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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, 2009



| ̈ | 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 5, 2009: 619,090









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##### Table of Contents

KILLBUCK BANCSHARES, INC.

Index



|                              |  |                                                                                                     |  |            
|----------------------------- |  | --------------------------------------------------------------------------------------------------- |  | -----------
|                              |  |                                                                                                     |  | Page Number
|                              | 
|PART I. FINANCIAL INFORMATION |  |                                                                                                    
|Item 1.                       |  | Financial Statements (Unaudited):                                                                   |  |            
|                              |  |                                                                                                    
|                              |  | Consolidated Balance Sheet as ofMarch 31, 2009 and December 31, 2008                                |  | 3          
|                              |  |                                                                                                    
|                              |  | Consolidated Statements of Income for thethree months ended March 31, 2009 and 2008                 |  | 4          
|                              |  |                                                                                                    
|                              |  | Consolidated Statements of Changes In Shareholders Equityfor the three months ended March 31,
2009 |  | 5          
|                              |  |                                                                                                    
|                              |  | Consolidated Statements of Cash Flows for thethree months ended March 31, 2009 and 2008             |  | 6          
|                              |  |                                                                                                    
|                              |  | Notes to Unaudited Consolidated Financial Statements                                                |  | 7-11       
|                              |  |                                                                                                    
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition                                         |  | 12-18      
|                              |  |                                                                                                    
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                          |  | 19         
|                              |  |                                                                                                    
|Item 4.                       |  | Controls and Procedures                                                                             |  | 19         
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                    
|Item 1.                       |  | Legal Proceedings                                                                                   |  | 20         
|                              |  |                                                                                                    
|Item 1A.                      |  | Risk Factors                                                                                        |  | 20         
|                              |  |                                                                                                    
|Item 2.                       |  | Unregistered Sales of EquitySecurities and Use of Proceeds                                          |  | 20         
|                              |  |                                                                                                    
|Item 3.                       |  | Default Upon Senior Securities                                                                      |  | 20         
|                              |  |                                                                                                    
|Item 4.                       |  | Submissions of Matters to a Vote of Security Holders                                                |  | 20         
|                              |  |                                                                                                    
|Item 5.                       |  | Other Information                                                                                   |  | 20         
|                              |  |                                                                                                    
|Item 6.                       |  | Exhibits                                                                                            |  | 21         
|                              | 
|SIGNATURES                    |  | 22                                                                                                 



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Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEET (UNAUDITED)



|                                                                         |  |                |             |   |                   |   |             |  
|------------------------------------------------------------------------ |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                         |  | March 31, 2009 |             |   | December 31, 2008 |  
|ASSETS                                                                   |  |                |             |   |                   |   |             |  
|Cash and cash equivalents:                                               |  |                |             |   |                   |   |             |  
|Cash and amounts due from depository institutions                        |  | $              | 18,288,991  |   |                   | $ | 31,868,633  |  
|Federal funds sold                                                       |  |                | 6,003,000   |   |                   |   | 8,448,000   |  
|                                                                         |  |                |             |   |                   |   |             |  
|Total cash and cash equivalents                                          |  |                | 24,291,991  |   |                   |   | 40,316,633  |  
|                                                                         |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|Investment securities:                                                   |  |                |             |   |                   |   |             |  
|Securities available for sale                                            |  |                | 64,322,647  |   |                   |   | 51,549,966  |  
|Time deposits                                                            |  |                | 1,715,000   |   |                   |   |            |  
|Securities held to maturity (fair value of $34,283,885 and $33,265,569)  |  |                | 33,441,432  |   |                   |   | 32,168,512  |  
|                                                                         |  |                |             |   |                   |   |             |  
|Total investment securities                                              |  |                | 99,479,079  |   |                   |   | 83,718,478  |  
|                                                                         |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|Loans (net of allowance for loan losses of $2,526,160 and $2,525,202)    |  |                | 204,139,794 |   |                   |   | 200,448,708 |  
|                                                                         |  |               
|Loans held for sale                                                      |  |                | 460,250     |   |                   |   |            |  
|Premises and equipment, net                                              |  |                | 6,232,716   |   |                   |   | 6,321,031   |  
|Accrued interest receivable                                              |  |                | 1,776,318   |   |                   |   | 1,470,883   |  
|Goodwill, net                                                            |  |                | 1,329,249   |   |                   |   | 1,329,249   |  
|Other assets                                                             |  |                | 7,726,482   |   |                   |   | 7,732,841   |  
|                                                                         |  |                |             |   |                   |   |             |  
|Total assets                                                             |  | $              | 345,435,879 |   |                   | $ | 341,337,823 |  
|                                                                         |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|LIABILITIES                                                              |  |                |             |   |                   |   |             |  
|Deposits:                                                                |  |                |             |   |                   |   |             |  
|Noninterest bearing demand                                               |  | $              | 46,227,136  |   |                   | $ | 52,971,305  |  
|Interest bearing demand                                                  |  |                | 25,521,325  |   |                   |   | 27,372,343  |  
|Money market                                                             |  |                | 32,381,267  |   |                   |   | 23,834,736  |  
|Savings                                                                  |  |                | 40,972,031  |   |                   |   | 40,496,289  |  
|Time                                                                     |  |                | 149,263,146 |   |                   |   | 144,272,233 |  
|                                                                         |  |                |             |   |                   |   |             |  
|Total deposits                                                           |  |                | 294,364,905 |   |                   |   | 288,946,906 |  
|Short-term borrowings                                                    |  |                | 5,410,000   |   |                   |   | 6,385,000   |  
|Federal Home Loan Bank advances                                          |  |                | 1,692,487   |   |                   |   | 1,862,667   |  
|Accrued interest and other liabilities                                   |  |                | 892,625     |   |                   |   | 1,207,652   |  
|                                                                         |  |                |             |   |                   |   |             |  
|Total liabilities                                                        |  |                | 302,360,017 |   |                   |   | 298,402,225 |  
|                                                                         |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|SHAREHOLDERS EQUITY                                                     |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|Common stock  No par value: 1,000,000 shares authorized, 718,431 issued |  |                | 8,846,670   |   |                   |   | 8,846,670   |  
|Retained earnings                                                        |  |                | 43,281,676  |   |                   |   | 42,461,137  |  
|Accumulated other comprehensive income                                   |  |                | 229,721     |   |                   |   | 643,359     |  
|Treasury stock, at cost (99,242 and 96,949 shares)                       |  |                | (9,282,205  | ) |                   |   | (9,015,568  | )
|                                                                         |  |                |             |   |                   |   |             |  
|Total shareholders equity                                               |  |                | 43,075,862  |   |                   |   | 42,935,598  |  
|                                                                         |  |                |             |   |                   |   |             |  
|                                                                         |  |               
|Total liabilities and shareholders equity                               |  | $              | 345,435,879 |   |                   | $ | 341,337,823 |  
|                                                                         |  |                |             |   |                   |   |             |  

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 EndedMarch 31,
|                                                    |  | 2009                        |           | 2008
|INTEREST INCOME                                     |  |                             |           |      |   |          
|Interest and fees on loans                          |  | $                           | 3,162,735 |      | $ | 3,842,642
|Federal funds sold                                  |  |                             | 16,307    |      |   | 197,013  
|Investment securities:                              |  |                             |           |      |   |          
|Taxable                                             |  |                             | 596,426   |      |   | 696,805  
|Exempt from federal income tax                      |  |                             | 341,019   |      |   | 344,624  
|                                                    |  |                             |           |      |   |          
|Total interest income                               |  |                             | 4,116,487 |      |   | 5,081,084
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|INTEREST EXPENSE                                    |  |                             |           |      |   |          
|Deposits                                            |  |                             | 1,185,864 |      |   | 1,881,351
|Federal Home Loan Bank advances                     |  |                             | 25,736    |      |   | 34,834   
|Short term borrowing                                |  |                             | 3,391     |      |   | 8,300    
|                                                    |  |                             |           |      |   |          
|Total interest expense                              |  |                             | 1,214,991 |      |   | 1,924,485
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|NET INTEREST INCOME                                 |  |                             | 2,901,496 |      |   | 3,156,599
|                                                    |  |                            
|Provision for loan losses                           |  |                             | 1,000     |      |   |         
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                             | 2,900,496 |      |   | 3,156,599
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|NON INTEREST INCOME                                 |  |                             |           |      |   |          
|Service charges on deposit accounts                 |  |                             | 86,532    |      |   | 85,291   
|NSF & OD fees, net                                  |  |                             | 180,803   |      |   | 209,978  
|Gain on sale of loans, net                          |  |                             | 17,718    |      |   | 16,203   
|BOLI                                                |  |                             | 59,452    |      |   | 49,080   
|Other income                                        |  |                             | 39,154    |      |   | 39,416   
|                                                    |  |                             |           |      |   |          
|Total non interest income                           |  |                             | 383,659   |      |   | 399,968  
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|NON INTEREST EXPENSE                                |  |                             |           |      |   |          
|Salaries and employee benefits                      |  |                             | 1,344,773 |      |   | 1,373,598
|Occupancy and Equipment expense                     |  |                             | 261,533   |      |   | 278,860  
|Professional fees                                   |  |                             | 96,502    |      |   | 86,250   
|Franchise tax                                       |  |                             | 128,300   |      |   | 123,050  
|Stationery, Supplies & Printing                     |  |                             | 47,342    |      |   | 52,339   
|Postage, Express, & Freight                         |  |                             | 56,657    |      |   | 46,146   
|Data Processing                                     |  |                             | 50,872    |      |   | 48,738   
|Other expenses                                      |  |                             | 248,792   |      |   | 244,262  
|                                                    |  |                             |           |      |   |          
|Total non interest expense                          |  |                             | 2,234,771 |      |   | 2,253,243
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|INCOME BEFORE INCOME TAXES                          |  |                             | 1,049,384 |      |   | 1,303,324
|Income taxes                                        |  |                             | 228,845   |      |   | 315,784  
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|NET INCOME                                          |  | $                           | 820,539   |      | $ | 987,540  
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|Earning per common share                            |  | $                           | 1.32      |      | $ | 1.57     
|                                                    |  |                             |           |      |   |          
|                                                    |  |                            
|Weighted Average shares outstanding                 |  |                             | 620,269   |      |   | 629,418  
|                                                    |  |                             |           |      |   |          

See accompanying notes to the unaudited consolidated financial statements.



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Killbuck Bancshares, Inc. and Subsidiary

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2009



|                                                       |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|------------------------------------------------------ |  | ----------- | --------- | ---------------- | - | ----------------------------------- |  | - | ------------- | - |  | ------------------------ | ---------- | - | ------------------- | - | ---------- | - |  | - | -------- | -
|                                                       |  | CommonStock |           | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome |  |   | TreasuryStock |   |  | TotalShareholdersEquity |            |   | ComprehensiveIncome |  
|Balance, December 31, 2008                             |  | $           | 8,846,670 |                  | $ | 42,461,137                          |  | $ | 643,359       |   |  | $                        | (9,015,568 | ) |                     | $ | 42,935,598 |   |  |   |          |  
|                                                       |  |             |           |                  |   |                                    
|Net income                                             |  |             |           |                  |   | 820,539                             |  |   |               |   |  |                          |            |   |                     |   | 820,539    |   |  | $ | 820,539  |  
|Purchase of Treasury stock, at cost (2,293 shares)     |  |             |           |                  |   |                                     |  |   |               |   |  |                          | (266,637   | ) |                     |   | (266,637   | ) |  |   |          |  
|Other comprehensive income:                            |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|Net unrealized loss on securities, net of tax $213,086 |  |             |           |                  |   |                                     |  |   | (413,638      | ) |  |                          |            |   |                     |   | (413,638   | ) |  |   | (413,638 | )
|                                                       |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|Comprehensive income                                   |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  | $ | 406,901  |  
|                                                       |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  
|                                                       |  |             |           |                  |   |                                    
|Balance, March 31, 2009                                |  | $           | 8,846,670 |                  | $ | 43,281,676                          |  | $ | 229,721       |   |  | $                        | (9,282,205 | ) |                     | $ | 43,075,862 |   |  |   |          |  
|                                                       |  |             |           |                  |   |                                     |  |   |               |   |  |                          |            |   |                     |   |            |   |  |   |          |  

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, |            
|                                                                                  |  | 2009                        |             |   | 2008 |  
|OPERATING ACTIVITIES                                                              |  |                             |             |   |      |   |            |  
|Net income                                                                        |  | $                           | 820,539     |   |      | $ | 987,540    |  
|Adjustments to reconcile net income to net cash provided by Operating activities: |  |                             |             |   |      |   |            |  
|Provision for loan losses                                                         |  |                             | 1,000       |   |      |   |           |  
|Gain on sale of loans                                                             |  |                             | (17,718     | ) |      |   | (16,203    | )
|Provision for depreciation and amortization                                       |  |                             | 227,932     |   |      |   | 135,658    |  
|Origination of loans held for sale                                                |  |                             | (3,561,750  | ) |      |   | (1,940,500 | )
|Proceeds from the sale of loans                                                   |  |                             | 3,119,218   |   |      |   | 1,801,703  |  
|Net change in:                                                                    |  |                             |             |   |      |   |            |  
|Accrued interest and other assets                                                 |  |                             | (295,464    | ) |      |   | (745,392   | )
|Accrued expenses and other liabilities                                            |  |                             | (105,553    | ) |      |   | 62,812     |  
|                                                                                  |  |                             |             |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                             | 188,204     |   |      |   | 285,618    |  
|                                                                                  |  |                             |             |   |      |   |            |  
|                                                                                  |  |                            
|INVESTING ACTIVITIES                                                              |  |                             |             |   |      |   |            |  
|Investment securities available for sale:                                         |  |                             |             |   |      |   |            |  
|Proceeds from maturities and repayments                                           |  |                             | 11,125,787  |   |      |   | 6,040,684  |  
|Purchases                                                                         |  |                             | (24,614,040 | ) |      |   | (5,996,250 | )
|Bank CDs  Purchases                                                              |  |                             | (1,715,000  | ) |      |   |           |  
|Investment securities held to maturity:                                           |  |                             |             |   |      |   |            |  
|Proceeds from maturities and repayments                                           |  |                             | 301,364     |   |      |   |           |  
|Purchases                                                                         |  |                             | (1,589,074  | ) |      |   | (940,032   | )
|Net (increase) decrease in loans                                                  |  |                             | (3,692,086  | ) |      |   | (4,616,123 | )
|Purchase of premises and equipment                                                |  |                             | (35,979     | ) |      |   | (134,141   | )
|Purchase of BOLI                                                                  |  |                             |            |   |      |   | (2,000,000 | )
|                                                                                  |  |                             |             |   |      |   |            |  
|Net cash used in investing activities                                             |  |                             | (20,219,028 | ) |      |   | (7,645,862 | )
|                                                                                  |  |                             |             |   |      |   |            |  
|                                                                                  |  |                            
|FINANCING ACTIVITIES                                                              |  |                             |             |   |      |   |            |  
|Net increase in demand, money market and savings deposits                         |  |                             | 427,086     |   |      |   | 356,771    |  
|Net increase in time deposits                                                     |  |                             | 4,990,913   |   |      |   | 3,044,284  |  
|Net decrease in short term borrowings                                             |  |                             | (975,000    | ) |      |   | (465,000   | )
|Repayment of Federal Home Loan Bank advances                                      |  |                             | (170,180    | ) |      |   | (179,591   | )
|Purchase of Treasury stock                                                        |  |                             | (266,637    | ) |      |   | (236,422   | )
|                                                                                  |  |                             |             |   |      |   |            |  
|Net cash provided by financing activities                                         |  |                             | 4,006,182   |   |      |   | 2,520,042  |  
|                                                                                  |  |                             |             |   |      |   |            |  
|                                                                                  |  |                            
|Net decrease in cash and cash equivalents                                         |  |                             | (16,024,642 | ) |      |   | (4,840,202 | )
|Cash and cash equivalents at beginning of period                                  |  |                             | 40,316,633  |   |      |   | 41,172,750 |  
|                                                                                  |  |                             |             |   |      |   |            |  
|Cash and cash equivalents at end of period                                        |  | $                           | 24,291,991  |   |      | $ | 36,332,548 |  
|                                                                                  |  |                             |             |   |      |   |            |  
|                                                                                  |  |                            
|Supplemental Disclosures of Cash Flows Information                                |  |                             |             |   |      |   |            |  
|Cash Paid During the Period For:                                                  |  |                             |             |   |      |   |            |  
|Interest on deposits and borrowings                                               |  | $                           | 1,238,139   |   |      | $ | 1,986,131  |  
|                                                                                  |  |                             |             |   |      |   |            |  
|                                                                                  |  |                            
|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 are, in the opinion of management, necessary for a fair statement of the 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, 2008 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 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 31,2009 |          |   | Three MonthsEndedMarch 31,2008 |  
|Net income                               |  | $                              | 820,539  |   |                                | $ | 987,540   |  
|Other comprehensive income:              |  |                                |          |   |                                |   |           |  
|Net unrealized (loss) gain on securities |  |                                | (626,724 | ) |                                |   | 571,983   |  
|Tax effect                               |  |                                | 213,086  |   |                                |   | (194,474  | )
|                                         |  |                                |          |   |                                |   |           |  
|Total comprehensive income               |  | $                              | 406,901  |   |                                | $ | 1,365,049 |  
|                                         |  |                                |          |   |                                |   |           |  



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NOTE 4  FAIR VALUE MEASUREMENTS (SFAS No. 157)

Effective January 1, 2008, the Company adopted SFAS No. 157, which, among other things, requires enhanced disclosures about assets and liabilities carried at
fair value. SFAS No. 157 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 by SFAS No. 157 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 their
fair value as of March 31, 2009 by level within the fair value hierarchy. As required by SFAS No. 157, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.



|                              |  |                |         |          |   |            |  |       |   |  |   |           
|----------------------------- |  | -------------- | ------- | -------- | - | ---------- |  | ----- | - |  | - | ----------
|                              |  | March 31, 2009
|                              |  | Level I        |         | Level II |   | Level III  |  | Total
|                              |  | (In thousands)
|Assets:                       |  |                |         |          |   |            |  |       |   |  |   |           
|Securities available for sale |  | $              |        |          | $ | 64,322,647 |  | $     |  |  | $ | 64,322,647
|Loans held for sale           |  |                | 460,250 |          |   |           |  |       |  |  |   | 460,250   



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NOTE 5  RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued FAS No. 141 (revised 2007), Business Combinations (FAS 141(R)), which establishes principles and requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in an acquiree, including the recognition and measurement of goodwill acquired in a business combination. FAS
No. 141(R) is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this standard is not expected to have a material effect on the Companys results of
operations or financial position

In March 2008, the FASB issued FAS No. 161, Disclosures about Derivative Instruments and Hedging Activities,
to require enhanced disclosures about derivative instruments and hedging activities. The new standard has revised financial reporting for derivative instruments and hedging activities by requiring more transparency about how and why an entity uses
derivative instruments, how derivative instruments and related hedged items are accounted for under FAS No. 133, Accounting for Derivative Instruments and Hedging Activities; and how derivative instruments and related hedged items affect
an entitys financial position, financial performance, and cash flows. FAS No. 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also requires entities to provide more
information about their liquidity by requiring disclosure of derivative features that are credit risk-related. Further, it requires cross-referencing within footnotes to enable financial statement users to locate important information about
derivative instruments. FAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The adoption of this standard is not expected to
have a material effect on the Companys results of operations or financial position.

In June 2008, the FASB ratified EITF Issue No. 08-4,
Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjusted Conversion Ratios. This Issue provides transition guidance for conforming changes made to EITF Issue No. 98-5, Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently Adjusted Conversion Ratios, that resulted from EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments,and FAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both Liability and Equity. The conforming changes are effective for financial statements issued for fiscal years ending after December 15, 2008, with earlier
application permitted. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.

In May 2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement. This FSP provides guidance
on the accounting for certain types of convertible debt instruments that may be settled in cash upon conversion. Additionally, this FSP specifies that issuers of such instruments should separately account for the liability and equity components in a
manner that will reflect the entitys nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.

In February 2008, the FASB issued FSP No. FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions. This FSP concludes that a transferor and transferee should not separately
account for a transfer of a financial asset and a related repurchase financing unless (a) the two transactions have a valid and distinct business or economic purpose for being entered into separately and (b) the repurchase financing does
not result in the initial transferor regaining control over the financial asset. The FSP is effective for financial statements issued for fiscal years beginning on or after November 15, 2008, and interim periods within those fiscal years. The
adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.



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In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets(FSP 142-3). FSP 142-3 amends the factors that should be considered in developing assumptions about renewal or extension used in estimating the useful life of a recognized intangible asset under FAS No. 142, Goodwill and
Other Intangible Assets. This standard is intended to improve the consistency between the useful life of a recognized intangible asset under FAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under
FAS No. 141R and other GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The measurement provisions of this standard will apply only to intangible assets of the Company
acquired after the effective date. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, to clarify that instruments granted in share-based
payment transactions can be participating securities prior to the requisite service having been rendered. A basic principle of the FSP is that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and are to be included in the computation of EPS pursuant to the two-class method. The provisions of this FSP are effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those years. All prior-period EPS data presented (including interim financial statements, summaries of earnings, and selected financial data) are required to be adjusted retrospectively to
conform with the provisions of the FSP. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.

In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies.This FSP requires companies acquiring
contingent assets or assuming contingent liabilities in business combination to either (a) if the assets or liabilities fair value can be determined, recognize them at fair value, at the acquisition date, or (b) if the
assets or liabilities fair value cannot be determined, but (i) it is probable that an asset existed or that a liability had been incurred at the acquisition date and (ii) the amount of the asset or liability can be reasonably
estimated, recognize them at their estimated amount, at the acquisition date. If the fair value of these contingencies cannot be determined and they are not probable or cannot be reasonably estimated, then companies should not recognize these
contingencies as of the acquisition date and instead should account for them in subsequent periods by following other applicable GAAP. This FSP also eliminates the FAS 141R requirement of disclosing in the footnotes to the financial statements the
range of expected outcomes for a recognized contingency. This FSP shall be effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.

In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly. This FSP relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms the need to use judgment to ascertain if
a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP No. FAS 157-4 is effective for interim and annual periods ending after June 15, 2009, but entities may early adopt this FSP for
the interim and annual periods ending after March 15, 2009. The adoption of this FSP is not expected to have a material effect on the Companys results of operations or financial position.



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In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instruments, which relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing this FSP, fair values for these assets and liabilities were
only disclosed once a year. The FSP now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair
value. FSP No. FAS 107-1 and APB 28-1 is effective for interim and annual periods ending after June 15, 2009, but entities may early adopt this FSP for the interim and annual periods ending after March 15, 2009. The adoption of this FSP is
not expected to have a material effect on the Companys results of operations or financial position.

In April 2009, the FASB issued FSP No. FAS 115-2
and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP No.
FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after June 15, 2009, but entities may early adopt this FSP for the interim and annual periods ending after March 15, 2009. The adoption of this FSP is not expected
to have a material effect on the Companys results of operations or financial position.



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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 fiscal year ended December 31, 2008. 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 involve 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 fiscal year ended December 31, 2008.

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 fiscal year ended December 31, 2008; 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.

Deferred Tax Assets - We use an estimate of future earnings to support our position that the benefit of our deferred tax assets will be realized. If future income
should prove non-existent or less than the amount of the deferred tax assets within the tax years to which they may be applied, the asset may not be realized and our net income will be reduced. Our deferred tax assets are described further in Note
14 of the consolidated financial statements filed with the Commission as part of the Companys annual report on Form 10-K for its fiscal year ended December 31, 2008.



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Financial Condition

Total assets at March 31, 2009 were $345,436,000 compared to $341,338,000 at December 31, 2008.

Cash and cash
equivalents decreased by $16,025,000 or 39.8% from December 31, 2008, to March 31, 2009, with federal funds sold decreasing $2,445,000. The federal funds were used to partially fund the increase in loans.

Investment securities available for sale increased by $12,773,000 or 24.7% from December 31, 2008 to March 31, 2009, due to an effort to maximize the yield on
excess liquidity. Due to the low interest rate on Federal Funds, a new investment in Bank time deposits was made for $1,715,000. Investments held to maturity increased $1,273,000 or 4.0% due to the same effort to increase earnings.

Net loans increased by $3,691,000 or 1.84% from December 31, 2008, to March 31, 2009. An increase of $728,000 occurred in the real estate loan category, which
is attributable primarily to an increase of $1,018,000 in construction lending. Residential real estate increased $433,000 with additional increases in farm lending activity of $453,000. These increases were partially offset by a decrease in
commercial real estate loan activity of $1,176,000. Commercial and other loan balances increased by $3,698,000 due to seasonal changes and inventory growth while consumer loan balances continued to decrease by $735,000.

Total deposits at March 31, 2009 were $294,365,000 compared to $288,947,000 at December 31, 2008. Time deposits increased $4,991,000, demand accounts decreased
$8,595,000, and money market and savings accounts increased $8,546,000 and $476,000, respectively. Management believes demand account decreases are attributable to normal fluctuations due to customer usage; business accounts using demand account
funds to build up seasonal inventories; the fact that demand deposit accounts at December 31, 2008 included additional funds due to the holiday period; and the disintermediation into other financial markets.

Short-term borrowings decreased $975,000 and Federal Home Loan Bank advances decreased $170,000 due to scheduled repayments at March 31, 2009 from December 31,
2008.

Shareholders Equity increased by $140,000 or .33%, which was mainly due to earnings of $821,000 for the first three months of 2009 decreased
by a $414,000 unrealized loss on securities included in other comprehensive income and decreased by the purchase of Treasury stock for $267,000. Treasury stock purchases are monitored against the Companys Strategic Plan and the goals set forth
in the plan. The Treasury stock purchases have not exceeded the Strategic Plans guidelines for the first three months of 2009. Management monitors risk-based capital and leveraged capital ratios in order to assess compliance with the
regulatory guidelines. At March 31, 2009, the total capital ratio was 18.83%; the Tier I capital ratio was 17.74%, and the leverage ratio was 12.03%, compared to regulatory capital requirements of 8.00%, 4.00% and 4.00% respectively. These
ratios are well in excess of regulatory capital requirements.



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RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2009 and 2008

Net income for the three-month period
ended March 31, 2009, was $821,000 a decrease of $167,000 or 20.3% from the $988,000 reported at March 31, 2008.

Total interest income of
approximately $4,117,000 for the three-month period ended March 31, 2009, compares to $5,081,000 for the same period in 2008, a decrease of $964,000 or 19.0%. The decrease in total interest income is mainly attributable to the interest and fees
on loans decreasing $680,000 or 17.7% for the three-month period ended March 31, 2009 compared to the same period for 2008. The decrease in interest and fees on loans is due to a decrease in the interest rates on the loan portfolio. The yield
was 7.68% compared to 6.16% for this three-month period of 2009 and 2008 respectively. Average loan balances were $205,375,000 for 2009 compared to $200,231,000 for 2008. See Average Balance Sheet for the three-month periods ended
March 31, 2009 and 2008. The interest on Federal Funds also decreased. It decreased due to the low interest rates. The excess funds were invested in securities earning a higher yield; thereby decreasing the volume in Federal Funds. The yield on
the excess liquidity in Federal Funds and Due from Federal Reserve decreased from 3.22% for 2008 to .31% for 2009. The average balance outstanding of $21,261,000 compares to $24,449,000 for 2008. The decrease in interest on taxable investment
securities including equities adds to the reduction in interest income. The decrease in interest on taxable investment securities of $96,000 was due to the decrease in rate. The average balances outstanding of $57,503,000 for 2009 compared to
$53,997,000 for 2008 and the yield was 4.01% compared to 4.99% for this three-month period of 2009 and 2008 respectively.

Total interest expense of
$1,215,000 for the three-month period ending March 31, 2009, represents a decrease of $709,000 from the $1,924,000 reported for the same three-month period in 2008. The decrease in interest expense on deposits is due mainly to a decrease in the
rate paid on the time deposits. The cost of time deposits was 2.92% compared to 4.35% for this three-month period of 2009 and 2008 respectively. Average time deposits were $147,762,000 for this three-month period of 2009 compared to $153,836,000 for
the same three months of 2008. The cost of interest bearing deposits was 2.0% compared to 3.2% for this three-month period of 2009 and 2008 respectively. See Average Balance Sheet for the three-month periods ended March 30, 2009 and
2008.

Net interest income of $2,902,000 for the three months ended March 31, 2009, compares to $3,157,000 for the same three-month period in 2008, a
decrease of $255,000 or 8.1%. The net interest margin is expected to stabilize but remain low in 2009.

Total non-interest income for the three-month
period ended March 31, 2009 decreased approximately $16,000 or 4.0% to $384,000 from $400,000 for the same three-month period in 2008. Net NSF and overdraft fees decreased approximately $29,000 or 13.8% on the overdraft program due to the
conservative culture of our service areas. Gains on sale of loans increased $2,000 due to increased activity in the secondary market. Other income remained stable at approximately $39,000.

Total non-interest expense of $2,235,000 for the three months ended March 31, 2009, compares to $2,253,000 for the same three-month period in 2008. This represents
a decrease of $18,000 or .8%. Approximately a net $29,000 decrease was attributable to a decrease in pension expenses and bonus expenses off set by normal recurring employee cost increases for annual salary increases and employee benefits.
Approximately $17,000 of the decrease was attributable to snow related expenses associated with less severe winter weather conditions. The changes in the remaining expense accounts were attributable to increases/decreases in items that are normal
and recurring in nature.



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Liquidity

Management monitors projected liquidity needs and determines the level desirable based in part on the Companys commitments to make loans and managements assessment of the Companys ability to generate
funds.

The primary sources of funds are deposits, repayment of loans, maturities of investments, funds provided from operations and advances from the FHLB
of Cincinnati. While scheduled repayments of loans and maturities of investment securities are predictable sources of funds, deposit flows and loan repayments are greatly influenced by the general level of interest rates, economic conditions and
competition. The Company uses its sources of funds to fund existing and future loan commitments, to fund maturing time deposits and demand deposit withdrawals, to invest in other interest-earning assets, to maintain liquidity, and to meet operating
expenses.

Cash and amounts due from depository institutions and federal funds sold totaled $24,292,000 at March 31, 2009. These assets provide the
primary source of liquidity for the Company. In addition, management has designated a portion of the investment portfolio, $64,323,000 as available for sale and has an available unused line of credit of $41,710,000 with the Federal Home Loan Bank of
Cincinnati to provide additional sources of liquidity at March 31, 2009. As of March 31, 2009, the Company had commitments to fund loans of approximately $2,901,000 and unused lines of credit totaling $36,588,000.

Cash was provided during the three month period ended March 31, 2009, mainly from the maturities and repayments of investment securities of $11.4 million, operating
activities of $.2 million, and a net increase in deposits of $5.4 million. Cash was used during the three month period ended March 31, 2009, mainly to fund a net increase in loans of $3.7 million, and for the purchase of investment securities
of $27.9 million. In addition, $.2 million was used to reduce Federal Home Loan Bank advances during the first three months of 2009, short-term borrowings decreased $1.0 million, and $.2 million was used to purchase Treasury Stock. Cash and cash
equivalents totaled $24.3 million at March 31, 2009, a decrease of $16.0 million from $40.3 million at December 31, 2008.

Management is not
aware of any conditions, including any regulatory recommendations or requirements, which would adversely affect its liquidity or ability to meet its funding needs in the normal course of business.



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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,
2009, and December 31, 2008. The Company ceased 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
re-classified 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 31,2009 |     |   | December 31,2008 |  
|                                                  | (dollars in thousands) |              
|Loans on nonaccrual basis                         |                        | $             | 293 |   |                  | $ | 73  |  
|Loans past due 90 days or more                    |                        |               |    |   |                  |   |    |  
|Renegotiated loans                                |                        |               |    |   |                  |   |    |  
|                                                  |                        |               |     |   |                  |   |     |  
|Total nonperforming loans                         |                        |               | 293 |   |                  |   | 73  |  
|                                                  |                        |              
|Other real estate                                 |                        |               |    |   |                  |   |    |  
|Repossessed assets                                |                        |               |    |   |                  |   |    |  
|                                                  |                        |               |     |   |                  |   |     |  
|Total nonperforming assets                        |                        | $             | 293 |   |                  | $ | 73  |  
|                                                  |                        |               |     |   |                  |   |     |  
|                                                  |                        |              
|Nonperforming loans as a percent of total loans   |                        |               | .14 | % |                  |   | .04 | %
|                                                  |                        |              
|Nonperforming loans as a percent of total assets  |                        |               | .08 | % |                  |   | .02 | %
|                                                  |                        |              
|Nonperforming assets as a percent of total assets |                        |               | .08 | % |                  |   | .02 | %

Management monitors impaired loans on a continual basis. As of March 2009, impaired loans had no material effect
on the Companys financial position or results from operations.

The allowance for loan losses at March 31, 2009, totaled $2,526,000 or 1.22% of
total loans as compared to $2,525,000 or 1.24% at December 31, 2008. Provisions for loan losses were $1,000 for the three months ended March 31, 2009 and $0 for the three months ended March 31, 2008.

The level of funding for the provision is a reflection of the overall loan portfolio. Nonperforming loans consist of approximately $94,000 in commercial real estate and
$199,000 in 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, 2009 |             |          | March 31, 2008 |           
|                                         | AverageBalance |                |             | Interest |                | Yield/Rate |           |  | AverageBalance |   |  | Interest |             | Yield/Rate | 
|Assets                                   |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Interest Earnings Assets:                |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Loans (1)(2)(2)(3)                       |                | $              | 205,375,436 |          |                | $          | 3,162,735 |  | 6.16           | % |  | $        | 200,231,008 |            |  | $ | 3,842,642 |  | 7.68 | %
|Securities-taxable (4)                   |                |                | 57,502,775  |          |                |            | 576,746   |  | 4.01           |   |  |          | 53,997,140  |            |  |   | 673,422   |  | 4.99 |  
|Securities-nontaxable                    |                |                | 32,577,793  |          |                |            | 341,019   |  | 4.19           |   |  |          | 29,806,864  |            |  |   | 344,624   |  | 4.62 |  
|Securities-equity (4)(5)                 |                |                | 1,734,560   |          |                |            | 19,680    |  | 4.54           |   |  |          | 1,680,910   |            |  |   | 23,383    |  | 5.56 |  
|Federal funds sold                       |                |                | 8,717,330   |          |                |            | 4,135     |  | 0.19           |   |  |          | 24,449,445  |            |  |   | 197,013   |  | 3.22 |  
|Due from Federal Reserve Bank (6)        |                |                | 12,543,596  |          |                |            | 12,172    |  | 0.39           |   |  |          |            |            |  |   |          |  | 0.00 |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total interest earnings assets           |                |                | 318,451,490 |          |                |            | 4,116,487 |  | 5.17           |   |  |          | 310,165,367 |            |  |   | 5,081,084 |  | 6.55 |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Noninterest earning assets               |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Cash and due from other institutions     |                | $              | 11,405,574  |          |                |            |           |  |                |   |  | $        | 11,004,192  |            |  |   |           |  |      |  
|Premises and equipment, net              |                |                | 6,276,168   |          |                |            |           |  |                |   |  |          | 6,549,278   |            |  |   |           |  |      |  
|Accrued interest                         |                |                | 1,193,378   |          |                |            |           |  |                |   |  |          | 1,376,733   |            |  |   |           |  |      |  
|Other assets                             |                |                | 7,994,780   |          |                |            |           |  |                |   |  |          | 7,161,635   |            |  |   |           |  |      |  
|Less allowance for loan losses           |                |                | (2,524,381  | )        |                |            |           |  |                |   |  |          | (2,504,000  | )          |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total noninterest earnings assets        |                |                | 24,345,519  |          |                |            |           |  |                |   |  |          | 23,587,838  |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total Assets                             |                | $              | 342,797,009 |          |                |            |           |  |                |   |  | $        | 333,753,205 |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |           
|Liabilities and Shareholders Equity      |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Interest bearing liabilities:            |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Interest bearing demand                  |                | $              | 26,387,451  |          |                | $          | 9,878     |  | 0.15           | % |  | $        | 26,095,256  |            |  | $ | 30,836    |  | 0.47 | %
|Money market accounts                    |                |                | 27,546,420  |          |                |            | 57,121    |  | 0.83           |   |  |          | 19,050,357  |            |  |   | 94,717    |  | 1.99 |  
|Savings deposits                         |                |                | 40,790,685  |          |                |            | 39,854    |  | 0.39           |   |  |          | 37,991,536  |            |  |   | 83,029    |  | 0.87 |  
|Time deposits                            |                |                | 147,761,678 |          |                |            | 1,079,011 |  | 2.92           |   |  |          | 153,836,201 |            |  |   | 1,672,769 |  | 4.35 |  
|Short term borrowings                    |                |                | 5,981,772   |          |                |            | 3,391     |  | 0.23           |   |  |          | 5,376,376   |            |  |   | 8,300     |  | 0.62 |  
|Federal Home Loan Advances               |                |                | 1,749,807   |          |                |            | 25,736    |  | 5.88           |   |  |          | 2,418,358   |            |  |   | 34,834    |  | 5.76 |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total interest bearing liabilities       |                |                | 250,217,813 |          |                |            | 1,214,991 |  | 1.94           |   |  |          | 244,768,084 |            |  |   | 1,924,485 |  | 3.14 |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Noninterest bearing liabilities:         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Demand deposits                          |                |                | 48,709,094  |          |                |            |           |  |                |   |  |          | 46,577,118  |            |  |   |           |  |      |  
|Accrued expenses and other liabilities   |                |                | 1,906,756   |          |                |            |           |  |                |   |  |          | 2,147,708   |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total noninterest bearing liabilities    |                |                | 50,615,850  |          |                |            |           |  |                |   |  |          | 48,724,826  |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Shareholders equity                     |                |                | 41,963,346  |          |                |            |           |  |                |   |  |          | 40,260,295  |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Total Liabilities and Equity             |                | $              | 342,797,009 |          |                |            |           |  |                |   |  | $        | 333,753,205 |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Net interest income                      |                |                |             |          |                | $          | 2,901,496 |  |                |   |  |          |             |            |  | $ | 3,156,599 |  |      |  
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|                                         |                |                |             |          |                |           
|Interest rate spread (7)                 |                |                |             |          |                |            |           |  | 3.23           | % |  |          |             |            |  |   |           |  | 3.41 | %
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  
|Net yield on interest earning assets (8) |                |                |             |          |                |            |           |  | 3.64           | % |  |          |             |            |  |   |           |  | 4.07 | %
|                                         |                |                |             |          |                |            |           |  |                |   |  |          |             |            |  |   |           |  |      |  



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

|(2) | Included in loan interest income are loan related fees of $82,000 and $85,000 in 2009 and 2008, respectively.
|--- | -------------------------------------------------------------------------------------------------------------

|(3) | Nonaccrual loans are included in loan totals and do not have a material impact on the information presented.
|--- | ------------------------------------------------------------------------------------------------------------

|(4) | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Equity securities are comprised of common stock of the Federal Home Loan Bank, Federal Reserve Bank, and Great Lakes Bankers Bank.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(6) | In 2009, The Federal Reserve Bank began paying interest on excess deposits. In 2008, excess liquidity was held in the Federal Funds.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(7) | Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | 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 March2009 Compared to
2008Increase (Decrease) Due To |     
|                                  | Volume |                                                                               |      | Rate |  |   | Net    |  
|Interest income                   |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Loans                             |        | $                                                                             | 395  |      |  | $ | (1,075 | ) |  | $ | (680 | )
|Securities-taxable                |        |                                                                               | 175  |      |  |   | (271   | ) |  |   | (96  | )
|Securities-nontaxable             |        |                                                                               | 128  |      |  |   | (132   | ) |  |   | (4   | )
|Securities-equities               |        |                                                                               | 3    |      |  |   | (6     | ) |  |   | (3   | )
|Federal funds sold                |        |                                                                               | (103 | )    |  |   | (78    | ) |  |   | (181 | )
|                                  |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Total interest earning            |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Assets                            |        |                                                                               | 598  |      |  |   | (1,562 | ) |  |   | (964 | )
|                                  |        |                                                                               |     
|Interest expense                  |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Interest bearing demand           |        |                                                                               | 1    |      |  |   | (22    | ) |  |   | (21  | )
|Money market accounts             |        |                                                                               | 169  |      |  |   | (206   | ) |  |   | (37  | )
|Savings deposits                  |        |                                                                               | 24   |      |  |   | (67    | ) |  |   | (43  | )
|Time deposits                     |        |                                                                               | (264 | )    |  |   | (330   | ) |  |   | (594 | )
|Short-term borrowing              |        |                                                                               | 4    |      |  |   | (9     | ) |  |   | (5   | )
|Federal Home Loan Bank            |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Advances                          |        |                                                                               | (38  | )    |  |   | 29     |   |  |   | (9   | )
|                                  |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Total interest bearing            |        |                                                                               |      |      |  |   |        |   |  |   |      |  
|Liabilities                       |        |                                                                               | (104 | )    |  |   | (605   | ) |  |   | (709 | )
|                                  |        |                                                                               |     
|Net change in net interest income |        | $                                                                             | 702  |      |  | $ | (957   | ) |  | $ | (255 | )
|                                  |        |                                                                               |      |      |  |   |        |   |  |   |      |  



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##### Table of Contents

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 Chief Financial Officer, 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 Chief Financial Officer 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 fiscal quarter ended
March 31, 2009 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, 2009.

ISSUER PURCHASES OF EQUITY SECURITIES



|                      |  |                                             |  |                                        |        |                                                                                            |     |                                                                                                                       |    
|--------------------- |  | ------------------------------------------- |  | -------------------------------------- | ------ | ------------------------------------------------------------------------------------------ | --- | --------------------------------------------------------------------------------------------------------------------- | ---
|Period                |  | (a) TotalNumberof Shares(or Units)Purchased |  | (b) AveragePricePaid perShare
(orUnit) |        | (c) Total Number ofShares (or Units)Purchased as Partof PubliclyAnnounced Plansor Programs |     | (d) Maximum Number(or ApproximateDollar Value) ofShares (or Units) thatMay Yet BePurchased Under
thePlans or Programs
|January 1  31, 2009  |  | 735                                         |  | $                                      | 116.12 |                                                                                            | N/A |                                                                                                                       | N/A
|                      |  |                                             |  |                                       
|February 1  28, 2009 |  | 748                                         |  | $                                      | 116.36 |                                                                                            | N/A |                                                                                                                       | N/A
|                      |  |                                             |  |                                       
|March 1  31, 2009    |  | 810                                         |  | $                                      | 116.36 |                                                                                            | N/A |                                                                                                                       | N/A
|                      |  |                                             |  |                                       
|Total (1)             |  | 2,293                                       |  | $                                      | 116.28 |                                                                                            | N/A |                                                                                                                       | N/A



|(1) | 2,293 shares of common stock were purchased by Killbuck Bancshares in an open-market transaction.
|--- | -------------------------------------------------------------------------------------------------

Item 3  Default upon senior securities

None

Item 4  Submissions of matters to a vote of security holders

None

Item 5  Other
Information

None



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##### Table of Contents

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.                                               



|* | 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 13, 2009 |  | By:                       |  | /s/ Luther E. Proper                 
|                   |  |                           |  | Luther E. Proper                     
|                   |  |                           |  | President and Chief Executive Officer
|                   |  |                          
|Date: May 13, 2009 |  | By:                       |  | /s/ Diane Knowles                    
|                   |  |                           |  | Diane Knowles                        
|                   |  |                           |  | Chief Financial Officer              



-22-