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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







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

For Quarter Ended June 30, 2010



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

Commission File Number 000-24147





KILLBUCK
BANCSHARES, INC.

(Exact name of registrant as specified in its Charter)







|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|OHIO                                                          |  | 34-1700284                         
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification 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 August 9, 2010: 616,706









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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 of June 30, 2010 and December 31, 2009                             |  | 3          
|                              |  | Consolidated Statement of Income for the six months ended June 30, 2010 and 2009                 |  | 4          
|                              |  | Consolidated Statement of Income for the three months ended June 30, 2010 and 2009               |  | 5          
|                              |  | Consolidated Statement of Changes In Shareholders Equity for the six months ended June 30, 2010 |  | 6          
|                              |  | Consolidated Statement of Cash Flows for the six months ended June 30, 2010 and 2009             |  | 7          
|                              |  | Notes to Unaudited Consolidated Financial Statements                                             |  | 8-13       
|                              |  |                                                                                                 
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations            |  | 14-26      
|                              |  |                                                                                                 
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                       |  | 27         
|                              |  |                                                                                                 
|Item 4.                       |  | Controls and Procedures                                                                          |  | 27         
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                 
|                              |  |                                                                                                 
|Item 1.                       |  | Legal Proceedings                                                                                |  | 28         
|                              |  |                                                                                                 
|Item 1A.                      |  | Risk Factors                                                                                     |  | 28         
|                              |  |                                                                                                 
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                      |  | 28         
|                              |  |                                                                                                 
|Item 3.                       |  | Default Upon Senior Securities                                                                   |  | 28         
|                              |  |                                                                                                 
|Item 4.                       |  | (Removed and Reserved)                                                                           |  | 29         
|                              |  |                                                                                                 
|Item 5.                       |  | Other Information                                                                                |  | 29         
|                              |  |                                                                                                 
|Item 6.                       |  | Exhibits                                                                                         |  | 29         
|                              | 
|SIGNATURES                    |  | 30                                                                                              



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Killbuck Bancshares, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)



|                                                                         |  |              |             |   |                  |   |             |  
|------------------------------------------------------------------------ |  | ------------ | ----------- | - | ---------------- | - | ----------- | -
|                                                                         |  | June 30,2010 |             |   | December 31,2009 |  
|ASSETS                                                                   |  |              |             |   |                  |  
|                                                                         |  |             
|Cash and cash equivalents:                                               |  |              |             |   |                  |   |             |  
|Cash and amounts due from depository institutions                        |  | $            | 39,267,891  |   |                  | $ | 42,575,944  |  
|Federal funds sold                                                       |  |              | 4,843,000   |   |                  |   | 2,938,000   |  
|                                                                         |  |              |             |   |                  |   |             |  
|Total cash and cash equivalents                                          |  |              | 44,110,891  |   |                  |   | 45,513,944  |  
|                                                                         |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|Investment securities:                                                   |  |              |             |   |                  |   |             |  
|Securities available for sale                                            |  |              | 68,760,561  |   |                  |   | 65,334,849  |  
|Securities held to maturity (fair value of $40,431,297 and $36,373,611)  |  |              | 39,045,130  |   |                  |   | 35,086,821  |  
|                                                                         |  |              |             |   |                  |   |             |  
|Total investment securities                                              |  |              | 107,805,691 |   |                  |   | 100,421,670 |  
|                                                                         |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|Loans (net of allowance for loan losses of $2,624,554 and $2,441,169)    |  |              | 206,675,353 |   |                  |   | 207,575,135 |  
|                                                                         |  |             
|Loans held for sale, at lower of cost or market                          |  |              | 343,350     |   |                  |   | 271,000     |  
|Premises and equipment, net                                              |  |              | 5,875,771   |   |                  |   | 6,009,442   |  
|Accrued interest receivable                                              |  |              | 1,396,318   |   |                  |   | 1,467,901   |  
|Goodwill, net                                                            |  |              | 1,329,249   |   |                  |   | 1,329,249   |  
|Other assets                                                             |  |              | 9,242,153   |   |                  |   | 9,391,044   |  
|                                                                         |  |              |             |   |                  |   |             |  
|Total assets                                                             |  | $            | 376,778,776 |   |                  | $ | 371,979,385 |  
|                                                                         |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|LIABILITIES                                                              |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|Deposits:                                                                |  |              |             |   |                  |   |             |  
|Noninterest bearing demand                                               |  | $            | 53,416,572  |   |                  | $ | 63,636,376  |  
|Interest-bearing demand                                                  |  |              | 26,198,803  |   |                  |   | 32,102,301  |  
|Money market                                                             |  |              | 45,642,230  |   |                  |   | 28,669,992  |  
|Savings                                                                  |  |              | 44,442,739  |   |                  |   | 42,973,020  |  
|Time                                                                     |  |              | 156,782,852 |   |                  |   | 153,913,387 |  
|                                                                         |  |              |             |   |                  |   |             |  
|Total deposits                                                           |  |              | 326,483,196 |   |                  |   | 321,295,076 |  
|Short-term borrowings                                                    |  |              | 4,260,000   |   |                  |   | 5,660,000   |  
|Federal Home Loan Bank advances                                          |  |              | 886,635     |   |                  |   | 1,212,000   |  
|Accrued interest and other liabilities                                   |  |              | 972,387     |   |                  |   | 748,901     |  
|                                                                         |  |              |             |   |                  |   |             |  
|Total liabilities                                                        |  |              | 332,602,218 |   |                  |   | 328,915,977 |  
|                                                                         |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|SHAREHOLDERS EQUITY                                                     |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|Common stock  No par value: 1,000,000 shares authorized, 718,431 issued |  |              | 8,846,670   |   |                  |   | 8,846,670   |  
|Retained earnings                                                        |  |              | 44,575,652  |   |                  |   | 43,742,847  |  
|Accumulated other comprehensive income                                   |  |              | 296,950     |   |                  |   | 16,605      |  
|Treasury stock, at cost (101,725 shares for both dates presented)        |  |              | (9,542,714  | ) |                  |   | (9,542,714  | )
|                                                                         |  |              |             |   |                  |   |             |  
|Total shareholders equity                                               |  |              | 44,176,558  |   |                  |   | 43,063,408  |  
|                                                                         |  |              |             |   |                  |   |             |  
|                                                                         |  |             
|Total liabilities and shareholders equity                               |  | $            | 376,778,776 |   |                  | $ | 371,979,385 |  
|                                                                         |  |              |             |   |                  |   |             |  

See accompanying notes to the unaudited consolidated financial statements.



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Killbuck Bancshares, Inc.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)



|                                                    |  |                          |           |      |   |          
|--------------------------------------------------- |  | ------------------------ | --------- | ---- | - | ---------
|                                                    |  | Six Months EndedJune 30,
|                                                    |  | 2010                     |           | 2009
|INTEREST INCOME                                     |  |                          |           |      |   |          
|Interest and fees on loans                          |  | $                        | 5,761,545 |      | $ | 6,271,761
|Federal funds sold and other                        |  |                          | 43,471    |      |   | 24,081   
|Investment securities:                              |  |                          |           |      |   |          
|Taxable                                             |  |                          | 962,531   |      |   | 1,170,922
|Exempt from federal income tax                      |  |                          | 719,692   |      |   | 695,572  
|                                                    |  |                          |           |      |   |          
|Total interest income                               |  |                          | 7,487,239 |      |   | 8,162,336
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|INTEREST EXPENSE                                    |  |                          |           |      |   |          
|Deposits                                            |  |                          | 1,964,870 |      |   | 2,295,384
|Short term borrowings                               |  |                          | 5,021     |      |   | 6,348    
|Federal Home Loan Bank advances                     |  |                          | 32,160    |      |   | 49,347   
|                                                    |  |                          |           |      |   |          
|Total interest expense                              |  |                          | 2,002,051 |      |   | 2,351,079
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|NET INTEREST INCOME                                 |  |                          | 5,485,188 |      |   | 5,811,257
|                                                    |  |                         
|Provision for loan losses                           |  |                          | 155,182   |      |   | 2,000    
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                          | 5,330,006 |      |   | 5,809,257
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|NON INTEREST INCOME                                 |  |                          |           |      |   |          
|Service charges on deposit accounts                 |  |                          | 65,604    |      |   | 68,147   
|ATM fees                                            |  |                          | 141,643   |      |   | 116,327  
|Fees on deposit accounts                            |  |                          | 358,499   |      |   | 373,747  
|Gain on sale of loans, net                          |  |                          | 51,931    |      |   | 90,692   
|Earnings on bank owned life insurance               |  |                          | 360,460   |      |   | 118,559  
|Other income                                        |  |                          | 73,705    |      |   | 75,218   
|                                                    |  |                          |           |      |   |          
|Total non interest income                           |  |                          | 1,051,842 |      |   | 842,690  
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|NON INTEREST EXPENSE                                |  |                          |           |      |   |          
|Salaries and employee benefits                      |  |                          | 2,371,605 |      |   | 2,484,861
|Occupancy and equipment expense                     |  |                          | 485,951   |      |   | 510,479  
|Professional fees                                   |  |                          | 193,240   |      |   | 196,105  
|Stationary, supplies and printing                   |  |                          | 76,566    |      |   | 85,938   
|Data processing                                     |  |                          | 102,486   |      |   | 98,420   
|Examinations and Audit                              |  |                          | 85,440    |      |   | 98,655   
|Postage, Express and Freight                        |  |                          | 108,602   |      |   | 105,206  
|Insurance and bond expense                          |  |                          | 224,936   |      |   | 230,842  
|Franchise tax                                       |  |                          | 266,693   |      |   | 258,935  
|Other expenses                                      |  |                          | 379,148   |      |   | 365,496  
|                                                    |  |                          |           |      |   |          
|Total non interest expense                          |  |                          | 4,294,667 |      |   | 4,434,937
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|INCOME BEFORE INCOME TAXES                          |  |                          | 2,087,181 |      |   | 2,217,010
|Income taxes                                        |  |                          | 329,317   |      |   | 509,977  
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|NET INCOME                                          |  | $                        | 1,757,864 |      | $ | 1,707,033
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|Earnings per common share                           |  | $                        | 2.85      |      | $ | 2.75     
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|Dividend per share                                  |  | $                        | 1.50      |      | $ | 1.45     
|                                                    |  |                          |           |      |   |          
|                                                    |  |                         
|Weighted Average shares outstanding                 |  |                          | 616,706   |      |   | 619,614  
|                                                    |  |                          |           |      |   |          

See accompanying notes to the unaudited consolidated
financial statements.



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Killbuck Bancshares, Inc.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)



|                                                    |  |                            |           |      |   |          
|--------------------------------------------------- |  | -------------------------- | --------- | ---- | - | ---------
|                                                    |  | Three Months EndedJune 30,
|                                                    |  | 2010                       |           | 2009
|INTEREST INCOME                                     |  |                            |           |      |   |          
|Interest and fees on loans                          |  | $                          | 2,854,628 |      | $ | 3,109,026
|Federal funds sold and other                        |  |                            | 23,615    |      |   | 7,774    
|Investment securities:                              |  |                            |           |      |   |          
|Taxable                                             |  |                            | 522,938   |      |   | 574,496  
|Exempt from federal income tax                      |  |                            | 364,679   |      |   | 354,553  
|                                                    |  |                            |           |      |   |          
|Total interest income                               |  |                            | 3,765,860 |      |   | 4,045,849
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|INTEREST EXPENSE                                    |  |                            |           |      |   |          
|Deposits                                            |  |                            | 990,689   |      |   | 1,109,521
|Short term borrowings                               |  |                            | 2,398     |      |   | 2,957    
|Federal Home Loan Bank advances                     |  |                            | 15,052    |      |   | 23,610   
|                                                    |  |                            |           |      |   |          
|Total interest expense                              |  |                            | 1,008,139 |      |   | 1,136,088
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|NET INTEREST INCOME                                 |  |                            | 2,757,721 |      |   | 2,909,761
|                                                    |  |                           
|Provision for loan losses                           |  |                            | 155,182   |      |   | 1,000    
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                            | 2,602,539 |      |   | 2,908,761
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|NON INTEREST INCOME                                 |  |                            |           |      |   |          
|Service charges on deposit accounts                 |  |                            | 32,440    |      |   | 34,627   
|ATM fees                                            |  |                            | 75,684    |      |   | 63,315   
|Fees on deposit accounts                            |  |                            | 182,835   |      |   | 192,944  
|Gain on sale of loans, net                          |  |                            | 35,883    |      |   | 72,974   
|Earnings on bank owned life insurance               |  |                            | 57,490    |      |   | 59,107   
|Other income                                        |  |                            | 39,063    |      |   | 36,064   
|                                                    |  |                            |           |      |   |          
|Total non interest income                           |  |                            | 423,395   |      |   | 459,031  
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|NON INTEREST EXPENSE                                |  |                            |           |      |   |          
|Salaries and employee benefits                      |  |                            | 1,118,420 |      |   | 1,140,088
|Occupancy and equipment expense                     |  |                            | 234,370   |      |   | 248,946  
|Professional fees                                   |  |                            | 88,372    |      |   | 99,603   
|Stationary, supplies and printing                   |  |                            | 33,752    |      |   | 38,596   
|Data processing                                     |  |                            | 51,014    |      |   | 47,548   
|Examinations and Audit                              |  |                            | 56,819    |      |   | 64,223   
|Postage, Express and Freight                        |  |                            | 49,071    |      |   | 48,549   
|Insurance and bond expense                          |  |                            | 111,197   |      |   | 208,793  
|Franchise tax                                       |  |                            | 131,643   |      |   | 130,635  
|Other expenses                                      |  |                            | 171,146   |      |   | 173,185  
|                                                    |  |                            |           |      |   |          
|Total non interest expense                          |  |                            | 2,045,804 |      |   | 2,200,166
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|INCOME BEFORE INCOME TAXES                          |  |                            | 980,130   |      |   | 1,167,626
|Income taxes                                        |  |                            | 164,283   |      |   | 281,132  
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|NET INCOME                                          |  | $                          | 815,847   |      | $ | 886,494  
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|Earnings per common share                           |  | $                          | 1.32      |      | $ | 1.43     
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|Dividend per share                                  |  | $                          | 1.50      |      | $ | 1.45     
|                                                    |  |                            |           |      |   |          
|                                                    |  |                           
|Weighted Average shares outstanding                 |  |                            | 616,706   |      |   | 618,960  
|                                                    |  |                            |           |      |   |          

See accompanying notes to the unaudited consolidated
financial statements.



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Killbuck Bancshares, Inc.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2010



|                                                       |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  |   |          
|------------------------------------------------------ |  | ----------- | --------- | ---------------- | - | ---------- | ----------------------------------- |  | ------------- | ------- |  | ------------------------ | ---------- | - | ------------------- | - | ---------- | - |  | - | ---------
|                                                       |  | CommonStock |           | RetainedEarnings |   |            | AccumulatedOtherComprehensiveIncome |  | TreasuryStock |         |  | TotalShareholdersEquity |            |   | ComprehensiveIncome
|                                                       |  |             |           |                  |   |           
|Balance, December 31, 2009                             |  | $           | 8,846,670 |                  | $ | 43,742,847 |                                     |  | $             | 16,605  |  | $                        | (9,542,714 | ) |                     | $ | 43,063,408 |   |  |   |          
|                                                       |  |             |           |                  |   |           
|Net income                                             |  |             |           |                  |   | 1,757,864  |                                     |  |               |         |  |                          |            |   |                     |   | 1,757,864  |   |  | $ | 1,757,864
|                                                       |  |             |           |                  |   |           
|Cash dividends paid ($1.50 per share)                  |  |             |           |                  |   | (925,059   | )                                   |  |               |         |  |                          |            |   |                     |   | (925,059   | ) |  |   |          
|Other comprehensive income:                            |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  |   |          
|Net unrealized gain on securities, net of tax $144,420 |  |             |           |                  |   |            |                                     |  |               | 280,345 |  |                          |            |   |                     |   | 280,345    |   |  |   | 280,345  
|                                                       |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  |   |          
|Comprehensive income                                   |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  | $ | 2,038,209
|                                                       |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  |   |          
|                                                       |  |             |           |                  |   |           
|Balance, June 30, 2010 (Unaudited)                     |  | $           | 8,846,670 |                  | $ | 44,575,652 |                                     |  | $             | 296,950 |  | $                        | (9,542,714 | ) |                     | $ | 44,176,558 |   |  |   |          
|                                                       |  |             |           |                  |   |            |                                     |  |               |         |  |                          |            |   |                     |   |            |   |  |   |          

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

Killbuck Bancshares, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                                                  |  |                          |             |   |      |   |             |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ----------- | - | ---- | - | ----------- | -
|                                                                                  |  | Six Months EndedJune 30, |            
|                                                                                  |  | 2010                     |             |   | 2009 |  
|OPERATING ACTIVITIES                                                              |  |                          |             |   |      |   |             |  
|Net income                                                                        |  | $                        | 1,757,864   |   |      | $ | 1,707,033   |  
|Adjustments to reconcile net income to net cash provided by Operating activities: |  |                          |             |   |      |   |             |  
|Provision for loan losses                                                         |  |                          | 155,182     |   |      |   | 2,000       |  
|Gain on sale of loans                                                             |  |                          | (51,931     | ) |      |   | (90,692     | )
|Provision for depreciation and amortization                                       |  |                          | 235,037     |   |      |   | 494,754     |  
|Origination of loans held for sale                                                |  |                          | (3,561,045  | ) |      |   | (12,015,300 | )
|Proceeds from the sale of loans                                                   |  |                          | 3,540,626   |   |      |   | 11,633,992  |  
|Bank-owned life insurance income                                                  |  |                          | (360,460    | ) |      |   |            |  
|Net change in:                                                                    |  |                          |             |   |      |   |             |  
|Accrued interest and other assets                                                 |  |                          | 99,328      |   |      |   | (387,553    | )
|Accrued expenses and other liabilities                                            |  |                          | 170,560     |   |      |   | (42,022     | )
|                                                                                  |  |                          |             |   |      |   |             |  
|Net cash provided by operating activities                                         |  |                          | 1,985,161   |   |      |   | 1,302,212   |  
|                                                                                  |  |                          |             |   |      |   |             |  
|                                                                                  |  |                         
|INVESTING ACTIVITIES                                                              |  |                          |             |   |      |   |             |  
|Investment securities available for sale:                                         |  |                          |             |   |      |   |             |  
|Proceeds from maturities and repayments                                           |  |                          | 39,547,107  |   |      |   | 19,059,165  |  
|Purchases                                                                         |  |                          | (42,548,053 | ) |      |   | (30,289,856 | )
|Bank CDs  purchases                                                              |  |                          |            |   |      |   | (1,715,000  | )
|Investment securities held to maturity:                                           |  |                          |             |   |      |   |             |  
|Proceeds from maturities and repayments                                           |  |                          | 822,255     |   |      |   | 1,459,701   |  
|Purchases                                                                         |  |                          | (4,838,018  | ) |      |   | (3,509,129  | )
|Net decrease (increase) in loans                                                  |  |                          | 732,101     |   |      |   | (3,781,700  | )
|Proceeds from sale of foreclosed assets                                           |  |                          | 22,500      |   |      |   |            |  
|Proceeds from bank owned life insurance                                           |  |                          | 390,111     |   |      |   |            |  
|Net Purchase of premises and equipment                                            |  |                          | (53,913     | ) |      |   | (45,023     | )
|                                                                                  |  |                          |             |   |      |   |             |  
|Net cash (used in) investing activities                                           |  |                          | (5,925,910  | ) |      |   | (18,821,842 | )
|                                                                                  |  |                          |             |   |      |   |             |  
|                                                                                  |  |                         
|FINANCING ACTIVITIES                                                              |  |                          |             |   |      |   |             |  
|Net increase (decrease) in demand, money market and savings deposits              |  |                          | 2,318,655   |   |      |   | (3,055,081  | )
|Net increase in time deposits                                                     |  |                          | 2,869,465   |   |      |   | 8,635,820   |  
|Repayments of Federal Home Loan Bank advances                                     |  |                          | (325,365    | ) |      |   | (341,723    | )
|Net (decrease) in short term borrowings                                           |  |                          | (1,400,000  | ) |      |   | (2,145,000  | )
|Purchase of Treasury stock                                                        |  |                          |            |   |      |   | (315,731    | )
|Dividends paid                                                                    |  |                          | (925,059    | ) |      |   | (897,332    | )
|                                                                                  |  |                          |             |   |      |   |             |  
|Net cash provided by financing activities                                         |  |                          | 2,537,696   |   |      |   | 1,880,953   |  
|                                                                                  |  |                          |             |   |      |   |             |  
|                                                                                  |  |                         
|Net decrease in cash and cash equivalents                                         |  |                          | (1,403,053  | ) |      |   | (15,638,677 | )
|Cash and cash equivalents at beginning of period                                  |  |                          | 45,513,944  |   |      |   | 40,316,633  |  
|                                                                                  |  |                          |             |   |      |   |             |  
|Cash and cash equivalents at end of period                                        |  | $                        | 44,110,891  |   |      | $ | 24,677,956  |  
|                                                                                  |  |                          |             |   |      |   |             |  
|                                                                                  |  |                         
|Supplemental Disclosures of Cash Flows Information                                |  |                          |             |   |      |   |             |  
|Cash Paid During the Period For:                                                  |  |                          |             |   |      |   |             |  
|Interest on deposits and borrowings                                               |  | $                        | 2,014,850   |   |      | $ | 2,399,549   |  
|                                                                                  |  |                          |             |   |      |   |             |  
|                                                                                  |  |                         
|Income taxes                                                                      |  | $                        | 186,356     |   |      | $ | 481,735     |  
|                                                                                  |  |                          |             |   |      |   |             |  

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

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, 2009
and related notes which are included on the Form 10-K (file no. 000-24147).

NOTE 2  EARNINGS PER SHARE

The Company currently maintains a simple capital structure; therefore, there are no 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:



|                                         |  |                                |           |   |                                |   |           |  
|---------------------------------------- |  | ------------------------------ | --------- | - | ------------------------------ | - | --------- | -
|                                         |  | Six MonthsEndedJune 30, 2010   |           |   | Six MonthsEndedJune 30, 2009   |  
|                                         |  |                               
|Net income                               |  | $                              | 1,757,864 |   |                                | $ | 1,707,033 |  
|Other comprehensive income:              |  |                                |           |   |                                |   |           |  
|Net unrealized gain (loss) on securities |  |                                | 424,765   |   |                                |   | (605,802  | )
|Tax effect                               |  |                                | (144,420  | ) |                                |   | 205,973   |  
|                                         |  |                                |           |   |                                |   |           |  
|Total comprehensive income               |  | $                              | 2,038,209 |   |                                | $ | 1,307,204 |  
|                                         |  |                                |           |   |                                |   |           |  
|                                         |  |                               
|                                         |  | Three MonthsEndedJune 30,
2010 |           |   | Three MonthsEndedJune 30,
2009 |  
|                                         |  |                               
|Net income                               |  | $                              | 815,847   |   |                                | $ | 886,494   |  
|Other comprehensive income:              |  |                                |           |   |                                |   |           |  
|Net unrealized gain on securities        |  |                                | 620,886   |   |                                |   | 20,921    |  
|Tax effect                               |  |                                | (211,101  | ) |                                |   | (7,113    | )
|                                         |  |                                |           |   |                                |   |           |  
|Total comprehensive income               |  | $                              | 1,225,632 |   |                                | $ | 900,302   |  
|                                         |  |                                |           |   |                                |   |           |  



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##### Table of Contents

Killbuck Bancshares, Inc.

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



NOTE 4  FAIR VALUE MEASUREMENTS

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



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

The following table presents the assets reported on the consolidated statements of financial condition at their fair value as of June 30, 2010, by
level within the fair value hierarchy. As required by the authoritative accounting guidance, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.



|                                       |  |                |   |          |   |           |  |       |   |  |   |       
|-------------------------------------- |  | -------------- | - | -------- | - | --------- |  | ----- | - |  | - | ------
|                                       |  | June 30, 2010 
|                                       |  | Level I        |   | Level II |   | Level III |  | Total
|                                       |  | (In thousands)
|                                       |  |                |   |         
|Assets measured on a recurring basis:  |  |                |   |          |   |           |  |       |   |  |   |       
|Securities available for sale :        |  |                |   |          |   |           |  |       |   |  |   |       
|U.S. Government and Agency Obligations |  | $              |  |          | $ | 68,111    |  | $     |  |  | $ | 68,111
|Mutual Funds                           |  |                |   |          |   | 650       |  |       |   |  |   | 650   



|                                       |  |                   |   |          |   |           |  |       |   |  |   |       
|-------------------------------------- |  | ----------------- | - | -------- | - | --------- |  | ----- | - |  | - | ------
|                                       |  | December 31, 2009
|                                       |  | Level I           |   | Level II |   | Level III |  | Total
|                                       |  | (In thousands)   
|                                       |  |                   |   |         
|Assets measured on a recurring basis:  |  |                   |   |          |   |           |  |       |   |  |   |       
|Securities available for sale :        |  |                   |   |          |   |           |  |       |   |  |   |       
|U.S. Government and Agency Obligations |  | $                 |  |          | $ | 64,841    |  | $     |  |  | $ | 64,841
|Mutual Funds                           |  |                   |   |          |   | 494       |  |       |   |  |   | 494   



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##### Table of Contents

Killbuck Bancshares, Inc.

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



NOTE 5  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values at June 30, 2010, and December 31, 2009, are as follows:



|                                          |  |                |         |           |   |                |  |           |         |  |   |        
|----------------------------------------- |  | -------------- | ------- | --------- | - | -------------- |  | --------- | ------- |  | - | -------
|                                          |  | 2010           |         | 2009     
|                                          |  | CarryingAmount |         | FairValue |   | CarryingAmount |  | FairValue
|                                          |  | (In thousands)
|Financial assets:                         |  |                |         |           |   |                |  |           |         |  |   |        
|Cash and due from depository institutions |  | $              | 39,268  |           | $ | 39,268         |  | $         | 42,576  |  | $ | 42,576 
|Federal funds sold                        |  |                | 4,843   |           |   | 4,843          |  |           | 2,938   |  |   | 2,938  
|Securities available for sale             |  |                | 68,761  |           |   | 68,761         |  |           | 65,335  |  |   | 65,335 
|Securities held to maturity               |  |                | 39,045  |           |   | 40,431         |  |           | 35,087  |  |   | 36,374 
|Net Loans                                 |  |                | 206,675 |           |   | 216,004        |  |           | 207,575 |  |   | 215,102
|Loans held for sale                       |  |                | 343     |           |   | 343            |  |           | 271     |  |   | 271    
|Accrued interest receivable               |  |                | 1,396   |           |   | 1,396          |  |           | 1,468   |  |   | 1,468  
|Regulatory stock                          |  |                | 1,884   |           |   | 1,884          |  |           | 1,884   |  |   | 1,884  
|Bank-owned life insurance                 |  |                | 5,624   |           |   | 5,624          |  |           | 5,662   |  |   | 5,662  
|                                          |  |                |         |          
|Financial liabilities:                    |  |                |         |           |   |                |  |           |         |  |   |        
|Deposits                                  |  | $              | 326,483 |           | $ | 329,489        |  | $         | 321,295 |  | $ | 324,246
|Short term borrowings                     |  |                | 4,260   |           |   | 4,260          |  |           | 5,660   |  |   | 5,660  
|Federal Home Loan Bank advances           |  |                | 887     |           |   | 1,019          |  |           | 1,212   |  |   | 1,027  
|Accrued interest payable                  |  |                | 170     |           |   | 170            |  |           | 183     |  |   | 183    

Financial instruments are defined as cash, evidence of ownership interest in an entity, or a contract which creates an
obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be exchanged in a current transaction between
willing parties other than in a forced or liquidation sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial instruments should be based upon
managements judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses, and other factors as determined through various option pricing formulas or simulation modeling. As many of these
assumptions result from judgments made by management based upon estimates which are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In
addition, changes in assumptions on which the estimated fair values are based may have a significant impact on the resulting estimated fair values.

As certain assets and liabilities such as deferred tax assets and liabilities, premises and equipment and many other
operational elements of the Company, are not considered financial instruments, but have value, this estimated fair value of financial instruments would not represent the full market value of the Company.

The Company employed simulation modeling in determining the estimated fair value of financial instruments for which quoted
market prices were not available based upon the following assumptions:

Cash and Due from Banks, Federal Funds Sold,
Accrued Interest Receivable, Regulatory Stock, BOLI, Short-Term Borrowings, and Accrued Interest Payable

The fair value approximates
the current carrying value.



10



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##### Table of Contents

Killbuck Bancshares, Inc.

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



NOTE 5  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS-CONTINUED



Investment Securities and Loans Held for Sale

The fair value of investment securities and loans held for sale are equal to the available quoted market price. If no quoted market price is available,
fair value is estimated using the quoted market price for similar securities.

Loans, Deposits, and Federal Home Loan
Bank Advances

The fair value is estimated by discounting future cash flows using current market inputs at which loans with similar
terms and qualities would be made to borrowers of similar credit quality. Where quoted market prices were available, primarily for certain residential mortgage loans, such market rates were utilized as estimates for fair value. Demand, savings, and
money market deposit accounts are valued at the amount payable on demand as of year end. The fair values of certificates of deposit and other borrowed funds are based on the discounted value of contractual cash flows. The discount rates are
estimated using rates currently offered for similar instruments with similar remaining maturities. Demand, Savings, and money market deposits are valued at the amount payable on demand as of year-end.

Commitments to Extend Credit and Standby Letters of Credit

These financial instruments are generally not subject to sale, and estimated fair values are not readily available. The carrying value, represented by the
net deferred fee arising from the unrecognized commitment or letter of credit, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements
with similar credit risk, are not considered material for disclosure.

NOTE 6  INVESTMENT SECURITIES

The amortized cost of securities and their estimated fair values are as follows:

Securities Available for Sale



|                               |  |                   |            |                      |   |                       |  |           |         |  |   |           
|------------------------------ |  | ----------------- | ---------- | -------------------- | - | --------------------- |  | --------- | ------- |  | - | ----------
|                               |  | June 30, 2010    
|                               |  | AmortizedCost     |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  | FairValue
|Obligations of U.S. Government |  |                   |            |                      |   |                       |  |           |         |  |   |           
|Agencies and Corporations      |  | $                 | 67,310,983 |                      | $ | 802,108               |  | $         | 2,091   |  | $ | 68,111,000
|                               |  |                   |            |                     
|Mutual funds                   |  |                   | 1,000,000  |                      |   |                      |  |           | 350,439 |  |   | 649,561   
|                               |  |                   |            |                      |   |                       |  |           |         |  |   |           
|                               |  |                   |            |                     
|Total                          |  | $                 | 68,310,983 |                      | $ | 802,108               |  | $         | 352,530 |  | $ | 68,760,561
|                               |  |                   |            |                      |   |                       |  |           |         |  |   |           
|                               | 
|                               |  | December 31, 2009
|                               |  | AmortizedCost     |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  | FairValue
|Obligations of U.S. Government |  |                   |            |                      |   |                       |  |           |         |  |   |           
|Agencies and Corporations      |  | $                 | 64,309,692 |                      | $ | 580,166               |  | $         | 48,906  |  | $ | 64,840,952
|                               |  |                   |            |                     
|Mutual funds                   |  |                   | 1,000,000  |                      |   |                      |  |           | 506,103 |  |   | 493,897   
|                               |  |                   |            |                      |   |                       |  |           |         |  |   |           
|                               |  |                   |            |                     
|Total                          |  | $                 | 65,309,692 |                      | $ | 580,166               |  | $         | 555,009 |  | $ | 65,334,849
|                               |  |                   |            |                      |   |                       |  |           |         |  |   |           



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##### Table of Contents

Killbuck Bancshares, Inc.

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



NOTE 6  INVESTMENT SECURITIES-CONTINUED



Securities Held to Maturity



|                                                 |  |                   |            |                      |   |                       |  |           |        |  |   |           
|------------------------------------------------ |  | ----------------- | ---------- | -------------------- | - | --------------------- |  | --------- | ------ |  | - | ----------
|                                                 |  | June 30, 2010    
|                                                 |  | AmortizedCost     |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  | FairValue
|Obligations of States and Political Subdivisions |  | $                 | 39,045,130 |                      | $ | 1,474,102             |  | $         | 87,935 |  | $ | 40,431,297
|                                                 |  |                   |            |                      |   |                       |  |           |        |  |   |           
|                                                 |  |                   |            |                     
|Total                                            |  | $                 | 39,045,130 |                      | $ | 1,474,102             |  | $         | 87,935 |  | $ | 40,431,297
|                                                 |  |                   |            |                      |   |                       |  |           |        |  |   |           
|                                                 | 
|                                                 |  | December 31, 2009
|                                                 |  | AmortizedCost     |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  | FairValue
|Obligations of States and Political Subdivisions |  | $                 | 35,086,821 |                      | $ | 1,328,071             |  | $         | 41,281 |  | $ | 36,373,611
|                                                 |  |                   |            |                      |   |                       |  |           |        |  |   |           
|                                                 |  |                   |            |                     
|Total                                            |  | $                 | 35,086,821 |                      | $ | 1,328,071             |  | $         | 41,281 |  | $ | 36,373,611
|                                                 |  |                   |            |                      |   |                       |  |           |        |  |   |           

Unrealized losses in debt securities represent temporary fluctuations
resulting from changes in market rates, or market illiquidity in the case of obligations of some state and political subdivisions. The Company presently holds an interest in one non-publicly traded mutual fund and considers this investment an equity
security. The fund is comprised solely of community and regional financial institution stocks. The Company reviews its position in all securities quarterly and has determined that, at June 30, 2010, the declines in fair value noted in the above
table represent temporary declines. The Company does not intend to sell and does not believe that it will be required to sell these securities before recovery of their cost basis.

NOTE 7  RECENT ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB issued ASU 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash 
a consensus of the FASB Emerging Issues Task Force. ASU 2010-01 clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that
all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend. ASU 2010-01 is effective for interim and annual periods ending on or after December 15,
2009 and should be applied on a retrospective basis. The adoption of this guidance did not have a material impact on the Companys financial position or results of operation.

In January 2010, the FASB issued ASU 2010-05, Compensation  Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of
Compensation. ASU 2010-05 updates existing guidance to address the SEC staffs views on overcoming the presumption that for certain shareholders escrowed share arrangements represent compensation. ASU 2010-05 is effective January 15,
2010. The adoption of this guidance did not have a material impact on the Companys financial position or results of operation.



12



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##### Table of Contents

Killbuck Bancshares, Inc.

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



NOTE 7  RECENT ACCOUNTING PRONOUNCEMENTS-CONTINUED



In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic
820): Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends Subtopic 820-10 to clarify existing disclosures, require new disclosures, and includes conforming amendments to guidance on employers disclosures about
postretirement benefit plan assets. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of this guidance is not expected to have a significant impact on the
Companys financial statements.

In February 2010, the FASB issued ASU 2010-08, Technical Corrections to Various Topics. ASU
2010-08 clarifies guidance on embedded derivatives and hedging. ASU 2010-08 is effective for interim and annual periods beginning after December 15, 2009. The adoption of this guidance did not have a material impact on the Companys
financial position or results of operation.

In March 2010, the FASB issued ASU 2010-11, Derivatives and Hedging. ASU 2010-11 provides
clarification and related additional examples to improve financial reporting by resolving potential ambiguity about the breadth of the embedded credit derivative scope exception in ASC 815-15-15-8. ASU 2010-11 is effective at the beginning of the
first fiscal quarter beginning after June 15, 2010. The adoption of this guidance is not expected to have a significant impact on the Companys financial statements.

In April 2010, the FASB issued ASU 2010-18, Receivables (Topic 310): Effect of a Loan Modification When the Loan is a Part of a Pool That is Accounted
for as a Single Asset  a consensus of the FASB Emerging Issues Task Force. ASU 2010-18 clarifies the treatment for a modified loan that was acquired as part of a pool of assets. Refinancing or restructuring the loan does not make it
eligible for removal from the pool, the FASB said. The amendment will be effective for loans that are part of an asset pool and are modified during financial reporting periods that end July 15, 2010 or later and is not expected to have a
significant impact on the Companys financial statements.

In July 2010, FASB issued ASU No. 2010-20, Receivables (Topic 310):
Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 is intended to provide additional information to assist financial statement users in assessing an entitys credit risk exposures
and evaluating the adequacy of its allowance for credit losses. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that
occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The amendments in ASU 2010-20 encourage, but do not require, comparative disclosures for earlier reporting
periods that ended before initial adoption. However, an entity should provide comparative disclosures for those reporting periods ending after initial adoption. The Company is currently evaluating the impact the adoption of this guidance
will have on the Companys financial position or results of operations.



13



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##### Table of Contents

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion,
the words believes, anticipates, contemplates, expects, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in interest rates, risks associated with the ability to control costs and expenses, and general economic conditions. Killbuck
Bancshares, Inc. (The Company) 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 (The Bank). 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, 2009. Our most complex accounting policies require managements judgment to ascertain the valuation of assets, liabilities, commitments and contingencies. We have established
detailed policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from period to period. In addition, the policies and procedures are intended to ensure that the process for changing
methodologies occurs in an appropriate manner. The following is a brief description of our current accounting policies involving significant management valuation judgments.

Allowance for Loan Losses - Arriving at an appropriate level of allowance for loan losses 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, 2009.

Goodwill and Other Intangible Assets - As discussed in Note 6 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, 2009, the Company must assess goodwill and other intangible assets each year for impairment. This assessment involves estimating cash flows for future periods. If
the future cash flows were less than the recorded goodwill and other intangible assets balances, we would be required to take a charge against earnings to write down the assets to the lower value.

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 13 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, 2009.



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##### Table of Contents

Financial Condition

Total assets at June 30, 2010 were $376.8 million compared to $372.0 million at December 31, 2009, an increase of $4.8 million, or 1.3%.

The asset growth during the first half of 2010 generally reflects a $5.2 million, or 1.6% increase in total deposits. The deposit growth is
generally reflective of the Companys continuing marketing efforts directed at profitable organic growth.

Cash and cash equivalents
decreased by $1.4 million or 3.1% from December 31, 2009, to June 30, 2010, with cash and amounts due from depository institutions decreasing $3.3 million. The decrease was used to partially fund the increase in Investment securities. The
Company has maintained above normal levels of cash and cash equivalents due to the economic uncertainty in the environment and the less than optimal loan demand during the first half of 2010.

Investment securities available for sale increased by $3.4 million or 5.2% from December 31, 2009, to June 30, 2010, due to an increase in
suitable securities available to purchase for the portfolio. Investments held to maturity increased $4.0 million or 11.3% due to some attractive municipal securities available for the portfolio.

Net loans decreased by $0.9 million or 0.4% from December 31, 2009 to June 30, 2010. A decrease of $352,000 occurred in the real estate loan
category, which is attributable primarily to decreases of $1.1 million in commercial real estate lending and a decrease of $1.0 million in construction loan activity offset by increases in residential real estate lending of $1.2 million with an
additional increase in farm lending of $440,000. The Company has seen a modest expansion of loan demand in the residential and farm sector, while decreases in commercial real estate and construction type loan products reflected lessened demand.
Commercial and other loan balances decreased by $369,000 as demand slowed and consumer loan balances increased by $3,000.

The Companys
allowance for loan losses at June 30, 2010 totaled $2.6 million, or 1.24% of total loans, as compared to $2.4 million, or 1.16% of total loans at December 31, 2009.

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

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

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



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##### Table of Contents

Total deposits at June 30, 2010, were $326.5 million compared to $321.3 million at December 31,
2009. Demand accounts decreased $16.1 million, while money market accounts, savings accounts and time deposits accounts increased $17.0 million, $1.5 million and $2.9 million respectively. Management attributes these changes to the changes in
interest rates. A Money Market account is a short term investment that customers use while waiting until the interest rates meet their expectations for longer term time deposits. Management believes the demand accounts decreases are attributable to
normal fluctuations due to customer usage.

Federal Home Loan Bank advances decreased $325,000 due to maturities and scheduled repayments, and
short-term borrowings decreased $1.4 million at June 30, 2010, from December 31, 2009.

Shareholders Equity increased by $1.1
million or 2.6%, which was mainly due to earnings of $1.8 million for the first six months of 2010 plus an increase of $280,000 in net unrealized gain on securities included in other comprehensive income, decreased by dividends paid totaling
$925,000. The Company did not make any Treasury stock purchases during the first six months of 2010. Management monitors risk-based capital and leveraged capital ratios in order to assess compliance of the regulatory guidelines. At June 30,
2010, the total capital ratio was 19.40%; the Tier I capital ratio was 18.27%, and the leverage ratio was 11.24%, 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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##### Table of Contents

RESULTS OF OPERATIONS

Comparison of the Six Months Ended June 30, 2010 and 2009

Net income for the six-month period ended June 30, 2010, was $1,758,000, an increase of $51,000 or 3.0% from the $1,707,000 reported at June 30,
2009.

Total interest income of approximately $7,487,000 for the six-month period ended June 30, 2010, compares to $8,162,000 for the
same period in 2009, a decrease of $675,000 or 8.3%. The decrease in total interest income is primarily attributable to a decrease in interest and fees on loans due primarily to a decrease in the average yield on the underlying principal balances.
See Average Balance Sheet for the six-month periods ended June 30, 2010 and 2009. The yield on loans decreased to 5.46% for the first six months of 2010 compared to 6.07% for the first six months of 2009. Average loan balances were
$210,890,000 for the first six months of 2010 compared to $206,565,000 for the first six months of 2009. The interest on investment securities of $1,682,000 for 2010 compares to $1,866,000 for 2009. The decrease in investment income is primarily
attributable to a decrease in yield. Average investment balances were $100,162,000 compared to $97,239,000 and the yields were 3.36% compared to 3.84% for the first six months of 2010 and 2009 respectively. The interest on Federal Funds and balances
held at the Federal Reserve Bank increased due to the increase in volume. The average balance outstanding in Federal Funds and due from the Federal Reserve Bank were $39,190,000 compared to $18,458,000 for the first six months of 2010 and 2009
respectively. The yield on the excess liquidity in Federal Funds and due from Federal Reserve Bank decreased from 0.26% for 2009 to 0.22% for 2010.

Total interest expense of $2,002,000 for the six-month period ending June 30, 2010 represents a decrease of $349,000 from the $2,351,000 reported
for the same six-month period in 2009. The decrease in interest expense on deposits of $331,000 is due mainly to a decrease in interest rates. The decreases in the average rate paid on the underlying principal balances of the interest bearing
liabilities are due mainly to the Time deposits. The cost of Time deposits was 2.18% compared to 2.78% for this six-month period of 2010 and 2009, respectively. The cost on interest bearing deposits was 1.47%, compared to 1.87% for the six-month
periods of 2010 and 2009 respectively. Average interest-bearing deposits were $272,659,000 for the first six months of 2010 compared to $251,963,000 for the first six months of 2009. See Average Balance Sheet for the six-month periods
ended June 30, 2010 and 2009.

Net interest income of $5,485,000 for the six months ended June 30, 2010, compares to $5,811,000 for
the same six-month period in 2009, a decrease of $326,000 or 5.6%. The foregoing factors culminated in the Companys attainment of an interest rate spread of 2.81% and a net yield on earning assets of 3.13% in 2010, compared to 3.20% and 3.61%
respectively, in 2009. Management believes the Companys reduction in spread and margin in 2010 primarily stems from the need to carry higher levels of liquidity in the current environment, and does not represent a material adverse trend. The
net interest margin is expected to stabilize in 2010 but remain low.

The provision for loan losses was $155,000 for the first six months of
2010, as compared to $2,000 for the same six-month period in 2009. The increased loss provision is attributable to managements analysis of the allowance for loan losses. As stated previously, the Company maintains the allowance at a level
commensurate with the credit risks inherent in the portfolio.

Total non-interest income for the six-month period ended June 30, 2010, of
$1,052,000 compares to $843,000 for the same six-month period in 2009, an increase of $209,000 or 24.8%. ATM fees increased $25,000 due to increased usage of ATM machines. The net Non-sufficient funds fees and overdraft fees decreased $15,000 due to
a decrease in Non-sufficient funds activity. Gains on sale of loans decreased $39,000 primarily due to a decline in refinancing. Bank Owned Life Insurance (BOLI) income increased $242,000 primarily due to earnings and recoveries on BOLI in the first
six months of 2010.



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##### Table of Contents

Total non-interest expense of $4,295,000 for the six months ended June 30, 2010, compares to $4,435,000
for the same six-month period in 2009. This represents an increase of $140,000 or 3.2%. Salary and employee benefits decreased approximately $113,000 due to one fewer pay period in 2010 and a slight decrease in employee benefits. This decrease was
partially offset by normal increases in salaries and employee benefits. Occupancy and Equipment costs decreased approximately $25,000 due mainly to decreased depreciation expense of $47,000, offset by increases in real estate taxes of $8,000 and
furniture and equipment expenses of $10,000. The changes in the remaining expense accounts were attributable to increases/decreases in items that are normal and recurring in nature.

Income tax expense declined to $329,000 for the six months ended June 30, 2010, representing a $181,000, or 35.4%, reduction from the $510,000 of
income tax expense recorded in 2009. The decline is primarily attributable to higher levels of tax-exempt income in 2010. The Companys effective tax rate was 15.8% in 2010, as compared to 23.0% in 2009. The principal difference between the
Companys effective tax rate in 2010 and 2009 and the 34% statutory tax rate in effect for both years resulted from the beneficial effects of tax-exempt income.



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##### Table of Contents

RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2010 and 2009

Net income for the three-month period ended June 30, 2010, was $816,000, a decrease of $70,000 or 7.9% from the $886,000 reported at June 30,
2009.

Total interest income of approximately $3,766,000 for the three-month period ended June 30, 2010, compares to $4,046,000 for the
same period in 2009, a decrease of $280,000 or 6.9%. The decrease in total interest income is primarily attributable to a decrease in the loan category. Interest and fees on loans decreased $254,000 or 8.2% for the three-month period ended
June 30, 2010 compared to the same period for 2009. The decrease in interest and fees on loans is due to a decrease in the yields earned on the underlying principal balances. The yield was 5.40% compared to 5.99% for this three-month period of
2010 and 2009, respectively and the average loan balances were $211,346,000 compared to $207,754,000. See Average Balance Sheet for the three-month periods ended June 30, 2010 and 2009. The decrease in interest on investment
securities of $41,000 was primarily attributable to a decrease in the yield of 3.41% compared to 3.62% for this three-month period of 2010 and 2009, respectively. The average balances outstanding of investment securities of $104,231,000 for 2010
compared to $102,663,000 for 2009. See Average Balance Sheet for the three-month periods ended June 30, 2010 and 2009.

Total
interest expense of $1,008,000 for the three-month period ending June 30, 2010, represents a decrease of $128,000 from the $1,136,000 reported for the same three-month period in 2009. The decrease in interest expense on deposits of $119,000 is
due mainly to the decreases in the average rate paid on the underlying principal balances of the interest bearing liabilities, specifically the Time deposits. The cost of Time deposits was 2.16% compared to 2.64% for this three-month period of 2010
and 2009, respectively and the cost of interest bearing deposits was 1.44% compared to 1.79% for this three-month period of 2010 and 2009 respectively. The average time deposits were $155,604,000 for this three-month period of 2010 compared to
$151,617,000 for the same three months of 2009. Average interest-bearing deposits were $279,330,000 for this three-month period of 2010 compared to $253,708,000 for the same three months of 2009. See Average Balance Sheet for the
three-month periods ended June 30, 2010 and 2009.

Net interest income of $2,758,000 for the three months ended June 30, 2010,
compares to $2,910,000 for the same three-month period in 2009, a decrease of $152,000 or 5.2%. The foregoing factors culminated in the Companys attainment of an interest rate spread of 2.78% and a net yield on earning assets of 3.10% in 2010,
compared to 3.17% and 3.57% respectively, in 2009.

The provision for loan losses was $155,000 for the three-month period ended June 30,
2010, as compared to $1,000 for the same three-month period in 2009. The increased loss provision is attributable to managements analysis of the allowance for loan losses. As stated previously, the Company maintains the allowance at a level
commensurate with the credit risks inherent in the portfolio.

Total non-interest income for the three-month period ended June 30, 2010,
of $423,000 compares to $459,000 for the same three-month period in 2009, a decrease of $36,000 or 7.8%. ATM fees increased $12,000 due to increased usage of ATM machines. Non-sufficient funds (NSF) fees and Overdraft fees decreased $10,000 due to a
decrease in Non-sufficient funds activity. Gain on sale of loans decreased $37,000 due to fewer number of loan refinancing. The changes in the remaining income accounts were attributable to increases/decreases in items that are normal and recurring
in nature.

Total non-interest expense of $2,046,000 for the three months ended June 30, 2010, compares to $2,200,000 for the same
three-month period in 2009. This represents a decrease of $154,000 or 7.0%. Salary and employee benefits decreased $22,000 due mainly to lower employee benefits costs offset by normal increases in salaries. Occupancy and Equipment costs decreased
approximately $15,000 due mainly to decreased depreciation expense. Insurance and bond expense decreased approximately $98,000 or 46.7% due to a special 5 bps assessment that was assessed by the FDIC as of June 30, 2009. 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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##### Table of Contents

Income tax expense declined to $164,000 for the three months ended June 30, 2010, representing a
$117,000, or 41.6%, reduction from the $281,000 of income tax expense recorded for the same three-month period in 2009. The decline is primarily attributable to higher levels of tax-exempt income in 2010. The Companys effective tax rate was
16.8% for the three months ended June 30, 2010, as compared to 24.1% in 2009. The principal difference between the Companys effective tax rate for the three months ended June 30, 2010 and 2009 and the 34% statutory tax rate in effect
for both quarters resulted from the beneficial effects of tax-exempt income.



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##### Table of Contents

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 $44.1 million at June 30, 2010. These assets provide the primary source of liquidity for the Company. In addition, management has designated a portion of the investment portfolio, $68.8 million as
available for sale and has an available unused line of credit of $40.2 million with the Federal Home Loan Bank of Cincinnati to provide additional sources of liquidity at June 30, 2010. As of June 30, 2010, the Company had commitments to
fund loans of approximately $1.9 million and unused lines of credit totaling $40.0 million.

Cash was provided during the six month period
ended June 30, 2010, mainly from operating activities of $2.0 million, and the net increase in deposits of $5.2 million, and the maturities and repayments of investment securities of $40.4 million. Cash was used during the six month period
ended June 30, 2010, mainly to fund the purchase of investment securities of $47.4 million, and to reduce $1.7 million in Federal Home Loan Bank advances and short-term borrowings. In addition, $925,000 was used to pay dividends to
shareholders. Cash and cash equivalents totaled $44.1 million at June 30, 2010, a decrease of $1.4 million from $45.5 million at December 31, 2009.

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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##### Table of Contents

Risk Elements

The table below presents information concerning nonperforming assets including nonaccrual loans, renegotiated loans, loans 90 days or more past due, other
real estate loans and repossessed assets at June 30, 2010, and December 31, 2009. 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 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 the terms of which have been renegotiated to provide a reduction or deferral of principal or interest as of result of the deterioration of the borrower.



|                                                  |  |                        |     |   |                  |   |     |  
|------------------------------------------------- |  | ---------------------- | --- | - | ---------------- | - | --- | -
|                                                  |  | June 30,2010           |     |   | December 31,2009 |  
|                                                  |  | (dollars in thousands) |    
|                                                  |  |                       
|Loans on nonaccrual basis                         |  | $                      | 40  |   |                  | $ |    |  
|Loans past due 90 days or more                    |  |                        | 140 |   |                  |   |    |  
|Renegotiated loans                                |  |                        |    |   |                  |   |    |  
|                                                  |  |                        |     |   |                  |   |     |  
|Total nonperforming loans                         |  |                        | 180 |   |                  |   |    |  
|                                                  |  |                       
|Other real estate                                 |  |                        | 12  |   |                  |   | 23  |  
|Repossessed assets                                |  |                        |    |   |                  |   |    |  
|Total nonperforming assets                        |  | $                      | 192 |   |                  | $ | 23  |  
|                                                  |  |                        |     |   |                  |   |     |  
|                                                  |  |                       
|Nonperforming loans as a percent of total loans   |  |                        | .09 | % |                  |   | .00 | %
|                                                  |  |                       
|Nonperforming loans as a percent of total assets  |  |                        | .05 | % |                  |   | .00 | %
|                                                  |  |                       
|Nonperforming assets as a percent of total assets |  |                        | .05 | % |                  |   | .01 | %

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

The allowance for loan losses at June 30, 2010, totaled $2,625,000 or 1.24% of total loans as compared to $2,441,000 or 1.16% at December 31,
2009. Provisions for loan losses were $155,000 for the six months ended June 30, 2010 and $2,000 for the six months ended June 30, 2009.

The level of funding for the provision is a reflection of the overall loan portfolio. Nonperforming loans as of June 30, 2010 consists of one, one
to four family residential mortgage on nonaccrual and one, one to four family residential mortgage past due 90 days or more. 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 and
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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##### Table of Contents

AVERAGE BALANCE SHEET

Average Balance Sheet for the Six-Month Period Ended June 30

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.



|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|------------------------------------------ |  | -------------- | ----------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ----------- | - | ---------- | - | --------- |  | ---- | -
|                                           |  | Period Ended   |            
|                                           |  | 2010           |             |   | 2009     |  
|                                           |  | AverageBalance |             |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest    |   | Yield/Rate |  
|Assets                                     |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest Earnings Assets:                  |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Loans (1)(2)(3)                            |  | $              | 210,890,455 |   |          | $ | 5,761,545  |  | 5.46 | %              |  | $ | 206,564,748 |   |            | $ | 6,271,761 |  | 6.07 | %
|Securities-taxable (4)                     |  |                | 61,370,829  |   |          |   | 919,847    |  | 3.00 | %              |  |   | 62,285,236  |   |            |   | 1,127,681 |  | 3.62 | %
|Securities-nontaxable (4)                  |  |                | 36,906,501  |   |          |   | 719,692    |  | 3.90 | %              |  |   | 33,219,396  |   |            |   | 695,572   |  | 4.19 | %
|Securities-Equity (4,5)                    |  |                | 1,884,560   |   |          |   | 42,684     |  | 4.53 | %              |  |   | 1,734,560   |   |            |   | 43,241    |  | 4.99 | %
|Federal funds sold                         |  |                | 5,853,263   |   |          |   | 3,450      |  | 0.12 | %              |  |   | 6,439,879   |   |            |   | 5,643     |  | 0.18 | %
|Due from Federal Reserve Bank              |  |                | 33,336,445  |   |          |   | 40,021     |  | 0.24 | %              |  |   | 12,017,677  |   |            |   | 18,438    |  | 0.31 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total interest earnings assets             |  |                | 350,242,053 |   |          |   | 7,487,239  |  | 4.28 | %              |  |   | 322,261,496 |   |            |   | 8,162,336 |  | 5.07 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Noninterest earning assets:                |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Cash and due from other institutions       |  | $              | 9,305,435   |   |          |   |            |  |      |                |  | $ | 10,462,319  |   |            |   |           |  |      |  
|Premises and equipment, net                |  |                | 5,941,635   |   |          |   |            |  |      |                |  |   | 6,232,940   |   |            |   |           |  |      |  
|Accrued interest                           |  |                | 1,172,708   |   |          |   |            |  |      |                |  |   | 1,328,767   |   |            |   |           |  |      |  
|Other assets                               |  |                | 9,390,718   |   |          |   |            |  |      |                |  |   | 8,115,048   |   |            |   |           |  |      |  
|Less allowance for loan losses             |  |                | (2,481,451  | ) |          |   |            |  |      |                |  |   | (2,527,974  | ) |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total noninterest earnings assets          |  |                | 23,329,045  |   |          |   |            |  |      |                |  |   | 23,611,100  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total Assets                               |  | $              | 373,571,098 |   |          |   |            |  |      |                |  | $ | 345,872,596 |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Liabilities and Shareholders Equity       |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest bearing liabilities:              |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest bearing demand                    |  | $              | 26,578,769  |   |          | $ | 20,650     |  | 0.16 | %              |  | $ | 26,470,288  |   |            | $ | 20,329    |  | 0.15 | %
|Money market accounts                      |  |                | 41,145,068  |   |          |   | 168,921    |  | 0.82 | %              |  |   | 27,642,783  |   |            |   | 116,122   |  | 0.84 | %
|Savings deposits                           |  |                | 44,279,129  |   |          |   | 86,710     |  | 0.39 | %              |  |   | 40,922,430  |   |            |   | 79,667    |  | 0.39 | %
|Time deposits                              |  |                | 155,209,672 |   |          |   | 1,688,589  |  | 2.18 | %              |  |   | 149,689,301 |   |            |   | 2,079,266 |  | 2.78 | %
|Short term borrowings                      |  |                | 4,420,733   |   |          |   | 5,021      |  | 0.23 | %              |  |   | 5,569,248   |   |            |   | 6,348     |  | 0.23 | %
|Federal Home Loan Advances                 |  |                | 1,025,249   |   |          |   | 32,160     |  | 6.27 | %              |  |   | 1,668,711   |   |            |   | 49,347    |  | 5.91 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total interest bearing liabilities         |  |                | 272,658,620 |   |          |   | 2,002,051  |  | 1.47 | %              |  |   | 251,962,761 |   |            |   | 2,351,079 |  | 1.87 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Noninterest bearing liabilities:           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Demand deposits                            |  |                | 56,597,348  |   |          |   |            |  |      |                |  |   | 49,876,221  |   |            |   |           |  |      |  
|Accrued expenses and other liabilities     |  |                | 2,175,103   |   |          |   |            |  |      |                |  |   | 2,428,490   |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total noninterest bearing liabilities      |  |                | 58,772,451  |   |          |   |            |  |      |                |  |   | 52,304,711  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Shareholders equity                       |  |                | 42,140,027  |   |          |   |            |  |      |                |  |   | 41,605,124  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total Liabilities and Shareholders Equity |  | $              | 373,571,098 |   |          |   |            |  |      |                |  | $ | 345,872,596 |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Net interest income                        |  |                |             |   |          | $ | 5,485,188  |  |      |                |  |   |             |   |            | $ | 5,811,257 |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Interest rate spread (6)                   |  |                |             |   |          |   |            |  | 2.81 | %              |  |   |             |   |            |   |           |  | 3.20 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Net yield on interest earning assets (7)   |  |                |             |   |          |   |            |  | 3.13 | %              |  |   |             |   |            |   |           |  | 3.61 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  



|(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 $156,000 and $173,000 in 2010 and 2009, 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
securities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(6) | Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Net yield on interest earning assets represents net interest income as a percentage of average interest earning assets.
|--- | -----------------------------------------------------------------------------------------------------------------------



23



---

##### Table of Contents

AVERAGE BALANCE SHEET

Average Balance Sheet for the Three-Month Period Ended June 30

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.



|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|------------------------------------------ |  | -------------- | ----------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ----------- | - | ---------- | - | --------- |  | ---- | -
|                                           |  | Period Ended   |            
|                                           |  | 2010           |             |   | 2009     |  
|                                           |  | AverageBalance |             |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest    |   | Yield/Rate |  
|Assets                                     |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest Earnings Assets:                  |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Loans (1)(2)(3)                            |  | $              | 211,345,815 |   |          | $ | 2,854,628  |  | 5.40 | %              |  | $ | 207,754,060 |   |            | $ | 3,109,026 |  | 5.99 | %
|Securities-taxable (4)                     |  |                | 64,723,724  |   |          |   | 499,674    |  | 3.09 | %              |  |   | 67,067,697  |   |            |   | 550,935   |  | 3.29 | %
|Securities-nontaxable (4)                  |  |                | 37,623,085  |   |          |   | 364,679    |  | 3.88 | %              |  |   | 33,861,000  |   |            |   | 354,553   |  | 4.19 | %
|Securities-Equity (4,5)                    |  |                | 1,884,560   |   |          |   | 23,264     |  | 4.94 | %              |  |   | 1,734,560   |   |            |   | 23,561    |  | 5.43 | %
|Federal funds sold                         |  |                | 6,092,961   |   |          |   | 1,995      |  | 0.13 | %              |  |   | 4,162,426   |   |            |   | 1,508     |  | 0.14 | %
|Due from Federal Reserve Bank              |  |                | 34,713,664  |   |          |   | 21,620     |  | 0.25 | %              |  |   | 11,491,758  |   |            |   | 6,266     |  | 0.22 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total interest earnings assets             |  |                | 356,383,809 |   |          |   | 3,765,860  |  | 4.23 | %              |  |   | 326,071,501 |   |            |   | 4,045,849 |  | 4.96 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Noninterest earning assets:                |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Cash and due from other institutions       |  | $              | 9,427,821   |   |          |   |            |  |      |                |  | $ | 9,519,064   |   |            |   |           |  |      |  
|Premises and equipment, net                |  |                | 5,909,853   |   |          |   |            |  |      |                |  |   | 6,189,713   |   |            |   |           |  |      |  
|Accrued interest                           |  |                | 1,235,105   |   |          |   |            |  |      |                |  |   | 1,464,155   |   |            |   |           |  |      |  
|Other assets                               |  |                | 9,446,924   |   |          |   |            |  |      |                |  |   | 8,235,315   |   |            |   |           |  |      |  
|Less allowance for loan losses             |  |                | (2,507,735  | ) |          |   |            |  |      |                |  |   | (2,531,566  | ) |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total noninterest earnings assets          |  |                | 23,511,968  |   |          |   |            |  |      |                |  |   | 22,876,681  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total Assets                               |  | $              | 379,895,777 |   |          |   |            |  |      |                |  | $ | 348,948,182 |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Liabilities and Shareholders Equity       |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest bearing liabilities:              |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Interest bearing demand                    |  | $              | 26,624,669  |   |          | $ | 10,765     |  | 0.16 | %              |  | $ | 26,553,124  |   |            | $ | 10,452    |  | 0.16 | %
|Money market accounts                      |  |                | 47,293,864  |   |          |   | 95,470     |  | 0.81 | %              |  |   | 27,739,146  |   |            |   | 59,002    |  | 0.85 | %
|Savings deposits                           |  |                | 44,671,891  |   |          |   | 44,094     |  | 0.39 | %              |  |   | 41,054,176  |   |            |   | 39,812    |  | 0.39 | %
|Time deposits                              |  |                | 155,604,436 |   |          |   | 840,360    |  | 2.16 | %              |  |   | 151,616,924 |   |            |   | 1,000,255 |  | 2.64 | %
|Short term borrowings                      |  |                | 4,187,968   |   |          |   | 2,398      |  | 0.23 | %              |  |   | 5,156,724   |   |            |   | 2,957     |  | 0.23 | %
|Federal Home Loan Advances                 |  |                | 947,072     |   |          |   | 15,052     |  | 6.36 | %              |  |   | 1,587,615   |   |            |   | 23,610    |  | 5.95 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total interest bearing liabilities         |  |                | 279,329,900 |   |          |   | 1,008,139  |  | 1.44 | %              |  |   | 253,707,709 |   |            |   | 1,136,088 |  | 1.79 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Noninterest bearing liabilities:           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Demand deposits                            |  |                | 56,006,298  |   |          |   |            |  |      |                |  |   | 51,043,348  |   |            |   |           |  |      |  
|Accrued expenses and other liabilities     |  |                | 2,704,698   |   |          |   |            |  |      |                |  |   | 2,950,222   |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total noninterest bearing liabilities      |  |                | 58,710,996  |   |          |   |            |  |      |                |  |   | 53,993,570  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Shareholders equity                       |  |                | 41,854,881  |   |          |   |            |  |      |                |  |   | 41,246,903  |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|Total Liabilities and Shareholders Equity |  | $              | 379,895,777 |   |          |   |            |  |      |                |  | $ | 348,948,182 |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Net interest income                        |  |                |             |   |          | $ | 2,757,721  |  |      |                |  |   |             |   |            | $ | 2,909,761 |  |      |  
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Interest rate spread (6)                   |  |                |             |   |          |   |            |  | 2.79 | %              |  |   |             |   |            |   |           |  | 3.17 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  
|                                           |  |                |             |   |          |  
|Net yield on interest earning assets (7)   |  |                |             |   |          |   |            |  | 3.10 | %              |  |   |             |   |            |   |           |  | 3.57 | %
|                                           |  |                |             |   |          |   |            |  |      |                |  |   |             |   |            |   |           |  |      |  



|(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 $72,000 and $91,000 in 2010 and 2009, 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
securities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(6) | Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Net yield on interest earning assets represents net interest income as a percentage of average interest earning assets.
|--- | -----------------------------------------------------------------------------------------------------------------------



24



---

##### 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).



|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|--------------------------------- |  | -------------------------------------------------------------------------- | --- | - | ---- | - | ---- | --- |  | - | ---- | -
|                                  |  | Six-Month Period Ended June2010 Compared to 2009Increase (Decrease) Due
To |    
|                                  |  | Volume                                                                     |     |   | Rate |   |      | Net | 
|Interest income                   |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Loans                             |  | $                                                                          | 131 |   |      | $ | (642 | )   |  | $ | (511 | )
|Securities-taxable                |  |                                                                            | (17 | ) |      |   | (191 | )   |  |   | (208 | )
|Securities-nontaxable             |  |                                                                            | 77  |   |      |   | (52  | )   |  |   | 25   |  
|Securities-equities               |  |                                                                            | 4   |   |      |   | (4   | )   |  |   |     |  
|Federal funds sold and other      |  |                                                                            | 32  |   |      |   | (13  | )   |  |   | 19   |  
|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Total interest earning            |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Assets                            |  |                                                                            | 227 |   |      |   | (902 | )   |  |   | (675 | )
|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|                                  |  |                                                                            |    
|Interest expense                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Interest bearing demand           |  |                                                                            |    |   |      |   | 1    |     |  |   | 1    |  
|Money market accounts             |  |                                                                            | 57  |   |      |   | (4   | )   |  |   | 53   |  
|Savings deposits                  |  |                                                                            | 7   |   |      |   |     |     |  |   | 7    |  
|Time deposits                     |  |                                                                            | 77  |   |      |   | (468 | )   |  |   | (391 | )
|Short-term borrowing              |  |                                                                            | (1  | ) |      |   | (1   | )   |  |   | (2   | )
|Federal Home Loan Bank            |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Advances                          |  |                                                                            | (19 | ) |      |   | 2    |     |  |   | (17  | )
|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Total interest bearing            |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|Liabilities                       |  |                                                                            | 121 |   |      |   | (470 | )   |  |   | (349 | )
|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  
|                                  |  |                                                                            |    
|Net change in net interest income |  | $                                                                          | 106 |   |      | $ | (432 | )   |  | $ | (326 | )
|                                  |  |                                                                            |     |   |      |   |      |     |  |   |      |  



25



---

##### 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 June2010 Compared to 2009Increase (Decrease) Due To |    
|                                  |  | Volume                                                                       |     |   | Rate |   |      | Net | 
|Interest income                   |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Loans                             |  | $                                                                            | 54  |   |      | $ | (308 | )   |  | $ | (254 | )
|Securities-taxable                |  |                                                                              | (19 | ) |      |   | (32  | )   |  |   | (51  | )
|Securities-nontaxable             |  |                                                                              | 39  |   |      |   | (29  | )   |  |   | 10   |  
|Securities-equities               |  |                                                                              | 2   |   |      |   | (3   | )   |  |   | (1   | )
|Federal funds sold and other      |  |                                                                              | 14  |   |      |   | 2    |     |  |   | 16   |  
|                                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Total interest earning            |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Assets                            |  |                                                                              | 90  |   |      |   | (370 | )   |  |   | (280 | )
|                                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|                                  |  |                                                                              |    
|Interest expense                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Interest bearing demand           |  |                                                                              |    |   |      |   | 1    |     |  |   | 1    |  
|Money market accounts             |  |                                                                              | 42  |   |      |   | (5   | )   |  |   | 37   |  
|Savings deposits                  |  |                                                                              | 4   |   |      |   |     |     |  |   | 4    |  
|Time deposits                     |  |                                                                              | 26  |   |      |   | (186 | )   |  |   | (160 | )
|Short-term borrowing              |  |                                                                              | (1  | ) |      |   |     |     |  |   | (1   | )
|Federal Home Loan Bank            |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Advances                          |  |                                                                              | (10 | ) |      |   | 1    |     |  |   | (9   | )
|                                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Total interest bearing            |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|Liabilities                       |  |                                                                              | 61  |   |      |   | (189 | )   |  |   | (128 | )
|                                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  
|                                  |  |                                                                              |    
|Net change in net interest income |  | $                                                                            | 29  |   |      | $ | (181 | )   |  | $ | (152 | )
|                                  |  |                                                                              |     |   |      |   |      |     |  |   |      |  



26



---

##### 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
Chief Executive Officer and Vice President/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 Chief
Executive Officer and Vice President/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
June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



27



---

##### 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 June 30, 2010

ISSUER PURCHASES OF EQUITY SECURITIES



|                   |  |                                             |  |                                          |  |                                                                                             |  |                                                                                                                       
|------------------ |  | ------------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Period             |  | (a) TotalNumberof Shares(or Units)Purchased |  | (b) Average PricePaid per Share(or Unit) |  | (c) Total Numberof Shares (or Units)Purchased as Part ofPublicly
AnnouncedPlans or Programs |  | (d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that May Yet
BePurchased Under thePlans or Programs
|April 1  30, 2010 |  | 0                                           |  |                                         |  | N/A                                                                                         |  | N/A                                                                                                                   
|May 1  31, 2010   |  | 0                                           |  |                                         |  | N/A                                                                                         |  | N/A                                                                                                                   
|June 1  30, 2010  |  | 0                                           |  |                                         |  | N/A                                                                                         |  | N/A                                                                                                                   
|Total (1)          |  | 0                                           |  |                                         |  | N/A                                                                                         |  | N/A                                                                                                                   



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

Item 3  Default upon senior securities

None



28



---

##### Table of Contents

Item 4  (Removed and Reserved)

Item 5  Other Information

None

Item 6
 Exhibits

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: August 11, 2010 |  |                           |  | By: |  | /S/    LUTHER E.
PROPER 
|                      |  |                           |  |     |  | Luther E. Proper        
|                      |  |                           |  |     |  | Chief Executive Officer 
|                      |  |                           | 
|Date: August 11, 2010 |  |                           |  | By: |  | /S/    LAWRENCE
CARDINAL
|                      |  |                           |  |     |  | Lawrence Cardinal       
|                      |  |                           |  |     |  | Chief Financial Officer 



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