TABLE OF CONTENTS




|                                                                                      |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|CONSOLIDATED BALANCE SHEETS                                                          
|CONSOLIDATED STATEMENTS OF INCOME                                                    
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                      
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY                           
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                
|Notes to Consolidated Financial Statements                                           
|Managements Discussion and Analysis of Financial Condition and Results of Operations
|Quantitative and Qualitative Disclosures About Market Risk                           
|PART II  OTHER INFORMATION                                                          
|Item 1  Legal Proceedings                                                           
|Item 2  Changes in Securities and Use of Proceeds                                   
|Item 3  Defaults Upon Senior Securities                                             
|Item 4  Submission of Matters to a Vote of Security Holders                         
|Item 5  Other Information                                                           
|Item 6  Exhibits and Reports on Form 8-K                                            
|SIGNATURES                                                                           
|Exhibit 27.1                                                                         
|Exhibit 27.2                                                                         



---



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended June 30, 2000

Commission file number 0-13270

UNB CORP.


|                                                              |  |                                        
|------------------------------------------------------------- |  | ---------------------------------------
|Ohio                                                          |  | 34-1442295                             
|                                                              |  |                                        
|(State or other jurisdiction
ofincorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  |                                        
|                                                             
|220 Market Avenue, South                                      |  |                                        
|                                                             
|                                                             
|                                                             
|                                                             
|Canton, Ohio                                                  |  | 44702                                  
|                                                              |  |                                        
|(Address of principal executive offices)                      |  | (Zip Code)                             

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

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X       No ____

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

|                                 |  |                                                      
|-------------------------------- |  | -----------------------------------------------------
|Common Stock, $1.00 Stated Value |  | Outstanding at July 31, 2000
10,458,006 Common Shares





---



##### Table of Contents



UNB CORP.

FORM 10-Q

QUARTER ENDED JUNE 30, 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        |     





---



##### Table of Contents






UNB CORP.  CONSOLIDATED BALANCE SHEETS


|                                                                                                                |                |                                    |                            |                                            |        |           |           |         |        |         |         | 
|--------------------------------------------------------------------------------------------------------------- | -------------- | ---------------------------------- | -------------------------- | ------------------------------------------ | ------ | --------- | --------- | ------- | ------ | ------- | ------- | 
|(In thousands except per share data)                                                                            |                | June 30,                           |                            | December 31,                              
|                                                                                                                |                | 2000                               |                            | 1999                                      
|                                                                                                                |               
|ASSETS                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash and cash equivalents                                                                                       |                | $                                  | 31,181                     |                                            |        | $         | 48,354    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Federal funds sold                                                                                              |                |                                    | 3,000                      |                                            |        |           | 0         |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Interest bearing deposits with banks                                                                            |                |                                    | 1,062                      |                                            |        |           | 568       |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Securities, net (Fair value:                                                                                   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                | $44,323 and $51,831, respectively) |                            |                                            | 44,315 |           |           |         | 51,835 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Mortgage-backed securities (Fair value:                                                                        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                |                | $81,825 and $81,848, respectively) |                            |                                            | 81,821 |           |           |         | 81,842 |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans originated and held for sale                                                                              |                |                                    | 717                        |                                            |        |           | 671       |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loans:                                                                                                         
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Total loans                                                                                                     |                |                                    | 835,526                    |                                            |        |           | 774,820   |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Less allowance for loan losses                                                                                  |                |                                    | (12,720                    | )                                          |        |           | (13,174   | )      
|                                                                                                               
|                                                                                                                | Net loans      |                                    |                            | 822,806                                    |        |           |           | 761,646 |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Premises and equipment, net                                                                                     |                |                                    | 11,053                     |                                            |        |           | 10,657    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Intangible assets                                                                                               |                |                                    | 2,863                      |                                            |        |           | 3,336     |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued interest receivable and other assets                                                                    |                |                                    | 13,172                     |                                            |        |           | 11,620    |        
|                                                                                                               
|                                                                                                                |                |                                    | Total Assets               |                                            | $      | 1,011,990 |           |         | $      | 970,529 |        
|                                                                                                               
|                                                                                                               
|LIABILITIES                                                                                                    
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Deposits:                                                                                                      
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Noninterest bearing deposits                                                                                    |                | $                                  | 99,493                     |                                            |        | $         | 90,790    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Interest bearing deposits                                                                                       |                |                                    | 711,404                    |                                            |        |           | 673,444   |        
|                                                                                                               
|                                                                                                                | Total deposits |                                    |                            | 810,897                                    |        |           |           | 764,234 |       
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Short-term borrowings                                                                                           |                |                                    | 71,598                     |                                            |        |           | 74,107    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Long-term debt                                                                                                  |                |                                    | 52,060                     |                                            |        |           | 54,332    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accrued taxes, expenses and other liabilities                                                                   |                |                                    | 6,651                      |                                            |        |           | 7,182     |        
|                                                                                                               
|                                                                                                                |                |                                    | Total Liabilities          |                                            |        | 941,206   |           |         |        | 899,855 |        
|                                                                                                               
|SHAREHOLDERS EQUITY                                                                                           
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Common stock ($1.00 stated value, 50,000,000 shares authorized;
11,646,293 and 11,646,310 issued, respectively) |                |                                    | 11,646                     |                                            |        |           | 11,646    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Paid-in capital                                                                                                 |                |                                    | 29,007                     |                                            |        |           | 29,008    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Retained earnings                                                                                               |                |                                    | 51,906                     |                                            |        |           | 47,011    |        
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Treasury stock, 1,163,385 and 894,081 shares at cost                                                            |                |                                    | (21,425                    | )                                          |        |           | (17,952   | )      
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Accumulated other comprehensive income                                                                          |                |                                    | (350                       | )                                          |        |           | 961       |        
|                                                                                                               
|                                                                                                                |                |                                    | Total Shareholders Equity |                                            |        | 70,784    |           |         |        | 70,674  |        
|                                                                                                               
|                                                                                                                |                |                                    |                            | Total Liabilities and Shareholders Equity |        | $         | 1,011,990 |         |        | $       | 970,529 | 
|                                                                                                               

See Notes to the Consolidated Financial Statements

1



---



##### Table of Contents






UNB CORP.
CONSOLIDATED STATEMENTS OF INCOME

|                                                    |                                                                     |                        |       |                  |        |      |       |            |       |      |        |            |        |   |        |            |        | 
|--------------------------------------------------- | ------------------------------------------------------------------- | ---------------------- | ----- | ---------------- | ------ | ---- | ----- | ---------- | ----- | ---- | ------ | ---------- | ------ | - | ------ | ---------- | ------ | 
|(In thousands except per share data)                |                                                                     | Three Months Ended     |       | Six Months Ended
|                                                    |                                                                     | June 30,               |       | June 30,        
|                                                    |                                                                     |                        |       |                  |        |     
|                                                    |                                                                     |                        |       | 2000             |        | 1999 |       | 2000       |       | 1999
|                                                    |                                                                     |                        |       |                  |        |      |       |            |       |     
|Interest income:                                   
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and fees on loans:                                        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Taxable                                                             |                        | $     | 17,662           |        |      | $     | 14,360     |       |      | $      | 34,396     |        |   | $      | 28,271     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Tax exempt                                                          |                        |       | 41               |        |      |       | 34         |       |      |        | 71         |        |   |        | 61         |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest and dividends on investments
& mortgage-backed securities:
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Taxable                                                             |                        |       | 1,930            |        |      |       | 1,878      |       |      |        | 3,923      |        |   |        | 3,842      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Tax exempt                                                          |                        |       | 30               |        |      |       | 0          |       |      |        | 51         |        |   |        | 0          |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on bank deposits and federal funds sold                    |                        |       | 197              |        |      |       | 181        |       |      |        | 368        |        |   |        | 305        |       
|                                                   
|                                                    | Total interest income                                               |                        |       | 19,860           |        |      |       | 16,453     |       |      |        | 38,809     |        |   |        | 32,479     |       
|                                                   
|Interest expense:                                  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on deposits                                                |                        |       | 8,652            |        |      |       | 6,079      |       |      |        | 16,660     |        |   |        | 11,943     |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on short-term borrowings                                   |                        |       | 920              |        |      |       | 670        |       |      |        | 1,792      |        |   |        | 1,348      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest on FHLB advances                                           |                        |       | 801              |        |      |       | 602        |       |      |        | 1,589      |        |   |        | 1,209      |       
|                                                   
|                                                    |                                                                     | Total interest expense |       |                  | 10,373 |      |       |            | 7,351 |      |        |            | 20,041 |   |        |            | 14,500 | 
|                                                   
|Net interest income                                 |                                                                     |                        | 9,487 |                  |        |      | 9,102 |            |       |      | 18,768 |            |        |   | 17,979 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for loan losses                           |                                                                     |                        | 255   |                  |        |      | 558   |            |       |      | 370    |            |        |   | 1,288  |           
|                                                   
|Net interest income after provision for loan losses |                                                                     |                        | 9,232 |                  |        |      | 8,544 |            |       |      | 18,398 |            |        |   | 16,691 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Other income:                                      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Service charges on deposits                                         |                        |       | 674              |        |      |       | 688        |       |      |        | 1,337      |        |   |        | 1,348      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Trust Department income                                             |                        |       | 1,462            |        |      |       | 1,400      |       |      |        | 2,787      |        |   |        | 2,499      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating income                                              |                        |       | 893              |        |      |       | 763        |       |      |        | 1,601      |        |   |        | 1,472      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Securities gains, net                                               |                        |       | 334              |        |      |       | (50        | )     |      |        | 1,008      |        |   |        | 4,127      |       
|                                                    | Gains on loans originated for resale and sold                       |                        |       | 61               |        |      |       | 140        |       |      |        | 83         |        |   |        | 431        |       
|                                                   
|                                                    |                                                                     | Total other income     |       |                  | 3,424  |      |       |            | 2,941 |      |        |            | 6,816  |   |        |            | 9,877  | 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                   
|Other expenses:                                    
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Salary, wages and benefits                                          |                        |       | 3,289            |        |      |       | 3,283      |       |      |        | 6,608      |        |   |        | 6,852      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Occupancy                                                           |                        |       | 438              |        |      |       | 441        |       |      |        | 850        |        |   |        | 858        |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Equipment                                                           |                        |       | 939              |        |      |       | 969        |       |      |        | 1,940      |        |   |        | 1,888      |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other operating expense                                             |                        |       | 2,296            |        |      |       | 1,661      |       |      |        | 4,490      |        |   |        | 4,969      |       
|                                                   
|                                                    | Total other expenses                                                |                        |       | 6,962            |        |      |       | 6,354      |       |      |        | 13,888     |        |   |        | 14,567     |       
|                                                   
|Income before income taxes                          |                                                                     |                        | 5,694 |                  |        |      | 5,131 |            |       |      | 11,326 |            |        |   | 12,001 |           
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                                                     |                        | 1,953 |                  |        |      | 1,804 |            |       |      | 3,890  |            |        |   | 4,152  |           
|                                                   
|                                                    | Net income                                                          |                        | $     | 3,741            |        |      | $     | 3,327      |       |      | $      | 7,436      |        |   | $      | 7,849      |       
|                                                   
|Earnings per share:                                
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                               |                        | $     | 0.36             |        |      | $     | 0.31       |       |      | $      | 0.70       |        |   | $      | 0.72       |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                             |                        | $     | 0.35             |        |      | $     | 0.30       |       |      | $      | 0.70       |        |   | $      | 0.70       |       
|                                                   
|Dividends per share                                 |                                                                     | $                      | 0.12  |                  |        | $    | 0.14  |            |       | $    | 0.24   |            |        | $ | 0.24   |           
|                                                   
|Weighted average shares outstanding:               
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Basic                                                               |                        |       | 10,529,643       |        |      |       | 10,847,557 |       |      |        | 10,610,254 |        |   |        | 10,937,339 |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Diluted                                                             |                        |       | 10,628,373       |        |      |       | 10,999,219 |       |      |        | 10,697,360 |        |   |        | 11,087,862 |       
|                                                   

See Notes to the Consolidated Financial Statements

2



---



##### Table of Contents






UNB CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|                                                                                |                                                                                     |                                         |       |                  |      |      |       |      |      |      |       |      |        |   |       |       |      |  
|------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------- | ----- | ---------------- | ---- | ---- | ----- | ---- | ---- | ---- | ----- | ---- | ------ | - | ----- | ----- | ---- | -
|(In thousands)                                                                  |                                                                                     | Three Months Ended                      |       | Six Months Ended
|                                                                                |                                                                                     | June 30,                                |       | June 30,        
|                                                                                |                                                                                     |                                         |       |                  |      |     
|                                                                                |                                                                                     |                                         |       | 2000             |      | 1999 |       | 2000 |      | 1999
|                                                                                |                                                                                     |                                         |       |                  |      |      |       |      |      |     
|Net Income                                                                      |                                                                                     | $                                       | 3,741 |                  |      | $    | 3,327 |      |      | $    | 7,436 |      |        | $ | 7,849 |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Other comprehensive income, net of tax
Unrealized gains/(losses) on securities:
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Unrealized gains/(losses) arising
during the period                                 |                                         |       | (594             | )    |      |       | (447 | )    |      |       | (656 | )      |   |       | 2,047 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Less: Reclassified adjustment for
accumulated
gains/(losses) included in net income |                                         |       | 217              |      |      |       | (33  | )    |      |       | 655  |        |   |       | 2,683 |     
|                                                                                |                                                                                     |                                         |       |                  |      |      |       |      |      |      |       |      |        |   |       |      
|                                                                                |                                                                                     | Unrealized gains/(losses) on securities |       |                  | (811 | )    |       |      | (414 | )    |       |      | (1,311 | ) |       |       | (636 | )
|                                                                                |                                                                                     |                                         |       |                  |      |      |       |      |      |      |       |      |        |   |       |      
|Comprehensive income                                                            |                                                                                     | $                                       | 2,930 |                  |      | $    | 2,913 |      |      | $    | 6,125 |      |        | $ | 7,213 |      
|                                                                                |                                                                                     |                                         |       |                  |      |      |       |      |      |      |       |      |        |   |       |      

See Notes to the Consolidated Financial Statements

3



---



##### Table of Contents






UNB CORP.
Consolidated Statements of Changes in Shareholders Equity

(In thousands except per share data)

|                                                                                          |  |                  |        |         |  |   |        |  
|----------------------------------------------------------------------------------------- |  | ---------------- | ------ | ------- |  | - | ------ | -
|                                                                                          |  | Six Months Ended
|                                                                                          |  |                 
|                                                                                          |  | 6/30/00          |        | 6/30/99
|                                                                                          |  |                  |        |        
|Balance at beginning of period                                                            |  | $                | 70,674 |         |  | $ | 71,702 |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Net Income                                                                                |  |                  | 7,436  |         |  |   | 7,849  |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Cash dividends $0.24 and $0.24 per share, respectively                                    |  |                  | (2,542 | )       |  |   | (2,614 | )
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Treasury stock purchases                                                                  |  |                  | (3,473 | )       |  |   | (9,229 | )
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Treasury stock sales                                                                      |  |                  | 0      |         |  |   | 828    |  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Change in market value on investment securities
available for sale, net of deferred taxes |  |                  | (1,311 | )       |  |   | (636   | )
|                                                                                          |  |                  |        |         |  |   |        |  
|Balance at end of period                                                                  |  | $                | 70,784 |         |  | $ | 67,900 |  
|                                                                                          |  |                  |        |         |  |   |        |  

See Notes to the Consolidated Financial Statements

4



---



##### Table of Contents






UNB CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                               |                                                                            |                                                                              |         |                  |         |      |        |         |         |  
|---------------------------------------------- | -------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------- | ---------------- | ------- | ---- | ------ | ------- | ------- | -
|                                               |                                                                            |                                                                              |         | Six months ended
|(In thousands)                                 |                                                                            | June 30,                                                                    
|                                               |                                                                            |                                                                              |         | 2000             |         | 1999
|                                               |                                                                            |                                                                              |         |                  |         |     
|Cash flows from operating activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net income                                                                 |                                                                              | $       | 7,436            |         |      | $      | 7,849   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Adjustments to reconcile net income to net cash from operating activities:
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Depreciation and amortization                                                |         |                  | 720     |      |        |         | 737     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Provision for loan losses                                                    |         |                  | 370     |      |        |         | 1,288   |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net securities gains                                                         |         |                  | (1,008  | )    |        |         | (4,127  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Net amortization/(accretion) on securities                                   |         |                  | (24     | )    |        |         | (51     | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Amortization of intangible assets                                            |         |                  | 473     |      |        |         | 499     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Loans originated for resale                                                  |         |                  | (4,874  | )    |        |         | (21,076 | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sale of loan originations                                      |         |                  | 4,911   |      |        |         | 26,949  |  
|                                              
|                                              
|                                              
|                                              
|                                               | Changes in:                                                               
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest receivable                                                          |         |                  | (501    | )    |        |         | (169    | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Interest payable                                                             |         |                  | 40      |      |        |         | 74      |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Other assets and liabilities, net                                            |         |                  | (909    | )    |        |         | 442     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Deferred income                                                              |         |                  | (6      | )    |        |         | (3      | )
|                                              
|                                               |                                                                            | Net cash from operating activities                                           |         |                  | 6,628   |      |        |         | 12,412  |  
|                                              
|Cash flows from investing activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net change in interest bearing deposits with banks                         |                                                                              |         | (494             | )       |      |        | (26,393 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in funds sold                                                 |                                                                              |         | (3,000           | )       |      |        | (700    | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Investment and mortgage-backed securities:                                
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from sales of securities available for sale                         |         |                  | 1,527   |      |        |         | 9,301   |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities held to maturity                      |         |                  | 1,125   |      |        |         | 500     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Proceeds from maturities of securities available for sale                    |         |                  | 33,768  |      |        |         | 60,701  |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities held to maturity                                     |         |                  | (2,715  | )    |        |         | (253    | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of securities available for sale                                   |         |                  | (26,887 | )    |        |         | (79,868 | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Purchases of mortgage-backed securities available for sale                   |         |                  | (9,266  | )    |        |         | (29,333 | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities held to maturity   |         |                  | 79      |      |        |         | 976     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                            | Principal payments received on mortgage-backed securities available for sale |         |                  | 8,924   |      |        |         | 26,559  |  
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in loans made to customers                                    |                                                                              |         | (61,613          | )       |      |        | (35,022 | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of premises and equipment, net                                   |                                                                              |         | (1,116           | )       |      |        | (398    | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Principal payments received under leases                                   |                                                                              |         | 0                |         |      |        | 23      |        
|                                              
|                                               |                                                                            | Net cash from investing activities                                           |         |                  | (59,668 | )    |        |         | (73,907 | )
|                                              
|Cash flows from financing activities:         
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase/(decrease) in deposits                                        |                                                                              |         | 46,663           |         |      |        | 70,394  |        
|                                              
|                                              
|                                              
|                                              
|                                               | Cash dividends paid, net of shares issued through dividend reinvestment    |                                                                              |         | (2,542           | )       |      |        | (2,614  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Purchase of treasury stock                                                 |                                                                              |         | (3,473           | )       |      |        | (9,229  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Sales of treasury stock                                                    |                                                                              |         | 0                |         |      |        | 828     |        
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in short-term borrowings                                      |                                                                              |         | (2,509           | )       |      |        | 1,414   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from FHLB advances                                                |                                                                              |         | 1,200            |         |      |        | 2,900   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments of FHLB advances                                                |                                                                              |         | (6,946           | )       |      |        | (1,525  | )      
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from bank loans                                                   |                                                                              |         | 3,500            |         |      |        | 0       |        
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments on capital lease                                                |                                                                              |         | (26              | )       |      |        | (24     | )      
|                                              
|                                               |                                                                            | Net cash from financing activities                                           |         |                  | 35,867  |      |        |         | 62,144  |  
|                                              
|Net change in cash and cash equivalents        |                                                                            |                                                                              | (17,173 | )                |         |      | 649    |        
|                                              
|                                              
|                                              
|                                              
|Cash and cash equivalents at beginning of year |                                                                            |                                                                              | 48,354  |                  |         |      | 28,195 |        
|                                              
|Cash and cash equivalents at end of period     |                                                                            | $                                                                            | 31,181  |                  |         | $    | 28,844 |        
|                                              

See Notes to the Consolidated Financial Statements

5



---



##### Table of Contents






UNB CORP.Notes to Consolidated Financial Statements

Note 1  Summary of Significant Accounting Policies

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

The accompanying consolidated financial statements include the accounts of UNB
Corp. and its wholly owned subsidiaries United National Bank & Trust Co.,
United Banc Financial Services, Inc. and United 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 June 30, 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 six months ended June 30, 2000, and June
30, 1999, UNB Corp. paid interest in the amount of $20,001 and $14,426,
respectively. For the same six month period federal income taxes paid totaled
$3,260 and $2,785, 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



---



##### Table of Contents



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 June 30, 2000, and December 31,
1999, are as follows:

7



---



##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements(continued)

|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |        |         |        | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ------ | ------------- | ------ | ---------- | -- | ---------- | ----- | ------ | ---- | --------- | ---- | ------ | ------ | ------- | ------ | 
|                                              |                                                          |                                                 |                             |        | June 30, 2000
|                                              |                                                          |                                                 |                             |        |              
|                                              |                                                          |                                                 |                             |        |               |        |            |    | Gross      |       | Gross  |      | Estimated
|                                              |                                                          |                                                 |                             |        | Amortized     |        | Unrealized |    | Unrealized |       | Fair  
|                                              |                                                          |                                                 |                             |        | Cost          |        | Gains      |    | Losses     |       | Value 
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |       
|Securities available for sale:               
|                                             
|                                             
|                                             
|                                             
|U.S. Treasury securities                      |                                                          | $                                               | 999                         |        |               | $      |           |    |            | $     | (9     | )    |           | $    | 990    |       
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of U.S. government
agencies and corporations |                                                 |                             | 25,848 |               |        |            | 22 |            |       |        | (229 | )         |      |        | 25,641 |        
|                                             
|                                             
|                                             
|                                             
|Securities held to maturity:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Obligations of state and
Municipal subdivisions          |                                                 |                             | 3,089  |               |        |            | 9  |            |       |        | (1   | )         |      |        | 3,097  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Corporate bonds and other debt
securities                |                                                 |                             | 250    |               |        |            |   |            |       |        |     |           |      |        | 250    |        
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |       
|                                              |                                                          |                                                 | Total debt securities       |        |               | 30,186 |            |    |            | 31    |        |      |           | (239 | )      |        |         | 29,978 | 
|                                             
|                                             
|                                             
|                                             
|Equity securities available for sale          |                                                          |                                                 | 12,212                      |        |               |        | 1,860      |    |            |       | (693   | )    |           |      | 13,379 |       
|                                             
|                                             
|                                             
|                                             
|Asset-backed securities available
for sale    |                                                          |                                                 | 999                         |        |               |        |           |    |            |       | (33    | )    |           |      | 966    |       
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |       
|                                              |                                                          |                                                 | Total investment securities |        |               | 43,397 |            |    |            | 1,891 |        |      |           | (965 | )      |        |         | 44,323 | 
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
available for sale |                                                          |                                                 | 82,769                      |        |               |        | 15         |    |            |       | (1,472 | )    |           |      | 81,312 |       
|                                             
|                                             
|                                             
|                                             
|Mortgage-backed securities
held to maturity   |                                                          |                                                 | 509                         |        |               |        | 4          |    |            |       |       |      |           |      | 513    |       
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |       
|                                              |                                                          | Total mortgage-backed securities                |                             |        | 83,278        |        |            |    | 19         |       |        |      | (1,472    | )    |        |        | 81,825  |       
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |       
|                                              |                                                          | Total investment and mortgage-backed securities |                             | $      | 126,675       |        |            | $  | 1,910      |       |        | $    | (2,437    | )    |        | $      | 126,148 |       
|                                              |                                                          |                                                 |                             |        |               |        |            |    |            |       |        |      |           |      |        |       

|                                              |                                                          |                                                 |        |                   |         |            |       |            |       |       |        |           |        |   |        |        |         | 
|--------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | ------ | ----------------- | ------- | ---------- | ----- | ---------- | ----- | ----- | ------ | --------- | ------ | - | ------ | ------ | ------- | 
|                                              |                                                          |                                                 |        | 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



---



##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements(continued)

During the six month period ended June 30, 2000 and 1999, the proceeds from
sales of securities available for sale were $1,527 and $9,301, respectively.
Net gains of $1,008 and $4,127 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 June 30,
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.

|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |      |  
|-------------------------------------------------------------------------- | ------------------------------------- | - | ------------- | ------ | ----- | - | --------- | ------ | -------- |  | ---- | ---- | -
|                                                                           |                                       |   | June 30, 2000
|                                                                           |                                       |   |              
|                                                                           |                                       |   |               |        |       |   | Estimated |        | Weighted
|                                                                           |                                       |   | Amortized     |        | Fair  |   | Average  
|                                                                           |                                       |   | Cost          |        | Value |   | Yield    
|                                                                           |                                       |   |               |        |       |   |          
|Securities available for sale:                                            
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|U.S. Treasuries
Due in one year or less                                    |                                       | $ | 999           |        |       | $ | 990       |        |          |  | 5.40 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Total                                                                      |                                       |   | 999           |        |       |   | 990       |        |          |  | 5.40 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|U.S. Government agencies and corporations
Due in one year or less          |                                       |   | 13,670        |        |       |   | 13,534    |        |          |  | 5.69 | %   
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Due after one year through five years                                      |                                       |   | 12,178        |        |       |   | 12,107    |        |          |  | 5.34 |     
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Total                                 |   |               | 25,848 |       |   |           | 25,641 |          |  |      | 5.53 | %
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           |                                       | $ | 26,847        |        |       | $ | 26,631    |        |          |  | 5.52 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Securities held to maturity:                                              
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Obligations of state and political subdivisions
Due in one year or less    |                                       | $ | 2,346         |        |       | $ | 2,351     |        |          |  | 4.55 | %   
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Due after one year through five years                                      |                                       |   | 743           |        |       |   | 746       |        |          |  | 5.21 |     
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Total                                                                      |                                       |   | 3,089         |        |       |   | 3,097     |        |          |  | 4.71 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Corp bonds and other debt securities                                      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Due after one year through five years |   |               | 250    |       |   |           | 250    |          |  |      | 8.00 |  
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Total                                 |   |               | 250    |       |   |           | 250    |          |  |      | 8.00 | %
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           |                                       | $ | 3,339         |        |       |   | 3,347     |        |          |  | 4.95 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Asset-backed securities available for sale                                 |                                       | $ | 999           |        |       | $ | 966       |        |          |  | 6.85 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|Mortgage-backed and collateralized
mortgage obligations available for sale |                                       | $ | 82,769        |        |       | $ | 81,312    |        |          |  | 6.54 | %   
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Mortgage-backed and collateralized
mortgage obligations held to maturity   |                                       |   | 509           |        |       |   | 513       |        |          |  | 7.82 |     
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     
|                                                                           |                                       | $ | 83,278        |        |       | $ | 81,825    |        |          |  | 6.54 | %   
|                                                                           |                                       |   |               |        |       |   |           |        |          |  |      |     

At June 30, 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 $105,374 at June 30, 2000 were pledged
to secure public funds and other obligations.

9



---



##### Table of Contents



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:

|                                       |  |               |         |                   |  |   |         | 
|-------------------------------------- |  | ------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | June 30, 2000 |         | December 31, 1999
|                                       |  |               |         |                  
|Commercial, financial and agricultural |  | $             | 111,475 |                   |  | $ | 98,775  | 
|                                      
|                                      
|                                      
|                                      
|Commercial real estate                 |  |               | 106,946 |                   |  |   | 100,205 | 
|                                      
|                                      
|                                      
|                                      
|Aircraft                               |  |               | 133,110 |                   |  |   | 115,301 | 
|                                      
|                                      
|                                      
|                                      
|Residential real estate                |  |               | 248,873 |                   |  |   | 235,345 | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |               | 235,122 |                   |  |   | 225,194 | 
|                                       |  |               |         |                   |  |   |         | 
|Total loans                            |  | $             | 835,526 |                   |  | $ | 774,820 | 
|                                       |  |               |         |                   |  |   |         | 

Impaired loans are as follows:

|                                                   |  |               |       |                   |  |   |     | 
|-------------------------------------------------- |  | ------------- | ----- | ----------------- |  | - | --- | 
|                                                   |  | June 30, 2000 |       | December 31, 1999
|                                                   |  |               |       |                  
|Loans with no allowance for loan
losses allocated  |  | $             | 1,315 |                   |  | $ | 282 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Loans with allowance for loan
losses allocated     |  |               | 1,471 |                   |  |   | 669 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Amount of allowance allocated                      |  |               | 981   |                   |  |   | 665 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Average of impaired loans,
year-to-date            |  | $             | 2,241 |                   |  | $ | 759 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Interest income recognized during
impairment       |  |               | 103   |                   |  |   | 67  | 
|                                                  
|                                                  
|                                                  
|                                                  
|Cash-basis interest income
recognized year-to-date |  |               | 100   |                   |  |   | 67  | 

At June 30, 2000 and December 31, 1999, loans on non-accrual status and/or
past due 90 days or more approximated $1,682 and $1,989, respectively. The
Other Real Estate Owned balance, net of allowance, was $455 and $325 at June
30, 2000 and December 31, 1999, respectively.

Note 4  Allowance for Loan Losses

A summary of activity in the allowance for loan losses for the six months
ended June 30, 2000, and June 30, 1999, are as follows:

|                                           |  |      |        |      |  |   |        |  
|------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                           |  | 2000 |        | 1999
|                                           |  |      |        |     
|Balance  January 1                        |  | $    | 13,174 |      |  | $ | 11,172 |  
|                                          
|                                          
|                                          
|                                          
|Provision charged to operating expense     |  |      | 370    |      |  |   | 1,288  |  
|                                          
|                                          
|                                          
|                                          
|Loans charged off                          |  |      | (1,248 | )    |  |   | (639   | )
|                                          
|                                          
|                                          
|                                          
|Recoveries on loans previously
charged off |  |      | 424    |      |  |   | 496    |  
|                                           |  |      |        |      |  |   |        |  
|Balance  June 30                          |  | $    | 12,720 |      |  | $ | 12,317 |  
|                                           |  |      |        |      |  |   |        |  

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



---



##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements(continued)

consumer loans comprising 13.4%, 12.8%, 15.9%, 29.8% and 28.1%,
respectively, at June 30, 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 59.5% of all
consumer loans and 16.7% of total loans at June 30, 2000. The dealer
network from which indirect loans were purchased includes 97 relationships
thus far in 2000, the largest of which was responsible for 6.1% of the total
indirect dollar volume for the first six months 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 June 30, 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 $258,563.

At June 30, 2000, the Corporation held two interest rate swap agreements with
notional amounts of $600 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                        |  | $                 | 600  |               |  | $ | 14,693 |  
|                                      
|                                      
|                                      
|                                      
|Final expiration                       |  | November 20, 2000 |      | June 18, 2003
|                                      
|                                      
|                                      
|                                      
|Variable rate in effect,
June 30, 2000 |  |                   | 6.82 | %             |  |   | 6.78   | %
|                                      
|                                      
|                                      
|                                      
|Fixed rate                             |  |                   | 2.88 | %             |  |   | 5.86   | %
|                                      
|                                      
|                                      
|                                      
|Market value, June 30, 2000            |  | $                 | 9    |               |  | $ | 413    |  

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 six month period ended June 30, 2000 was $42. For the six month period
ended June 30, 1999, net expense of $39 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 June 30, 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 June 30, 2000, FHLB advances outstanding are comprised of the following:

11



---



##### Table of Contents



UNB CORP.
Notes to Consolidated Financial Statements(continued)

|         |  |               |            |        |  |   |        | 
|-------- |  | ------------- | ---------- | ------ |  | - | ------ | 
|Maturity |  | Interest Rate |            | Amount
|        
|2000     |  |               | 6.00%-7.32 | %      |  | $ | 2,342  | 
|        
|        
|        
|        
|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    |  |               |            |        |  | $ | 39,967 | 
|        

Based on the Banks investment in FHLB stock, the maximum dollar amount of
FHLB advance borrowings available to the Bank is $160,594.

The Corporation has maximum borrowing arrangements of $18 million with a
national financial institution consisting of two lines of credit. The total
outstanding balance at June 30, 2000 was $12 million. United Banc
Financial Services, Inc. (UBFS) arranged a $8 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, 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
|              |      |       
|              | 7.97 | %      |  | $ | 3,500 | 
|             
|             
|             
|             
|              | 7.94 |        |  |   | 1,000 | 
|             
|             
|             
|             
|              | 7.35 |        |  |   | 500   | 

The Parent Company arranged an unsecured $10 million line of credit for
liquidity purposes and to facilitate additional investment in subsidiaries.
At June 30, 2000, the outstanding balance was $7 million with an interest
rate of 7.46%. 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 June 30, 2000
was $93.

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 the adoption of FAS 133.

12



---



##### Table of Contents



UNB CORP.




Managements Discussion and Analysis of Financial Conditionand Results of Operations

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

INTRODUCTION

The following areas of discussion pertain to the consolidated financial
statements of UNB Corp. at June 30, 2000, compared to December 31, 1999, and
the results of operations for the quarter and year-to-date periods ending June
30, 2000, compared to the same periods 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 June 30, 2000 were $1,011,990, an increase of $41,461, or 4.3%,
from year-end 1999. Total earning assets at June 30, 2000 of $966,441
increased from year-end 1999 by $56,705, or 6.2%. The ratio of earning assets
to total assets also increased from 93.7% at December 31, 1999 to 95.5% at June
30, 2000. Highly liquid balances, comprised of cash and cash equivalents,
federal funds sold and interest bearing deposits with banks, decreased by
$13,679, or 28.0%, from year-end 1999. The reduction in highly liquid balances
and the increase in earning assets are mainly the result of the cash balances
that were held at 1999 year-end for Year 2000 liquidity contingencies being
converted back into interest bearing assets.

INVESTMENTS
Balances in the investment and mortgage-backed securities portfolios declined
from 1999 year-end balances by $7,541, or 5.6%. 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. 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 half of 2000 were used in the
Corporations stock buy back program and for other Corporate liquidity needs.

LOANS
For the first half of 2000, total loans grew by $60,706, or 7.8%. Aircraft
lending experienced the most significant growth of all loan categories thus far
in 2000, with increased outstanding balances of $17,809, or 15.4%, 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 slowed 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.

The commercial lending area experienced growth of $11,159, or 11.5%, from
year-end 1999 levels, with the increase the result of seasonal line of credit
usage and the addition of new borrower relationships. Commercial real estate
balances

13



---



##### Table of Contents



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

increased by $6,741, or 6.7%, from year-end balances due largely to advances
under previously approved construction commitments, which converted to
permanent financing.

Residential real estate balances increased by $13,528, or 5.7%, for the first
six months of 2000. This increase was the result of increased seasonal
activity in the residential construction market and the impact of rising market
rates slowing the volume of payoffs and refinancings in the existing portfolio.

Consumer loans increased by $9,928, or 4.4%, from year-end 1999, with the
majority of the increase, $8,554, in the home equity product which was promoted
during the first half of the year with 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 manufacturers financing alternatives.

LIABILITIES
Total liabilities increased by $41,351 or 4.6%, from year-end 1999 levels.
Deposits, the main component of liabilities, increased by $46,663, or 6.1%,
from December 31, 1999. The following table shows deposit composition and
change in deposit mix between the periods ended June 30, 2000 and December 31,
1999:

|                                       |  |               |         |                   |  |   |         | 
|-------------------------------------- |  | ------------- | ------- | ----------------- |  | - | ------- | 
|                                       |  | June 30, 2000 |         | December 31, 1999
|                                       |  |               |         |                  
|Non-interest bearing checking          |  | $             | 99,493  |                   |  | $ | 90,790  | 
|                                      
|                                      
|                                      
|                                      
|Interest bearing checking              |  |               | 76,016  |                   |  |   | 77,555  | 
|                                      
|                                      
|                                      
|                                      
|Savings                                |  |               | 250,629 |                   |  |   | 217,304 | 
|                                      
|                                      
|                                      
|                                      
|Certificates of deposit and other time |  |               | 384,759 |                   |  |   | 378,585 | 
|                                       |  |               |         |                   |  |   |         | 
|Total deposits                         |  | $             | 810,897 |                   |  | $ | 764,234 | 
|                                       |  |               |         |                   |  |   |         | 

The category with the most significant change is savings deposits, which
includes the Money Market Access product in which balances grew by $40 million,
or 30.9%, from December 31, 1999. Certificates of deposit generated through
the branch network increased by $16,446, more than offsetting the maturity of
$9,990 in brokered certificates. Short-term borrowings, which is mainly
comprised of federal funds purchased and repurchase agreements, declined by
$2,509 from December 31, 1999 due to a reduction of federal funds purchased
which were used to fund Y2K cash balances. This reduction was partially offset
by an increase in repurchase agreements. Long-term debt decreased by $2,272 or
4.2%, primarily due to the maturing of Federal Home Loan Bank advances. The
decrease in advances was 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.

CAPITAL RESOURCES
Total shareholders equity at June 30, 2000 was $70,784, an increase of
$110, or .2%, from year-end 1999. This slight growth in shareholders equity
was influenced by year-to-date net income of $7,436. This increase was
partially offset by reductions in shareholders equity as the result of $2,542
in cash dividends paid and an increase in treasury stock of $3,473.
Shareholders equity also decreased due to the elimination of unrealized gains
and the recognition of

14



---



##### Table of Contents



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

unrealized losses, net of deferred tax, on available for sale securities of
$1,311. 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.

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.

UNB Corp.s capital ratios at June 30, 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
|                                       |  | June 30, |      | December 31, |  | for adequately/ 
|                                       |  | 2000     |      | 1999         |  | well capitalized
|                                       |  |          |      |              |  |                 
|Total capital to risk
weighted assets  |  |          | 9.80 | %            |  |                  | 10.38 | % |  |                   | 8.0%/10.0 | %
|                                      
|                                      
|                                      
|                                      
|Tier 1 capital to
risk weighted assets |  |          | 8.48 | %            |  |                  | 8.94  | % |  |                   | 4.0%/ 6.0 | %
|                                      
|                                      
|                                      
|                                      
|Tier 1 capital to
average assets       |  |          | 6.83 | %            |  |                  | 7.02  | % |  |                   | 4.0%/ 5.0 | %

All ratios as of June 30, 2000 exceeded 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 June 30, 2000 was 6.99% versus 7.28% at December 31, 1999.

For the first six months of 1999 and 2000, the cash dividends were $0.24 per
share. Cash dividends paid in the first six months of 2000 represent 34.2% of
year-to-date net income.

RESULTS OF OPERATIONS

UNB Corp.s second quarter 2000 net income was $3,741 or $0.35 per diluted
share, compared with $3,327, or $0.30 per diluted share for the second quarter
of 1999. This represents an increase in earnings of 12.4% and an increase in
diluted earnings per share of 16.7%. Year-to-date net income of $7,436 was
$413, or 5.3%, below the same period in 1999. Despite higher earnings in 1999
as a result of a larger net gain from the sale of securities, earnings per
diluted share were the same in 1999 and 2000 due to the decrease in the number
of shares outstanding as a result of UNB Corp.s stock repurchase program. In
the first six months of 2000 and 1999 pre-tax gains of $1,008 and $4,127,
respectively, were recognized on the sale of equity securities from UNB Corp.s
Parent Company portfolio. Operating earnings for the two periods, excluding
the after-tax effect of these transactions and related expenses taken in
anticipation of the gains, were $6,782 and $6,202 for the first six months of
2000 and 1999, respectively, an increase of $580, or 9.4%.

15



---



##### Table of Contents



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

Return on average assets and return on average equity for the second quarter of
2000 were 1.50% and 21.30%, respectively, compared with 1.51% and 19.21%,
respectively, for the same period in 1999. On a year-to-date basis, return on
average assets and return on average equity for 2000 were 1.51% and 21.10%,
respectively, compared to 1.81% and 22.39%, respectively, for the same period
in 1999. On a year-to-date basis, adjusted for the impact of the net securities
gains, return on average assets was 1.38% for 2000 versus 1.43% for 1999.
Return on average equity was 19.24% for 2000 compared to 17.69% for 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 second quarter and year-to-date periods of 2000, net interest income
increased by $392 and $802, or 4.3% and 4.5%, respectively, over the same
period in 1999. Total interest income increased by 20.7% and 19.5% for the
quarter and year-to-date, respectively, while interest expense increased by
41.1% and 38.2%, respectively, for the same periods. The growth in net
interest income was primarily the result of growth in average earning assets of
14.0% and 13.6%, respectively from the second quarter and year-to-date periods
of 2000 compared with the same periods in 1999.

NET INTEREST MARGIN
The net interest margin is net interest income (FTE) divided by average earning
assets. For the first half of 2000, the net interest margin was 3.99%, versus
4.35% for the same period in 1999, a reduction of 36 basis points. Yields on
earning assets increased by 40 basis points, while the cost of interest bearing
liabilities increased by 79 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 second
quarter of 2000. Asset yields were also impacted 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 was 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 second quarter of 2000 was $3,424, an increase of 16.4%
from the second quarter of 1999. For the six months ended June 30, 2000, other
income was $6,816, a decrease of $3,061, or 31.0% over the same period in 1999.
Excluding security gains on marketable equity securities of $1,008 and $4,127
taken in the first six months of 2000 and 1999 respectively, other income for
the first six months of 2000 increased from the same period in 1999 by $58.

On a year-to-date basis, the Trust Department recorded earnings of $2,787, an
increase of $288, or 11.5%, from the same period in 1999. This was
accomplished through an increase in assets managed from June 30, 1999 to June
30, 2000 of 12.9%. Gains on loans sold in the secondary market declined to $83,
or by $348, from the first six months 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 29.8% while loan brokerage income on non-conforming consumer and
mortgage and aircraft loans declined by

16



---



##### Table of Contents



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

27.9%. The decline in brokerage income is mainly due to loans secured by
residential real estate being retained in United Banc Financial Services, Inc.
loan portfolio and due to a sharp decline in the dollar amount of loans sold.

OTHER EXPENSES
Other expenses for the second quarter were $6,962, an increase of $608, or
9.6%, from the same period in 1999. On a year-to-date basis, other expenses
were $13,888, a decrease of $679, or 4.7%, over the same period in 1999.
Salary, wages and benefits declined by $244, or 3.6%, from the same six month
period in 1999. 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.

Occupancy expenses for the first six months ended June 30, 2000 decreased by
   .9% from the same period in 1999 due to a reduction in utility and snow removal
expenses attributed to the mild winter.

Equipment expenses increased by 2.8% for the first six months of 2000 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 several branch transformations into more customer
friendly sales environments and increased costs of outside computer software
services.

Other operating expenses for the six months ended June 30, 2000 were reduced by
$479, or 9.6%, from the same period in 1999. In the first six months 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 $1,100.
Excluding these items, other operating expenses for the first six months of
2000 were above the same period in 1999 by $621 due to increases in franchise
taxes and loan related expenses.

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 is responsible for the contamination cleanup, to obtain an
engineering status report on the condition and remediation of the contaminated
ground. Negotiations are currently under way for the sale of the property. The
proposed sale price is subject to a 90 day review and one 90 day renewal, which
would put the tentative closing date in January, 2001. 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 second quarter of 2000 was $255, a
decrease of $303, or 54.3%, from the same period in 1999. On a year-to-date
basis, the provision for loan losses was $370, a decrease of $918, or 71.3%,
from the same period in 1999. At June 30, 2000, the allowance for loan losses
as a percentage of loans outstanding was 1.52% compared to 1.70% at December
31, 1999.

17



---



##### Table of Contents



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

Management continues to review the amount 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. Due to improved
underwriting, early detection systems and increased collection efforts, the
December 31, 1999 ratio of net charge-offs to average loans outstanding reached
its lowest levels in the last ten years at 0.06%. In addition, managements
increased experience and expertise in the aircraft portfolio since its
acquisition in June, 1998 and the elimination of concerns for Year 2000s
impact on loan delinquencies and losses has justified the reduction in the
provision and resulting reduction in allowance.

Net charge-offs for the period ending June 30, 2000 were 0.10% as compared to
0.02% for the same period in 1999. This increase was the result of increased
seasonal charge-offs of indirect boat and recreational vehicle loans and the
charge-off of a commercial loan. A detailed analysis of the allowance for loan
losses for the first six months of 2000 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 |                          |     | 375  |       |        |       | 26  |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Real Estate  Commercial            |                          |     |     |       |        |       |    |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Real Estate  Residential           |                          |     | 8    |       |        |       |    |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Aircraft                            |                          |     |     |       |        |       |    |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Consumer Loans                      |                          |     | 865  |       |        |       | 613 |    
|                                                                                |                           |                                     |                          |     |      |       |        |      
|                                                                                |                           |                                     | Total Charge-Offs        |     |      | 1,248 |        |       |     | 639 | 
|                                                                                |                           |                                     |                          |     |      |       |        |      
|                                                                                | Recoveries (Domestic):   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Commercial, Financial, Agricultural |                          |     | 82   |       |        |       | 29  |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           |                                     | Real Estate  Commercial |     |     |       |        |       |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Real Estate  Residential           |                          |     |     |       |        |       | 33 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Aircraft                            |                          |     |     |       |        |       |    |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                           | Consumer Loans                      |                          |     | 342  |       |        |       | 434 |    
|                                                                                |                           |                                     |                          |     |      |       |        |      
|                                                                                |                           |                                     | Total Recoveries         |     |      | 424   |        |       |     | 496 | 
|                                                                                |                           |                                     |                          |     |      |       |        |      
|                                                                                | Net Charge-Offs           |                                     |                          | 824 |      |       |        | 143   |    
|                                                                                |                           |                                     |                          |     |      |       |        |      
|                                                                                | Provision for loan losses |                                     |                          | 370 |      |       |        | 1,288 |    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Balance at June 30,                                                             |                           | $                                   | 12,720                   |     |      | $     | 12,317 |      
|                                                                                |                           |                                     |                          |     |      |       |        |      
|Ratio of year-to-date net charge-offs
to year-to-date average loans outstanding |                           |                                     | 0.10                     | %   |      |       | 0.02   | %    
|                                                                                |                           |                                     |                          |     |      |       |        |      
|Allowance as a percentage of total loans                                        |                           |                                     | 1.52                     | %   |      |       | 1.74   | %    
|                                                                                |                           |                                     |                          |     |      |       |        |      

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

18



---



##### Table of Contents



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

and recoveries. The following table sets forth the Corporations allocation of
the allowance for loan losses as of June 30, 2000 and December 31, 1999:

|                        |       |   |               |        |                  |   |       |        | 
|----------------------- | ----- | - | ------------- | ------ | ---------------- | - | ----- | ------ | 
|                        |       |   | June 30, 2000 |        | December 31,1999
|                        |       |   |               |        |                 
|Commercial              |       | $ | 4,630         |        |                  | $ | 5,798 |       
|                       
|                       
|                       
|                       
|Commercial real estate  |       |   | 2,136         |        |                  |   | 1,795 |       
|                       
|                       
|                       
|                       
|Aircraft                |       |   | 1,589         |        |                  |   | 1,020 |       
|                       
|                       
|                       
|                       
|Residential real estate |       |   | 260           |        |                  |   | 206   |       
|                       
|                       
|                       
|                       
|Consumer                |       |   | 2,287         |        |                  |   | 2,859 |       
|                       
|                       
|                       
|                       
|Unallocated             |       |   | 1,818         |        |                  |   | 1,496 |       
|                        |       |   |               |        |                  |   |       |       
|                        | Total |   | $             | 12,720 |                  |   | $     | 13,174 | 
|                        |       |   |               |        |                  |   |       |       

ASSET QUALITY

At June 30, 2000, impaired loans were $2,786, an increase of $1,835 from
December 31, 1999. The amount of allowance allocated to impaired loans
increased from $665 at December 31, 1999 to $981 at June 30, 2000 due to a
number of loans being reclassified during the second quarter of 2000 as a
result of an early detection program instituted in the loan review system.
Nonperforming assets, which include non-accrual loans, accruing loans past due
90 days or more, restructured loans and other real estate owned were $2,150 at
June 30, 2000 compared to $2,337 at December 31, 1999, a decrease of $187, or
8.0%. The following table presents the amounts of nonperforming assets and
pertinent ratios as of the dates indicated:

|                                                                                      |  |          |       |              |  |          |       |   |  |   |       |  
|------------------------------------------------------------------------------------- |  | -------- | ----- | ------------ |  | -------- | ----- | - |  | - | ----- | -
|                                                                                      |  | June 30, |       | December 31, |  | June 30,
|                                                                                      |  | 2000     |       | 1999         |  | 1999    
|                                                                                      |  |          |       |              |  |         
|Non-accrual loans                                                                     |  | $        | 1,595 |              |  | $        | 1,636 |   |  | $ | 1,267 |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Accruing loans past due
90 days or more                                               |  |          | 87    |              |  |          | 353   |   |  |   | 169   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Restructured loans                                                                    |  |          | 13    |              |  |          | 23    |   |  |   | 190   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other real estate owned                                                               |  |          | 455   |              |  |          | 325   |   |  |   | 325   |  
|                                                                                      |  |          |       |              |  |          |       |   |  |   |       |  
|Total nonperforming assets                                                            |  | $        | 2,150 |              |  | $        | 2,337 |   |  | $ | 1,951 |  
|                                                                                      |  |          |       |              |  |          |       |   |  |   |       |  
|Total nonperforming assets
as a percentage of total
loans and other real
estate owned |  |          | 0.26  | %            |  |          | 0.30  | % |  |   | 0.28  | %

The ratio of nonperforming loans to total loans outstanding at June 30, 2000 of
0.20% is a four basis point improvement from year-end 1999. Also, this ratio
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 0.61% at March 31, 2000, 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, investments and mortgage-backed securities available for sale of $156,469
represent 15.5% of total assets at June 30, 2000. Of the investments available
for sale, $26,631 are held in U.S. Treasury and

19



---



##### Table of Contents



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

Agency securities, 54.5% of which mature within one year. Approximately
$105,374 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 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



---



##### Table of Contents






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 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 June
30, the Corporations modified twelve month cumulative gap was at 3.98%
compared to 5.40% 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

21



---



##### Table of Contents



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

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 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.

At June 30, 2000, the Corporations interest rate shock analysis forecasted a
3.41% increase in the market value of equity in response to a decrease of 200
basis points in market rates and a 2.73% decrease in the market value of equity
based on a corresponding increase in market rates. The model results indicate
that the Corporation would benefit from a decrease in rates, subject to the
limitations and assumptions previously discussed.

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 June, the swaps had a combined net gain of $422 on outstanding notional
principal of $15,293.

22



---



##### Table of Contents






UNB CORP.PART II  OTHER INFORMATION




Item 1  Legal Proceedings

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




Item 2  Changes in Securities and Use of Proceeds

Not applicable.




Item 3  Defaults Upon Senior Securities

Not applicable.




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

UNB Corp. held its Annual Meeting of Shareholders on April 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

23



---



##### Table of Contents



UNB CORP.
PART II  OTHER INFORMATION (continued)

Chairman Donald W. Schneider, who retired from the board on May 8.
DAtri, 61,
is an attorney and principal of Zollinger, DAtri, Gruber, Thomas & Co. He 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 six months ended June 30, 2000 (1)
|  
|  
|  
|  
|   |  | 27.199                                                                                                        |  | Financial Data Schedule for the six months ended June 30, 1999 (1)
|  
|B. |  | Reports  Form 8-K  No reports on Form 8-K were filed by the Registrant
during the first six months 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   8/10/00 |  | /s/ James J. Pennetti                                               
|               |  |                                                                     
|               |  | James J. Pennetti
(Duly authorized officer and
Treasurer, UNB Corp.)

24