================================================================================

                                                                      Exhibit 13

CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

Report of Independent Registered Public Accounting Firm .............45

Financial Condition .................................................46

Earnings ............................................................47

Stockholders' Equity ................................................48

Comprehensive Income ................................................49

Cash Flows ..........................................................50

Notes ...............................................................52

                                                           Grant Thornton [LOGO]


                                       44
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Report of Independent Registered Public Accounting Firm

Accountants and Business Advisors

Board of Directors
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, 2004 and
2003 and the related consolidated statements of earnings,  stockholders' equity,
comprehensive  income  and cash  flows for each of the  years in the three  year
period ended December 31, 2004. 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 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, 2004 and 2003, and the consolidated  results
of its  operations  and its cash  flows for each of the years in the three  year
period  ended  December 31,  2004,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

      We have also audited,  in accordance  with standards of the Public Company
Accounting  Oversight Board (United  States),  the  effectiveness  of Oak Hill's
internal  control over  financial  reporting  as of December 31, 2004,  based on
criteria established in Internal Control - Integrated Framework by the Committee
of Sponsoring  Organizations of the Treadway  Commission ("COSO") and our report
dated March 17, 2005  expressed  an  unqualified  opinion  that Oak Hill had not
maintained  effective  control  over  financial  reporting at December 31, 2004,
based on control criteria issued by COSO.


/s/ Grant Thornton LLP

Cincinnati, Ohio
March 17, 2005


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Oak Hill Financial, Inc.
Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                                                               December 31,
                                                                                                     ------------------------------
(In thousands, except share data)                                                                       2004                 2003
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>                <C>
ASSETS
Cash and due from banks                                                                              $    31,009        $    20,390
Federal funds sold                                                                                           988                123
Investment securities designated as available for sale - at market                                        88,383             75,886
Investment securities held to maturity - at cost (approximate market value
     of $3,853 and $3,583 at December 31, 2004 and 2003, respectively)                                     3,640              3,659
Loans receivable - net                                                                                   912,282            810,827
Loans held for sale - at lower of cost or market                                                             256                194
Office premises and equipment - net                                                                       15,489             12,192
Federal Home Loan Bank stock - at cost                                                                     6,590              5,998
Real estate acquired through foreclosure                                                                   1,614                585
Accrued interest receivable on loans                                                                       3,407              2,942
Accrued interest receivable on investment securities                                                         527                495
Goodwill - net                                                                                             1,674                413
Core deposit intangible                                                                                    1,270                 --
Bank owned life insurance                                                                                 10,118                 --
Prepaid expenses and other assets                                                                          2,505              2,474
Prepaid federal income taxes                                                                               2,929              1,514
Deferred federal income taxes                                                                                359                589
------------------------------------------------------------------------------------------------------------------------------------
                    TOTAL ASSETS                                                                     $ 1,083,040        $   938,281
====================================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
     Demand                                                                                          $    88,712        $    66,712
     Savings and time deposits                                                                           773,384            651,109
------------------------------------------------------------------------------------------------------------------------------------
                    Total deposits                                                                       862,096            717,821
Securities sold under agreement to repurchase                                                              5,359              4,365
Advances from the Federal Home Loan Bank                                                                 105,601            122,887
Notes payable                                                                                              2,700              3,100
Guaranteed preferred beneficial interests in the Company's
     junior subordinated debentures                                                                       18,000              5,000
Accrued interest payable and other liabilities                                                             4,241              5,180
------------------------------------------------------------------------------------------------------------------------------------
                    Total liabilities                                                                    997,997            858,353
Stockholders' equity
     Common stock - $.50 stated value; authorized 15,000,000 shares,
          5,653,583 and 5,594,228 shares issued at December 31, 2004 and 2003, respectively                2,827              2,797
     Additional paid-in capital                                                                            6,658              5,704
     Retained earnings                                                                                    78,071             70,844
     Treasury stock (96,302 and 21,542 shares at December 31, 2004 and
          2003, respectively - at cost)                                                                   (3,118)              (332)
     Accumulated comprehensive income:
          Unrealized gain on securities designated as available for sale,
               net of related tax effects                                                                    605                915
------------------------------------------------------------------------------------------------------------------------------------
                    Total stockholders' equity                                                            85,043             79,928
------------------------------------------------------------------------------------------------------------------------------------
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $ 1,083,040        $   938,281
====================================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.


                                       46
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Oak Hill Financial, Inc.
Consolidated Statements of Earnings

<TABLE>
<CAPTION>
                                                                                                   Year Ended December 31,
                                                                                        -------------------------------------------
(In thousands, except share data)                                                          2004             2003              2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>               <C>              <C>
INTEREST INCOME
     Loans                                                                              $ 55,540          $ 52,009         $ 52,660
     Investments
          U.S. Government and agency securities                                            2,295             1,862            3,095
          Obligations of state and political subdivisions                                    838               771              815
          Other securities                                                                   535               503              523
          Federal funds sold                                                                  15                 7              119
          Interest-bearing deposits                                                           28                18               10
------------------------------------------------------------------------------------------------------------------------------------
               Total interest income                                                      59,251            55,170           57,222
INTEREST EXPENSE
     Deposits                                                                             15,923            15,577           19,654
     Borrowings                                                                            4,915             4,891            5,070
------------------------------------------------------------------------------------------------------------------------------------
               Total interest expense                                                     20,838            20,468           24,724
------------------------------------------------------------------------------------------------------------------------------------
               Net interest income                                                        38,413            34,702           32,498
Less provision for losses on loans                                                         3,136             3,347            2,757
------------------------------------------------------------------------------------------------------------------------------------
               Net interest income after provision for losses on loans                    35,277            31,355           29,741
OTHER INCOME
     Service fees, charges and other operating                                             5,370             3,889            2,845
     Insurance commissions                                                                 3,050             2,827            2,457
     Gain on sale of loans                                                                 1,882             4,489            2,358
     Gain on sale of securities                                                              276               314              315
     Gain on sale of branch                                                                   --                --              122
     Gain (loss) on sale of other real estate owned                                         (323)               19               16
     Loss on sale of consumer finance loan portfolio and related assets                   (3,585)               --               --
------------------------------------------------------------------------------------------------------------------------------------
               Total other income                                                          6,670            11,538            8,113
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
     Employee compensation and benefits                                                   14,519            14,201           13,123
     Occupancy and equipment                                                               3,400             2,910            2,433
     Federal deposit insurance premiums                                                      132               104              109
     Franchise taxes                                                                         988                69              709
     Other operating                                                                       7,745             6,765            5,922
     Merger-related expenses                                                                 160                --              367
------------------------------------------------------------------------------------------------------------------------------------
               Total general, administrative and other expense                            26,944            24,049           22,663
------------------------------------------------------------------------------------------------------------------------------------
               Earnings before federal income taxes                                       15,003            18,844           15,191
FEDERAL INCOME TAXES
     Current                                                                               4,486             6,166            5,078
     Deferred                                                                               (145)              100             (227)
------------------------------------------------------------------------------------------------------------------------------------
               Total federal income taxes                                                  4,341             6,266            4,851
------------------------------------------------------------------------------------------------------------------------------------
               NET EARNINGS                                                             $ 10,662          $ 12,578         $ 10,340
====================================================================================================================================

               EARNINGS PER SHARE
                    Basic                                                               $   1.92          $   2.29         $   1.94
====================================================================================================================================
                    Diluted                                                             $   1.87          $   2.23         $   1.90
====================================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.


                                       47
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Oak Hill Financial, Inc.
Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
                                                               For the Years Ended December 31, 2004, 2003 and 2002
                                                ------------------------------------------------------------------------------
                                                                                                       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, 2002                      $  2,797     $  5,114      $ 53,506      $ (5,007)     $    (61)     $ 56,349
Issuance of 98,313 shares under
     stock option plan                                --           (1)           --         1,536            --         1,535
                                                                                                                          301
Dividends declared of $.491 per share                 --           --        (2,610)           --            --        (2,610)
Unrealized gains on securities
     designated as available for sale,
     net of related tax effects                       --           --            --            --         1,267         1,267
Net earnings for the year                             --           --        10,340            --            --        10,340
------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2002                       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
                                                                                                                          301
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
==============================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.


                                       48
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Oak Hill Financial, Inc.
Consolidated Statements of Comprehensive Income

<TABLE>
<CAPTION>
                                                                                             Year Ended December 31,
                                                                                     ---------------------------------------
(In thousands)                                                                         2004           2003           2002
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>            <C>
Net earnings                                                                         $ 10,662       $ 12,578       $ 10,340
Other comprehensive income, net of tax:
     Unrealized gains  (losses) on securities  designated as available for sale,
          net of taxes (benefits) of $(71), $(47) and $760 in 2004, 2003 and
          2002, respectively                                                             (131)           (87)         1,475
     Reclassification adjustment for realized gains included in
          net earnings, net of taxes of $97, $110 and $107 in
          2004, 2003 and 2002, respectively                                              (179)          (204)          (208)
----------------------------------------------------------------------------------------------------------------------------
Comprehensive income                                                                 $ 10,352       $ 12,287       $ 11,607
============================================================================================================================
Accumulated comprehensive income                                                     $    605       $    915       $  1,206
============================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.


                                       49
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Oak Hill Financial, Inc.
Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                                    Year Ended December 31,
                                                                                        --------------------------------------------
(In thousands)                                                                             2004             2003             2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings                                                                            $  10,662        $  12,578        $  10,340
Adjustments to reconcile net earnings to net cash provided by
     (used in) operating activities:
          Depreciation and amortization                                                     1,237              985              651
          Gain on sale of securities                                                         (276)            (314)            (315)
      Amortization of premiums and discounts on investment
           securities - net                                                                   836            1,310              949
      Amortization of mortgage servicing rights                                               624            1,222              602
      Proceeds from sale of loans in secondary market                                      59,428          178,542          110,247
      Loans disbursed for sale in secondary market                                        (55,614)        (175,411)        (108,764)
      Gain on sale of loans                                                                (1,132)          (2,080)          (1,091)
      (Gain) loss on disposition of assets                                                     --              (15)            (138)
      Loss on sale of consumer finance loan portfolio                                       3,585               --               --
      Amortization (accretion) of deferred loan origination costs (fees)                     (155)               1              195
      Proceeds from disposal of other real estate owned                                     1,163               --               --
      Loss on sale of other real estate owned                                                 323               --               --
      Purchase of loans                                                                      (282)              --               --
      Federal Home Loan Bank stock dividends                                                 (255)            (234)            (270)
      Provision for losses on loans                                                         3,136            3,347            2,757
      Tax benefit of stock options exercised                                                  693              802              266
      Bank owned life insurance income                                                       (118)              --               --
      Increase (decrease) in cash due to changes in:
           Prepaid expenses and other assets                                                   41             (225)            (874)
           Accrued interest receivable                                                       (121)             189              195
           Accrued interest payable and other liabilities                                  (1,371)           1,603             (457)
           Federal income taxes
                Current                                                                    (1,116)          (1,133)          (1,442)
                Deferred                                                                     (145)             100             (227)
------------------------------------------------------------------------------------------------------------------------------------
                     Net cash provided by operating activities                             21,143           21,267           12,624
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
    Loan disbursements                                                                   (409,234)        (445,612)        (389,543)
    Principal repayments on loans                                                         338,646          330,329          331,494
    Principal repayments on mortgage-backed securities designated
         as available for sale                                                             19,095           31,230           16,708
    Proceeds from sale of investment securities designated
         as available for sale                                                             14,192            7,573           31,711
    Proceeds from sale of investment securities designated
         as held to maturity                                                                   --               --            2,011
    Proceeds from maturity of investment securities                                         4,342              780            5,170
    Proceeds from disposition of assets                                                        64              371
    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                    (45,713)         (35,678)         (58,079)
    Purchase of investment securities designated as held-to-maturity                                        (1,098)          (1,050)
    Decrease in federal funds sold - net                                                    5,241            5,417            6,111
    Purchase of MPA Group Insurance Specialists                                                --               --              (97)
    Purchase of Federal Home Loan Bank stock                                                   --               --             (138)
    Purchase of bank owned life insurance                                                 (10,000)              --               --
    Purchase of office premises and equipment                                              (2,583)          (2,960)          (1,756)
    Ripley acquisition - net of cash received                                              (2,927)              --               --
------------------------------------------------------------------------------------------------------------------------------------
                        Net cash used in investing activities                             (92,526)        (109,955)         (57,087)
------------------------------------------------------------------------------------------------------------------------------------
                        Net cash used in operating and investing activities
                             (balance carried forward)                                    (71,383)         (88,688)         (44,463)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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Oak Hill Financial, Inc.
Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                                     Year Ended December 31,
                                                                                           -----------------------------------------
(In thousands)                                                                               2004            2003            2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>             <C>             <C>
                        Net cash used in operating and investing activities
                             (balance brought forward)                                     $(71,383)       $(88,688)       $(44,463)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
    Proceeds (repayments) from securities sold under agreement
       to repurchase                                                                            994          (1,188)          2,335
    Net increase in deposit accounts                                                         92,706          54,008          51,609
    Proceeds from Federal Home Loan Bank advances                                                --          50,301          20,000
    Repayment of Federal Home Loan Bank advances                                            (18,368)        (13,469)        (27,887)
    Proceeds from notes payable                                                                  --           3,050              --
    Repayment of notes payable                                                                 (400)         (2,700)            (50)
    Proceeds from issuance of debt securities                                                13,000              --              --
    Dividends on common shares                                                               (3,435)         (2,970)         (2,610)
    Purchase of treasury stock                                                               (4,369)             --              --
    Proceeds from issuance of shares under stock option plan                                  1,874           2,928           1,269
------------------------------------------------------------------------------------------------------------------------------------
                        Net cash provided by financing activities                            82,002          89,960          44,666
------------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                    10,619           1,272             203
Cash and cash equivalents at beginning of year                                               20,390          19,118          18,915
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                                   $ 31,009        $ 20,390        $ 19,118
====================================================================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the year for:
         Federal income taxes                                                              $  5,417        $  6,474        $  4,874
====================================================================================================================================
         Interest on deposits and borrowings                                               $ 20,552        $ 20,463        $ 24,974
====================================================================================================================================

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
    Unrealized gains (losses) on securities designated as
         available for sale, net of related tax effects                                    $   (310)       $   (291)       $  1,267
====================================================================================================================================
    Recognition of mortgage servicing rights in
         accordance with SFAS No. 140                                                      $    750        $  2,409        $  1,267
====================================================================================================================================
    Transfer from loans to real estate acquired through foreclosure                        $  2,564        $  1,447        $     --
====================================================================================================================================
    Issuance of loans upon sale of real estate acquired
         though foreclosure                                                                $    738        $    862        $  1,760
====================================================================================================================================
      Fair value of assets acquired in acquisition of Ripley National Bank                 $ 58,611        $     --        $     --
====================================================================================================================================

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
    Issuance of note payable in connection with the purchase of
         McNelly Insurance Agency                                                          $     --        $     --        $    100
====================================================================================================================================
    Acquisition of treasury stock in exchange for stock options                            $     --        $    165        $     23
====================================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.


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Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002

NOTE A -- SUMMARY OF ACCOUNTING POLICIES

      Oak Hill Financial,  Inc. (the "Company") is a financial  holding company,
the  principal  assets of which have been its  ownership of Oak Hill Banks ("Oak
Hill"),  Towne Bank ("Towne"),  Action Finance Company  ("Action") and MPA Group
Insurance  Specialists  ("MPA").   Accordingly,  the  Company's  operations  are
primarily  dependent  upon  its  financial  services  subsidiaries,   which  are
collectively  viewed  as a single  operating  segment  for  financial  statement
purposes.

      During 2002,  the Board of  Directors  of the Company,  Oak Hill and Towne
approved a plan of reorganization  whereby the Banks merged on November 30, 2002
into a single  bank  charter  under the name Oak Hill  Banks.  Hereinafter,  the
consolidated  financial  statements  use the term  "Oak  Hill" to  describe  the
preexisting individual banks owned by the Company.

      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.

      On October 9, 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.

      On December 31, 2004,  the Company  sold the  consumer  loan  portfolio of
Action. 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.

      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,  Action,  MPA 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.

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


                                       52
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Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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, 2004 and 2003,
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  $624,000,  $1.2 million and $602,000 for the years ended
December 31, 2004, 2003 and 2002,  respectively.  At December 31, 2004 and 2003,
the carrying value of Oak Hill's mortgage  servicing rights,  which approximated
their fair value, totaled $3.1 million and $3.0 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).


                                       53
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      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 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.

      The  Company  had $3.8  million and $4.0  million of  impaired  loans,  as
defined  under SFAS No. 114, at December  31, 2004 and 2003,  respectively.  The
Company maintained an allowance for credit losses related to such impaired loans
of $1.3 million and $982,000 at December 31, 2004 and 2003, respectively.

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.

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 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.


                                       54
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      In January 2002, MPA 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 an increase in goodwill of
$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 and  whenever an  impairment
indicator  arises.  Goodwill  has  been  assigned  to Oak  Hill  and  MPA as the
reporting units that are expected to benefit from the goodwill.

      The Company tests  goodwill  annually.  There were no  impairment  charges
related to goodwill for the years ended December 31, 2004 and 2003.

      The core deposit intangible recorded as part of the Ripley merger is being
amortized  over its  estimated  useful  life of 9.3  years.  Oak  Hill  recorded
amortization  of the core  deposit  intangible  of  $72,000  for the year  ended
December 31, 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, 2004 was 7.79%,  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 offset by a fair value change in the junior
subordinated debentures during the year ended December 31, 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, 2004 and 2003.

      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.

      Bank  owned  life  insurance.   The  carrying  amount   presented  in  the
consolidated  statements of financial  condition is deemed to  approximate  fair
value.

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


                                       55
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      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, 2004 and 2003.  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, 2004 and 2003 was not
material.

      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,
                                                         ----------------------------------------------------------------
                                                                      2004                               2003
                                                         ----------------------------        ----------------------------
                                                           Carrying           Fair            Carrying            Fair
(In thousands)                                              value             value             value             value
-------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>               <C>               <C>
Financial assets
     Cash and due from banks                             $   31,009        $   31,009        $   20,390        $   20,390
     Federal funds sold                                         988               988               123               123
     Investment securities                                   92,023            92,236            79,545            79,469
     Loans receivable                                       912,538           915,674           811,021           822,684
     Bank owned life insurance                               10,118            10,118                --                --
     Federal Home Loan Bank stock                             6,590             6,590             5,998             5,998
-------------------------------------------------------------------------------------------------------------------------
                                                         $1,053,266        $1,056,615        $  917,077        $  928,664
=========================================================================================================================

Financial liabilities
     Deposits                                            $  862,096        $  857,213        $  717,821        $  717,574
     Advances from the Federal Home Loan Bank               105,601           108,827           122,887           129,336
     Securities sold under agreement to repurchase            5,359             5,359             4,365             4,365
     Notes payable                                            2,700             2,700             3,100             3,110
     Subordinated debentures                                 18,000            18,131             5,000             6,138
-------------------------------------------------------------------------------------------------------------------------
                                                         $  993,756        $  992,230        $  853,173        $  860,523
=========================================================================================================================
</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.


                                       56
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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

<TABLE>
<CAPTION>
                                                                    2004              2003             2002
--------------------------------------------------------------------------------------------------------------
<S>                                                               <C>              <C>               <C>
Weighted-average common shares outstanding (basic)                5,549,855        5,487,436         5,317,313
Dilutive effect of assumed exercise of stock options                142,613          139,855           121,285
--------------------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding (diluted)              5,692,468        5,627,291         5,438,598
==============================================================================================================
</TABLE>

      Options  to  purchase  68,000  and 1,000  shares of  common  stock  with a
respective weighted-average exercise price of $30.46 and $21.85 were outstanding
at  December  31,  2003  and  2002,  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.

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)                          2004            2003             2002
--------------------------------------------------------------------------------
Net earnings
     As reported                     $   10,662      $   12,578      $   10,340
     Stock-based
       compensation, net
       of tax                              (399)           (114)           (128)
================================================================================
     Pro forma                       $   10,263      $   12,464      $   10,212
================================================================================

Basic earnings per share
     As reported                     $     1.92      $     2.29      $     1.94
     Stock-based
       compensation, net
       of tax                             (0.07)          (0.02)          (0.02)
================================================================================
     Pro forma                       $     1.85      $     2.27      $     1.92
================================================================================

Diluted earnings per share
     As reported                     $     1.87      $     2.23      $     1.90
     Stock-based
       compensation, net
       of tax                             (0.07)          (0.02)          (0.02)
================================================================================
     Pro forma                       $     1.80      $     2.21      $     1.88
================================================================================


                                       57
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      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 2004, 2003 and 2002:  dividend
yield of 1.6% for 2004 and 2.3% for 2003 and 2002; expected volatility of 39.8%,
41.5% and 30.0% for 2004, 2003 and 2002, respectively;  risk-free interest rates
of 3.65%,  3.38% and 4.00% for 2004,  2003 and 2002,  respectively  and expected
lives of 4 years for 2004 and 2003 and 10 years for 2002.

      A summary of the status of the Company's  Stock Option Plan as of December
31,  2004,  2003 and 2002 and  changes  during the years ended on those dates is
presented below:

<TABLE>
<CAPTION>
                                                      2004                       2003                       2002
                                              -----------------------   ----------------------     ----------------------
                                                           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               572,397      $17.36       718,717      $15.35        821,401     $15.02
Granted                                        130,500       37.19        68,000       30.46          1,000      21.85
Exercised                                     (118,131)      15.87      (210,820)      14.77       (101,284)     12.73
Forfeited                                       (2,300)      28.45        (3,500)      15.05         (2,400)     14.96
-------------------------------------------------------------------------------------------------------------------------
Outstanding at end of year                     582,466      $22.21       572,397      $17.36        718,717     $15.35
=========================================================================================================================
Options exercisable at year-end                451,633                   503,730                    640,842
=========================================================================================================================
Weighted-average fair value of
     options granted during the year                        $12.91                    $ 9.31                    $ 7.25
=========================================================================================================================
</TABLE>

The following information applies to options outstanding at December 31, 2004:

Range of                                             Number
exercise prices                                   outstanding
-------------------------------------------------------------
$ 6.67 - $10.01                                       23,150
$10.02 - $15.03                                       46,600
$15.04 - $22.56                                      318,616
$22.57 - $33.86                                       64,100
$33.87 - $37.21                                      130,000
-------------------------------------------------------------
Total                                                582,466
============================================================
Weighted-average exercise price                       $22.21
============================================================
Weighted-average remaining contractual life        8.2 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, 2004 and 2003.

15. Advertising

      Advertising  costs are expensed when incurred.  The Company's  advertising
expense totaled  $421,000,  $437,000,  and $423,000 for the years ended December
31, 2004, 2003 and 2002, respectively.

16. Cash and Cash Equivalents

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


                                       58
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

17. Reclassifications

      Certain prior year amounts have been  reclassified  to conform to the 2004
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 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  euity
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.

      Initially, the cost of employee services received in exchange for an award
of liability  instruments will be measured base don 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 123R,  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  June 15,  2005,  or July 1,  2005 as to the
Company.  Management  believes the annual  compensation  cost,  net of tax, will
approximate the amount 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>
                                                                                     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>


                                       59
<PAGE>

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

<TABLE>
<CAPTION>
                                                                                               2003
                                                                ------------------------------------------------------------
                                                                                     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                 $ 3,659         $    83         $   159         $ 3,583
============================================================================================================================

Available for sale:
     U.S. Government and agency obligations                         $57,836         $   760         $   106         $58,490
     Obligations of state and political subdivisions                 16,539             752              80          17,211
     Other securities                                                   125              81              21             185
----------------------------------------------------------------------------------------------------------------------------
          Total securities available for sale                       $74,500         $ 1,593         $   207         $75,886
============================================================================================================================
</TABLE>

      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>
                                                                              2004                           2003
                                                                   --------------------------      -------------------------
                                                                                    Estimated                      Estimated
                                                                   Amortized          fair         Amortized          fair
(In thousands)                                                       cost             value           cost           value
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>             <C>             <C>
Due in three years or less                                          $ 8,111         $ 8,120         $ 5,060         $ 5,109
Due after three years through five years                              5,787           5,729           2,793           2,836
Due after five years through ten years                                9,252           9,302          11,884          12,046
Due after ten years                                                  64,313          65,232          54,763          55,895
----------------------------------------------------------------------------------------------------------------------------
                                                                    $87,463         $88,383         $74,500         $75,886
============================================================================================================================
</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>
Held to maturity:
     Trust preferred securities                                     $    --         $    --       $    --         $    --
     Obligations of state and political subdivisions                    392               1            --              --

Available for sale:
     U.S. Government and agency obligations                          31,670             306         7,603             109
     Obligations of state and political subdivisions                  2,717              32         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, 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.


                                       60
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      Proceeds from sales of investment  securities  designated as available for
sale during the year ended December 31, 2002,  totaled $31.7 million,  resulting
in gross realized gains of $268,000 and gross realized losses of $82,000 on such
sales.

      Proceeds   from  the  sale  of   investment   securities   designated   as
held-to-maturity  during the year ended December 31, 2002, totaled $2.0 million,
resulting in a gross realized gain of $129,000 on such sale. The sale followed a
significant  deterioration  of  the  issuer's  creditworthiness  such  that  the
securities were deemed by a nationally  recognized  rating  organization as less
than investment grade.

      At December  31, 2004 and 2003,  investment  securities  with an aggregate
book value of $70.0  million and $67.6  million,  respectively,  were pledged as
collateral for public deposits.

      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 $5.4 million
and $4.4  million at December 31, 2004 and 2003,  respectively.  At December 31,
2004 and 2003,  the  agreements  were  scheduled to mature within 90 days and no
material  amount of agreements to resell  securities  was  outstanding  with any
individual  dealer.  Securities  purchased  under  agreement to resell  averaged
approximately $5.0 million during 2004 and the maximum amount outstanding at any
month-end during 2004 was $6.2 million.

NOTE C - LOANS RECEIVABLE

      The composition of the loan  portfolio,  including loans held for sale, is
as follows at December 31:

(In thousands)                                           2004             2003
--------------------------------------------------------------------------------
Real estate mortgage
     (primarily residential)                           $270,092         $235,180
Installment, net of unearned
     interest of $2,000
     and $1.5 million at
     December 31, 2004 and
     2003, respectively                                  68,072           71,100
Commercial and other                                    584,201          513,848
Credit card                                               2,020            1,729
--------------------------------------------------------------------------------
          Gross loans                                   924,385          821,857
Less:
     Allowance for loan losses                           11,847           10,836
--------------------------------------------------------------------------------
          Loans receivable - net                       $912,538         $811,021
================================================================================

      The Company's  lending  efforts have  historically  focused on real estate
mortgages and consumer  installment loans, which comprised  approximately $338.2
million,  or 37%,  of the  total  loan  portfolio  at  December  31,  2004,  and
approximately  $306.3  million,  or 37%, of the total loan portfolio at December
31,  2003.  In recent  years,  lending  efforts  have  increasingly  focused  on
commercial  loans,  generally  secured by commercial  real estate and equipment,
which comprise approximately $584.2 million, or 63%, of the total loan portfolio
at December 31, 2004, and  approximately  $513.8  million,  or 63%, of the total
loan  portfolio  at  December  31,  2003.   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  $275.9 million,
$271.4  million  and  $187.0  million  at  December  31,  2004,  2003 and  2002,
respectively.

      At December  31,  2004,  2003 and 2002,  the Company  had  nonaccrual  and
nonperforming loans totaling  approximately $6.3 million,  $8.1 million and $7.3
million,  respectively.  Interest  income  that would have been  recognized  had
nonaccrual loans performed  pursuant to contractual terms totaled  approximately
$406,000,  $508,000 and $357,000 for the years ended December 31, 2004, 2003 and
2002, respectively.


                                       61
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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

(In thousands)                            2004            2003            2002
-------------------------------------------------------------------------------
Balance at beginning
     of year                           $ 10,836        $  9,142        $  8,345
Provision charged to
     operations                           3,136           3,347           2,757
Charge-offs                              (3,545)         (2,152)         (2,563)
Recoveries                                1,291             499             603
Allowance of acquired
     institution and other                  129              --              --
--------------------------------------------------------------------------------
Balance at end of year                 $ 11,847        $ 10,836        $  9,142
================================================================================

NOTE D - OFFICE PREMISES AND EQUIPMENT

      Office premises and equipment are summarized at December 31 as follows:

(In thousands)                                          2004             2003
--------------------------------------------------------------------------------
Land and buildings                                   $ 16,048          $ 12,741
Furniture and equipment                                 9,181             7,093
Leasehold improvements                                  1,117             1,067
--------------------------------------------------------------------------------
                                                       26,346            20,901
     Less accumulated depreciation
          and amortization                            (10,857)           (8,709)
--------------------------------------------------------------------------------
                                                     $ 15,489          $ 12,192
================================================================================

NOTE E - DEPOSITS

      Deposit balances at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                        2004                      2003
                                              ----------------------     -----------------------
(Dollars in thousands)                          Amount        Rate        Amount          Rate
------------------------------------------------------------------------------------------------
<S>                                           <C>              <C>       <C>              <C>
Deposit type and interest rate range
Demand deposit accounts                       $ 88,712           --      $ 66,712           --
Savings accounts                                58,978         0.45%       48,224         0.42%
NOW accounts                                    65,395         1.06%       62,033         1.19%
Money market deposit accounts                    9,249         0.41%        7,644         0.43%
Premium investment accounts                     53,093         2.17%       35,474         0.93%
Select investment accounts                      27,197         1.77%       33,426         1.12%
------------------------------------------------------------------------------------------------
Total transaction accounts                     302,624                    253,513
Certificates of deposit
     1.00 - 2.99%                              344,757                    286,245
     3.00 - 4.99%                              203,406                    162,541
     5.00 - 6.99%                               10,909                     15,447
     7.00 - 8.00%                                  400                         75
------------------------------------------------------------------------------------------------
Total certificates of deposit                  559,472         2.82%      464,308         2.79%
------------------------------------------------------------------------------------------------
Total deposits                                $862,096         2.14%     $717,821         2.04%
================================================================================================
</TABLE>

      The  Company  had  deposit  accounts  with  balances in excess of $100,000
totaling  $371.1  million  and $285.7  million at  December  31,  2004 and 2003,
respectively.


                                       62
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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

(In thousands)                                 2004         2003           2002
--------------------------------------------------------------------------------
NOW accounts                                 $   804       $   839       $ 1,204
Savings accounts                                 195           295           485
Money market deposit accounts                     31            56           108
Premium investment accounts                      548           411           790
Select investment accounts                       419           401           459
Certificates of deposit                       13,926        13,575        16,608
--------------------------------------------------------------------------------
                                             $15,923       $15,577       $19,654
================================================================================

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

(In thousands)                                        2004                2003
--------------------------------------------------------------------------------
Less than one year                                  $239,199            $214,292
One year through
     three years                                     259,816             198,390
More than three years                                 60,457              51,626
--------------------------------------------------------------------------------
                                                    $559,472            $464,308
================================================================================

NOTE F - ADVANCES FROM

THE FEDERAL HOME LOAN BANK

      Advances from the Federal Home Loan Bank,  collateralized  at December 31,
2004 and 2003 by pledges of certain  residential  mortgage loans totaling $142.6
million and $165.9 million,  respectively,  and Oak Hill's investment in Federal
Home Loan Bank stock, are summarized as follows:

                                      Maturing                 December 31,
                                    in year ended        ----------------------
Interest rate range                 December 31,           2004          2003
-------------------------------------------------------------------------------
                                                         (Dollars in thousands)
0.94% to 8.30%                          2004             $             $ 46,989
1.85% to 8.10%                          2005                43,426       11,422
3.77% to 6.50%                          2006                 2,401        2,990
4.14% to 7.30%                          2007                 5,501        5,501
4.29% to 5.30%                          2009                   333          564
5.15% to 8.02%                          2010                 6,158        6,274
3.94% to 6.95%                          2011                40,063       40,571
        3.09%                           2013                 3,819        4,929
        7.62%                           2015                   850          850
        6.25%                           2016                   283           --
        6.70%                           2017                   790          828
        5.15%                           2018                 1,691        1,969
        3.50%                           2025                    47           --
        3.50%                           2029                   167           --
        3.50%                           2030                    72           --
-------------------------------------------------------------------------------
                                                          $105,601     $122,887
===============================================================================
Weighted-average
     interest rate                                            3.95%        3.39%
===============================================================================


                                       63
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

NOTE G - OTHER BORROWINGS

      At  December  31,  2003,  Action had a note  payable to another  financial
institution  totaling $3.1 million bearing  interest at 5.125% maturing in 2006.
At December 31, 2004, the note had an outstanding  balance of $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.

      Additionally,  MPA had a note  payable  created  in  connection  with  the
purchase of a local insurance agency during 2002. At December 31, 2003, the note
had a balance of $50,000  bearing  interest at 6.0%. The note matured in January
2004.

NOTE H - GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE COMPANY'S

JUNIOR SUBORDINATED DEBENTURES

      In March 2000, a Delaware trust owned by the Company  ("Trust 1"),  issued
$5.0 million of mandatorily  redeemable  debt  securities.  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 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 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.

      On October  1, 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 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 will be
used for merger activity and general corporate purposes.

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)                                                           2004         2003        2002
---------------------------------------------------------------------------------------------------------
<S>                                                                    <C>          <C>          <C>
Federal income taxes computed at the statutory rate                    $ 5,251      $ 6,611      $ 5,223
Increase (decrease) in taxes resulting from:
     Interest income on municipal loans and obligations of state
          and political subdivisions                                      (419)        (354)        (371)
     Nondeductible merger-related expenses                                  --           --            2
     New markets tax credits                                              (500)          --           --
     Other                                                                   9            9           (3)
---------------------------------------------------------------------------------------------------------
Federal income tax provision per consolidated financial statements     $ 4,341      $ 6,266      $ 4,851
=========================================================================================================
</TABLE>


                                       64
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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

<TABLE>
<CAPTION>
(In thousands)                                                               2004        2003
-----------------------------------------------------------------------------------------------
<S>                                                                        <C>          <C>
Taxes (payable) refundable on temporary differences at statutory rate:
Deferred tax assets:
     Book/tax difference of allowance for loan losses                      $ 4,155      $ 3,793
     Deferred compensation benefits                                             89           95
     Other                                                                      10            4
-----------------------------------------------------------------------------------------------
          Total deferred tax assets                                          4,254        3,892
Deferred tax liabilities:
     Deferred loan origination costs                                          (753)        (680)
     Federal Home Loan Bank stock dividends                                   (959)        (959)
     Unrealized gains on securities designated as available for sale          (321)        (471)
     Book/tax difference of depreciation                                      (235)          --
     Mortgage servicing rights                                              (1,101)      (1,044)
     Impairment recoveries                                                      --         (114)
     Purchase price adjustments                                               (499)          --
     Other                                                                     (27)         (35)
-----------------------------------------------------------------------------------------------
          Total deferred tax liabilities                                    (3,895)      (3,303)
-----------------------------------------------------------------------------------------------
Net deferred tax asset                                                     $   359      $   589
===============================================================================================
</TABLE>

      The Company has not recorded a valuation  allowance for any portion of the
net  deferred  tax asset at December  31, 2004 and 2003,  based on the amount of
income taxes subject to recovery in carryback years.

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,  2004,  2003 and 2002  totaled  approximately  $7.3
million, $5.2 million and $5.0 million, respectively.

      The Company had also received  demand and time  deposits  from  directors,
officers and their related business  interests of  approximately  $14.7 million,
$10.5  million  and  $12.4  million  at  December  31,  2004,   2003  and  2002,
respectively.

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,  $300,000  and  $250,000  to the plan for the years ended
December 31, 2004, 2003 and 2002, respectively.

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  $327,000,  $285,000  and  $260,000 for the years
ended December 31, 2004, 2003 and 2002, respectively.

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.


                                       65
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      At  December  31,  2004,  the  Company  had  outstanding   commitments  of
approximately $21.7 million to originate residential and commercial loans. Also,
the  Company  had  unused  lines  of  credit  and  letters  of  credit  totaling
approximately $139.9 million and $15.2 million, respectively, as of December 31,
2004. In the opinion of  management,  outstanding  loan  commitments  equaled or
exceeded  prevalent  market  interest  rates  as  of  December  31,  2004,  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 2010. The following table  summarizes  minimum  payments due under
lease agreements by year:

Year ending
December 31,                           (Dollars in thousands)
-------------------------------------------------------------
2005                                          $  614
2006                                             520
2007                                             433
2008                                             265
2009 through 2010                              1,206
-------------------------------------------------------------
                                              $3,038
=============================================================

      Total rent  expense  under  operating  leases was  $850,000,  $741,000 and
$588,000 for the years ended December 31, 2004, 2003 and 2002, 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.

      During the year ended  December  31,  2004,  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, 2004, Oak Hill was well-capitalized.


                                       66
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      As of December 31, 2004 and 2003, 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, 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%

<CAPTION>
                                                                 As of December 31, 2003
                                       --------------------------------------------------------------------------
                                                                                                 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                           $93,351        11.7%      $64,078      >=8.0%        $80,098       >=10.0%
     (to risk-weighted assets)
Tier 1 capital                          $83,302        10.4%      $32,039      >=4.0%        $48,059        >=6.0%
     (to risk-weighted assets)
Tier 1 leverage ratio                   $83,302         9.1%      $36,551      >=4.0%        $45,688        >=5.0%
</TABLE>

Oak Hill:

<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>


                                       67
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

<TABLE>
<CAPTION>
                                                               As of December 31, 2003
                                       --------------------------------------------------------------------------
                                                                                                 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                           $80,437        10.2%      $63,387      >=8.0%        $79,234       >=10.0%
     (to risk-weighted assets)
Tier 1 capital                          $70,526         8.9%      $31,693      >=4.0%        $47,540        >=6.0%
     (to risk-weighted assets)
Tier 1 leverage ratio                   $70,526         7.8%      $36,112      >=4.0%        $45,140        >=5.0%
</TABLE>

      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.


                                       68
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

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, 2004 and 2003, and the
results  of its  operations  and its  cash  flows  for each of the  years  ended
December 31, 2004, 2003 and 2002.

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF
FINANCIAL CONDITION

                                                              December 31,
                                                     ---------------------------
(In thousands)                                          2004              2003
--------------------------------------------------------------------------------
ASSETS
Cash and due from banks                              $   2,089        $     666
Interest-bearing deposits in
     Oak Hill Banks                                      6,721            6,263
Investment securities                                      561               --
Investment in Oak Hill Banks                            88,664           71,915
Investment in Action Finance Co.                         1,945            2,649
Investment in Oak Hill Capital
     Trust                                                 558              155
Investment in MPA                                        1,056            1,178
Investment in Oak Hill Title LLC                            15               15
Office premises and
     equipment - net                                     2,307            2,302
Prepaid expenses and other assets                        1,694            1,673
--------------------------------------------------------------------------------
     Total assets                                    $ 105,610        $  86,816
================================================================================

LIABILITIES AND
STOCKHOLDER'S EQUITY

Accrued expenses and other
     liabilities                                     $   2,001        $   1,725
Minority interests                                           8                8
Guaranteed preferred beneficial
     interests in the Corporation's
     junior subordinated debentures                     18,558            5,155
--------------------------------------------------------------------------------
     Total liabilities                                  20,567            6,888
Stockholders' equity
     Common stock                                        2,827            2,797
     Additional paid-in capital                          6,658            5,704
     Retained earnings                                  78,071           70,844
     Less cost of treasury stock                        (3,118)            (332)
     Unrealized gains on
          securities designated as
          available for sale, net of
          related tax effects                              605              915
--------------------------------------------------------------------------------
     Total stockholders' equity                         85,043           79,928
--------------------------------------------------------------------------------
     Total liabilities and
          stockholders' equity                       $ 105,610        $  86,816
================================================================================


                                       69
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF EARNINGS

                                               Year ended December 31,
                                       -----------------------------------------
(In thousands)                           2004            2003            2002
--------------------------------------------------------------------------------
REVENUE
Interest income                        $     58        $     24        $     32
Other income                                  6              10               6
Equity in earnings of
     subsidiaries                        11,548          13,306          11,144
--------------------------------------------------------------------------------
     Total revenue                       11,612          13,340          11,182
EXPENSES
Interest expense                            683             578             578
General and
     administrative                         686             498             644
--------------------------------------------------------------------------------
     Total expenses                       1,369           1,076           1,222
--------------------------------------------------------------------------------
     Earnings before
          federal income
          tax credits                    10,243          12,264           9,960
Federal income
          tax credits                      (419)           (314)           (380)
--------------------------------------------------------------------------------
      NET EARNINGS                     $ 10,662        $ 12,578        $ 10,340
================================================================================

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31,
                                                                                      --------------------------------------
(In thousands)                                                                          2004          2003           2002
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net earnings for the year                                                        $ 10,662      $ 12,578      $ 10,340
     Adjustments to reconcile net earnings to net cash provided by
          operating activities:
               Undistributed earnings of consolidated subsidiaries                      (4,316)       (7,444)       (8,360)
               Depreciation of office premises and equipment                               243           228           147
               Tax benefit of stock options exercised                                      693           802           266
               Increase (decrease) in cash due to changes in:
                    Prepaid expenses and other assets                                      522          (759)         (844)
                    Other liabilities                                                     (257)         (498)          (53)
         Federal income taxes
              Deferred                                                                      73            --            --
----------------------------------------------------------------------------------------------------------------------------
                         Net cash provided by operating activities                       7,620         4,907         1,496
CASH FLOWS FROM INVESTING ACTIVITIES:
     Investment in Oak Hill Banks                                                      (10,250)           --            (5)
     Investment in Action Finance Company                                               (1,750)           --
     Investment in Oak Hill Capital Trust                                                 (403)           --            --
     Investment in U.S. Government Agencies                                               (561)           --
     Purchase of office premises and equipment                                            (248)         (703)         (513)
     (Increase) decrease in interest-bearing deposits                                     (458)       (4,092)          488
----------------------------------------------------------------------------------------------------------------------------
                         Net cash used in investing activities                         (13,670)       (4,795)          (30)
----------------------------------------------------------------------------------------------------------------------------
                Net cash provided by (used in) operating and investing activities       (6,050)          112         1,466
                     (balance carried forward)
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       70
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

Oak Hill Financial, Inc.
CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             Year Ended December 31,
                                                                                      -------------------------------------
(In thousands)                                                                           2004          2003          2002
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>           <C>           <C>
                Net cash provided by (used in) operating and investing activities       (6,050)          112         1,466
                     (balance carried forward)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from exercise of stock options                                             1,874         2,928         1,269
     Proceeds from issuance of debt securities                                          13,403            --            --
     Purchase of treasury stock                                                         (4,369)           --            --
     Dividends on common shares                                                         (3,435)       (2,970)       (2,610)
---------------------------------------------------------------------------------------------------------------------------
                         Net cash provided by (used in) financing activities             7,473           (42)       (1,341)
---------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                1,423            70           125
Cash and cash equivalents at beginning of year                                             666           596           471
---------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                              $  2,089      $    666      $    596
===========================================================================================================================
</TABLE>

NOTE O -- SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE

      Obligations  for  securities  sold under  agreements  to  repurchase  were
collateralized  at December 31, 2004 and 2003 by  investment  securities  with a
book value including  accrued  interest of  approximately  $6.4 million and $4.7
million and a market  value of  approximately  $6.4  million  and $4.8  million,
respectively.  The maximum balance of repurchase  agreements  outstanding at any
month-end during the years ended December 31, 2004 and 2003 was $6.2 million and
$10.1 million,  respectively,  and the average month-end balance outstanding for
2004 and 2003 was approximately $5.0 million.

NOTE P -- ACQUISITIONS AND PENDING ACQUISITIONS

      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.

      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
     per share                        $  1.92         $ (0.25)         $  1.67
================================================================================

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


                                       71
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      On October 12, 2004,  the Company  entered into a definitive  agreement to
acquire Lawrence Financial Holdings,  Inc. and its subsidiary,  Lawrence Federal
Savings Bank, ("Lawrence") headquartered in Ironton, Ohio. At December 31, 2004,
Lawrence  had  approximately  total loans of $74.1  million,  $108.1  million in
deposits and $119.3  million in total assets.  The total value of the stock-cash
deal is approximately  $16.0 million.  On February 16, 2005,  Lawrence  received
stockholder approval for the pending merger with the Company. The transaction is
expected to close in the second quarter of 2005, subject to regulatory approval,
and other customary conditions of closing.

NOTE Q -- OAK HILL BANKS COMMUNITY DEVELOPMENT CORP.

      On May 7,  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 an allocation of new
markets  tax  credits  ("NMTC").   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, will pay to OHBCDC $20 million for its QEIs.

      OHBCDC will utilize its $20.0 million NMTC  allocation to provide loans to
qualifying  businesses located in twelve Appalachian  counties in rural southern
Ohio.  It will  also  provide  financial  counseling  services  through a formal
program of community business  workshops.  The NMTC allocation will allow OHBCDC
to provide 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, 2004,  Oak Hill had paid to OHBCDC $10.0  million for QEIs
in OHBCDC.  Oak Hill  claimed  $500,000  in new markets tax credits for the year
ended December 31, 2004.  Oak Hill  estimates  that the remaining  $10.0 million
will be paid to OHBCDC on or before September 30, 2006 for QEIs in OHBCDC.

      The NMTC tax benefits claimed by Oak Hill with respect to each QEI remains
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, 2004, none of the above recapture events had occurred.


                                       72
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

      The  following  condensed  financial  statements  summarize  the financial
position  of OHBCDC as of  December  31,  2004 and 2003,  and the results of its
operations  and its cash flows for each of the three  years ended  December  31,
2004, 2003 and 2002.

OHBCDC
CONDENSED STATEMENTS OF
FINANCIAL CONDITION

                                                               December 31,
                                                          ----------------------
(In thousands)                                              2004           2003
--------------------------------------------------------------------------------
ASSETS
Cash and due from banks                                   $  8,784        $   --
Loans receivable-net                                         1,207            --
Interest receivable                                              1            --
--------------------------------------------------------------------------------
     Total assets                                         $  9,992        $   --
================================================================================

LIABILITIES AND
STOCKHOLDER'S EQUITY
Total liabilities                                         $     --        $   --
Stockholders equity
     Common stock                                                1            --
     Additional paid-in capital                             10,000            --
     Retained earnings                                          (9)           --
--------------------------------------------------------------------------------
     Total stockholders equity                               9,992            --
--------------------------------------------------------------------------------
     Total liabilities and
          Stockholders equity                             $  9,992        $   --
================================================================================

OHBCDC
CONDENSED STATEMENTS OF OPERATIONS

                                                      Year ended December 31,
                                                --------------------------------
(In thousands)                                    2004         2003        2002
--------------------------------------------------------------------------------
REVENUE
Interest income                                 $     3      $    --     $    --

EXPENSES
Loan loss provision                                   7           --          --
General and
     administrative                                   5           --          --
--------------------------------------------------------------------------------
     Loss before
        federal income
        tax credits                                  (9)          --          --
Federal income tax credits
--------------------------------------------------------------------------------
          NET LOSS                                   (9)          --          --
================================================================================


                                       73
<PAGE>

================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

OHBCDC
CONDENSED STATEMENTS OF CASH FLOWS

                                                    Year ended December 31,
                                             -----------------------------------
(In thousands)                                  2004         2003          2002
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                     $     (9)     $     --     $     --
Provision for losses on
   loans                                            7            --           --
Increase in interest
   receivable                                      (1)           --           --
--------------------------------------------------------------------------------
     Net cash used in
        operating activities                       (3)           --           --

CASH FLOWS FROM INVESTING ACTIVITIES:
Loan disbursements                             (1,214)           --           --
Principal repayments
   on loans
--------------------------------------------------------------------------------
     Net cash used in
        investing activities(1,214)                --                         --

CASH FLOWS FROM FINANCING ACTIVITIES:
Investment by
     Oak Hill Banks                                 1            --           --
Qualified equity
   investments by
   Oak Hill Banks                              10,000            --           --
--------------------------------------------------------------------------------
     Net cash provided by
        financing activities                   10,001            --           --
--------------------------------------------------------------------------------
Net increase in cash
     and cash equivalents                       8,784            --           --
Cash and cash
     equivalents at
     beginning of year
--------------------------------------------------------------------------------
Cash and cash
     equivalents at
     end of year                             $  8,784      $     --     $     --
================================================================================


                                       74
<PAGE>
================================================================================

Oak Hill Financial, Inc.
Notes to Consolidated Financial Statements
For Years Ended December 31, 2004, 2003 and 2002 (continued)

NOTE R - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The following  table  summarizes the Company's  quarterly  results for the
years ended December 31, 2004 and 2003.

<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                 (830)
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                                     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
================================================================================================================================

<CAPTION>
2003
                                                                                     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                                 $ 13,740             $ 13,776             $ 13,475             $ 14,179
Total interest expense                                   5,320                5,141                5,003                5,004
--------------------------------------------------------------------------------------------------------------------------------
Net interest income                                      8,420                8,635                8,472                9,175
Provision for losses on loans                              509                1,031                  966                  841
Other income                                             2,404                3,052                3,302                2,780
General, administrative and other expense                5,904                6,057                5,946                6,142
--------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                             4,411                4,599                4,862                4,972
Federal income taxes                                     1,432                1,490                1,608                1,736
--------------------------------------------------------------------------------------------------------------------------------
Net earnings                                          $  2,979             $  3,109             $  3,254             $  3,236
================================================================================================================================
Basic earnings per share                              $    .55             $    .57             $    .59             $    .58
================================================================================================================================
Diluted earnings per share                            $    .54             $    .55             $    .57             $    .57
================================================================================================================================
</TABLE>


                                       75
<PAGE>