involvement in such financial instruments.

         The Company's exposure to credit loss in the event of nonperformance by
the other party to the financial  instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The Company
uses the same credit policies in making commitments and conditional  obligations
as those utilized for  on-balance-sheet  instruments,  including  utilization of
collateral where appropriate.

         At  December  31,  2005,  the Company had  outstanding  commitments  of
approximately $24.6 million to originate residential and commercial loans. Also,
the  Company  had  unused  lines  of  credit  and  letters  of  credit  totaling
approximately $112.6 million and $15.0 million, respectively, as of December 31,
2005. In the opinion of  management,  outstanding  loan  commitments  equaled or
exceeded  prevalent  market  interest  rates  as  of  December  31,  2005,  such
commitments  were  underwritten  in  accordance  with normal  loan  underwriting
policies,  and all  disbursements  will be  funded  via  normal  cash  flow from
operations and existing excess liquidity.

         The Company has also entered into  non-cancelable  lease agreements for
office  premises and equipment  under  operating  leases which expire at various
dates through 2013. The following table  summarizes  minimum  payments due under
lease agreements by year:

Year ending
December 31,                              (Dollars in thousands)
----------------------------------------------------------------
2006                                              $ 612
2007                                                543
2008                                                422
2009                                                222
2010                                                124
2011 - 2013                                         222
----------------------------------------------------------------
                                                 $2,145
================================================================


         Total rent expense under  operating  leases was $747,000,  $850,000 and
$741,000 for the years ended December 31, 2005, 2004 and 2003, respectively.

NOTE M -- REGULATORY CAPITAL
         As a registered bank holding company, the Company is subject to capital
requirements  imposed by the Board of  Governor of the  Federal  Reserve  System
("FRB").  Oak Hill is  subject to the  regulatory  capital  requirements  of the
Federal  Deposit  Insurance  Corporation  (the "FDIC").  Failure to meet minimum
capital  requirements can initiate certain mandatory -- and possibly  additional
discretionary -- actions by regulators that, if undertaken,  could have a direct
material  effect on Oak Hill's  financial  statements.  Under  capital  adequacy
guidelines and the regulatory  framework for prompt corrective  action, Oak Hill
must meet specific capital guidelines that involve quantitative  measures of Oak
Hill's assets,  liabilities,  and certain  off-balance-sheet items as calculated
under  regulatory  accounting   practices.   Oak  Hill's  capital  accounts  and
classifications  are also subject to  qualitative  judgments  by the  regulators
about components, risk weightings, and other factors.

         The FRB and the FDIC have  adopted  risk-based  capital  guidelines  to
which  the  Company  and Oak  Hill  are  subject.  The  guidelines  establish  a
systematic  analytical framework that makes regulatory capital requirements more
sensitive  to  differences   in  risk  profiles  among  banking   organizations.
Risk-based  capital  ratios are  determined by  allocating  assets and specified
off-balance-sheet  commitments to four  risk-weighting  categories,  with higher
levels of capital being  required for the categories  perceived as  representing
greater risk.

         These  guidelines  divide the  capital  into two tiers.  The first tier
("Tier 1") includes common equity,  certain  non-cumulative  perpetual preferred
stock (excluding  auction rate issues) and minority interests in equity accounts
of consolidated subsidiaries,  less goodwill and certain other intangible assets
(except  mortgage  servicing  rights and  purchased  credit card  relationships,
subject to certain  limitations).  Supplementary  ("Tier 2")  capital  includes,
among other items,  cumulative  perpetual and long-term  limited-life  preferred
stock,  mandatory  convertible  securities,  certain hybrid capital instruments,
term  subordinated  debt, and the allowance for loan losses,  subject to certain
limitations,  less required  deductions.  Banks are required to maintain a total
risk-based  capital (the sum of Tier 1 and Tier 2 capital) ratio of 8%, of which
4%  must  be  Tier  1  capital.  The  FDIC  may,  however,  set  higher  capital
requirements  when  particular  circumstances  warrant.  Banks  experiencing  or
anticipating  significant  growth  are  expected  to  maintain  capital  ratios,
including tangible capital positions, well above minimum required levels.

                                       59
<PAGE>

         During the year ended  December 31, 2005,  Oak Hill was notified by its
primary federal  regulator that it was categorized as  "well-capitalized"  under
the  regulatory  framework for prompt  corrective  action.  To be categorized as
"well-capitalized"  Oak  Hill  must  maintain  minimum  Tier  1  capital,  total
risk-based capital, and Tier 1 leverage ratios of 6%, 10%, and 5%, respectively.
At December 31, 2005, Oak Hill was well-capitalized.

         As of December 31, 2005 and 2004,  management believes that the Company
and Oak Hill  have met all of the  capital  adequacy  requirements  to which the
entities  are  subject.  The  Company's  and Oak Hill's  Tier 1  capital,  total
risk-based  capital,  and Tier 1 leverage  ratios are set forth in the following
tables:

Company consolidated:
<TABLE>
<CAPTION>
                                                                         As of December 31, 2005
                                   ------------------------------------------------------------------------------------------------
                                                                                                                  To be "well
                                                                                                              capitalized" under
                                                                               For capital                     prompt corrective
                                              Actual                        adequacy purposes                  action provisions
(Dollars in thousands)               Amount             Ratio           Amount             Ratio           Amount             Ratio
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                 <C>             <C>                 <C>           <C>                 <C>
Total capital                       $119,933            11.7%           $81,722            >8.0%          $102,152           >10.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 capital                      $107,106            10.5%           $40,861            >4.0%         $  61,291           > 6.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 leverage ratio               $107,106             8.7%           $49,002            >4.0%         $  61,253           > 5.0%
                                                                                           -                                 -
</TABLE>
<TABLE>
<CAPTION>
                                                                         As of December 31, 2004
                                   ------------------------------------------------------------------------------------------------
                                                                                                                  To be "well
                                                                                                              capitalized" under
                                                                               For capital                     prompt corrective
                                              Actual                        adequacy purposes                  action provisions
(Dollars in thousands)               Amount             Ratio           Amount             Ratio           Amount             Ratio
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                 <C>             <C>                 <C>            <C>                <C>
Total capital                       $110,620            12.2%           $72,816            >8.0%           $91,020           >10.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 capital                     $  99,201            10.9%           $36,408            >4.0%           $54,612           > 6.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 leverage ratio              $  99,201             9.3%           $42,682            >4.0%           $53,353           > 5.0%
                                                                                           -                                 -
</TABLE>
<TABLE>
<CAPTION>
Oak Hill:
                                                                         As of December 31, 2005
                                   ------------------------------------------------------------------------------------------------
                                                                                                                  To be "well
                                                                                                              capitalized" under
                                                                               For capital                     prompt corrective
                                              Actual                        adequacy purposes                  action provisions
(Dollars in thousands)               Amount             Ratio           Amount             Ratio           Amount             Ratio
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                 <C>             <C>                 <C>           <C>                 <C>
Total capital                       $111,980            11.0%           $81,633            >8.0%          $102,041           >10.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 capital                     $  99,214             9.7%           $40,816            >4.0%         $  61,225           > 6.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 leverage ratio              $  99,214             8.1%           $48,838            >4.0%         $  61,047           > 5.0%
                                                                                           -                                 -
</TABLE>
<TABLE>
<CAPTION>
                                                                           As of December 31, 2004
                                   ------------------------------------------------------------------------------------------------
                                                                                                                  To be "well
                                                                                                              capitalized" under
                                                                               For capital                     prompt corrective
                                              Actual                        adequacy purposes                  action provisions
(Dollars in thousands)               Amount             Ratio           Amount             Ratio           Amount             Ratio
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                <C>             <C>                 <C>            <C>                <C>
Total capital                        $96,383            10.7%           $72,364            >8.0%           $90,545           >10.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 capital                       $85,070             9.4%           $36,182            >4.0%           $54,273           > 6.0%
                                                                                           -                                 -
     (to risk-weighted assets)
Tier 1 leverage ratio                $85,070             8.1%           $42,265            >4.0%           $52,831           > 5.0%
                                                                                           -                                 -
</TABLE>

                                       60
<PAGE>

         The Company's  management  believes  that under the current  regulatory
capital regulations,  the Company and Oak Hill will continue to meet the minimum
capital  requirements  in the  foreseeable  future.  However,  events beyond the
control of the Company,  such as increased  interest  rates or a downturn in the
economy in Oak Hill's  primary  market  areas,  could  adversely  affect  future
earnings and consequently, the ability to meet future minimum regulatory capital
requirements.


NOTE N -- OAK HILL FINANCIAL, INC. CONDENSED FINANCIAL INFORMATION
         The following  condensed financial  statements  summarize the financial
position of Oak Hill  Financial,  Inc. as of December 31, 2005 and 2004, and the
results  of its  operations  and its  cash  flows  for each of the  years  ended
December 31, 2005, 2004 and 2003.

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF
FINANCIAL CONDITION

                                             December 31,
                                       ----------------------
(In thousands)                           2005          2004
-------------------------------------------------------------
ASSETS
Cash and due from banks                $     451    $   2,089
Interest-bearing deposits in
     Oak Hill Banks                        6,243        6,721
Investment securities                        537          561
Investment in Oak Hill Banks             108,921       88,664
Investment in Oak Hill Capital
     Trusts                                  713          558
Investment in OHFI                           996        1,056
Investment in Oak Hill Title LLC              15           15
Office premises and
     equipment - net                         275        2,307
Prepaid expenses and other assets          2,588        3,639
-------------------------------------------------------------
     Total assets                      $ 120,739    $ 105,610
=============================================================

LIABILITIES AND
STOCKHOLDER'S EQUITY
Accrued expenses and other
     liabilities                       $   2,945    $   2,009
Subordinated debentures                   23,713       18,558
-------------------------------------------------------------
     Total liabilities                    26,658       20,567
Stockholders' equity
     Common stock                          2,937        2,827
     Additional paid-in capital           13,952        6,658
     Retained earnings                    85,505       78,071
     Less cost of treasury stock          (7,972)      (3,118)
     Unrealized gains (losses) on
          securities designated as
          available for sale, net of
          related tax effects               (341)         605
-------------------------------------------------------------
     Total stockholders' equity           94,081       85,043
-------------------------------------------------------------
     Total liabilities and
          stockholders' equity         $ 120,739    $ 105,610
=============================================================

                                       61
<PAGE>

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF EARNINGS

                                 Year ended December 31,
                           ---------------------------------
(In thousands)               2005        2004        2003
------------------------------------------------------------
REVENUE
Interest income            $    151    $     58    $     24
Other income                      4           6          10
Equity in earnings of
     subsidiaries            12,813      11,548      13,306
------------------------------------------------------------
     Total revenue           12,968      11,612      13,340
EXPENSES
Interest expense              1,425         683         578
General and
     administrative             830         686         498
------------------------------------------------------------
     Total expenses           2,255       1,369       1,076
------------------------------------------------------------
     Earnings before
          federal income
          tax credits        10,713      10,243      12,264
------------------------------------------------------------
Federal income
          tax credits          (666)       (419)       (314)
------------------------------------------------------------
      NET EARNINGS         $ 11,379    $ 10,662    $ 12,578
============================================================

<TABLE>
<CAPTION>
Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF CASH FLOWS

                                                                                         Year Ended December 31,
                                                                                    --------------------------------
(In thousands)                                                                        2005        2004        2003
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net earnings for the year                                                      $ 11,379    $ 10,662    $ 12,578
     Adjustments to reconcile net earnings to net cash provided by
        operating activities:
          Undistributed earnings of consolidated subsidiaries                           (542)     (4,316)     (7,444)
          Depreciation of office premises and equipment                                  168         243         228
          Amortization of premium on investment securities                                11          --          --
          Tax benefit of stock options exercised                                         447         693         802
          Increase (decrease) in cash due to changes in:
             Prepaid expenses and other assets                                           124        (522)       (759)
             Other liabilities                                                         1,430        (257)       (498)
          Federal income taxes
             Deferred                                                                   (31)         73          --
--------------------------------------------------------------------------------------------------------------------
                         Net cash provided by operating activities                    12,986       7,620       4,907
CASH FLOWS USED IN INVESTING ACTIVITIES:
     Investment in Oak Hill Banks                                                     (5,000)    (10,250)         --
     Investment in Action Finance Company                                                 --      (1,750)         --
     Investment in Oak Hill Capital Trusts                                              (155)       (403)         --
     Investment in U.S. Government Agencies                                               --        (561)         --
     Purchase of office premises and equipment                                          (121)       (248)       (703)
     Proceeds from disposition of assets                                               1,985          --          --
     (Increase) decrease in interest-bearing deposits                                    478        (458)     (4,092)
     Lawrence Financial acquisition                                                   (6,868)         --          --
--------------------------------------------------------------------------------------------------------------------
                Net cash used in investing activities                                 (9,681)    (13,670)     (4,795)
--------------------------------------------------------------------------------------------------------------------
                Net cash provided by (used in) operating and investing activities      3,305      (6,050)        112
                     (balance carried forward)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       62
<PAGE>

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31,
(In thousands)                                                                        2005              2004             2003
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>               <C>
                Net cash provided by (used in) operating and investing activities  $   3,305          $(6,050)          $   112
                     (balance carried forward)
--------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from exercise of stock options                                           1,667            1,874             2,928
     Proceeds from issuance of subordinated debentures                                 5,155           13,403                --
     Purchase of treasury stock                                                       (7,820)          (4,369)               --
     Dividends on common shares                                                       (3,945)          (3,435)           (2,970)
--------------------------------------------------------------------------------------------------------------------------------
                         Net cash provided by (used in) financing activities          (4,493)           7,473               (42)
--------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                             (1,638)           1,423                70
Cash and cash equivalents at beginning of year                                         2,089              666               596
--------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                           $     451          $ 2,089           $   666
================================================================================================================================
</TABLE>

NOTE O -- SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE
         Obligations  for securities  sold under  agreements to repurchase  were
collateralized  at December 31, 2005 and 2004 by  investment  securities  with a
book value including  accrued interest of  approximately  $25.8 million and $6.4
million and a market  value of  approximately  $25.4  million and $6.4  million,
respectively.  The maximum balance of repurchase  agreements  outstanding at any
month-end  during the years ended  December 31, 2005 and 2004 was $20.5  million
and $6.2 million,  respectively,  and the average month-end balance  outstanding
for  2005  and  2004  was   approximately   $16.5   million  and  $5.0  million,
respectively.

NOTE P -- ACQUISITIONS
         On April 1, 2005,  the  Company  acquired  Lawrence  Financial  and its
subsidiary  for  $15.2  million,  of which  $7.7  million  was paid in cash.  In
addition,  the  Company  issued  221,051  shares  of  common  stock to  Lawrence
Financial  shareholders.  As part of the transaction,  the Company acquired five
full-service  offices in southern Ohio,  involving total loans of $76.5 million,
$104.2  million in  deposits  and $116.9  million in total  assets.  Of the five
full-service offices acquired, one was combined with an existing Oak Hill branch
and one was sold. The acquisition was accounted for as a purchase.

         The following  unaudited,  pro-forma  condensed  financial  information
gives retroactive effect as if the merger had occurred on January 1, 2005.

                       Oak Hill     Lawrence     Pro-forma
                       Financial    Financial    combined
----------------------------------------------------------
                                   (unaudited) (unaudited)
----------------------------------------------------------
                        (In thousands, except share data)

Total revenue           $81,358     $  1,562       $82,920
Total expenses           69,979        2,354        72,333
----------------------------------------------------------
Net earnings (loss)     $11,379     $   (792)      $10,587
==========================================================
Basic earnings (loss)
     per share          $  2.01     $  (0.14)      $  1.87
==========================================================
Diluted earnings
     per share          $  1.97          N/A       $  1.83
==========================================================

         On  October  9,  2004,  the  Company   acquired  Ripley  National  Bank
("Ripley") for $5.3 million in cash whereby Oak Hill and Ripley merged.  As part
of the  transaction,  the Company  acquired  full-service  offices in Ripley and
Georgetown,  Ohio,  involving  total loans of $39.1  million,  $51.6  million in
deposits and $58.6 million in total assets. The acquisition was accounted for as
a purchase.

                                       63
<PAGE>

         The following  unaudited,  pro-forma  condensed  financial  information
gives retroactive effect as if the merger had occurred on January 1, 2004.

                       Oak Hill                  Pro-forma
                       Financial     Ripley      combined
----------------------------------------------------------
                                   (unaudited) (unaudited)
----------------------------------------------------------
                        (In thousands, except share data)

Total revenue           $65,921    $   2,686       $68,607
Total expenses           55,259        4,069        59,328
----------------------------------------------------------
Net earnings (loss)     $10,662     $ (1,383)     $  9,279
==========================================================

Basic earnings (loss)
     per share         $   1.92     $  (0.25)     $   1.67
==========================================================

Diluted earnings
     per share         $   1.87          N/A       $  1.63
==========================================================


NOTE Q -- OAK HILL BANKS COMMUNITY DEVELOPMENT CORP.
         During  2004,  the  Company  announced  that Oak Hill  Banks  Community
Development   Corp.   ("OHBCDC"),   a  wholly  owned  subsidiary  and  Certified
Development  Entity  ("CDE"),  had been  selected  to  receive  a $20.0  million
allocation of new markets tax credits  ("NMTC")  authority.  Administered by the
Community Development Financial  Institutions Fund of the U.S. Department of the
Treasury,  the NMTC  program  is aimed at  stimulating  economic  and  community
development  and job creation in low-income  communities.  The program  provides
federal tax credits to investors who make qualified equity investments  ("QEIs")
in a CDE. The CDE is required to invest the  proceeds of each QEI in  low-income
communities,  which are  generally  defined as those census  tracts with poverty
rates of greater than 20 percent and/or median family incomes that are less than
or equal to 80 percent of the area median family income.

         The credit  provided to the investor totals 39 percent of each QEI in a
CDE and is claimed over a seven-year  credit  allowance  period.  In each of the
first three years,  the investor  receives a credit equal to five percent of the
total  amount  the  investor  paid to the  CDE for  each  QEI.  For  each of the
remaining four years, the investor receives a credit equal to six percent of the
total amount the investor  paid to the CDE for each QEI. The  Company's  primary
subsidiary, Oak Hill, has paid to OHBCDC $20 million for its QEIs. Oak Hill paid
$10.0 million to OHBCDC during 2005 and 2004,  i.e.,  the maximum total of $20.0
million permitted for its QEIs in OHBCDC.

         OHBCDC is utilizing  its $20.0  million of QEI proceeds to provide "New
Markets" loans to qualifying  businesses located in twelve Appalachian  counties
in rural southern Ohio. It also provides financial counseling services through a
formal  program of  community  business  workshops.  Under its New Markets  loan
program,  OHBCDC  provides  short-term  and  long-term  loans  to a  variety  of
qualifying   businesses   with   non-conventional,   non-conforming   terms  and
conditions,  including reduced fees,  extended repayment terms, and below-market
interest rates.

         At December  31, 2005,  Oak Hill had paid to OHBCDC  $20.0  million for
QEIs in OHBCDC. Oak Hill recognized $1.0 million and $500,000 in new markets tax
credits in its federal  income tax returns for the years ended December 31, 2005
and 2004,  respectively.  The  following  table sets forth the new  markets  tax
credits  expected  to be claimed by Oak Hill for years  2006  through  2011 with
respect to the aggregate QEI amounts paid by Oak Hill during 2005 and 2004.


          Aggregate                      New Markets Tax Credit
                      ----------------------------------------------------------
Year     QEI Amount     2006     2007        2008      2009      2010     2011
--------------------------------------------------------------------------------

2004        $10,000   $  500   $   600    $   600    $   600   $  600    $  --
2005         10,000      500       500        600        600      600      600
--------------------------------------------------------------------------------

Total       $20,000   $1,000    $1,100     $1,200     $1,200   $1,200     $600
================================================================================

                                       64
<PAGE>

         The new markets tax  credits  claimed by Oak Hill with  respect to each
QEI remain subject to recapture over each QEI's credit allowance period upon the
occurrence of any of the following:

      o  if less than  substantially  all (generally  defined as 85%) of the QEI
         proceeds are not used by OHBCDC to make qualified low income  community
         investments;

      o  OHBCDC ceases to be a CDE; or

      o  OHBCDC  redeems  its QEI  investments  prior  to the end of the  credit
         allowance periods.

         At December 31, 2005 and 2004, none of the above  recapture  events had
occurred,  nor in the opinion of  management  are such events likely to occur in
the foreseeable future.

         The following  condensed financial  statements  summarize the financial
position  of OHBCDC as of  December  31,  2005 and 2004,  and the results of its
operations  and its cash flows for each of the two years ended December 31, 2005
and 2004.

OHBCDC
CONDENSED STATEMENTS OF
FINANCIAL CONDITION

                                        December 31,
                                  ------------------------
(In thousands)                       2005          2004
----------------------------------------------------------
ASSETS
Cash and due from banks           $  6,786        $ 8,784
Loans receivable-net                13,166          1,207
Interest receivable                     48              1
----------------------------------------------------------
     Total assets                  $20,000        $ 9,992
==========================================================

LIABILITIES AND
STOCKHOLDER'S EQUITY
Total liabilities                  $    --        $    --
Stockholders equity
     Common stock                        1              1
     Additional paid-in capital     20,013         10,000
     Retained deficit                  (14)            (9)
----------------------------------------------------------
     Total stockholder's equity     20,000          9,992
----------------------------------------------------------
     Total liabilities and
          Stockholder's equity     $20,000        $ 9,992
==========================================================

OHBCDC
CONDENSED STATEMENTS OF OPERATIONS

                    Year ended December 31,
                    -----------------------
(In thousands)            2005       2004
--------------------------------------------
REVENUE
Interest income         $   287     $    3
Other income                  1         --

EXPENSES
Provision for loan losses   166          7
General and
     administrative         129          5
--------------------------------------------
     Loss before
        federal income
        tax credits          (7)        (9)
Federal income tax credits    2          --
--------------------------------------------
          NET LOSS      $    (5)    $   (9)
============================================

                                       65
<PAGE>

OHBCDC
CONDENSED STATEMENTS OF CASH FLOWS

                      Year ended December 31,
                      -----------------------
(In thousands)             2005       2004
--------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                 $   (5)    $   (9)
Provision for losses on
   loans                    166          7
Increase in interest
   receivable               (47)        (1)
--------------------------------------------
     Net cash provided by
        (used in) operating
        activities          114         (3)

CASH FLOWS USED IN INVESTING ACTIVITIES:
Loan disbursements      (12,329)    (1,214)
Principal repayments
   on loans                 204         --
--------------------------------------------
     Net cash used in
        investing
        activities      (12,125)    (1,214)

CASH FLOWS FROM FINANCING ACTIVITIES:
Investment by
     Oak Hill Banks          13          1
Qualified equity
   investment by
   Oak Hill Banks        10,000     10,000
--------------------------------------------
     Net cash provided by
        financing
        activities       10,013     10,001
--------------------------------------------
Net increase (decrease)
     in cash and cash
   equivalents           (1,998)     8,784
Cash and cash
     equivalents at
     beginning of year    8,784         --
--------------------------------------------
Cash and cash
     equivalents at
     end of year        $ 6,786    $ 8,784
============================================

NOTE R - DETAILS OF OPERATING EXPENSES
         The following  table details the composition of occupancy and equipment
expenses for the years ended December 31, 2005, 2004 and 2003.

                                                  Year Ended December 31,
                                            ----------------------------------
(In thousands)                                2005          2004         2003
------------------------------------------------------------------------------


Depreciation and amortization               $1,522        $1,146       $  985
Rent expense, net of rent income               674           820          711
Maintenance contracts and repairs            1,260           921          775
Other                                          611           513          439
------------------------------------------------------------------------------
Total                                       $4,067        $3,400       $2,910
==============================================================================

                                       66
<PAGE>

         The following table details the composition of other operating expenses
for the years ended December 31, 2005, 2004 and 2003.

                                                   Year Ended December 31,
                                            -----------------------------------
(In thousands)                                 2005          2004         2003
-------------------------------------------------------------------------------

ATM processing                              $   580           498          304
Supplies                                        794           644          694
Insurance commissions paid                      465           533          581
Credit and collection expenses                  631           772          692
Dealer participation                            571           315           --
Marketing                                       737           421          437
Postage                                         507           388          392
Telephone                                       659           567          542
Professional fees                             1,274           796          622
Other                                         2,841         2,739        2,501
-------------------------------------------------------------------------------
Total                                        $9,059        $7,673       $6,765
===============================================================================

NOTE S - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following  table  summarizes the Company's  quarterly  results for the years
ended December 31, 2005 and 2004.

<TABLE>
<CAPTION>
2005
                                                                                           Three Months Ended
----------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                              March 31,        June 30,        September 30,    December 31,
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>               <C>               <C>
Total interest income                                              $15,777           $17,090           $18,179           $18,674
Total interest expense                                               6,091             7,104             7,760             8,481
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                                  9,686             9,986            10,419            10,193
Provision for losses on loans                                          750             4,709               212               670
Other income                                                         2,539             3,004             3,013             3,082
General, administrative and other expense                            6,895             7,899             8,144             8,107
----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                         4,580               382             5,076             4,498
Federal income taxes (credits)                                       1,320              (219)            1,137               919
----------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                       $ 3,260           $   601           $ 3,939           $ 3,579
==================================================================================================================================
Basic earnings per share                                           $  0.59           $  0.10           $  0.69           $  0.64
==================================================================================================================================
Diluted earnings per share                                         $  0.57           $  0.10           $  0.68           $  0.63
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
2004
                                                                                            Three Months Ended
----------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                              March 31,        June 30,        September 30,    December 31,
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>               <C>               <C>
Total interest income                                              $14,188           $14,374           $14,933           $15,756
Total interest expense                                               4,910             4,966             5,230             5,732
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                                  9,278             9,408             9,703            10,024
Provision for losses on loans                                          575               708             1,002               851
Other income                                                         2,352             2,764             2,414              (860)
General, administrative and other expense                            6,333             6,591             6,745             7,275
----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                         4,722             4,873             4,370             1,038
Federal income taxes (credits)                                       1,575             1,625             1,156               (15)
----------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                       $ 3,147           $ 3,248           $ 3,214           $ 1,053
==================================================================================================================================
Basic earnings per share                                           $  0.56           $  0.59           $  0.58           $  0.19
==================================================================================================================================
Diluted earnings per share                                         $  0.55           $  0.57           $  0.57           $  0.18
==================================================================================================================================
</TABLE>

                                       67
<PAGE>