TABLE OF CONTENTS




|                                                                                      |                                                                                                |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|FORM 10-Q                                                                            
|Part I  Financial Information                                                       
|                                                                                      | Item 1  Financial Statements                                                                 
|Notes to Consolidated Financial Statements                                           
|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.
|Quantitative and Qualitative Disclosures About Market Risk                           
|                                                                                      | 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                                                                                    

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 March 31, 2000

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 April 30, 200010,550,299 Common Shares





---



UNB CORP.

FORM 10-Q

QUARTER ENDED MARCH 31, 2000

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     | 
|          
|          
|          
|          
|Item 3 -   | Quantitative and Qualitative Disclosures About
Market Risk                            |  |  | 21-22     | 
|          
|          
|          
|          
|Part II -  | Other Information                                                                    
|          
|          
|          
|          
|Item 1 -   | Legal Proceedings                                                                     |  |  | 23        | 
|          
|          
|          
|          
|Item 2 -   | Changes in Securities                                                                 |  |  | 23        | 
|          
|          
|          
|          
|Item 3 -   | Defaults Upon Senior Securities                                                       |  |  | 23        | 
|          
|          
|          
|          
|Item 4 -   | Submission of Matters to a Vote of Security Holders                                   |  |  | 23        | 
|          
|          
|          
|          
|Item 5 -   | Other Information                                                                     |  |  | 23-24     | 
|          
|          
|          
|          
|Item 6 -   | Exhibits and Reports on Form 8-K                                                      |  |  | 24        | 
|          
|          
|          
|          
|Signatures |                                                                                       |  |  | 24        | 





---



U N B C O R P.
CONSOLIDATED BALANCE SHEETS

|                                                                                                                |                                    |                                            |         |              |         |   |         |        |         |  
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------------------------ | ------- | ------------ | ------- | - | ------- | ------ | ------- | -
|(In thousands except per share data)                                                                            |                                    | March 31,                                  |         | December 31,
|                                                                                                                |                                    | 2000                                       |         | 1999        
|                                                                                                                |                                    |                                            |         |              |         |  
|ASSETS                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash and cash equivalents                                                                                       |                                    | $                                          | 30,947  |              |         | $ | 48,354  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Federal funds sold                                                                                              |                                    |                                            | 10,900  |              |         |   | 0       |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Interest bearing deposits with banks                                                                            |                                    |                                            | 119     |              |         |   | 568     |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Securities, net (Fair value:                                                                                   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | $43,429 and $51,831, respectively) |                                            |         | 43,434       |         |   |         | 51,835 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Mortgage-backed securities (Fair value:                                                                        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | $81,214 and $81,848, respectively) |                                            |         | 81,210       |         |   |         | 81,842 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans originated and held for sale                                                                              |                                    |                                            | 874     |              |         |   | 671     |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans:                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Total loans                                |         |              | 810,481 |   |         |        | 774,820 |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Less allowance for loan losses             |         |              | (12,751 | ) |         |        | (13,174 | )
|                                                                                                               
|                                                                                                                |                                    | Net loans                                  |         |              | 797,730 |   |         |        | 761,646 |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Premises and equipment, net                                                                                     |                                    |                                            | 10,800  |              |         |   | 10,657  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Intangible assets                                                                                               |                                    |                                            | 3,088   |              |         |   | 3,336   |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued interest receivable and other assets                                                                    |                                    |                                            | 11,585  |              |         |   | 11,620  |       
|                                                                                                               
|                                                                                                                |                                    | Total Assets                               |         | $            | 990,687 |   |         | $      | 970,529 |  
|                                                                                                               
|LIABILITIES                                                                                                    
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Deposits:                                                                                                      
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Noninterest bearing deposits               |         | $            | 94,797  |   |         | $      | 90,790  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                                    | Interest bearing deposits                  |         |              | 698,158 |   |         |        | 673,444 |  
|                                                                                                               
|                                                                                                                |                                    | Total deposits                             |         |              | 792,955 |   |         |        | 764,234 |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Short-term borrowings                                                                                           |                                    |                                            | 71,910  |              |         |   | 74,107  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Long-term debt                                                                                                  |                                    |                                            | 50,570  |              |         |   | 54,332  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued taxes, expenses and other liabilities                                                                   |                                    |                                            | 6,144   |              |         |   | 7,182   |       
|                                                                                                               
|                                                                                                                |                                    | Total Liabilities                          |         |              | 921,579 |   |         |        | 899,855 |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|SHAREHOLDERS EQUITY                                                                                           
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Common stock ($1.00 stated value, 50,000,000 shares authorized;
11,646,307 and 11,646,310 issued, respectively) |                                    |                                            | 11,646  |              |         |   | 11,646  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Paid-in capital                                                                                                 |                                    |                                            | 29,008  |              |         |   | 29,008  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Retained earnings                                                                                               |                                    |                                            | 49,425  |              |         |   | 47,011  |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Treasury stock, 1,092,936 and 894,081 shares at cost                                                            |                                    |                                            | (20,510 | )            |         |   | (17,952 | )     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accumulated other comprehensive income                                                                          |                                    |                                            | (461    | )            |         |   | 961     |       
|                                                                                                               
|                                                                                                                |                                    | Total Shareholders Equity                 |         |              | 69,108  |   |         |        | 70,674  |  
|                                                                                                               
|                                                                                                                |                                    | Total Liabilities and Shareholders Equity |         | $            | 990,687 |   |         | $      | 970,529 |  
|                                                                                                               

See Notes to the Consolidated Financial Statements

1



---



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

|                                                    |                                                                     |                    |                        |            |        |        |       |            |        |        | 
|--------------------------------------------------- | ------------------------------------------------------------------- | ------------------ | ---------------------- | ---------- | ------ | ------ | ----- | ---------- | ------ | ------ | 
|(In thousands except per share data)                |                                                                     | Three Months Ended
|                                                    |                                                                     | March 31,         
|                                                    |                                                                     |                    |                        |            |       
|                                                    |                                                                     |                    |                        |            | 2000   |        | 1999 
|                                                    |                                                                     |                    |                        |            |        |        |      
|Interest income:                                   
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and fees on loans:                                        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                     | Taxable            |                        | $          | 16,734 |        |       | $          | 13,911 |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                     | Tax exempt         |                        |            | 30     |        |       |            | 27     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and dividends on investments
& mortgage-backed securities:
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                     | Taxable            |                        |            | 1,993  |        |       |            | 1,964  |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                                                     | Tax exempt         |                        |            | 21     |        |       |            | 0      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on bank deposits and federal funds sold                    |                    |                        | 171        |        |        |       | 124        |       
|                                                   
|                                                    |                                                                     |                    | Total interest income  |            |        | 18,949 |       |            |        | 16,026 | 
|                                                   
|Interest expense:                                  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on deposits                                                |                    |                        | 8,008      |        |        |       | 5,864      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on short-term borrowings                                   |                    |                        | 872        |        |        |       | 678        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on FHLB advances                                           |                    |                        | 788        |        |        |       | 607        |       
|                                                   
|                                                    |                                                                     |                    | Total interest expense |            |        | 9,668  |       |            |        | 7,149  | 
|                                                   
|Net interest income                                 |                                                                     |                    | 9,281                  |            |        |        | 8,877 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for loan losses                           |                                                                     |                    | 115                    |            |        |        | 730   |           
|                                                   
|Net interest income after provision for loan losses |                                                                     |                    | 9,166                  |            |        |        | 8,147 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Other income:                                      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Service charges on deposits                                         |                    |                        | 663        |        |        |       | 660        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Trust Department income                                             |                    |                        | 1,325      |        |        |       | 1,099      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating income                                              |                    |                        | 708        |        |        |       | 709        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Securities gains, net                                               |                    |                        | 674        |        |        |       | 4,177      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Gains on loans originated for resale and sold                       |                    |                        | 22         |        |        |       | 291        |       
|                                                   
|                                                    |                                                                     |                    | Total other income     |            |        | 3,392  |       |            |        | 6,936  | 
|                                                   
|Other expenses:                                    
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Salary, wages and benefits                                          |                    |                        | 3,319      |        |        |       | 3,569      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Occupancy                                                           |                    |                        | 412        |        |        |       | 417        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Equipment                                                           |                    |                        | 1,001      |        |        |       | 919        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating expense                                             |                    |                        | 2,194      |        |        |       | 3,308      |       
|                                                   
|                                                    |                                                                     |                    | Total other expenses   |            |        | 6,926  |       |            |        | 8,213  | 
|                                                   
|Income before income taxes                          |                                                                     |                    | 5,632                  |            |        |        | 6,870 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                                                     |                    | 1,937                  |            |        |        | 2,348 |           
|                                                   
|                                                    | Net income                                                          |                    | $                      | 3,695      |        |        | $     | 4,522      |       
|                                                   
|Earnings per share:                                
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                               |                    | $                      | 0.35       |        |        | $     | 0.41       |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                             |                    | $                      | 0.34       |        |        | $     | 0.40       |       
|                                                   
|Dividends per share                                 |                                                                     | $                  | 0.12                   |            |        | $      | 0.10  |           
|                                                   
|Weighted average shares outstanding:               
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                               |                    |                        | 10,690,865 |        |        |       | 11,028,118 |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                             |                    |                        | 10,766,347 |        |        |       | 11,181,032 |       
|                                                   

See Notes to the Consolidated Financial Statements

2



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

|                                       |                                          |                                                                                     |                                         |  |      |        |       |  |       |      |  
|-------------------------------------- | ---------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------- |  | ---- | ------ | ----- |  | ----- | ---- | -
|(In thousands)                         |                                          | Three Months Ended                                                                 
|                                       |                                          | March 31,                                                                          
|                                       |                                          |                                                                                     |                                         |  |     
|                                       |                                          |                                                                                     |                                         |  | 2000 |        | 1999 
|                                       |                                          |                                                                                     |                                         |  |      |        |      
|Net Income                             |                                          | $                                                                                   | 3,695                                   |  |      | $      | 4,522 | 
|                                      
|                                      
|                                      
|                                      
|Other comprehensive income, net of tax
|                                      
|                                      
|                                      
|                                      
|                                       | Unrealized gains/(losses) on securities:
|                                      
|                                      
|                                      
|                                      
|                                       |                                          | Unrealized gains/(losses) arising
during the period                                 |                                         |  | (984 | )      |       |  | 2,493 |     
|                                      
|                                      
|                                      
|                                      
|                                       |                                          | Less: Reclassified adjustment for
accumulated gains/(losses)
included in net income |                                         |  | 438  |        |       |  | 2,715 |     
|                                       |                                          |                                                                                     |                                         |  |      |        |       | 
|                                       |                                          |                                                                                     | Unrealized gains/(losses) on securities |  |      | (1,422 | )     |  |       | (222 | )
|                                       |                                          |                                                                                     |                                         |  |      |        |       | 
|Comprehensive income                   |                                          | $                                                                                   | 2,273                                   |  |      | $      | 4,300 | 
|                                       |                                          |                                                                                     |                                         |  |      |        |       | 

See Notes to the Consolidated Financial Statements

3



---



U N B CORP.

Condensed Consolidated Statements of Changes in Shareholders Equity

|                                                                                          |  |                    |        |         |  |   |        |  
|----------------------------------------------------------------------------------------- |  | ------------------ | ------ | ------- |  | - | ------ | -
|(In thousands except per share data)                                                     
|                                                                                          |  | Three Months Ended
|                                                                                          |  |                   
|                                                                                          |  | 3/31/00            |        | 3/31/99
|                                                                                          |  |                    |        |        
|Balance at beginning of period                                                            |  | $                  | 70,674 |         |  | $ | 71,702 |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Net Income                                                                                |  |                    | 3,695  |         |  |   | 4,522  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Cash dividends $0.120 and $0.100 per share, respectively                                  |  |                    | (1,281 | )       |  |   | (1,099 | )
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Treasury stock purchases                                                                  |  |                    | (2,558 | )       |  |   | (5,020 | )
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Treasury stock sales                                                                      |  |                    | 0      |         |  |   | 707    |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Change in market value on investment securities
available for sale, net of deferred taxes |  |                    | (1,422 | )       |  |   | (222   | )
|                                                                                          |  |                    |        |         |  |   |        |  
|Balance at end of period                                                                  |  | $                  | 69,108 |         |  | $ | 70,590 |  
|                                                                                          |  |                    |        |         |  |   |        |  

See Notes to the Consolidated Financial Statements

4



---



UNB CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                               |                                                                            |                                                                              |         |                    |         |      |        |        |         |  
|---------------------------------------------- | -------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------- | ------------------ | ------- | ---- | ------ | ------ | ------- | -
|                                               |                                                                            |                                                                              |         | Three months ended
|(In thousands)                                 |                                                                            | March 31,                                                                   
|                                               |                                                                            |                                                                              |         | 2000               |         | 1999
|                                               |                                                                            |                                                                              |         |                    |         |     
|Cash flows from operating activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net income                                                                 |                                                                              | $       | 3,695              |         |      | $      | 4,522  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Adjustments to reconcile net income to net cash from operating activities:
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Depreciation and amortization                                                |         |                    | 378     |      |        |        | 356     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Provision for loan losses                                                    |         |                    | 115     |      |        |        | 730     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net securities gains                                                         |         |                    | (674    | )    |        |        | (4,177  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net amortization/(accretion) on securities                                   |         |                    | (33     | )    |        |        | 7       |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Amortization of intangible assets                                            |         |                    | 248     |      |        |        | 249     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Loans originated for resale                                                  |         |                    | (2,237  | )    |        |        | (14,054 | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sale of loan originations                                      |         |                    | 2,055   |      |        |        | 17,741  |  
|                                              
|                                              
|                                              
|                                              
|                                               | Changes in:                                                               
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest receivable                                                          |         |                    | (305    | )    |        |        | 70      |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest payable                                                             |         |                    | (66     | )    |        |        | (345    | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Other assets and liabilities, net                                            |         |                    | 136     |      |        |        | 1,629   |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Deferred income                                                              |         |                    | (2      | )    |        |        | (2      | )
|                                              
|                                               |                                                                            | Net cash from operating activities                                           |         |                    | 3,310   |      |        |        | 6,726   |  
|                                              
|Cash flows from investing activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in interest bearing deposits with banks                         |                                                                              |         | 449                |         |      |        | 392    |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in funds sold                                                 |                                                                              |         | (10,900            | )       |      |        | (600   | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Investment and mortgage-backed securities:                                
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sales of securities available for sale                         |         |                    | 1,038   |      |        |        | 8,932   |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities held to maturity                      |         |                    | 125     |      |        |        | 0       |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities available for sale                    |         |                    | 26,961  |      |        |        | 15,555  |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities held to maturity                                     |         |                    | (878    | )    |        |        | (125    | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities available for sale                                   |         |                    | (19,936 | )    |        |        | (19,500 | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of mortgage-backed securities available for sale                   |         |                    | (3,926  | )    |        |        | (9,974  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities held to maturity   |         |                    | 41      |      |        |        | 648     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities available for sale |         |                    | 4,127   |      |        |        | 14,083  |  
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in loans made to customers                                    |                                                                              |         | (36,220            | )       |      |        | (8,191 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of premises and equipment, net                                   |                                                                              |         | (521               | )       |      |        | (90    | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Principal payments received under leases                                   |                                                                              |         | 0                  |         |      |        | 17     |        
|                                              
|                                               |                                                                            | Net cash from investing activities                                           |         |                    | (39,640 | )    |        |        | 1,147   |  
|                                              
|Cash flows from financing activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase/(decrease) in deposits                                        |                                                                              |         | 28,721             |         |      |        | (1,168 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Cash dividends paid, net of shares issued through dividend reinvestment    |                                                                              |         | (1,281             | )       |      |        | (1,099 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchase of treasury stock                                                 |                                                                              |         | (2,558             | )       |      |        | (5,020 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Sales of treasury stock                                                    |                                                                              |         | 0                  |         |      |        | 707    |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in short-term borrowings                                      |                                                                              |         | (2,197             | )       |      |        | (1,094 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from FHLB advances                                                |                                                                              |         | 1,200              |         |      |        | 0      |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments of FHLB advances                                                |                                                                              |         | (5,949             | )       |      |        | (756   | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from bank loans                                                   |                                                                              |         | 1,000              |         |      |        | 0      |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments on capital lease                                                |                                                                              |         | (13                | )       |      |        | (12    | )      
|                                              
|                                               |                                                                            | Net cash from financing activities                                           |         |                    | 18,923  |      |        |        | (8,442  | )
|                                              
|Net change in cash and cash equivalents        |                                                                            |                                                                              | (17,407 | )                  |         |      | (569   | )     
|                                              
|                                              
|                                              
|                                              
|Cash and cash equivalents at beginning of year |                                                                            |                                                                              | 48,354  |                    |         |      | 28,195 |       
|                                              
|Cash and cash equivalents at end of period     |                                                                            | $                                                                            | 30,947  |                    |         | $    | 27,626 |       
|                                              

See the Notes to the Consolidated Financial Statements

5



---






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 Insurance Agency 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 March 31, 2000, 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, 1999, 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 three months ended March 31, 2000, and
March 31, 1999, UNB Corp. paid interest in the amount of $22,833 and $23,060,
respectively. For the same three month period federal income taxes paid
totaled $5,605 and $4,639, respectively.

The Corporation classifies securities as held to maturity, available for sale,
or trading. Securities classified as held to maturity are those that
management has the positive intent and ability to hold to maturity. Securities
classified as available for sale are those that 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 gains and losses included as a separate component
of shareholders equity, net of tax. 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, home equity and credit card loans with balances less than
$300. In addition, loans held for sale and leases are excluded from
consideration as impaired.

6



---



UNB CORP.
Notes to Consolidated Financial Statements(continued)

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 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.

All impaired loans are placed on non-accrual status. However, all non-accrual
loans are not considered impaired because non-accrual loans which have been
brought current are included on non-accrual status for six months and would not
be considered impaired.

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 are based on net
income divided by the weighted average number of shares outstanding during the
period. Diluted earnings per share show the dilutive effect of additional
common shares issuable 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.

Certain 1999 amounts have been reclassified to conform to the 2000
presentation.

Note 2  Investment Securities

The amortized cost and estimated fair value of the investment and
mortgage-backed securities, available for sale and held to maturity, as
presented on the consolidated balance sheet at March 31, 2000, and December 31,
1999, are as follows:

7



---



|                                                      
|------------------------------------------------------
|                                                      
|Notes to Consolidated Financial Statements (continued)

|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |        |         |        | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ------ | --------- | ------ | ---------- | - | -------------- | ----- | ------ | ---- | --------- | ---- | ------ | ------ | ------- | ------ | 
|                                              |                                                          |                                                 |                             |        |           |        |            |   | March 31, 2000
|                                              |                                                          |                                                 |                             |        |          
|                                              |                                                          |                                                 |                             |        |           |        |            |   | Gross          |       | Gross  |      | Estimated
|                                              |                                                          |                                                 |                             |        | Amortized |        | Unrealized |   | Unrealized     |       | Fair  
|                                              |                                                          |                                                 |                             |        | Cost      |        | Gains      |   | Losses         |       | Value 
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |       
|Securities available for sale:               
|                                             
|                                             
|                                             
|                                             
|                                              | U.S. Treasury securities                                 |                                                 | $                           | 3,000  |           |        | $          |  |                |       | $      | (13  | )         |      | $      | 2,987  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of U.S. government agencies and corporations |                                                 |                             | 23,685 |           |        |            |  |                |       |        | (279 | )         |      |        | 23,406 |        
|                                             
|                                             
|                                             
|                                             
|Securities held to maturity:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of state and
subdivisions                    |                                                 |                             | 2,525  |           |        |            |  |                |       |        | (5   | )         |      |        | 2,520  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Corporate bonds and other debt
securities                |                                                 |                             | 250    |           |        |            |  |                |       |        |     |           |      |        | 250    |        
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |       
|                                              |                                                          |                                                 | Total debt securities       |        |           | 29,460 |            |   |                |      |        |      |           | (297 | )      |        |         | 29,163 | 
|                                             
|                                             
|                                             
|                                             
|Equity securities available for sale          |                                                          |                                                 | 12,097                      |        |           |        | 1,836      |   |                |       | (637   | )    |           |      | 13,296 |       
|                                             
|                                             
|                                             
|                                             
|Asset-backed securities available
for sale    |                                                          |                                                 | 999                         |        |           |        |           |   |                |       | (29    | )    |           |      | 970    |       
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |       
|                                              |                                                          |                                                 | Total investment securities |        |           | 42,556 |            |   |                | 1,836 |        |      |           | (963 | )      |        |         | 43,429 | 
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
available for sale |                                                          |                                                 | 82,250                      |        |           |        | 8          |   |                |       | (1,595 | )    |           |      | 80,663 |       
|Mortgage-backed securities
held to maturity   |                                                          |                                                 | 547                         |        |           |        | 4          |   |                |       |       |      |           |      | 551    |       
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |       
|                                              |                                                          | Total mortgage-backed securities                |                             |        | 82,797    |        |            |   | 12             |       |        |      | (1,595    | )    |        |        | 81,214  |       
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |       
|                                              |                                                          | Total investment and mortgage-backed securities |                             | $      | 125,353   |        |            | $ | 1,848          |       |        | $    | (2,558    | )    |        | $      | 124,643 |       
|                                              |                                                          |                                                 |                             |        |           |        |            |   |                |       |        |      |           |      |        |       

|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |        |         | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | ------ | --------- | ------- | ---------- | ----- | ----------------- | ----- | ----- | ------ | --------- | ------ | - | ------ | ------ | ------- | 
|                                              |                                                          |                                                 |        |           |         |            |       | December 31, 1999
|                                              |                                                          |                                                 |        |           |        
|                                              |                                                          |                                                 |        |           |         |            |       | Gross             |       | Gross |        | Estimated
|                                              |                                                          |                                                 |        | Amortized |         | Unrealized |       | Unrealized        |       | Fair 
|                                              |                                                          |                                                 |        | Cost      |         | Gains      |       | Losses            |       | Value
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |      
|Securities available for sale:               
|                                             
|                                             
|                                             
|                                             
|                                              | U.S. Treasury securities                                 |                                                 | $      | 4,005     |         |            | $     |                  |       |       | $      | (10       | )      |   | $      | 3,995  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of U.S. government
agencies and corporations |                                                 |        | 29,635    |         |            |       | 4                 |       |       |        | (195      | )      |   |        | 29,444 |        
|                                             
|                                             
|                                             
|                                             
|Securities held to maturity:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of state and
subdivisions                    |                                                 |        | 1,908     |         |            |       |                  |       |       |        | (4        | )      |   |        | 1,904  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Corporate bonds and other debt
securities                |                                                 |        | 250       |         |            |       |                  |       |       |        |          |        |   |        | 250    |        
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |       
|                                              |                                                          | Total debt securities                           |        |           | 35,798  |            |       |                   | 4     |       |        |           | (209   | ) |        |        | 35,593  | 
|                                             
|                                             
|                                             
|                                             
|Equity securities available for sale          |                                                          |                                                 | 12,326 |           |         |            | 3,653 |                   |       |       | (713   | )         |        |   | 15,266 |       
|                                             
|                                             
|                                             
|                                             
|Asset-backed securities available
for sale    |                                                          |                                                 | 999    |           |         |            |      |                   |       |       | (27    | )         |        |   | 972    |       
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |       
|                                              |                                                          | Total investment securities                     |        |           | 49,123  |            |       |                   | 3,657 |       |        |           | (949   | ) |        |        | 51,831  | 
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
available for sale |                                                          |                                                 | 82,487 |           |         |            | 12    |                   |       |       | (1,245 | )         |        |   | 81,254 |       
|Mortgage-backed securities
held to maturity   |                                                          |                                                 | 588    |           |         |            | 6     |                   |       |       |       |           |        |   | 594    |       
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |       
|                                              |                                                          | Total mortgage-backed securities                |        |           | 83,075  |            |       |                   | 18    |       |        |           | (1,245 | ) |        |        | 81,848  | 
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |       
|                                              |                                                          | Total investment and mortgage-backed securities |        | $         | 132,198 |            |       | $                 | 3,675 |       |        | $         | (2,194 | ) |        | $      | 133,679 | 
|                                              |                                                          |                                                 |        |           |         |            |       |                   |       |       |        |           |        |   |        |       

8



---



UNB CORP.
Notes to Consolidated Financial Statements(continued)

During the three month period ended March 31, 2000 and 1999, the proceeds from
sales of securities available for sale were $1,038 and $9,832, respectively.
Net gains of $674 and $4,177 were recognized in 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 March 31,
2000, 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.

|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |      |   |      |  
|-------------------------------------------------------------------------- | ------------------------------------- | - | ------ | ------ | -------------- | ------ | ------ | ------ | --------- | ------ | -------- | ---- | - | ---- | -
|                                                                           |                                       |   |        |        | March 31, 2000
|                                                                           |                                       |   |        |        |                |        |        |        | Estimated |        | Weighted
|                                                                           |                                       |   |        |        | Amortized      |        | Fair   |        | Average  
|                                                                           |                                       |   |        |        | Cost           |        | Value  |        | Yield    
|                                                                           |                                       |   |        |        |                |        |        |        |          
|Securities available for sale:                                            
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|U.S. Treasuries                                                           
|                                                                           | Due in one year or less               |   | $      | 2,002  |                |        | $      | 2,000  |           |        |          | 5.49 | %
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Due after one year through five years |   |        | 998    |                |        |        | 987    |           |        |          | 5.25 |  
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       |   | Total  |        |                | 3,000  |        |        |           | 2,987  |          |      |   | 5.41 | %
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|U.S. Government agencies and corporations                                 
|                                                                           | Due in one year or less               |   |        | 13,204 |                |        |        | 13,044 |           |        |          | 5.85 | %
|                                                                           | Due after one year through five years |   |        | 10,481 |                |        |        | 10,362 |           |        |          | 6.38 |  
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       |   | Total  |        |                | 23,685 |        |        |           | 23,406 |          |      |   | 6.08 | %
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       | $ | 26,685 |        |                | $      | 26,393 |        |           |        | 6.01     | %   
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|Securities held to maturity:                                              
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Obligations of state and political subdivisions                           
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Due in one year or less               |   | $      | 1,782  |                |        | $      | 1,780  |           |        |          | 4.21 | %
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Due after one year through five years |   |        | 743    |                |        |        | 740    |           |        |          | 5.21 |  
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       |   | Total  |        |                | 2,525  |        |        |           | 2,520  |          |      |   | 4.21 | %
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|Corp bonds and other debt securities                                      
|                                                                           | Due after one year through five years |   |        | 250    |                |        |        | 250    |           |        |          | 8.00 |  
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       |   | Total  |        |                | 250    |        |        |           | 250    |          |      |   | 8.00 | %
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       | $ | 2,775  |        |                |        | 2,770  |        |           |        | 4.55     | %   
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|Asset-backed securities available for sale                                 |                                       | $ | 999    |        |                | $      | 970    |        |           |        | 7.00     | %   
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|Mortgage-backed and collateralized
mortgage obligations available for sale |                                       | $ | 82,250 |        |                | $      | 80,663 |        |           |        | 6.50     | %   
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Mortgage-backed and collateralized
mortgage obligations held to maturity   |                                       |   | 547    |        |                |        | 551    |        |           |        | 7.82     |     
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     
|                                                                           |                                       | $ | 82,797 |        |                | $      | 81,214 |        |           |        | 6.51     | %   
|                                                                           |                                       |   |        |        |                |        |        |        |           |        |          |     

At March 31, 2000, 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. Investments
with a carrying value of approximately $112,955 at March 31, 2000 were pledged
to secure public funds and other obligations.

9



---



UNB CORP.
Notes to Consolidated Financial Statements(continued)

Note 3  Loans

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

|                                       |  |                |         |                   |  |   |         | 
|-------------------------------------- |  | -------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | March 31, 2000 |         | December 31, 1999
|                                       |  |                |         |                  
|Commercial, financial and agricultural |  | $              | 106,924 |                   |  | $ | 97,787  | 
|                                      
|                                      
|                                      
|                                      
|Commercial real estate                 |  |                | 102,238 |                   |  |   | 100,205 | 
|                                      
|                                      
|                                      
|                                      
|Aircraft                               |  |                | 130,309 |                   |  |   | 115,301 | 
|                                      
|                                      
|                                      
|                                      
|Residential real estate                |  |                | 240,953 |                   |  |   | 235,345 | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |                | 230,057 |                   |  |   | 226,182 | 
|                                       |  |                |         |                   |  |   |         | 
|Total loans                            |  | $              | 810,481 |                   |  | $ | 774,820 | 
|                                       |  |                |         |                   |  |   |         | 

Impaired loans are as follows:

|                                                   |  |                |       |                   |  |   |     | 
|-------------------------------------------------- |  | -------------- | ----- | ----------------- |  | - | --- | 
|                                                   |  | March 31, 2000 |       | December 31, 1999
|                                                   |  |                |       |                  
|Loans with no allowance for loan
losses allocated  |  | $              | 1,421 |                   |  | $ | 282 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Loans with allowance for loan
losses allocated     |  |                | 327   |                   |  |   | 669 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Amount of allowance allocated                      |  |                | 646   |                   |  |   | 665 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Average of impaired loans,
year-to-date            |  | $              | 1,174 |                   |  | $ | 759 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Interest income recognized during
impairment       |  |                | 28    |                   |  |   | 67  | 
|                                                  
|                                                  
|                                                  
|                                                  
|Cash-basis interest income
recognized year-to-date |  |                | 20    |                   |  |   | 67  | 

At March 31, 2000 and December 31, 1999, loans on non-accrual status and/or
past due 90 days or more approximated $1,700 and $1,989, respectively. The
Other Real Estate Owned balance, net of allowance, was $455 and $325 at March
31, 2000 and December 31, 1999, respectively.

Note 4  Allowance for Loan Losses

A summary of activity in the allowance for loan losses for the three months
ended March 31, 2000, and March 31, 1999, are as follows:

|                                           |  |      |        |      |  |   |        |  
|------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                           |  | 2000 |        | 1999
|Balance  January 1                        |  | $    | 13,174 |      |  | $ | 11,172 |  
|                                          
|                                          
|                                          
|                                          
|Provision charged to operating expense     |  |      | 115    |      |  |   | 730    |  
|                                          
|                                          
|                                          
|                                          
|Loans charged off                          |  |      | (734   | )    |  |   | (369   | )
|                                          
|                                          
|                                          
|                                          
|Recoveries on loans previously
charged off |  |      | 196    |      |  |   | 223    |  
|                                           |  |      |        |      |  |   |        |  
|Balance  March 31                         |  | $    | 12,751 |      |  | $ | 11,756 |  
|                                           |  |      |        |      |  |   |        |  

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

10



---



UNB CORP.
Notes to Consolidated Financial Statements(continued)

consumer loans comprising 13.2%, 12.6%, 16.1%, 29.7% and 28.4%, respectively,
at March 31, 2000. Residential mortgages, automobile, recreational vehicle and
boat loans were the four largest concentrations in the loan portfolio by loan
type. Indirect loans accounted for 60.6% of all consumer loans and 17.2% of
total loans at March 31, 2000. The dealer network from which indirect loans
were purchased includes 88 relationships thus far in 2000, the largest of which
was responsible for 5.7% of the total indirect dollar volume for the first
quarter of 2000.

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.

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 March 31, 2000, 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 $240,766.

At March 31, 2000, the Corporation held two interest rate swap agreements with
notional amounts of $900 and $14,700. The notional amount of an 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
each of the swaps in effect:

|                                        |  |         |                   |         |  |  |               |  
|--------------------------------------- |  | ------- | ----------------- | ------- |  |  | ------------- | -
|                                        |  | Swap #1 |                   | Swap #2
|                                        |  |         |                   |        
|Notional amount                         |  |         | $900              |         |  |  | $14,693       |  
|                                       
|                                       
|                                       
|                                       
|Final expiration                        |  |         | November 20, 2000 |         |  |  | June 18, 2003 |  
|                                       
|                                       
|                                       
|                                       
|Variable rate in effect,
March 31, 2000 |  |         | 6.11              | %       |  |  | 6.19          | %
|                                       
|                                       
|                                       
|                                       
|Fixed rate                              |  |         | 2.88              | %       |  |  | 5.86          | %
|                                       
|                                       
|                                       
|                                       
|Market value, March 31, 2000            |  |         | $15               |         |  |  | $383          |  

Variable interest payments received are based on the three month LIBOR rate
which is adjusted on a quarterly basis. The net income from these agreements
for the three month period ended March 31, 2000 was $20. For the three month
period ended March 31, 1999, net expense of $17 was recorded. Under the terms
of these contracts, future changes in LIBOR will affect the payments received,
the income or expense generated by each swap and their market value.

Note 6  Long Term Debt

Long term debt consists of Federal Home Loan Bank borrowings, two line of
credit borrowing arrangements and a capital lease. The majority of long-term
debt at March 31, 2000 is comprised of advances from the Federal Home Loan Bank
(FHLB) of Cincinnati. Pursuant to collateral agreements with the FHLB,
advances are secured by all FHLB stock and qualifying first mortgage loans.

At March 31, 2000, FHLB advances outstanding are comprised of the following:

11



---



|                                                       |  |               |            |        |  |   |        | 
|------------------------------------------------------ |  | ------------- | ---------- | ------ |  | - | ------ | 
|                                                       |  | UNB CORP.    
|Notes to Consolidated Financial Statements (continued)
|Maturity                                               |  | Interest Rate |            | Amount
|                                                      
|2000                                                   |  |               | 6.00%-7.32 | %      |  | $ | 3,339  | 
|                                                      
|                                                      
|                                                      
|                                                      
|2001                                                   |  |               | 6.10%-7.32 | %      |  |   | 4,524  | 
|                                                      
|                                                      
|                                                      
|                                                      
|2002                                                   |  |               | 5.95%-7.32 | %      |  |   | 31,159 | 
|                                                      
|                                                      
|                                                      
|                                                      
|2003                                                   |  |               | 6.25%-7.32 | %      |  |   | 1,235  | 
|                                                      
|                                                      
|                                                      
|                                                      
|2004                                                   |  |               | 6.28%-7.32 | %      |  |   | 660    | 
|                                                      
|                                                      
|                                                      
|                                                      
|2005                                                   |  |               | 7.32       | %      |  |   | 47     | 
|                                                      
|Total                                                  |  |               |            |        |  | $ | 40,964 | 
|                                                      

Based on the Banks investment in FHLB stock, the maximum dollar amount of FHLB
advance borrowings available to the Bank is $157,704.

The Corporation has maximum borrowing arrangements of $15 million with a
national financial institution consisting of two lines of credit. The total
outstanding balance at March 31, 2000 was $9,500. United Banc Financial
Services, Inc. (UBFS)arranged a $5 million line of credit to partially pay off
its line of credit with United National Bank and Trust Co. and fund future loan
growth. The interest on each draw is variable and is priced off one of several
indexes plus a spread, at the option of UBFS. The loan agreement calls for
quarterly interest payments and is secured by a first security agreement on
UBFS receivables, pledged equity securities held by the Parent Company of UNB
Corp., the unconditional guarantee of UNB Corp., and an intercreditor agreement
with United National Bank and Trust Co. The outstanding balance on this
facility consists of the following draws:

|              |      |        |  |   |       | 
|------------- | ---- | ------ |  | - | ----- | 
|Interest Rate |      | Amount
|              |      |       
|              | 6.96 | %      |  | $ | 3,500 | 
|             
|             
|             
|             
|              | 7.18 |        |  |   | 1,000 | 
|             
|             
|             
|             
|              | 7.35 |        |  |   | 500   | 

The Parent Company of UNB Corp. arranged an unsecured $10 million line of
credit for liquidity purposes and to facilitate additional investment in
subsidiaries. At March 31, 2000, the outstanding balance was $4,500 with an
interest rate of 6.92%. The interest on each draw is variable, is paid at
least quarterly and is priced off one of several indexes plus a spread, at the
option of UNB Corp.

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 March 31, 2000 was
$106.

Note 7  Derivative Instruments and Hedging Activities

The Financial Accounting Standards Boards Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities (FAS 133)is effective for all
fiscal years beginning July 1, 2000 or later. All derivative instruments will
be recorded at their fair values. If the derivative instruments are designated
as hedges of fair values, both the change in the fair value of the hedge and
the hedged item will be included in current earnings. Fair value adjustments
related to cash flow hedges will be 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 derivative instruments in the form of interest rate swaps
hedging fixed rate mortgage loans (see Note 5). Management expects
these interest rate swaps to be recorded at fair value on the
financial statements of the Corporation at adoption of FAS 133.

12



---



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 March 31, 2000, compared to December 31, 1999, and
the results of operations for the quarter ending March 31, 2000, compared to
the same period in 1999. 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 March 31, 2000 were $990,687, an increase of $20,158, or 2.1%,
from year-end 1999. Total earning assets at March 31, 2000 of $947,018
increased from year-end 1999 by $37,282, or 4.1%. The ratio of earning assets
to total assets also increased from 93.7% at December 31, 1999 to 95.6% at
March 31, 2000. Highly liquid balances, comprised of cash and cash
equivalents, federal funds sold and interest bearing deposits with banks,
decreased by $6,956, or 14.2%, from year-end 1999. The reduction in highly
liquid balances and the increase in earning assets are partially the result of
a change in asset mix from cash to federal funds purchased, due to a conversion
of cash balances held at 1999 year-end for Year 2000 liquidity contingencies
back into interest bearing assets.

INVESTMENTS

Balances in the investment and mortgage-backed securities portfolios declined
from 1999 year-end balances by $9,033, or 6.8%. The reduction was due to the
maturity of U.S. Government and Agency securities invested in fairly short term
maturities which were available for sale as potential liquidity sources at
year-end for Year 2000 considerations. Net reductions in these securities were
used to partially fund the growth in outstanding loans during the quarter.
Cash flows from mortgage-backed securities were reinvested in like securities
eligible as collateral to pledge against borrowings with a corresponding increase in yield
as market rates increased. Proceeds from the sale of equity securities in the
Corporations Parent Company during the first quarter of 2000 were used in the
Corporations stock buy back program and other Corporate liquidity needs.

LOANS

For the first quarter of 2000, total loans grew by $35,661, or 4.6%. Aircraft
lending experience the most significant growth of all loan categories thus far
in 2000, with increased outstanding balances of $15,008, or 13.0%, from 1999
year-end levels. This growth was the result of renewed calling and sales
efforts in the central U.S. market as well as reductions in payoffs due to the
rising rate environment. Growth is expected to slow in the second quarter of
the year due to rising interest rates dampening demand as well as competitive
pricing pressures and an inventory shortage of good collateral in the loan size
of the Banks target market. Many of the loans originated after the business
was purchased in June, 1998 were blended rate products which will begin
repricing to prime rate loans in the second and third quarter of this year,
possibly increasing loan payoffs. Management expects this portfolio to
continue to grow with outstanding

13



---



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

balances by year-end 2000 budgeted to be in excess of $150 million.

The commercial lending area experienced growth of $9,137, or 9.34%, from
year-end 1999 levels, with the increase the result of expansion of existing
borrower relationships, especially increased line of credit usage. Commercial
real estate balances increased by $2,034, or 2.0%, from year-end balances with
growth and refinancing opportunities being somewhat curtailed by rising market
rates.

Residential real estate balances increased by $5,608, or 2.4%, for the first
quarter of 2000. This increase was the result of increased seasonal activity
in the residential construction market and the impact of rising market rates.
Increasing rates have slowed the volume of payoffs and refinancings in the
existing portfolio as well as changed borrowers new loan preference from fixed
rate products which are usually sold by the Bank in the secondary market to a
three year ARM product which the Bank retains in portfolio due to its interest
rate risk advantages.

Consumer loans increased by $3,875, or 1.7%, from year-end 1999, with the
majority of the increase, $3,493, in the home equity product which was promoted
during the quarter with three month teaser rates tiered to the amount borrowed.
Direct and indirect installment lending remained flat from year-end 1999 due
to the Bank exiting the indirect boat and recreational vehicle markets to focus
on indirect automobile volumes. Loan activity has been concentrated in
high-end used automobiles, as new automobile financing has been dominated by
leasing and manufacturers financing alternatives.

Managements loan growth target for 2000 is approximately 11.5% over year-end
1999 balances, focusing on the aircraft and consumer portfolios, specifically
the direct consumer and home equity products. In all segments of the loan
portfolio, growth with high credit quality and acceptable yields will be
stressed, while exposure to interest rate risk will be limited.

LIABILITIES

Total liabilities increased by $21,724 or 2.4%, from year-end 1999 levels.
Deposits, the main component of liabilities, increased by $28,721, or 3.8%,
from December 31, 1999. The following table shows deposit composition and
change in deposit mix between the periods ended March 31, 2000 and December 31,
1999:

|                                       |  |                |         |                   |  |   |         | 
|-------------------------------------- |  | -------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | March 31, 2000 |         | December 31, 1999
|                                       |  |                |         |                  
|Non-interest bearing checking          |  | $              | 94,797  |                   |  | $ | 90,790  | 
|                                      
|                                      
|                                      
|                                      
|Interest bearing checking              |  |                | 75,622  |                   |  |   | 77,555  | 
|                                      
|                                      
|                                      
|                                      
|Savings                                |  |                | 242,291 |                   |  |   | 217,304 | 
|                                      
|                                      
|                                      
|                                      
|Certificates of deposit and other time |  |                | 380,245 |                   |  |   | 378,585 | 
|                                       |  |                |         |                   |  |   |         | 
|Total deposits                         |  | $              | 792,955 |                   |  | $ | 764,234 | 
|                                       |  |                |         |                   |  |   |         | 

The category with the most significant change is savings deposits which include
the Money Market Access product in which balances grew by $26 million, or
20.4%, from December 31, 1999. Certificates of deposit generated through the
branch network increased by $6,822, more than offsetting the maturity of $4,990
in brokered certificates. Federal funds purchased and short-term borrowings
declined by $2,197 from December 31, 1999 due to the reduction of Y2K cash
balances which they were used to fund. Federal Home Loan Bank advances and
bank borrowings decreased by $3,762 or 6.9%, primarily due to maturing
advances. These were partially offset by increased bank line of credit
borrowings which were used to fund loan growth in United Banc Financial
Services, Inc. and to fund the purchase of additional treasury stock by UNB
Corp.s parent company.

14



---



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

CAPITAL RESOURCES

Total shareholders equity at March 31, 2000 was $69,108, an decrease of
$1,566, or 2.2%, from year-end 1999. The reductions in shareholders equity
were the result of $1,281 in cash dividends paid and an increase in treasury
stock of $2,558. Shareholders equity also decreased due to the elimination of
unrealized gains and the recognition of unrealized losses, net of deferred tax,
on available for sale securities of $1,422. This reduction was due in part to
the impact of rising interest rates on the market values of fixed rate
investment securities as well as the sale of equity securities with significant
market appreciation. These were partially offset by year-to-date net income of
$3,695.

During the first quarter of 2000, the Corporation completed the repurchase of 8
percent of outstanding stock approved under the Board of Directors August,
1994 repurchase authorization. On April 24, 2000 the Board authorized the
Corporation to repurchase up to an additional 5 percent of its outstanding
common stock reinforcing its commitment to enhancing shareholder value and its
belief that the stock repurchase program is an excellent use of the
Corporations cash flow. The Board had also previously authorized up to an
additional $5 million in treasury stock to be held temporarily for use in
funding various plans of the Corporation which require stock issuance. These
plans include the UNB Corp. Dividend Reinvestment Plan reinstated in the third
quarter of 1999 and internal benefit plans of the Corporation which include the
UNB Corp. Employee Stock Purchase Payroll Deduction Plan, the 401-K plan, and
the stock option plans of 1987 and 1997.

UNB Corp.s capital ratios at March 31, 2000 and December 31, 1999 along with
the ratios required for the Corporation to be adequately and well capitalized
under regulatory guidelines are as follows:

|                                       |  |           |      |              |  |                  |       |   |  |                   |           |  
|-------------------------------------- |  | --------- | ---- | ------------ |  | ---------------- | ----- | - |  | ----------------- | --------- | -
|                                       |  |           |      |              |  |                  |       |   |  | Minimum regula-  
|                                       |  |           |      |              |  |                  |       |   |  | tory requirements
|                                       |  | March 31, |      | December 31, |  | for adequately/ 
|                                       |  | 2000      |      | 1999         |  | well capitalized
|                                       |  |           |      |              |  |                 
|Total capital to risk
weighted assets  |  |           | 9.86 | %            |  |                  | 10.38 | % |  |                   | 8.0%/10.0 | %
|                                      
|                                      
|                                      
|                                      
|Tier 1 capital to
risk weighted assets |  |           | 8.53 | %            |  |                  | 8.94  | % |  |                   | 4.0%/ 6.0 | %
|                                      
|                                      
|                                      
|                                      
|Total capital to
average assets        |  |           | 6.84 | %            |  |                  | 7.02  | % |  |                   | 4.0%/ 5.0 | %

All ratios at March 31, 2000 exceed the required ratios for an adequately
capitalized financial institution. At December 31, 1999 all ratios exceeded
the requirements for a well capitalized financial institution. The ratio of
equity-to-assets at March 31, 2000 was 6.98% versus 7.28% at December 31, 1999.

The dividend of $0.12 per share for the first quarter of 2000 was a 20.0%
increase over the dividend paid in the first quarter of 1999. Cash dividends
paid in the first quarter represent 34.7% of net income for the quarter.

RESULTS OF OPERATIONS

UNB Corp.s first quarter 2000 net income was $3,695 or $0.34 per diluted
share, compared with $4,522, or $0.40 per diluted share for the first quarter
of 1999. This represents a decrease in earnings of 18.3% and a decrease in
diluted earnings per share of 15.0%. The significant factors affecting net
income and earnings per share between the two periods were the respective
pre-tax gains of

15



---



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

$674 and $4,177 for the first quarter of 2000 and 1999 recognized on the sale
of equity securities from the marketable equities security portfolio of UNB
Corp.s Parent Company. Operating earnings for the two periods, excluding the
after-tax effect of these transactions and related expenses taken in
anticipation of the gains, were $3,258 and $2,955 for the first quarter of 2000
and 1999, respectively, an increase of $303, or 10.2%.

Return on average assets and return on average equity for the first quarter of
2000 were 1.52% and 20.84%, respectively, compared to 2.12% and 25.49%,
respectively, for the first quarter of 1999. Adjusted for the impact of the net
securities gains in both periods, return on average assets was 1.34% for the
first quarter of 2000 versus 1.37% for the first quarter of 1999. Return on
average equity was 18.3% for the first quarter of 2000 compared to 16.4% for
the first quarter of 1999.

NET INTEREST INCOME

Net interest income is the Corporations most significant source of earnings
and 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 first quarter of 2000, net interest income was $9,281, an increase of
$404, or 4.6%, over the same period in 1999. Interest income for the first
quarter of 2000 increased by $2,923, or 18.2%, over the same period while
interest expense increased by $2,519, or 35.2%, for the same periods. The
growth in net interest income was primarily the result of growth in average
earning assets of $108,569, or 13.2%, from March, 1999 to March, 2000.

NET INTEREST MARGIN

The net interest margin is net interest income (FTE) divided by average earning
assets. For the first quarter of 2000, net interest margin was 4.01%, a
reduction of 36 basis points from the same period in 1999. Yields on earning
assets increased by 31 basis points, while the cost of interest bearing
liabilities increased by 66 basis points. Asset yields were significantly
impacted by rising market rates including the increase in prime rate of 125
basis points between the second quarter of 1999 and the end of the first
quarter of 2000 and by changes in loan mix from consumer installment and
residential mortgages to the relatively higher yielding aircraft and commercial
loans. The cost of interest bearing liabilities were impacted by the
increasing cost of the Money Market Access account which is tied to the three
month Treasury rate, by the impact of increasing market rates on the cost of
short-term liabilities and the use of more costly bank borrowings to purchase
treasury stock, thus replacing interest free equity with interest bearing debt
in the funding of earning assets.

OTHER INCOME

Other income for the quarter ended March 31, 2000 was $3,392, a decrease of
51.1% from the first quarter of 1999. Excluding security gains on marketable
equity securities of $674 and $4,177 for the first quarter of 2000 and 1999
respectively, other income for the first quarter 2000 declined from the same
period in 1999 by $41.

The Trust Department recorded earnings for the quarter of $1,325, an increase
of $226, or 20.6%, from the same period in 1999. This was accomplished through
an increase in assets managed from March 31, 1999 to March 31, 2000 of 23.8%.
Gains on loans sold in the secondary market declined to $22, or $269, from the
first

16



---



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

quarter of 1999 due to rising interest rates limiting the volume of fixed rate
mortgage loans available for sale. Service charges on deposits and other
operating income remained fairly constant between the two periods. Within
other operating income, merchant service fees increased by 39.0% while income
from the sales of financial products and planning services declined by 63.8% as
the new in-house operation, United Bank Financial Advisors, initiated
operations in fourth quarter of 1999.

OTHER EXPENSES

Other expenses were $6,926 for the quarter, a decrease of $1,287, or 15.7%,
from the same period in 1999. For the first quarter, salary, wages and
benefits declined by $250, or 7.0%. Increases due to annual merit increases
for 2000 along with several additions to staff were more than offset by
reductions in pension, incentive compensation accruals needed for the ROE
incentive model payout and reduced employer contributions to the 401K plan.

First quarter occupancy expenses decreased by 1.2% from the same quarter in
1999 due the June, 1999 closing of the Manchester branch, for which the lease
buyout was recognized in the first quarter of 1999.

Equipment expenses increased by 8.9% for the first quarter, compared to the
same period in 1999. These increases were the result of increased maintenance
costs on the Corporations mainframe and personal computer networks, expenses
related to the several branch transformations into more customer friendly sales
environments and increased costs of outside computer software services.

Other operating expenses for the first quarter were reduced by $1,287, or
33.7%, from the same period in 1999. In the first quarter of 1999 the gain on
the sale of equity securities afforded the Corporation the opportunity to take
advantage of one time expenditures in the areas of Year 2000 compliance, donations,
consulting, sales training for retail personnel and other efficiency and
productivity enhancements of approximately $1,400. Excluding these items,
first quarter 2000 other operating expense was above the same quarter in 1999
by $286 due to increases in franchise taxes and loan related expenses.

During the quarter, the Bank continued in its efforts to resolve the legal
proceedings and dispose 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. Unsuccessful attempts have
been made to contact the State of Ohio Bureau of Underground Storage Tanks
(BUSTER) as well as the large national petroleum company which owned the
facility at the time it was taken out of service and which is responsible for
the contamination cleanup to obtain an engineering status report on the
condition and remediation of the contaminated ground. Three parties have
expressed interest in the property, however, serious negotiations have not yet
occurred. Estimated cleanup costs, should they become the responsibility of
United Bank, are not material to the business or financial condition of the
Bank and have been set up as an allowance against the propertys value on the
Corporations consolidated balance sheet.

ALLOWANCE FOR LOAN LOSSES

The provision for loan losses for the first quarter of 2000 was $115, a
decrease of $615, or 84.2%, from the same period in 1999. At March 31, 2000,
the allowance for loan losses as a percentage of loans outstanding was 1.57%
compared to 1.70% at December 31, 1999. The reduction was due to managements
assessment of the
loan loss allowance and 1999 loss experience based on the ratio of net
charge-offs to average loans which was at its lowest levels in the last ten
years at 0.06%.

17



---



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

This is due to improved underwriting standards and collection efforts in 1999.
In addition, concerns about a lack of historical loss experience in the
relatively new aircraft portfolio have proved unfounded so far, as both
regulatory and ongoing internal examinations of the portfolio have not
uncovered any significant problems. Management also feels the elimination of
concerns for Year 2000s impact on loan delinquencies and losses in the
commercial and commercial real estate portfolio has justified the reduction in
the provision and resulting reduction in allowance. Management continues to
review the amounts of provision for loan losses charged to earnings on a
regular basis, 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.

Net charge-off for the first quarter of 2000 was 0.07% as compared to 0.02% for
the same period in 1999. This increase was the result of increased seasonal
charge-offs in the indirect boat and recreational vehicle experienced during
the colder months of the year. A detailed analysis of the allowance for loan
losses for the first quarter of 2000 as compared to the same period in 1999 is
as follows:

|                                                                                       |                       |                           |        |                                     |     |      |        |        |     |  |     | 
|-------------------------------------------------------------------------------------- | --------------------- | ------------------------- | ------ | ----------------------------------- | --- | ---- | ------ | ------ | --- |  | --- | 
|                                                                                       |                       |                           |        |                                     |     | 2000 |        | 1999  
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       | Balance at January 1, |                           | $      | 13,174                              |     |      | $      | 11,172 |    
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       | Charge-Offs (Domestic):  
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Commercial, Financial, Agricultural |     |      | 234    |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Real Estate  Commercial            |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Real Estate  Residential           |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Aircraft                            |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Consumer Loans                      |     |      | 500    |        |     |  | 369 | 
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       |                       |                           |        | Total Charge-Offs                   |     |      | 734    |        |     |  | 369 | 
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       |                       | Recoveries (Domestic):   
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Commercial, Financial, Agricultural |     |      | 18     |        |     |  | 17  | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Real Estate  Commercial            |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Real Estate  Residential           |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Aircraft                            |     |      |       |        |     |  |    | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                       |                       |                           |        | Consumer Loans                      |     |      | 178    |        |     |  | 206 | 
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       |                       |                           |        | Total Recoveries                    |     |      | 196    |        |     |  | 223 | 
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       |                       | Net Charge-Offs           |        |                                     | 538 |      |        |        | 146 | 
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|                                                                                       |                       | Provision for loan losses |        |                                     | 115 |      |        |        | 730 | 
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|Balance at March 31,                                                                   |                       | $                         | 12,751 |                                     |     | $    | 11,756 |       
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|Ratio of net charge-offs during this
quarter to average loans outstanding this quarter |                       |                           | 0.07   | %                                   |     |      | 0.02   | %     
|                                                                                       |                       |                           |        |                                     |     |      |        |       
|Allowance as a percentage of total loans                                               |                       |                           | 1.57   | %                                   |     |      | 1.73   | %     
|                                                                                       |                       |                           |        |                                     |     |      |        |       

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, chargeoffs and recoveries. The following table sets forth the
Corporations allocation of the allowance for loan losses as of March 31, 2000
and December 31, 1999:

18



---



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

|                        |       |   |                |        |                  |   |       |        | 
|----------------------- | ----- | - | -------------- | ------ | ---------------- | - | ----- | ------ | 
|                        |       |   | March 31, 2000 |        | December 31,1999
|                        |       |   |                |        |                 
|Commercial              |       | $ | 4,173          |        |                  | $ | 5,798 |       
|                       
|                       
|                       
|                       
|Commercial real estate  |       |   | 1,452          |        |                  |   | 1,795 |       
|                       
|                       
|                       
|                       
|Aircraft                |       |   | 1,547          |        |                  |   | 1,020 |       
|                       
|                       
|                       
|                       
|Residential real estate |       |   | 212            |        |                  |   | 206   |       
|                       
|                       
|                       
|                       
|Consumer                |       |   | 2,089          |        |                  |   | 2,859 |       
|                       
|                       
|                       
|                       
|Unallocated             |       |   | 3,278          |        |                  |   | 1,496 |       
|                        |       |   |                |        |                  |   |       |       
|                        | Total |   | $              | 12,751 |                  |   | $     | 13,174 | 
|                        |       |   |                |        |                  |   |       |       

ASSET QUALITY

At March 31, 2000, impaired loans were $1,421, an increase of $1,139 from
December 31, 1999. The amount of allowance allocated to impaired loans has
declined slightly from $665 at December 31, 1999 to $646 at March 31, 2000 due
to the increased levels of collateralization on impaired loans between the two
periods. Nonperforming assets, which include non-accrual loans, accruing loans
past due 90 days or more, restructured loans and other real estate owned were
$2,476 at March 31, 2000 compared to $2,337 at December 31, 1999, an increase
of $139, or 5.9%. The following table presents the amounts of nonperforming
assets and pertinent ratios as of the dates indicated:

|                                                                                      |                                         |  |           |       |              |  |           |       |  |  |      |       | 
|------------------------------------------------------------------------------------- | --------------------------------------- |  | --------- | ----- | ------------ |  | --------- | ----- |  |  | ---- | ----- | 
|                                                                                      |                                         |  | March 31, |       | December 31, |  | March 31,
|                                                                                      |                                         |  | 2000      |       | 1999         |  | 1999     
|                                                                                      |                                         |  |           |       |              |  |          
|                                                                                      | Non-accrual loans                       |  | $         | 1,613 |              |  | $         | 1,636 |  |  | $    | 1,533 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Accruing loans past due
90 days or more |  |           | 87    |              |  |           | 353   |  |  |      | 133   | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Restructured loans                      |  |           | 321   |              |  |           | 23    |  |  |      | 295   | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Other real estate owned                 |  |           | 455   |              |  |           | 325   |  |  |      | 325   | 
|                                                                                      |                                         |  |           |       |              |  |           |       |  |  |      |      
|                                                                                      | Total nonperforming assets              |  | $         | 2,476 |              |  | $         | 2,337 |  |  | $    | 2,286 | 
|                                                                                      |                                         |  |           |       |              |  |           |       |  |  |      |      
|Total nonperforming assets
as a percentage of total
loans and other real
estate owned |                                         |  | 0.31      | %     |              |  | 0.30      | %     |  |  | 0.34 | %    

The ratio of nonperforming loans to total loans outstanding at March 31, 2000
of 0.25%, a one basis point decline from year-end 1999, compares favorably to
the ratio for the Corporations peers, all bank holding companies with
consolidated assets between $500 million and $1 billion, which stands at 0.65%
at December 31, 1999, the most current data available.

LIQUIDITY

Management ensures that the liquidity position of the Corporation is adequate
to meet the credit needs and cash demands of its borrowers and depositors as
well as maintain reserve requirements. This is accomplished through the
Corporations ability to readily convert assets to cash and raise funds in the
market place in a timely and cost effective manner. Total cash, federal funds
sold, investment and mortgage-backed securities available for sale of $163,169
represent 16.5% of total assets at March 31, 2000. Of the investments
available for sale, $26,393 are held in U.S. Treasury and Agency securities,
57.0% of which mature within one year. Approximately $112,955 of total
Corporate securities are 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

19



---



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

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, investments
in the Parent Company, dividends from the Bank and borrowings from a third
party financial institution.

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



---



UNB CORP.
Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK

The Corporations primary market risk exposure is interest rate risk,
which is defined as the potential loss of income or capital as a result of
changes in interest rates. The differences in the cash flows and repricing
characteristics that occur in various assets and liabilities that are available
in the banking industry means that some level of interest rate risk will always
be present, but the Corporation has the responsibility to manage that risk to
minimize the negative impact on both the earnings and capital. Evaluating the
Corporations exposure to changes in interest rates includes assessing both the
management process used to control interest rate risk and the calculated level
of risk. The Corporation maintains the appropriate policies, procedures,
management information systems and internal controls as required by the Joint
Agency Policy Statement on Risk. The Asset and Liability Management Committee
meets regularly to monitor the Corporations exposure to interest rate risk and
to assess strategies to manage that risk.

The Corporation uses a number of methods to calculate and measure interest rate
risk. The asset/liability gap compares the dollar amounts of assets and
liabilities that will mature or reprice in a given time period to determine the
level and direction of interest rate sensitivity. The Corporation is considered
asset sensitive if more assets than liabilities mature or reprice in the
specified time frame and liability sensitive if more liabilities than assets
mature or reprice in that same period. Asset sensitivity, or a positive gap,
indicates that the Corporations exposure is to falling rates, since more
assets than liabilities could reprice or require reinvestment at lower interest
rates. Liability sensitivity, or a negative gap, means that the Corporations
exposure is to rising rates since more liabilities than assets could reprice at
higher rates.

The Corporation makes a number of assumptions when calculating its gap
position. The most significant assumption 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. To
compensate for these extremes, the Corporation uses multiple deposit
distribution assumptions to provide a range of interest rate risk measurements
that it uses as a guide for managing various assets and liabilities. As of
March 31, the Corporations modified twelve month cumulative gap was at -5.40%
compared to -7.42% in the previous period, indicating a moderately liability
sensitive position.

One of the shortcomings of the gap analysis is that the use of a static balance
sheet results in a measure of interest rate risk at one specific point in time.
Simulation analysis provides a more dynamic interpretation of the impact of
rates on the Corporations forecasted income and net present value of assets,
liabilities and capital. The Corporation makes certain assumptions regarding
the level of interest rates, prepayments on assets with imbedded options
including loans and asset backed securities, and the behavior of deposits
without contractual maturity dates. These assumptions, in addition to actual
rates and maturity and repricing dates on loans, investments and deposits, are
incorporated into a computer model which calculates forecasted net income and
discounts the projected cash flows of rate sensitive

21



---



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

assets and liabilities to determine the present value of the Corporations
capital. 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
more 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.

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.

The Corporation has two pay-fixed amortizing interest rate swaps executed as
hedges against fixed rate mortgages held in the portfolio, one initiated in
1993 and the other in 1998. The net cash flows and market values of the swaps
move inversely with those of the fixed rate loans in the portfolio, which
reduces the Corporations exposure to changing interest rates. If rates rise,
the Corporation receives net cash flows from the swaps 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 swaps. At the end
of March, the swaps had a combined net gain of $398 on outstanding notional
principal of $15,592.

22



---



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 18, 2000, for the
purpose of electing five directors and to transact such other business as would
properly come before the meeting. Results of shareholder voting on these
individuals were as follows:

|                            |  |                       |           |              |  |            |           |  |  |  |           | 
|--------------------------- |  | --------------------- | --------- | ------------ |  | ---------- | --------- |  |  |  | --------- | 
|                            |  | Election of Directors
|                            |  |                      
|                            |  | Louis V.              |           | Harold M.    |  | Russell W.
|                            |  | Bockius III           |           | Kolenbrander |  | Maier     
|                            |  |                       |           |              |  |           
|For                         |  |                       | 8,533,578 |              |  |            | 8,595,093 |  |  |  | 8,509,337 | 
|                           
|                           
|                           
|                           
|Against                     |  |                       | 106,845   |              |  |            | 45,330    |  |  |  | 131,086   | 
|                           
|                           
|                           
|                           
|Abstain                     |  |                       | 200,789   |              |  |            | 200,789   |  |  |  | 200,789   | 
|                           
|                           
|                           
|                           
|Shares not voted by
brokers |  |                       | 660,094   |              |  |            | 660,094   |  |  |  | 660,094   | 
|                           
|                            |  | Abner A.              |           | Robert J.   
|                            |  | Yoder                 |           | Gasser      
|                            |  |                       |           |             
|For                         |  |                       | 8,594,700 |              |  |            | 8,535,214 | 
|                           
|                           
|                           
|                           
|Against                     |  |                       | 45,722    |              |  |            | 105,209   | 
|                           
|                           
|                           
|                           
|Abstain                     |  |                       | 200,789   |              |  |            | 200,789   | 
|                           
|                           
|                           
|                           
|Shares not voted by
brokers |  |                       | 660,094   |              |  |            | 660,094   | 

Item 5  Other Information

On April 24, 2000, UNB Corp. announced the appointment of Roger L. Mann to
chairman of the board of directors and the reappointment of E. Lang DAtri to
vice chairman of the board of directors. Mann, 58, has served as president and
chief executive officer of UNB Corp. since 1997 and will continue in those
capacities with the additional responsibility of chairman. He succeeds
Chairman Donald W. Schneider, who will retire from the board on May 8. DAtri,
61, is an attorney and principal of Zollinger, DAtri, Gruber, Thomas & Co. He

23



---



UNB CORP.
PART II  OTHER INFORMATION (continued)

has served on UNB Corp.s board since 1978 and as vice chairman of the board of
directors since 1998.

Item 6  Exhibits and Reports on Form 8-K

|   |                                                                                                            |  |                                                                       |  | 
|-- | ---------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------- |  | 
|A. | Exhibit                                                                                                   
|   | Number                                                                                                     |  | Exhibit                                                              
|   |                                                                                                            |  |                                                                      
|   | 27.200                                                                                                     |  | Financial Data Schedule for the three months ended March 31, 2000 (1)
|  
|  
|  
|  
|   | 27.199                                                                                                     |  | Financial Data Schedule for the three months ended March 31, 1999 (1)
|  
|B. | Reports - Form 8-K - No reports on Form 8-K were filed by the Registrant during the first quarter of 2000.



|(1) |  | Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
S-K.
|--- |  | ------------------------------------------------------------------------------

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 | May 12, 2000 |  |  |  |  |  | /s/ James J. Pennetti        | 
|     |              |  | 
|     |              |  |  |  |  |  | James J. Pennetti            | 
|    
|    
|    
|    
|     |              |  |  |  |  |  | (Duly authorized officer and | 
|    
|    
|    
|    
|     |              |  |  |  |  |  | Treasurer, UNB Corp.)        | 

24