##### Table of Contents

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US SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB



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|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------



For the fiscal year ended December 31, 2003



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------



For the transition period from
 to



Commission File Number: 000-32489



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TRI - STATE 1ST BANC, INC.

(Name of small business issuer in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1824708                          
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification Number)
|                                                               | 
|16924 St. Clair Avenue East Liverpool, Ohio                    |  | 43920                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



Issuers
telephone number, including area code:

(330) 385-9200



---



Securities registered persuant to Section 12(b) of the Act:

None



Securities registered persuant to Section 12(g) of the Act:

Common Stock, no par value

(Title
of class)



---



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



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



Issuers revenues for its most recent fiscal year: $5.8 million.



The aggregate market value of the voting stock held by non - affiliates computed by reference to the averaged bid and ask price on March 10, 2004, was $11,834,738 (631,186 shares at $18.75 per share).



As of March 10, 2004, there were 892,397 shares outstanding of the registrants Common
Stock.



DOCUMENTS INCORPORATED BY REFERENCE



1. Portions of the Issuers Annual Report to Shareholders for the year ended December
31, 2003 (Parts I and II).

2. Portions of the Issuers definitive Proxy Statement for the 2004 Annual meeting of Shareholders (Part III).



Transitional Small Business disclusure format (check
one)    Yes ̈No  x



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##### Table of Contents

Tri-State 1st Banc, Inc.

Form 10-KSB

Table of Contents



|                                                                                                        |  |           
|------------------------------------------------------------------------------------------------------- |  | ----------
|                                                                                                        |  | PageNumber
|Part I                                                                                                  |  |           
|                                                                                                        | 
|Item 1.
Description of Business                                                                         |  | 3-10      
|                                                                                                        | 
|Item 2.
Description of Properties                                                                       |  | 10        
|                                                                                                        | 
|Item 3.
Legal Proceedings                                                                               |  | 10        
|                                                                                                        | 
|Item 4.
Submission of Matters to a Vote of Security Holders                                             |  | 11        
|                                                                                                        | 
|Part II                                                                                                 |  |           
|                                                                                                        | 
|Item 5.
Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 11        
|                                                                                                        | 
|Item 6.
Managements Discussion and Analysis or Plan of Operations                                      |  | 11        
|                                                                                                        | 
|Item 7.
Financial Statements                                                                            |  | 11        
|                                                                                                        | 
|Item 8.
Changes in and disagreements with Accountants on Accounting and Financial Disclosure            |  | 11        
|                                                                                                        | 
|Item 8A.
Controls and Procedures                                                                        |  | 11        
|                                                                                                        | 
|Part III                                                                                                |  |           
|                                                                                                        | 
|Item 9.
Directors and Executive Officers of the Issuer                                                  |  | 11        
|                                                                                                        | 
|Item 10.
Executive Compensation                                                                         |  | 11        
|                                                                                                        | 
|Item 11.
Security Ownership of Certain Beneficial Owners and Management                                 |  | 12        
|                                                                                                        | 
|Item 12.
Certain Relationships and Related Transactions                                                 |  | 12        
|                                                                                                        | 
|Item 13.
Exhibits and Reports on Form 8-K                                                               |  | 12        
|                                                                                                        | 
|Item 14.
Principal Accountant Fees and Services                                                         |  | 12        
|                                                                                                        | 
|Signatures                                                                                              |  | 13        



Page 2



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##### Table of Contents

PART I



Item 1. Description of Business



General



Certain information required by this section is presented on pages 16
and 39 of the 2003 Annual Report and is incorporated herein by reference.



As
of December 31, 2003, the Company had 47 full-time employees and 21 part-time employees. The Company considers its relationship with its employees to be good. None of the employees are covered by a collective bargaining agreement.



Supervision and Regulation



The Company is subject to regulation under the Bank Holding Company Act of 1956 as amended,
and as such is subject to regulation by the Federal Reserve Board (FRB). Bank Holding Companys are required to file with the FRB certain reports and other information regarding their business operations and those of its subsidiaries. A
Bank Holding Company and its subsidiaries are also subject to examination by the FRB.



In 1999, the Financial Services Modernization Act became law and substantially changed the Bank Holding Company Act of 1956. The act permits subsidiaries of Bank Holding Companies to engage in a broad range of financial activities that were
not previously permitted. The law authorizes a Bank Holding Company to affiliate with any financial company (for example, insurance or securities companies) and to cross-sell an affiliates products, thus allowing such a company to offer its
customers any financial product or service. In addition, the law greatly expands the number of permissible holding company activities to include numerous financial activities that were not previously permitted. The law also permits operating
subsidiaries of national banks to sell any financial product without geographic limitation.



Under the Riegle - Neal Interstate Banking and Branching Efficiency Act of 1994 (the Interstate Banking Law), various federal banking laws were amended to provide for nationwide interstate banking, interstate
bank mergers and interstate branching. The Interstate Banking Law allows the acquisition by a Bank Holding Company of a bank located in another state. Interstate bank mergers and branch purchase and assumption transactions are allowed however,
states may opt out of the merger and purchase and assumption provisions by enacting laws that specifically prohibit such interstate transactions.



Deposits maintained with the Bank are insured up to regulatory limits by the FDIC, and accordingly, are subject to deposit insurance assessments to maintain the Bank
Insurance Fund (BIF) administered by the FDIC. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) was enacted on August 9, 1989. FIRREA significantly affected the financial industry in several
ways, including higher deposit insurance premiums, more stringent capital requirements and new investment limitations and restrictions. The Federal Deposit Insurance Corporation Act of 1991 (The FDIC Improvement Act) covers a wide
expanse of Banking regulatory issues including the capitalization of the BIF, deposit insurance reform, requiring the FDIC to establish a risk - based premium assessment system and a number of other regulatory and supervisory matters.



The monetary policies of regulatory authorities, including the Federal Reserve Board, have a
significant effect on the operating results of Banks and Bank Holding Companies. The nature of future monetary policies and the effect of such policies on the future business and earnings of the Company cannot be predicted.



Management is not aware of any current recommendations by regulatory authorities which, if
they were to be implemented, would have a material effect on liquidity, capital resources or operations of the Company.



Page 3



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##### Table of Contents

Competition and Market area



Business is conducted through seven full-service banking offices located in the Upper Ohio Valley Area which constitutes the tri-state
region of Columbiana County, Ohio, Hancock County, West Virginia and Beaver County, Pennsylvania. The Upper Ohio Valley has long been an important industrial community of the United States. The Company is not dependent upon any single industry or
business for its banking opportunities.



The Company functions in a highly
competitive environment. In addition to other commercial banks, savings and loans, and savings banks, the Company must also contend with other providers of financial services including finance companies, credit unions and insurance companies.
Despite having access to less resources and smaller lending limits, the Bank remains competitive in its service area with respect to interest rates and fees charged on loans, interest rates paid on time and savings deposits, and service charges on
deposit accounts. The deposit base of the Bank is relatively stable whereby seasonal fluctuations in the amount of deposits have not been experienced. All of the Banks deposits emanate from inside the United States.



Statistical Disclosures by Bank Holding Companies



I. Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and
Interest Differential



Rate/Volume Analysis



The following table presents the extent to which changes in interest rates and changes in
the volume of interest-earning assets and interest-bearing liabilities have affected the Companys interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes
attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume) and (iii) the changes attributable to the combined impact of volume and rate.
The change in interest rate due to both rate and volume in the rate/volume analysis table table have been allocated to changes due to rate and volume in proportion to the absolute amounts of changes in each.



|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  
|----------------------------------------------------------------- |  | -------------------------------------------- | -------- | - | ---- | - | -------- | ----------------------- |  | - | -------- | -
|                                                                  |  | For the Year Ended December 31, 2003 vs 2002 |         
|                                                                  |  | Increase (Decrease) Due to                   |         
|                                                                  |  | Volume                                       |          |   | Rate |   |          | TotalIncrease(Decrease) | 
|Interest-earning assets:                                          |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Interest-bearing deposits with other banks and federal funds sold |  | $                                            | 5,634    |   |      | $ | (22,562  | )                       |  | $ | (16,927  | )
|Taxable investment securities                                     |  |                                              | (295,941 | ) |      |   | 337,479  |                         |  |   | 41,538   |  
|Nontaxable investment securities (1)                              |  |                                              | (63,544  | ) |      |   | 23,264   |                         |  |   | (40,280  | )
|Loans (1)                                                         |  |                                              | 105,009  |   |      |   | (173,910 | )                       |  |   | (68,901  | )
|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Total interest-earning assets                                     |  |                                              | (248,842 | ) |      |   | 164,271  |                         |  |   | (84,570  | )
|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Interest-bearing liabilities:                                     |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Interest-bearing demand                                           |  |                                              | 22,938   |   |      |   | (48,061  | )                       |  |   | (25,123  | )
|Money market accounts                                             |  |                                              | 4,658    |   |      |   | (5,760   | )                       |  |   | (1,101   | )
|Savings deposits                                                  |  |                                              | (614,129 | ) |      |   | 615,021  |                         |  |   | 891      |  
|Time deposits                                                     |  |                                              | 38,103   |   |      |   | (221,564 | )                       |  |   | (183,461 | )
|Short-term borrowings                                             |  |                                              | 26,508   |   |      |   | (52,585  | )                       |  |   | (26,076  | )
|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Total interest-bearing liabilities                                |  |                                              | (521,922 | ) |      |   | 287,051  |                         |  |   | (234,870 | )
|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  
|Net change in net interest income                                 |  | $                                            | 273,080  |   |      | $ | (122,780 | )                       |  | $ | 150,300  |  
|                                                                  |  |                                              |          |   |      |   |          |                         |  |   |          |  

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|(1) | Computed on a tax equivalent basis using a 34% federal income tax rate.
|--- | -----------------------------------------------------------------------



Page 4



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##### Table of Contents

Rate/Volume Analysis (continued)



|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  
|----------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ---- | - | -------- | ----------------------- |  | - | -------- | -
|                                                                  |  | For the Year Ended December 31, 2002 vs 2001 |        
|                                                                  |  | Increase (Decrease) Due to                   |        
|                                                                  |  | Volume                                       |         |   | Rate |   |          | TotalIncrease(Decrease) | 
|Interest-earning assets:                                          |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Interest-bearing deposits with other banks and federal funds sold |  | $                                            | (38,047 | ) |      | $ | (82,345  | )                       |  | $ | (120,392 | )
|Taxable investment securities                                     |  |                                              | 32,365  |   |      |   | (136,324 | )                       |  |   | (103,959 | )
|Nontaxable investment securities (1)                              |  |                                              | 6,850   |   |      |   | 28,236   |                         |  |   | 35,086   |  
|Loans (1)                                                         |  |                                              | 413,210 |   |      |   | (515,718 | )                       |  |   | (102,508 | )
|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Total interest-earning assets                                     |  |                                              | 414,378 |   |      |   | (706,151 | )                       |  |   | (291,773 | )
|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Interest-bearing liabilities:                                     |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Interest-bearing demand                                           |  |                                              | (22,521 | ) |      |   | (144,505 | )                       |  |   | (167,026 | )
|Money market accounts                                             |  |                                              | (8,400  | ) |      |   | (27,574  | )                       |  |   | (35,974  | )
|Savings deposits                                                  |  |                                              | 19,110  |   |      |   | (90,720  | )                       |  |   | (71,610  | )
|Time deposits                                                     |  |                                              | 117,885 |   |      |   | (368,329 | )                       |  |   | (250,444 | )
|Short-term borrowings                                             |  |                                              | 4,821   |   |      |   | (65,497  | )                       |  |   | (60,676  | )
|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Total interest-bearing liabilities                                |  |                                              | 110,895 |   |      |   | (696,625 | )                       |  |   | (585,730 | )
|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  
|Net change in net interest income                                 |  | $                                            | 303,483 |   |      | $ | (9,526   | )                       |  | $ | 293,957  |  
|                                                                  |  |                                              |         |   |      |   |          |                         |  |   |          |  

---

|(1) | Computed on a tax equivalent basis using a 34% federal income tax rate.
|--- | -----------------------------------------------------------------------



Additional information required by this section is presented on page 10 of the 2003 Annual Report and is incorporated herein by reference.



II. Investment Portfolio



A. Book Value of Investment Portfolio



The required information is incorporated by reference to pages 23 through 25 of the 2003
Annual Report.



B. Maturity and Yield Information



The following table sets forth the maturity of investments at December 31, 2003 and the
weighted average yields of such investments. The yields reflected are calculated based on the basis of the cost and effective yields for the scheduled maturity of each investment.



|                                                 |  |                        |           |                                    |   |                                      |  |                    |            |       |   |           |  |   |           
|------------------------------------------------ |  | ---------------------- | --------- | ---------------------------------- | - | ------------------------------------ |  | ------------------ | ---------- | ----- | - | --------- |  | - | ----------
|                                                 |  | Due in OneYear or Less |           | Due AfterOne YearThroughFive Years |   | Due AfterFive YearsThrough Ten Years |  | Due AfterTen Years |            | Total
|U.S. Government agency securities                |  | $                      | 999,448   |                                    | $ | 4,221,597                            |  | $                  | 8,131,604  |       | $ |          |  | $ | 13,352,649
|Obligations of states and political subdivisions |  |                        | 917,220   |                                    |   | 3,416,722                            |  |                    | 3,080,187  |       |   | 375,000   |  |   | 7,789,129 
|Mortgage - backed securities                     |  |                        |          |                                    |   | 24,684                               |  |                    | 2,642,097  |       |   | 6,806,527 |  |   | 9,473,308 
|                                                 |  |                        |           |                                    |   |                                      |  |                    |            |       |   |           |  |   |           
|Total debt securities                            |  |                        | 1,916,668 |                                    |   | 7,663,003                            |  |                    | 13,853,888 |       |   | 7,181,527 |  |   | 30,615,086
|Mutual Funds (1)                                 |  |                        |          |                                    |   |                                     |  |                    |           |       |   |          |  |   | 1,000,000 
|                                                 |  |                        |           |                                    |   |                                      |  |                    |            |       |   |           |  |   |           
|Total investment securities                      |  | $                      | 1,916,668 |                                    | $ | 7,663,003                            |  | $                  | 13,853,888 |       | $ | 7,181,527 |  | $ | 31,615,086
|                                                 |  |                        |           |                                    |   |                                      |  |                    |            |       |   |           |  |   |           

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|(1) | Consists of investment in Asset Management Fund ARM Fund.
|--- | ---------------------------------------------------------



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##### Table of Contents

B. Maturity and Yield Information (continued)



|                                                 |  |                        |   |  |                                     |   |  |                                       |   |  |                    |   |  |       |  
|------------------------------------------------ |  | ---------------------- | - |  | ----------------------------------- | - |  | ------------------------------------- | - |  | ------------------ | - |  | ----- | -
|                                                 |  | Due in OneYear or Less |   |  | Due After One YearThroughFive Years |   |  | Due After Five Years ThroughTen Years |   |  | Due AfterTen Years |   |  | Total |  
|U.S. Government agency securities                |  | 5.63                   | % |  | 4.58                                | % |  | 4.13                                  | % |  |                   | % |  | 4.38  | %
|Obligations of states and political subdivisions |  | 8.39                   |   |  | 7.90                                |   |  | 6.99                                  |   |  | 6.82               |   |  | 7.54  |  
|Mortgage - backed securities                     |  |                       |   |  | 7.00                                |   |  | 5.03                                  |   |  | 4.77               |   |  | 4.85  |  
|                                                 |  |                        |   |  |                                     |   |  |                                       |   |  |                    |   |  |       |  
|Total debt securities                            |  | 6.95                   |   |  | 6.07                                |   |  | 4.94                                  |   |  | 4.88               |   |  | 5.33  |  
|Mutual Funds (1)                                 |  |                       |   |  |                                    |   |  |                                      |   |  |                   |   |  | 2.19  |  
|                                                 |  |                        |   |  |                                     |   |  |                                       |   |  |                    |   |  |       |  
|Total investment securities                      |  | 6.95                   | % |  | 6.07                                | % |  | 4.94                                  | % |  | 4.88               | % |  | 5.23  | %
|                                                 |  |                        |   |  |                                     |   |  |                                       |   |  |                    |   |  |       |  

---

|(1) | Consists of investment in Asset Management Fund ARM Fund.
|--- | ---------------------------------------------------------



Weighted average yields are computed on a tax equivalent basis using a federal tax rate of 34% based on cost, adjusted for amortization of premium or accretion of
discount.



C. Aggregate Book Value of Securities Exceeding 10% of
Stockholders Equity



At December 31, 2003, non-U.S. Government and
U.S. Government agency securities that exceeded ten percent of stockholders equity consisted of an investment in The Asset Management Fund ARM Fund which invests solely in mortgage-backed securities issued or guaranteed by U.S. government
agencies or government-sponsored enterprises or which are rated in the two highest investment grades.



|                                   |  |            |           |              |   |        
|---------------------------------- |  | ---------- | --------- | ------------ | - | -------
|Issuer                             |  | Book Value |           | Market Value
|The Asset Management Fund ARM Fund |  | $          | 1,000,000 |              | $ | 993,970



III. Loan Portfolio



A. Types of Loans



The following table sets forth the composition of the loan portfolio by type of loan at the
dates indicated.



|                                         |  |                 |            |   |         |        |   |        |   |            |         |  |        |  
|---------------------------------------- |  | --------------- | ---------- | - | ------- | ------ | - | ------ | - | ---------- | ------- |  | ------ | -
|                                         |  | At December 31, |           
|                                         |  | 2003            |            |   | 2002    |       
|                                         |  | Amount          |            |   | Percent |        |   | Amount |   |            | Percent | 
|Real Estate Loans:                       |  |                 |            |   |         |        |   |        |   |            |         |  |        |  
|Construction                             |  | $               | 162,492    |   |         | 0.36   | % |        | $ | 354,813    |         |  | 0.78   | %
|1 - 4 Family                             |  |                 | 18,251,197 |   |         | 40.35  |   |        |   | 19,236,822 |         |  | 42.40  |  
|Commercial                               |  |                 | 3,795,636  |   |         | 8.39   |   |        |   | 4,073,735  |         |  | 8.98   |  
|Commercial Loans                         |  |                 | 17,619,755 |   |         | 38.96  |   |        |   | 16,234,944 |         |  | 35.78  |  
|Consumer Loans                           |  |                 | 5,398,486  |   |         | 11.94  |   |        |   | 5,468,219  |         |  | 12.06  |  
|                                         |  |                 |            |   |         |        |   |        |   |            |         |  |        |  
|Total                                    |  |                 | 45,227,566 |   |         | 100.00 | % |        |   | 45,368,533 |         |  | 100.00 | %
|                                         |  |                 |            |   |         |        |   |        |   |            |         |  |        |  
|Deferred loan origination fees and costs |  |                 | 13,114     |   |         |        |   |        |   | 27,409     |         |  |        |  
|Allowance for possible loan losses       |  |                 | (514,260   | ) |         |        |   |        |   | (514,276   | )       |  |        |  
|                                         |  |                 |            |   |         |        |   |        |   |            |         |  |        |  
|Net loans                                |  | $               | 44,726,420 |   |         |        |   |        | $ | 44,881,666 |         |  |        |  
|                                         |  |                 |            |   |         |        |   |        |   |            |         |  |        |  



The Banks lending policy
requires the application and satisfaction of certain underwriting standards prior to funding any loan, among which are documentation requirements to include credit and collateral value analysis. Credit qualifications entails evaluation of business
cash flows or consumer income available to service debt payments. Secondary sources of repayment, including collateral and guarantees may be requested as well. Lending opportunities typically are restricted to the market areas the Banks
branches serve.



Page 6



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##### Table of Contents

The Banks lending strategy has historically focused on the origination of a mixture in its portfolio of commercial
loans, one-to-four family mortgage loans and, to a lesser extent, working capital loans in the form of credit lines and term notes, personal loans, and home equity loans. Commercial real estate loans are granted for the acquisition or improvement of
real property. Generally, commercial real estate loans do not exceed 70% of the appraised value of the property pledged to secure the transaction. With repayment typically contingent upon successful operation of the subject real estate, this is
carefully scrutinized prior to approval.



Real estate construction loans are
granted for the purpose of construction improvements to real property, both commercial and residential. Real estate loans secured by one-to-four family residential housing properties are granted subject to statutory limits regarding the maximum
percentage of appraised value of the mortgaged property. Residential loan terms are normally established based upon factors such as interest rates in general, the supply of money available to the bank and the demand for such loans.



Consumer loans represent the extension of financing to customers for personal expenditures or
household purposes. Creditworthiness is evaluated on the basis of projected repayment capacity as well as credit history. Such loans are granted in the form of installment or revolving transactions.



B. Maturities and Sensitivities of Loans to Changes in Interest Rates



The following table exhibits the maturity of commercial and real estate construction loans
outstanding as of December 31, 2003, and the amounts due after one year classified according to the sensitivity to changes in interest rates.



|                                        |  |               |           |                           |   |                  |  |   |           |  |   |           
|--------------------------------------- |  | ------------- | --------- | ------------------------- | - | ---------------- |  | - | --------- |  | - | ----------
|                                        |  | Maturing      |           | Total                    
|                                        |  | Within 1 Year |           | One YearThroughFive Years |   | After Five Years | 
|Commercial and agricultural             |  | $             | 7,795,536 |                           | $ | 4,750,381        |  | $ | 5,073,838 |  | $ | 17,619,755
|Real estate - construction              |  |               | 162,492   |                           |   |                 |  |   |          |  |   | 162,492   
|                                        |  |               |           |                           |   |                  |  |   |           |  |   |           
|Total                                   |  | $             | 7,958,028 |                           | $ | 4,750,381        |  | $ | 5,073,838 |  | $ | 17,782,247
|                                        |  |               |           |                           |   |                  |  |   |           |  |   |           
|Sensitivity of loans to interest rates: |  |               |           |                           |   |                  |  |   |           |  |   |           
|Predetermined interest rates            |  |               |           |                           | $ | 1,503,691        |  | $ | 2,172,722 |  |   |           
|Floating interest rates                 |  |               |           |                           |   | 3,246,690        |  |   | 2,901,116 |  |   |           
|                                        |  |               |           |                           |   |                  |  |   |           |  |   |           
|Total                                   |  |               |           |                           | $ | 4,750,381        |  | $ | 5,073,838 |  |   |           
|                                        |  |               |           |                           |   |                  |  |   |           |  |   |           



C. Risk Elements



Certain information required by this section is presented on pages 8, 25 through 26 and
39 through 43 of the 2003 Annual Report and is incorporated herein by reference.



The following table sets forth information regarding non - performing assets:



|                                                                   |  |                 |           |   |      |   |         |  
|------------------------------------------------------------------ |  | --------------- | --------- | - | ---- | - | ------- | -
|                                                                   |  | At December 31, |          
|                                                                   |  | 2003            |           |   | 2002 |  
|Loans past due 90 days or more and still accruing interest         |  | $               | 5,884     |   |      | $ | 133,119 |  
|Nonaccrual loans                                                   |  |                 | 362,756   |   |      |   | 98,149  |  
|Impaired loans                                                     |  |                 | 992,584   |   |      |   | 62,128  |  
|                                                                   |  |                 |           |   |      |   |         |  
|Total non - performing loans                                       |  |                 | 1,361,224 |   |      |   | 293,396 |  
|Other real estate owned                                            |  |                 | 40,000    |   |      |   |        |  
|                                                                   |  |                 |           |   |      |   |         |  
|Total non - performing assets                                      |  | $               | 1,401,224 |   |      | $ | 293,396 |  
|                                                                   |  |                 |           |   |      |   |         |  
|Non-performing loans as a percentage of total loans                |  |                 | 3.01      | % |      |   | 0.65    | %
|Non-performing assets as a percentage of total assets              |  |                 | 1.57      | % |      |   | 0.38    | %
|Allowance for loan losses as a percentage of non-performing assets |  |                 | 36.7      | % |      |   | 175.3   | %



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##### Table of Contents

Non - performing assets include non - performing loans and other real estate owned. The Banks non-performing assets
do not represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources. Impaired loans are commercial and commercial real estate loans for which it
is probable that the Bank will not be able to collect all amounts due according to the contractual terms of the loan agreement.



Although the Bank has a diversified loan portfolio, a substantial portion of its debtors ability to honor their agreements is dependent upon the economic stability
of the tri - state area. At December 31, 2003, the company did not have any concentrations of loans to borrowers engaged in similar activities exceeding 10% of total loans.



While it is impossible to predict what 2004 loan losses will be, there are no potential problem loans outstanding at the end of any period
presented for which there was serious doubt as to the ability of the borrower to comply with present loan repayment terms except as discussed above.



IV. Summary of Loan Loss Experience



A. Analysis of Loan Loss Experience



The following table sets forth information with respect to the banks allowance for loan losses at the dates indicated:



|                                                |  |                 |         |   |      |   |         |  
|----------------------------------------------- |  | --------------- | ------- | - | ---- | - | ------- | -
|                                                |  | At December 31, |        
|                                                |  | 2003            |         |   | 2002 |  
|Balance, January 1                              |  | $               | 514,276 |   |      | $ | 443,350 |  
|Charge - offs:                                  |  |                 |         |   |      |   |         |  
|Commercial and agricultural                     |  |                 | 7,778   |   |      |   | 45,834  |  
|Real estate mortgages                           |  |                 | 18,057  |   |      |   | 2,059   |  
|Consumer                                        |  |                 | 83,470  |   |      |   | 38,265  |  
|                                                |  |                 |         |   |      |   |         |  
|Total charge - offs                             |  |                 | 109,305 |   |      |   | 86,158  |  
|                                                |  |                 |         |   |      |   |         |  
|Loan recoveries:                                |  |                 |         |   |      |   |         |  
|Commercial and agricultural                     |  |                 |        |   |      |   | 19,887  |  
|Real estate mortgages                           |  |                 |        |   |      |   |        |  
|Consumer                                        |  |                 | 33,669  |   |      |   | 29,197  |  
|                                                |  |                 |         |   |      |   |         |  
|Total loan recoveries                           |  |                 | 33,669  |   |      |   | 49,084  |  
|                                                |  |                 |         |   |      |   |         |  
|Net charge - offs                               |  |                 | 75,636  |   |      |   | 37,074  |  
|                                                |  |                 |         |   |      |   |         |  
|Provision charged to operations                 |  |                 | 75,620  |   |      |   | 108,000 |  
|                                                |  |                 |         |   |      |   |         |  
|Balance, December 31                            |  | $               | 514,260 |   |      | $ | 514,276 |  
|                                                |  |                 |         |   |      |   |         |  
|Net charge - offs as a percent of average loans |  |                 | 0.17    | % |      |   | 0.09    | %



The Bank believes that the allowance
for loan losses at December 31, 2003 is adequate to cover probable losses inherent in the portfolio. However, there can be no assurance that the Bank will not sustain additional losses in future periods, which could be substantial in relation to the
size of the allowance at December 31, 2003.



The Bank monitors its loan
portfolio on a monthly basis, taking into consideration the status of potential problem loans and non- performing assets, as well as trends in delinquencies. Managements determination of of the adequacy of the allowance for loan losses is
based on periodic evaluations of the credit portfolio and other relevant factors. In addition to the estimate of the amounts and timing of expected future cash flows on impaired loans, other components of the allowance for loan losses include
estimates for loan losses associated within the commercial, consumer and real estate mortgage portfolios, general amounts for historical loss experience, uncertainties in estimating losses, and inherent risks in the various credit portfolios.



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##### Table of Contents

B. Allocation of the Allowance for Possible Loan Losses



The following table provides a breakdown of the allowance for loan losses for the periods
indicated:



|                   |  |                 |         |                         |        |   |        |   |                         |  |        |  
|------------------ |  | --------------- | ------- | ----------------------- | ------ | - | ------ | - | ----------------------- |  | ------ | -
|                   |  | At December 31, |        
|                   |  | 2003            |         |                         | 2002   |  
|                   |  | Amount          |         | % of Loansto TotalLoans |        |   | Amount |   | % of Loansto TotalLoans | 
|Real Estate Loans: |  |                 |         |                         |        |   |        |   |                         |  |        |  
|Construction       |  | $               | 3,543   |                         | 0.36   | % |        | $ | 10,280                  |  | 0.78   | %
|1 - 4 Family       |  |                 | 97,452  |                         | 40.35  |   |        |   | 81,820                  |  | 42.37  |  
|Commercial         |  |                 | 153,792 |                         | 8.39   |   |        |   | 111,444                 |  | 8.97   |  
|Commercial Loans   |  |                 | 119,337 |                         | 38.96  |   |        |   | 115,604                 |  | 35.78  |  
|Consumer Loans     |  |                 | 129,851 |                         | 11.94  |   |        |   | 122,052                 |  | 12.10  |  
|                   |  |                 |         |                         |        |   |        |   |                         |  |        |  
|Unallocated        |  |                 | 10,285  |                         |        |   |        |   | 73,076                  |  |        |  
|                   |  |                 |         |                         |        |   |        |   |                         |  |        |  
|Total              |  | $               | 514,260 |                         | 100.00 | % |        | $ | 514,276                 |  | 100.00 | %
|                   |  |                 |         |                         |        |   |        |   |                         |  |        |  



The allocation of the allowance for
possible loan losses is predicated upon periodic review and evaluation of individual loans, past loss experience, risk elements associated with particular loan categories, and the impact of the economic environment. The allowance for loan losses is
available to absorb credit losses arising from individual or portfolio segments. When losses on specific loans are identified, the portion deemed uncollectable is charged off.



V. Deposits



A. Average Deposits and Rates Paid by Type



The following tables summarize the daily average amount of deposits and rates paid on such deposits for the periods indicated.



|                             |  |                         |            |   |      |   |            |  
|---------------------------- |  | ----------------------- | ---------- | - | ---- | - | ---------- | -
|                             |  | Year Ended December 31, |           
|                             |  | 2003                    |            |   | 2002 |  
|Amount                       |  |                         |            |   |      |   |            |  
|Noninterest - bearing demand |  | $                       | 12,698,943 |   |      | $ | 9,794,127  |  
|Interest - bearing demand    |  |                         | 16,283,175 |   |      |   | 14,554,272 |  
|Savings                      |  |                         | 12,894,488 |   |      |   | 11,496,766 |  
|Money market                 |  |                         | 3,842,791  |   |      |   | 3,593,368  |  
|Time                         |  |                         | 24,607,583 |   |      |   | 23,663,866 |  
|                             |  |                         |            |   |      |   |            |  
|Total                        |  | $                       | 70,326,980 |   |      | $ | 63,102,399 |  
|                             |  |                         |            |   |      |   |            |  
|Rate                         |  |                         |            |   |      |   |            |  
|Noninterest - bearing demand |  |                         |           | % |      |   |           | %
|Interest - bearing demand    |  |                         | 0.50       |   |      |   | 0.75       |  
|Savings deposits             |  |                         | 0.85       |   |      |   | 1.10       |  
|Money market                 |  |                         | 1.25       |   |      |   | 1.50       |  
|Time deposits                |  |                         | 1.76       |   |      |   | 3.30       |  



Remaining maturity of time
certificates of deposit in denominations of $100,000 or more.



The
required information is incorporated by reference to page 27 of the 2003 Annual Report.



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##### Table of Contents

VI. Return on Equity and Assets



The required information is incorporated by reference to pages 7 and 8 of the 2003 Annual Report.



VII. Short - Term Borrowings



The required information is incorporated by reference to page 27 of the 2003 Annual Report.



Item 2. Description of Properties



The
following are the principal locations and operations of the Company and Bank:



|                           |  |             |  |                
|-------------------------- |  | ----------- |  | ---------------
|Description                |  | Own orLease |  | LeaseExpiration
|Executive Offices of the   |  |             |  |                
|Company and Bank and       |  |             |  |                
|Branch office              |  |             |  |                
|16924 St. Clair Avenue     |  |             |  |                
|East Liverpool, OH 43920   |  | Own         |  | N/A            
|                           |  |            
|Branch office              |  |             |  |                
|Jefferson & Lincoln Way    |  |             |  |                
|Lisbon, OH 44432           |  | Own         |  | N/A            
|                           |  |            
|Branch office              |  |             |  |                
|15703 St Rt. 170           |  |             |  |                
|Calcutta, OH 43920         |  | Lease       |  | 2006           
|                           |  |            
|Branch office              |  |             |  |                
|Wal-Mart Store             |  |             |  |                
|Calcutta, OH 43920         |  | Lease       |  | 2008           
|                           |  |            
|Branch office              |  |             |  |                
|1200 North Chestnut Street |  |             |  |                
|New Cumberland, WV 26047   |  | Own         |  | N/A            
|                           |  |            
|Branch office              |  |             |  |                
|627 Midland Avenue         |  |             |  |                
|Midland, PA 15059          |  | Own         |  | N/A            
|                           |  |            
|Branch office              |  |             |  |                
|Bradshaw Square            |  |             |  |                
|East Liverpool, Ohio 43920 |  | Lease       |  | 2010           



Management asserts that for insurance
purposes all facilities and equipment are subject to periodic appraisal and all properties are adequately insured.



Item 3. Legal Proceedings



There are no
pending legal proceedings, other than ordinary routine litigation incidental to banking, to which the Company or the Bank is a party of or to which any of the Companys or Banks property is subject.



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##### Table of Contents

Item 4. Submission of Matters to a Vote of Security Holders



No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2003.



PART II



Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



Certain information is incorporated by reference to page 9 of the 2003 Annual Report.



There were no purchases of the Issuers equity securities during the fourth quarter of fiscal 2003.



Item 6. Managements Discussion and Analysis or Plan of Operations



The required information is incorporated by reference to pages 39 through 43 of the 2003 Annual Report.



Item 7. Financial Statements



The required
information is incorporated by reference to pages 11 through 36 of the 2003 Annual Report.



Critical Accounting Policies



The
Companys accounting policies are integral to understanding the results reported. The accounting policies are described in detail in Note 1 of the consolidated financial statements. Our most complex accounting policies require managements
judgment to ascertain the valuation of assets, liabilities, commitments and contingencies. We have established detailed policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from
period to period. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The following is a brief description of our current accounting policies involving
significant management valuation judgments.



Allowance for Loan Losses



Arriving at an appropriate level of allowance for loan losses involves a high
degree of judgment. The Companys allowance for loan losses provides for probable losses based upon evaluations of known, and inherent risks in the loan portfolio.



Management uses historical information to assess the adequacy of the allowance for loan losses as well as the prevailing business
environment; as it is affected by changing economic conditions and various external factors, which may impact the portfolio in ways currently unforeseen. The allowance is increased by provisions for loan losses and by recoveries of loans previously
charged-off and reduced by loans charged-off. For a full discussion of the Companys methodology of assessing the adequacy of the reserve for loan losses, refer to Note 1 of Notes to Consolidated Financial Statements commencing on
page XX of this Form 10-KSB.



Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure



None.



Item 8A. Controls and Procedures



Evaluation of Disclosure Controls and Procedures



Based on
their evaluation as of a date within 90 days of the filing date of this annual report on Form 10KSB, the Companys principal executive officer and principal financial officer have concluded that the Companys disclosure controls and
procedures (as defined in Rules 13a-14c under the Securities and Excgange Act of 1934, the Exchange Act) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the
exchange act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



Changes in Internal Controls



There were no significant changes in the Companys internal controls or other factors that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



PART III



Item 9. Directors and Executive Officers of the Issuer



The required information is incorporated by reference to pages 4 through 5 of the 2004 Proxy Statement.



Item 10. Executive Compensation



The required
information is incorporated by reference to page 6 through 7 of the 2004 Proxy Statement.



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---

##### Table of Contents

Item 11. Security Ownership of Certain Beneficial Owners and Management



The required information is incorporated by reference to pages 7 through 8 of the 2004 Proxy Statement.



Item 12. Certain Relationships and Related Transactions



The required information is incorporated by reference to page 9 of the 2004 Proxy Statement.



Item 13. Exhibits and Reports on Form 8 - K



The following documents are filed as part of this report, except as may be indicated:



(1) Financial Statements:



The
following Consolidated Financial Statements of Tri - State 1st Banc, Inc. together with the Report of Independent Auditors dated February 6, 2004, are included in the 2003 Annual Report of the registrant which is referenced in Part II, Item 7 -
Financial Statements and are incorporated herein:



|                                                                                              |  |               
|--------------------------------------------------------------------------------------------- |  | --------------
|                                                                                              |  | Page Reference
|Report of Independent Auditors                                                                |  | 11            
|Consolidated Balance Sheet, December 31, 2003 and 2002                                        |  | 12            
|Consolidated Statement of Income for the years ended December 31, 2003 and 2002               |  | 13            
|Consolidated Statement of Stockholders Equity for the years ended December 31, 2003 and 2002 |  | 14            
|Consolidated Statement of Cash Flows for the years ended December 31, 2003 and 2002           |  | 15            
|Notes to Consolidated Financial Statements                                                    |  | 16-34         



(2) Exhibits and reports of Form
8-K:



|(a) | Exhibits filed herewith or incorporated by reference are set forth in the following table prepared in accordance with item 601 of Regulation S - B.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | (3.1) | Articles of Incorporation of the registrant are incorporated herein by reference to the registrants Registration Statement on Form S - 4 filed with the Securities and Exchange
Commission on March 8, 1996.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3.2) | By - laws of the registrant are incorporated by reference to the registrants Registration Statement on Form S - 4 filed with the Securities and Exchange Commission on March 8,
1996.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10.1) | The 1997 Stock Option Plan is incorporated by reference to the registrants amendment No. 1 Registration Statement Form SB-2 filed with the Securities and Exchange Commission
on December 1, 1999.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (13) | Portions of the Annual Report to Security Holders for the year ended December 31, 2003, filed herewith as exhibit 13.
| | ---- | ---------------------------------------------------------------------------------------------------------------------



| | (14) | Code of Ethics Policy
| | ---- | ---------------------



| | (21) | Subsidiary of the registrant incorporated herein by reference to the registrants Registration Statement on Form S - 4 filed with the Securities and Exchange Commission on
March 8, 1996.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (31.0) | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ------ | ----------------------------------------------------------------------------------------------------------------------



| | (31.1) | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ------ | ----------------------------------------------------------------------------------------------------------------------



| | (32.0) | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ------ | ----------------------------------------------------------------------------------------------------------------------



|(b) | Reports on Form 8-K
|--- | -------------------



None



Item 14. Principal Accountant Fees and Services



The required information is incorporated by reference to page 9 of the 2004 Proxy Statement.



Page 12



---

##### Table of Contents

SIGNATURES



In accordance with Section 13 or 15(d) of
the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |     |  |                        
|-------------------- |  | --- |  | -----------------------
|Date: March 10, 2004 |  | By: |  | /s/ Charles B. Lang    
|                     |  |     |  | Charles B. Lang        
|                     |  |     |  | President              
|                     |  |    
|Date: March 10, 2004 |  |     |  |                        
|                     |  | By: |  | /s/ Kevin Anglemyer    
|                     |  |     |  | Kevin Anglemyer        
|                     |  |     |  | Chief Financial Officer



In accordance with the Exchange Act,
this report has been signed below by the persons on behalf of the registrant and in the capacities and on the dates indicated.



|                          |  |                                                                  |  |               
|------------------------- |  | ---------------------------------------------------------------- |  | --------------
|Name                      |  | Title                                                            |  | Date          
|/s/ Charles B. Lang       |  | President (Principal Executive
Officer)                          |  | March 10, 2004
|Charles B. Lang           |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ Keith R. Clutter      |  | Secretary                                                        |  | March 10, 2004
|Keith R. Clutter          |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ Kevin Anglemyer       |  | Chief Financial Officer (Principal
Financial/Accounting Officer) |  | March 10, 2004
|Kevin Anglemyer           |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ J. Robert berg        |  | Director                                                         |  | March 10, 2004
|J. Robert Berg            |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ William E. Blair      |  | Director                                                         |  | March 10, 2004
|William E. Blair          |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ Stephen W. Cooper     |  | Director                                                         |  | March 10, 2004
|Stephen W. Cooper         |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ Timothy G. Dickey     |  | Director                                                         |  | March 10, 2004
|Timothy G. Dickey         |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ Marvin H. Feldman     |  | Director                                                         |  | March 10, 2004
|Marvin H. Feldman         |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ John P. Scotford, Sr. |  | Director                                                         |  | March 10, 2004
|John P. Scotford, Sr.     |  |                                                                  |  |               
|                          |  |                                                                 
|/s/ John C. Thompson      |  | Director                                                         |  | March 10, 2004
|John C. Thompson          |  |                                                                  |  |               



Page 13