##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the
quarterly period ended March 31, 2005



OR



| ̈ | 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



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Unizan Financial Corp.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1442295                          
|(State or other jurisdiction of incorporation or organization) |  | (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)



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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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act).    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 April 30, 2005
|Common Stock, $1.00 Stated Value |  | 22,098,632                      



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##### Table of Contents

INDEX

UNIZAN FINANCIAL CORP.



|           |  |                                                                                       |  |         
|---------- |  | ------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                       |  | PAGE NO.
|PART I.    |  | FINANCIAL INFORMATION                                                                 |  |         
|           |  |                                                                                      
|Item 1.    |  | Financial Statements                                                                  |  |         
|           |  |                                                                                      
|           |  | Consolidated Balance Sheets                                                           |  | 3       
|           |  |                                                                                      
|           |  | Consolidated Statements of Income                                                     |  | 4       
|           |  |                                                                                      
|           |  | Consolidated Statements of Comprehensive Income                                       |  | 5       
|           |  |                                                                                      
|           |  | Consolidated Statements of Cash Flows                                                 |  | 6       
|           |  |                                                                                      
|           |  | Notes to Consolidated Financial Statements                                            |  | 7-12    
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 13-20   
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 21-22   
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 23      
|           |  |                                                                                      
|PART II.   |  | OTHER INFORMATION                                                                     |  |         
|           |  |                                                                                      
|           |  | Other Information                                                                     |  | 24-26   
|           |  |                                                                                      
|           |  | 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 |  | 26                                                                                   



2



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##### Table of Contents

Unizan Financial Corp.

CONSOLIDATED BALANCE SHEETS



|                                                                                              |  |                |           |   |                  |   |           |  
|--------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ---------------- | - | --------- | -
|(Unaudited, except December 31, 2004) (In
thousands except share and per share data)          |  | March 31, 2005 |           |   | December 31,2004 |  
|ASSETS                                                                                        |  |                |           |   |                  |   |           |  
|Cash and cash equivalents                                                                     |  | $              | 45,347    |   |                  | $ | 52,057    |  
|Federal funds sold                                                                            |  |                | 3,400     |   |                  |   |          |  
|Interest bearing deposits with banks                                                          |  |                | 9,749     |   |                  |   | 7,139     |  
|Securities held-to-maturity, (Fair value: $1,747 and $1,881, respectively)                    |  |                | 1,659     |   |                  |   | 1,779     |  
|Securities available-for-sale, at fair value                                                  |  |                | 418,091   |   |                  |   | 420,787   |  
|Federal Home Loan Bank stock, at cost                                                         |  |                | 36,572    |   |                  |   | 36,170    |  
|Loans originated and held for sale                                                            |  |                | 2,066     |   |                  |   | 1,256     |  
|Loans:                                                                                        |  |                |           |   |                  |   |           |  
|Commercial, financial and agricultural                                                        |  |                | 236,062   |   |                  |   | 268,339   |  
|Aircraft                                                                                      |  |                | 93,527    |   |                  |   | 106,845   |  
|Commercial real estate                                                                        |  |                | 610,945   |   |                  |   | 607,470   |  
|Residential real estate                                                                       |  |                | 437,819   |   |                  |   | 439,866   |  
|Consumer                                                                                      |  |                | 442,783   |   |                  |   | 450,617   |  
|                                                                                              |  |                |           |   |                  |   |           |  
|Total loans                                                                                   |  |                | 1,821,136 |   |                  |   | 1,873,137 |  
|Less allowance for loan losses                                                                |  |                | (25,868   | ) |                  |   | (26,356   | )
|                                                                                              |  |                |           |   |                  |   |           |  
|Net loans                                                                                     |  |                | 1,795,268 |   |                  |   | 1,846,781 |  
|Premises and equipment, net                                                                   |  |                | 22,111    |   |                  |   | 22,226    |  
|Goodwill                                                                                      |  |                | 91,971    |   |                  |   | 91,971    |  
|Other intangible assets                                                                       |  |                | 14,823    |   |                  |   | 15,473    |  
|Bank owned life insurance                                                                     |  |                | 55,607    |   |                  |   | 55,038    |  
|Accrued interest receivable and other assets                                                  |  |                | 21,277    |   |                  |   | 22,157    |  
|                                                                                              |  |                |           |   |                  |   |           |  
|Total Assets                                                                                  |  | $              | 2,517,941 |   |                  | $ | 2,572,834 |  
|                                                                                              |  |                |           |   |                  |   |           |  
|LIABILITIES                                                                                   |  |                |           |   |                  |   |           |  
|Deposits:                                                                                     |  |                |           |   |                  |   |           |  
|Noninterest bearing deposits                                                                  |  | $              | 209,872   |   |                  | $ | 231,004   |  
|Interest bearing deposits                                                                     |  |                | 1,615,435 |   |                  |   | 1,609,722 |  
|                                                                                              |  |                |           |   |                  |   |           |  
|Total deposits                                                                                |  |                | 1,825,307 |   |                  |   | 1,840,726 |  
|Short-term borrowings                                                                         |  |                | 55,834    |   |                  |   | 31,676    |  
|Other borrowings                                                                              |  |                | 277,338   |   |                  |   | 342,078   |  
|Subordinated note                                                                             |  |                | 20,619    |   |                  |   | 20,619    |  
|Accrued taxes, expenses and other liabilities                                                 |  |                | 25,973    |   |                  |   | 25,810    |  
|                                                                                              |  |                |           |   |                  |   |           |  
|Total Liabilities                                                                             |  |                | 2,205,071 |   |                  |   | 2,260,909 |  
|                                                                                              |  |               
|SHAREHOLDERS EQUITY                                                                          |  |                |           |   |                  |   |           |  
|Common stock ($1.00 stated value, 100,000,000 shares authorized and 22,123,069 shares issued) |  |                | 22,123    |   |                  |   | 22,123    |  
|Additional paid-in capital                                                                    |  |                | 220,669   |   |                  |   | 220,741   |  
|Retained earnings                                                                             |  |                | 76,405    |   |                  |   | 74,854    |  
|Stock held by deferred compensation plan, 127,063 and 128,400 shares at cost                  |  |                | (2,243    | ) |                  |   | (2,279    | )
|Treasury stock, 24,587 and 43,956 shares at cost                                              |  |                | (646      | ) |                  |   | (1,137    | )
|Accumulated other comprehensive loss                                                          |  |                | (3,438    | ) |                  |   | (2,377    | )
|                                                                                              |  |                |           |   |                  |   |           |  
|Total Shareholders Equity                                                                    |  |                | 312,870   |   |                  |   | 311,925   |  
|                                                                                              |  |                |           |   |                  |   |           |  
|Total Liabilities and Shareholders Equity                                                    |  | $              | 2,517,941 |   |                  | $ | 2,572,834 |  
|                                                                                              |  |                |           |   |                  |   |           |  



See Notes to the
Consolidated Financial Statements



3



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##### Table of Contents

Unizan Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME



|                                                           |      |                              |            |  |   |           
|---------------------------------------------------------- | ---- | ---------------------------- | ---------- |  | - | ----------
|(Unaudited) (In thousands
except share and per share data) |      | Three Months Ended March 31,
|                                                           | 2005 |                              | 2004      
|Interest income:                                           |      |                              |            |  |   |           
|Interest and fees on loans                                 |      | $                            | 26,889     |  | $ | 27,674    
|Interest and dividends on securities                       |      |                              |            |  |   |           
|Taxable                                                    |      |                              | 3,367      |  |   | 4,121     
|Tax exempt                                                 |      |                              | 501        |  |   | 476       
|Interest on bank deposits and federal funds sold           |      |                              | 71         |  |   | 8         
|                                                           |      |                              |            |  |   |           
|Total interest income                                      |      |                              | 30,828     |  |   | 32,279    
|                                                           |      |                              |            |  |   |           
|Interest expense:                                          |      |                              |            |  |   |           
|Interest on deposits                                       |      |                              | 9,920      |  |   | 9,150     
|Interest on borrowings                                     |      |                              | 4,135      |  |   | 4,337     
|                                                           |      |                              |            |  |   |           
|Total interest expense                                     |      |                              | 14,055     |  |   | 13,487    
|                                                           |      |                              |            |  |   |           
|Net interest income                                        |      |                              | 16,773     |  |   | 18,792    
|Provision for loan losses                                  |      |                              | 1,295      |  |   | 1,000     
|                                                           |      |                              |            |  |   |           
|Net interest income after provision for loan losses        |      |                              | 15,478     |  |   | 17,792    
|                                                           |      |                             
|Other income:                                              |      |                              |            |  |   |           
|Trust, financial planning, brokerage and insurance sales   |      |                              | 2,247      |  |   | 1,953     
|Customer service fees                                      |      |                              | 1,579      |  |   | 1,844     
|Gains on sale of loans                                     |      |                              | 1,187      |  |   | 1,245     
|Security gains, net                                        |      |                              |           |  |   | 71        
|Merchant services income                                   |      |                              | 423        |  |   | 446       
|Income on bank owned life insurance                        |      |                              | 569        |  |   | 673       
|Other operating income                                     |      |                              | 999        |  |   | 782       
|                                                           |      |                              |            |  |   |           
|Total other income                                         |      |                              | 7,004      |  |   | 7,014     
|                                                           |      |                              |            |  |   |           
|Other expenses:                                            |      |                              |            |  |   |           
|Salaries, wages, and benefits                              |      |                              | 7,988      |  |   | 12,774    
|Occupancy expense                                          |      |                              | 908        |  |   | 867       
|Furniture and equipment                                    |      |                              | 503        |  |   | 534       
|Data processing                                            |      |                              | 681        |  |   | 904       
|Taxes other than income taxes                              |      |                              | 679        |  |   | 630       
|Other intangible amortization expense                      |      |                              | 650        |  |   | 825       
|Other operating expense                                    |      |                              | 4,738      |  |   | 4,880     
|                                                           |      |                              |            |  |   |           
|Total other expenses                                       |      |                              | 16,147     |  |   | 21,414    
|                                                           |      |                              |            |  |   |           
|Income before income taxes                                 |      |                              | 6,335      |  |   | 3,392     
|Provision for income taxes                                 |      |                              | 1,802      |  |   | 980       
|                                                           |      |                              |            |  |   |           
|Net income                                                 |      | $                            | 4,533      |  | $ | 2,412     
|                                                           |      |                              |            |  |   |           
|Earnings per share:                                        |      |                              |            |  |   |           
|Basic                                                      |      | $                            | 0.21       |  | $ | 0.11      
|Diluted                                                    |      | $                            | 0.20       |  | $ | 0.11      
|                                                           |      |                              |            |  |   |           
|Dividends per share                                        |      | $                            | 0.135      |  | $ | 0.135     
|                                                           |      |                              |            |  |   |           
|Weighted average shares outstanding:                       |      |                              |            |  |   |           
|Basic                                                      |      |                              | 22,088,798 |  |   | 21,733,289
|Diluted                                                    |      |                              | 22,199,973 |  |   | 21,972,349
|                                                           |      |                              |            |  |   |           



See Notes to the
Consolidated Financial Statements



4



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##### Table of Contents

Unizan Financial Corp.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



|                                                                                  |      |                             |        |      |  |   |        |  
|--------------------------------------------------------------------------------- | ---- | --------------------------- | ------ | ---- |  | - | ------ | -
|(Unaudited) (In
thousands)                                                        |      | Three Months EndedMarch 31, |       
|                                                                                  | 2005 |                             |        | 2004 | 
|Net Income                                                                        |      | $                           | 4,533  |      |  | $ | 2,412  |  
|                                                                                  |      |                            
|Unrealized holding gains (losses) on available-for-sale securities                |      |                             | (2,300 | )    |  |   | 3,530  |  
|Reclassification adjustment for gains on securities included in net income        |      |                             |       |      |  |   | (71    | )
|                                                                                  |      |                             |        |      |  |   |        |  
|Net                                                                               |      |                             | (2,300 | )    |  |   | 3,459  |  
|                                                                                  |      |                             |        |      |  |   |        |  
|Unrealized gains (losses) on cash flow hedges                                     |      |                             | 395    |      |  |   | (676   | )
|Reclassification adjustment for losses on cash flow hedges included in net income |      |                             | 273    |      |  |   | 415    |  
|                                                                                  |      |                             |        |      |  |   |        |  
|Net                                                                               |      |                             | 668    |      |  |   | (261   | )
|                                                                                  |      |                             |        |      |  |   |        |  
|Total                                                                             |      |                             | (1,632 | )    |  |   | 3,198  |  
|Tax (expense) benefit                                                             |      |                             | 571    |      |  |   | (1,119 | )
|                                                                                  |      |                             |        |      |  |   |        |  
|Other comprehensive income (loss), net of tax                                     |      |                             | (1,061 | )    |  |   | 2,079  |  
|                                                                                  |      |                             |        |      |  |   |        |  
|Comprehensive income                                                              |      | $                           | 3,472  |      |  | $ | 4,491  |  
|                                                                                  |      |                             |        |      |  |   |        |  



See Notes to the
Consolidated Financial Statements



5



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##### Table of Contents

Unizan Financial Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                           |      |                             |         |      |  |   |         |  
|-------------------------------------------------------------------------- | ---- | --------------------------- | ------- | ---- |  | - | ------- | -
|(Unaudited) (In
thousands)                                                 |      | Three months endedMarch 31, |        
|                                                                           | 2005 |                             |         | 2004 | 
|Cash flows from operating activities:                                      |      |                             |         |      |  |   |         |  
|Net income                                                                 |      | $                           | 4,533   |      |  | $ | 2,412   |  
|Adjustments to reconcile net income to net cash from operating activities: |      |                             |         |      |  |   |         |  
|Depreciation, amortization and accretion                                   |      |                             | 2,274   |      |  |   | 1,881   |  
|Provision for loan losses                                                  |      |                             | 1,295   |      |  |   | 1,000   |  
|Net securities gains                                                       |      |                             |        |      |  |   | (71     | )
|Loans originated for resale                                                |      |                             | (15,488 | )    |  |   | (18,219 | )
|Proceeds from sale of loan originations                                    |      |                             | 15,865  |      |  |   | 17,140  |  
|Gains from sales of loans                                                  |      |                             | (1,187  | )    |  |   | (1,245  | )
|Federal Home Loan Bank stock dividend                                      |      |                             | (402    | )    |  |   | (345    | )
|Net increase in bank owned life insurance                                  |      |                             | (569    | )    |  |   | (673    | )
|Increase in interest receivable                                            |      |                             | (161    | )    |  |   | (89     | )
|Increase in interest payable                                               |      |                             | 667     |      |  |   | 218     |  
|Other assets and liabilities, net                                          |      |                             | 1,765   |      |  |   | 1,992   |  
|                                                                           |      |                             |         |      |  |   |         |  
|Net cash from operating activities                                         |      |                             | 8,592   |      |  |   | 4,001   |  
|                                                                           |      |                             |         |      |  |   |         |  
|Cash flows from investing activities:                                      |      |                             |         |      |  |   |         |  
|Net change in interest bearing deposits with banks                         |      |                             | (2,610  | )    |  |   | (2,888  | )
|Net change in federal funds sold                                           |      |                             | (3,400  | )    |  |   | (250    | )
|Proceeds from sales of securities available-for-sale                       |      |                             |        |      |  |   | 571     |  
|Proceeds from maturities of securities held-to-maturity                    |      |                             | 116     |      |  |   | 295     |  
|Proceeds from maturities of securities available-for-sale                  |      |                             | 24,698  |      |  |   | 19,810  |  
|Purchases of securities available-for-sale                                 |      |                             | (25,007 | )    |  |   | (30,191 | )
|Net decreases (increase) in loans made to customers                        |      |                             | 49,846  |      |  |   | (9,589  | )
|Proceeds from sale of loans from portfolio                                 |      |                             |        |      |  |   | 7,341   |  
|Purchases of premises and equipment                                        |      |                             | (479    | )    |  |   | (109    | )
|                                                                           |      |                             |         |      |  |   |         |  
|Net cash from investing activities                                         |      |                             | 43,164  |      |  |   | (15,010 | )
|                                                                           |      |                             |         |      |  |   |         |  
|Cash flows from financing activities:                                      |      |                             |         |      |  |   |         |  
|Net change in deposits                                                     |      |                             | (15,403 | )    |  |   | (29,649 | )
|Cash dividends paid                                                        |      |                             | (2,982  | )    |  |   | (2,935  | )
|Treasury stock sales                                                       |      |                             | 607     |      |  |   | 13,014  |  
|Treasury stock purchases                                                   |      |                             | (188    | )    |  |   | (10,707 | )
|Net change in stock held in deferred compensation plan                     |      |                             | 36      |      |  |   |        |  
|Net change in short-term borrowings                                        |      |                             | 24,158  |      |  |   | 2,951   |  
|Net change in Federal Home Loan Bank overnight borrowings                  |      |                             | (32,325 | )    |  |   | 54,300  |  
|Proceeds from other borrowings                                             |      |                             |        |      |  |   | 4,585   |  
|Repayment of other borrowings                                              |      |                             | (32,369 | )    |  |   | (567    | )
|                                                                           |      |                             |         |      |  |   |         |  
|Net cash from financing activities                                         |      |                             | (58,466 | )    |  |   | 30,992  |  
|                                                                           |      |                             |         |      |  |   |         |  
|Net change in cash and cash equivalents                                    |      |                             | (6,710  | )    |  |   | 19,983  |  
|                                                                           |      |                            
|Cash and cash equivalents at beginning of year                             |      |                             | 52,057  |      |  |   | 59,622  |  
|                                                                           |      |                             |         |      |  |   |         |  
|Cash and cash equivalents at end of period                                 |      | $                           | 45,347  |      |  | $ | 79,605  |  
|                                                                           |      |                             |         |      |  |   |         |  
|Supplemental cash flow disclosures:                                        |      |                             |         |      |  |   |         |  
|Income taxes paid                                                          |      | $                           | 1,000   |      |  |   |        |  
|Interest paid                                                              |      | $                           | 13,439  |      |  | $ | 13,243  |  
|Non cash transfers:                                                        |      |                             |         |      |  |   |         |  
|Transfer of loans to other assets owned                                    |      | $                           | 408     |      |  | $ | 635     |  



See the Notes to the
Consolidated Financial Statements



6



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##### Table of Contents

UNIZAN FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2005 (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 the Companys consolidated financial statements and notes thereto included in the Companys annual
report on Form 10-K, as amended, for the year ended December 31, 2004 for additional disclosures, including a summary of the Companys accounting policies. The results of operations for the three month period ended March 31, 2005 are not
necessarily indicative of the results to be expected for the full year.



1)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



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. Certain reclassifications have been made to the three month period ended March 31, 2004 information to conform with the three month period ended March 31, 2005 information.



Accounting Pronouncements: In December 2004, the Financial Accounting
Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123-R), which revises SFAS No. 123, Accounting for Stock Based Compensation and supersedes APB Opinion No. 25
Accounting for Stock Issued to Employees. SFAS No. 123-R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This Statement requires an entity to recognize
the cost of employee services received in share-based payment transactions and measure the cost on a grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange
for the award. The effective date for the provisions of SFAS No. 123-R to be applied has been delayed and is now required for annual, rather than interim, periods that begin after June 15, 2005. The Company has not determined the methodology to be
used when adopting this Statement.



In March 2004, the FASB
ratified the consensus reached by the Emerging Issues Task Force (EITF) in Issue No. 03-1, Measuring of Other-Than-Temporary Impairment and its Application to Certain Investments (EITF 03-1). This issue provides
guidance for determining when an investment is considered impaired, whether impairment is other than temporary and measurement of an impairment loss. In September 2004, the FASB issued FASB Staff Position 03-1-1 (FSP 03-1-1) which
delayed the effective date for certain measurement and recognition guidance contained in paragraphs 10  20 of EITF 03-1. FSP 03-1-1 requires the application of pre-existing other-than-temporary guidance during the period of delay until a final
consensus is reached. To date, no consensus has been reached on this issue.



2) PENDING MERGER



On January 27, 2004,
Huntington Bancshares Incorporated (Huntington), a $32 billion regional bank holding company headquartered in Columbus, Ohio, and the Company announced the signing of a definitive agreement to merge the two organizations. Under terms of
the agreement, the Companys shareholders will receive 1.1424 shares of Huntington common stock, on a tax-free basis, for each share of the Company. The merger was unanimously approved by both boards and has also been approved by the
Companys shareholders. During the first quarter of 2004, the Company recorded $1,203 of expense for merger-related professional fees. Minimal amounts of merger-related expense were incurred in the first quarter of 2005.



In June 2004, the Federal Reserve Board informed Huntington that it had
extended its review period to coordinate further with the staff of the Securities and Exchange Commission (SEC) regarding the SECs ongoing formal investigation of Huntington and to complete its review of the Community Reinvestment
Act aspects of the merger. In November 2004, Huntington announced that it expected to enter into formal supervisory agreements with its banking regulators, the Federal Reserve Board and the Office of the Comptroller of the Currency, providing for a
comprehensive action plan designed to address its financial reporting and accounting policies, procedures and controls and its corporate governance practices and that it was withdrawing its regulatory applications for approval of the merger with the
Company pending the resolution of these various matters. As a result, Huntington and the Company



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##### Table of Contents

agreed to extend the expiration date of the definitive agreement from January 27, 2005 to January 27,
2006. On March 1, 2005, Huntington announced that it had entered into formal written agreements with its banking regulators, the Federal Reserve Bank of Cleveland and the Office of the Comptroller of the Currency, to provide for a comprehensive
action plan to address the aforementioned issues.



On April
25, 2005, Huntington announced that it had proposed a settlement to the staff of the SEC regarding the resolution of its formal investigation and that the staff of the SEC has agreed to recommend the proposed settlement offer to the Commission. The
resolution of the SEC investigation is separate and distinct from the formal banking regulatory written agreements announced March 1, 2005 with the Federal Reserve Bank of Cleveland and the Office of the Comptroller of the Currency, which remain in
effect until terminated by the banking regulators. Huntington intends to resubmit its application for regulatory approval of the merger with the Company once all of the regulatory concerns have been resolved. No assurances, however, can be provided
as to the ultimate timing or outcome of these matters.



3) STOCK BASED
COMPENSATION



Employee compensation expense for stock
options is reported using the intrinsic value method. All options granted had an exercise price equal to or greater than the market price of the underlying common stock at the date of grant. Any tax benefit realized by the Company from the exercise
of non-qualified stock options is added to paid-in-capital. During the first quarter of 2004, an expense of $3,638 was recognized in relation to the exercise of certain stock options as a result of the settlement of options for cash or with shares
held for less than six months. No similar expense was



recorded in the first quarter of 2005. The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value method of SFAS No. 123, Accounting for Stock-Based Compensation:



|                                                                                  |  |                             |       |      |   |      
|--------------------------------------------------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                                                                  |  | Three Months EndedMarch 31,
|                                                                                  |  | 2005                        |       | 2004
|Net income, as reported                                                           |  | $                           | 4,533 |      | $ | 2,412
|Deduct: Stock based compensation expense determined under fair value based method |  |                             | 89    |      |   | 15   
|                                                                                  |  |                             |       |      |   |      
|Pro forma net income                                                              |  | $                           | 4,444 |      | $ | 2,397
|Earnings per share, as reported:                                                  |  |                             |       |      |   |      
|Basic                                                                             |  | $                           | 0.21  |      | $ | 0.11 
|Diluted                                                                           |  | $                           | 0.20  |      | $ | 0.11 
|Pro forma earnings per share:                                                     |  |                             |       |      |   |      
|Basic                                                                             |  | $                           | 0.20  |      | $ | 0.11 
|Diluted                                                                           |  | $                           | 0.20  |      | $ | 0.11 



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##### Table of Contents

For purposes of providing the pro forma disclosures required under SFAS No. 123, the fair value of the stock options
granted were estimated at the date of grant using a Black-Scholes option pricing model. The weighted average assumptions used in the option pricing model and resulting fair values at the grant dates for options granted during the three months ended
March 31, 2005 and 2004 were as follows:



|                                              |  |      |        |   |      |   |        |  
|--------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                              |  | 2005 |        |   | 2004 |  
|Nonqualified Stock Options- Immediate Vesting |  |      |        |   |      |   |        |  
|Number of shares                              |  |      | 18,000 |   |      |   | 19,000 |  
|Exercise Price                                |  | $    | 25.11  |   |      | $ | 26.37  |  
|Fair Value                                    |  | $    | 6.88   |   |      | $ | 1.20   |  
|Risk-free interest rate                       |  |      | 3.74   | % |      |   | 1.02   | %
|Expected dividend yield                       |  |      | 2.15   | % |      |   | 2.90   | %
|Expected option life (years)                  |  |      | 5.00   |   |      |   | 0.67   |  
|Expected volatility                           |  |      | 31.80  | % |      |   | 16.00  | %
|                                              |  |     
|Nonqualified Stock Options- Delayed Vesting   |  |      |        |   |      |   |        |  
|Number of shares                              |  |      | 72,300 |   |      |   |       |  
|Exercise Price                                |  | $    | 24.72  |   |      |   | N/A    |  
|Fair Value                                    |  | $    | 6.76   |   |      |   | N/A    |  
|Risk-free interest rate                       |  |      | 3.74   | % |      |   | N/A    |  
|Expected dividend yield                       |  |      | 2.18   | % |      |   | N/A    |  
|Expected option life (years)                  |  |      | 5.00   |   |      |   | N/A    |  
|Expected volatility                           |  |      | 31.90  | % |      |   | N/A    |  



The nonqualified stock
options with delayed vesting granted in 2005 will vest immediately if the pending merger with Huntington closes.



The following summarizes the number of options outstanding at March 31, 2005 and activity during the three months then ended for the Companys
various stock incentive plans:



|                              |  |           |  |           |   |  |           |   |  |         |  
|----------------------------- |  | --------- |  | --------- | - |  | --------- | - |  | ------- | -
|                              |  | 1987 Plan |  | 1997 Plan |   |  | BFOH Plan |   |  | Total   |  
|Balance, December 31, 2004    |  | 7,184     |  | 342,257   |   |  | 238,333   |   |  | 587,774 |  
|Granted                       |  |          |  | 90,300    |   |  |          |   |  | 90,300  |  
|Exercised                     |  |          |  | (13,309   | ) |  | (6,022    | ) |  | (19,331 | )
|Forfeited                     |  |          |  | (667      | ) |  | (904      | ) |  | (1,571  | )
|                              |  |           |  |           |   |  |           |   |  |         |  
|Balance, March 31, 2005       |  | 7,184     |  | 418,581   |   |  | 231,407   |   |  | 657,172 |  
|                              |  |           |  |           |   |  |           |   |  |         |  
|Exercisable at March 31, 2005 |  | 7,184     |  | 346,281   |   |  | 231,407   |   |  | 584,872 |  
|                              |  |           |  |           |   |  |           |   |  |         |  



4) COMPUTATION OF EARNINGS PER
SHARE



The computation of earnings per share is as
follows.



|                                                                                          |  |                              |            |      |   |           
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ---------- | ---- | - | ----------
|                                                                                          |  | Three Months Ended March 31,
|                                                                                          |  | 2005                         |            | 2004
|Weighted average common shares outstanding - basic                                        |  |                              | 22,088,798 |      |   | 21,733,289
|Dilutive effect due to stock incentive plans                                              |  |                              | 111,175    |      |   | 239,060   
|                                                                                          |  |                              |            |      |   |           
|Weighted average common shares outstanding adjusted for dilutive common stock equivalents |  |                              | 22,199,973 |      |   | 21,972,349
|                                                                                          |  |                              |            |      |   |           
|Net income                                                                                |  | $                            | 4,533      |      | $ | 2,412     
|                                                                                          |  |                              |            |      |   |           
|Basic earnings per share                                                                  |  | $                            | 0.21       |      | $ | 0.11      
|                                                                                          |  |                              |            |      |   |           
|Diluted earnings per share                                                                |  | $                            | 0.20       |      | $ | 0.11      
|                                                                                          |  |                              |            |      |   |           



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##### Table of Contents

5) SECURITIES



The amortized cost and fair value of available-for-sale securities were as follows:



|                                                 |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|------------------------------------------------ |  | ----------------- | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                 |  | March 31, 2005   
|                                                 |  | AmortizedCost     |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|Securities available-for-sale:                   |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|U.S. Treasury securities                         |  | $                 | 1,006   |                      | $ |                      |  | $ | (33        | ) |  | $ | 973    
|Obligations of states and political subdivisions |  |                   | 43,241  |                      |   | 1,035                 |  |   | (143       | ) |  |   | 44,133 
|Mortgage-backed and related securities           |  |                   | 364,085 |                      |   | 615                   |  |   | (6,659     | ) |  |   | 358,041
|Other securities                                 |  |                   | 13,936  |                      |   | 1,008                 |  |   |           |   |  |   | 14,944 
|                                                 |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|Total securities available-for-sale              |  | $                 | 422,268 |                      | $ | 2,658                 |  | $ | (6,835     | ) |  | $ | 418,091
|                                                 |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|                                                 | 
|                                                 |  | December 31, 2004
|                                                 |  | AmortizedCost     |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|Securities available-for-sale:                   |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|U.S. Treasury securities                         |  | $                 | 1,006   |                      | $ |                      |  | $ | (23        | ) |  | $ | 983    
|Obligations of states and political subdivisions |  |                   | 43,265  |                      |   | 1,240                 |  |   | (46        | ) |  |   | 44,459 
|Mortgage-backed and related securities           |  |                   | 364,458 |                      |   | 906                   |  |   | (3,954     | ) |  |   | 361,410
|Other securities                                 |  |                   | 13,935  |                      |   |                      |  |   |           |   |  |   | 13,935 
|                                                 |  |                   |         |                      |   |                       |  |   |            |   |  |   |        
|Total securities available-for-sale              |  | $                 | 422,664 |                      | $ | 2,146                 |  | $ | (4,023     | ) |  | $ | 420,787
|                                                 |  |                   |         |                      |   |                       |  |   |            |   |  |   |        



Available-for-sale
securities with unrealized losses at March 31, 2005 not recognized in income were as follows:



|                                                |  |                     |         |                     |   |            |  |                  |         |            |   |                  |  |   |         |  |   |      
|----------------------------------------------- |  | ------------------- | ------- | ------------------- | - | ---------- |  | ---------------- | ------- | ---------- | - | ---------------- |  | - | ------- |  | - | -----
|                                                |  | Less than 12 months |         | 12 months or longer |   | Total     
|                                                |  | Fair Value          |         | UnrealizedLosses    |   | Fair Value |  | UnrealizedLosses |         | Fair Value |   | UnrealizedLosses
|US Treasury securities                          |  | $                   | 973     |                     | $ | 33         |  | $                |        |            | $ |                 |  | $ | 973     |  | $ | 33   
|Obligations of state and political subdivisions |  |                     | 9,771   |                     |   | 122        |  |                  | 488     |            |   | 21               |  |   | 10,259  |  |   | 143  
|Mortgage-backed and related securities          |  |                     | 145,230 |                     |   | 2,172      |  |                  | 171,780 |            |   | 4,487            |  |   | 317,010 |  |   | 6,659
|                                                |  |                     |         |                     |   |            |  |                  |         |            |   |                  |  |   |         |  |   |      
|Total temporarily impaired securities           |  | $                   | 155,974 |                     | $ | 2,327      |  | $                | 172,268 |            | $ | 4,508            |  | $ | 328,242 |  | $ | 6,835
|                                                |  |                     |         |                     |   |            |  |                  |         |            |   |                  |  |   |         |  |   |      



Management believes
the unrealized losses on these securities are temporary in nature. Management also believes that the issuers have the ability to re-pay their obligations and the Company has the ability to hold these securities until a forecasted recovery in value
occurs. Mortgage-backed and related securities with unrealized losses not recognized in income of 12 months or longer include twenty-one agency issued collateralized mortgage obligations and ten mortgage pass-through securities. All of these
securities are currently paying principal and interest monthly and have final maturity dates ranging from June 2008 to February 2026. In total, the amount of the unrealized loss is approximately 2.6% of the carrying value and ranges from .2% to 5.4%
on an individual security basis.



6) LOANS



Impaired loans at March 31, 2005 and December 31, 2004 were as follows.



|                                                |  |               |       |                  |   |      
|----------------------------------------------- |  | ------------- | ----- | ---------------- | - | -----
|                                                |  | March 31,2005 |       | December 31,2004
|Loans with no allowance for loan loss allocated |  | $             | 5,798 |                  | $ | 6,871
|Loans with allowance for loan loss allocated    |  |               | 7,014 |                  |   | 6,043
|Amount of allowance allocated                   |  |               | 2,165 |                  |   | 2,221



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##### Table of Contents

At March 31, 2005 and December 31, 2004 the government guaranteed portions of government guaranteed
impaired loans were $6,738 and $7,294, respectively. These amounts were not included in the impaired loan balances in the table above.



Non-performing loans consisted of the following at March 31, 2005 and December 31, 2004:



|                                                  |  |               |        |                  |   |       
|------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                                  |  | March 31,2005 |        | December 31,2004
|Loans past due 90 days or more and still accruing |  | $             | 726    |                  | $ | 1,856 
|Non-accrual loans                                 |  |               | 29,423 |                  |   | 28,294



7) ALLOWANCE FOR LOAN LOSSES



An analysis of activity in the allowance for loan losses
for the three months ended March 31, 2005 and 2004 was as follows:



|                                           |  |      |        |   |      |   |        |  
|------------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | -
|                                           |  | 2005 |        |   | 2004 |  
|Balance at beginning of period             |  | $    | 26,356 |   |      | $ | 24,611 |  
|Provision charged to expense               |  |      | 1,295  |   |      |   | 1,000  |  
|Loans charged off                          |  |      | (2,558 | ) |      |   | (1,683 | )
|Recoveries of previously charged-off loans |  |      | 775    |   |      |   | 683    |  
|                                           |  |      |        |   |      |   |        |  
|Balance at end of period                   |  | $    | 25,868 |   |      | $ | 24,611 |  
|                                           |  |      |        |   |      |   |        |  



8) OTHER BORROWINGS



Federal Home Loan Bank (FHLB) advances and other borrowings were as
follows:



|                                          |  |                |         |             |                   |   |        |   |             |  |      |  
|----------------------------------------- |  | -------------- | ------- | ----------- | ----------------- | - | ------ | - | ----------- |  | ---- | -
|                                          |  | March 31, 2005 |         |             | December 31, 2004 |  
|                                          |  | Amount         |         | AverageRate |                   |   | Amount |   | AverageRate | 
|FHLB advances                             |  | $              | 198,864 |             | 4.56              | % |        | $ | 261,549     |  | 3.80 | %
|Term repurchase agreements                |  |                | 45,000  |             | 5.47              |   |        |   | 45,000      |  | 5.44 |  
|Line of credit with financial institution |  |                | 33,000  |             | 4.00              |   |        |   | 35,000      |  | 3.25 |  
|Capital leases                            |  |                | 339     |             | 6.75              |   |        |   | 369         |  | 6.75 |  
|Subordinated term notes                   |  |                | 135     |             | 4.92              |   |        |   | 160         |  | 4.71 |  
|                                          |  |                |         |             |                   |   |        |   |             |  |      |  
|                                          |  | $              | 277,338 |             |                   |   |        | $ | 342,078     |  |      |  
|                                          |  |                |         |             |                   |   |        |   |             |  |      |  



Pursuant to collateral
agreements with the FHLB, advances are secured by FHLB stock and qualifying first mortgage loans. At March 31, 2005, FHLB advances outstanding were comprised of the following:



|                    |  |              |   |  |        |        
|------------------- |  | ------------ | - |  | ------ | -------
|Maturity            |  | InterestRate |   |  | Amount
|One year or less    |  | 4.53         | % |  | $      | 52,170 
|One to two years    |  | 3.89         |   |  |        | 50,430 
|Two to three years  |  | 4.95         |   |  |        | 17,581 
|Three to four years |  | 5.27         |   |  |        | 43,000 
|Four to five years  |  |             |   |  |        |       
|Five years or more  |  | 4.49         |   |  |        | 35,683 
|                    |  |              |   |  |        |        
|Total               |  | 4.56         | % |  | $      | 198,864
|                    |  |              |   |  |        |        



FHLB advances must be
secured by eligible collateral as specified by the FHLB. Accordingly, the Company has a blanket pledge of its one-to-four family residential mortgages, multi-family, commercial real estate and home equity loans held in the loan portfolio as
collateral for the advances outstanding at March 31, 2005 with a required minimum ratio of collateral to advances of 135%. Also, the Company has an investment in FHLB stock of $36,572 at March 31, 2005 of which approximately $10,000 is pledged as
collateral for outstanding advances. FHLB advances comprise a combination of fixed and variable rate advances. Variable rate advances can be paid off, in part or in full, on any interest reset date without penalty. Fixed rate advances are generally
subject to early prepayment fees approximately equal to the present value of the lost cash flow to the FHLB.



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##### Table of Contents

The Company has a line of credit of $35,000 from a financial institution that is used for liquidity
purposes and to facilitate additional investment in subsidiaries. The line of credit is secured by common stock of Unizan Bank, National Association and matures in January 2006. The total outstanding balance at March 31, 2005 was $33,000. The
interest on each draw is variable and is priced off the Federal Funds Rate plus 1.00% per annum and is paid quarterly.



At March 31, 2005, 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 $48,095 at March 31, 2005. The repurchase agreements had a weighted average maturity of 3.2 years at March 31, 2005. Also, such repurchase agreements are callable at the option
of the counter-party. The securities are held at Salomon Brothers, Inc. and will be returned to the Company at maturity.



9) DIVIDEND RESTRICTIONS



Banking regulations require maintaining certain capital levels and may limit the amount of dividends paid by the Bank to the Company or by the Company to
its shareholders. Currently, the payment of any dividend by the Company requires the prior approval of its primary regulator based on an understanding between the Company and such primary regulator.



10) SEGMENT REPORTING



The Company manages and operates two major lines of businesses: community banking and investment and funds management.
Community banking includes lending and related services to businesses and consumers, mortgage banking, and deposit gathering. Investment and funds management includes trust and investment services, financial planning services and retail sales of
brokerage and insurance products. These business lines are identified by the entities through which the product or service is delivered.



The reported line of business results reflect the underlying core operating performance within the business units. Parent and Other includes activities
that are not directly attributed to the identified lines of businesses and is comprised of the parent company and its special purpose trust subsidiary. Substantially all of the Companys assets are part of the community banking line of
business. Selected segment information is included in the following tables:



|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       
|---------------------------------- |  | ---------------- | ------ | ----------------------------- | - | --------------- |  | - | ------ | - |  | - | ------
|Three months ended March 31, 2005: |  | CommunityBanking |        | Investmentand FundsManagement |   | Parentand Other |  |   | Total 
|Net interest income (expense)      |  | $                | 17,540 |                               | $ | 5               |  | $ | (772   | ) |  | $ | 16,773
|Provision for loan losses          |  |                  | 1,295  |                               |   |                |  |   |       |   |  |   | 1,295 
|Non-interest income                |  |                  | 4,742  |                               |   | 2,247           |  |   | 15     |   |  |   | 7,004 
|Non-interest expense               |  |                  | 14,015 |                               |   | 1,308           |  |   | 824    |   |  |   | 16,147
|Income tax expense (benefit)       |  |                  | 2,032  |                               |   | 322             |  |   | (552   | ) |  |   | 1,802 
|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       
|Net income (loss)                  |  | $                | 4,940  |                               | $ | 622             |  | $ | (1,029 | ) |  | $ | 4,533 
|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       



|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       
|---------------------------------- |  | ---------------- | ------ | ----------------------------- | - | --------------- |  | - | ------ | - |  | - | ------
|Three months ended March 31, 2004: |  | CommunityBanking |        | Investmentand FundsManagement |   | Parentand Other |  |   | Total 
|Net interest income (expense)      |  | $                | 19,477 |                               | $ | 4               |  | $ | (689   | ) |  | $ | 18,792
|Provision for loan losses          |  |                  | 1,000  |                               |   |                |  |   |       |   |  |   | 1,000 
|Non-interest income                |  |                  | 5,058  |                               |   | 1,956           |  |   |       |   |  |   | 7,014 
|Non-interest expense               |  |                  | 16,707 |                               |   | 1,460           |  |   | 3,247  |   |  |   | 21,414
|Income tax expense (benefit)       |  |                  | 2,348  |                               |   | 172             |  |   | (1,540 | ) |  |   | 980   
|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       
|Net income (loss)                  |  | $                | 4,480  |                               | $ | 328             |  | $ | (2,396 | ) |  | $ | 2,412 
|                                   |  |                  |        |                               |   |                 |  |   |        |   |  |   |       



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 as defined in 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 subsidiaries 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; pre-payments of loans and securities;
material unforeseen changes in the liquidity, results of operations, or financial position of the Companys customers; completion of the pending merger with Huntington, all of which are difficult to predict and many of which are beyond the
control of the Company.



Overview



The reported results of the Company primarily reflect the operations of the
Companys bank subsidiary, Unizan Bank, National Association. 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.



13



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##### Table of Contents

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 average 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.



Unizan Financial Corp.

Average Balance Sheet and Related Yields



|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|------------------------------------------------ |  | ---------------------------- | --------- | - | -------------- | - | -------- |  | ---- | -------------- |  | - | -------------- | - | -------- | - | ------ |  | ---- | -
|                                                 |  | Three Months Ended March 31, |          
|                                                 |  | 2005                         |           |   | 2004           |  
|(dollars in thousands)                           |  | AverageBalance               |           |   | Income/Expense |   | Rate (1) |  |      | AverageBalance |  |   | Income/Expense |   | Rate (1) |  
|Interest-earning assets                          |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |  
|Interest bearing deposits and federal funds sold |  | $                            | 14,071    |   |                | $ | 71       |  | 2.05 | %              |  | $ | 4,395          |   |          | $ | 8      |  | 0.73 | %
|Securities                                       |  |                              | 446,304   |   |                |   | 4,138    |  | 3.76 |                |  |   | 510,827        |   |          |   | 4,853  |  | 3.82 |  
|Total loans (2)                                  |  |                              | 1,830,693 |   |                |   | 26,902   |  | 5.96 |                |  |   | 1,971,090      |   |          |   | 27,687 |  | 5.65 |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Total interest-earning assets (3)                |  |                              | 2,291,068 |   |                |   | 31,111   |  | 5.51 |                |  |   | 2,486,312      |   |          |   | 32,548 |  | 5.27 |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Nonearning assets:                               |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |  
|Cash and due from banks                          |  |                              | 48,892    |   |                |   |          |  |      |                |  |   | 57,353         |   |          |   |        |  |      |  
|Other nonearning assets                          |  |                              | 205,060   |   |                |   |          |  |      |                |  |   | 209,843        |   |          |   |        |  |      |  
|Allowance for loan losses                        |  |                              | (26,155   | ) |                |   |          |  |      |                |  |   | (24,622        | ) |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Total assets                                     |  | $                            | 2,518,865 |   |                |   |          |  |      |                |  | $ | 2,728,886      |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Interest bearing liabilities:                    |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |  
|Demand deposits                                  |  | $                            | 208,896   |   |                | $ | 336      |  | 0.65 | %              |  | $ | 258,295        |   |          | $ | 369    |  | 0.57 | %
|Savings and money market deposits                |  |                              | 520,053   |   |                |   | 2,505    |  | 1.95 |                |  |   | 531,844        |   |          |   | 1,296  |  | 0.98 |  
|Time deposits                                    |  |                              | 870,996   |   |                |   | 7,079    |  | 3.30 |                |  |   | 955,864        |   |          |   | 7,485  |  | 3.15 |  
|Subordinated note                                |  |                              | 20,619    |   |                |   | 489      |  | 9.62 |                |  |   | 20,619         |   |          |   | 505    |  | 9.85 |  
|Other borrowings                                 |  |                              | 340,748   |   |                |   | 3,646    |  | 4.34 |                |  |   | 422,995        |   |          |   | 3,832  |  | 3.64 |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Total interest bearing liabilities               |  |                              | 1,961,312 |   |                |   | 14,055   |  | 2.91 |                |  |   | 2,189,617      |   |          |   | 13,487 |  | 2.48 |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Noninterest bearing liabilities:                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |  
|Demand deposits                                  |  |                              | 217,212   |   |                |   |          |  |      |                |  |   | 208,704        |   |          |   |        |  |      |  
|Other liabilities                                |  |                              | 25,357    |   |                |   |          |  |      |                |  |   | 24,437         |   |          |   |        |  |      |  
|Shareholders equity                             |  |                              | 314,984   |   |                |   |          |  |      |                |  |   | 306,128        |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Total liabilities and equity                     |  | $                            | 2,518,865 |   |                |   |          |  |      |                |  | $ | 2,728,886      |   |          |   |        |  |      |  
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Net interest income and interest rate spread (3) |  |                              |           |   |                | $ | 17,056   |  | 2.60 | %              |  |   |                |   |          | $ | 19,061 |  | 2.79 | %
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  
|Net interest margin (4)                          |  |                              |           |   |                |   |          |  | 3.02 | %              |  |   |                |   |          |   |        |  | 3.08 | %
|                                                 |  |                              |           |   |                |   |          |  |      |                |  |   |                |   |          |   |        |  |      |  

---

|(1) | Calculated on an annualized basis.
|--- | ----------------------------------

|(2) | Loan fees are included in interest income on loans.
|--- | ---------------------------------------------------

|(3) | Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%.
|--- | -------------------------------------------------------------------------------------------

|(4) | The net interest margin represents net interest income as a percentage of average interest-earning assets.
|--- | ----------------------------------------------------------------------------------------------------------



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Comparison of Operating Results For The Three Months Ended March 31, 2005 and 2004



Net Income. Net income for the first quarter of 2005 was $4,533, or
$0.20 per diluted share. This compares with net income of $2,412, or $0.11 per diluted share for the first quarter of 2004. During the first quarter of 2004, an expense of $3,638 pre-tax, or $2,365 after-tax, was recognized in relation to the
settlement of certain stock options for cash or with shares held for less than six months and expenses of $1,203 pre-tax, or $944 after-tax, were recognized for merger-related professional fees. Excluding the option expense and merger-related
expenses, net income for the first quarter of 2004 was $5,721, or $0.26 per diluted share. During the first quarter of 2005, net interest income decreased by 10.7%, non-interest income decreased by 0.1%, and non-interest expense decreased by 24.6%
as compared to the same period in 2004. The net interest margin decreased to 3.02% for the first quarter of 2005, compared to 3.08% for the same period in 2004. The decrease in the net interest margin was primarily due to the cost of
interest-bearing liabilities increasing faster than yields on interest-earning assets. The Companys return on average assets and return on average equity were 0.73% and 5.84%, respectively, in the first quarter of 2005, compared to 0.36% and
3.17%, respectively, for the first quarter of 2004.



Interest Income. Total interest income decreased 4.5% to $30,828 for the three months ended March 31, 2005, compared to $32,279 for the first quarter of 2004. During the first quarter of 2005, the yield on interest-earning assets
increased by 24 basis points from the same period in 2004. The Companys yield on average loans was 5.96% for the three months ended March 31, 2005 and 5.65% for the comparable year ago period. The increase in the yield on loans was primarily
impacted by increases in market interest rates throughout 2004 and so far in 2005.



Yields on the securities portfolio decreased from 3.82% during the first quarter of 2004 to 3.76% during the first quarter of 2005. The yield on securities was primarily impacted by the sale of higher yielding
corporate obligations in the second quarter of 2004 and the continued run-off of higher yielding mortgage-backed and related securities, partially attributed to pre-payments throughout 2004.



Interest Expense. Total interest expense increased 4.2% to $14,055 for
the three months ended March 31, 2005, compared to $13,487 for the three months ended March 31, 2004. The Companys cost of interest-bearing liabilities increased to 2.91% in the three months ended March 31, 2005 compared to 2.48% in the same
period of 2004. The increase in the cost of funds was primarily from higher market rates affecting the rates paid on all deposit products, particularly money market deposits, and the cost of short-term borrowings.



Provision for Loan Losses. The provision for loan losses was $1,295
for the three months ended March 31, 2005, compared to $1,000 in the first quarter of 2004. The provision is based on the Companys review of the adequacy of the allowance for loan losses which includes a review of general economic conditions
and uncertainties and charge-offs. The provision for loan losses was considered sufficient by management for maintaining an appropriate allowance for loan losses. Additional information regarding the allowance for loan losses and non-performing
assets is included in the section captioned Asset Quality.



Management analyzes the appropriateness of the allowance for loan losses regularly through reviews of historical loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated
collateral values, economic conditions, and other factors. The allowance for loan losses is a material estimate that is particularly susceptible to significant changes in the near term and is established through a provision for loan losses based on
managements evaluation of the risk in the Companys loan portfolio and the general economy. Loan losses are charged against the allowance when the uncollectibility of a loan balance is confirmed. Management believes that the allowance for
loan losses was appropriate at March 31, 2005.



Non-Interest
Income.Total non-interest income decreased by $10, to $7,004 for the three months ended March 31, 2005, compared to $7,014 in the three months ended March 31, 2004.



Trust, brokerage and insurance sales income increased by $294, or 15.1%, to $2,247 in the first quarter of 2005 from $1,953
in the first quarter of 2004. Brokerage and insurance sales revenue increased by $206 primarily due to more favorable market conditions and increased sales efforts.



Customer service fees, representing service charges on deposits and fees for other banking services, decreased by $265, or
14.4%, to $1,579 in the first quarter of 2005 from $1,844 in the first quarter of 2004. The decrease was mainly attributed to lower non sufficient funds fees due to trends in consumer behavior and lower service charges on business accounts as a
result of higher earnings credits associated with such accounts.



Gains on sales of loans totaled $1,187 for the first quarter of 2005 compared to $1,245 for the same period in 2004. During the first quarter of 2005, the Company sold $10,675 of the guaranteed portion of its SBA (Small Business
Association) and other government guaranteed loan originations in the secondary market compared to $7,746 during the first



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quarter of 2004, realizing gains of $1,157 in 2005 and $797 in 2004. Also, in the first quarter of 2005, the Company sold
$4,003 of residential loans originated for sale compared to $10,473 during the same period in 2004, realizing gains of $30 in 2005 compared to $189 in 2004. In addition, in the first quarter of 2004, the Company sold $7,082 of construction loans
that became eligible for permanent financing, realizing gains of $259. No similar sales occurred in the first quarter of 2005. As a result of increases in market rates throughout 2004 and during the first quarter of 2005, mortgage refinancing
activity has slowed as fewer prospective borrowers benefit from refinancing at current rates. As a result, fees associated with the mortgage-related business have declined.



The Company intends to continue to place emphasis on its small business lending activities. The nature of the political
climate in Washington D.C. has consistently subjected many existing government programs to much scrutiny and possible cutbacks. While the Company believes that any future cutbacks could negatively affect its activities in SBA lending programs as
well as any planned expansion of such activities, it has successfully managed through previous imposed changes with minimal impact on production levels.



Merchant service fees decreased $23 to $423 in the three months ended March 31, 2005 from $446 for the year ago quarter.



Income on bank owned life insurance (BOLI) decreased $104 to $569 in the
first quarter of 2005 from $673 for same period a year ago. The decline is attributed to lower policy earnings rates in 2005 as compared to 2004.



Other income increased by $217, or 27.7%, to $999 for the first quarter of 2005 from $782 in the first quarter of 2004. The increase in other operating
income was partially attributed to mortgage servicing income for the first quarter of 2004 being reduced by $123 for a temporary impairment charge associated with the value of the Companys mortgage servicing rights (MSRs) compared to $31
for the first quarter of 2005. The value of the MSR portfolio is analyzed quarterly by considering critical assumptions for pre-payment speeds, the targeted investor yield to a buyer of MSRs, and float on escrows. Market interest rates are an
external factor that can have a material influence on this valuation process, as interest rates influence pre-payment speeds and targeted investor yield. At March 31, 2005 the recorded book value of MSRs and aggregate estimated fair value was
$1,412 and $1,853, respectively. Future impairment could be realized if pre-payment speeds increase beyond the assumption rates. If rates continue to rise and pre-payment activity slows, the value of the servicing rights should be positively
impacted. Also within other income, check card and ATM interchange fee income increased by $98 due primarily to higher transaction volumes.



Non-Interest Expense.Total non-interest expense decreased $5,267 to $16,147 in the three months ended March 31, 2005, compared to $21,414 in the
three months ended March 31, 2004. Excluding the expense of $3,638 recognized in relation to the exercise of certain stock options and $1,203 of expense recognized for merger-related professional fees in the year ago quarter, total non-interest
expense decreased $426, or 2.6%.



Salaries, wages and benefits
decreased to $7,988 for the three months ended March 31, 2005 compared to $9,136 for the same period in 2004, excluding the expense of $3,638 recognized in 2004 in relation to the exercise of certain stock options. This decrease was mainly
attributed to staffing levels which have declined from 730 full time equivalent employees at March 31, 2004 to 619 at March 31, 2005.



Occupancy expense increased by $41 to $908 in the 2005 quarter from $867 in 2004. This increase was attributed to higher utilities costs.



Furniture and equipment expense decreased by $31 to $503 in the three months
ended March 31, 2005 from $534 in year ago quarter. This decrease was attributed to lower depreciation expense as many new equipment purchases have been delayed due to the pending merger.



Data processing expense decreased by $223 to $681 in the three months ended March 31, 2005 from $904 in year ago quarter.
This decrease was also attributed to lower depreciation and amortization expense as many new equipment and software purchases have been delayed due to the pending merger.



Taxes other than income taxes, which are primarily based on net worth levels, increased by $49 to $679 in the first quarter
of 2005 from $630 in the first quarter of 2004. This increase resulted primarily from higher capital levels within the Companys bank subsidiary.



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Other intangible amortization expense decreased to $650 in the first quarter of 2005 from $825 in the
same period a year ago. This decrease resulted from a decline in scheduled amortization rates.



Excluding merger-related professional fees of $1,203 in 2004, other non-interest expenses increased $1,061, to $4,738 during the first quarter of 2005 compared to $3,667 in the first quarter of 2004. The increase was
mainly due to a $989 increase in legal, accounting and other professional fees from $440 in the first quarter of 2004 to $1,429 in the first quarter of 2005. Higher expenses in the first quarter of 2005 were primarily attributed to activities
associated with implementing provisions of Section 404 of the Sarbanes Oxley Act of 2004 as well as filling staffing vacancies.



Provision for Income Taxes. The Companys provision for federal income taxes was $1,802, or 28.4% of pre-tax income, for the three months
ended March 31, 2005 compared to $980, or 28.9% of pretax income, for the same period in 2004. The effective tax rate differed from the federal statutory rate principally as a result of tax-exempt income from obligations of states and political
subdivisions and earnings on bank owned life insurance. Also, the first quarter of 2004 effective tax rate was impacted by the non-deductible nature of a portion of the merger-related professional fees.



Asset Quality



Non-performing Assets. To maintain the loan portfolios level of credit risk 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 appropriateness of the allowance for loan losses. The Company formally documents its
evaluation of the appropriateness of the allowance for loan losses on a quarterly basis and the evaluation is approved by its board of directors.



Failure to receive principal and interest payments when due on a loan results in efforts by the Company 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 in accordance with the contractual terms of the loan 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 $1,604 of such property at March 31, 2005 compared to $2,612 at December 31, 2004.



Non-performing loans totaled $30,149, or 1.65% of total loans, at March 31, 2005, compared to $30,150, or 1.61% of total loans, at December 31, 2004.
Non-performing assets totaled $31,753, or 1.74% of loans and other assets owned at March 31, 2005, compared to $32,762, or 1.75%, at December 31, 2004. Non-performing loans were mainly comprised of $8,931 of residential mortgage loans, $1,588 of
commercial loans, $6,477 of commercial real estate loans, $2,950 of aircraft loans and $8,690 of SBA and other government guaranteed loans, of which $6,738 was guaranteed by the government. Non-performing loans, excluding the $6,738 of
non-performing loans guaranteed by the government, totaled $23,411, or 1.28% of total loans, at March 31, 2005 compared to 1.22%, excluding $7,294 of non-performing loans guaranteed by the government, at December 31, 2004. Many of the SBA loans are
collateralized by real estate which must be liquidated prior to receiving the guaranteed principal portion of the loan balance from the SBA. Also impacting non-performing loan levels are delinquency and bankruptcy trends in general. Residential
delinquency trends are consistent with Ohio and national trends; bankruptcies have increased, and are a significant part of non-performing loans. While these factors have caused higher relative levels of delinquencies and non-performing assets,
there continues to be little translation into losses. Management continues to remain cautious as the economic uncertainty extends into certain areas of the Companys markets and record levels of bankruptcies continue. 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.



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The following is an analysis of the composition of non-performing assets and restructured loans:



|                                                             |  |               |        |   |                  |   |        |  
|------------------------------------------------------------ |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                                             |  | March 31,2005 |        |   | December 31,2004 |  
|Non-accrual                                                  |  | $             | 29,423 |   |                  | $ | 28,294 |  
|Accruing loans 90 days or more past due                      |  |               | 726    |   |                  |   | 1,856  |  
|                                                             |  |               |        |   |                  |   |        |  
|Total non-performing loans                                   |  |               | 30,149 |   |                  |   | 30,150 |  
|Other assets owned and other non-performing assets           |  |               | 1,604  |   |                  |   | 2,612  |  
|                                                             |  |               |        |   |                  |   |        |  
|Total non-performing assets                                  |  | $             | 31,753 |   |                  | $ | 32,762 |  
|                                                             |  |               |        |   |                  |   |        |  
|Restructured loans                                           |  | $             | 5,339  |   |                  | $ | 2,430  |  
|                                                             |  |               |        |   |                  |   |        |  
|Non-performing loans to total loans                          |  |               | 1.65   | % |                  |   | 1.61   | %
|Non-performing assets to total assets                        |  |               | 1.26   | % |                  |   | 1.27   | %
|Non-performing assets to total loans plus other assets owned |  |               | 1.74   | % |                  |   | 1.75   | %



Restructured loans at
March 31, 2005 consisted of two loans. One such loan, with a balance of $2,393 at March 31, 2005, was initially restructured in May 1999. This loan performed in accordance with the restructured terms until its maturity date in May 2004 at which time
the maturity date was extended to November 2005. Since that time, all required payments have been made in accordance with the extension agreement. The other restructured loan, with a balance of $2,946 at March 31, 2005, was modified in February 2005
to provide for a lower contractual interest rate and extension of the scheduled maturity date in return for the borrower / guarantors pledging additional collateral for the loan. Management does not anticipate any loss on this loan based on the
value of the underlying collateral. The restructured loans were not included in non-performing assets.



As of March 31, 2005, impaired loans were $12,812 compared with $12,914 at December 31, 2004. Impaired loans exclude $6,738 and $7,294 at March 31, 2005
and December 31, 2004, respectively, which represents the government guaranteed portion of government guaranteed impaired loans. Commercial, commercial real estate and aircraft loans are classified as impaired if full collection of principal and
interest in accordance with the terms of the loan documents is not probable. Impaired loans and non-performing loans have been considered in managements analysis of the appropriateness of the allowance for loan losses.



Allowance for Loan Losses. The Company maintains the allowance for
loan losses at a level considered appropriate for probable losses within the loan portfolio. The amount of the provision for loan losses charged to operating expense is the amount necessary, in the opinion of management, to maintain the balance in
the allowance for loan losses at an appropriate level. The allowance is assessed based on historical experience, changes in portfolio size and mix, the relative quality of the loan portfolio, current and anticipated loan growth and economic
conditions. Information about specific borrower situations, including their financial position and collateral values, are also important as well as assessments of current and future economic conditions, and other factors and estimates, which are
subject to change over time. Specific borrower situations are based on a continuous analysis of loans by internal credit rating. The historical experience assessment is based upon a loss migration analysis that assesses the amount of loss likely
based upon loan category and internal credit rating. The loss migration analysis is performed periodically and loss factors are updated regularly based upon actual experience.



The allowance for loan losses totaled $25,868, or 1.42% of total loans outstanding, at March 31, 2005 compared to $26,356,
or 1.41% of total loans outstanding, at December 31, 2004. Net charge-offs for the three months ended March 31, 2005 were $1,783, or 0.39% (annualized) of average loans outstanding, compared to net charge-offs of $1,000, or 0.20% (annualized) of
average loans outstanding, for the same period in 2004. Charge-offs were made in accordance with the Companys standard policy.



The allowance for loan losses as a percentage of non-performing loans (coverage ratio) was 85.8% at March 31, 2005, compared to 87.4% at
December 31, 2004. Although used as a general indicator, the coverage ratio is not a primary factor in the determination of the appropriateness of the allowance by management, particularly given the extent to which the Companys non-performing
loans consist of single-family residential mortgage loans and that $6,738 of non-performing loans are guaranteed by the government. The allowance for loan losses as a percentage of non-performing loans, excluding the $6,738 of non-performing loans
that are guaranteed by the government, was 110.5% at March 31, 2005 compared to 115.3%, excluding the $7,294 of non-performing loans that are guaranteed by the government, at December 31, 2004.



As of March 31, 2005, the aircraft portfolio of $93,527 represented 5.1% of
the total loan portfolio compared to $106,845, or 5.7% of the total loan portfolio, at December 31, 2004. The aircraft portfolio consisted of $64,644 of non-jet aircraft and values of non-jet aircrafts have historically been more stable than jet
aircrafts. The remainder of the portfolio



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consists of loans secured by jets. These loans are predominately to businesses that use their planes as a business tool
and not actually within the aircraft industry, i.e. charters or flight schools, thus reducing the Banks exposure to the aircraft industry as a whole. The Company no longer originates aircraft loans and closed its aircraft lending centers
during 2004.



Comparison of March 31, 2005 and December 31, 2004 Financial
Condition



Total assets were $2.52 billion at March 31,
2005, a decrease of $54,893 from December 31, 2004.



Total
securities decreased by $2,414, or 0.5%, to $456,322 from December 31, 2004. Substantially all principal payments received on the securities portfolio during the first quarter of 2005 were re-invested in mortgage-backed securities. 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 March 31, 2005, 99.6% of the total securities portfolio, excluding FHLB
stock, was classified as available-for-sale, while those securities that the Company intends to hold to maturity represented the remaining 0.4%. Management periodically reviews the securities portfolio for possible impairment. Management believes
that the unrealized losses at March 31, 2005 on securities available for sale are temporary in nature and due primarily to changes in interest rates and not a result of credit related issues. Management believes that the Company has the ability to
hold securities with unrealized losses to maturity or until such time as the unrealized losses reverse.



Total loans, excluding loans held for sale, decreased $52,001 to $1.82 billion at March 31, 2005 from $1.87 billion at December 31, 2004. This decrease
was primarily attributed to the expected repayment of a single commercial loan with an outstanding balance of $26,968, a $13,318 decline in aircraft loans due to the Company no longer originating this type of loan and a decrease of $6,155 in
indirect consumer loans.



Total deposits decreased $15,419, or
0.8%, to $1.83 billion at March 31, 2005 from $1.84 billion at December 31, 2004. Non-interest bearing demand deposits decreased by $21,132, primarily attributed to business accounts, and interest bearing demand deposits decreased by $16,598. These
decreases were partially offset by a $21,017 increase in time deposits, attributed to increases in brokered deposits, and a $3,862 increase in money market deposits. Management maintains an overall strategy to raise lower cost core deposits as
funding sources with less emphasis on retaining rate sensitive balances.



Short-term borrowings, which include sweep repurchase agreements and federal funds purchased, increased by $24,158 to $55,834 at March 31, 2005, compared to $31,676 at December 31, 2004. Other borrowings decreased by
$64,740 to $277,338 at March 31, 2005 compared to $342,078 at December 31, 2004. The decline in other borrowings resulted primarily from a decrease in overnight borrowings of $32,325 and the scheduled repayment of a $30,000 FHLB advance.



Critical Accounting Policies



The Company follows financial accounting and reporting policies that are in
accordance with generally accepted accounting principles in the United States of America. These policies are presented in Note 1 to the consolidated audited financial statements in Unizan Financial Corp.s annual report on Form 10-K, as
amended, for the year ended December 31, 2004. Some of these accounting policies, as discussed below, are considered to be critical accounting policies. Critical accounting policies are those policies that require managements most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company has identified two accounting policies that are critical accounting policies and an understanding
of these policies is necessary to understand the financial statements. These policies relate to determining the appropriateness of the allowance for loan losses and the valuation of the MSR. Additional information regarding these policies is
included in the sections captioned Provision for Loan Losses and Non-Interest Income, respectively.



Management believes that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given
the factual circumstances at the time.



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, 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.



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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, Federal Reserve Bank primary credit 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. As of March 31, 2005, cash, due from banks, federal funds sold and interest bearing deposits with banks totaled $58,496 compared with $59,196 at
December 31, 2004. The securities portfolio serves as an additional source of liquidity for the Company. Securities with a market value of $418,091 were classified as available-for-sale as of March 31, 2005, representing 99.6% 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. Securities with a market value of $290,569 at March 31, 2005 were pledged to secure
public funds and other obligations.



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.



Shareholders equity at March 31, 2005 was $312,870, compared to
shareholders equity at December 31, 2004 of $311,925, an increase of $945. This increase was primarily the result of the retention of earnings after payment of dividends, offset in part by increases in unrealized losses on available-for-sale
securities.



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 March 31, 2005, the Company had a total risk-based capital ratio of 13.5%, of which 12.3% consisted of Tier 1 capital. The leverage ratio for the Company at March 31, 2005, was 9.5%.



Cash dividends declared and paid to shareholders of the Company totaled $2,982, or $0.135 per share, during the first three
months of 2005. This compares to dividends of $2,935, or $0.135 per share, for the same period in 2004.



At March 31, 2005, the Company (parent only) had $12,843 of cash and cash equivalents. The Companys ability to obtain additional funds for the
payment of dividends and for other cash requirements is largely dependent on the amount of dividends which may be declared by the Bank and other subsidiaries. However, the Federal Reserve Board expects the Company to serve as a source of strength to
its subsidiary Bank, which may require the Company to retain capital for further investment in its subsidiary bank, rather than pay dividends to shareholders. Payment of dividends by the Bank may be restricted at any time at the discretion of its
applicable regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice. These provisions could have the effect of limiting the Companys ability to pay dividends on its common shares. Presently,
based on an understanding between the Company and its primary regulator, any dividend payment or repurchase of common stock by the Company requires the prior approval of such primary regulator.



In addition, bank regulators limit the amount of dividends a subsidiary bank
can declare in any calendar year without obtaining prior approval. Banks must have the approval of its regulatory authority if a dividend in any year would cause the total dividends for that year to exceed the sum of the Banks current
years net profits (or net income, less dividends declared during the period based on regulatory accounting principles) and the retained net profits for the preceding two years, less required transfers to surplus. As of March 31,
2005, $9,752 was available to pay as dividends to the holding company. Dividends in excess of this amount require regulatory approval prior to being paid.



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 Company 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 Company 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, pre-payment 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. Prior to March 31, 2005, the Company used
an estimated average decay rate to approximate deposit behavior over the simulation time horizon. Commencing with the March 31, 2005 analyses, decay rates have been developed based on a statistical analysis of historical deposit behavior.



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, and the Company makes assumptions regarding the magnitude of changes that are applied to
various deposit products. The residential mortgage pre-payment assumptions are based on industry medians and could differ from the Companys actual results due to non-financial pre-payment 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 Company might implement
in response to shifts in interest rates.



At March 31, 2005,
assuming an immediate, parallel 100 basis point shift in market yields, the Companys net interest income for the next twelve months was calculated to decrease by 2.84% if rates decline and to increase by 2.14% if rates increase. At December
31, 2004, assuming an immediate, parallel 100 basis point shift in market yields, the Companys net interest income for the next twelve months was calculated to decrease by 1.78% if rates declined and to increase by 1.21% if rates increased.
Since interest rates on deposit products are very low, the Company 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 Companys 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.



Interest rate risk can be managed by using a variety of techniques, including but not limited to, 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 Company can also use derivative financial
instruments such as interest rate swaps, caps, and floors to manage the potential impact of adverse changes in interest rates.



The Company has interest rate swaps on which it pays fixed rates and receives variable rates that were executed to convert a variable rate borrowing to a
fixed rate to reduce the risk of increased interest expense in a rising rate environment. Such swaps at March 31, 2005, which had a total notional amount of $15,000, were recorded at a fair value of ($1,120) with changes recognized in other
comprehensive income. For the three months ended March 31, 2005, $273 was recognized in interest expense related to these interest rate swaps compared with $415 for the same period in 2004.



Also, the Company has a program that provides long-term fixed rate loans to
commercial borrowers without the Company incurring interest rate risk by executing simultaneous interest rate swaps. Each swap under this program has been structured to have the same amortization and rate reset schedule as its underlying loan, which
results in an effective fair value



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hedge. At March 31, 2005, the notional value of swaps in this program totaled $30,408 at a fair value of $559. Changes in the market value of these swaps and
the underlying loans are included in earnings. For the three months ended March 31, 2005, $141 was recognized as a reduction in interest income related to these interest rate swaps compared with $99 for the same period in 2004.



The Company also has a notional balance of $3,000 of options on the S & P
500 which offsets the equivalent risk of certificate of deposit liabilities that have a return contractually linked to the index. The options and the embedded derivative had a fair value of $153 at March 31, 2005.



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##### Table of Contents

Item 4:

CONTROLS AND PROCEDURES



Management is responsible for establishing and maintaining effective disclosure controls and procedures as defined under
Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of the end of the period covered by this quarterly report, an evaluation of the effectiveness and design and operation of the Companys disclosure controls and procedures
was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Based on this evaluation, management concluded the Companys disclosure controls and procedures as
of March 31, 2005, were effective in ensuring material information required to be disclosed in this Quarterly Report on Form 10-Q was recorded, processed, summarized, and reported on a timely basis. Additionally, there were no changes in the
Companys internal control over financial reporting that occurred during the quarter ended March 31, 2005 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial
reporting.



As reported in the Companys annual report on
Form 10-K, as amended, for the year ended December 31, 2004, management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2004 based on the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control  Integrated Framework and determined that the Company did not maintain effective control over financial reporting due to material weaknesses identified in general
computer controls. A variety of procedural improvements were implemented throughout the fourth quarter of 2004; however, because some were not fully implemented until December 17, 2004, this did not allow for adequate testing time to determine such
weaknesses were remediated and the controls were effective at December 31, 2004. Testing of these improvements was performed during the first quarter of 2005 and the weaknesses were determined to be remediated and the controls effective at March 30,
2005.



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PART II - OTHER INFORMATION



Item 1. Legal Proceedings



None



Item 2. Changes in Securities and Use of Proceeds



|                                     |  |                               |  |                           |  |                                                                 |  |                                                             
|------------------------------------ |  | ----------------------------- |  | ------------------------- |  | --------------------------------------------------------------- |  | ------------------------------------------------------------
|                                     |  | TotalNumber ofSharesPurchased |  | AveragePricePaid perShare |  | Total Number ofSharesPurchased asPart of PubliclyAnnounced Plan |  | MaximumNumber ofShares that MayYet BePurchasedUnder the Plan
|January 1, 2005  January 31, 2005   |  | 3,700                         |  | 25.48                     |  |                                                                |  |                                                             
|February 1, 2005  February 28, 2005 |  | 2,379                         |  | 24.05                     |  |                                                                |  |                                                             
|March 1, 2005  March 31, 2005       |  | 1,444                         |  | 25.21                     |  |                                                                |  |                                                             
|                                     |  |                               |  |                           |  |                                                                 |  |                                                             
|Total                                |  | 7,523                         |  | 24.98                     |  |                                                                |  |                                                             
|                                     |  |                               |  |                           |  |                                                                 |  |                                                             



The above shares were
purchased from shareholders selling less than 500 shares and participate in the Companys Dividend Reinvestment Plan. In addition to the above share purchases, a total of 19,331 of treasury shares were issued in connection with stock option
activity and 7,561 of treasury shares were issued in connection with the Companys Dividend Reinvestment and Stock Purchase Plan during the first quarter of 2005.



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 2(a)  Agreement and Plan of Merger by and between Unizan Financial Corp. and Huntington Bancshares Incorporated dated January 27, 2004, is incorporated by reference to Form 10-K for the year ended
December 31, 2003, Exhibit 2(a).



Exhibit 2(b) 
Amendment No. 1 to the Agreement and Plan of Merger by and between Unizan Financial Corp. and Huntington Bancshares Incorporated, dated November 12, 2004, is incorporated by reference to Report on Form 8-K dated November 15, 2004.



Exhibit 3(a)  Articles of Incorporation, as amended is incorporated
by reference to Appendix A to UNB Corp.s Form S-4 dated October 15, 2001.



Exhibit 3(b)  Code of Regulations, is incorporated by reference to Exhibit (4)B to UNB Corp.s registration statement on Form S-3 (No. 33-27471).



Exhibit 10.2  Indenture of the Company relating to the Junior
Subordinated Debentures is incorporated by reference to Exhibit 4.1 to the Companys Registration Statement on Form S-4, Registration Statement (No. 333-30570).



Exhibit 10.3  Amended and Restated Trust Agreement of BFOH Capital Trust I is incorporated by reference to the
Companys Registration Statement of Form S-4, Registration Statement (No. 333-30570).



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Exhibit 10.e  UNB Corp. 1997 Stock Option Plan, filed on February 28, 1998, is incorporated herein
by reference to Form Definitive 14-A, dated April 15, 1997, Appendix A, as amended by Form S-8 filed on July 11, 2003.



Exhibit 10.y  Split Dollar Agreement for Salary Continuation Agreement Roger L. Mann, James J. Pennetti and Scott E. Dodds, dated May 1, 2001, is
incorporated herein by reference to Form 10-Q for quarter ended September 30, 2001, Exhibit 10.y.



Exhibit 10.z  Key Man Split Dollar Agreement for Roger L. Mann, dated July 18, 2001, is incorporated herein by reference to Form 10-Q for quarter
ended September 30, 2001, Exhibit 10.z.



Exhibit 10.aa 
Group Term Carve Out Plan, dated June 19, 2003, is incorporated by reference to Form 10-K for the year ended December 31, 2003, Exhibit 10.aa.



Exhibit 10.ab  Unizan Financial Corp. Severance Agreement for Roger L. Mann entered into as of August 1, 2002, is incorporated herein by reference
to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.ab.



Exhibit 10.ac  Unizan Bank, National Association Amended Salary Continuation Agreement for Roger L. Mann entered into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit
10.ac.



Exhibit 10.af  Unizan Financial Corp. Severance
Agreement for Scott E. Dodds entered into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.af.



Exhibit 10.ag  Unizan Bank, National Association Amended Salary Continuation Agreement for Scott E. Dodds entered
into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.ag.



Exhibit 10.ah  Unizan Financial Corp. Severance Agreement for James H. Nicholson entered into as of August 1, 2002, is incorporated herein by
reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.ah.



Exhibit 10.ai  Unizan Financial Corp. Severance Agreement for Edward N. Cohn entered into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit
10.ai.



Exhibit 10.aj  Unizan Financial Corp. Severance
Agreement for Robert J. Blackburn entered into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.aj.



Exhibit 10.ak  Unizan Financial Corp. Severance Agreement for James B. Baemel entered into as of August 1, 2002, is
incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.ak.



Exhibit 10.al  Unizan Financial Corp. Severance Agreement for Gary L. McGlaughlin entered into as of August 1, 2002, is incorporated herein by
reference to Form 10-Q for quarter ended September 30, 2002, Exhibit 10.al.



Exhibit 10.am  Unizan Financial Corp. Severance Agreement for Thomas J. Selock entered into as of August 1, 2002, is incorporated herein by reference to Form 10-Q for quarter ended September 30, 2002, Exhibit
10.am.



Exhibit 10.an  Consulting and Noncompetition
Agreement for James J. Pennetti entered into as of December 1, 2003, is incorporated by reference to Form 10-K for the year ended December 31, 2003, Exhibit 10.an.



Exhibit 10.ao  Unizan Financial Corp. Severance Agreement for Kim M. Taylor entered into as of February 15, 2005, is
incorporated by reference to Report on Form 8-K dated February 16, 2005.



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Exhibit 31.1  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Roger L.
Mann, President and Chief Executive Officer



Exhibit 31.2
 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Kim M. Taylor, Chief Financial Officer



Exhibit 32.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Roger L.
Mann, President and Chief Executive Officer



Exhibit 32.2
 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Kim M. Taylor, Chief Financial Officer



(b) Reports on Form 8-K filed during the quarter ended March 31, 2005:



Report on Form 8-K dated January 24, 2005 announcing that Unizan Financial
Corp. intends to record an other-than-temporary impairment charge in the quarter ending December 31, 2004 related to perpetual preferred stock issued by FNMA and FHLMC.



Report on Form 8-K dated February 16, 2005 announcing that Unizan Financial Corp. had entered into a severance agreement
with Kim M. Taylor, Chief Financial Officer of Unizan Bank, National Association.



Report on Form 8-K dated February 18, 2005 reporting earnings for the quarter and year ended December 31, 2004.



Report on Form 8-K dated March 11, 2005 announcing the declaration of a quarterly cash dividend of $0.135 per common share.



Report on Form 8-K dated March 23, 2005 announcing the retirement of Louis
V. Bockius III from the Companys Board of Directors in accordance with its code of regulations.



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 May 5, 2005 |  | /s/ ROGER L. MANN                    
|                 |  | Roger L. Mann                        
|                 |  | President and Chief Executive Officer
|                 | 
|Date May 5, 2005 |  | /s/ KIM M. TAYLOR                    
|                 |  | Kim M. Taylor                        
|                 |  | Chief Financial Officer              



26