##### Table of Contents





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 Quarter Ended March 31, 2010



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------

Commission File Number 000-24147





KILLBUCK
BANCSHARES, INC.

(Exact name of registrant as specified in its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|OHIO                                                           |  | 34-1700284                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

165 N. Main Street, Killbuck, OH 44637

(Address of principal executive offices and zip code)

(330) 276-2771

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting Company |  | x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

State the number of shares outstanding for each of the issuers classes of common equity as of the latest practicable date:

Class: Common Stock, no par value

Outstanding at May 12, 2010: 616,706









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##### Table of Contents

KILLBUCK BANCSHARES, INC.

Index



|                              |  |                                                                                                      |  |            
|----------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | -----------
|                              |  |                                                                                                      |  | Page Number
|                              | 
|PART I. FINANCIAL INFORMATION |  |                                                                                                     
|                              |  |                                                                                                     
|Item 1.                       |  | Financial Statements:                                                                                |  |            
|                              |  | Consolidated Balance Sheet as of March 31, 2010 and December 31, 2009                                |  | 3          
|                              |  | Consolidated Statements of Income for the three months ended March 31, 2010 and 2009                 |  | 4          
|                              |  | Consolidated Statements of Changes In Shareholders Equity for the three months ended March 31,
2010 |  | 5          
|                              |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and
2009             |  | 6          
|                              |  | Notes to Unaudited Consolidated Financial Statements                                                 |  | 7-8        
|                              |  |                                                                                                     
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition                                          |  | 9-16       
|                              |  |                                                                                                     
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                           |  | 17         
|                              |  |                                                                                                     
|Item 4.                       |  | Controls and Procedures                                                                              |  | 17         
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                     
|                              |  |                                                                                                     
|Item 1.                       |  | Legal Proceedings                                                                                    |  | 18         
|                              |  |                                                                                                     
|Item 1A.                      |  | Risk Factors                                                                                         |  | 18         
|                              |  |                                                                                                     
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                          |  | 18         
|                              |  |                                                                                                     
|Item 3.                       |  | Default Upon Senior Securities                                                                       |  | 18         
|                              |  |                                                                                                     
|Item 4.                       |  | (Removed and Reserved)                                                                               |  | 18         
|                              |  |                                                                                                     
|Item 5.                       |  | Other Information                                                                                    |  | 18         
|                              |  |                                                                                                     
|Item 6.                       |  | Exhibits                                                                                             |  | 18         
|                              | 
|SIGNATURES                    |  | 20                                                                                                  



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##### Table of Contents

Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEET



|                                                                         |  |                           |             |   |                  |   |             |  
|------------------------------------------------------------------------ |  | ------------------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                         |  | March 31, 2010(unaudited) |             |   | December 31,2009 |  
|ASSETS                                                                   | 
|Cash and cash equivalents:                                               |  |                           |             |   |                  |   |             |  
|Cash and amounts due from depository institutions                        |  | $                         | 47,917,722  |   |                  | $ | 42,575,944  |  
|Federal funds sold                                                       |  |                           | 3,787,000   |   |                  |   | 2,938,000   |  
|                                                                         |  |                           |             |   |                  |   |             |  
|Total cash and cash equivalents                                          |  |                           | 51,704,722  |   |                  |   | 45,513,944  |  
|                                                                         |  |                           |             |   |                  |   |             |  
|                                                                         |  |                          
|Investment securities:                                                   |  |                           |             |   |                  |   |             |  
|Securities available for sale                                            |  |                           | 59,170,174  |   |                  |   | 65,334,849  |  
|Securities held to maturity (fair value of $38,392,068 and $36,373,611)  |  |                           | 37,112,070  |   |                  |   | 35,086,821  |  
|                                                                         |  |                           |             |   |                  |   |             |  
|Total investment securities                                              |  |                           | 96,282,244  |   |                  |   | 100,421,670 |  
|                                                                         |  |                           |             |   |                  |   |             |  
|                                                                         |  |                          
|Loans (net of allowance for loan losses of $2,459,104 and $2,441,169)    |  |                           | 208,713,388 |   |                  |   | 207,575,135 |  
|                                                                         |  |                          
|Loans held for sale, at lower of cost or market                          |  |                           | 379,600     |   |                  |   | 271,000     |  
|Premises and equipment, net                                              |  |                           | 5,951,256   |   |                  |   | 6,009,442   |  
|Accrued interest receivable                                              |  |                           | 1,566,930   |   |                  |   | 1,467,901   |  
|Goodwill, net                                                            |  |                           | 1,329,249   |   |                  |   | 1,329,249   |  
|Other assets                                                             |  |                           | 9,340,804   |   |                  |   | 9,391,044   |  
|                                                                         |  |                           |             |   |                  |   |             |  
|Total assets                                                             |  | $                         | 375,268,193 |   |                  | $ | 371,979,385 |  
|                                                                         |  |                           |             |   |                  |   |             |  
|                                                                        
|LIABILITIES                                                              | 
|Deposits:                                                                |  |                           |             |   |                  |   |             |  
|Noninterest bearing demand                                               |  | $                         | 54,483,710  |   |                  | $ | 63,636,376  |  
|Interest-bearing demand                                                  |  |                           | 25,328,077  |   |                  |   | 32,102,301  |  
|Money market                                                             |  |                           | 43,338,979  |   |                  |   | 28,669,992  |  
|Savings                                                                  |  |                           | 44,246,169  |   |                  |   | 42,973,020  |  
|Time                                                                     |  |                           | 158,186,222 |   |                  |   | 153,913,387 |  
|                                                                         |  |                           |             |   |                  |   |             |  
|Total deposits                                                           |  |                           | 325,583,156 |   |                  |   | 321,295,076 |  
|Short-term borrowings                                                    |  |                           | 3,985,000   |   |                  |   | 5,660,000   |  
|Federal Home Loan Bank advances                                          |  |                           | 1,047,343   |   |                  |   | 1,212,000   |  
|Accrued interest and other liabilities                                   |  |                           | 776,708     |   |                  |   | 748,901     |  
|                                                                         |  |                           |             |   |                  |   |             |  
|Total liabilities                                                        |  |                           | 331,392,208 |   |                  |   | 328,915,977 |  
|                                                                         |  |                           |             |   |                  |   |             |  
|                                                                        
|SHAREHOLDERS EQUITY                                                     | 
|                                                                         |  |                          
|Common stock  No par value: 1,000,000 shares authorized, 718,431 issued |  |                           | 8,846,670   |   |                  |   | 8,846,670   |  
|Retained earnings                                                        |  |                           | 44,684,864  |   |                  |   | 43,742,847  |  
|Accumulated other comprehensive income (loss)                            |  |                           | (112,835    | ) |                  |   | 16,605      |  
|Treasury stock, at cost (101,725)                                        |  |                           | (9,542,714  | ) |                  |   | (9,542,714  | )
|                                                                         |  |                           |             |   |                  |   |             |  
|Total shareholders equity                                               |  |                           | 43,875,985  |   |                  |   | 43,063,408  |  
|                                                                         |  |                           |             |   |                  |   |             |  
|                                                                         |  |                          
|Total liabilities and shareholders equity                               |  | $                         | 375,268,193 |   |                  | $ | 371,979,385 |  
|                                                                         |  |                           |             |   |                  |   |             |  

See accompanying notes to the unaudited consolidated financial statements.



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Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)



|                                                    |  |                              |           |      |   |          
|--------------------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                                    |  | Three Months Ended
March 31,
|                                                    |  | 2010                         |           | 2009
|                                                    |  |                             
|INTEREST INCOME                                     |  |                              |           |      |   |          
|Interest and fees on loans                          |  | $                            | 2,906,917 |      | $ | 3,162,735
|Federal funds sold and other                        |  |                              | 19,856    |      |   | 16,307   
|Investment securities:                              |  |                              |           |      |   |          
|Taxable                                             |  |                              | 439,593   |      |   | 596,426  
|Exempt from federal income tax                      |  |                              | 355,013   |      |   | 341,019  
|                                                    |  |                              |           |      |   |          
|Total interest income                               |  |                              | 3,721,379 |      |   | 4,116,487
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|INTEREST EXPENSE                                    |  |                              |           |      |   |          
|Deposits                                            |  |                              | 974,182   |      |   | 1,185,864
|Federal Home Loan Bank advances                     |  |                              | 17,108    |      |   | 25,736   
|Short-term borrowings                               |  |                              | 2,623     |      |   | 3,391    
|                                                    |  |                              |           |      |   |          
|Total interest expense                              |  |                              | 993,913   |      |   | 1,214,991
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|NET INTEREST INCOME                                 |  |                              | 2,727,466 |      |   | 2,901,496
|                                                    |  |                             
|Provision for loan losses                           |  |                              |          |      |   | 1,000    
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                              | 2,727,466 |      |   | 2,900,496
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|NONINTEREST INCOME                                  |  |                              |           |      |   |          
|Service charges and fees on deposit accounts        |  |                              | 274,787   |      |   | 267,335  
|Gain on sale of loans, net                          |  |                              | 16,048    |      |   | 17,718   
|Bank-owned life insurance                           |  |                              | 58,970    |      |   | 59,452   
|Recovery on bank-owned life insurance               |  |                              | 244,000   |      |   |         
|Other income                                        |  |                              | 34,642    |      |   | 39,154   
|                                                    |  |                              |           |      |   |          
|Total noninterest income                            |  |                              | 628,447   |      |   | 383,659  
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|NONINTEREST EXPENSE                                 |  |                              |           |      |   |          
|Salaries and employee benefits                      |  |                              | 1,253,184 |      |   | 1,344,773
|Occupancy and equipment expense                     |  |                              | 251,581   |      |   | 261,533  
|Professional fees                                   |  |                              | 104,869   |      |   | 96,502   
|Franchise tax                                       |  |                              | 135,050   |      |   | 128,300  
|Stationery, supplies and printing                   |  |                              | 42,814    |      |   | 47,342   
|Postage, express and freight                        |  |                              | 59,530    |      |   | 56,657   
|Data processing                                     |  |                              | 51,472    |      |   | 50,872   
|Other expenses                                      |  |                              | 350,362   |      |   | 248,792  
|                                                    |  |                              |           |      |   |          
|Total noninterest expense                           |  |                              | 2,248,862 |      |   | 2,234,771
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|INCOME BEFORE INCOME TAXES                          |  |                              | 1,107,051 |      |   | 1,049,384
|Income taxes                                        |  |                              | 165,034   |      |   | 228,845  
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|NET INCOME                                          |  | $                            | 942,017   |      | $ | 820,539  
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|Earnings per common share                           |  | $                            | 1.53      |      | $ | 1.32     
|                                                    |  |                              |           |      |   |          
|                                                    |  |                             
|Weighted average shares outstanding                 |  |                              | 616,706   |      |   | 620,269  
|                                                    |  |                              |           |      |   |          

See accompanying notes to the unaudited consolidated
financial statements.



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##### Table of Contents

Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

THREE MONTHS ENDED MARCH 31, 2010



|                                                      |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|----------------------------------------------------- |  | ----------- | --------- | ---------------- | - | ------------------------------------------ |  | - | ------------- | - |  | ------------------------ | ---------- | - | ------------------- | - | ---------- | - |  | - | -------- | -
|                                                      |  | CommonStock |           | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome (Loss) |  |   | TreasuryStock |   |  | TotalShareholdersEquity |            |   | ComprehensiveIncome |  
|                                                      |  |             |           |                  |   |                                           
|Balance, December 31, 2009                            |  | $           | 8,846,670 |                  | $ | 43,742,847                                 |  | $ | 16,605        |   |  | $                        | (9,542,714 | ) |                     | $ | 43,063,408 |   |  |   |          |  
|                                                      |  |             |           |                  |   |                                           
|Net income                                            |  |             |           |                  |   | 942,017                                    |  |   |               |   |  |                          |            |   |                     |   | 942,017    |   |  | $ | 942,017  |  
|Other comprehensive income:                           |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|Net unrealized loss on securities, net of tax $66,681 |  |             |           |                  |   |                                            |  |   | (129,440      | ) |  |                          |            |   |                     |   | (129,440   | ) |  |   | (129,440 | )
|                                                      |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|Comprehensive income                                  |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  | $ | 812,577  |  
|                                                      |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|                                                      |  |             |           |                  |   |                                           
|Balance, March 31, 2010 (Unaudited)                   |  | $           | 8,846,670 |                  | $ | 44,684,864                                 |  | $ | (112,835      | ) |  | $                        | (9,542,714 | ) |                     | $ | 43,875,985 |   |  |   |          |  
|                                                      |  |             |           |                  |   |                                            |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  

See accompanying notes to the unaudited consolidated financial statements.



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Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                            |  |                             |             |   |      |   |             |  
|----------------------------------------------------------- |  | --------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                            |  | Three Months EndedMarch
31, |            
|                                                            |  | 2010                        |             |   | 2009 |  
|OPERATING ACTIVITIES                                        |  |                             |             |   |      |   |             |  
|Net income                                                  |  | $                           | 942,017     |   |      | $ | 820,539     |  
|Adjustments to reconcile net income to net cash provided by |  |                             |             |   |      |   |             |  
|Operating activities:                                       |  |                             |             |   |      |   |             |  
|Provision for loan losses                                   |  |                             |            |   |      |   | 1,000       |  
|Gain on sale of loans                                       |  |                             | (16,048     | ) |      |   | (17,718     | )
|Provision for depreciation and amortization                 |  |                             | 209,157     |   |      |   | 227,932     |  
|Origination of loans held for sale                          |  |                             | (1,146,295  | ) |      |   | (3,561,750  | )
|Proceeds from the sale of loans                             |  |                             | 1,053,743   |   |      |   | 3,119,218   |  
|Bank-owned life insurance income                            |  |                             | (244,662    | ) |      |   |            |  
|Net change in:                                              |  |                             |             |   |      |   |             |  
|Accrued interest and other assets                           |  |                             | (97,821     | ) |      |   | (295,464    | )
|Accrued expenses and other liabilities                      |  |                             | (1,928      | ) |      |   | (105,553    | )
|                                                            |  |                             |             |   |      |   |             |  
|Net cash provided by operating activities                   |  |                             | 698,163     |   |      |   | 188,204     |  
|                                                            |  |                             |             |   |      |   |             |  
|                                                            |  |                            
|INVESTING ACTIVITIES                                        |  |                             |             |   |      |   |             |  
|Investment securities available for sale:                   |  |                             |             |   |      |   |             |  
|Proceeds from maturities and repayments                     |  |                             | 27,902,877  |   |      |   | 11,125,787  |  
|Purchases                                                   |  |                             | (22,023,742 | ) |      |   | (24,614,040 | )
|Purchases of bank certificates of deposit                   |  |                             |            |   |      |   | (1,715,000  | )
|Investment securities held to maturity:                     |  |                             |             |   |      |   |             |  
|Proceeds from maturities and repayments                     |  |                             | 702,255     |   |      |   | 301,364     |  
|Purchases                                                   |  |                             | (2,754,568  | ) |      |   | (1,589,074  | )
|Net increase in loans                                       |  |                             | (1,150,753  | ) |      |   | (3,692,086  | )
|Proceeds from sale of foreclosed assets                     |  |                             | 22,500      |   |      |   |            |  
|Purchase of premises and equipment                          |  |                             | (44,487     | ) |      |   | (35,979     | )
|Proceeds from bank-owned life insurance                     |  |                             | 390,111     |   |      |   |            |  
|                                                            |  |                             |             |   |      |   |             |  
|Net cash provided by (used in) investing activities         |  |                             | 3,044,193   |   |      |   | (20,219,028 | )
|                                                            |  |                             |             |   |      |   |             |  
|                                                            |  |                            
|FINANCING ACTIVITIES                                        |  |                             |             |   |      |   |             |  
|Net increase in demand, money market and savings deposits   |  |                             | 15,245      |   |      |   | 427,086     |  
|Net increase in time deposits                               |  |                             | 4,272,834   |   |      |   | 4,990,913   |  
|Net decrease in short-term borrowings                       |  |                             | (1,675,000  | ) |      |   | (975,000    | )
|Repayment of Federal Home Loan Bank advances                |  |                             | (164,657    | ) |      |   | (170,180    | )
|Purchase of treasury stock                                  |  |                             |            |   |      |   | (266,637    | )
|                                                            |  |                             |             |   |      |   |             |  
|Net cash provided by financing activities                   |  |                             | 2,448,422   |   |      |   | 4,006,182   |  
|                                                            |  |                             |             |   |      |   |             |  
|                                                            |  |                            
|Net increase (decrease) in cash and cash equivalents        |  |                             | 6,190,778   |   |      |   | (16,024,642 | )
|Cash and cash equivalents at beginning of period            |  |                             | 45,513,944  |   |      |   | 40,316,633  |  
|                                                            |  |                             |             |   |      |   |             |  
|Cash and cash equivalents at end of period                  |  | $                           | 51,704,722  |   |      | $ | 24,291,991  |  
|                                                            |  |                             |             |   |      |   |             |  
|                                                            |  |                            
|Supplemental Disclosures of Cash Flows Information          |  |                             |             |   |      |   |             |  
|Cash Paid During the Period For:                            |  |                             |             |   |      |   |             |  
|Interest on deposits and borrowings                         |  | $                           | 994,885     |   |      | $ | 1,238,139   |  
|                                                            |  |                             |             |   |      |   |             |  
|                                                            |  |                            
|Income taxes                                                |  | $                           |            |   |      | $ |            |  
|                                                            |  |                             |             |   |      |   |             |  

See accompanying notes to the unaudited consolidated financial statements.



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Killbuck Bancshares, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1  BASIS OF PRESENTATION

The
consolidated financial statements include the accounts of Killbuck Bancshares, Inc. (the Company) and its wholly owned subsidiary Killbuck Savings Bank Company (the Bank). All significant intercompany balances and
transactions have been eliminated in the consolidation.

The accompanying reviewed consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information that would be included in audited financial statements. The information furnished reflects all adjustments which, in the opinion of management,
are necessary for a fair presentation of financial condition and results of operations. All such adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be
expected for the full year.

These statements should be read in conjunction with the consolidated statements of and for the year ended
December 31, 2009 and related notes which are included on the Form 10-K (file no. 000-24147)

NOTE 2  EARNINGS PER SHARE

The Company currently maintains a simple capital structure; therefore, there are no potential dilutive effects on earnings per share. As such,
earnings per share are calculated using the weighted number of shares for the period.

NOTE 3  COMPREHENSIVE INCOME

The Company is required to present comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income is
comprised of the following:



|                                    |  |                                 |          |   |                                 |   |          |  
|----------------------------------- |  | ------------------------------- | -------- | - | ------------------------------- | - | -------- | -
|                                    |  | Three MonthsEndedMarch 31, 2010 |          |   | Three MonthsEndedMarch 31, 2009 |  
|                                    |  |                                
|Net income                          |  | $                               | 942,017  |   |                                 | $ | 820,539  |  
|Other comprehensive income:         |  |                                 |          |   |                                 |   |          |  
|Net unrealized losses on securities |  |                                 | (196,121 | ) |                                 |   | (626,724 | )
|Related tax benefits                |  |                                 | 66,681   |   |                                 |   | 213,086  |  
|                                    |  |                                 |          |   |                                 |   |          |  
|Total comprehensive income          |  | $                               | 812,577  |   |                                 | $ | 406,901  |  
|                                    |  |                                 |          |   |                                 |   |          |  



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##### Table of Contents

Killbuck Bancshares, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(Continued)



NOTE 4  FAIR VALUE MEASUREMENTS

The Company accounts for the fair value of its assets, including related disclosures, in accordance with the current authoritative accounting guidance.
This accounting guidance establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The three broad levels defined in this hierarchy are as follows:



|           |  |                                                                                                                                                                                                                                                                                                                                                                                          
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level I:   |  | Quoted prices are available in active markets for identical assets or liabilities as of the reported date.                                                                                                                                                                                                                                                                               
|           | 
|Level II:  |  | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities
include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
|           | 
|Level III: |  | Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using managements best
estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.                                                                       

The following table presents the assets reported on the consolidated statements of financial condition at fair value as of March 31, 2010 by level
within the fair value hierarchy. As required by the authoritative accounting guidance, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.



|                              |  |                |   |          |   |           |  |       |   |  |   |       
|----------------------------- |  | -------------- | - | -------- | - | --------- |  | ----- | - |  | - | ------
|                              |  | March 31, 2010
|                              |  | Level I        |   | Level II |   | Level III |  | Total
|                              |  | (In thousands)
|                              |  |                |   |         
|Assets:                       |  |                |   |          |   |           |  |       |   |  |   |       
|Securities available for sale |  | $              |  |          | $ | 59,170    |  | $     |  |  | $ | 59,170

NOTE 5  RECENT ACCOUNTING
PRONOUNCEMENTS

Management has reviewed accounting pronouncements promulgated during the first quarter of 2010 and believes, based on such
review, that the Company will not be directly affected by any of these pronouncements.



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##### Table of Contents

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion,
the words believes, anticipates, contemplates, expects, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in interest rates, risks associated with the ability to control costs and expenses, and general economic conditions. Killbuck
Bancshares, Inc. undertakes no obligation to publicly release the results of any revisions to those forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated
events.

The Company conducts no significant business or operations of its own other than holding all of the outstanding stock of the Killbuck
Savings Bank Company. As a result, references to the Company generally refer to the Bank unless the context indicates otherwise.

Critical
Accounting Policies

The Companys accounting policies are integral to understanding the results reported. The accounting policies are
described in detail in Note 1 of the Consolidated Financial Statements filed with the Commission as part of the Companys Annual Report on Form 10-K for its calendar year ended December 31, 2009. Our most complex accounting policies
require managements judgment to ascertain the valuation of assets, liabilities, commitments and contingencies. We have established detailed policies and control procedures that are intended to ensure valuation methods are well controlled and
applied consistently from period to period. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The following is a brief description of our current accounting
policies involving significant management valuation judgments.

Allowance for Loan Losses - Arriving at an appropriate level of
allowance for loan losses involves a high degree of judgment. The Companys allowance for loan losses provides for probable losses based upon evaluations of known and inherent risks in the loan portfolio.

Management uses historical information to assess the adequacy of the allowance for loan losses as well as the prevailing business environment as it is
affected by changing economic conditions and various external factors, which may impact the portfolio in ways currently unforeseen. The allowance is increased by provisions for loan losses and by recoveries of loans previously charged-off and
reduced by loans charged-off. For a full discussion of the Companys methodology of assessing the adequacy of the reserve for loan losses, refer to Note 1 of the Consolidated Financial Statements filed with the Commission as part of the
Companys Annual Report on Form 10-K for its calendar year ended December 31, 2009.

Goodwill and Other Intangible Assets -
As discussed in Note 7 of the Consolidated Financial Statements, filed with the Commission as part of the Companys Annual Report on Form 10-K for its calendar year ended December 31, 2009; the Company must assess goodwill and other
intangible assets each year for impairment. This assessment involves estimating cash flows for future periods. If the future cash flows were less than the recorded goodwill and other intangible assets balances, we would be required to take a charge
against earnings to write down the assets to the lower value.



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Financial Condition

The Companys assets at March 31, 2010 totaled $375.3 million, an increase of $3.3 million, or .9% over 2009 totals.

The asset growth during the first quarter of 2010 generally reflects a $4.3 million, or 1.3% increase in total deposits. The deposit growth is generally
reflective of the Companys continuing marketing efforts directed at profitable organic growth.

Cash and cash equivalents increased by
$6.2 million, or 13.6% to $51.7 million at March 31, 2010. The increase was generally reflective of two major components. First, cash was maintained at above normal levels due to economic uncertainty in the environment. Secondly, the
Companys deployment of growth to liquid assets was indicative of less than optimal loan demand during the first quarter of 2010.

Loans
receivable increased during the first quarter of 2010 by $1.1 million, or .5%, totaling $208.7 million at quarter end. Loan growth during the first quarter of 2010 was principally confined to commercial credits, which increased during the quarter by
$1.9 million, or 4.5%. The remainder of the Companys loan products, with the exception of a slight increase in farm and residential real estate credits, showed a modest $1.9 million, or 2.5% decline during the first quarter of 2010. The growth
in commercial loans can generally be attributable to a modest expansion of loan demand in the commercial sector, while consumer type loan products reflected lessened demand.

The Companys allowance for loan losses at March 31, 2010 totaled $2.5 million, or 1.16% of total loans, as compared to $2.4 million, or 1.16%
of total loans at December 31, 2009.

The allowance for loan losses is managements estimate of the amount of probable credit losses
in the portfolio. The Company determines the allowance for loan losses based upon an ongoing evaluation. This evaluation is inherently subjective, as it requires material estimates, including the amounts and timing of cash flows expected to be
received on impaired loans that may be susceptible to significant change. Increases to the allowance for loan losses are made by charges to the provision for loan losses. Loans deemed uncollectible are charged against the allowance for loan losses.
Recoveries of previously charged-off amounts are credited to the allowance for loan losses.

The Companys allowance for loan losses is
the accumulation of various components calculated based upon independent methodologies. All components of the allowance for loan losses represent an estimation performed according to either Financial Accounting Standards Board Accounting Standards
Codification Topic 450-Contingencies, or Topic 310-Receivables. Managements estimate of each allowance component is based on certain observable data that management believes is the most reflective of the underlying loan losses being estimated.
Changes in the amount of each component of the allowance for loan losses are directionally consistent with changes in the observable data and corresponding analyses. Some of the components that management factors in are current economic conditions,
loan growth assumptions, credit concentrations, and levels of nonperforming loans.

A key element of the methodology for determining the
allowance for loan losses is the Companys credit-risk-evaluation process, which includes credit-risk grading of individual commercial loans. Loans are assigned credit-risk grades based on an internal assessment of conditions that affect a
borrowers ability to meet its contractual obligation under the loan agreement. The assessment process includes reviewing a borrowers current financial information, historical payment experience, credit documentation, public information,
and other information specific to each individual borrower. Certain commercial loans are reviewed on an annual or rotational basis or as management becomes aware of information affecting a borrowers ability to fulfill its obligation.



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##### Table of Contents

Funds generated in the first quarter of 2010 from deposit growth and operations were partially deployed to
reduce amortizing Federal Home Loan Bank advances by approximately $165,000 and retire short-term borrowings by $1.7 million, or 29.6%.

Shareholders equity increased by approximately $813,000 during the quarter ended March 31, 2010, totaling $43.9 million at quarter-end, as
compared to $43.1 million at December 31, 2009. The growth in shareholders equity during the first quarter of 2010 was comprised of period earnings of $942,000, which were partially offset by a $129,000 decrease in accumulated other
comprehensive income.



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RESULTS OF OPERATIONS

Comparison of the Quarters Ended March 31, 2010 and 2009

Net Interest Income

The Companys
net interest income for the quarter ended March 31, 2010 totaled $2.7 million, a reduction of approximately $174,000, or 6.0% from 2009 levels. The principal factor underlying the net decline was a reduction in average yields on loans, taxable
investments and interest-bearing deposits, which were partially offset by a $25.6 million increase in the volume of interest-earning assets, and a 45 basis point decrease in the average cost of interest-bearing liabilities in 2010 as compared to
2009.

Total interest income in 2010 decreased by approximately $395,000, or 9.6%, due to a $139,000 or 14.6% decline in interest on
interest-bearing deposits and investments and a $256,000, or 8.1% reduction in interest on loans. These declines in interest income generally reflect the effects of the continuing overall reduction in interest rates in the economy resulting from the
Feds easing of monetary policy.

Total interest expense for the quarter ended March 31, 2010 declined by $221,000, or 18.4% as
compared to 2009. The preponderance of this 2010 reduction emanated from a $212,000, or 21.3% decrease in the cost of time deposits. Similar to the earnings side, this decline in interest costs mirrors the overall reduction of interest rates in the
economy.

The foregoing factors culminated in the Companys attainment of an interest rate spread of 2.83% and a net yield on earning
assets of 3.17% in 2010, compared to 3.23% and 3.64% respectively, in 2009. Management believes the Companys reduction in spread and margin in 2010 primarily stems from the need to carry higher levels of liquidity in the current environment,
and does not represent a material adverse trend.

Provision for Loan Losses

There was no provision for loan losses for the first quarter of 2010, as compared to $1,000 for 2009. The reduced loss provision is principally
attributable to the continuing low levels of nonperforming assets in the portfolio. As stated previously, the Company maintains the allowance at a level commensurate with the credit risks inherent in the portfolio.

Noninterest Income

Noninterest income
increased by $245,000, or 63.8%, in 2010 as compared to 2009. The increase was principally related to $244,000 in earnings and recoveries on bank-owned life insurance.

Noninterest Expense

The Companys
management stringently monitors noninterest expenses. A continuation of these control efforts in 2010 culminated with a modest $14,000, or .6%, increase in all noninterest expense categories. However, a $92,000 increase in FDIC insurance costs in
the first quarter of 2010 more than overcame managements cost controls. Management believes the Companys deposit insurance costs will continue to increase in the future. In December of 2009, the Company prepaid $1.3 million in deposit
premiums, constituting three years of premiums at current rates.

Income Taxes

Income tax expense declined to $165,000 in 2010, representing a $64,000, or 27.9%, reduction from the $229,000 of income tax expense recorded in 2009. The
quarter over quarter decline is primarily attributable to higher levels of tax-exempt income in the 2010 quarter. The Companys effective tax rate was 14.9% in 2010, as compared to 21.8% in 2009. The principal difference between the
Companys effective tax rate in 2010 and 2009 and the 34% statutory tax rate in effect for both quarters resulted from the beneficial effects of tax-exempt income.



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Liquidity

Liquidity represents our ability to meet normal cash flow requirements of our customers for the funding of loans and repayment of deposits. Both
short-term and long-term liquidity needs are generally derived from the repayments and maturities of loans and investment securities, and the receipt of deposits. Management monitors liquidity daily, and on a monthly basis incorporates liquidity
management into its asset/liability program. The assets defined as liquid are cash, cash equivalents, and the available for sale security portfolio. The liquidity ratio as of March 31, 2010 was 29.5%.

Operating activities, as presented in the Statement of Cash Flows in the accompanying Consolidated Financial Statements, provided $698,000 and $188,000
in cash flows during 2010 and 2009 respectively, principally generated from net income.

Investing activities provided $3.0 million of the
Companys cash flows during 2010. The preponderance of this total represents the funding of a $3.8 million decrease in the investment securities portfolios and a $1.2 million increase in loans receivable.

Financing activities in 2010 provided the Company with net cash inflows totaling $2.4 million. The vast majority of this total consists of a $4.3 million
increase in deposits. This deposit growth was partially utilized in other financing activities to retire $1.8 million of borrowings.

In
addition to using the loan, investment, and deposit portfolios as sources of liquidity, we have access to funds from the Federal Home Loan Bank of Cincinnati. We also have a ready source of funds through the available-for-sale component of the
investment securities portfolio.



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##### Table of Contents

Risk Elements

The table below presents information concerning nonperforming assets including nonaccrual loans, renegotiated loans, loans 90 days or more past due,
other real estate loans and repossessed assets at March 31, 2010, and December 31, 2009. The Company ceases accruing interest on residential mortgages secured by real estate and consumer loans when principal or interest payments are
delinquent 90 days or more. Commercial loans, that are 90 days or more past due, are reviewed by the Executive Vice President and the loan officer to determine whether they will be classified as nonperforming. These officers review various factors,
which include, but are not limited to, the timing of the maturity of the loan in relation to the ability to collect, whether the loan is deemed to be well secured, whether the loan is in the process of collection, and the favorable results of the
analysis of customer financial data. A nonperforming loan will only be reclassified as a performing loan when stringent criteria have been met. At the time the accrual of interest is discontinued, future income is recognized only when cash is
received or the loan has been returned to performing loan status. Renegotiated loans are those loans which terms have been renegotiated to provide a reduction or deferral of principal or interest as of result of the deterioration of the borrower.



|                                                  |  |                        |     |   |              |   |     |  
|------------------------------------------------- |  | ---------------------- | --- | - | ------------ | - | --- | -
|                                                  |  | March 31,              |     |   | December 31, |  
|                                                  |  | 2010                   |     |   | 2009         |  
|                                                  |  | (dollars in thousands) |    
|Loans on nonaccrual basis                         |  | $                      | 62  |   |              | $ |    |  
|Loans past due 90 days or more                    |  |                        |    |   |              |   |    |  
|Renegotiated loans                                |  |                        |    |   |              |   |    |  
|                                                  |  |                        |     |   |              |   |     |  
|Total nonperforming loans                         |  |                        | 62  |   |              |   |    |  
|                                                  |  |                       
|Other real estate                                 |  |                        | 13  |   |              |   | 23  |  
|Repossessed assets                                |  |                        |    |   |              |   |    |  
|                                                  |  |                        |     |   |              |   |     |  
|Total nonperforming assets                        |  | $                      | 75  |   |              | $ | 23  |  
|                                                  |  |                        |     |   |              |   |     |  
|                                                  |  |                       
|Nonperforming loans as a percent of total loans   |  |                        | .03 | % |              |   | .00 | %
|                                                  |  |                       
|Nonperforming loans as a percent of total assets  |  |                        | .02 | % |              |   | .00 | %
|                                                  |  |                       
|Nonperforming assets as a percent of total assets |  |                        | .02 | % |              |   | .01 | %

Management monitors impaired loans on a
continual basis. As of March 2010, impaired loans had no material effect on the Companys financial position or results from operations.

The allowance for loan losses at March 31, 2010, totaled $2.5 million or 1.16% of total loans as compared to $2.4 million or 1.16% at
December 31, 2009. There was no provision for the three months ended March 31, 2010 and a $1,000 provision for the three months ended March 31, 2009.

The level of funding for the provision is a reflection of the overall loan portfolio. Nonperforming loans consist solely of one to four family
residential mortgages. The collateral requirements on such loans reduce the risk of potential losses to an acceptable level in managements opinion.

Management performs a quarterly evaluation of the allowance for loan losses. The evaluation incorporates internal loan review, actual historical losses,
as well as any negative economic trends in the local market. The evaluation is presented to and approved by the Board of Directors. Although the Company maintains its allowance for loan losses at a level that it considers to be adequate to provide
for the inherent risk of loss in its portfolio, there can be no assurance that future losses will not exceed estimated amounts or that additional provisions for loan losses will not be required in future periods.



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AVERAGE BALANCE SHEET

Average Balance Sheet for the Three-Month Period Ended March 31

The following table sets forth certain information relating to the Companys average balance sheet and reflects the average yield on assets and
average cost of liabilities for the periods indicated and the average yields earned and rates paid. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods
presented. Average balances are derived from month-end balances. Management does not believe that the use of month-end balances instead of daily average balances has caused any material differences in the information presented.



|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|------------------------------------------ |  | -------------- | ----------- | - | -------------- | - | --------- |  | ---- | ------- |  | - | ----------- | - | ------ | - | --------- |  | ---- | -
|                                           |  | March 31, 2010 |             |   | March 31, 2009 |  
|                                           |  | Average        |             |   |                |   | Yield/    |  |      | Average |  |   |             |   | Yield/ |  
|                                           |  | Balance        |             |   | Interest       |   | Rate      |  |      | Balance |  |   | Interest    |   | Rate   |  
|Assets                                     |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Interest-earning assets:                   |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Loans (1)(2)                               |  | $              | 210,435,096 |   |                | $ | 2,906,917 |  | 5.53 | %       |  | $ | 205,375,436 |   |        | $ | 3,162,735 |  | 6.16 | %
|Investment securities:                     |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Taxable (3)                                |  |                | 58,017,935  |   |                |   | 420,173   |  | 2.90 |         |  |   | 57,502,775  |   |        |   | 576,746   |  | 4.01 |  
|Exempt from federal income tax             |  |                | 36,189,917  |   |                |   | 355,013   |  | 3.92 |         |  |   | 32,577,793  |   |        |   | 341,019   |  | 4.19 |  
|Federal funds sold and other (3)           |  |                | 39,457,350  |   |                |   | 39,276    |  | 0.40 |         |  |   | 22,995,486  |   |        |   | 35,987    |  | 0.63 |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total interest earnings assets             |  |                | 344,100,298 |   |                |   | 3,721,379 |  | 4.33 |         |  |   | 318,451,490 |   |        |   | 4,116,487 |  | 5.17 |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Noninterest earning assets                 |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Cash and due from other institutions       |  | $              | 9,183,048   |   |                |   |           |  |      |         |  | $ | 11,405,574  |   |        |   |           |  |      |  
|Premises and equipment, net                |  |                | 5,973,416   |   |                |   |           |  |      |         |  |   | 6,276,168   |   |        |   |           |  |      |  
|Accrued interest                           |  |                | 1,110,311   |   |                |   |           |  |      |         |  |   | 1,193,378   |   |        |   |           |  |      |  
|Other assets                               |  |                | 9,334,513   |   |                |   |           |  |      |         |  |   | 7,994,780   |   |        |   |           |  |      |  
|Less allowance for loan losses             |  |                | (2,455,166  | ) |                |   |           |  |      |         |  |   | (2,524,381  | ) |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total noninterest earnings assets          |  |                | 23,146,122  |   |                |   |           |  |      |         |  |   | 24,345,519  |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total assets                               |  | $              | 367,246,420 |   |                |   |           |  |      |         |  | $ | 342,797,009 |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |  
|Liabilities and Shareholders Equity       |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Interest-bearing liabilities:              |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Deposits                                   |  | $              | 260,230,415 |   |                | $ | 1,004,182 |  | 1.54 | %       |  | $ | 242,486,234 |   |        | $ | 1,185,864 |  | 2.92 | %
|Short-term borrowings                      |  |                | 4,653,498   |   |                |   | 2,623     |  | 0.23 |         |  |   | 5,981,772   |   |        |   | 3,391     |  | 0.23 |  
|Federal Home Loan Bank advances            |  |                | 1,103,427   |   |                |   | 17,107    |  | 6.20 |         |  |   | 1,749,807   |   |        |   | 25,736    |  | 5.88 |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total interest-bearing liabilities         |  |                | 265,987,340 |   |                |   | 993,912   |  | 1.49 |         |  |   | 250,217,813 |   |        |   | 1,214,991 |  | 1.94 |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Noninterest bearing liabilities:           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Demand deposits                            |  |                | 57,188,397  |   |                |   |           |  |      |         |  |   | 48,709,094  |   |        |   |           |  |      |  
|Accrued expenses and other liabilities     |  |                | 1,645,509   |   |                |   |           |  |      |         |  |   | 1,906,756   |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total noninterest bearing liabilities      |  |                | 58,833,906  |   |                |   |           |  |      |         |  |   | 50,615,850  |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Shareholders equity                       |  |                | 42,425,174  |   |                |   |           |  |      |         |  |   | 41,963,346  |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Total liabilities and shareholders equity |  | $              | 367,246,420 |   |                |   |           |  |      |         |  | $ | 342,797,009 |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Net interest income                        |  |                |             |   |                | $ | 2,727,466 |  |      |         |  |   |             |   |        | $ | 2,901,496 |  |      |  
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|                                           |  |                |             |   |                |  
|Interest rate spread (4)                   |  |                |             |   |                |   |           |  | 2.83 | %       |  |   |             |   |        |   |           |  | 3.23 | %
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  
|Net yield on interest-earning assets (5)   |  |                |             |   |                |   |           |  | 3.17 | %       |  |   |             |   |        |   |           |  | 3.64 | %
|                                           |  |                |             |   |                |   |           |  |      |         |  |   |             |   |        |   |           |  |      |  



|(1) | For purposes of these computations, the daily average loan amounts outstanding are net of deferred loan fees.
|--- | -------------------------------------------------------------------------------------------------------------

|(2) | Nonaccrual loans are included in loan totals and do not have a material impact on the information presented.
|--- | ------------------------------------------------------------------------------------------------------------

|(3) | Average balance is computed using the carrying value of securities. The average yield has been computed using the historical amortized cost average balance for
available for sale securities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Net yield on interest-earning assets represents net interest income as a percentage of average interest earning assets.
|--- | -----------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Rate/Volume Analysis

The table below sets forth certain information regarding changes in interest income and interest expense of the Company for the periods indicated. For
each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (changes in average volume multiplied by old rate) and (ii) changes in rates (changes in
rate multiplied by old average volume). Changes, which are not solely attributable to rate, or volume are allocated to changes in rate due to rate sensitivity of interest-earning assets and interest-bearing liabilities (dollars in thousands).



|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|---------------------------------- |  | ----------------------------------------------------------------------------- | --- | - | ---- | - | ---- | --- |  | - | ---- | -
|                                   |  | Three-Month Period Ended March2010 Compared to 2009Increase
(Decrease) Due To |    
|                                   |  | Volume                                                                        |     |   | Rate |   |      | Net | 
|Interest income                    |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|Loans                              |  | $                                                                             | 312 |   |      | $ | (568 | )   |  | $ | (256 | )
|Investment securities:             |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|Taxable                            |  |                                                                               | 21  |   |      |   | (178 | )   |  |   | (157 | )
|Exempt from federal income tax     |  |                                                                               | 151 |   |      |   | (137 | )   |  |   | 14   |  
|Federal funds sold and other       |  |                                                                               | 77  |   |      |   | (73  | )   |  |   | 4    |  
|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|Total interest-earning assets      |  |                                                                               | 561 |   |      |   | (956 | )   |  |   | (395 | )
|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|                                   |  |                                                                               |    
|Interest expense                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|Deposits                           |  |                                                                               | 280 |   |      |   | (492 | )   |  |   | (212 | )
|Short-term borrowings              |  |                                                                               | (3  | ) |      |   | 3    |     |  |   |     |  
|Federal Home Loan Bank advances    |  |                                                                               | (38 | ) |      |   | 29   |     |  |   | (9   | )
|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|Total interest-bearing liabilities |  |                                                                               | 239 |   |      |   | (460 | )   |  |   | (221 | )
|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  
|                                   |  |                                                                               |    
|Net change in net interest income  |  | $                                                                             | 322 |   |      | $ | (496 | )   |  | $ | (174 | )
|                                   |  |                                                                               |     |   |      |   |      |     |  |   |      |  



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Item 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable to Smaller Reporting Companies.

Item 4  CONTROLS AND PROCEDURES

The Company has carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys
President and Chief Executive Officer and Vice President and Treasurer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
President and Chief Executive Officer and Vice President and Treasurer concluded that the Companys disclosure controls and procedures are effective, as of the end of the period covered by this report, in timely alerting them to material
information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings.

Disclosure controls and procedures are the control and other procedures of the Company that are designed to ensure that the information required to be
disclosed by the Company in its reports or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchanges Commissions rules and forms.

There was no change in the Companys internal control over financial reporting that occurred during the Companys quarter ended March 31,
2010 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

Part II  OTHER INFORMATION

Item 1  Legal Proceedings

None

Item 1A
 Risk Factors

Not applicable to Smaller Reporting Companies.

Item 2  Unregistered sales of equity securities and use of proceeds

The Company did not engage in any unregistered sales of its securities during the quarter ended March 31, 2010.

ISSUER PURCHASES OF EQUITY SECURITIES



|                      |  |                                              |  |                                         |   |                                                                                             |     |                                                                                                                        |    
|--------------------- |  | -------------------------------------------- |  | --------------------------------------- | - | ------------------------------------------------------------------------------------------- | --- | ---------------------------------------------------------------------------------------------------------------------- | ---
|Period                |  | (a) TotalNumber 
ofShares(or Units)Purchased |  | (b)AveragePrice 
Paidper Share(or Unit) |   | (c) Total Number ofShares (or Units)Purchased as Part ofPublicly
AnnouncedPlans or Programs |     | (d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that May Yet
BePurchased Under thePlans or Programs
|January 1  31, 2010  |  |                                             |  | $                                       |  |                                                                                             | N/A |                                                                                                                        | N/A
|February 1  28, 2010 |  |                                             |  | $                                       |  |                                                                                             | N/A |                                                                                                                        | N/A
|March 1  31, 2010    |  |                                             |  | $                                       |  |                                                                                             | N/A |                                                                                                                        | N/A
|Total (1)             |  | 0                                            |  | $                                       |  |                                                                                             | N/A |                                                                                                                        | N/A



|(1) | No shares of common stock were purchased by Killbuck Bancshares in open-market transactions.
|--- | --------------------------------------------------------------------------------------------

Item 3  Default upon senior securities

None

Item 4
 (Removed and Reserved)

Item 5  Other Information

None

Item 6
 Exhibits



| | a) | The following exhibits are included in this report or incorporated herein by reference:
| | -- | ---------------------------------------------------------------------------------------



| | 3.1(i) | Articles of Incorporation of Killbuck Bancshares, Inc.*
| | ------ | -------------------------------------------------------



| | 3.1(ii) | Amendment to the Articles of Incorporation of Killbuck Bancshares, Inc. increasing authorized shares.**
| | ------- | -------------------------------------------------------------------------------------------------------



| | 3.2 | Code of Regulations of Killbuck Bancshares, Inc.*
| | --- | -------------------------------------------------



| | 31.1 | Rule 13a-14(a) Certification
| | ---- | ----------------------------



| | 31.2 | Rule 13a-14(a) Certification
| | ---- | ----------------------------



| | 32.1 | Section 1350 Certifications
| | ---- | ---------------------------



| | 32.2 | Section 1350 Certifications
| | ---- | ---------------------------



| | 99.1 | Report of Independent Registered Public Accounting Firm.
| | ---- | --------------------------------------------------------



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##### Table of Contents

| | * | Incorporated by reference to an identically numbered exhibit to the Form 10 (file No. 0-24147) filed with SEC on April 30, 1998 and subsequently amended on
July 8, 1998 and July 31, 1998.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ** | Incorporated by reference to Registrants report on Form 10-Q for the quarter ended March 31, 2004, filed with the Commission on May 13, 2004.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Signatures

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



|                   |  |  |  |                           |  |                        
|------------------ |  |  |  | ------------------------- |  | -----------------------
|                   |  |  |  | Killbuck Bancshares, Inc.
|                   |  |  | 
|Date: May 12, 2010 |  |  |  | By:                       |  | /S/    LUTHER E.
PROPER
|                   |  |  |  |                           |  | Luther E. Proper       
|                   |  |  |  |                           |  | President and          
|                   |  |  |  |                           |  | Chief Executive Officer
|                   |  |  | 
|Date: May 12, 2010 |  |  |  | By:                       |  | /S/    CRAIG
LAWHEAD   
|                   |  |  |  |                           |  | Craig Lawhead          
|                   |  |  |  |                           |  | Treasurer              



20