TABLE OF CONTENTS




|                                       |                                                                                                |  |  |  |  |  |  | 
|-------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I  Financial Information        
|                                       | Item 1  Financial Statements                                                                 
|                                       | Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations.
|                                       | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            
|PART II  OTHER INFORMATION           
|                                       | Item 1  Legal Proceedings                                                                    
|                                       | Item 2  Changes in Securities and Use of Proceeds                                            
|                                       | Item 3  Defaults Upon Senior Securities                                                      
|                                       | Item 4  Submission of Matters to a Vote of Security Holders                                  
|                                       | Item 5  Other Information                                                                    
|                                       | Item 6  Exhibits and Reports on Form 8-K                                                     
|                                       | SIGNATURES                                                                                    
|EXHIBIT 10.R INDEMNIFICATION AGREEMENT
|EXHIBIT 10.S SEVERANCE AGREEMENT      



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##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]      
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          
  ACT OF 1934

For the quarterly period
ended  June 30, 2001

Commission file number 0-13270

|                                                      
|------------------------------------------------------
|UNB CORP                                              
|                                                      
|(Exact name of Registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Ohio                                                           |  | 34-1442295                             
|                                                               |  |                                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification Number)

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

Registrants telephone number, including area
code        (330) 454-5821

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 report), and (2) has been subject to such
filing requirements for the past 90 days.

Yes
  X
    No

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

|                                 |  |                                                      
|-------------------------------- |  | -----------------------------------------------------
|Common Stock, $1.00 Stated Value |  | Outstanding at July 31, 2001
10,476,860 Common Shares





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##### Table of Contents



UNB CORP.

FORM 10-Q

QUARTER ENDED June 30, 2001




Part I  Financial Information




Item 1  Financial Statements



| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Interim financial information required by Rule 10-01 of Regulation S-X
(17 CFR Part 210) is included in this Form 10Q as referenced below:

|                            |                                                                                       |  |           |       | 
|--------------------------- | ------------------------------------------------------------------------------------- |  | --------- | ----- | 
|                            |                                                                                       |  | Page     
|                            |                                                                                       |  | Number(s)
|                            |                                                                                       |  |          
|                           
|                            | Consolidated Balance Sheets                                                           |  |           | 1     | 
|                           
|                            | Consolidated Statements of Income                                                     |  |           | 2     | 
|                           
|                            | Consolidated Statements of Comprehensive Income                                       |  |           | 3     | 
|                           
|                            | Condensed Consolidated Statements of Changes in
Shareholders Equity                  |  |           | 4     | 
|                           
|                            | Consolidated Statements of Cash Flows                                                 |  |           | 5     | 
|                           
|                            | Notes to the Consolidated Financial Statements                                        |  |           | 6-12  | 
|                           
|Item 2                     | Managements Discussion and
Analysis of Financial Condition and Results of Operations |  |           | 13-20 | 
|                           
|                            | Consolidated Average Balance Sheets                                                   |  |           | 21    | 
|                           
|Item 3                     | Quantitative and Qualitative Disclosures About Market Risk                            |  |           | 22-23 | 
|                           
|Part II  Other Information
|                           
|Item 1                     | Legal Proceedings                                                                     |  |           | 24    | 
|                           
|Item 2                     | Changes in Securities                                                                 |  |           | 24    | 
|                           
|Item 3                     | Defaults Upon Senior Securities                                                       |  |           | 24    | 
|                           
|Item 4                     | Submission of Matters to a Vote of Security Holders                                   |  |           | 24    | 
|                           
|Item 5                     | Other Information                                                                     |  |           | 24    | 
|                           
|Item 6                     | Exhibits and Reports on Form 8-K                                                      |  |           | 25    | 
|                           
|Signatures                  |                                                                                       |  | 25        |      





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##### Table of Contents



U N B C O R P.
CONSOLIDATED BALANCE SHEETS

|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |        |         |         |           | 
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------------ | -------------- | ------------------------------------------ | ------- | ------- | --------- | ---- |  | - | ------- | ------ | ------- | ------- | --------- | 
|(In thousands except per share data)                                                                            |                                    | June 30,                       |                | December 31,                              
|                                                                                                                |                                    | 2001                           |                |                                            |         |         |           | 2000
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|ASSETS                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash and cash equivalents                                                                                       |                                    | $                              | 33,870         |                                            |         |         |           |      |  | $ | 32,155  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Federal funds sold                                                                                              |                                    |                                | 0              |                                            |         |         |           |      |  |   | 0       |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Interest bearing deposits with banks                                                                            |                                    |                                | 455            |                                            |         |         |           |      |  |   | 0       |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Securities, net (Fair value:                                                                                   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | $31,465 and $52,179, respectively) |                                |                | 31,442                                     |         |         |           |      |  |   |         | 52,170 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Mortgage-backed securities (Fair value:                                                                        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | $92,108 and $78,728, respectively) |                                |                | 92,098                                     |         |         |           |      |  |   |         | 78,721 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans originated and held for sale                                                                              |                                    |                                | 2,489          |                                            |         |         |           |      |  |   | 3,433   |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans:                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Total loans                    |                |                                            | 882,411 |         |           |      |  |   |         |        | 872,015 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Less allowance for loan losses |                |                                            | (12,835 | )       |           |      |  |   |         |        | (12,760 | )      
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      | 
|                                                                                                                |                                    |                                | Net loans      |                                            |         | 869,576 |           |      |  |   |         |        |         | 859,255 |          
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Premises and equipment, net                                                                                     |                                    |                                | 11,098         |                                            |         |         |           |      |  |   | 11,026  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Intangible assets                                                                                               |                                    |                                | 2,309          |                                            |         |         |           |      |  |   | 2,432   |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued interest receivable and other assets                                                                    |                                    |                                | 35,358         |                                            |         |         |           |      |  |   | 14,755  |       
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|                                                                                                                |                                    |                                |                | Total Assets                               |         | $       | 1,078,695 |      |  |   |         |        |         | $       | 1,053,947 | 
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|LIABILITIES                                                                                                    
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Deposits:                                                                                                      
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Noninterest bearing deposits   |                | $                                          | 104,256 |         |           |      |  |   |         | $      | 108,351 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Interest bearing deposits      |                |                                            | 702,635 |         |           |      |  |   |         |        | 719,290 |        
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|                                                                                                                |                                    |                                | Total deposits |                                            |         | 806,891 |           |      |  |   |         |        |         | 827,641 |          
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Short-term borrowings                                                                                           |                                    |                                | 72,299         |                                            |         |         |           |      |  |   | 81,979  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Other borrowings                                                                                                |                                    |                                | 111,398        |                                            |         |         |           |      |  |   | 61,188  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued taxes, expenses and other liabilities                                                                   |                                    |                                | 6,842          |                                            |         |         |           |      |  |   | 7,211   |       
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|                                                                                                                |                                    |                                |                | Total Liabilities                          |         |         | 997,430   |      |  |   |         |        |         |         | 978,019   | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|SHAREHOLDERS EQUITY                                                                                           
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Common stock ($1.00 stated value, 50,000,000 shares authorized;
11,646,258 and 11,646,274 issued, respectively) |                                    |                                | 11,646         |                                            |         |         |           |      |  |   | 11,646  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Paid-in capital                                                                                                 |                                    |                                | 28,989         |                                            |         |         |           |      |  |   | 28,949  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Retained earnings                                                                                               |                                    |                                | 61,622         |                                            |         |         |           |      |  |   | 56,233  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Treasury stock, 1,169,313 and 1,209,382 shares at cost                                                          |                                    |                                | (21,543        | )                                          |         |         |           |      |  |   | (22,004 | )     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accumulated other comprehensive income                                                                          |                                    |                                | 551            |                                            |         |         |           |      |  |   | 1,104   |       
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|                                                                                                                |                                    |                                |                | Total Shareholders Equity                 |         |         | 81,265    |      |  |   |         |        |         |         | 75,928    | 
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       
|                                                                                                                |                                    |                                |                | Total Liabilities and Shareholders Equity |         | $       | 1,078,695 |      |  |   |         |        |         | $       | 1,053,947 | 
|                                                                                                                |                                    |                                |                |                                            |         |         |           |      |  |   |         |       

See Notes to the Consolidated Financial Statements

1



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##### Table of Contents



U N B C O R P.
CONSOLIDATED STATEMENTS OF INCOME

|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |        | 
|--------------------------------------------------- | ------------------------------------------------------------------ | -------------------- | ---------------------- |  |  | ------------------ | ------ | ----- | ------ | ------ |  | ---------------- |  | - | ----- | ----- | ------ | ------ |  |  | ---- | - | ------ | ------ | ------ | ------ | ---- |  |  | - | ------ | ------ | ------ | ------ | 
|(In thousands except per share data)                |                                                                    |                      |                        |  |  | Three Months Ended |        |       |        |        |  | Six Months Ended
|                                                    |                                                                    |                      |                        |  |  | June 30,           |        |       |        |        |  | June 30,        
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |      
|                                                    |                                                                    |                      |                        |  |  |                    |        |       | 2001   |        |  |                  |  |   | 2000  |       |        |        |  |  | 2001 |   |        |        |        |        | 2000
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |     
|Interest income:                                   
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and fees on loans:                                       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                    | Taxable              |                        |  |  |                    |        | $     | 18,538 |        |  |                  |  |   |       | $     | 17,619 |        |  |  |      |   |        | $      | 37,269 |        |      |  |  |   |        | $      | 34,315 |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                    | Tax exempt           |                        |  |  |                    |        |       | 58     |        |  |                  |  |   |       |       | 41     |        |  |  |      |   |        |        | 118    |        |      |  |  |   |        |        | 71     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and dividends on securities
& mortgage-backed securities:
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                    | Taxable              |                        |  |  |                    |        |       | 1,846  |        |  |                  |  |   |       |       | 1,930  |        |  |  |      |   |        |        | 3,711  |        |      |  |  |   |        |        | 3,923  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                    | Tax exempt           |                        |  |  |                    |        |       | 39     |        |  |                  |  |   |       |       | 30     |        |  |  |      |   |        |        | 87     |        |      |  |  |   |        |        | 51     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on bank deposits and federal funds sold                   |                      |                        |  |  |                    |        | 55    |        |        |  |                  |  |   |       | 197   |        |        |  |  |      |   |        | 111    |        |        |      |  |  |   |        | 368    |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                    |                                                                    |                      | Total interest income  |  |  |                    |        |       |        | 20,536 |  |                  |  |   |       |       |        | 19,817 |  |  |      |   |        |        |        | 41,296 |      |  |  |   |        |        |        | 38,728 | 
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Interest expense:                                  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on deposits                                               |                      |                        |  |  |                    |        | 7,893 |        |        |  |                  |  |   |       | 8,652 |        |        |  |  |      |   |        | 16,699 |        |        |      |  |  |   |        | 16,660 |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on short-term borrowings                                  |                      |                        |  |  |                    |        | 648   |        |        |  |                  |  |   |       | 920   |        |        |  |  |      |   |        | 1,500  |        |        |      |  |  |   |        | 1,792  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on other borrowings                                       |                      |                        |  |  |                    |        | 1,410 |        |        |  |                  |  |   |       | 801   |        |        |  |  |      |   |        | 2,441  |        |        |      |  |  |   |        | 1,589  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                    |                                                                    |                      | Total interest expense |  |  |                    |        |       |        | 9,951  |  |                  |  |   |       |       |        | 10,373 |  |  |      |   |        |        |        | 20,640 |      |  |  |   |        |        |        | 20,041 | 
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Net interest income                                 |                                                                    |                      |                        |  |  |                    | 10,585 |       |        |        |  |                  |  |   | 9,444 |       |        |        |  |  |      |   | 20,656 |        |        |        |      |  |  |   | 18,687 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for loan losses                           |                                                                    |                      |                        |  |  |                    | 630    |       |        |        |  |                  |  |   | 255   |       |        |        |  |  |      |   | 973    |        |        |        |      |  |  |   | 370    |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Net interest income after provision for loan losses |                                                                    |                      |                        |  |  |                    | 9,955  |       |        |        |  |                  |  |   | 9,189 |       |        |        |  |  |      |   | 19,683 |        |        |        |      |  |  |   | 18,317 |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                   
|                                                   
|                                                   
|                                                   
|Other income:                                      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Service charges on deposits                                        |                      |                        |  |  |                    |        | 769   |        |        |  |                  |  |   |       | 674   |        |        |  |  |      |   |        | 1,474  |        |        |      |  |  |   |        | 1,337  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Trust Department income                                            |                      |                        |  |  |                    |        | 1,436 |        |        |  |                  |  |   |       | 1,462 |        |        |  |  |      |   |        | 2,685  |        |        |      |  |  |   |        | 2,787  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Gains on loans originated for resale and sold                      |                      |                        |  |  |                    |        | 273   |        |        |  |                  |  |   |       | 61    |        |        |  |  |      |   |        | 498    |        |        |      |  |  |   |        | 83     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Securities gains, net                                              |                      |                        |  |  |                    |        | 4     |        |        |  |                  |  |   |       | 334   |        |        |  |  |      |   |        | 1,321  |        |        |      |  |  |   |        | 1,008  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating income                                             |                      |                        |  |  |                    |        | 980   |        |        |  |                  |  |   |       | 936   |        |        |  |  |      |   |        | 1,925  |        |        |      |  |  |   |        | 1,682  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                    |                                                                    | Total other income   |                        |  |  |                    |        |       | 3,462  |        |  |                  |  |   |       |       | 3,467  |        |  |  |      |   |        |        | 7,903  |        |      |  |  |   |        |        | 6,897  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Other expenses:                                    
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Salary, wages and benefits                                         |                      |                        |  |  |                    |        | 4,085 |        |        |  |                  |  |   |       | 3,289 |        |        |  |  |      |   |        | 7,781  |        |        |      |  |  |   |        | 6,608  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Occupancy expense                                                  |                      |                        |  |  |                    |        | 456   |        |        |  |                  |  |   |       | 438   |        |        |  |  |      |   |        | 911    |        |        |      |  |  |   |        | 850    |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Equipment expense                                                  |                      |                        |  |  |                    |        | 966   |        |        |  |                  |  |   |       | 939   |        |        |  |  |      |   |        | 1,960  |        |        |      |  |  |   |        | 1,940  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Derivative instruments and hedging activity expense                |                      |                        |  |  |                    |        | (17   | )      |        |  |                  |  |   |       | 0     |        |        |  |  |      |   |        | 204    |        |        |      |  |  |   |        | 0      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating expense                                            |                      |                        |  |  |                    |        | 2,340 |        |        |  |                  |  |   |       | 2,296 |        |        |  |  |      |   |        | 4,573  |        |        |      |  |  |   |        | 4,490  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                    |                                                                    | Total other expenses |                        |  |  |                    |        |       | 7,830  |        |  |                  |  |   |       |       | 6,962  |        |  |  |      |   |        |        | 15,429 |        |      |  |  |   |        |        | 13,888 |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Income before income taxes                          |                                                                    |                      |                        |  |  |                    | 5,587  |       |        |        |  |                  |  |   | 5,694 |       |        |        |  |  |      |   | 12,157 |        |        |        |      |  |  |   | 11,326 |       
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                                                    |                      |                        |  |  |                    | 1,859  |       |        |        |  |                  |  |   | 1,953 |       |        |        |  |  |      |   | 4,139  |        |        |        |      |  |  |   | 3,890  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|                                                    | Income before accounting method changes                            |                      |                        |  |  |                    |        | 3,728 |        |        |  |                  |  |   |       | 3,741 |        |        |  |  |      |   |        | 8,018  |        |        |      |  |  |   |        | 7,436  |       
|                                                   
|                                                   
|                                                   
|                                                   
|Accounting method change  adoption of FAS 133      |                                                                    |                      |                        |  |  |                    | 0      |       |        |        |  |                  |  |   | 0     |       |        |        |  |  |      |   | 14     |        |        |        |      |  |  |   | 0      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Net Income                                                         |                      |                        |  |  |                    | $      | 3,728 |        |        |  |                  |  |   | $     | 3,741 |        |        |  |  |      |   | $      | 8,004  |        |        |      |  |  |   | $      | 7,436  |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Earnings per share:                                
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                              |                      |                        |  |  |                    | $      | 0.36  |        |        |  |                  |  |   | $     | 0.36  |        |        |  |  |      |   | $      | 0.77   |        |        |      |  |  |   | $      | 0.70   |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                            |                      |                        |  |  |                    | $      | 0.35  |        |        |  |                  |  |   | $     | 0.35  |        |        |  |  |      |   | $      | 0.76   |        |        |      |  |  |   | $      | 0.70   |       
|                                                    |                                                                    |                      |                        |  |  |                    |        |       |        |        |  |                  |  |   |       |       |        |        |  |  |      |   |        |        |        |        |      |  |  |   |        |        |        |       
|Dividends per share                                 |                                                                    |                      |                        |  |  | $                  | 0.13   |       |        |        |  |                  |  | $ | 0.12  |       |        |        |  |  |      | $ | 0.25   |        |        |        |      |  |  | $ | 0.24   |       
|                                                   

|                                     |         |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  | 
|------------------------------------ | ------- |  |  |  |  |  |  | ---------- |  |  |  |  |  |  |  | ---------- |  |  |  |  |  |  |  | ---------- |  |  |  |  |  |  |  | ---------- |  |  | 
|Weighted average shares outstanding:
|                                    
|                                    
|                                    
|                                    
|                                     | Basic   |  |  |  |  |  |  | 10,457,827 |  |  |  |  |  |  |  | 10,529,643 |  |  |  |  |  |  |  | 10,447,218 |  |  |  |  |  |  |  | 10,610,254 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Diluted |  |  |  |  |  |  | 10,584,451 |  |  |  |  |  |  |  | 10,628,373 |  |  |  |  |  |  |  | 10,560,733 |  |  |  |  |  |  |  | 10,697,360 | 
|                                     |         |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  | 

See Notes to the Consolidated Financial Statements

2



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##### Table of Contents



U N B C O R P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



|                                       |                                          |                                                                                     |                                         |                  |      |     |       |  |      |      |       |  |     |      |       |  |      |        |  
|-------------------------------------- | ---------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------- | ---------------- | ---- | --- | ----- |  | ---- | ---- | ----- |  | --- | ---- | ----- |  | ---- | ------ | -
|(In thousands)                         |                                          | Three Months Ended                                                                  |                                         | Six Months Ended
|                                       |                                          | June 30,                                                                            |                                         | June 30,        
|                                       |                                          |                                                                                     |                                         |                  |      |     |      
|                                       |                                          |                                                                                     |                                         |                  | 2001 |     | 2000  |  | 2001 |      | 2000 
|                                       |                                          |                                                                                     |                                         |                  |      |     |       |  |      |      |      
|Net Income                             |                                          | $                                                                                   | 3,728                                   |                  |      | $   | 3,741 |  |      | $    | 8,004 |  |     | $    | 7,436 | 
|                                      
|                                      
|                                      
|                                      
|Other comprehensive income, net of tax
|                                      
|                                      
|                                      
|                                      
|                                       | Unrealized gains/(losses) on securities:
|                                      
|                                      
|                                      
|                                      
|                                       |                                          | Unrealized gains/(losses) arising
during the period                                 |                                         |                  | 324  |     |       |  | (594 | )    |       |  | 306 |      |       |  | (656 | )     
|                                      
|                                      
|                                      
|                                      
|                                       |                                          | Less: Reclassified adjustment for
accumulated gains/(losses)
included in net income |                                         |                  | 3    |     |       |  | 217  |      |       |  | 859 |      |       |  | 655  |       
|                                       |                                          |                                                                                     |                                         |                  |      |     |       |  |      |      |       |  |     |      |       | 
|                                       |                                          |                                                                                     | Unrealized gains/(losses) on securities |                  |      | 321 |       |  |      | (811 | )     |  |     | (553 | )     |  |      | (1,311 | )
|                                       |                                          |                                                                                     |                                         |                  |      |     |       |  |      |      |       |  |     |      |       | 
|Comprehensive income                   |                                          | $                                                                                   | 4,049                                   |                  |      | $   | 2,930 |  |      | $    | 7,451 |  |     | $    | 6,125 | 
|                                       |                                          |                                                                                     |                                         |                  |      |     |       |  |      |      |       |  |     |      |       | 

See Notes to the Consolidated Financial Statements

3



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##### Table of Contents



U N B CORP.

Condensed Consolidated Statements of Changes in Shareholders Equity



(In thousands except per share data)

|                                                                               |  |         |  |         |  |                  |        |   |  |  |  |  |  |   |        |  
|------------------------------------------------------------------------------ |  | ------- |  | ------- |  | ---------------- | ------ | - |  |  |  |  |  | - | ------ | -
|                                                                               |  |         |  |         |  | Six Months Ended
|                                                                               |  |         |  |         |  |                 
|                                                                               |  | 6/30/01 |  | 6/30/00
|                                                                               |  |         |  |         |  |                  |        |  
|Balance at beginning of period                                                 |  |         |  |         |  | $                | 75,928 |   |  |  |  |  |  | $ | 70,674 |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Net Income                                                                     |  |         |  |         |  |                  | 8,004  |   |  |  |  |  |  |   | 7,436  |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Cash dividends $0.25 and $0.24 per share, respectively                         |  |         |  |         |  |                  | (2,615 | ) |  |  |  |  |  |   | (2,542 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Treasury stock purchases                                                       |  |         |  |         |  |                  | (102   | ) |  |  |  |  |  |   | (3,473 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Treasury stock sold and issued for stock options                               |  |         |  |         |  |                  | 597    |   |  |  |  |  |  |   | 0      |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Tax benefit from non-qualified stock option exercise                           |  |         |  |         |  |                  | 6      |   |  |  |  |  |  |   | 0      |  
|Change in market value on securities available
for sale, net of deferred taxes |  |         |  |         |  |                  | (553   | ) |  |  |  |  |  |   | (1,311 | )
|                                                                               |  |         |  |         |  |                  |        |   |  |  |  |  |  |   |        |  
|Balance at end of period                                                       |  |         |  |         |  | $                | 81,265 |   |  |  |  |  |  | $ | 70,784 |  
|                                                                               |  |         |  |         |  |                  |        |   |  |  |  |  |  |   |        |  

See Notes to the Consolidated Financial Statements

4



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##### Table of Contents



UNB CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |         |         |  
|---------------------------------------------- | -------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---------------------------------- | ------- | ---------------- | ------- | ------- | ------- | ------- | ------- | -
|                                               |                                                                            |                                                                              |                                    |         | Six months ended
|(In thousands)                                 |                                                                            | June 30,                                                                    
|                                               |                                                                            |                                                                              |                                    |         | 2001             |         | 2000   
|                                               |                                                                            |                                                                              |                                    |         |                  |         |        
|Cash flows from operating
activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net income                                                                 |                                                                              | $                                  | 8,004   |                  |         | $       | 7,436   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Adjustments to reconcile net income to net cash from operating activities:
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Depreciation and amortization                                                |                                    |         | 661              |         |         |         | 720     |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Provision for loan losses                                                    |                                    |         | 973              |         |         |         | 370     |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net securities gains                                                         |                                    |         | (1,321           | )       |         |         | (1,008  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net amortization/(accretion) on securities                                   |                                    |         | (373             | )       |         |         | (24     | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Amortization of intangible assets                                            |                                    |         | 391              |         |         |         | 473     |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Loans originated for resale                                                  |                                    |         | (36,405          | )       |         |         | (4,874  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sale of loan originations                                      |                                    |         | 37,847           |         |         |         | 4,911   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Changes in:                                                               
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest receivable                                                          |                                    |         | 664              |         |         |         | (501    | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest payable                                                             |                                    |         | (180             | )       |         |         | 40      |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Other assets and liabilities, net                                            |                                    |         | (1,206           | )       |         |         | (909    | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Deferred income                                                              |                                    |         | (3               | )       |         |         | (6      | )      
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|                                               |                                                                            |                                                                              | Net cash from operating activities |         |                  | 9,052   |         |         |         | 6,628   |  
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|Cash flows from investing
activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in interest bearing deposits with banks                         |                                                                              |                                    | (455    | )                |         |         | (494    | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in funds sold                                                 |                                                                              |                                    | 0       |                  |         |         | (3,000  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Investment and mortgage-backed securities:                                
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sales of securities available for sale                         |                                    |         | 3,656            |         |         |         | 1,527   |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities held to maturity                      |                                    |         | 1,940            |         |         |         | 1,125   |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities available for sale                    |                                    |         | 99,686           |         |         |         | 33,768  |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities held to maturity                                     |                                    |         | (320             | )       |         |         | (2,715  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities available for sale                                   |                                    |         | (84,687          | )       |         |         | (26,887 | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of mortgage-backed securities available for sale                   |                                    |         | (30,664          | )       |         |         | (9,266  | )      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities held to maturity   |                                    |         | 73               |         |         |         | 79      |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities available for sale |                                    |         | 18,510           |         |         |         | 8,924   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net (increase)/decrease in loans made to customers                         |                                                                              |                                    | (11,792 | )                |         |         | (61,613 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in bank owned life insurance                                  |                                                                              |                                    | (20,217 | )                |         |         | 0      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of premises and equipment, net                                   |                                                                              |                                    | (733    | )                |         |         | (1,116  | )      
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|                                               |                                                                            |                                                                              | Net cash from investing activities |         |                  | (25,003 | )       |         |         | (59,668 | )
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|Cash flows from financing
activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase/(decrease) in deposits                                        |                                                                              |                                    | (20,750 | )                |         |         | 46,663  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Cash dividends paid, net of shares issued through dividend reinvestment    |                                                                              |                                    | (2,615  | )                |         |         | (2,542  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchase of treasury stock                                                 |                                                                              |                                    | (102    | )                |         |         | (3,473  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Sales of treasury stock                                                    |                                                                              |                                    | 597     |                  |         |         | 0       |        
|                                              
|                                              
|                                              
|                                              
|                                               | Tax benefit from non-qualified stock option exercise                       |                                                                              |                                    | 6       |                  |         |         | 0       |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase/(decrease) in short-term borrowings                           |                                                                              |                                    | (9,680  | )                |         |         | (2,509  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from FHLB advances                                                |                                                                              |                                    | 62,400  |                  |         |         | 1,200   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments of FHLB advances                                                |                                                                              |                                    | (14,215 | )                |         |         | (6,946  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from bank borrowings                                              |                                                                              |                                    | 2,052   |                  |         |         | 3,500   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments on capital lease                                                |                                                                              |                                    | (27     | )                |         |         | (26     | )      
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|                                               |                                                                            |                                                                              | Net cash from financing activities |         |                  | 17,666  |         |         |         | 35,867  |  
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|Net change in cash and cash
equivalents        |                                                                            |                                                                              | 1,715                              |         |                  |         | (17,173 | )      
|                                              
|                                              
|                                              
|                                              
|Cash and cash equivalents
at beginning of year |                                                                            |                                                                              | 32,155                             |         |                  |         | 48,354  |        
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|Cash and cash equivalents
at end of period     |                                                                            | $                                                                            | 33,870                             |         |                  | $       | 31,181  |        
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        
|Non cash activities:                          
|                                              
|                                              
|                                              
|                                              
|                                               | Merger with Rownd's for stock                                              |                                                                              | $                                  | (255    | )                |         |         | 0      
|                                               |                                                                            |                                                                              |                                    |         |                  |         |         |         |        

See the Notes to the Consolidated Financial Statements

5



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements

Note 1  Summary of Significant Accounting Policies

Unless otherwise indicated, amounts are in thousands, except per share data.

The accompanying consolidated financial statements include the accounts of UNB
Corp. and its wholly owned subsidiaries United National Bank & Trust Co., United
Banc Financial Services, Inc. and United Financial Advisors, Inc. All material
intercompany accounts and transactions have been eliminated in consolidation.

These interim financial statements reflect all adjustments of a normal recurring
nature which, in the opinion of management, are necessary to present fairly the
consolidated financial position of UNB Corp. at June 30, 2001, and its results
of operations and cash flows for the periods presented. The accompanying
consolidated financial statements do not purport to contain all the necessary
financial disclosures required by generally accepted accounting principles that
might otherwise be necessary in the circumstances and are not necessarily
indicative of the results to be expected for the full year. The Annual Report
for UNB Corp. for the year ended December 31, 2000, contains consolidated
financial statements and related notes, which should be read in conjunction with
the accompanying consolidated financial statements.

For consolidated financial statement classification and cash flow reporting
purposes, cash and cash equivalents include currency on hand and non-interest
bearing deposits with banks. For the quarters ended June 30, 2001 and June 30,
2000, UNB Corp. paid interest in the amount of $20,821 and $20,001,
respectively. For the same six month periods federal income taxes paid totaled
$4,000 and $3,260, respectively.

The Corporation classifies debt and equity securities as held to maturity,
available for sale, or trading. Securities classified as held to maturity are
those management has the positive intent and ability to hold to maturity.
Securities classified as available for sale are those management intends to sell
or that could be sold for liquidity, investment management, or similar reasons,
even if there is not a present intention for such a sale. Trading securities are
purchased principally for sale in the near term and are reported at fair value
with unrealized gains and losses included in earnings. The Corporation held no
trading securities during the periods reported.

Securities held to maturity are stated at cost, adjusted for amortization of
premiums and accretion of discounts. Securities available for sale are carried
at fair value, with unrealized holding gains and losses included in other
comprehensive income. Gains or losses on dispositions are based on net proceeds
and the amortized cost of securities sold, using the specific identification
method.

Management analyzes loans on an individual basis and classifies a loan as
impaired when an analysis of the borrowers operating results and financial
condition indicates that underlying cash flows are not adequate to meet its debt
service requirements. Often this is associated with a delay or shortfall in
payments of 30 days or more. Smaller-balance homogeneous loans are evaluated for
impairment in total and are excluded from reported impaired loans. Such loans
include residential first mortgage loans secured by one-to-four family
residences, residential construction loans and consumer automobile, boat, RV,
and home equity loans. In addition, loans held for sale and leases are excluded
from consideration as impaired.

Impaired loans are fully or partially charged off when in managements opinion
an event or events have occurred which provide reasonable certainty that a loss
is probable. When management determines that a loss is probable, a full or
partial

6



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)

charge off is recorded for the amount the book value of the impaired
loan exceeds the present value of the cash flows or the fair value of the
collateral, for collateral dependent loans.

Loans considered to be impaired are reduced to the present value of expected
future cash flows or to the fair value of collateral by allocating a portion of
the allowance for loan losses to such loans. Any reduction in carrying value
through impairment or any change in impairment based on cash payments received
or revised cash flow estimates as determined on a quarterly basis would be
applied against the unallocated portion of the allowance for loan losses and
become a specific allocation of the allowance or as an addition to the provision
for loan losses if the unallocated portion of the allowance was insufficient to
cover the impairment.

Basic and diluted earnings per share are computed under the provisions of SFAS
No. 128, Earnings Per Share. Basic earnings per share is net income divided by
the weighted average number of shares outstanding during the period. Diluted
earnings per share includes the dilutive effect of additional common shares
issued under stock options assuming the exercise of stock options less the
treasury shares assumed to be purchased from the proceeds using the average
market price of UNB Corp.s stock for the periods presented.

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141. Business
Combinations. SFAS No. 141 requires all business combinations within its
scope to be accounted for using the purchase method, rather that the
pooling-of-interests method. The provisions of this Statement apply to all
business combinations initiated after June 30, 2001. The adoption of this
Statement will only impact the Companys financial statements if it enters
into a business combination.

Also in June 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets, which addresses the accounting for such assets arising
from prior and future business combinations. Upon the adoption of this Statement,
goodwill arising from business combinations will no longer be amortized, but
rather will be assessed regularly for impairment, with any such impairment recognized
as a reduction to earnings in the period identified. Other identified intangible
assets, such as core deposit intangible assets, will continue to be amortized
over their estimated useful lives. The Company is required to adopt this Statement
on January 1, 2002 and early adoption is not permitted. The Company has not
determined the impact of this statement on its financial statements.

Certain 2000 amounts may have been reclassified to conform to the 2001
presentation.

Note 2  Securities

The amortized cost and estimated fair value of securities and mortgage-backed
securities, available for sale and held to maturity, as presented on the
consolidated balance sheet at June 30, 2001 and December 31, 2000, follows:

7



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)

|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |         | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | ------ | --------- | ------- | ---------- | --- | ------------- | ----- | ----- | ---- | --------- | ---- | - | ------ | ------ | ------- | 
|                                              |                                                          |                                                 |        |           |         |            |     | June 30, 2001
|                                              |                                                          |                                                 |        |          
|                                              |                                                          |                                                 |        |           |         |            |     | Gross         |       | Gross |      | Estimated
|                                              |                                                          |                                                 |        | Amortized |         | Unrealized |     | Unrealized    |       | Fair 
|                                              |                                                          |                                                 |        | Cost      |         | Gains      |     | Losses        |       | Value
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |      
|                                             
|Securities available for sale:               
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of U.S. government
agencies and corporations |                                                 | $      | 14,783    |         |            | $   | 260           |       |       | $    |          |      |   | $      | 15,043 |        
|                                             
|Securities held to maturity:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of state and
political subdivisions          |                                                 |        | 2,644     |         |            |     | 23            |       |       |      |          |      |   |        | 2,667  |        
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |        
|                                              |                                                          | Total debt securities                           |        |           | 17,427  |            |     |               | 283   |       |      |           |     |   |        |        | 17,710  | 
|                                             
|                                             
|                                             
|                                             
|Equity securities available for sale          |                                                          |                                                 | 12,908 |           |         |            |    |               |       |       | (180 | )         |      |   | 12,728 |       
|                                             
|                                             
|                                             
|                                             
|Asset-backed securities available
for sale    |                                                          |                                                 | 999    |           |         |            | 28  |               |       |       |     |           |      |   | 1,027  |       
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |        
|                                              |                                                          | Total securities                                |        |           | 31,334  |            |     |               | 311   |       |      |           | (180 | ) |        |        | 31,465  | 
|                                             
|Mortgage-backed securities
available for sale |                                                          |                                                 | 90,998 |           |         |            | 807 |               |       |       | (66  | )         |      |   | 91,739 |       
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
held to maturity   |                                                          |                                                 | 359    |           |         |            | 10  |               |       |       |     |           |      |   | 369    |       
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |        
|                                              |                                                          | Total mortgage-backed securities                |        |           | 91,357  |            |     |               | 817   |       |      |           | (66  | ) |        |        | 92,108  | 
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |        
|                                              |                                                          | Total securities and mortgage-backed securities |        | $         | 122,691 |            |     | $             | 1,128 |       |      | $         | (246 | ) |        | $      | 123,573 | 
|                                              |                                                          |                                                 |        |           |         |            |     |               |       |       |      |           |      |   |        |        |        

|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |         | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | ------ | --------- | ------- | ---------- | ----- | ----------------- | ----- | ----- | ---- | --------- | ------ | - | ------ | ------ | ------- | 
|                                              |                                                          |                                                 |        |           |         |            |       | December 31, 2000
|                                              |                                                          |                                                 |        |          
|                                              |                                                          |                                                 |        |           |         |            |       | Gross             |       | Gross |      | Estimated
|                                              |                                                          |                                                 |        | Amortized |         | Unrealized |       | Unrealized        |       | Fair 
|                                              |                                                          |                                                 |        | Cost      |         | Gains      |       | Losses            |       | Value
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |      
|                                             
|Securities available for sale:               
|                                             
|                                             
|                                             
|                                             
|                                              | U.S. Treasury securities                                 |                                                 | $      | 999       |         |            | $     |                  |       |       | $    | (1        | )      |   | $      | 998    |        
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of U.S. government
agencies and corporations |                                                 |        | 31,473    |         |            |       | 146               |       |       |      | (15       | )      |   |        | 31,604 |        
|                                             
|Securities held to maturity:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of state and
political subdivisions          |                                                 |        | 4,265     |         |            |       | 10                |       |       |      | (1        | )      |   |        | 4,274  |        
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |        
|                                              |                                                          | Total debt securities                           |        |           | 36,737  |            |       |                   | 156   |       |      |           | (17    | ) |        |        | 36,876  | 
|                                             
|                                             
|                                             
|                                             
|Equity securities available for sale          |                                                          |                                                 | 12,518 |           |         |            | 2,518 |                   |       |       | (728 | )         |        |   | 14,308 |       
|                                             
|                                             
|                                             
|                                             
|Asset-backed securities available
for sale    |                                                          |                                                 | 999    |           |         |            |      |                   |       |       | (4   | )         |        |   | 995    |       
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |        
|                                              |                                                          | Total securities                                |        |           | 50,254  |            |       |                   | 2,674 |       |      |           | (749   | ) |        |        | 52,179  | 
|                                             
|Mortgage-backed securities
available for sale |                                                          |                                                 | 78,506 |           |         |            | 268   |                   |       |       | (484 | )         |        |   | 78,290 |       
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
held to maturity   |                                                          |                                                 | 431    |           |         |            | 7     |                   |       |       |     |           |        |   | 438    |       
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |        
|                                              |                                                          | Total mortgage-backed securities                |        |           | 78,937  |            |       |                   | 275   |       |      |           | (484   | ) |        |        | 78,728  | 
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |        
|                                              |                                                          | Total securities and mortgage-backed securities |        | $         | 129,191 |            |       | $                 | 2,949 |       |      | $         | (1,233 | ) |        | $      | 130,907 | 
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |      |           |        |   |        |        |        



During the periods ended June 30, 2001 and 2000, the proceeds from sales of
securities available for sale were $3,656 and $1,527, respectively. Net gains of
$1,321 and $1,008 were recognized on those sales, respectively. There were no
sales or transfers of securities classified as held to maturity.

The amortized cost and estimated fair value of debt securities at June 30, 2001,
by contractual maturity, are shown below. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

8



---



##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)



|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |      |      |  
|--------------------------------------------------------------------------- | ------------------------------------- | ----- | ------ | --------- | ------ | ----- | ------ | ------------- | ------ | -------- | ---- | ---- | ---- | -
|                                                                            |                                       |       |        |           |        |       |        | June 30, 2001
|                                                                            |                                       |       |        |           |        |       |        | Estimated     |        | Weighted
|                                                                            |                                       |       |        | Amortized |        | Fair  |        | Average      
|                                                                            |                                       |       |        | Cost      |        | Value |        | Yield        
|                                                                            |                                       |       |        |           |        |       |        |              
|                                                                           
|Securities available for sale:                                             
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|U.S. Government agencies and
corporations
  Due in one year or less         |                                       | $     | 7,311  |           |        | $     | 7,411  |               |        |          | 6.64 | %   
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Due after one year through five years |       |        | 7,472     |        |       |        | 7,632         |        |          |      | 6.46 |     
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                            |                                       | Total |        | $         | 14,783 |       |        | $             | 15,043 |          |      |      | 6.55 | %
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                           
|Securities held to maturity:                                               
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Obligations of state and
political subdivisions
  Due in one year or less   |                                       | $     | 1,871  |           |        | $     | 1,883  |               |        |          | 4.73 | %   
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Due after one year through five years |       |        | 773       |        |       |        | 784           |        |          |      | 4.68 |     
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                            |                                       | Total |        | $         | 2,644  |       |        | $             | 2,667  |          |      |      | 4.71 | %
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                           
|Asset-backed securities available for sale                                  |                                       | $     | 999    |           |        | $     | 1,027  |               |        |          | 6.85 | %   
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                           
|Mortgage-backed and collateralized
mortgage  obligations available for sale |                                       | $     | 90,998 |           |        | $     | 91,739 |               |        |          | 6.28 | %   
|                                                                           
|Mortgage-backed and collateralized
mortgage  obligations held to maturity   |                                       |       | 359    |           |        |       | 369    |               |        |          | 7.82 |     
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     
|                                                                            |                                       | $     | 91,357 |           |        | $     | 92,108 |               |        |          | 6.29 | %   
|                                                                            |                                       |       |        |           |        |       |        |               |        |          |      |     



At June 30, 2001, there were no holdings of securities of any one issuer, other
than the U.S. government and its agencies and corporations, with an aggregate
book value in excess of 10% of shareholders equity. Securities with a carrying
value of approximately $108,389 at June 30, 2001 were pledged to secure public
funds and other obligations.

Note 3  Loans

Total loans as presented on the balance sheet are comprised of the following
classifications:

|                                       |  |               |         |                   |  |   |         | 
|-------------------------------------- |  | ------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | June 30, 2001 |         | December 31, 2000
|                                       |  |               |         |                  
|                                      
|Commercial, financial and agricultural |  | $             | 110,491 |                   |  | $ | 112,263 | 
|                                      
|                                      
|                                      
|                                      
|Commercial real estate                 |  |               | 129,368 |                   |  |   | 121,677 | 
|                                      
|                                      
|                                      
|                                      
|Aircraft                               |  |               | 142,914 |                   |  |   | 138,696 | 
|                                      
|                                      
|                                      
|                                      
|Residential real estate                |  |               | 246,678 |                   |  |   | 260,088 | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |               | 252,960 |                   |  |   | 239,291 | 
|                                       |  |               |         |                   |  |   |         | 
|Total loans                            |  | $             | 882,411 |                   |  | $ | 872,015 | 
|                                       |  |               |         |                   |  |   |         | 

9



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)



Impaired loans were as follows:

|                                                   |  |               |       |                   |  |   |       | 
|-------------------------------------------------- |  | ------------- | ----- | ----------------- |  | - | ----- | 
|                                                   |  | June 30, 2001 |       | December 31, 2000
|                                                   |  |               |       |                  
|                                                  
|Loans with no allowance for loan
losses allocated  |  | $             | 1,199 |                   |  | $ | 1,343 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Loans with allowance for loan
losses allocated     |  |               | 1,402 |                   |  |   | 2,516 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Amount of allowance allocated                      |  |               | 783   |                   |  |   | 909   | 
|                                                  
|Average of impaired loans,
year-to-date            |  |               | 3,030 |                   |  |   | 3,093 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Interest income recognized during
impairment       |  |               | 90    |                   |  |   | 210   | 
|                                                  
|                                                  
|                                                  
|                                                  
|Cash-basis interest income
recognized year-to-date |  |               | 93    |                   |  |   | 206   | 



At June 30, 2001 and December 31, 2000, loans on non-accrual status and/or past
due 90 days or more approximated $1,898 and $3,141, respectively. The Other Assets Owned balance, net of allowance, was $1,897 and $394 at June 30, 2001 and
December 31, 2000, respectively.

Note 4  Allowance for Loan Losses

A summary of activity in the allowance for loan losses for the six months ended
June 30, 2001 and June 30, 2000, follows:

|                                           |  |      |        |      |  |   |        |  
|------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                           |  | 2001 |        | 2000
|                                           |  |      |        |     
|                                          
|Balance  January 1                        |  | $    | 12,760 |      |  | $ | 13,174 |  
|                                          
|                                          
|                                          
|                                          
|Provision charged to operating expense     |  |      | 973    |      |  |   | 370    |  
|                                          
|                                          
|                                          
|                                          
|Loans charged off                          |  |      | (1,358 | )    |  |   | (1,248 | )
|                                          
|                                          
|                                          
|                                          
|Recoveries on loans previously
charged off |  |      | 460    |      |  |   | 424    |  
|                                           |  |      |        |      |  |   |        |  
|Balance  June 30                          |  | $    | 12,835 |      |  | $ | 12,720 |  
|                                           |  |      |        |      |  |   |        |  

Note 5  Concentrations of Credit Risk and
Financial Instruments With      
     
   Off-Balance Sheet Risk

The Corporation offers commercial, residential mortgage and consumer credit
products to customers within Stark and its contiguous counties with the
exception of the Aircraft Finance Group which serves a national market. The
Corporation maintains a diversified loan portfolio, with commercial loans and
leases, commercial real estate loans, aircraft loans, residential mortgage loans
and consumer loans comprising 12.5%, 14.7%, 16.2%, 27.9% and 28.7%,
respectively, at June 30, 2001. Within the consumer loan portfolio, indirect
loans accounted for 55.6% of all consumer loans and 16.0% of total loans at June
30, 2001. The dealer network from which indirect loans were purchased included
106 relationships thus far in 2001, the largest of which was responsible for
5.1% of the total indirect dollar volume for the first six months of 2001.

Within the commercial real estate portfolio, real estate is mainly held as
collateral while the cash flows of the business are considered the primary
source of repayment on the loans. With all loan types, management attempts to
balance credit risk versus return by employing conservative credit standards and
comprehensive underwriting guidelines in addition to the loan review function
which monitors credits during and after the approval process.

10



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)



The Corporation is a party to financial instruments with off-balance sheet risk.
These instruments are required in the normal course of business to meet the
financial needs of its customers. The contract or notional amounts of these
instruments are not included in the consolidated financial statements. At June
30, 2001, the contract or notional amounts of these instruments, which primarily
include commitments to extend credit, standby letters of credit and financial
guarantees, and interest rate swaps totaled $257,786.

At June 30, 2001, the Corporation held an interest rate swap agreement with a
notional amount of $11,600. The notional amount of the interest rate swap does
not represent an amount exchanged by the parties and is not a measure of the
Corporations exposure through its use of derivatives. The amounts exchanged are
determined by reference to the notional amount and the other terms of the
interest rate swap. The following table summarizes the terms of the swap in
effect:

|                                       |  |  |               |  
|-------------------------------------- |  |  | ------------- | -
|Notional amount                        |  |  | $11,600       |  
|                                      
|                                      
|                                      
|                                      
|Final expiration                       |  |  | June 18, 2003 |  
|                                      
|                                      
|                                      
|                                      
|Variable rate in effect,
June 30, 2001 |  |  | 3.88          | %
|                                      
|                                      
|                                      
|                                      
|Fixed rate                             |  |  | 5.86          | %
|                                      
|                                      
|                                      
|                                      
|Market value, June 30, 2001            |  |  | ($235         | )

Variable interest payments received are based on the three month LIBOR rate that
is adjusted on a quarterly basis. For the six month periods ended June 30, 2001
and June 30, 2000, expense of $18 and income of $42, respectively, was recorded
in interest income. Under the terms of the contract, future changes in LIBOR
will affect the payments received, the income or expense generated by the swap
and the market value of the swap.

Note 6  Other Borrowings

Other borrowings consist of Federal Home Loan Bank borrowings, three line of
credit borrowing arrangements and a capital lease. The majority of the other
borrowings at June 30, 2001 were comprised of advances from the Federal Home
Loan Bank (FHLB) of Cincinnati. Pursuant to collateral agreements with the FHLB,
advances are secured by FHLB stock and qualifying first mortgage loans.

At June 30, 2001, FHLB advances outstanding were comprised of the following:

|         |  |               |            |   |  |   |        | 
|-------- |  | ------------- | ---------- | - |  | - | ------ | 
|Maturity |  | Interest Rate | Amount    
|         |  |               |           
|2001     |  |               | 4.30%-7.32 | % |  | $ | 17,710 | 
|        
|        
|        
|        
|2002     |  |               | 5.95%-7.32 | % |  |   | 31,159 | 
|        
|        
|        
|        
|2003     |  |               | 6.25%-7.32 | % |  |   | 1,235  | 
|        
|        
|        
|        
|2004     |  |               | 5.20%-7.32 | % |  |   | 10,660 | 
|        
|        
|        
|        
|2005     |  |               | 4.49%-7.32 | % |  |   | 15,547 | 
|        
|        
|        
|        
|2006     |  |               | 5.47%-5.59 | % |  |   | 10,000 | 
|        
|        
|        
|        
|2011     |  |               | 4.70%      |   |  |   | 10,000 | 
|         |  |               |            |   |  |   |        | 
|Total    |  |               |            |   |  | $ | 96,311 | 
|         |  |               |            |   |  |   |        | 

Based on the Banks investment in FHLB stock, the maximum dollar amount of FHLB
advance borrowings available to the Bank is $172,750.

The Corporation has maximum borrowing arrangements of $20,050 with two national
financial institutions consisting of three lines of credit. The total
outstanding

11



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##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements (continued)

balance at June 30, 2001 was $15,048. United Banc Financial Services, Inc.
(UBFS) arranged a $10 million line of credit to fund loan growth. The interest
on each draw is variable and is priced off an index plus a spread. The loan
agreement calls for quarterly interest payments and is secured by a first
security agreement on UBFS receivables, the unconditional guarantee of UNB
Corp., and an intercreditor agreement with United National Bank & Trust Co. The
outstanding balance on this facility consists of the following draws:

|              |  |        |       | 
|------------- |  | ------ | ----- | 
|Interest Rate |  | Amount
|             
|4.92%         |  | $      | 3,500 | 
|             
|             
|             
|             
|5.66          |  |        | 1,000 | 
|             
|             
|             
|             
|6.18          |  |        | 500   | 
|             
|             
|             
|             
|6.44          |  |        | 1,000 | 
|             
|             
|             
|             
|5.64          |  |        | 500   | 
|             
|             
|             
|             
|5.68          |  |        | 500   | 
|             
|             
|             
|             
|4.74          |  |        | 500   | 
|             
|             
|             
|             
|7.05          |  |        | 500   | 

The Parent Company arranged an unsecured $10 million line of credit for
liquidity purposes and to facilitate additional investment in subsidiaries. At
June 30, 2001, the outstanding balance was $7 million with an interest rate of
4.66%. The interest is priced off the Federal Funds Rate plus 0.85% per annum
and is paid quarterly.

United Financial Advisors, Inc. has an unsecured $50 line of credit with an
interest rate of prime rate plus one percent that is used for liquidity
purposes. As of June 30, 2001, the outstanding balance was $48 with an interest
rate of 8.0%.

In 1997, the Bank entered into a capital lease to finance the acquisition of
computer hardware and related software with an original amount of $252. The
lease terms call for sixty monthly payments of approximately $5 with the last
payment due in March, 2002. The balance outstanding at June 30, 2001 was $39.

Note 7  Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Corporation adopted the Financial Accounting
Standards Boards Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities (FAS 133). FAS 133 requires all derivative instruments be
recorded at their fair values. If the derivative instruments are designated as
fair value hedges, changes in the fair value of the hedge and the hedged item
are included in current earnings. Fair value adjustments related to cash flow
hedges are recorded in other comprehensive income and reclassified to earnings
when the hedged transaction is reflected in earnings. Ineffective portions of
hedges are reflected in income currently.

UNB Corp. holds a derivative instrument in the form of an interest rate swap
hedging fixed rate mortgage loans (see Note 5). The interest rate swap was
recorded at fair value on the financial statements of the Corporation at the
adoption of FAS 133. For the period ended June 30, 2001, $14, net of taxes, was
recognized in expense for the adoption of FAS 133 on January 1, 2001 and $204 in
expense was recognized for the change in the fair value of the swap since
adoption.

12



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##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations




Item 2.  Managements Discussion and Analysis of Financial Condition and Results
         
   of Operations.



INTRODUCTION

The following areas of discussion pertain to the consolidated financial
statements of UNB Corp. at June 30, 2001, compared to December 31, 2000, and the
results of operations for the quarter and year-to-date periods ending June 30,
2001, compared to the same periods in 2000. It is the intent of this discussion
to provide the reader with a more thorough understanding of the consolidated
financial statements and supporting schedules, and should be read in conjunction
with those consolidated financial statements and schedules.

UNB Corp. is not aware of any trends, events, or uncertainties that might have a
material effect on the soundness of operations; neither is UNB Corp. aware of
any proposed recommendations by regulatory authorities which would have a
similar effect if implemented.

FINANCIAL CONDITION

Total assets at June 30, 2001 were $1,078,695, an increase of $24,748, or 2.3%,
from year-end 2000. Total earning assets at June 30, 2001 of $1,008,895
increased from year-end 2000 by $2,556, or 0.3%. Highly liquid balances,
comprised of cash and cash equivalents, federal funds sold and interest bearing
deposits with banks, increased by $2,170, or 6.7%, from year-end 2000.

SECURITIES
Balances in the securities and mortgage-backed securities portfolio declined
from 2000 year-end balances by $7,351, or 5.6%. Within the portfolio, as
obligations of U.S. government agency securities matured they were replaced with
higher yielding mortgage-backed securities. The decline within the securities
portfolio is partially due to a reduction of balances in equity securities.
During the first six months of 2001, the equity securities in the Parent
Company, which were invested in various bank stocks, were sold and a majority of
the proceeds were reinvested in various equity securities to provide more
diversification within the portfolio. As a result, the Parent Companys equity
portfolio declined by $884. Also contributing to the decline of equity
securities was the call of $1 million of FNMA Preferred Stock that was in the
Bank portfolio.

LOANS
For the first six months of 2001, total loans outstanding increased by $10,396,
or 1.2%, from year-end 2000. The aircraft lending area experienced growth of
$4,218, or 3.0%, from 2000 year-end levels. Growth remained slower for the first
six months of 2001 due to current economic conditions and lower interest rates
causing an increase in payoffs. However, growth is expected to increase
throughout the remainder of the year due to lower interest rates increasing
demand.

Commercial loan balances decreased by $1,039, or 1.0%, from year-end 2000
levels. The decline was attributed to term loan run-off and weaker commercial
loan demand. Commercial real estate balances increased by $7,691, or 6.3%, from
year-end balances due to a seasonal increase in construction activity and
continued growth in permanent financing opportunities.

Residential real estate balances decreased by $13,410, or 5.2%, for the six
months ended June 30, 2001. The decrease was the result of lower market rates
increasing the volume of payoffs and refinancings in the existing portfolio.

13



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##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Consumer loans increased by $13,669, or 5.7%, from year-end 2000, with the
majority of the increase, $8,933, within the home equity product, which is being
promoted with lower introductory rates. Direct and indirect installment lending
increased by $4,736, or 2.9%, from year-end 2000 with the Bank continuing to
focus on indirect automobile lending and not on longer-term fixed rate loans
such as boat and recreational vehicles. Loan activity has been concentrated in
high-end used automobiles, as leasing and manufacturers financing alternatives
have dominated new automobile financing.

OTHER ASSETS
Accrued interest receivable and other assets increased by $20,603, or 139.6%,
from December 31, 2000. The increase was mainly due to the Bank purchase of $20
million of bank owned life insurance (BOLI) to fund future employee benefit
costs.

LIABILITIES
Total liabilities increased by $19,411, or 2.0%, from year-end 2000 levels.
Deposits, the main component of liabilities, decreased by $20,750, or 2.5%, from
December 31, 2000. The following table shows deposit composition and deposit mix
between the periods ended June 30, 2001 and December 31, 2000:

|                                       |  |               |         |                   |  |   |         | 
|-------------------------------------- |  | ------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | June 30, 2001 |         | December 31, 2000
|                                       |  |               |         |                  
|                                      
|Non-interest bearing deposits          |  | $             | 104,256 |                   |  | $ | 108,351 | 
|                                      
|                                      
|                                      
|                                      
|Interest bearing checking              |  |               | 77,846  |                   |  |   | 79,894  | 
|                                      
|                                      
|                                      
|                                      
|Savings                                |  |               | 262,214 |                   |  |   | 267,486 | 
|                                      
|                                      
|                                      
|                                      
|Certificates of deposit and other time |  |               | 362,575 |                   |  |   | 371,910 | 
|                                       |  |               |         |                   |  |   |         | 
|Total deposits                         |  | $             | 806,891 |                   |  | $ | 827,641 | 
|                                       |  |               |         |                   |  |   |         | 

Non-interest bearing deposits at June 30, 2001 were $4,095, or 3.8% below 2000
year-end levels and interest bearing checking decreased by $2,048, or 2.6%, from
year-end 2000. The reduction in non-interest bearing deposits was partially
regarded as a seasonal trend, the result of artificially high year-end balances
of commercial customers. Certificates of deposit generated through the branch
network remained relatively flat and $9,921 of brokered certificates matured
during the first six months of 2001. Short-term borrowings, which are comprised
of federal funds purchased and repurchase agreements, declined by $9,680 from
December 31, 2000 due to a reduction in sweep repurchase agreement balances.
Other borrowings increased by $50,210, or 82.1%, primarily due to new Federal
Home Loan Bank advances that were borrowed to take advantage of lower interest
rates.

CAPITAL RESOURCES
Total shareholders equity at June 30, 2001 was $81,265, an increase of $5,337,
or 7.0%, from year-end 2000. The increase in shareholders equity was the result
of year-to-date net income of $8,004, with this increase being partially offset
by a reduction of $2,615 for cash dividends paid and a decrease of $553 on
unrealized gains on available for sale securities, net of deferred tax. The
decrease of unrealized gains on available for sale securities was mainly due to
the sale of equity securities with significant market appreciation. This
reduction was partially offset by an increase in the market values of fixed rate
securities due to lower interest rates.

UNB Corp.s capital ratios at June 30, 2001 and December 31, 2000 along with the
ratios required for the Corporation to be adequately and well capitalized under
regulatory guidelines were as follows:

14



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##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

|                                       |  |          |       |              |  |                 |      |   |  |                    |            |  
|-------------------------------------- |  | -------- | ----- | ------------ |  | --------------- | ---- | - |  | ------------------ | ---------- | -
|                                       |  |          |       |              |  |                 |      |   |  | Minimum regulatory
|                                       |  |          |       |              |  |                 |      |   |  | requirements for  
|                                       |  | June 30, |       | December 31, |  | adequately/well
|                                       |  | 2001     |       | 2000         |  | capitalized    
|                                       |  |          |       |              |  |                
|                                      
|Total capital to risk
weighted assets  |  |          | 10.12 | %            |  |                 | 9.99 | % |  |                    | 8.0%/10.0  | %
|                                      
|                                      
|                                      
|                                      
|Tier 1 capital to
risk weighted assets |  |          | 8.88  | %            |  |                 | 8.64 | % |  |                    | 4.0%/  6.0 | %
|                                      
|                                      
|                                      
|                                      
|Tier 1 capital to
average assets       |  |          | 7.31  | %            |  |                 | 6.97 | % |  |                    | 4.0%/  5.0 | %

All ratios as of June 30, 2001 exceeded the requirements for a well capitalized
financial institution. At December 31, 2000 all ratios exceeded the requirements
for an adequately capitalized financial institution. The ratio of
equity-to-assets at June 30, 2001 was 7.53% versus 7.20% at December 31, 2000.

For the first six months of 2001 and 2000, cash dividends were $0.25 and $0.24
per share, respectively. Cash dividends paid for the period ended June 30, 2001
represents 32.7% of year-to-date net income.

RESULTS OF OPERATIONS
UNB Corp.s second quarter 2001 net income was $3,728, or $0.35 per diluted
share, compared with $3,741, or $0.35 per diluted share, for the second quarter
of 2000. Excluding securities gains, second quarter 2001 net income was $3,725,
or $0.35 per diluted share, compared with $3,524, or $0.33 per diluted share,
for the same period in 2000. This represents an increase in earnings of 5.7% and
an increase in diluted earnings per share of 6.1%. Year-to-date net income of
$8,004 was $568, or 7.6%, higher than the same period in 2000. Excluding
securities gains, June 30, 2001 year-to-date net income was $7,146, or $0.68 per
diluted share, compared with $6,781, or $0.63 per diluted share, for the same
period in 2000. This represents an increase in earnings of 5.4% and an increase
in diluted earnings per share of 7.9%. For the first six months of 2001 and 2000
pre-tax gains of $1,321 and $1,008, respectively, were recognized on the sale of
equity securities from the Parent Company portfolio.

Return on average assets and return on average equity for the second quarter of
2001 were 1.39% and 18.60%, respectively, compared with 1.50% and 21.30%,
respectively, for the same period in 2000. On a year-to-date basis, return on
average assets and return on average equity for 2001 were 1.52% and 20.42%,
respectively, compared with 1.51% and 21.10%, respectively, for the same period
in 2000. Adjusted for the impact of securities gains, return on average assets
was 1.36% for 2001 versus 1.38% for 2000. Return on average equity was 18.23%
for 2001 compared to 19.24% for 2000.

NET INTEREST INCOME
Net interest income, the Corporations most significant source of earnings, is
the difference between interest income and related loan fees earned on interest
earning assets and interest expense incurred on interest bearing liabilities.
For this discussion, net interest income is presented on a fully-taxable
equivalent (FTE) basis. Interest on tax exempt securities and loans is restated
on a fully taxable basis using the tax rate of 35% adjusted for non-deductible
interest expense incurred in the acquisition of tax-free assets.

For the second quarter and year-to-date periods of 2001, net interest income
increased by $1,153 and $1,998, or 12.2% and 10.7%, respectively, over the same
periods in 2000. For the second quarter of 2001, total interest income increased
by 3.7%, while interest expense decreased by 4.1% from the same period in 2000.

15



---



##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

On a year-to-date basis, total interest income increased by 6.7% and interest
expense increased by 3.0% from the same period in 2000. The increase in net
interest income was the result of growth in average earning assets of 6.6% from
June 30, 2000 to June 30, 2001 and the result of the 275 basis point reduction
in rates that occurred in 2001.

NET INTEREST MARGIN
The net interest margin is net interest income (FTE) divided by average earning
assets. For the six months ended June 30, 2001, the net interest margin was
4.13%, versus 3.97% for the same period in 2000, an increase of 16 basis points.
Yields on earning assets increased by 3 basis points, while the cost of interest
bearing liabilities decreased by 19 basis points. Asset yields were impacted by
an increase in yields on the consumer and aircraft loans. The cost of interest
bearing liabilities were favorably impacted by the 275 basis point reduction in
rates that occurred during the first half of 2001. The cost of the Money Market
Access product, which is tied to the three month Treasury rate, declined 143
basis points and the cost of FHLB advances declined by 44 basis points. This was
partially offset by an increase in the cost of certificate of deposits due to
the rate increases that occurred throughout 2000.

OTHER INCOME
Other income for the second quarter of 2001 was $3,462, a decrease of 0.1% from
the second quarter of 2000. Excluding securities gains taken in the second
quarter of 2001 and 2000, other income in the second quarter of 2001 increased
from the same period in 2000 by $325, or 10.4%. On a year-to-date basis, other
income as of June 30, 2001 was $7,903, an increase of 14.6% from the same period
in 2000. Excluding securities gains of $1,321 and $1,008 taken in 2001 and 2000,
respectively, other income increased by $693, or 11.8%, from the same period in
2000.

Service charges on deposits increased by $95, or 14.1%, during the second
quarter of 2001 and by $137, or 10.2%, during the six month period ended June
30, 2001 from the same periods in 2000. The increase was mainly attributed to an
increase in service charges that was effective February 1, 2001. On a
year-to-date basis, Trust Department earnings were $2,685, a decrease of $102,
or 3.7%, from the same period in 2000, due to the decline in the stock market
since fees are tied to asset value. Gains on loans sold in the secondary market
increased by $212, or 347.5%, during the second quarter of 2001 and by $415, or
500.0%, during the six month period ended June 30, 2001 from the same periods in
2000. The increase was due to declining interest rates increasing the volume of
fixed rate mortgage loans available for sale. For the second quarter 2001, other
operating income increased by $44, or 4.7%, from the same period in 2000. On a
year-to-date basis, other operating income increased by $243, or 14.4%, from the
same period in 2000. Within other operating income, income from bank owned life
insurance increased by $235 and letter of credit commitment fees increased by
$207, while loan brokerage income on non-conforming mortgage and aircraft loans
declined by $179. The increase in letter of credit commitment fees was mainly
attributed to a fee received on a purchased participation for a commercial
letter of credit. The decline in brokerage income was mainly due to loans that
were previously considered non-conforming and which generated the brokerage income are now being sold to FNMA and FHLMC as
conforming which is reflected as gain on sale of loans and due to a decline in aircraft loans sold.

OTHER EXPENSES
Other expenses for the second quarter were $7,830, an increase of $868, or
12.5%, from the same period in 2000. On a year-to-date basis, other expenses
were $15,429, an increase of $1,541, or 11.1%, from the same period in 2000.
Salary, wages and benefits increased by $796, or 24.2%, during the second
quarter of 2001 and by $1,173, or 17.8%, during the six month period ended June
30, 2001 from the same periods in 2000. The increase was due to annual merit
increases, increased

16



---



##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

pension and incentive compensation expense accruals and increased expenses
related to deferred FASB91 costs. The increase in deferred FASB91 costs is due
to lower interest rates increasing payoffs within the aircraft portfolio.

Occupancy expense for the six months ended June 30, 2001 increased by $61, or
7.2% from the same period in 2000. The increase is mainly due to an increase in
rent expense from the opening of two new branches.

Derivative instruments and hedging activity expense of $204 was recognized for
the six month period ended June 30, 2001, for the change in the fair value of
the swap since adoption of FAS 133 on January 1, 2001.

Other operating expenses for the six month period ended June 30, 2001 was
$4,573, an increase of $83, or 1.8%, from the same period in 2000. Categories
with increases included investor relations expense, legal, consulting and
donation expense. Investor relations expense reflects an increase resulting from
the Corporation promoting the awareness of its stock. Legal and consulting
expenses increased mainly due to the non-recurring expenses related to the
establishment of United Portfolio Management, Inc. and the bank owned life
insurance policies. These increases were partially offset by reductions in Ohio
Franchise tax expense and marketing expenses. Marketing expenses were lower in
2001 since there were increased expenses in 2000 due to special promotions for
the grand opening of two new branches.

The Bank resolved the legal proceedings and disposed of the environmentally
contaminated seven and one half acre parcel of real estate acquired through
foreclosure. The property is located in the northwest quadrant of Stark County.
On July 31, 2001, the property was sold resulting in a gain of approximately
$490 that will be recognized in the third quarter 2001.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan loss is maintained at levels considered sufficient to
absorb probable losses in the loan portfolio. The amount of the provision for
loan losses charged to expense is the amount necessary, in the opinion of
management, to maintain the balance in the allowance for loan losses at an
adequate level. Management reviews the amount of provision for loan losses
charged to earnings based on its evaluation of the loan portfolios credit
quality, the adequacy of the allowance for loan losses under current economic
conditions and current and anticipated loan growth. Due to improved
underwriting, early detection systems and increased collection efforts, the
ratio of net charge-offs to average loans outstanding for December 31, 2000
remained at a very low level of 0.18%.

The provision for loan losses for the first six months of 2001 was $973, an
increase of $603, or 163.0%, from the same period in 2000. The increase in the provision for loan losses was due to an increase in net charge-offs of 9.0% from June 30, 2000 to June 30, 2001. In addition, management remains concerned due to the expectations of a slower economy and of the national trends indicating increased in consumer bankruptcies and foreclosures. At June 30, 2001, the
allowance for loan losses as a percentage of loans outstanding was 1.45%
compared to 1.46% at December 31, 2000.

Net charge-offs for the period ending June 30, 2001 and June 30, 2000 were
0.10%. A detailed analysis of the allowance for loan losses for the six months
ended June 30, 2001 and June 30, 2000, follows:

17



---



##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

|                                                                                |                         |                                     |                   |   |      |       |        |   |     |       | 
|------------------------------------------------------------------------------- | ----------------------- | ----------------------------------- | ----------------- | - | ---- | ----- | ------ | - | --- | ----- | 
|                                                                                |                         |                                     |                   |   | 2001 |       | 2000  
|                                                                                |                         |                                     |                   |   |      |       |       
|                                                                               
|Balance at January 1,                                                           |                         | $                                   | 12,760            |   |      | $     | 13,174 |  
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Charge-Offs (Domestic):
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Commercial, Financial, Agricultural |                   |   | 357  |       |        |   | 375 |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Real Estate  Commercial            |                   |   |     |       |        |   |    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Real Estate  Residential           |                   |   | 11   |       |        |   | 8   |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Aircraft                            |                   |   |     |       |        |   |    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Consumer Loans                      |                   |   | 990  |       |        |   | 865 |      
|                                                                                |                         |                                     |                   |   |      |       |        |  
|                                                                                |                         |                                     | Total Charge-Offs |   |      | 1,358 |        |   |     | 1,248 | 
|                                                                                |                         |                                     |                   |   |      |       |        |  
|                                                                                | Recoveries (Domestic): 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Commercial, Financial, Agricultural |                   |   | 49   |       |        |   | 82  |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Real Estate  Commercial            |                   |   |     |       |        |   |    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Real Estate  Residential           |                   |   |     |       |        |   |    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Aircraft                            |                   |   |     |       |        |   |    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                         | Consumer Loans                      |                   |   | 411  |       |        |   | 342 |      
|                                                                                |                         |                                     |                   |   |      |       |        |  
|                                                                                |                         |                                     | Total Recoveries  |   |      | 460   |        |   |     | 424   | 
|                                                                                |                         |                                     |                   |   |      |       |        |  
|Net Charge-Offs                                                                 |                         |                                     | 898               |   |      |       | 824    |  
|                                                                                |                         |                                     |                   |   |      |       |        |  
|Provision for loan losses                                                       |                         |                                     | 973               |   |      |       | 370    |  
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Balance at June 30,                                                             |                         | $                                   | 12,835            |   |      | $     | 12,720 |  
|                                                                                |                         |                                     |                   |   |      |       |        |  
|Ratio of year-to-date net charge-offs
to year-to-date average loans outstanding |                         |                                     | 0.10              | % |      |       | 0.10   | %
|                                                                                |                         |                                     |                   |   |      |       |        |  
|Allowance as a percentage of total loans                                        |                         |                                     | 1.45              | % |      |       | 1.52   | %
|                                                                                |                         |                                     |                   |   |      |       |        |  

The allowance for loan losses is allocated among the major loan categories based
on historical loss factors as well as the level and trends in delinquencies,
charge-offs and recoveries. The following table sets forth the Corporations
allocation of the allowance for loan losses as of June 30, 2001 and December 31,
2000:

|                        |       |   |               |        |                   |   |       |        | 
|----------------------- | ----- | - | ------------- | ------ | ----------------- | - | ----- | ------ | 
|                        |       |   | June 30, 2001 |        | December 31, 2000
|                        |       |   |               |        |                  
|                       
|Commercial              |       | $ | 5,380         |        |                   | $ | 5,063 |       
|                       
|                       
|                       
|                       
|Commercial real estate  |       |   | 2,556         |        |                   |   | 2,149 |       
|                       
|                       
|                       
|                       
|Aircraft                |       |   | 1,845         |        |                   |   | 2,761 |       
|                       
|                       
|                       
|                       
|Residential real estate |       |   | 218           |        |                   |   | 230   |       
|                       
|                       
|                       
|                       
|Consumer                |       |   | 2,260         |        |                   |   | 2,284 |       
|                       
|                       
|                       
|                       
|Unallocated             |       |   | 576           |        |                   |   | 273   |       
|                        |       |   |               |        |                   |   |       |       
|                        | Total |   | $             | 12,835 |                   |   | $     | 12,760 | 
|                        |       |   |               |        |                   |   |       |       

ASSET QUALITY

At June 30, 2001, impaired loans were $2,601, a decrease of $1,258 from December
31, 2000. The decrease in impaired loans was due to the resolution of
several loan workout situations mainly within the aircraft portfolio. The amount of allowance allocated to impaired
loans decreased from $909 at December 31, 2000 to $783 at June 30, 2001.
Nonperforming assets, which include non-accrual loans, accruing loans past due
90 days or more, restructured loans and other assets owned were $3,795 at
June 30, 2001 compared to $3,538 at December 31, 2000, an increase of $257, or
7.3%. The increase in other assets owned was due to a $1.5 million airplane
that was repossessed. Subsequent to quarter end, the
airplane was disposed of with no loss to the corporation. The following table
presents the amounts of nonperforming assets and pertinent ratios as of the
dates indicated:

18



---



##### Table of Contents



UNB CORP.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

|                                                                                 |                            |   |          |       |              |   |          |       |  |   |       |       | 
|-------------------------------------------------------------------------------- | -------------------------- | - | -------- | ----- | ------------ | - | -------- | ----- |  | - | ----- | ----- | 
|                                                                                 |                            |   | June 30, |       | December 31, |   | June 30,
|                                                                                 |                            |   | 2001     |       | 2000         |   | 2000    
|                                                                                 |                            |   |          |       |              |   |         
|                                                                                
|Non-accrual loans                                                                |                            | $ | 1,656    |       |              | $ | 2,945    |       |  | $ | 1,595 |      
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Accruing loans past due
90 days or more                                          |                            |   | 242      |       |              |   | 196      |       |  |   | 87    |      
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Restructured loans                                                               |                            |   |         |       |              |   | 3        |       |  |   | 13    |      
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other assets owned                                                               |                            |   | 1,897    |       |              |   | 394      |       |  |   | 455   |      
|                                                                                 |                            |   |          |       |              |   |          |       |  |   |       |      
|                                                                                 | Total nonperforming assets |   | $        | 3,795 |              |   | $        | 3,538 |  |   | $     | 2,150 | 
|                                                                                 |                            |   |          |       |              |   |          |       |  |   |       |      
|                                                                                
|Total nonperforming assets
as a percentage of total
loans and other assets owned |                            |   | 0.43     | %     |              |   | 0.41     | %     |  |   | 0.26  | %    

The ratio of nonperforming loans to total loans outstanding at June 30, 2001 of
0.43% is a two basis point decline from year-end 2000. This ratio compares
favorably to the ratio for the Corporations peers, all bank holding companies
with consolidated assets between $1 billion and $3 billion, which stands at
0.69% at March 31, 2001, the most current data available.

LIQUIDITY

Management ensures the liquidity position of the Corporation is adequate to meet
the credit needs and cash demands of its borrowers and depositors in a timely
and cost-effective manner. Principal sources of liquidity for the Corporation
are cash and cash equivalents, federal funds sold and the cash flows provided by
maturities and amortizations in the loan and securities portfolios. Total cash,
federal funds sold, interest bearing deposits with banks and securities
available for sale of $154,862 represented 14.4% of total assets at June 30,
2001. Of the securities available for sale, $15,043 were held in U.S. Treasury
and Agency securities, 49.3% of which mature within one year. Approximately
$108,389 of total Corporate securities were pledged as collateral to secure
public fund deposits, sweep or term repurchase agreements or other obligations.
The Corporations ability to raise funds in the market place is provided by the
Banks branch network, in addition to the availability of Federal Home Loan Bank
(FHLB) advance borrowings, brokered deposits, Federal funds purchased and
securities sold under agreement to repurchase.

The liquidity needs of the Parent Company, primarily cash dividends, treasury
stock purchases and vendor and tax payments, are met through cash, securities in
the Parent Company, dividends from the Bank and borrowings from a third party
financial institution.

UNITED FINANCIAL ADVISORS, INC.

UNB Corp.s subsidiary, United Insurance Agency, Inc.,
announced on June 13, 2001 that it will merge with Rownd Financial
Advisors Corp. The merger enables United Financial Advisors, Inc. to
offer an expanded, well-rounded array of products and services related to financial planning, insurance, annuities, investments and brokerage services. The impact of the merger on earnings is expected to be neutral in 2001 and accretive to diluted earnings per share in 2002.

19



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##### Table of Contents



FORWARD LOOKING STATEMENTS

Certain statements contained in this report that are not historical facts are
forward looking statements that are subject to certain risks and uncertainties.
When used herein, the terms anticipates, plans, expects, believes, and
similar expressions as they relate to UNB Corp. or its management are intended
to identify such forward looking statements. UNB Corp.s actual results,
performance or achievements may materially differ from those expressed or
implied in the forward looking statements. Risks and uncertainties that could
cause or contribute to such material differences include, but are not limited
to, general economic conditions, interest rate environment, competitive
conditions in the financial services industry, changes in law, governmental
policies and regulations, and rapidly changing technology affecting financial
services.

20



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##### Table of Contents



U N B C O R P.
CONSOLIDATED AVERAGE BALANCE SHEETS



|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |         |         |         | 
|--------------------------------------------- | ------------------------------ | -------------------------- | ------------------------------------------ | ------- | --------- | --------- |  | ------- |  | - | ------- | ------- | --------- | ----------- |  | ----------- |  | - | ------- | ------- | --------- | --------- |  |  |  | - | ------- | ------- | ------- | ------- | 
|(In thousands)                                |                                | 2nd Qtr                    |                                            |         |           |           |  | 2nd Qtr |  |   |         |         |           | 2nd Qtr YTD |  | 2nd Qtr YTD
|                                              |                                | 2001                       |                                            |         |           |           |  | 2000    |  |   |         |         |           | 2001        |  |             |  |   |         | 2000   
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           | 
|                                             
|ASSETS                                       
|                                             
|                                             
|                                             
|                                             
|Cash and cash equivalents                     |                                | $                          | 28,456                                     |         |           |           |  |         |  | $ | 26,010  |         |           |             |  |             |  | $ | 28,290  |         |           |           |  |  |  | $ | 27,653  |        
|                                             
|                                             
|                                             
|                                             
|Federal funds sold                            |                                |                            | 3,664                                      |         |           |           |  |         |  |   | 12,987  |         |           |             |  |             |  |   | 2,677   |         |           |           |  |  |  |   | 12,338  |        
|                                             
|                                             
|                                             
|                                             
|Interest bearing deposits with banks          |                                |                            | 1,343                                      |         |           |           |  |         |  |   | 85      |         |           |             |  |             |  |   | 1,114   |         |           |           |  |  |  |   | 52      |        
|                                             
|                                             
|                                             
|                                             
|Securities, net                               |                                |                            | 39,607                                     |         |           |           |  |         |  |   | 42,101  |         |           |             |  |             |  |   | 43,023  |         |           |           |  |  |  |   | 44,763  |        
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities                    |                                |                            | 86,667                                     |         |           |           |  |         |  |   | 80,766  |         |           |             |  |             |  |   | 81,914  |         |           |           |  |  |  |   | 81,500  |        
|                                             
|                                             
|                                             
|                                             
|Loans originated and held for sale            |                                |                            | 3,911                                      |         |           |           |  |         |  |   | 1,163   |         |           |             |  |             |  |   | 3,651   |         |           |           |  |  |  |   | 714     |        
|                                             
|                                             
|                                             
|                                             
|Loans:                                       
|                                             
|                                             
|                                             
|                                             
|                                              | Total loans                    |                            |                                            | 882,016 |           |           |  |         |  |   |         | 825,930 |           |             |  |             |  |   |         | 877,998 |           |           |  |  |  |   |         | 808,691 |        
|                                             
|                                             
|                                             
|                                             
|                                              | Less allowance for loan losses |                            |                                            | (12,925 | )         |           |  |         |  |   |         | (12,889 | )         |             |  |             |  |   |         | (12,915 | )         |           |  |  |  |   |         | (12,963 | )      
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                | Net loans                  |                                            |         | 869,091   |           |  |         |  |   |         |         | 813,041   |             |  |             |  |   |         |         | 865,083   |           |  |  |  |   |         |         | 795,728 |        
|                                             
|                                             
|                                             
|                                             
|Premises and equipment, net                   |                                |                            | 10,984                                     |         |           |           |  |         |  |   | 10,901  |         |           |             |  |             |  |   | 11,014  |         |           |           |  |  |  |   | 10,816  |        
|                                             
|                                             
|                                             
|                                             
|Intangible assets                             |                                |                            | 2,183                                      |         |           |           |  |         |  |   | 2,969   |         |           |             |  |             |  |   | 2,257   |         |           |           |  |  |  |   | 3,089   |        
|                                             
|                                             
|                                             
|                                             
|Accrued interest receivable and other assets  |                                |                            | 28,918                                     |         |           |           |  |         |  |   | 12,524  |         |           |             |  |             |  |   | 21,413  |         |           |           |  |  |  |   | 11,720  |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                | Total Assets               |                                            | $       | 1,074,824 |           |  |         |  |   |         | $       | 1,002,547 |             |  |             |  |   |         | $       | 1,060,436 |           |  |  |  |   |         | $       | 988,373 |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|LIABILITIES                                  
|                                             
|                                             
|                                             
|                                             
|Deposits:                                    
|                                             
|                                             
|                                             
|                                             
|                                              | Noninterest bearing deposits   |                            | $                                          | 100,530 |           |           |  |         |  |   | $       | 98,837  |           |             |  |             |  |   | $       | 99,680  |           |           |  |  |  |   | $       | 95,616  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Interest bearing deposits      |                            |                                            | 710,712 |           |           |  |         |  |   |         | 707,917 |           |             |  |             |  |   |         | 716,579 |           |           |  |  |  |   |         | 694,660 |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                | Total deposits             |                                            |         | 811,242   |           |  |         |  |   |         |         | 806,754   |             |  |             |  |   |         |         | 816,259   |           |  |  |  |   |         |         | 790,276 |        
|                                             
|                                             
|                                             
|                                             
|Short-term borrowings                         |                                |                            | 73,247                                     |         |           |           |  |         |  |   | 67,364  |         |           |             |  |             |  |   | 71,849  |         |           |           |  |  |  |   | 68,939  |        
|                                             
|                                             
|                                             
|                                             
|Other borrowings                              |                                |                            | 101,990                                    |         |           |           |  |         |  |   | 50,696  |         |           |             |  |             |  |   | 85,112  |         |           |           |  |  |  |   | 50,899  |        
|                                             
|                                             
|                                             
|                                             
|Accrued taxes, expenses and other liabilities |                                |                            | 7,969                                      |         |           |           |  |         |  |   | 7,291   |         |           |             |  |             |  |   | 8,185   |         |           |           |  |  |  |   | 7,373   |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                | Total Liabilities          |                                            |         | 994,448   |           |  |         |  |   |         |         | 932,105   |             |  |             |  |   |         |         | 981,405   |           |  |  |  |   |         |         | 917,487 |        
|                                             
|                                             
|                                             
|                                             
|SHAREHOLDERS EQUITY                         
|                                             
|                                             
|                                             
|                                             
|Common stock                                  |                                |                            | 11,646                                     |         |           |           |  |         |  |   | 11,646  |         |           |             |  |             |  |   | 11,646  |         |           |           |  |  |  |   | 11,646  |        
|                                             
|                                             
|                                             
|                                             
|Paid-in capital                               |                                |                            | 28,928                                     |         |           |           |  |         |  |   | 29,008  |         |           |             |  |             |  |   | 28,934  |         |           |           |  |  |  |   | 29,008  |        
|                                             
|                                             
|                                             
|                                             
|Retained earnings                             |                                |                            | 61,241                                     |         |           |           |  |         |  |   | 51,069  |         |           |             |  |             |  |   | 60,115  |         |           |           |  |  |  |   | 49,771  |        
|                                             
|                                             
|                                             
|                                             
|Treasury stock                                |                                |                            | (21,748                                    | )       |           |           |  |         |  |   | (20,849 | )       |           |             |  |             |  |   | (21,872 | )       |           |           |  |  |  |   | (19,800 | )      
|                                             
|                                             
|                                             
|                                             
|Accumulated other comprehensive income        |                                |                            | 309                                        |         |           |           |  |         |  |   | (432    | )       |           |             |  |             |  |   | 208     |         |           |           |  |  |  |   | 261     |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                | Total Shareholders Equity |                                            |         | 80,376    |           |  |         |  |   |         |         | 70,442    |             |  |             |  |   |         |         | 79,031    |           |  |  |  |   |         |         | 70,886  |        
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        
|                                              |                                |                            | Total Liabilities and Shareholders Equity |         | $         | 1,074,824 |  |         |  |   |         |         | $         | 1,002,547   |  |             |  |   |         |         | $         | 1,060,436 |  |  |  |   |         |         | $       | 988,373 | 
|                                              |                                |                            |                                            |         |           |           |  |         |  |   |         |         |           |             |  |             |  |   |         |         |           |           |  |  |  |   |         |        

See Notes to the Consolidated Financial Statements.

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##### Table of Contents



UNB CORP.
Quantitative and Qualitative Disclosures About Market Risk




Item 3. Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK

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

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

One of the most significant assumptions is the assignment of deposit balances
without a stated maturity date to specific time frames. Since these deposits are
subject to withdrawal on demand, and have rates that can be changed at any time,
they could be considered immediately repriceable and assigned to the shortest
maturity, resulting in a significant level of liability sensitivity. However,
actual practice indicates that balances are withdrawn and replaced over a much
longer time frame, and rates are modified less frequently and in smaller
increments than changes which occur in financial market rates. The Corporation
uses a statistical analysis of historical deposit behavior to derive appropriate
distributions of deposit balances over the simulation time horizon. The model
then applies a predetermined immediate parallel increase or decrease in the
level of interest rates to forecast the impact on both net interest income and
capital one year forward. While this methodology provides a comprehensive
appraisal of interest rate risk, it is not necessarily indicative of actual or
expected financial performance. Changes in interest rates that affect the entire
yield curve equally at a single point in time are not typical. The residential
mortgage prepayment assumptions are based on industry medians and could differ
from the Corporations actual results due to non-financial prepayment incentives
and other local factors. The behavior of depositors is based on an analysis of
historical changes in balances and might not fully reflect current attitudes
toward other investment alternatives. Moreover, the model does not include any
interim changes in strategy the Corporation might instate in response to shifts
in interest rates.

At June 30, 2001, assuming an immediate, parallel 200 basis point shift in
market yields, the Corporations net interest income for the next twelve months
was calculated to increase by approximately 8.86% if rates fell and decrease by
10.88% if rates rose. The net present value of equity is defined as the
difference between the present value of the Corporations assets and liabilities.
In general, the present value of fixed rate financial instruments declines as
market rate increase and increases as rates fall. Using the yield scenario
defined above, the net present value of equity was forecasted to decline by
9.03% in a rising rate environment and to rise by 9.84% in a falling rate
scenario. The duration of total assets was 51 months, compared to a duration of
total liabilities of 29 months, indicating that liabilities will both reprice
faster

22



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##### Table of Contents



UNB CORP.
Quantitative and Qualitative Disclosures About Market Risk (continued)

than assets and change in value by a smaller amount than the assets over a
similar time frame.

Interest rate risk can be managed by using a variety of techniques, including
selling existing assets or repaying liabilities, pricing loans and deposits to
attract preferred maturities and developing alternative sources of funding or
structuring new products to hedge existing exposures. In addition to these
balance sheet strategies, the Corporation can also use derivative financial
instruments such as interest rate swaps, caps, and floors to minimize the
potential impact of adverse changes in interest rates. During the second
quarter, the Corporation acquired $20,000 in advances from the Federal Home Loan
Bank with semi-annual laddered maturities from three to four and one-half years,
and plans to issue $10,000 in national market certificates of deposits with a
maturity of three years. Both of these transactions lengthen the duration of
total liabilities to minimize the effect of rising rates on future net interest
income.

The Corporation has a pay-fixed amortizing interest rate swap executed in 1998
as a hedge against fixed rate mortgages held in the portfolio. The net cash
flows and market value of the swap move inversely with those of the fixed rate
loans in the portfolio, which reduces the Corporations exposure to changing
interest rates. If rates rise, the Corporation receives net cash flows from the
swap which compensates for the opportunity loss of holding an asset with a below
market yield. Alternatively, the increase in the market value of the swaps would
balance the loss on the mortgage loans if the loans were sold. If rates fall,
the net cash flows given up are offset by the increased value of assets with an
above market yield. The gain that would be realized on the sale of the loans
would counteract the loss on the termination of the interest rate swap. At the
end of June, the swap had a net loss of $235 on outstanding notional principal
of $11,600.

23



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##### Table of Contents






UNB CORP.
PART II  OTHER INFORMATION




Item 1  Legal Proceedings

The nature of UNB Corp.s business results in a certain amount of litigation.
Accordingly, the Corporation and its subsidiaries are subject to various pending
and threatened lawsuits in which claims for monetary damages are asserted in the
ordinary course of business. While any litigation involves an element of
uncertainty, in the opinion of management, liabilities, if any, arising from
such litigation or threat thereof will not have a material effect on the
Corporation.




Item 2  Changes in Securities and Use of Proceeds

Not applicable.




Item 3  Defaults Upon Senior Securities

Not applicable.




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

UNB Corp. held its Annual Meeting of Shareholders on April 24, 2001, for the
purpose of electing four directors, to adopt the form and use of the
indemnification agreement for directors and to transact such other business as
would properly come before the meeting. The purpose of the indemnification
agreement for directors, is to insure that UNB Corp. will be able to attract and
retain qualified people to serve as directors. Increases in litigation risks
impair a companys ability to recruit and retain qualified people. Therefore,
UNB Corp. believes it is necessary and desirable to provide directors with
assurance that the burden of liability and litigation expenses arising out of
their services will be indemnified to the full extent permitted by the Ohio
General Corporation Law. The adoption of the indemnification agreement required
the holders of a majority of the voting power, excluding shares held by the
directors, to vote in favor of approval. Results of shareholder voting on these
issues were as follows:

|                            |  |          |           |          |  |                       |           |           |  |  |           |  |  |  |           | 
|--------------------------- |  | -------- | --------- | -------- |  | --------------------- | --------- | --------- |  |  | --------- |  |  |  | --------- | 
|                            |  |          |           |          |  | Election of Directors
|                            |  |          |           |          |  |                      
|                            |  | Roger L. |           | Nan B.   |  | Edgar W.              |           | E. Scott 
|                            |  | DeVille  |           | Johnston |  | Jones                 |           | Robertson
|                            |  |          |           |          |  |                       |           |          
|For                         |  |          | 9,062,299 |          |  |                       | 9,067,946 |           |  |  | 8,701,567 |  |  |  | 9,085,524 | 
|                           
|                           
|                           
|                           
|Against                     |  |          | 66,644    |          |  |                       | 60,997    |           |  |  | 427,376   |  |  |  | 43,419    | 
|                           
|                           
|                           
|                           
|Shares not voted by
Brokers |  |          | 224,358   |          |  |                       | 224,358   |           |  |  | 224,358   |  |  |  | 224,358   | 

|                            |  |                                 |           | 
|--------------------------- |  | ------------------------------- | --------- | 
|                            |  | Proposed use of Indemnification
|                            |  | Agreement for Directors        
|                            |  |                                
|For                         |  |                                 | 8,380,044 | 
|                           
|                           
|                           
|                           
|Against                     |  |                                 | 368,261   | 
|                           
|                           
|                           
|                           
|Abstain                     |  |                                 | 598,885   | 
|                           
|                           
|                           
|                           
|Shares not voted by
brokers |  |                                 | 7,415     | 




Item 5  Other Information

Effective April 1, 2001, United Portfolio Management, Inc. was established as a
wholly owned subsidiary of the Bank. The new subsidiary was established to
provide independent management of the securities portfolio.

24



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##### Table of Contents






Item 6  Exhibits and Reports on Form 8-K

|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. Exhibit
|Number     |  | Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|10.r       |  | Messrs. Edgar W. Jones, Jr., Roger L. DeVille, E.
Scott Robertson, E. Lang DAtri, Robert L. Mang,
Roger L. Mann, Marc L. Schneider, George M. Smart,
Louis V. Bockius III, Russell W. Maier, Robert J.
Gasser, and Mrs. Nan B. Johnston and Mrs. Jane M.
Timken entered into indemnification agreements with
UNB Corp. on May 17, 2001 identical to the form of
Exhibit 10.r. Additionally, UNB Corp. entered into
indemnification agreements with Messrs. James J.
Pennetti and Robert M. Sweeney on May 17, 2001
identical to the form of Exhibit 10.r.                                                                                                                                                                                                                                                                                                                                                      
|          
|          
|          
|          
|10.s       |  | Messrs. Roger L. Mann, Leo E. Doyle, James J.
Pennetti, Robert M. Sweeney and Scott E. Dodds
entered into severance agreements with UNB Corp. on
May 8, 2001 identical to the form of Exhibit 10.s.
Additionally, UNB Corp. entered into a form of
severance agreement with an officer of a subsidiary
company on May 8, 2001 identical to the form of
Exhibit 10.s except that the change-in-control
severance benefit provided by Section 2(a)(1) of the
Severance Agreement for the unnamed officer of the
subsidiary is two time the executives annual
compensation (as that term is defined in the
severance agreement). Additionally, in the last
whereas recital clause appearing on page 1 in the
form of severance agreement executed by Messrs. Mann,
Doyle, Pennetti, Sweeney and Dodds on May 8, 2001,
each executives existing change-of-control agreement
was entered into on different dates.

B. Reports  Form 8-K  During the second quarter of 2001 the Registrant filed
one report on Form 8-K. This report, filed June 20, 2001, disclosed the
transaction in which Rownd Financial Advisors Corp. merged with United Insurance
Agency, Inc., a wholly owned subsidiary of UNB Corp. Immediately following the
merger United Insurance Agency, Inc. changed its corporate name to United
Financial Advisors, Inc.




SIGNATURES

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.

|                     |  |                                                                                 
|-------------------- |  | --------------------------------------------------------------------------------
|                     |  | UNB CORP.                                                                       
|                     |  |                                                                                 
|                     |  | (Registrant)                                                                    
|                    
|Date August 10, 2001 |  | /s/ James J. Pennetti                                                           
|                     |  |                                                                                 
|                     |  | James J. Pennetti
(Duly authorized officer and
Chief Financial Officer, UNB Corp

25