##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Check Box QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

OR

Box TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                    
 to

Commission File Number 0-13270

Unizan Financial Corp.
(Exact name of registrant as specified in its charter)

|                                                                    |  |                                                
|------------------------------------------------------------------- |  | -----------------------------------------------
|Ohio
(State or other jurisdiction of
incorporation or organization) |  | 34-1442295
(I.R.S. Employer
Identification No.)

220 Market Avenue South, Canton, Ohio 44702
(Address of principal executive offices)
(Zip Code)

(330) 438-1118
(Registrants telephone number, including area code)

(Former name, former address and former fiscal year, if changed
since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of the latest practicable date.

|                                 |  |                                
|-------------------------------- |  | -------------------------------
|Class                            |  | Outstanding as of July 31, 2002
|                                
|                                
|                                
|                                
|Common Stock, $1.00 Stated Value |  | 22,042,017                     





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TABLE OF CONTENTS



|                              |                                                                                                            |                                                 |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|PART 1. Financial information
|                              | Item 1. Financial Statements                                                                              
|                              |                                                                                                            | CONSOLIDATED BALANCE SHEETS                    
|                              |                                                                                                            | CONSOLIDATED STATEMENTS OF INCOME              
|                              |                                                                                                            | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|                              |                                                                                                            | CONSOLIDATED STATEMENTS OF CASH FLOWS          
|                              |                                                                                                            | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                              | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION                      AND RESULTS OF OPERATIONS
|                              | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                
|PART II  OTHER INFORMATION  
|                              | Item 1. Legal Proceedings                                                                                 
|                              | Item 2. Changes in Securities and Use of Proceeds                                                         
|                              | Item 3. Defaults upon Senior Securities                                                                   
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                               
|                              | Item 5. Other Information                                                                                 
|                              | Item 6. Exhibits and Reports on Form 8-K                                                                  
|Signatures                   
|EX 99.1 Cert CEO             
|EX 99.2 Cert CFO             



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##### Table of Contents



INDEX
UNIZAN FINANCIAL CORP.

|                                                                                                       |                   |                                                             |                                                 |    |          |      | 
|------------------------------------------------------------------------------------------------------ | ----------------- | ----------------------------------------------------------- | ----------------------------------------------- | -- | -------- | ---- | 
|                                                                                                       |                   |                                                             |                                                 |    | PAGE NO.
|                                                                                                       |                   |                                                             |                                                 |    |         
|PART I. FINANCIAL INFORMATION                                                                          |                   |                                                             |                                                 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Item 1. Financial Statements                                                                           |                   |                                                             |                                                 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   |                                                             | Consolidated Balance Sheets                     |    |          | 1    | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   |                                                             | Consolidated Statements of Income               |    |          | 2    | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   |                                                             | Consolidated Statements of Comprehensive Income |    |          | 3    | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   |                                                             | Consolidated Statements of Cash Flows           |    |          | 4    | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   |                                                             | Notes to Consolidated Financial Statements      |    |          | 5-12 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Item 2. Managements Discussion and Analysis of Financial Condition
and Results of          Operations |                   |                                                             | 13-21                                           |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                     |                   |                                                             | 22-23                                           |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|PART II. OTHER INFORMATION                                                                             |                   |                                                             |                                                 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       | Other Information |                                                             |                                                 | 24 |         
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 1. Legal Proceedings                                   |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 2. Changes in Securities and Use of Proceeds           |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 3. Defaults upon Senior Securities                     |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 4. Submission of Matters to a Vote of Security Holders |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 5. Other Information                                   |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | Item 6. Exhibits and Reports on Form 8-K                    |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |                   | (a) Exhibits on Item 601 of Regulation S-K                  |                                                 |    |          |     
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Signatures                                                                                             |                   |                                                             | 25                                              |   





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##### Table of Contents












Unizan Financial Corp.
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                       |                                        |                                |                                            |              |           |           |           |           |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------ | ------------------------------------------ | ------------ | --------- | --------- | --------- | --------- | --------- | --------- | --------- | 
|(In thousands except per share data)                                                                                                                                   |                                        | June 30,                       |                                            | December 31,
|                                                                                                                                                                       |                                        | 2002                           |                                            | 2001        
|                                                                                                                                                                       |                                        |                                |                                            |              |           |          
|ASSETS                                                                                                                                                                 |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Cash and cash equivalents                                                                                                                                              |                                        | $                              | 78,708                                     |              |           | $         | 26,978    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Interest bearing deposits with banks                                                                                                                                   |                                        |                                | 1,967                                      |              |           |           | 906       |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Securities held-to-maturity, (Fair value:                                                                                                                              |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | $7,730 and $9,693, respectively)       |                                |                                            | 7,433        |           |           |           | 9,421     |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Securities available-for-sale, at fair value                                                                                                                           |                                        |                                | 399,822                                    |              |           |           | 293,805   |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Federal Home Loan Bank stock, at cost                                                                                                                                  |                                        |                                | 32,597                                     |              |           |           | 22,950    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Loans originated and held for sale                                                                                                                                     |                                        |                                | 8,200                                      |              |           |           | 10,455    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Loans:                                                                                                                                                                 |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Commercial, financial and agricultural |                                |                                            | 251,058      |           |           |           | 105,590   |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Aircraft                               |                                |                                            | 134,483      |           |           |           |          |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Commercial real estate                 |                                |                                            | 563,469      |           |           |           | 432,840   |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Residential real estate                |                                |                                            | 551,264      |           |           |           | 350,176   |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Consumer                               |                                |                                            | 409,469      |           |           |           | 140,431   |          
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        | Total loans                    |                                            |              | 1,909,743 |           |           |           | 1,029,037 |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        | Less allowance for loan losses |                                            |              | (26,785   | )         |           |           | (10,610   | )        
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        | Net loans                      |                                            |              | 1,882,958 |           |           |           | 1,018,427 |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Premises and equipment, net                                                                                                                                            |                                        |                                | 28,273                                     |              |           |           | 17,744    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Goodwill                                                                                                                                                               |                                        |                                | 93,969                                     |              |           |           | 18,332    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Other intangible assets                                                                                                                                                |                                        |                                | 24,318                                     |              |           |           | 2,318     |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Accrued interest receivable and other assets                                                                                                                           |                                        |                                | 81,066                                     |              |           |           | 50,118    |          
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        |                                |                                            | Total Assets |           | $         | 2,639,311 |           |           | $         | 1,471,454 | 
|                                                                                                                                                                      
|LIABILITIES                                                                                                                                                            |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Deposits:                                                                                                                                                              |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Noninterest bearing deposits           |                                | $                                          | 183,037      |           |           | $         | 83,521    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                       | Interest bearing deposits              |                                |                                            | 1,648,469    |           |           |           | 1,015,316 |          
|                                                                                                                                                                      
|                                                                                                                                                                       | Total deposits                         |                                |                                            | 1,831,506    |           |           |           | 1,098,837 |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Short-term borrowings                                                                                                                                                  |                                        |                                | 98,291                                     |              |           |           | 1,000     |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Other borrowings                                                                                                                                                       |                                        |                                | 359,683                                    |              |           |           | 219,565   |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Accrued taxes, expenses and other liabilities                                                                                                                          |                                        |                                | 36,215                                     |              |           |           | 15,546    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Company obligated mandatorily redeemable trust preferred                                                                                                               |                                        |                                | 20,000                                     |              |           |           | 20,000    |          
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        |                                | Total Liabilities                          |              |           | 2,345,695 |           |           |           | 1,354,948 |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|SHAREHOLDERS EQUITY                                                                                                                                                   |                                        |                                |                                            |              |           |           |           |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Common stock (2002 - $1.00 stated value, 100,000,000 shares
authorized and 22,045,533 issued; 2001 - no par value,
20,000,000 shares authorized and 12,632,896 issued) |                                        |                                | 22,046                                     |              |           |           | 87,049    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Paid-in capital                                                                                                                                                        |                                        |                                | 221,472                                    |              |           |           |          |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Retained earnings                                                                                                                                                      |                                        |                                | 51,771                                     |              |           |           | 49,820    |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Stock held by deferred compensation plan, 31,673 and 0
shares at cost                                                                                                  |                                        |                                | (597                                       | )            |           |           |          |          
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Treasury stock, 887 and 1,052,834 shares at cost                                                                                                                       |                                        |                                | (18                                        | )            |           |           | (17,991   | )        
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|                                                                                                                                                                      
|Accumulated other comprehensive income                                                                                                                                 |                                        |                                | (1,058                                     | )            |           |           | (2,372    | )        
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        |                                | Total Shareholders Equity                 |              |           | 293,616   |           |           |           | 116,506   |          
|                                                                                                                                                                      
|                                                                                                                                                                       |                                        |                                | Total Liabilities and Shareholders Equity |              | $         | 2,639,311 |           |           | $         | 1,471,454 |          
|                                                                                                                                                                      

See Notes to the Consolidated Financial Statements

1



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##### Table of Contents






Unizan Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME

|                                                    |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |            |  
|--------------------------------------------------- | ------------------------------------------------------------ | ------------------ | ------ | ---------------- | ---- | - | ------ | ---------- | ---- | - | ------ | ---------- |  | - | ------ | ---------- | -
|(In thousands except per share data)                |                                                              | Three Months Ended |        | Six Months Ended
|                                                    |                                                              | June 30,           |        | June 30,        
|                                                    |                                                              |                    |        |                  |     
|                                                    |                                                              |                    | 2002   |                  | 2001 |   | 2002   |            | 2001
|                                                    |                                                              |                    |        |                  |      |   |        |            |     
|Interest income:                                    |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and fees on loans:                                  |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |            |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Taxable                                                      |                    | $      | 33,271           |      |   | $      | 23,399     |      |   | $      | 56,917     |  |   | $      | 47,066     |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Tax exempt                                                   |                    |        | 55               |      |   |        | 18         |      |   |        | 80         |  |   |        | 36         |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and dividends on securities
  Taxable               |                    |        | 5,812            |      |   |        | 5,371      |      |   |        | 10,714     |  |   |        | 11,095     |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Tax exempt                                                   |                    |        | 393              |      |   |        | 330        |      |   |        | 747        |  |   |        | 659        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on bank deposits and federal funds sold             |                    |        | 24               |      |   |        | 556        |      |   |        | 47         |  |   |        | 1,103      |  
|                                                   
|                                                    | Total interest income                                        |                    |        | 39,555           |      |   |        | 29,674     |      |   |        | 68,505     |  |   |        | 59,959     |  
|                                                   
|Interest expense:                                   |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on deposits                                         |                    |        | 11,228           |      |   |        | 13,590     |      |   |        | 21,389     |  |   |        | 27,834     |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on borrowings                                       |                    |        | 5,575            |      |   |        | 4,639      |      |   |        | 10,061     |  |   |        | 9,634      |  
|                                                   
|                                                    | Total interest expense                                       |                    |        | 16,803           |      |   |        | 18,229     |      |   |        | 31,450     |  |   |        | 37,468     |  
|                                                   
|Net interest income                                 |                                                              |                    | 22,752 |                  |      |   | 11,445 |            |      |   | 37,055 |            |  |   | 22,491 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for loan losses                           |                                                              |                    | 622    |                  |      |   | 495    |            |      |   | 6,209  |            |  |   | 960    |           
|                                                   
|Net interest income after provision for loan losses |                                                              |                    | 22,130 |                  |      |   | 10,950 |            |      |   | 30,846 |            |  |   | 21,531 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Other income:                                       |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Trust income                                                 |                    |        | 1,954            |      |   |        | 546        |      |   |        | 2,930      |  |   |        | 1,138      |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Financial planning income                                    |                    |        | 448              |      |   |        | 258        |      |   |        | 720        |  |   |        | 557        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Customer service fees                                        |                    |        | 1,564            |      |   |        | 646        |      |   |        | 2,436      |  |   |        | 1,280      |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Gains on loans originated for sale                           |                    |        | 1,058            |      |   |        | 888        |      |   |        | 1,842      |  |   |        | 1,597      |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Security gains                                               |                    |        |                 |      |   |        | 92         |      |   |        |           |  |   |        | 195        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Derivative instruments and hedging activity income/(expense) |                    |        | (19              | )    |   |        | 11         |      |   |        | 136        |  |   |        | (21        | )
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating income                                       |                    |        | 2,335            |      |   |        | 926        |      |   |        | 3,416      |  |   |        | 2,006      |  
|                                                   
|                                                    | Total other income                                           |                    |        | 7,340            |      |   |        | 3,367      |      |   |        | 11,480     |  |   |        | 6,752      |  
|                                                   
|Other expenses:                                     |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Salaries, wages, pension and benefits                        |                    |        | 8,245            |      |   |        | 4,492      |      |   |        | 15,138     |  |   |        | 8,908      |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Occupancy expense                                            |                    |        | 913              |      |   |        | 479        |      |   |        | 1,505      |  |   |        | 989        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Furniture and equipment expense                              |                    |        | 535              |      |   |        | 294        |      |   |        | 869        |  |   |        | 585        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Taxes other than income taxes                                |                    |        | 280              |      |   |        | 254        |      |   |        | 1,523      |  |   |        | 498        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Goodwill amortization expense                                |                    |        | 123              |      |   |        | 281        |      |   |        | 154        |  |   |        | 561        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other intangible amortization expense                        |                    |        | 861              |      |   |        | 220        |      |   |        | 940        |  |   |        | 442        |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Impairment of goodwill                                       |                    |        |                 |      |   |        |           |      |   |        | 1,392      |  |   |        |           |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating expense                                      |                    |        | 5,462            |      |   |        | 2,378      |      |   |        | 9,439      |  |   |        | 4,666      |  
|                                                   
|                                                    | Total other expenses                                         |                    |        | 16,419           |      |   |        | 8,398      |      |   |        | 30,960     |  |   |        | 16,649     |  
|                                                   
|Income before income taxes                          |                                                              |                    | 13,051 |                  |      |   | 5,919  |            |      |   | 11,366 |            |  |   | 11,634 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                                              |                    | 4,044  |                  |      |   | 1,957  |            |      |   | 3,611  |            |  |   | 3,824  |           
|                                                   
|                                                    | Net Income                                                   |                    | $      | 9,007            |      |   | $      | 3,962      |      |   | $      | 7,755      |  |   | $      | 7,810      |  
|                                                   
|Earnings per share:                                 |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                        |                    | $      | 0.41             |      |   | $      | 0.34       |      |   | $      | 0.43       |  |   | $      | 0.67       |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                      |                    | $      | 0.40             |      |   | $      | 0.34       |      |   | $      | 0.41       |  |   | $      | 0.67       |  
|                                                   
|Dividends per share                                 |                                                              | $                  | 0.13   |                  |      | $ | 0.11   |            |      | $ | 0.26   |            |  | $ | 0.22   |           
|                                                   
|Weighted average shares outstanding:                |                                                              |                    |        |                  |      |   |        |            |      |   |        |            |  |   |        |           
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                        |                    |        | 22,043,924       |      |   |        | 11,618,394 |      |   |        | 18,230,526 |  |   |        | 11,631,862 |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                      |                    |        | 22,456,973       |      |   |        | 11,689,869 |      |   |        | 18,909,528 |  |   |        | 11,689,628 |  
|                                                   

See Notes to the Consolidated Financial Statements

2



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##### Table of Contents






Unizan Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|                     |                                                                                     |                                          |                                                     |                  |   |       |       |      |  |      |       |      |   |       |       |      |   |       |  | 
|-------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------------- | ---------------- | - | ----- | ----- | ---- |  | ---- | ----- | ---- | - | ----- | ----- | ---- | - | ----- |  | 
|(In thousands)       |                                                                                     | Three Months Ended                       |                                                     | Six Months Ended
|                     |                                                                                     | June 30,                                 |                                                     | June 30,        
|                     |                                                                                     |                                          |                                                     |                  |   |       |       |     
|                     |                                                                                     |                                          |                                                     |                  |   | 2002  |       | 2001 |  | 2002 |       | 2001
|                     |                                                                                     |                                          |                                                     |                  |   |       |       |      |  |      |       |     
|Net Income           |                                                                                     | $                                        | 9,007                                               |                  |   | $     | 3,962 |      |  | $    | 7,755 |      |   | $     | 7,810 |     
|                    
|                    
|                    
|                    
|                     | Other comprehensive income, net of tax
Unrealized gains/(losses) on derivatives     |                                          |                                                     | (157             | ) |       |       | 422  |  |      |       | (157 | ) |       |       | (796 | )
|                    
|                    
|                    
|                    
|                     |                                                                                     | Unrealized gains/(losses) on securities: |                                                     |                  |   |       |       |      |  |      |       |      |   |       |       |      |   |      
|                    
|                    
|                    
|                    
|                     |                                                                                     |                                          | Unrealized gains/(losses) arising
during the period |                  |   | 5,007 |       |      |  | (305 | )     |      |   | 1,471 |       |      |   | 1,383 | 
|                    
|                    
|                    
|                    
|                     | Less: Reclassified adjustment for
accumulated gains/(losses)
included in net income |                                          |                                                     |                 |   |       |       | 60   |  |      |       |     |   |       |       | 127  |  
|                     |                                                                                     |                                          |                                                     |                  |   |       |       |      |  |      |       |      |   |       |       |     
|                     |                                                                                     |                                          | Unrealized gains/(losses) on securities             |                  |   | 5,007 |       |      |  | (245 | )     |      |   | 1,471 |       |      |   | 1,510 | 
|                     |                                                                                     |                                          |                                                     |                  |   |       |       |      |  |      |       |      |   |       |       |     
|Comprehensive income |                                                                                     | $                                        | 13,857                                              |                  |   | $     | 4,139 |      |  | $    | 9,226 |      |   | $     | 8,524 |     
|                     |                                                                                     |                                          |                                                     |                  |   |       |       |      |  |      |       |      |   |       |       |     

See Notes to the Consolidated Financial Statements

3



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##### Table of Contents






Unizan Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                               |                                                                            |                                         |                                    |         |                  |         |        |         |         |         |  
|---------------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------- | ---------------------------------- | ------- | ---------------- | ------- | ------ | ------- | ------- | ------- | -
|                                               |                                                                            |                                         |                                    |         | Six months ended
|(In thousands)                                 |                                                                            | June 30,                               
|                                               |                                                                            |                                        
|                                               |                                                                            |                                         |                                    |         | 2002             |         | 2001  
|                                               |                                                                            |                                         |                                    |         |                  |         |       
|Cash flows from operating activities:          |                                                                            |                                         |                                    |         |                  |         |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net income/(loss)                                                          |                                         | $                                  | 7,755   |                  |         | $      | 7,810   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Adjustments to reconcile net income to net cash from operating activities: |                                         |                                    |         |                  |         |        |         |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Depreciation and amortization           |                                    |         | 2,466            |         |        |         | 2,338   |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Provision for loan losses               |                                    |         | 6,209            |         |        |         | 960     |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net securities gains                    |                                    |         |                 |         |        |         | (195    | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Loans originated for resale             |                                    |         | (54,622          | )       |        |         | (43,851 | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sale of loan originations |                                    |         | 56,877           |         |        |         | 39,918  |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Gains from sale of loans                |                                    |         | (1,842           | )       |        |         | (1,597  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Changes in:                                                                |                                         |                                    |         |                  |         |        |         |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest receivable                     |                                    |         | (851             | )       |        |         | 1,194   |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest payable                        |                                    |         | (135             | )       |        |         | (1,966  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Other assets and liabilities, net       |                                    |         | 62               |         |        |         | (3,239  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | FHLB stock dividend                     |                                    |         | (735             | )       |        |         | (779    | )      
|                                              
|                                               |                                                                            |                                         | Net cash from operating activities |         |                  | 15,184  |        |         |         | 593     |  
|                                              
|Cash flows from investing activities:          |                                                                            |                                         |                                    |         |                  |         |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in interest bearing deposits with banks                         |                                         |                                    | (1,061  | )                |         |        |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in funds sold                                                 |                                         |                                    |        |                  |         |        | 28,451  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from maturities of securities held to maturity                    |                                         |                                    | 6,461   |                  |         |        | 1,627   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from maturities of securities available for sale                  |                                         |                                    | 63,817  |                  |         |        | 34,974  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of securities available for sale                                 |                                         |                                    | (56,890 | )                |         |        | (27,926 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Net decrease in loans made to customers                                    |                                         |                                    | 17,417  |                  |         |        | 9,152   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net cash received in merger                                                |                                         |                                    | 46,492  |                  |         |        |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in bank owned life insurance                                  |                                         |                                    | (1,064  | )                |         |        |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of premises and equipment, net                                   |                                         |                                    | (2,228  | )                |         |        | (996    | )      
|                                              
|                                               |                                                                            |                                         | Net cash from investing activities |         |                  | 72,944  |        |         |         | 45,282  |  
|                                              
|Cash flows from financing activities:          |                                                                            |                                         |                                    |         |                  |         |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in deposits                                                     |                                         |                                    | (69,791 | )                |         |        | 17,811  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Cash dividends paid, net of shares issued through dividend reinvestment    |                                         |                                    | (5,803  | )                |         |        | (2,550  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchase of treasury stock, net                                            |                                         |                                    | (417    | )                |         |        | (949    | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in Federal Home Loan Bank advances and other borrowings         |                                         |                                    | 39,613  |                  |         |        | (60,598 | )      
|                                              
|                                               |                                                                            |                                         | Net cash from financing activities |         |                  | (36,398 | )      |         |         | (46,286 | )
|                                              
|Net change in cash and cash equivalents        |                                                                            |                                         | 51,730                             |         |                  |         | (411   | )      
|                                              
|                                              
|                                              
|                                              
|Cash and cash equivalents at beginning of year |                                                                            |                                         | 26,978                             |         |                  |         | 32,511 |        
|                                              
|Cash and cash equivalents at end of period     |                                                                            | $                                       | 78,708                             |         |                  | $       | 32,100 |        
|                                              
|Supplemental cash flow disclosures:            |                                                                            |                                         |                                    |         |                  |         |        |        
|                                              
|                                              
|                                              
|                                              
|                                               | Income taxes paid                                                          |                                         | $                                  | 5,700   |                  |         | $      | 2,100   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Interest paid                                                              |                                         | $                                  | 31,573  |                  |         | $      | 39,843  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Merger with UNB Corp. through issuance of common stock                     |                                         |                                    | 174,581 |                  |         |        |         |        

See the Notes to the Consolidated Financial Statements

4



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##### Table of Contents






UNIZAN FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002 (Unaudited)
(In thousands, except per share data)

The consolidated financial statements for interim periods are unaudited;
however, in the opinion of management of Unizan Financial Corp. (Company),
the accompanying consolidated financial statements contain all material
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position and results of operations and cash flows
for the periods presented. The unaudited financial statements are presented in
accordance with the requirements of Form 10-Q and do not include all
disclosures normally required by accounting principles generally accepted in
the United States of America. Reference should be made to UNB Corp.s
consolidated financial statements and notes thereto included in the annual
report on Form 10-K for the year ended December 31, 2001 and BancFirst Ohio
Corp.s audited financial statements included as an exhibit to Companys March
31, 2002 Form 10-Q for additional disclosures, including a summary of the
Companys accounting policies. The results of operations for the three month
and six month periods ended June 30, 2002 are not necessarily indicative of the
results to be expected for the full year.



|1) |  | BASIS OF PRESENTATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation. Unless
otherwise indicated, dollars are in thousands except per share data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|2) |  | NEW ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | In July 2001, the FASB issued SFAS No. 141, Business Combinations and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141
requires that all business combinations be accounted for using the
purchase method. This statement applies to business combinations
initiated after June 30, 2001. The merger between BancFirst Ohio Corp. and
UNB Corp. was accounted for as a purchase. SFAS No. 142, which was
adopted January 1, 2002, addresses the accounting for such assets arising
from prior and future business combinations. Since the adoption of this
Statement, goodwill arising from business combinations will no longer be
amortized, but rather will be assessed regularly for impairment, with any
such impairment recognized as a reduction to earnings in the period
identified. Other identified intangible assets, such as core deposit
intangible assets, will continue to be amortized over their estimated
useful lives. As of June 30, 2002, goodwill of $1,084 generated from
branch purchase transactions will continue to be amortized and the
remaining goodwill of $92,885 will not be amortized, but rather will be
tested for impairment. In the first quarter of 2002, the Company
recognized $1,392 in expense for the impairment of goodwill from prior
acquisitions by both BancFirst Ohio Corp. and UNB Corp. Net income
adjusted to remove the effect of the goodwill amortization expense
recognized would have been $4,243, or $0.36 diluted earnings per share, for
the second quarter of 2001 and $8,371, or $.72 diluted earnings per share,
for the six month period ended June 30, 2001.
|  
|   |  | In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which amends SFAS No. 121 by
addressing business segments accounted for as a discontinued operation
under Accounting Principles Board Opinion No. 30. This Statement is
effective for fiscal years beginning after December 15, 2001. The effect
of this Statement on the financial position and results of operations of
the Corporation is not expected to be material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | The FASB recently issued Statements 145 and 146. Statement 145 covers
debt extinguishments and leases, and made some minor technical
corrections. Gains and losses on extinguishments of debt, always treated
as an extraordinary item under a previous standard, will now no longer be
considered extraordinary, except under very limited conditions. If a
capital lease is modified to an operating, then it will now be treated as
a sale leaseback instead of a new lease. Statement 146 covers accounting
for costs associated with exit or disposal activities, such as lease
termination costs or employee severance costs. The Statement replaces
EITF 94-3, and is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. It requires these costs to
be recognized when they are incurred rather than at the date of commitment
to an exit or disposal plan. Management does not expect the effects of
adoption of these statements to be material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

5



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##### Table of Contents





|3) |  | MERGER                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | On March 7, 2002, the Company completed a merger between BancFirst Ohio
Corp, and UNB Corp. In connection with the merger, UNB Corp. issued 1.325
shares of common stock in exchange for each share of BancFirst common
stock. The purchase price was valued at $175 million and the value of
the 11.6 million shares issued was based on the average price of UNB Corp.
stock for three days before and two days after the terms of the merger
were agreed to and announced. Cash was paid for any fractional shares.                                                                                                               
|  
|   |  | The merger is being accounted for as a purchase of UNB Corp. Accordingly,
UNB Corp.s results of operations have been included from the date of the
merger. The merger creates a financial services holding company with
total assets of $2.6 billion, and deposits of $1.9 billion. As a result of
the merger, management believes that the combination of the companies is a
complementary strategic fit of the existing businesses and enables Unizan
to compete more effectively with other financial institutions in the
Companys existing markets. In addition, the Company entered into the
merger for the following reasons:



| |  |  | expands market area and creates critical mass                                               
| | - |  | --------------------------------------------------------------------------------------------
|
| |  |  | enhances ability to compete and broadens product range                                      
|
| |  |  | expected to be accretive to per share earnings                                              
|
| |  |  | increases liquidity for the sale of common stock                                            
|
| |  |  | provides an additional platform for further growth and improves cross selling opportunities.



| |  | The following table summarizes the fair values of the assets acquired and
liabilities assumed at the date of the acquisition. Unizan is in the
process of obtaining valuations of certain intangible assets; thus, the
allocation of the purchase price is subject to refinement.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                |                           |   |                  |           | 
|------------------------------- | ------------------------- | - | ---------------- | --------- | 
|                                |                           |   | at March 7, 2002
|                                |                           |  
|Cash and short-term investments |                           | $ | 46,671           |          
|                               
|                               
|                               
|                               
|Investment securities           |                           |   | 124,248          |          
|                               
|                               
|                               
|                               
|Loans, net                      |                           |   | 886,971          |          
|                               
|                               
|                               
|                               
|Goodwill                        |                           |   | 75,505           |          
|                               
|                               
|                               
|                               
|Core deposit intangible         |                           |   | 21,493           |          
|                               
|                               
|                               
|                               
|Other assets                    |                           |   | 47,089           |          
|                                |                           |   |                  |          
|                                | Total assets acquired     |   |                  | 1,201,977 | 
|                               
|                               
|                               
|                               
|Deposits                        |                           |   | 801,354          |          
|                               
|                               
|                               
|                               
|Other borrowed funds            |                           |   | 199,566          |          
|                               
|                               
|                               
|                               
|Other liabilities               |                           |   | 26,476           |          
|                                |                           |   |                  |          
|                                | Total liabilities assumed |   |                  | 1,027,396 | 
|                                |                           |   |                  |          
|Net assets acquired             |                           | $ | 174,581          |          
|                                |                           |   |                  |          



| |  | The core deposit intangible is subject to amortization on an accelerated
basis over an estimated life of ten years. The goodwill will not be
amortized, but will be evaluated for impairment on an annual basis.
Because the merger was structured as a tax free exchange, none of the
goodwill is expected to be deductible for tax purposes.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The following table summarizes the pro-forma results of operations for the
six months ended June 30, 2002 and 2001 as if UNB Corp. had been acquired
as of the beginning of such period:                                                                                                                                                      

|                           |  |      |        |      |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                           |  | 2002 |        | 2001
|                           |  |      |        |     
|Net interest income        |  | $    | 45,290 |      |  | $ | 43,147 | 
|                          
|                          
|                          
|                          
|Net income/(loss)          |  |      | (362   | )    |  |   | 15,814 | 
|                          
|                          
|                          
|                          
|Basic earnings per share   |  |      | (.02   | )    |  |   | .72    | 
|                          
|                          
|                          
|                          
|Diluted earnings per share |  |      | (.02   | )    |  |   | .71    | 

|   |  | The pro-forma results for the six months ended June 30, 2002 include merger related expenses
recognized by UNB Corp. prior to the merger.                                                         
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|4) |  | COMPUTATION OF EARNINGS PER SHARE                                                                                                                                                                 
|  
|   |  | The computation of earnings per share is as follows. All share and per
share amounts have been adjusted to give
effect to the exchange of one BancFirst share for 1.325 shares of UNB
Corp. stock.

6



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##### Table of Contents



|                                                                                          |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |    | 
|----------------------------------------------------------------------------------------- | ---------------------------- | - | ------------------ | --- | ---------------- | - | ------ | -- | ---- | - | ------ | --- |  | - | ------ | -- | 
|                                                                                          |                              |   | Three Months Ended |     | Six Months Ended
|                                                                                          |                              |   | June 30,           |     | June 30,        
|                                                                                          |                              |   |                    |     |                 
|                                                                                          |                              |   | 2002               |     | 2001             |   | 2002   |    | 2001
|                                                                                          |                              |   |                    |     |                  |   |        |    |     
|Actual weighted average common
   Shares outstanding                                      |                              |   | 22,044             |     |                  |   | 11,618 |    |      |   | 18,231 |     |  |   | 11,632 |   
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Dilutive common stock equivalents:                                                        |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |   
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Stock options                |   |                    | 377 |                  |   |        | 45 |      |   |        | 643 |  |   |        | 31 | 
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Bonus shares  Company match |   |                    | 36  |                  |   |        | 27 |      |   |        | 36  |  |   |        | 27 | 
|                                                                                          |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |   
|Weighted average common shares
Outstanding adjusted for dilutive common
Stock equivalents |                              |   | 22,457             |     |                  |   | 11,690 |    |      |   | 18,910 |     |  |   | 11,690 |   
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Net income                                                                                |                              | $ | 9,007              |     |                  | $ | 3,962  |    |      | $ | 7,755  |     |  | $ | 7,810  |   
|                                                                                          |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |   
|Basic earnings per share                                                                  |                              | $ | 0.41               |     |                  | $ | 0.34   |    |      | $ | 0.43   |     |  | $ | 0.67   |   
|                                                                                          |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |   
|Diluted earnings per share                                                                |                              | $ | 0.40               |     |                  | $ | 0.34   |    |      | $ | 0.41   |     |  | $ | 0.67   |   
|                                                                                          |                              |   |                    |     |                  |   |        |    |      |   |        |     |  |   |        |   



|5) |  | SECURITIES                                                     
|-- |  | ---------------------------------------------------------------
|  
|   |  | The amortized cost and fair value of securities are as follows:

|                                                 |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |         | 
|------------------------------------------------ | ----------------------------------- | - | --------- | ------- | ---------------- | - | ---------------- | ----- | ---------- | - | ------ | ------ | - | - | ------- | ------- | 
|                                                 |                                     |   |           |         |                  |   | June 30, 2002    |       |            |   |       
|                                                 |                                     |   | Amortized |         | Gross Unrealized |   | Gross Unrealized |       |            |   |       
|                                                 |                                     |   | Cost      |         | Gains            |   | Losses           |       | Fair Value
|                                                 |                                     |   |           |         |                  |   |                  |       |           
|Securities available-for-sale:                   |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        
|                                                
|                                                
|                                                
|                                                
|U.S. Treasury securities                         |                                     | $ | 1,104     |         |                  | $ | 12               |       |            | $ |       |        |   | $ | 1,116   |        
|                                                
|                                                
|                                                
|                                                
|Securities of other government agencies          |                                     |   | 22,161    |         |                  |   | 24               |       |            |   | (3     | )      |   |   | 22,182  |        
|                                                
|                                                
|                                                
|                                                
|Obligations of states and political subdivisions |                                     |   | 31,246    |         |                  |   | 408              |       |            |   | (354   | )      |   |   | 31,300  |        
|                                                
|                                                
|                                                
|                                                
|Corporate obligations                            |                                     |   | 57,903    |         |                  |   | 620              |       |            |   | (4,058 | )      |   |   | 54,465  |        
|                                                
|                                                
|                                                
|                                                
|Mortgage-backed and related securities           |                                     |   | 269,124   |         |                  |   | 5,565            |       |            |   | (323   | )      |   |   | 274,366 |        
|                                                
|                                                
|                                                
|                                                
|Other securities                                 |                                     |   | 17,312    |         |                  |   | 2                |       |            |   | (921   | )      |   |   | 16,393  |        
|                                                 |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        
|                                                 | Total securities available-for-sale |   | $         | 398,850 |                  |   | $                | 6,631 |            |   | $      | (5,659 | ) |   | $       | 399,822 | 
|                                                 |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        
|Securities held-to-maturity:                     |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        
|                                                
|                                                
|                                                
|                                                
|Obligations of states and political subdivisions |                                     | $ | 855       |         |                  | $ | 22               |       |            | $ |       |        |   | $ | 877     |        
|                                                
|                                                
|                                                
|                                                
|Industrial revenue bonds                         |                                     |   | 98        |         |                  |   |                 |       |            |   |       |        |   |   | 98      |        
|                                                
|                                                
|                                                
|                                                
|Mortgage-backed securities                       |                                     |   | 6,480     |         |                  |   | 275              |       |            |   |       |        |   |   | 6,755   |        
|                                                 |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        
|                                                 | Total securities held-to-maturity   |   | $         | 7,433   |                  |   | $                | 297   |            |   | $      |       |   |   | $       | 7,730   | 
|                                                 |                                     |   |           |         |                  |   |                  |       |            |   |        |        |   |   |         |        

7



---



##### Table of Contents



|                                                 |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |         | 
|------------------------------------------------ | ----------------------------------- | - | --------- | ------- | ---------------- | - | ----------------- | ----- | ---------- | - | ------ | ------ | - | - | ------- | ------- | 
|                                                 |                                     |   |           |         |                  |   | December 31, 2001 |       |            |   |       
|                                                 |                                     |   | Amortized |         | Gross Unrealized |   | Gross Unrealized  |       |            |   |       
|                                                 |                                     |   | Cost      |         | Gains            |   | Losses            |       | Fair Value
|                                                 |                                     |   |           |         |                  |   |                   |       |           
|Securities available-for-sale:                   |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        
|                                                
|                                                
|                                                
|                                                
|U.S. Treasury securities                         |                                     | $ | 250       |         |                  | $ | 4                 |       |            | $ |       |        |   | $ | 254     |        
|                                                
|                                                
|                                                
|                                                
|Securities of other government agencies          |                                     |   | 3,061     |         |                  |   | 44                |       |            |   |       |        |   |   | 3,105   |        
|                                                
|                                                
|                                                
|                                                
|Obligations of states and political subdivisions |                                     |   | 28,083    |         |                  |   | 90                |       |            |   | (743   | )      |   |   | 27,430  |        
|                                                
|                                                
|                                                
|                                                
|Corporate obligations                            |                                     |   | 61,416    |         |                  |   | 241               |       |            |   | (4,779 | )      |   |   | 56,878  |        
|                                                
|                                                
|                                                
|                                                
|Mortgage-backed and related securities           |                                     |   | 188,603   |         |                  |   | 4,499             |       |            |   | (535   | )      |   |   | 192,567 |        
|                                                
|                                                
|                                                
|                                                
|Other securities                                 |                                     |   | 13,683    |         |                  |   | 12                |       |            |   | (124   | )      |   |   | 13,571  |        
|                                                 |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        
|                                                 | Total securities available-for-sale |   | $         | 295,096 |                  |   | $                 | 4,890 |            |   | $      | (6,181 | ) |   | $       | 293,805 | 
|                                                 |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        
|Securities held-to-maturity:                     |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        
|                                                
|                                                
|                                                
|                                                
|Obligations of states and political subdivisions |                                     | $ | 857       |         |                  | $ | 22                |       |            | $ |       |        |   | $ | 879     |        
|                                                
|                                                
|                                                
|                                                
|Industrial revenue bonds                         |                                     |   | 195       |         |                  |   |                  |       |            |   |       |        |   |   | 195     |        
|                                                
|                                                
|                                                
|                                                
|Mortgage-backed securities                       |                                     |   | 8,369     |         |                  |   | 259               |       |            |   | (9     | )      |   |   | 8,619   |        
|                                                 |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        
|                                                 | Total securities held-to-maturity   |   | $         | 9,421   |                  |   | $                 | 281   |            |   | $      | (9     | ) |   | $       | 9,693   | 
|                                                 |                                     |   |           |         |                  |   |                   |       |            |   |        |        |   |   |         |        



| |  | The amortized cost and fair value of debt securities at June 30,
2002, by contractual maturity, are shown below. Actual maturities will
differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                       |                                     |   |               |         |            |   |         |         | 
|-------------------------------------- | ----------------------------------- | - | ------------- | ------- | ---------- | - | ------- | ------- | 
|                                       |                                     |   | June 30, 2002
|                                       |                                     |   | Amortized     |         |           
|                                       |                                     |   | Cost          |         | Fair Value
|                                       |                                     |   |               |         |           
|Securities available-for-sale:         |                                     |   |               |         |            |   |         |        
|                                      
|                                      
|                                      
|                                      
|Within one year                        |                                     | $ | 21,777        |         |            | $ | 21,784  |        
|                                      
|                                      
|                                      
|                                      
|After one year through five years      |                                     |   | 14,539        |         |            |   | 14,583  |        
|                                      
|                                      
|                                      
|                                      
|After five years through ten years     |                                     |   | 2,490         |         |            |   | 2,618   |        
|                                      
|                                      
|                                      
|                                      
|After ten years                        |                                     |   | 73,608        |         |            |   | 70,078  |        
|                                       |                                     |   |               |         |            |   |         |        
|                                       | Sub-total                           |   |               | 112,414 |            |   |         | 109,063 | 
|                                      
|                                      
|                                      
|                                      
|Mortgage-backed and related securities |                                     |   | 269,124       |         |            |   | 274,366 |        
|                                      
|                                      
|                                      
|                                      
|Other non-maturity securities          |                                     |   | 17,312        |         |            |   | 16,393  |        
|                                       |                                     |   |               |         |            |   |         |         | 
|                                       | Sub-total                           |   |               | 286,436 |            |   |         | 290,759 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Total securities available-for-sale |   | $             | 398,850 |            |   | $       | 399,822 | 
|                                       |                                     |   |               |         |            |   |         |        
|Securities held-to-maturity:           |                                     |   |               |         |            |   |         |        
|                                      
|                                      
|                                      
|                                      
|Within one year                        |                                     | $ | 618           |         |            | $ | 621     |        
|                                      
|                                      
|                                      
|                                      
|After one year through five years      |                                     |   | 335           |         |            |   | 354     |        
|                                       |                                     |   |               |         |            |   |         |        
|                                       | Sub-total                           |   |               | 953     |            |   |         | 975     | 
|                                      
|                                      
|                                      
|                                      
|Mortgage-backed securities             |                                     |   | 6,480         |         |            |   | 6,755   |        
|                                       |                                     |   |               |         |            |   |         |        
|                                       | Total securities held-to-maturity   |   | $             | 7,433   |            |   | $       | 7,730   | 
|                                       |                                     |   |               |         |            |   |         |        



|6) |  | ALLOWANCE FOR LOAN LOSSES:                                             
|-- |  | -----------------------------------------------------------------------
|  
|   |  | An analysis of activity in the allowance for loan losses is as follows:

8



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##### Table of Contents



|                               |                                    |   |          |        |      |   |        |        |  
|------------------------------ | ---------------------------------- | - | -------- | ------ | ---- | - | ------ | ------ | -
|                               |                                    |   | June 30,
|                               |                                    |   | 2002     |        | 2001
|                               |                                    |   |          |        |     
|Balance at beginning of period |                                    | $ | 10,610   |        |      | $ | 10,150 |       
|                              
|                              
|                              
|                              
|                               | Acquired allowance for loan losses |   |          | 12,148 |      |   |        |       |  
|                              
|                              
|                              
|                              
|                               | Provision for loan losses          |   |          | 6,209  |      |   |        | 960    |  
|                              
|                              
|                              
|                              
|                               | Loans charged off                  |   |          | (3,004 | )    |   |        | (1,023 | )
|                              
|                              
|                              
|                              
|                               | Loan recoveries                    |   |          | 822    |      |   |        | 176    |  
|                               |                                    |   |          |        |      |   |        |       
|Balance at end of period       |                                    | $ | 26,785   |        |      | $ | 10,263 |       
|                               |                                    |   |          |        |      |   |        |       

Impaired loans are as follows:

|                              |  |               |        | 
|----------------------------- |  | ------------- | ------ | 
|                              |  | June 30, 2002
|                              |  |              
|Impaired loans                |  | $             | 53,805 | 
|                             
|                             
|                             
|                             
|Amount of allowance allocated |  |               | 15,632 | 



|   |  | At December 31, 2001, the recorded investment in loans considered impaired
and the interest income recognized related thereto was not material.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|  
|7) |  | PREMISES AND EQUIPMENT:                                                                                                                        
|  
|   |  | Premises and equipment are summarized below:                                                                                                   

|                                               |  |               |        |                   |  |   |        | 
|---------------------------------------------- |  | ------------- | ------ | ----------------- |  | - | ------ | 
|                                               |  | June 30, 2002 |        | December 31, 2001
|                                               |  |               |        |                  
|Land                                           |  | $             | 4,512  |                   |  | $ | 2,896  | 
|                                              
|                                              
|                                              
|                                              
|Buildings and improvements                     |  |               | 21,870 |                   |  |   | 17,251 | 
|                                              
|                                              
|                                              
|                                              
|Furniture, fixture and equipment               |  |               | 19,368 |                   |  |   | 13,586 | 
|                                               |  |               |        |                   |  |   |        | 
|                                               |  |               | 45,750 |                   |  |   | 33,733 | 
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and amortization |  |               | 17,477 |                   |  |   | 15,989 | 
|                                               |  |               |        |                   |  |   |        | 
|Premises and equipment, net                    |  | $             | 28,273 |                   |  | $ | 17,744 | 
|                                               |  |               |        |                   |  |   |        | 



|   |  | Total depreciation expense was $917 and $550 for the three months ended
June 30, 2002 and 2001, respectively and $1,531 and $1,078 for the six
months ended June 30, 2002 and 2001, respectively.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|8) |  | DEPOSITS:                                                                                                                                                                                        
|  
|   |  | A summary of deposits is as follows:                                                                                                                                                             

|                             |  |               |           |                   |  |   |           | 
|---------------------------- |  | ------------- | --------- | ----------------- |  | - | --------- | 
|                             |  | June 30, 2002 |           | December 31, 2001
|                             |  |               |           |                  
|Demand, non-interest bearing |  | $             | 183,037   |                   |  | $ | 83,521    | 
|                            
|                            
|                            
|                            
|Demand, interest bearing     |  |               | 266,362   |                   |  |   | 166,853   | 
|                            
|                            
|                            
|                            
|Savings                      |  |               | 433,868   |                   |  |   | 171,430   | 
|                            
|                            
|                            
|                            
|Time, $100 and over          |  |               | 233,595   |                   |  |   | 194,364   | 
|                            
|                            
|                            
|                            
|Time, other                  |  |               | 714,644   |                   |  |   | 482,669   | 
|                             |  |               |           |                   |  |   |           | 
|                             |  | $             | 1,831,506 |                   |  | $ | 1,098,837 | 
|                             |  |               |           |                   |  |   |           | 



| |  | Time deposits, other includes brokered deposits of $17,772 and $7,395 at
June 30, 2002 and December 31, 2001,
respectively.
| |  | ---------------------------------------------------------------------------------------------------------------------------

9



---



##### Table of Contents





| |  | At June 30, 2002, stated maturities of time deposits are as follows:
| |  | --------------------------------------------------------------------

|           |       |   |         |         | 
|---------- | ----- | - | ------- | ------- | 
|2002       |       | $ | 390,143 |        
|          
|          
|          
|          
|2003       |       |   | 283,267 |        
|          
|          
|          
|          
|2004       |       |   | 144,280 |        
|          
|          
|          
|          
|2005       |       |   | 52,714  |        
|          
|          
|          
|          
|2006       |       |   | 34,078  |        
|          
|          
|          
|          
|Thereafter |       |   | 43,757  |        
|           |       |   |         |        
|           | Total |   | $       | 948,239 | 
|           |       |   |         |        



|9) |  | OTHER BORROWINGS:                                                                                                                                                                                    
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Other borrowings consist of Federal Home Loan Bank borrowings, repurchase
agreements, two lines of credit borrowing arrangements and a capital
lease.                                                
|  
|   |  | Pursuant to collateral agreements with the FHLB, advances are secured by
FHLB stock and qualifying first mortgage loans. At June 30, 2002, FHLB
advances outstanding were comprised of the following:

|                     |  |               |      |        |  |   |         | 
|-------------------- |  | ------------- | ---- | ------ |  | - | ------- | 
|Maturity             |  | Interest Rate |      | Amount
|                     |  |               |      |       
|Wiithin 1 year       |  |               | 3.64 | %      |  | $ | 70,224  | 
|                    
|                    
|                    
|                    
|1 year thru 2 years  |  |               | 5.82 |        |  |   | 44,350  | 
|                    
|                    
|                    
|                    
|2 years thru 3 years |  |               | 6.31 |        |  |   | 32,124  | 
|                    
|                    
|                    
|                    
|3 years thru 4 years |  |               | 4.73 |        |  |   | 42,036  | 
|                    
|                    
|                    
|                    
|4 years thru 5 years |  |               | 5.00 |        |  |   | 27,290  | 
|                    
|                    
|                    
|                    
|More than 5 years    |  |               | 4.82 |        |  |   | 80,470  | 
|                     |  |               |      |        |  |   |         | 
|Total                |  |               |      |        |  | $ | 296,494 | 
|                     |  |               |      |        |  |   |         | 



|    |  | FHLB advances must be secured by eligible collateral as specified by
the FHLB. Accordingly, the Company has a blanket pledge of its first
mortgage loan portfolio as collateral for the advances outstanding at June
30, 2002 with a required minimum ratio of collateral to advances of 135%.
Also, the Companys investment in FHLB stock of $32,597 at June 30, 2002
is pledged as collateral for outstanding advances. At June 30, 2002, the
maximum dollar amount of FHLB advance borrowings available to the Bank was
$325,946.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Company also has maximum borrowing arrangements of $22 million with a
national financial institution consisting of two lines of credit. The
total outstanding balance at June 30, 2002 was $18 million. Unizan Banc
Financial Services, Inc. (UBFS) arranged a $12 million line of credit to
fund loan growth. At June 30, 2002, the outstanding balance was $11
million. The interest on each draw is variable and is priced off an index
plus a spread. The loan agreement calls for quarterly interest payments
and is secured by a first security agreement on UBFS receivables, the
unconditional guarantee of Unizan Financial Corp., and an intercreditor
agreement with Unizan Bank, National Association. The Parent Company
arranged an unsecured $10 million line of credit for liquidity purposes
and to facilitate additional investment in subsidiaries. At June 30,
2002, the outstanding balance was $7 million. The interest rate is priced
off the Federal Funds Rate plus 0.85% per annum and is paid quarterly.
|   
|    |  | At June 30, 2002, the Company had $45,000 in term repurchase agreements
with Salomon Brothers, Inc. under which the Company sold mortgage-backed
and related securities classified as available-for-sale with a fair value
of $49,659 at June 30, 2002. The repurchase agreements had a weighted
average maturity of 5.9 years at June 30, 2002. Also, such repurchase
agreements at June 30, 2002 are callable at the option of the
counter-party. The securities are held at Salomon Brothers, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|10) |  | COMPANY OBLIGATED MANDATORILY REDEEMABLE TRUST PREFERRED:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | On October 18, 1999, the Company completed an offering of $20,000
aggregate liquidation amount of 9.875% Capital Securities, Series A, due
2029. These securities represent preferred beneficial interests in BFOH
Capital Trust I, a special purpose trust formed for the purpose of the
offering. The Trusts obligations under the Capital Securities issued are
fully and unconditionally guaranteed by the Company. The proceeds from the
sale of the Capital
Securities of the Trust, as well as the proceeds from the issuance of
common securities to the Company, were                                                                                                                                                                                                                                                                                                                                                                                                                                                        

10



---



##### Table of Contents





|    |  | utilized by the Trust to invest in
$20,619 of 9.875% Junior Subordinated Debentures (the Debentures) of the
Company. The Debentures are unsecured obligations and rank subordinate and
junior to the right of payment to all indebtedness, liabilities and
obligations of the Company. The Debentures represent the sole assets of
the Trust. Interest on the Capital Securities is cumulative and payable
semi-annually in arrears. The Company has the right to optionally redeem
the Debentures prior to the maturity date of October 15, 2029, on or after
October 15, 2009 at 104.938% (declining annually thereafter to 100% after
October 15, 2019) of the stated liquidation amount, plus accrued and
unpaid distributions, if any, to the redemption date. Under the occurrence
of certain events, specifically a Tax Event, Investment Company Event or
Capital Treatment Event as more fully defined in the BFOH Capital Trust I
Prospectus dated October 13, 1999, the Company may redeem in whole, but
not in part, the Debentures prior to October 15, 2009. Proceeds from any
redemption of the Debentures would cause a mandatory redemption of the
Capital Securities and the common securities having an aggregate
liquidation amount equal to the principal amount of the Debentures
redeemed. The Companys liability is fully recorded on the balance sheet
at June 30, 2002.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Trust is a wholly owned subsidiary of the Company, has no independent
operations and has issued securities that contain a full and unconditional
guarantee of its parent, the Company. The Trust is exempt from the
reporting requirements of the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|11) |  | STOCK INCENTIVE PLAN:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | In 1987, the shareholders approved a Stock Option and Performance Unit
Plan reserving 764,040 shares of common stock, adjusted for stock
dividends and splits, for the granting of options to executive officers
and other senior management personnel. Options are not exercisable for at
least four years from the date of grant and are not fully exercisable
until six years from the date of grant. The duration of the exercise
period is ten years. In 1997, the shareholders approved a Stock Option
Plan reserving 1,000,000 shares of common stock, adjusted for stock
dividends and splits for the granting of options to directors and
employees of the Corporation and its affiliates. The duration of the
exercise period is ten years. In accordance
with provisions of the Plan, upon a change in control, as defined in the
Plan, all options outstanding at the time of such change in control fully
vested and became 100% exercisable. The summary of stock option activity is as
follows:                                                                                                                                                                                                                                                                                                                                                                                      

|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|----------------------- |  | ------------------- | ------- | -------------- |  | ---------------- | ----- | --------------- |  | - | ----- |  |  | - | ----- | 
|                        |  |                     |         |                |  | Weighted Average |       | Range of Option
|1987 Plan               |  | Options Outstanding |         | Exercise Price |  | Price per Share 
|                        |  |                     |         |                |  |                 
|December 31, 2000       |  |                     | 291,306 |                |  | $                | 8.76  |                 |  | $ | 4.76  |  |  | $ | 15.00 | 
|                       
|                       
|                       
|                       
|Less:                   |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options forfeited |  |                     | 6,400   |                |  |                  | 15.00 |                 |  |   | 15.00 |  |  |   | 15.00 | 
|                       
|                       
|                       
|                       
|Stock options exercised |  |                     | 18,896  |                |  |                  | 7.18  |                 |  |   | 4.76  |  |  |   | 11.00 | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|December 31, 2001       |  |                     | 266,010 |                |  |                  | 8.72  |                 |  |   | 6.00  |  |  |   | 15.00 | 
|                       
|                       
|                       
|                       
|Less:                   |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options exercised |  |                     | 2,720   |                |  |                  | 7.25  |                 |  |   | 7.25  |  |  |   | 7.25  | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|June 30, 2002           |  |                     | 263,290 |                |  | $                | 8.74  |                 |  |   | 6.00  |  |  |   | 15.00 | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 

|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|----------------------- |  | ------------------- | ------- | -------------- |  | ---------------- | ----- | --------------- |  | - | ----- |  |  | - | ----- | 
|                        |  |                     |         |                |  | Weighted Average |       | Range of Option
|1997 Plan               |  | Options Outstanding |         | Exercise Price |  | Price per Share 
|                        |  |                     |         |                |  |                 
|December 31, 2000       |  |                     | 429,235 |                |  | $                | 16.61 |                 |  | $ | 12.69 |  |  | $ | 20.25 | 
|                       
|                       
|                       
|                       
|Options granted         |  |                     | 258,884 |                |  |                  | 12.88 |                 |  |   | 12.83 |  |  |   | 13.62 | 
|                       
|                       
|                       
|                       
|Less:                   |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options forfeited |  |                     | 18,878  |                |  |                  | 19.54 |                 |  |   | 15.69 |  |  |   | 20.25 | 
|                       
|                       
|                       
|                       
|Stock options exercised |  |                     | 17,739  |                |  |                  | 13.32 |                 |  |   | 12.69 |  |  |   | 15.69 | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|December 31, 2001       |  |                     | 651,502 |                |  |                  | 15.13 |                 |  |   | 12.69 |  |  |   | 20.25 | 
|                       
|                       
|                       
|                       
|Options granted         |  |                     | 206,998 |                |  |                  | 18.43 |                 |  |   | 18.40 |  |  |   | 20.00 | 
|                       
|                       
|                       
|                       
|Less:                   |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options exercised |  |                     | 17,903  |                |  |                  | 14.25 |                 |  |   | 12.83 |  |  |   | 18.40 | 
|                       
|                       
|                       
|                       
|Stock options forfeited |  |                     | 1,323   |                |  |                  | 18.40 |                 |  |   | 18.40 |  |  |   | 18.40 | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 
|June 30, 2002           |  |                     | 839,274 |                |  | $                | 15.96 |                 |  |   | 12.69 |  |  |   | 20.25 | 
|                        |  |                     |         |                |  |                  |       |                 |  |   |       |  |  |   |       | 



| |  | The weighted average remaining option life for outstanding options issued
under the 1987 Stock Option Plan is 1.9 years. The weighted average
remaining option life for outstanding options issued under the 1997 Stock
Option Plan is 7.9 years.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



---



##### Table of Contents





| |  | For options granted during 2002 and 2001, the weighted-average fair values
at the grant dates are as follows:
| |  | -------------------------------------------------------------------------------------------------------------

|                            |                |  |      |       |      |  |   |       | 
|--------------------------- | -------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                            |                |  | 2002 |       | 2001
|                            |                |  |      |       |     
|Nonqualified Stock Options- |                |  |      |       |      |  |   |      
|                           
|                           
|                           
|                           
|Immediate Vesting           |                |  |      |       |      |  |   |      
|                           
|                           
|                           
|                           
|                            | Exercise Price |  | $    | 18.55 |      |  | $ | 13.62 | 
|                           
|                           
|                           
|                           
|                            | Fair Value     |  |      | 2.16  |      |  |   | 2.29  | 
|                           
|                           
|                           
|                           
|Nonqualified Stock Options- |                |  |      |       |      |  |   |      
|                           
|                           
|                           
|                           
|Delayed Vesting             |                |  |      |       |      |  |   |      
|                           
|                           
|                           
|                           
|                            | Exercise Price |  | $    | 18.40 |      |  | $ | 12.83 | 
|                           
|                           
|                           
|                           
|                            | Fair Value     |  |      | 2.77  |      |  |   | 1.37  | 



| |  | BancFirst Ohio Corp. had a 1997 Omnibus Stock Incentive Plan (the Plan),
which provided for the granting of stock options and other stock related
awards to key employees. Upon the completion of the merger, all
outstanding options of BancFirst were converted to Unizan Financial Corp.
and no additional options will be granted under the plan. In accordance
with provisions of the Plan, upon a change in control, as defined in the
Plan, all options outstanding at the time of such change in control fully
vested and became 100% exercisable. All options granted were at a price
that equaled or exceeded the market value of the Companys common stock at
the date of grant. No compensation expense was recognized in 2002 or 2001
related to the Plan. The summary of stock option activity is as follows:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|----------------------- |  | ------------------- | ------- | -------------- |  | ------------------- | ----- | -------------- |  |  | ------- | ---------------- |  | - | ----- | 
|                        |  |                     |         |                |  | Weighted Average    |       |                |  |  |         | Weighted Average
|                        |  | Options Outstanding |         | Exercise Price |  | Options Exercisable |       | Exercise Price
|                        |  |                     |         |                |  |                     |       |               
|December 31, 2000       |  |                     | 607,805 |                |  | $                   | 16.58 |                |  |  | 153,829 |                  |  | $ | 19.34 | 
|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|Options granted         |  |                     | 271,002 |                |  |                     | 17.63 |                |  |  |         |                  |  |   |       | 
|                       
|                       
|                       
|                       
|Less:                   |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options forfeited |  |                     | 31,751  |                |  |                     | 15.46 |                |  |  |         |                  |  |   |       | 
|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|December 31, 2001       |  |                     | 847,056 |                |  | $                   | 16.96 |                |  |  | 287,598 |                  |  | $ | 17.65 | 
|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|Less:                   |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options forfeited |  |                     | 21,315  |                |  |                     | 17.99 |                |  |  |         |                  |  |   |       | 
|                       
|                       
|                       
|                       
|Stock options exercised |  |                     | 75,476  |                |  |                     | 15.70 |                |  |  |         |                  |  |   |       | 
|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 
|June 30, 2002           |  |                     | 750,265 |                |  | $                   | 17.19 |                |  |  | 750,265 |                  |  | $ | 17.19 | 
|                        |  |                     |         |                |  |                     |       |                |  |  |         |                  |  |   |       | 



| |  | The following table summarizes information about stock options outstanding
at June 30, 2002:
| |  | --------------------------------------------------------------------------------------------

|                     |  |                     |         |         |  |                   |      |                  |  |   |       | 
|-------------------- |  | ------------------- | ------- | ------- |  | ----------------- | ---- | ---------------- |  | - | ----- | 
|                     |  |                     |         |         |  | Average Remaining |      | Average Exercise
|                     |  |                     |         |         |  | Contractual Life  |      | Price  Options 
|Exercise Price Range |  | Options Outstanding |         | (Years) |  | Outstanding      
|                     |  |                     |         |         |  |                  
|$10.00 to $15.00     |  |                     | 204,316 |         |  |                   | 18.5 |                  |  | $ | 12.43 | 
|                    
|                    
|                    
|                    
|$15.01 to $19.00     |  |                     | 368,002 |         |  |                   | 18.6 |                  |  |   | 17.76 | 
|                    
|                    
|                    
|                    
|$19.01 to $22.00     |  |                     | 103,962 |         |  |                   | 16.4 |                  |  |   | 20.06 | 
|                    
|                    
|                    
|                    
|$22.01 to $25.00     |  |                     | 73,985  |         |  |                   | 16.5 |                  |  |   | 23.52 | 
|                     |  |                     |         |         |  |                   |      |                  |  |   |       | 
|Total                |  |                     | 750,265 |         |  |                   | 18.1 |                  |  | $ | 17.19 | 
|                     |  |                     |         |         |  |                   |      |                  |  |   |       | 



| |  | SFAS No. 123 requires pro
forma disclosures for companies that do not adopt its fair value
accounting method for stock-based employee compensation. Accordingly,
as of June 30, 2002, pro forma net income was $6,736, pro forma basic
earnings per share was $0.37 and pro forma diluted earnings per share
was $0.36. Compensation cost actually recognized for stock options
was $0 for 2002 and 2001.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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##### Table of Contents



ITEM 2:




MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
UNIZAN FINANCIAL CORP.

For a comprehensive understanding of the Companys financial condition and
performance, this discussion should be considered in conjunction with the
Companys Consolidated Financial Statements, accompanying notes, and other
information contained elsewhere herein.

This discussion contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995 that involves risks and uncertainties.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included herein will prove to be accurate.
Factors that could cause actual results to differ from the results discussed in
the forward-looking statements include, but are not limited to: economic
conditions (both generally and more specifically in the markets in which the
Company and its Banking Subsidiary operate); competition for the Companys
customers from other providers of financial services; government legislation
and regulation (which changes from time to time and over which the Company has
no control); changes in interest rates; prepayments of loans and securities;
material unforeseen changes in the liquidity, results of operations, or other
financial position of the Companys customers, all of which are difficult to
predict and many of which are beyond the control of the Company.

Overview

Unizan Financial Corp. was formed as a result of the merger between
BancFirst Ohio Corp. and UNB Corp. that was completed on March 7, 2002. This
merger was accounted for under the purchase method of accounting for
business combinations. Accordingly, the financial results include Unizans
results since March 7, 2002, and BancFirst Ohio Corp.s results prior to the
merger. The historical numbers reported for comparison purposes reflect
BancFirst Ohio Corp.s results.

The reported results of the Company primarily reflect the operations of
the Companys bank subsidiary. The Companys results of operations are
dependent on a variety of factors, including the general interest rate
environment, competitive conditions in the industry, governmental policies and
regulations and conditions in the markets for financial assets. Like most
financial institutions, the primary contributor to the Companys income is net
interest income, which is defined as the difference between the interest the
Company earns on interest-earning assets, such as loans and securities, and the
interest the Company pays on interest-bearing liabilities, such as deposits and
borrowings. The Companys operations are also affected by non-interest income,
such as checking account and trust fees and gains from sales of loans. The
Companys principal operating expenses, aside from interest expense, consist of
salaries and employee benefits, occupancy costs, and other general and
administrative expenses.

Average Balances and Yields

The following table presents, for each of the periods indicated, the total
dollar amount of interest income from average interest-earning assets and the
resultant yields, as well as the interest expense on average interest-bearing
liabilities, expressed both in dollars and percentage rates, and the net
interest margin. Net interest margin is calculated by dividing net interest
income on a fully tax equivalent basis (FTE) by total interest-earning
assets. The net interest margin is influenced by the level and relative mix of
interest-earning assets and interest-bearing liabilities. FTE income includes
tax-exempt income, restated to a pre-tax equivalent, based on the statutory
federal income tax rate. All average balances are daily average balances.
Non-accruing loans are included in average loan balances.

13



---



##### Table of Contents



Unizan Financial Corp.

Average Balance Sheet and Related Yields



|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |      | 
|------------------------------------------------ | ---------------------------------- | ------- | --------------------------- | --------- | ------- | -------- | ------ | ------- |  | ------- | ------- | -------- | ------- | - | --------- | --------- |  | - | ------ | ------- |  |  | ---- | ---- | 
|                                                 |                                    |         | Three Months Ended June 30,
|                                                 |                                    |         | 2002                        |           | 2001   
|                                                 |                                    |         |                             |           |        
|                                                 |                                    |         | Average                     |           | Income/ |          |        |         |  |         | Average |          | Income/ |   |           |           | 
|(dollars in thousands)                           |                                    | Balance |                             | Expense   |         | Rate (1) |        | Balance |  | Expense |         | Rate (1)
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |         
|Interest-earning assets                          |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Interest bearing deposits and
federal funds sold |                                    | $       | 2,588                       |           |         | $        | 24     |         |  |         | 3.72    | %        |         |   | 50,298    |           |  | $ | 2,230  |         |  |  | 4.43 | %   
|                                                
|                                                
|                                                
|                                                
|Securities                                       |                                    |         | 426,461                     |           |         |          | 6,417  |         |  |         | 6.04    | %        |         |   | 326,658   |           |  |   | 23,597 |         |  |  | 7.22 |     
|                                                
|                                                
|                                                
|                                                
|Total loans                                      |                                    |         | 1,902,175                   |           |         |          | 33,340 |         |  |         | 7.03    | %        |         |   | 1,088,822 |           |  |   | 93,973 |         |  |  | 8.63 |     
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                 | Total interest-earning assets (2)  |         |                             | 2,331,224 |         |          |        | 39,781  |  |         |         | 6.84     |         |   |           | 1,465,778 |  |   |        | 119,800 |  |  |      | 8.17 | 
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|Nonearning assets:                               |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Cash and due from banks                          |                                    |         | 67,779                      |           |         |          |        |         |  |         |         |          |         |   | 25,368    |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Other nonearning assets                          |                                    |         | 227,832                     |           |         |          |        |         |  |         |         |          |         |   | 86,115    |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Allowance for loan losses                        |                                    |         | (27,069                     | )         |         |          |        |         |  |         |         |          |         |   | (10,263   | )         |  |   |        |         |  |  |      |     
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                 | Total assets                       |         | $                           | 2,599,766 |         |          |        |         |  |         |         |          |         |   | $         | 1,566,998 |  |   |        |         |  |  |      |      | 
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|Interest bearing liabilities:                    |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Demand deposits                                  |                                    | $       | 254,325                     |           |         |          | 889    |         |  |         | 1.40    | %        |         | $ | 130,731   |           |  |   | 3,927  |         |  |  | 3.00 | %   
|                                                
|                                                
|                                                
|                                                
|Savings deposits                                 |                                    |         | 439,237                     |           |         |          | 1,662  |         |  |         | 1.52    | %        |         |   | 162,893   |           |  |   | 4,777  |         |  |  | 2.93 |     
|                                                
|                                                
|                                                
|                                                
|Time deposits                                    |                                    |         | 950,065                     |           |         |          | 8,677  |         |  |         | 3.66    | %        |         |   | 776,360   |           |  |   | 45,805 |         |  |  | 5.90 |     
|                                                
|                                                
|                                                
|                                                
|Other borrowings                                 |                                    |         | 443,717                     |           |         |          | 5,575  |         |  |         | 5.04    | %        |         |   | 296,389   |           |  |   | 18,607 |         |  |  | 6.28 |     
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                 | Total interest bearing liabilities |         |                             | 2,087,344 |         |          |        | 16,803  |  |         |         | 3.23     |         |   |           | 1,366,373 |  |   |        | 73,116  |  |  |      | 5.35 | 
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|Noninterest bearing liabilities:                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Demand deposits                                  |                                    |         | 180,587                     |           |         |          |        |         |  |         |         |          |         |   | 72,456    |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Other liabilities                                |                                    |         | 40,043                      |           |         |          |        |         |  |         |         |          |         |   | 17,407    |           |  |   |        |         |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Shareholders equity                             |                                    |         | 291,792                     |           |         |          |        |         |  |         |         |          |         |   | 110,762   |           |  |   |        |         |  |  |      |     
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|                                                 | Total liabilities and equity       |         | $                           | 2,599,766 |         |          |        |         |  |         |         |          |         |   | $         | 1,566,998 |  |   |        |         |  |  |      |      | 
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|Net interest income (FTE)                        |                                    |         |                             |           |         | $        | 22,978 |         |  |         |         |          |         |   |           |           |  | $ | 46,684 |         |  |  |      |     
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     
|Net interest margin (3)                          |                                    |         |                             |           |         |          |        |         |  |         | 3.95    | %        |         |   |           |           |  |   |        |         |  |  | 3.18 | %   
|                                                 |                                    |         |                             |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |         |  |  |      |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |      | 
|------------------------------------------------ | ---------------------------------- | ------- | ------------------------- | --------- | ------- | -------- | ------ | ------- |  | ------- | ------- | -------- | ------- | - | --------- | --------- |  | - | ------ | ------ |  |  | ---- | ---- | 
|                                                 |                                    |         | Six Months Ended June 30,
|                                                 |                                    |         | 2002                      |           | 2001   
|                                                 |                                    |         |                           |           |        
|                                                 |                                    |         | Average                   |           | Income/ |          |        |         |  |         | Average |          | Income/ |   |           |           | 
|(dollars in thousands)                           |                                    | Balance |                           | Expense   |         | Rate (1) |        | Balance |  | Expense |         | Rate (1)
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |         
|Interest-earning assets                          |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Interest bearing deposits and
federal funds sold |                                    |         | 5,380                     |           |         | $        | 47     |         |  |         | 1.76    | %        |         |   | 44,349    |           |  | $ | 1,103  |        |  |  | 5.02 | %   
|                                                
|                                                
|                                                
|                                                
|Securities                                       |                                    |         | 392,769                   |           |         |          | 11,783 |         |  |         | 6.05    |          |         |   | 328,409   |           |  |   | 12,119 |        |  |  | 7.44 |     
|                                                
|                                                
|                                                
|                                                
|Total loans                                      |                                    |         | 1,582,962                 |           |         |          | 57,027 |         |  |         | 7.26    |          |         |   | 1,090,248 |           |  |   | 47,125 |        |  |  | 8.72 |     
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                 | Total interest-earning assets (2)  |         |                           | 1,981,111 |         |          |        | 68,857  |  |         |         | 7.01     |         |   |           | 1,463,006 |  |   |        | 60,347 |  |  |      | 8.32 | 
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|Nonearning assets:                               |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Cash and due from banks                          |                                    |         | 52,258                    |           |         |          |        |         |  |         |         |          |         |   | 26,029    |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Other nonearning assets                          |                                    |         | 176,771                   |           |         |          |        |         |  |         |         |          |         |   | 85,382    |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Allowance for loan losses                        |                                    |         | (20,643                   | )         |         |          |        |         |  |         |         |          |         |   | (10,235   | )         |  |   |        |        |  |  |      |     
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                 | Total assets                       |         | $                         | 2,189,497 |         |          |        |         |  |         |         |          |         |   | $         | 1,564,182 |  |   |        |        |  |  |      |      | 
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|Interest bearing liabilities:                    |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Demand deposits                                  |                                    | $       | 222,047                   |           |         |          | 1,704  |         |  |         | 1.55    | %        |         | $ | 107,817   |           |  |   | 1,527  |        |  |  | 2.86 | %   
|                                                
|                                                
|                                                
|                                                
|Savings deposits                                 |                                    |         | 347,154                   |           |         |          | 2,700  |         |  |         | 1.57    |          |         |   | 165,633   |           |  |   | 2,564  |        |  |  | 3.12 |     
|                                                
|                                                
|                                                
|                                                
|Time deposits                                    |                                    |         | 847,307                   |           |         |          | 16,985 |         |  |         | 4.04    |          |         |   | 787,396   |           |  |   | 23,743 |        |  |  | 6.08 |     
|                                                
|                                                
|                                                
|                                                
|Other borrowings                                 |                                    |         | 369,422                   |           |         |          | 10,061 |         |  |         | 5.49    |          |         |   | 305,001   |           |  |   | 9,634  |        |  |  | 6.37 |     
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                 | Total interest bearing liabilities |         |                           | 1,785,930 |         |          |        | 31,450  |  |         |         | 3.55     |         |   |           | 1,365,847 |  |   |        | 37,468 |  |  |      | 5.53 | 
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|Noninterest bearing liabilities:                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Demand deposits                                  |                                    |         | 141,867                   |           |         |          |        |         |  |         |         |          |         |   | 72,285    |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Other liabilities                                |                                    |         | 31,279                    |           |         |          |        |         |  |         |         |          |         |   | 15,882    |           |  |   |        |        |  |  |      |     
|                                                
|                                                
|                                                
|                                                
|Shareholders equity                             |                                    |         | 230,421                   |           |         |          |        |         |  |         |         |          |         |   | 110,168   |           |  |   |        |        |  |  |      |     
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|                                                 | Total liabilities and equity       |         | $                         | 2,189,497 |         |          |        |         |  |         |         |          |         |   | $         | 1,564,182 |  |   |        |        |  |  |      |      | 
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|Net interest income (FTE)                        |                                    |         |                           |           |         | $        | 37,407 |         |  |         |         |          |         |   |           |           |  | $ | 22,879 |        |  |  |      |     
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     
|Net interest margin (3)                          |                                    |         |                           |           |         |          |        |         |  |         | 3.81    | %        |         |   |           |           |  |   |        |        |  |  | 3.15 | %   
|                                                 |                                    |         |                           |           |         |          |        |         |  |         |         |          |         |   |           |           |  |   |        |        |  |  |      |     



|(1) |  | Calculated on an annualized basis.                                                                        
|--- |  | ----------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%.               
|   
|   
|   
|   
|(3) |  | The net interest margin represents net interest income as a percentage of average interest-earning assets.

14



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##### Table of Contents



Comparison of Operating Results For The Three Months Ended June 30, 2002 and 2001

Net Income.Net income for the second quarter was $9,007, or $.40 per
diluted share. This compares with net income of $3,962, or $.34 per diluted
share for the second quarter of 2001. The second quarter of 2002 results were
impacted by the merger between BancFirst Ohio Corp. and UNB Corp. Since the
transaction was accounted for as a purchase of UNB Corp. by BancFirst, the
operating results include the operations of BancFirst for the entire year and
only the operating results of UNB from March 8, 2002 through June 30, 2002.
During the second quarter, net interest income increased by 98.8% and
non-interest income increased by 118.0%, as compared to the same period in
2001. The net interest margin increased to 3.95% for the second quarter of
2002, compared to 3.18% for the same period in 2001. Also, the net interest
margin continued to increase from 3.60% in the first quarter of 2002, to 3.95%
in the second quarter of 2002. The improvement in the net interest margin was
primarily from lower cost of funds due to the decline in market interest rates.
The Companys return on average assets and return on average equity were 1.39%
and 12.38%, respectively, in the second quarter of 2002, compared to 1.01% and
14.35%, respectively, for the second quarter of 2001.

Interest Income.Total interest income increased 33.3% to $39,555 for the
three months ended June 30, 2002, compared to $29,674 for the second quarter of
2001. The increase was primarily related to the increase in average
interest-earning assets added from the merger with UNB Corp. During the second
quarter of 2002, the yield on interest-earning assets declined by 133 basis
points from the same period in 2001. The Companys yield on average loans was
7.03% for the three months ended June 30, 2002 and 8.63% for the comparable
year ago period. Yields on the securities portfolio decreased from 7.22% during
the second quarter of 2001 to 6.04% during the second quarter of 2002. The
decrease in the yields on loans and securities resulted primarily from lower
market rates throughout 2002.

Interest Expense.Total interest expense decreased 7.8% to $16,803 for
the three months ended June 30, 2002, compared to $18,229 for the three months
ended June 30, 2001. Interest expense decreased due to a 212 basis point
decrease in the Companys cost of funds. The Companys cost of funds decreased
to 3.23% in the three months ended June 30, 2002 compared to 5.35% in the same
period of 2001. The decrease in cost of funds was primarily from decreased
market rates combined with the maturing of higher costing certificates of
deposit that are being renewed at lower current rates.

Provision for Loan Losses.The provision for loan losses was $622 for the
three months ended June 30, 2002, compared to $495 in the second quarter of
2001. The increased provision in 2002 resulted primarily from the Companys
review of general economic conditions and uncertainties and an updated analysis
of the Companys loan portfolio. The provision for loan losses was considered
sufficient by management for maintaining an adequate allowance for loan losses.

Non-Interest Income.Total non-interest income increased $3,973 for the
three months ended June 30, 2002, compared to the same period a year ago. The
following table sets forth the Companys non-interest income for the periods
indicated:

|                                                             |       |   |                    |       |                  |   |      |       |      |   |       |        |  |   |       |       | 
|------------------------------------------------------------ | ----- | - | ------------------ | ----- | ---------------- | - | ---- | ----- | ---- | - | ----- | ------ |  | - | ----- | ----- | 
|                                                             |       |   | Three Months Ended |       | Six Months Ended
|                                                             |       |   | June 30,           |       | June 30,        
|                                                             |       |   |                    |       |                 
|                                                             |       |   |                    |       |                 
|                                                             |       |   | 2002               |       | 2001             |   | 2002 |       | 2001
|                                                             |       |   |                    |       |                  |   |      |       |     
|Trust and custodian fees                                     |       | $ | 1,954              |       |                  | $ | 546  |       |      | $ | 2,930 |        |  | $ | 1,138 |      
|                                                            
|                                                            
|                                                            
|                                                            
|Customer service fees                                        |       |   | 1,564              |       |                  |   | 646  |       |      |   | 2,436 |        |  |   | 1,280 |      
|                                                            
|                                                            
|                                                            
|                                                            
|Financial planning fees                                      |       |   | 448                |       |                  |   | 258  |       |      |   | 720   |        |  |   | 557   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Gains on sales of loans                                      |       |   | 1,058              |       |                  |   | 888  |       |      |   | 1,842 |        |  |   | 1,597 |      
|                                                            
|                                                            
|                                                            
|                                                            
|Securities gains, net                                        |       |   |                   |       |                  |   | 92   |       |      |   |      |        |  |   | 195   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Derivative instruments
and hedging
activity
income/(expense) |       |   | (19                | )     |                  |   | 11   |       |      |   | 136   |        |  |   | (21   | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Other                                                        |       |   | 2,335              |       |                  |   | 926  |       |      |   | 3,416 |        |  |   | 2,006 |      
|                                                             |       |   |                    |       |                  |   |      |       |      |   |       |        |  |   |       |      
|                                                             | Total |   | $                  | 7,340 |                  |   | $    | 3,367 |      |   | $     | 11,480 |  |   | $     | 6,752 | 
|                                                             |       |   |                    |       |                  |   |      |       |      |   |       |        |  |   |       |      

Trust and custodian fees increased by $1,408 to $1,954 in the second
quarter of 2002 from $546 in the second quarter of 2001, and financial planning
fees increased to $448 in the second quarter of 2002 from $258 from the same
period a year ago. The increase in trust and financial planning fees was
primarily related to the fee income added from the merger with UNB Corp.

Customer service fees, representing service charges on deposits and fees
for other banking services, increased by $918 to $1,564 in the second quarter
of 2002 from $646 in the second quarter of 2001. The increase was attributed to

15



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##### Table of Contents



the merger with UNB Corp.

Gains on sales of loans totaled $1,058 for the three months ended June 30,
2002 compared to $888 for the three months ended June 30, 2001. During the
second quarter of 2002, the Company sold $7.6 million of the guaranteed portion
of its SBA and other government guaranteed loan originations in the secondary
market compared to $8.9 million during the second quarter of 2001, realizing
gains of $685 in 2002 and $637 in 2001. Also, the Company recorded gains of
$373 from the sales of residential loans during the second quarter of 2002
compared to $251 in 2001. Residential loan sale activity increased in the
second quarter of 2002 compared to the year ago period as a result of lower
market rates.

The Company intends to continue to place emphasis on its small business
lending activities, including the evaluation of expansion into new markets.
The nature of the political climate in Washington, D.C. may periodically
subject many existing government programs to much scrutiny and possible
cutbacks. It is not currently known whether the government guaranteed loan programs will be impacted.
Management believes that any such cutbacks could negatively affect the
Companys activities in the government guaranteed lending programs as well as the planned
expansion of such activities.

During the second quarter of 2001, the Company sold approximately $5.3
million of securities, realizing gains of $92. The Company had no sales of
securities during the second quarter of 2002.

Other income increased by $1,409 to $2,335 for the second quarter of 2002
from $926 in the second quarter of 2001. Within other operating income, income
from bank owned life insurance increased by $566, merchant fee income increased
by $312 and interchange income increased by $130. Of the increase in bank
owned life insurance, $291 was related to a death benefit recognized in the
second quarter of 2002 and the remaining increases were attributed to the
merger with UNB Corp.

Non-Interest Expense.Total non-interest expense increased $8,021 to
$16,419 in the three months ended June 30, 2002, compared to $8,398 in the
three months ended June 30, 2001. The following table sets forth the Companys
non-interest expense for the periods indicated:

|                                  |       |   |                    |        |                  |   |       |       |      |   |        |        |  |   |       |        | 
|--------------------------------- | ----- | - | ------------------ | ------ | ---------------- | - | ----- | ----- | ---- | - | ------ | ------ |  | - | ----- | ------ | 
|                                  |       |   | Three Months Ended |        | Six Months Ended
|                                  |       |   | June 30,           |        | June 30,        
|                                  |       |   |                    |        |                 
|                                  |       |   | 2002               |        | 2001             |   | 2002  |       | 2001
|                                  |       |   |                    |        |                  |   |       |       |     
|                                  |       |   |                    |        |                 
|Salaries and employee benefits    |       | $ | 8,245              |        |                  | $ | 4,492 |       |      | $ | 15,138 |        |  | $ | 8,908 |       
|                                 
|                                 
|                                 
|                                 
|Net occupancy expense             |       |   | 913                |        |                  |   | 479   |       |      |   | 1,505  |        |  |   | 989   |       
|                                 
|                                 
|                                 
|                                 
|Furniture, fixtures and equipment |       |   | 535                |        |                  |   | 294   |       |      |   | 869    |        |  |   | 585   |       
|                                 
|                                 
|                                 
|                                 
|Taxes other than income taxes     |       |   | 280                |        |                  |   | 254   |       |      |   | 1,523  |        |  |   | 498   |       
|                                 
|                                 
|                                 
|                                 
|Amortization of goodwill          |       |   | 123                |        |                  |   | 281   |       |      |   | 154    |        |  |   | 561   |       
|                                 
|                                 
|                                 
|                                 
|Amortization of other intangibles |       |   | 861                |        |                  |   | 220   |       |      |   | 940    |        |  |   | 442   |       
|                                 
|                                 
|                                 
|                                 
|Impairment of goodwill            |       |   |                   |        |                  |   |      |       |      |   | 1,392  |        |  |   |      |       
|                                 
|                                 
|                                 
|                                 
|Other                             |       |   | 5,462              |        |                  |   | 2,378 |       |      |   | 9,439  |        |  |   | 4,666 |       
|                                  |       |   |                    |        |                  |   |       |       |      |   |        |        |  |   |       |       
|                                  | Total |   | $                  | 16,419 |                  |   | $     | 8,398 |      |   | $      | 30,960 |  |   | $     | 16,649 | 
|                                  |       |   |                    |        |                  |   |       |       |      |   |        |        |  |   |       |       

Salaries and employee benefits increased to $8,245 and represented
approximately 53.4% of total operating expenses (non-interest expense less
amortization of intangibles) for the three months ended June 30, 2002 compared
to 56.9% in the second quarter of 2001. The increase is attributed to the
merger with UNB Corp.

Net occupancy expense increased to $913 in the second quarter of 2002 from
$479 in the second quarter of 2002 primarily due to additional expenses
attributed to facilities acquired from the merger with UNB Corp.

Furniture, fixtures and equipment expense increased to $535 in the second
quarter of 2002 from $294 in the second quarter of 2001 primarily due to
depreciation expense attributed to fixed assets added by the merger with UNB
Corp.

Taxes other than income taxes for the quarter ended June 30, 2002 were
$280 compared with $254 in the second quarter 2001.

Amortization of goodwill and other intangible assets increased by $483 in the
second quarter of 2002 compared to

16



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##### Table of Contents



the year ago period. The increase was mainly attributed to the core deposit
amortization related to the merger with UNB Corp. which was partially offset by
the adoption of SFAS No. 142 on January 1, 2002.

Other non-interest expenses increased $3,084, to $5,462 during the second
quarter of 2002 compared to $2,378 in the second quarter of 2001. Of this
increase, $117 was related to losses on sales of other real estate owned that
were acquired through loan foreclosures. Also, the increase includes $566 of
marketing and legal expenses related to the merger with UNB Corp. The remaining
increase is attributed to the merger with UNB Corp.

Provision for Income Taxes.The Companys provision for Federal income
taxes was $4,044, or 31.0% of pretax income, for the three months ended June
30, 2002 compared to $1,957, or 33.1% of pretax income, for the same period in
2001. The effective tax rate for each period differed from the federal
statutory rate principally as a result of tax-exempt income from obligations of
states and political subdivisions, non-taxable loans and earnings on bank-owned
life insurance.

Comparison of Operating Results For The Six Months Ended June 30, 2002 and 2001

Net Income.Net income for the six months ended June 30, 2002, was
$7,755, or $.41 per diluted share compared with net income of $7,810, or $.67
per diluted share for the same period in 2001. Year-to-date 2002 results were
significantly impacted by $4,200 of one time merger related expenses and a
provision for loan loss expense of $6,209. The 2002 results were also impacted
by the merger between BancFirst Ohio Corp. and UNB Corp. Since the transaction
was accounted for as a purchase of UNB Corp. by BancFirst, the operating
results include the operations of BancFirst for the entire year and only the
operating results of UNB from March 8, 2002 through June 30, 2002. During the
first six months of 2002, net interest income increased by 64.8% and
non-interest income increased by 70.0%, as compared to the same period in 2001.
For the six month period ended June 30, 2002, non-interest expense, excluding
one time merger related expenses and the impairment of goodwill, totaled
$26,495, an increase of 59.1% from the same period a year ago. The net
interest margin increased to 3.81% for the first six months of 2002, compared
to 3.15% for the same period in 2001. The improvement in the net interest
margin was primarily from lower cost of funds due to the decline in market
interest rates. The Companys return on average assets and return on average
equity were 0.71% and 6.79%, respectively, in 2002, compared to 1.01% and
14.30%, respectively, for the six months ended June 30, 2001.

Interest Income.Total interest income increased 14.3% to $68,505 for the
six months ended June 30, 2002, compared to $59,959 for the same period in
2001. The increase was primarily related to the increase in average
interest-earning assets added from the merger with UNB Corp. During 2002, the
yield on interest-earning assets declined by 131 basis points from the same
period in 2001. The Companys yield on average loans was 7.26% for the six
months ended June 30, 2002 and 8.72% for the comparable year ago period. Yields
on the securities portfolio decreased from 7.44% during the first six months of
2001 to 6.05% during the same period in 2002. The decrease in the yields on
loans and securities resulted primarily from lower market rates throughout
2002.

Interest Expense.Total interest expense decreased 16.1% to $31,450 for
the six months ended June 30, 2002, compared to $37,468 for the six months
ended June 30, 2001. Interest expense decreased due to a 198 basis point
decrease in the Companys cost of funds. The Companys cost of funds decreased
to 3.55% in the six months ended June 30, 2002 compared to 5.53% in the same
period of 2001. The decrease in cost of funds was primarily from decreased
market rates combined with the maturity of higher costing certificates of
deposit that are being renewed at lower current rates.

Provision for Loan Losses.The provision for loan losses was $6,209 for
the six months ended June 30, 2002, compared to $960 in the same period in
2001. The increased provision in 2002 resulted primarily from the Companys
review of general economic conditions and uncertainties and a continual
analysis of the Companys loan portfolio. This led to an increase in specific
allocations recognized based on deterioration in credit quality of specific
credits and an increase in the non-specific allocation based on managements
analysis of current economic conditions. Also, it was managements intention to
reduce non-performing loans of the combined company which resulted in a
reevaluation of expected losses as it works to cure non-performing assets
quicker than previously anticipated. The provision for loan losses was
considered sufficient by management for maintaining an adequate allowance for
loan losses.

Non-Interest Income.Total non-interest income was $11,480 for the six
months ended June 30, 2002, compared to $6,752 for the six months ended June
30, 2001.

Trust and custodian fees increased by $1,792 to $2,930 for the six months
ended June 30, 2002 from $1,138 in the same period in 2001, and financial
planning fees increased to $720 for the six months ended June 30, 2002 from
$557 from the same period a year ago. The increase in trust and financial
planning fees was primarily related to the fee income added from the merger
with UNB Corp.

17



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##### Table of Contents



Customer service fees, representing service charges on deposits and fees
for other banking services, increased by $1,156 to $2,436 for the six months
ended June 30, 2002 from $1,280 for the same period in 2001. The increase was
attributed to the merger with UNB Corp.

Gains on sales of loans totaled $1,842 for the six months ended June 30,
2002 compared to $1,597 for the six months ended June 30, 2001. During 2002,
the Company sold $13.1 million of the guaranteed portion of its SBA and other
government guaranteed loan originations in the secondary market compared to
$15.1 million during the first six months of 2001, realizing gains of $1,183 in
2002 and $1,237 in 2001. Also, the Company recorded gains of $659 from the
sales of residential loans during the first six months of 2002 compared to $360
in 2001. Residential loan sale activity increased during 2002 compared to the
year ago period as a result of lower market rates. Also, the increase was
attributed to the merger with UNB Corp.

Securities gains of $195 were realized during the six months ended June
30, 2001 and the Company has had no sales of securities during 2002.

Other income increased by $1,410 to $3,416 for the six months ended June
30, 2002 from $2,006 during the same period in 2001. Within other operating
income, income from bank owned life insurance increased by $662, merchant fee income increased by $408 and
interchange income increased by $158. Of the increase in bank owned life
insurance, $291 was related to a death benefit recognized in 2002 and the
remaining increases were attributed to the merger with UNB Corp.

Non-Interest Expense.Total non-interest expense increased $14,311 to
$30,960 for the six months ended June 30, 2002, compared to $16,649 for the six
months ended June 30, 2001. Excluding one time merger related expenses and
impairment of goodwill of $4,466, non-interest expense increased by $9,845 to
$26,494 for the first six months of 2002.

Salaries and employee benefits increased to $15,138 for the six months
ended June 30, 2002 compared to $8,908 for the same period of 2001. The increase
includes $980 of severance and benefit plan expenses and the remaining increase
is attributed to the merger with UNB Corp.

Net occupancy expense increased to $1,505 for the six months ended June
30, 2002 from $989 in the same period of 2001 primarily due to additional
expenses attributed to UNB Corp.

Furniture, fixtures and equipment expense increased to $869 for the six
months ended June 30, 2002 from $585 in the same period of 2001 primarily due
to depreciation expense attributed to fixed assets added by the merger with UNB
Corp.

Taxes other than income taxes for the six months ended June 30, 2002 were
$1,523 compared with $498 in the same period of 2001. The increase was due to
the recognition of the full year of Ohio Franchise tax expense for First
National Bank of Zanesville to correspond with the ending of the Bank charter.

Amortization of goodwill and other intangible assets increased by $91 for
the six months ended June 30, 2002 compared to the year ago period. The
increase was attributed to the core deposit amortization related to the merger
with UNB Corp. which was partially offset by the adoption of SFAS No. 142 on
January 1, 2002. Also, as part of SFAS No. 142, an expense of $1,392 was
recognized for the impairment of goodwill related to the write down of $1,392
associated with prior acquisitions.

Other non-interest expenses increased $4,773, to $9,439 during the six
months ended June 30, 2002 compared to $4,666 in the same period in 2001. Of
this increase, $1,072 was related to losses on sales and write down of other
real estate owned that were acquired through loan foreclosures. Also, the
increase includes $736 of marketing, legal and other miscellaneous expenses
related to the merger with UNB Corp. The remaining increase is attributed to
the merger with UNB Corp.

Provision for Income Taxes.The Companys provision for Federal income
taxes was $3,611, or 31.8% of pretax income, for the six months ended June 30,
2002 compared to $3,824, or 32.9% of pretax income, for the same period in
2001. The effective tax rate for each period differed from the federal
statutory rate principally as a result of tax-exempt income from obligations of
states and political subdivisions, non-taxable loans and earnings on bank-owned
life insurance.

18



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##### Table of Contents



Asset Quality

Non-performing Assets.To maintain the level of credit risk of the loan
portfolio at an appropriate level, management sets underwriting standards and
internal lending limits and provides for proper diversification of the
portfolio by placing constraints on the concentration of credits within the
portfolio. In monitoring the level of credit risk within the loan portfolio,
management utilizes a formal loan review process to monitor, review, and
consider relevant factors in evaluating specific credits in determining the
adequacy of the allowance for possible loan losses. The Companys banking
subsidiary formally documents its evaluation of the adequacy of the allowance
for loan losses on a quarterly basis and the evaluation is reviewed and
discussed with its board of directors.

Failure to receive principal and interest payments when due on any loan
results in efforts to restore such loan to current status. Loans are classified
as non-accrual when, in the opinion of management, full collection of principal
and accrued interest is in doubt. Continued unsuccessful collection efforts
generally lead to initiation of foreclosure or other legal proceedings.
Property acquired by the Company as a result of foreclosure or by deed in lieu
of foreclosure is classified as other assets owned until such time as it is
sold or otherwise disposed of. The Company owned $2,610 of such property at
June 30, 2002 compared to $1,762 at June 30, 2001.

Non-performing loans totaled $14,288, or 0.75% of total loans, at June 30,
2002, compared to $9,460, or 0.87% of total loans, at June 30, 2001.
Non-performing assets totaled $16,898, or 0.88% of loans and other assets owned
at June 30, 2002, compared to $11,222, or 1.17%, at June 30, 2001. Non-accrual
loans were mainly comprised of $6,694 of residential mortgage loans, $1,037 of
commercial loans, $2,326 of commercial real estate loans and $2,069 of SBA
loans, of which $1,345 is guaranteed by the government. The increase resulted
primarily from delinquency trends in general. Management of the Company is not
aware of any material amounts of loans outstanding, not disclosed in the tables
below, for which there is significant uncertainty as to the ability of the
borrower to comply with present payment terms. The following is an analysis of
the composition of non-performing assets and restructured loans:

|                                                             |  |               |        |               |  |   |        |  
|------------------------------------------------------------ |  | ------------- | ------ | ------------- |  | - | ------ | -
|                                                             |  | June 30, 2002 |        | June 30, 2001
|                                                             |  |               |        |              
|                                                             |  |              
|Non-accrual                                                  |  | $             | 12,938 |               |  | $ | 6,082  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Accruing loans 90 days or more past due                      |  |               | 1,350  |               |  |   | 3,378  |  
|                                                             |  |               |        |               |  |   |        |  
|Total non-performing loans                                   |  |               | 14,288 |               |  |   | 9,460  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Other assets owned                                           |  |               | 2,610  |               |  |   | 1,762  |  
|                                                             |  |               |        |               |  |   |        |  
|Total non-performing assets                                  |  | $             | 16,898 |               |  | $ | 11,222 |  
|                                                             |  |               |        |               |  |   |        |  
|Restructured loans                                           |  | $             | 2,755  |               |  | $ | 3,241  |  
|                                                             |  |               |        |               |  |   |        |  
|Non-performing loans to total loans                          |  |               | 0.75   | %             |  |   | 0.87   | %
|                                                            
|                                                            
|                                                            
|                                                            
|Non-performing assets to total assets                        |  |               | 0.64   | %             |  |   | 0.74   | %
|                                                            
|                                                            
|                                                            
|                                                            
|Non-performing assets to total loans
plus other assets owned |  |               | 0.88   | %             |  |   | 1.17   | %

Restructured loans consist of one loan that was restructured in May 1999
and has been performing in accordance with its restructured terms since such
time. The restructured loan is not included in non-performing assets.

As of June 30, 2002, impaired loans were $53,805 compared with $28,844 at
March 31, 2002. The increase in impaired loans was attributed to the downgrade
of several commercial loans after a complete review and analysis of the borrowers primary source of repayment and documentation related to that source of repayment.

Allowance for Loan Losses.The Company records a provision necessary to
maintain the allowance for loan losses at a level sufficient to provide for
probable incurred credit losses. The provision is charged against earnings when
it is established. An allowance for loan losses is established based on
managements best judgment, which involves a continuing review of prevailing
national and local economic conditions, changes in the size and composition of
the portfolio and review of individual problem credits. Growth of the loan
portfolio, loss experience, economic conditions, delinquency levels, credit
mix, and an evaluation of selected credits are factors that affect judgments
concerning the adequacy of the allowance. Actual losses on loans are charged
against the allowance.

The allowance for loan losses totaled $26.8 million at June 30, 2002,
representing 1.40% of total loans, compared to $10.6 million at December 31,
2001, or 1.03% of total loans. Net charge-offs for the six months ended June
30, 2002

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were $2,182, compared to net charge-offs of $847 for the same period in
2001. The increase in net charge-offs for the 2002 period compared to 2001 is
partially attributed to a weakening in economic conditions from the fourth
quarter 2001 and write downs of impaired loans within the commercial and
commercial real estate portfolios, which reflects managements philosophy to
reduce non-performing loans and assets.

Charge-offs have been made in accordance with the Companys standard
policy and have occurred primarily in
the commercial, commercial real estate and mortgage loan portfolios.

The allowance for loan losses as a percentage of non-performing loans
(coverage ratio) was 187.5% at June 30, 2002, compared to 108.5% at June 30,
2001. Although used as a general indicator, the coverage ratio is not a primary
factor in the determination of the adequacy of the allowance by management,
particularly given the extent to which the Companys non-performing loans
consist of single-family residential mortgage loans.

Comparison of June 30, 2002 and December 31, 2001 Financial Condition

Total assets were $2.64 billion at June 30, 2002, an increase of $1.17
billion from December 31, 2001. Total securities increased by $104.0 million to
$407.3 million from December 31, 2001. Both of these increases were primarily
due to the merger with UNB Corp. The Companys general investment strategy is
to manage the portfolio to include rate sensitive assets, matched against
interest sensitive liabilities to reduce interest rate risk. In recognition of
this strategy, as well as to provide a secondary source of liquidity to
accommodate loan demand and possible deposit withdrawals, the Company has
chosen to classify the majority of its securities as available-for-sale. At
June 30, 2002, 98.2% of the total securities portfolio was classified as
available-for-sale, while those securities that the Company intends to hold to
maturity represented the remaining 1.8%. This compares to 96.9% and 3.1%
classified as available-for-sale and held to maturity, respectively, at
December 31, 2001.

Total loans increased $880.7 million to $1.91 billion at June 30, 2002.
This increase was primarily due to the merger with UNB Corp.

Total deposits increased to $1.83 billion at June 30, 2002 from $1.10
billion at December 31, 2001. The increase was due to the merger with UNB
Corp. The Company continues to emphasize growth in its existing retail deposit
base, provided incremental deposit growth is cost effective compared to
alternative funding sources. Total interest-bearing deposits accounted for
90.0% of total deposits at June 30, 2002, compared to 92.4% at December 31,
2001.

Short-term borrowings, including federal funds purchased, increased $97.3
million to $98.3 million at June 30, 2002, compared to $1.0 million at December
31, 2001. This increase was primarily due sweep repurchase agreements added from the Merger with UNB Corp. and short term funding needs. Other borrowings
increased $140.1 million to $359.7 million at June 30, 2002, compared to $219.6
million at December 31, 2001. This increase was primarily due to the merger
with UNB Corp. This increase was partially offset by the payoff of the $7.0
million term loan.

Liquidity and Capital Resources

The objective of liquidity management is to ensure the availability of
funds to accommodate customer loan demand as well as deposit withdrawals while
continuously seeking higher yields from longer term lending and investing
opportunities. This is accomplished principally by maintaining sufficient cash
flows and liquid assets along with consistent stable core deposits and the
capacity to maintain immediate access to funds. These immediately accessible
funds may include federal funds sold, unpledged marketable securities, reverse
repurchase agreements or available lines of credit from the Federal Reserve
Bank, Federal Home Loan Bank (FHLB), or other financial institutions. An
important factor in the preservation of liquidity is the maintenance of public
confidence, as this facilitates the retention and growth of a large, stable
supply of core deposits.

The Companys principal source of funds to satisfy short-term liquidity
needs comes from cash, due from banks, federal funds sold and borrowing
capabilities through the FHLB as well as other sources. Changes in the balance
of cash and due from banks are due to changes in volumes of federal funds sold,
and the float and reserves related to deposit accounts, which may fluctuate
significantly on a day-to-day basis. The securities portfolio serves as an
additional source of liquidity for the Company. Securities with a market value
of $399,822 were classified as available-for-sale as of June 30, 2002,
representing 98.2% of the total securities portfolio. Classification of
securities as available-for-sale provides for flexibility in managing net
interest margin, interest rate risk, and liquidity.

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The Companys bank subsidiary is a member of the FHLB. Membership provides
an opportunity to control the banks cost of funds by providing alternative
funding sources, to provide flexibility in the management of interest rate risk
through the wide range of available funding sources, to manage liquidity via
immediate access to such funds, and to provide flexibility through utilization
of customized funding products to fund various loan and investment products and
strategies.

On October 18, 1999, the Company completed an offering of $20.0 million
aggregate liquidation amount of 9.875% Capital Securities, Series A, due 2029.
These securities represent preferred beneficial interests in BFOH Capital Trust
I, a special purpose trust formed for the purpose of the offering. The
proceeds from the offering were used by the Trust to purchase Junior
Subordinated Deferrable Interest Debentures (Debentures) from the Company.
Under Federal Reserve Board regulations, these Capital Securities may represent
up to 25% of a bank holding companys Tier 1 capital. The holders of the
Capital Securities are entitled to receive cumulative cash distributions at the
annual rate of 9.875% of the liquidation amount. Distributions are payable
semi-annually on April 15 and October 15 of each year, beginning on April 15,
2000. The Company has fully and unconditionally guaranteed the payment of the
Capital Securities, and payment of distributions on the Capital Securities.
The Trust is required to redeem the Capital Securities on or, in certain
circumstances, prior to October 15, 2029. There are no significant covenants
or limitations with respect to the business of the Company that are contained
in the instruments which govern the Capital Securities and the Debentures.

Shareholders equity at June 30, 2002 was $293.6 million, compared to
shareholders equity at December 31, 2001 of $116.5 million, an increase of
$177.1 million. The merger with UNB Corp. contributed $174.6 million to
shareholders equity. Shareholders equity also increased by net income of
$7.8 million, an increase of $1.3 in other comprehensive income and these
increases were partially offset by cash dividends paid of $5.8 million. The
Companys Board of Directors has approved a stock repurchase program
authorizing management to repurchase up to 550,000 common shares. The company
expects to purchase shares from time to time in the open market as market
conditions warrant.

Under the risk-based capital guidelines, a minimum capital to
risk-weighted assets ratio of 8.0% is required, of which, at least 4.0% must
consist of Tier 1 capital (equity capital net of goodwill). Additionally, a
minimum leverage ratio (Tier 1 capital to total assets) of 3.0% must be
maintained. At June 30, 2002, the Company had a total risk-based capital ratio
of 10.80%, of which 9.56% consisted of Tier 1 capital. The leverage ratio for
the Company at June 30, 2002, was 7.94%.

Cash dividends declared and paid to shareholders of the Company totaled
$5.8 million, or $0.26 per share, during the first six months of 2002. This
compares to dividends of $2.6 million, or $0.22 per share, for the same period
in 2001.

Considering the Companys capital adequacy, profitability, available
liquidity sources and funding sources, the Companys liquidity is considered by
management to be adequate to meet current and projected needs.

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Item 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, the Corporation is exposed to interest
rate risk caused by the differences in cash flows and repricing characteristics
that occur in various assets and liabilities as a result of changes in interest
rates. The asset and liability management process is designed to measure and
manage that risk to maintain consistent levels of net interest income and net
present value of equity under any interest rate scenario.

The Corporation uses a dynamic computer model to generate earnings
simulations, duration and net present value forecasts and gap analyses, each of
which measures interest rate risk from a different perspective. The model
incorporates a large number of assumptions, including the absolute level of
future interest rates, the slope of the yield curve, various spread
relationships, prepayment speeds, repricing opportunities, cash flow
characteristics of instruments without contractual maturity dates and changes
in the volumes of multiple loan, investment and deposit categories. Management
believes that individually and in the aggregate these assumptions are
reasonable, but the complexity of the simulation modeling process results in a
sophisticated estimate, not a precise calculation of exposure.

One of the most significant assumptions is the assignment of deposit
balances without a stated maturity date to specific time frames. Since these
deposits are subject to withdrawal on demand, and have rates that can be
changed at any time, they could be considered immediately repriceable and
assigned to the shortest maturity, resulting in a significant level of
liability sensitivity. However, actual practice indicates that balances are
withdrawn and replaced over a much longer time frame, and rates are modified
less frequently and in smaller increments than changes which occur in financial
market rates. Although the Corporation prefers to use a statistical analysis of
historical deposit behavior to derive appropriate distributions of deposit
balances over the simulation time horizon, in the current data non-maturity
deposits are assigned a one-month maturity. The combined deposits of the merged
company will be reanalyzed to provide a more accurate depiction of interest
rate risk.

The model then applies a predetermined immediate parallel increase or
decrease in the level of interest rates to forecast the impact on both net
interest income and capital one year forward. While this methodology provides a
comprehensive appraisal of interest rate risk, it is not necessarily indicative
of actual or expected financial performance. Changes in interest rates that
affect the entire yield curve equally at a single point in time are not
typical. The residential mortgage prepayment assumptions are based on industry
medians and could differ from the Corporations actual results due to
non-financial prepayment incentives and other local factors. The behavior of
depositors is based on an analysis of historical changes in balances and might
not fully reflect current attitudes toward other investment alternatives.
Moreover, the model does not include any interim changes in strategy the
Corporation might instate in response to shifts in interest rates.

At June 30, 2002, assuming an immediate, parallel 200 basis point shift in
market yields, the Corporations net interest income for the next twelve months
was calculated to decline if rates fell or if rates rose. Since interest rates on deposit products are very low, the
Corporation would not realize any significant future benefit from lower rates,
but could see a continuing decrease in earning asset rates. The net present
value of equity is defined as the difference between the present value of the
Corporation assets and liabilities. In general, the present value of fixed
rate financial instruments declines as market rates increase and increases as
rates fall. Using the yield scenario defined above, the net present value of
equity was forecasted to decline in a rising rate environment and to
rise in a falling rate scenario. The duration of total assets was
37.9 months, compared to a duration of total liabilities of 13 months,
indicating that liabilities will both reprice faster than assets and change in
value by a smaller amount than the assets over a similar time frame.

Interest rate risk can be managed by using a variety of techniques,
including selling existing assets or repaying liabilities, pricing loans and
deposits to attract preferred maturities and developing alternative sources of
funding or structuring new products to hedge existing exposures. In addition to
these balance sheet strategies, the Corporation can also use derivative
financial instruments such as interest rate swaps, caps, and floors to minimize
the potential impact of adverse changes in interest rates. During the second
quarter, the Corporation continued to lengthen the duration of its liabilities
by extending the term of maturing borrowings to minimize the effect of rising
rates on future net interest income.

The Corporation has four interest rate swaps on which it pays a fixed rate
and receives a variable rate. One swap was executed as a hedge against fixed
rate mortgages, which are held in the Corporations portfolio. The net cash
flows and market value of the swaps move inversely with those of the fixed rate
loans in the portfolio, which reduces the Corporations exposure to changing
interest rates. If rates rise, the Corporation receives net cash flows from the
swap which compensates for the opportunity loss of holding an asset with a
below market yield. Alternatively, the increase in the market value of the swap
would balance the loss on the mortgage loans if the loans were sold. If rates
fall, the net cash

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flows given up are offset by the increased value of assets with an above
market yield. The gain that would be realized on the sale of the loans would
counteract the loss on the termination of the interest rate swap. Three other
swaps were executed to convert variable rate borrowings to a fixed rate, which
reduces the risk of increased interest expense in a rising rate environment.
The Corporation also maintains a portfolio of options on the S & P 500 to
offset five-year certificate of deposit liabilities that are contractually
linked to the index. At the end of June, the derivatives portfolio had a net
loss of $2,883 on outstanding notional principal of $62,483.

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PART II  OTHER INFORMATION




Item 1. Legal Proceedings

None




Item 2. Changes in Securities and Use of Proceeds

None




Item 3. Defaults upon Senior Securities

Not Applicable




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

None




Item 5. Other Information

None




Item 6. Exhibits and Reports on Form 8-K



| |  | (a) Exhibits Required by Item 601 of Regulation S-K                                                                                             
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Exhibit 3(a)  Articles of Incorporation, as amended (incorporated by
reference to Appendix A to UNB Corp.s Form S-4 dated October 15, 2001).  
|
| |  | Exhibit 3(b)  Code of Regulations, (incorporated by reference to Exhibit
(4)B to UNB Corp.s registration statement on Form S-3 (No. 33-27471).
|
| |  | Exhibit 99.1  Certification of Financial Results                                                                                               
|
| |  | Exhibit 99.2  Certification of Financial Results                                                                                               
|
| |  | (c) Reports on Form 8-K                                                                                                                         
|
| |  | Report on Form 8-K dated July 19, 2002 regarding the sale of Chornyak &
Associates, Inc.                                                        

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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|     |  |                 |  |                                                                                                                                                   
|---- |  | --------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                 |  | Unizan Financial Corp.
(Registrant)                                                                                                               
|    
|     |  |                 |  |                                                                                                                                                   
|    
|Date |  | August 12, 2002 |  | (Signed) /s/ Roger L. Mann
Roger L. Mann
President and
Chief Executive Officer                                                                    
|    
|     |  |                 |  |                                                                                                                                                   
|    
|Date |  | August 12, 2002 |  | (Signed) /s/ James J. Pennetti
James J. Pennetti
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)

25