##### 





Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)



For Quarterly Period ended March 31, 2003

Commission File Number 0-24120

WESTERN OHIO FINANCIAL CORPORATION






|                                                                   |  |                                      
|------------------------------------------------------------------ |  | -------------------------------------
|Delaware                                                           |  | 31-1403116                           
|                                                                   |  |                                      
|(State or other jurisdiction of
    incorporation or organization) |  | (IRS Employer
    Identification No.)

28 East Main Street, Springfield, Ohio 45501-0509




(Address of principal executive offices)


(Zip Code)


(937) 325-9990




(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
an accelerated filer (as defined in Exchange Act
Rule 12b-2).

Yes
  NoX

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

|                                        |  |                                                        
|--------------------------------------- |  | -------------------------------------------------------
|Class:
    Common stock, $.01 par value |  | Outstanding at May 15, 2003
    common shares 1,733,711



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##### 

TABLE OF CONTENTS



|                                           |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION (UNAUDITED)
|                                           | Item 1.  Condensed Financial
Statements                                                      
|                                           | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                           | Item 3. Quantitative and Qualitative Disclosure About Market Risk                            
|                                           | Item 4. Controls and procedures                                                              
|PART II  OTHER INFORMATION               
|                                           | Item 1. Legal Proceedings                                                                    
|                                           | Item 2. Changes in Securities and Use of Proceeds                                            
|                                           | Item 3. Defaults Upon Senior Securities                                                      
|                                           | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                           | Item 5. Other Information                                                                    
|                                           | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                
|EX-99.1                                   
|EX-99.2                                   

WESTERN OHIO FINANCIAL CORPORATION


INDEX

|                                                                                                  |                                                                |      |  
|------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ---- | -
|                                                                                                  |                                                                | Page
|                                                                                                  |                                                                |     
|PART I  FINANCIAL INFORMATION (UNAUDITED)                                                        |                                                                |     
|                                                                                                 
|Item 1. Condensed Financial Statements                                                            |                                                                |     
|                                                                                                 
|                                                                                                  | Consolidated Balance Sheets                                    |      | 3
|                                                                                                 
|                                                                                                  | Consolidated Statements of Income and
    Comprehensive Income |      | 4
|                                                                                                 
|                                                                                                  | Consolidated Statements of Cash Flows                          |      | 5
|                                                                                                 
|                                                                                                  | Notes to Condensed Consolidated Financial
    Statements       |      | 6
|                                                                                                 
|Item 2. Managements Discussion and
    Analysis of Financial Condition and Results of Operations |                                                                | 12  
|                                                                                                 
|Item 3. Quantitative and Qualitative
    Disclosure About Market Risk                             |                                                                | 17  
|                                                                                                 
|Item 4. Controls and Procedures                                                                   |                                                                | 18  
|                                                                                                 
|PART II  OTHER INFORMATION                                                                       |                                                                |     
|                                                                                                 
|Item 1. Legal Proceedings                                                                         |                                                                | 19  
|                                                                                                 
|Item 2. Changes in Securities and Use of
    Proceeds                                             |                                                                | 19  
|                                                                                                 
|Item 3. Defaults Upon Senior Securities                                                           |                                                                | 19  
|                                                                                                 
|Item 4. Submission of Matters to a Vote of
    Security Holders                                   |                                                                | 19  
|                                                                                                 
|Item 5. Other Information                                                                         |                                                                | 19  
|                                                                                                 
|Item 6. Exhibits and Reports on Form 8-K                                                          |                                                                | 19  
|                                                                                                 
|SIGNATURES                                                                                        |                                                                | 20  



---

2.



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##### 






WESTERN OHIO FINANCIAL CORPORATION





CONSOLIDATED BALANCE SHEETS


(Unaudited)




---

Item 1.  Condensed Financial
Statements

(Amounts in thousands, except share data)

|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |         |         |         | 
|----------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------------ | ------- | ------- | -- | ------- | ------- | ------- | 
|                                                                                                            |                                                                      | March 31,                  |                                            | December 31,
|                                                                                                            |                                                                      | 2003                       |                                            | 2002        
|                                                                                                            |                                                                      |                            |                                            |             
|ASSETS                                                                                                      |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            | Cash and cash equivalents                                            |                            | $                                          | 5,703        |         |         | $  | 19,312  |        
|                                                                                                            | Securities available for sale                                        |                            |                                            | 41,110       |         |         |    | 46,001  |        
|                                                                                                            | Federal Home Loan Bank stock                                         |                            |                                            | 9,059        |         |         |    | 8,971   |        
|                                                                                                            | Loans, net                                                           |                            |                                            | 279,888      |         |         |    | 256,883 |        
|                                                                                                            | Real Estate Owned                                                    |                            |                                            | 398          |         |         |    | 494     |        
|                                                                                                            | Premises and equipment, net                                          |                            |                                            | 4,291        |         |         |    | 4,352   |        
|                                                                                                            | Bank owned life insurance                                            |                            |                                            | 8,800        |         |         |    | 8,683   |        
|                                                                                                            | Other assets                                                         |                            |                                            | 1,995        |         |         |    | 2,099   |        
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            |                                                                      |                            | Total assets                               |              | $       | 351,244 |    |         | $       | 346,795 | 
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                                    |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            | Deposits                                                             |                            | $                                          | 216,951      |         |         | $  | 219,169 |        
|                                                                                                            | Borrowed funds                                                       |                            |                                            | 88,297       |         |         |    | 81,243  |        
|                                                                                                            | Other liabilities                                                    |                            |                                            | 2,662        |         |         |    | 3,178   |        
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            |                                                                      | Total liabilities          |                                            |              | 307,910 |         |    |         | 303,590 |        
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|Shareholders equity Common stock, $.01 par
    value, 7,250,000 shares authorized, 2,645,000 shares issued |                                                                      |                            | 26                                         |              |         |         | 26 |        
|                                                                                                            | Additional paid-in capital                                           |                            |                                            | 40,665       |         |         |    | 40,642  |        
|                                                                                                            | Unearned employee stock ownership plan shares                        |                            |                                            | (298         | )       |         |    | (357    | )      
|                                                                                                            | Unearned management recognition plan shares                          |                            |                                            | (54          | )       |         |    | (71     | )      
|                                                                                                            | Shares held by deferred compensation plan                            |                            |                                            | (298         | )       |         |    | (260    | )      
|                                                                                                            | Treasury stock; 886,289 and 889,889 shares at
    cost, respectively |                            |                                            | (18,018      | )       |         |    | (18,102 | )      
|                                                                                                            | Accumulated other comprehensive income                               |                            |                                            | 268          |         |         |    | 472     |        
|                                                                                                            | Retained earnings                                                    |                            |                                            | 21,043       |         |         |    | 20,855  |        
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            |                                                                      | Total shareholders equity |                                            |              | 43,334  |         |    |         | 43,205  |        
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        
|                                                                                                            |                                                                      |                            | Total liabilities and shareholders equity |              | $       | 351,244 |    |         | $       | 346,795 | 
|                                                                                                            |                                                                      |                            |                                            |              |         |         |    |        

See accompanying notes to condensed consolidated
financial statements.

3.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION


CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME


(Unaudited)




---

(Amounts in thousands, except per share data)


|                                                        |                                               |                    |       |       |   |     |       |       |   |     | 
|------------------------------------------------------- | --------------------------------------------- | ------------------ | ----- | ----- | - | --- | ----- | ----- | - | --- | 
|                                                        |                                               |                   
|                                                        |                                               | Three Months Ended
|                                                        |                                               | March 31,         
|                                                        |                                               |                   
|                                                        |                                               | 2003               |       | 2002 
|                                                        |                                               |                    |       |      
|Interest and dividend income                            |                                               |                    |       |       |   |     |       |      
|                                                        | Loans, including fees                         |                    | $     | 4,143 |   |     | $     | 4,745 |  
|                                                        | Securities                                    |                    |       | 484   |   |     |       | 602   |  
|                                                        | Interest-bearing deposits and overnight funds |                    |       | 14    |   |     |       | 27    |  
|                                                        | Other interest and dividend income            |                    |       | 88    |   |     |       | 95    |  
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                        |                                               |                    | 4,729 |       |   |     | 5,469 |      
|                                                        |                                               |                    |       |       |   |     |       |      
|Interest expense                                        |                                               |                    |       |       |   |     |       |      
|                                                        | Deposits                                      |                    |       | 1,352 |   |     |       | 2,035 |  
|                                                        | Borrowed funds                                |                    |       | 984   |   |     |       | 1,037 |  
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                        |                                               |                    | 2,336 |       |   |     | 3,072 |      
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                       
|Net interest income                                     |                                               |                    | 2,393 |       |   |     | 2,397 |      
|                                                       
|Provision for loan losses                               |                                               |                    | 84    |       |   |     | 84    |      
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                       
|Net interest income after provision for loan
    losses |                                               |                    | 2,309 |       |   |     | 2,313 |      
|                                                        |                                               |                    |       |       |   |     |       |      
|Noninterest income                                      |                                               |                    |       |       |   |     |       |      
|                                                        | Service charges                               |                    |       | 564   |   |     |       | 508   |  
|                                                        | Net gain on sale of loans                     |                    |       | 85    |   |     |       | 60    |  
|                                                        | Net gain on sale of securities                |                    |       | 69    |   |     |       |      |  
|                                                        | Other                                         |                    |       | 107   |   |     |       | 6     |  
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                        |                                               |                    | 825   |       |   |     | 574   |      
|                                                       
|Noninterest expense                                     |                                               |                    |       |       |   |     |       |      
|                                                        | Salaries and employee benefits                |                    |       | 1,162 |   |     |       | 1,128 |  
|                                                        | Occupancy and equipment                       |                    |       | 239   |   |     |       | 227   |  
|                                                        | Federal deposit insurance                     |                    |       | 9     |   |     |       | 9     |  
|                                                        | State franchise taxes                         |                    |       | 141   |   |     |       | 134   |  
|                                                        | Professional services                         |                    |       | 149   |   |     |       | 85    |  
|                                                        | Advertising                                   |                    |       | 34    |   |     |       | 83    |  
|                                                        | Data processing                               |                    |       | 200   |   |     |       | 202   |  
|                                                        | Other                                         |                    |       | 312   |   |     |       | 340   |  
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                        |                                               |                    | 2,246 |       |   |     | 2,208 |      
|                                                        |                                               |                    |       |       |   |     |       |      
|Income before income taxes                              |                                               |                    | 888   |       |   |     | 679   |      
|Income tax expense                                      |                                               |                    | 267   |       |   |     | 230   |      
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                       
|Net income                                              |                                               |                    | 621   |       |   |     | 449   |      
|                                                       
|Other comprehensive income                              |                                               |                    | (204  | )     |   |     | (190  | )    
|                                                        |                                               |                    |       |       |   |     |       |      
|Comprehensive income                                    |                                               | $                  | 417   |       |   | $   | 259   |      
|                                                        |                                               |                    |       |       |   |     |       |      
|                                                       
|Earnings per common share                               |                                               |                    |       |       |   |     |       |       |  
|                                                        | Basic                                         |                    |       |       | $ | .36 |       |       | $ | .26 | 
|
|                                                        | Diluted                                       |                    |       |       | $ | .35 |       |       | $ | .26 | 
|                                                       
|                                                        | Dividends per common share                    |                    | $     | .25   |   |     | $     | .25   |  

See accompanying notes to condensed consolidated
financial statements.

4.



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##### 



WESTERN OHIO FINANCIAL CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)




---

|                                                 |                                                                     |                                    |         |         |         |   |         |         |         |  
|------------------------------------------------ | ------------------------------------------------------------------- | ---------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                                 |                                                                     |                                   
|                                                 |                                                                     | Three Months Ended                
|                                                 |                                                                     | March 31,                         
|                                                 |                                                                     |                                   
|                                                 |                                                                     | 2003                               |         | 2002   
|(Amount in thousands)                            |                                                                     |                                    |         |        
|Net cash from operating activities               |                                                                     | $                                  | 605     |         |         | $ | 794     |        
|Cash flows from investing activities             |                                                                     |                                    |         |         |         |   |         |        
|                                                 | Securities available for sale:                                      |                                    |         |         |         |   |         |         |        
|                                                 |                                                                     | Maturities and principal payments  |         |         | 2,891   |   |         |         | 3,624   |  
|                                                 |                                                                     | Purchases                          |         |         |        |   |         |         | (19,448 | )
|                                                 |                                                                     | Sales                              |         |         | 1,718   |   |         |         |        |  
|                                                 | Net (increase) decrease in loans                                    |                                    |         | (2,125  | )       |   |         | 5,658   |        
|                                                 | Purchases of loans                                                  |                                    |         | (20,813 | )       |   |         | (10,836 | )      
|                                                 | Premises and equipment expenditures                                 |                                    |         | (69     | )       |   |         | (62     | )      
|                                                 | Proceeds from sale of premises and equipment                        |                                    |         | 4       |         |   |         |        |        
|                                                 |                                                                     |                                    |         |         |         |   |         |        
|                                                 |                                                                     | Net cash from investing activities |         |         | (18,394 | ) |         |         | (21,064 | )
|Cash flows from financing activities             |                                                                     |                                    |         |         |         |   |         |        
|                                                 | Net change in deposits                                              |                                    |         | (2,218  | )       |   |         | (56     | )      
|                                                 | Net decrease in advances from borrowers for taxes
    and insurance |                                    |         | (282    | )       |   |         | (358    | )      
|                                                 | Purchase of treasury stock                                          |                                    |         |        |         |   |         |        |        
|                                                 | Cash dividends paid                                                 |                                    |         | (433    | )       |   |         | (441    | )      
|                                                 | Proceeds from exercise of stock options                             |                                    |         | 59      |         |   |         | 89      |        
|                                                 | Net increase (decrease) in short-term
    borrowings                |                                    |         | 7,454   |         |   |         | 1,600   |        
|                                                 | Proceeds from FHLB advances                                         |                                    |         |        |         |   |         | 12,000  |        
|                                                 | Repayments on FHLB advances                                         |                                    |         | (400    | )       |   |         | (3,662  | )      
|                                                 |                                                                     |                                    |         |         |         |   |         |        
|                                                 |                                                                     | Net cash from financing activities |         |         | 4,180   |   |         |         | 9,172   |  
|                                                 |                                                                     |                                    |         |         |         |   |         |        
|Net change in cash and cash equivalents          |                                                                     |                                    | (13,609 | )       |         |   | (11,098 | )      
|Cash and cash equivalents at beginning of period |                                                                     |                                    | 19,312  |         |         |   | 16,915  |        
|                                                 |                                                                     |                                    |         |         |         |   |         |        
|Cash and cash equivalents at end of period       |                                                                     | $                                  | 5,703   |         |         | $ | 5,817   |        
|                                                 |                                                                     |                                    |         |         |         |   |         |        

See accompanying notes to condensed consolidated
financial statements.

5.



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##### 



WESTERN OHIO FINANCIAL CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




---

NOTE 1  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Basis of
Presentation:The accompanying
unaudited condensed consolidated financial statements have been
prepared in accordance accounting principles generally accepted
in the United States of America for interim financial reporting
and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. These
unaudited condensed consolidated financial statements should be
read in conjunction with the financial statements and notes
thereto included in the Corporations annual report on
Form 10-K for the year ended December 31, 2002. The
financial data and results of operations for interim periods
presented may not necessarily reflect the results to be
anticipated for the entire year. Internal financial information
is primarily reported and aggregated solely in the line of the
banking business.

Consolidation
Policy:The financial statements
include Western Ohio Financial Corporation (Western) and its
wholly-owned subsidiary Cornerstone Bank (Cornerstone), together
referred to as the Corporation. The financial statements of
Cornerstone include the accounts of its wholly-owned subsidiary,
CornerstoneBanc Financial Services, Inc. Intercompany
transactions and balances are eliminated in consolidation.

Use of Estimates:To
prepare financial statements in conformity with accounting
principles generally accepted in the United States of America, management
makes estimates and assumptions based on available information.
These estimates and assumptions affect the amounts reported in
the financial statements and the disclosures provided, and
future results could differ. The allowance for loan losses, fair
values of financial instruments and status of contingencies are
particularly subject to change.

Income Taxes:Income
tax expense is the total of the current year income tax due or
refundable and the change in deferred tax assets and
liabilities. Deferred tax assets and liabilities are the
expected future tax amounts for the temporary differences
between the carrying amounts and tax basis of assets and
liabilities, computed using enacted tax rates. A valuation
allowance, if needed, reduces deferred tax assets to the amount
expected to be realized. Income tax expense is based on the
effective rate expected to be applicable for the entire year.

Earnings Per Common
Share:Basic earnings per common share
is based on net income divided by the weighted average number of
common shares outstanding during the period. Employee Stock
Ownership Plan (ESOP) shares are considered to be
outstanding for the calculation unless unearned. Management
Recognition Plan (MRP) shares are considered outstanding as
they become vested. Diluted earnings per common share include
the dilutive effect of additional potential common shares
issuable under stock options.

Stock Compensation:Employee compensation expense under stock options is reported
using the intrinsic value method. No stock-based compensation
cost is reflected in net income, as all options granted had an
exercise price equal to or greater than the market price of the
underlying common stock at date of grant. The following table
illustrates the effect on net income and earnings per share if
expense were measured using the fair value recognition provisions
of FASB Statement No. 123, Accounting for Stock Based
Compensation.






6.



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##### 



WESTERN OHIO FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



---

|                    |             |           |   |           |  |  |   |     | 
|------------------- | ----------- | --------- | - | --------- |  |  | - | --- | 
|                    |             | March 31, |   | March 31,
|                    |             | 2003      |   | 2002     
|                    |             |           |   |          
|Net income:         |             |           |   |           |  |  |   |    
|                    | As reported |           | $ | 621       |  |  | $ | 449 | 
|                    | Pro forma   |           |   | 622       |  |  |   | 430 | 
|Earnings per share: |             |           |   |           |  |  |   |    
|                    | As reported |           |   |           |  |  |   |     | 
|                    | Basic       |           |   | .36       |  |  |   | .26 | 
|
|                    | Diluted     |           |   | .35       |  |  |   | .26 | 
|Pro forma           |             |           |   |           |  |  |   |    
|
|                    | Basic       |           |   | .36       |  |  |   | .25 | 
|                    | Diluted     |           |   | .35       |  |  |   | .25 | 

The pro forma effects are computed using option
pricing models, using the following weighted-average assumptions
as of grant date.

|                                        |  |      |   |      |  |  |         |  
|--------------------------------------- |  | ---- | - | ---- |  |  | ------- | -
|                                        |  | 2003 |   | 2002
|                                        |  |      |   |     
|Risk-free interest rate                 |  |      |  |      |  |  | 4.31    | %
|Expected option life                    |  |      |  |      |  |  | 5 Years |  
|Expected stock price volatility         |  |      |  |      |  |  | 23.99   |  
|Dividend yield                          |  |      |  |      |  |  | 5.33    | %
|Estimated fair value of options granted |  |      |  |      |  |  | $2.76   |  

New Accounting
Standards:The Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting
Standard (SFAS) No. 143 Asset Retirement
Obligation. The provisions of this standard apply to asset
retirements beginning in 2003. The adoption of this standard did
not have a material effect on the Corporations financial
position or results of operations.

In June 2002, the FASB issued No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. This Statement addresses the timing of
recognition of a liability for exit and disposal cost at the
time a liability is incurred, rather than at a planned commitment
date, as previously required. Exit or disposal costs will be
measured at fair value, and the recorded liability will be
subsequently adjusted for changes in estimated cash flows. This
Statement is required to be effective for exit or disposal
activities entered after December 31, 2002, and early
adoptions is encouraged. The Corporation does not believe this
statement will have a material effect on its financial position
or results or operations.






7.



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##### 



WESTERN OHIO FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



---

NOTE 2  SECURITIES

Securities available for sale were as follows:

|                       |                            |       |   |            |  |            |   |     |  |  |   |     |  
|---------------------- | -------------------------- | ----- | - | ---------- |  | ---------- | - | --- |  |  | - | --- | -
|                       |                            |       |   |           
|(Amounts in thousands) |                            | Gross |   | Gross     
|                       |                            | Fair  |   | Unrealized |  | Unrealized
|                       |                            | Value |   | Gains      |  | Loss      
|                       |                            |       |   |            |  |           
|March 31, 2003         |                            |       |   |            |  |            |   |     |  |  |   |    
|                       | U.S. government agencies   |       | $ | 1,086      |  |            | $ | 62  |  |  |   |    |  
|                       | Municipal securities       |       |   | 6,956      |  |            |   | 24  |  |  |   |    |  
|                       | Mortgage-backed securities |       |   | 33,068     |  |            |   | 372 |  |  |   | (52 | )
|                       |                            |       |   |            |  |            |   |     |  |  |   |    
|                       | Total                      |       | $ | 41,110     |  |            | $ | 458 |  |  | $ | (52 | )
|                       |                            |       |   |            |  |            |   |     |  |  |   |    
|December 31, 2002      |                            |       |   |            |  |            |   |     |  |  |   |    
|                       | U.S. government agencies   |       | $ | 2,180      |  |            | $ | 128 |  |  |   |    |  
|                       | Municipal securities       |       |   | 6,955      |  |            |   | 23  |  |  |   |    |  
|                       | Mortgage-backed securities |       |   | 36,866     |  |            |   | 595 |  |  |   | (30 | )
|                       |                            |       |   |            |  |            |   |     |  |  |   |    
|                       | Total                      |       | $ | 46,001     |  |            | $ | 746 |  |  | $ | (30 | )
|                       |                            |       |   |            |  |            |   |     |  |  |   |    

Gross proceeds from sales of securities during
the three month period ending March 31, 2003 were
$1,718,000, with gross gains of $69,000 included in earnings.
There were no sales during the three months ended March 31,
2002.

NOTE 3  LOANS

Loans were as follows:

|                                 |                                                |             |                                |              |   |         |         |        |   |         |         | 
|-------------------------------- | ---------------------------------------------- | ----------- | ------------------------------ | ------------ | - | ------- | ------- | ------ | - | ------- | ------- | 
|                                 |                                                | March 31,   |                                | December 31,
|                                 |                                                | 2003        |                                | 2002        
|(Amounts in thousands)           |                                                |             |                                |             
|First mortgage loans secured by: |                                                |             |                                |              |   |         |         |       
|                                 |                                                |             | One to four family residential |              | $ | 136,563 |         |        | $ | 124,117 |        
|                                 |                                                |             | Other properties               |              |   | 96,386  |         |        |   | 87,031  |        
|                                 |                                                |             | Construction properties        |              |   | 3,317   |         |        |   | 4,644   |        
|                                
|                                 |                                                | Other loans |                                |              |   |         |         |        |   |        
|                                 |                                                |             | Consumer                       |              |   | 785     |         |        |   | 848     |        
|                                 |                                                |             | Commercial                     |              |   | 23,210  |         |        |   | 21,977  |        
|                                 |                                                |             | Home equity                    |              |   | 22,363  |         |        |   | 21,587  |        
|                                 |                                                |             |                                |              |   |         |         |       
|                                
|                                 |                                                |             |                                | Total loans  |   |         | 282,624 |        |   |         | 260,204 | 
|                                
|Less:                            |                                                |             |                                |              |   |         |         |       
|                                 | Net deferred loan fees, premiums and discounts |             |                                | (100         | ) |         |         | (125   | )
|                                 | Loans in process                               |             |                                | (751         | ) |         |         | (1,390 | )
|                                 | Allowance for loan losses                      |             |                                | (1,885       | ) |         |         | (1,806 | )
|                                 |                                                |             |                                |              |   |         |         |       
|                                 |                                                | $           | 279,888                        |              |   | $       | 256,883 |       
|                                 |                                                |             |                                |              |   |         |         |       






8.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



---

NOTE 3  LOANS(Continued)

Activity in the allowance for loan losses was as
follows:

|                      |                           |                    |       |       |   |   |       |       |  
|--------------------- | ------------------------- | ------------------ | ----- | ----- | - | - | ----- | ----- | -
|                      |                           |                   
|                      |                           | Three Months Ended
|                      |                           | March 31, 2002    
|                      |                           |                   
|                      |                           | 2003               |       | 2002 
|(Amount in thousands) |                           |                    |       |      
|Beginning balance     |                           | $                  | 1,806 |       |   | $ | 1,695 |      
|                      | Provision for loan losses |                    |       | 84    |   |   |       | 84    |  
|                      | Recoveries                |                    |       | 2     |   |   |       | 251   |  
|                      | Charge-offs               |                    |       | (7    | ) |   |       | (278  | )
|                      |                           |                    |       |       |   |   |       |      
|                      | Ending balance            |                    | $     | 1,885 |   |   | $     | 1,752 |  
|                      |                           |                    |       |       |   |   |       |      

Nonperforming loans were $1,304,000 and
$1,779,000 at March 31, 2003 and December 31, 2002.

Impaired loans were as follows:

|                                                  |  |           |     |              |  |   |     | 
|------------------------------------------------- |  | --------- | --- | ------------ |  | - | --- | 
|                                                  |  | March 31, |     | December 31,
|                                                  |  | 2003      |     | 2002        
|                                                  |  |           |     |             
|Loans with no allocated allowance for loan losses |  | $         | 277 |              |  |   | 216 | 
|Loans with allocated allowance for loan losses    |  |           | 268 |              |  |   | 268 | 
|                                                  |  |           |     |              |  |   |     | 
|Total                                             |  | $         | 545 |              |  | $ | 484 | 
|                                                  |  |           |     |              |  |   |     | 
|Amount of the allowance for loan losses allocated |  | $         | 268 |              |  | $ | 129 | 

NOTE 4  DEPOSITS

Deposits were as follows:

|                               |                                      |           |         |              |  |   |         |        | 
|------------------------------ | ------------------------------------ | --------- | ------- | ------------ |  | - | ------- | ------ | 
|                               |                                      | March 31, |         | December 31,
|                               |                                      | 2003      |         | 2002        
|(Amounts in thousands)         |                                      |           |         |             
|Checking  Noninterest bearing |                                      | $         | 12,475  |              |  | $ | 10,778  |       
|Checking  Interest bearing    |                                      |           | 17,490  |              |  |   | 18,596  |       
|Money market accounts          |                                      |           | 63,551  |              |  |   | 66,466  |       
|Passbook and savings accounts  |                                      |           | 11,949  |              |  |   | 11,502  |       
|Certificates of deposit:       |                                      |           |         |              |  |   |         |       
|                               | In denominations under $100,000      |           |         | 91,054       |  |   |         | 91,210 | 
|                               | In denominations of $100,000 or more |           |         | 20,432       |  |   |         | 20,617 | 
|                               |                                      |           |         |              |  |   |         |       
|                               |                                      | $         | 216,951 |              |  | $ | 219,169 |       
|                               |                                      |           |         |              |  |   |         |       






9.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



---

NOTE 5  BORROWED FUNDS

Borrowed funds consisted of advances from the
Federal Home Loan Bank of Cincinnati (FHLB) and are
summarized by contractual maturity as follows:

|                           |                         |                |   |                   |  |         |  |              |   |  |   |        |  |  |  |      |  
|-------------------------- | ----------------------- | -------------- | - | ----------------- |  | ------- |  | ------------ | - |  | - | ------ |  |  |  | ---- | -
|                           |                         |                |   |                  
|                           |                         | March 31, 2003 |   | December 31, 2002
|                           |                         |                |   |                  
|                           |                         |                |   | Weighted          |  |         |  | Weighted    
|                           |                         | Balance        |   | Average Rate      |  | Balance |  | Average Rate
|(Amount in thousands)      |                         |                |   |                   |  |         |  |             
|FHLB advances maturing in: |                         |                |   |                   |  |         |  |              |   |  |   |        |  |  |  |     
|                           | One year or less        |                | $ | 23,050            |  |         |  | 2.66         | % |  | $ | 15,674 |  |  |  | 3.90 | %
|                           | Over 1 year to 3 years  |                |   | 11,784            |  |         |  | 5.23         |   |  |   | 11,978 |  |  |  | 5.25 |  
|                           | Over 3 years to 5 years |                |   | 1,000             |  |         |  | 4.73         |   |  |   | 1,089  |  |  |  | 4.74 |  
|                           | Over 5 years            |                |   | 52,463            |  |         |  | 5.14         |   |  |   | 52,502 |  |  |  | 5.15 |  
|                           |                         |                |   |                   |  |         |  |              |   |  |   |        |  |  |  |     
|                           | Total                   |                | $ | 88,297            |  |         |  | 4.50         | % |  | $ | 81,243 |  |  |  | 4.92 | %
|                           |                         |                |   |                   |  |         |  |              |   |  |   |        |  |  |  |     

NOTE 6  EARNINGS PER COMMON
SHARE

The factors used in the earnings per share
computation were as follows:

|                                              |                                                                                    |                    |   |       |   |  |   |       |  
|--------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------ | - | ----- | - |  | - | ----- | -
|                                              |                                                                                    |                   
|                                              |                                                                                    | Three Months Ended
|                                              |                                                                                    | March 31,         
|                                              |                                                                                    | 2003               |   | 2002 
|(Amounts in thousands, except per share data) |                                                                                    |                    |   |      
|Basic earnings per common share               |                                                                                    |                    |   |       |   |  |   |      
|                                              | Net income                                                                         |                    | $ | 621   |   |  | $ | 449   |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Weighted average common shares outstanding                                         |                    |   | 1,757 |   |  |   | 1,760 |  
|                                              | Less: Average unallocated ESOP shares                                              |                    |   | (23   | ) |  |   | (37   | )
|                                              | Less: Average nonvested MRP shares                                                 |                    |   | (3    | ) |  |   | (4    | )
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Average shares                                                                     |                    |   | 1,731 |   |  |   | 1,719 |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Basic earnings per common share                                                    |                    | $ | .36   |   |  | $ | .26   |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|Diluted earnings per common share             |                                                                                    |                    |   |       |   |  |   |      
|                                              | Net income                                                                         |                    | $ | 621   |   |  | $ | 449   |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Weighted average common shares outstanding for
    basic earnings per common share |                    |   | 1,731 |   |  |   | 1,719 |  
|                                              | Add: Dilutive effects of average nonvested MRP
    shares                          |                    |   |      |   |  |   |      |  
|                                              | Add: Dilutive effects of stock options                                             |                    |   | 22    |   |  |   | 15    |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Average shares and dilutive potential common
    shares                            |                    |   | 1,753 |   |  |   | 1,734 |  
|                                              |                                                                                    |                    |   |       |   |  |   |      
|                                              | Diluted earnings per common share                                                  |                    | $ | .35   |   |  | $ | .26   |  
|                                              |                                                                                    |                    |   |       |   |  |   |      






10.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



---

Stock options covering 66,936 and 78,736 shares
of common stock were not considered in computing diluted
earnings per common share for the three months ended
March 31, 2003 and 2002, as they were antidilutive. In
addition, nonvested MRP awards for 2,908 and 3,513 shares of
common stock were not considered in computing diluted earnings
per common share for the three months ended March 31, 2003
and March 31, 2002 respectively.






11.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION


MANAGEMENTS DISCUSSION AND ANALYSIS OF


FINANCIAL CONDITION AND RESULTS OF OPERATIONS




---



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

The following discusses the financial condition
of the Company as of March 31, 2003 as compared to
December 31, 2002, and the results of operations for the
three months ended March 31, 2003, compared with the same
periods in 2002. This discussion should be read in conjunction
with the interim financial statements and footnotes included
herein.

Forward-Looking Statements

When used in this filing and in future filings by
the Company with the Securities and Exchange Commission, in the
Companys press releases or other public or shareholder
communications, or in oral statements made with the approval of
an authorized executive officer, the words or phrases
would be, will allow, intends
to, will likely result, are expected
to, will continue, is anticipated,
estimate, project or similar expressions
are intended to identify forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements are subject to risks and
uncertainties, including but not limited to changes in economic
conditions in the Companys market area, changes in
policies by regulatory agencies, fluctuations in interest rates,
demand for loans in the Companys market area and
competition, all or some of which could cause actual results to
differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers
not to place undue reliance on any such forward-looking
statements, which speak only as of the date made and advises
readers that various factors, including regional and national
economic conditions, substantial changes in levels of market
interest rates, credit and other risks of lending and investment
activities and competitive and regulatory factors, could affect
the Companys financial performance and could cause the
Companys actual results for future periods to differ
materially from those anticipated or projected.

The Company does not undertake, and specifically
disclaims any obligation, to update any forward-looking
statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements.

Analysis of Financial Condition

Consolidated assets of the Company totaled
$351.2 million at March 30, 2003, an increase of
$4.4 million from the December 31, 2002 total of
$346.8 million. The increase in assets is a result of an
increase of $23.0 million in loans and was partially offset
by decrease of $4.9 million in securities available for
sale. This activity was funded by a decrease of
$13.6 million in cash and cash equivalents and an increase
in FHLB advances of $7.1 million.

Net loans increased $23.0 million, or 9.0%,
from $256.9 million at December 31, 2002 to
$279.9 million at March 31, 2003. Traditional
one-to-four family residential mortgage loans increased
$12.4 million to $136.6 at March 31, 2003 from
$124.1 million at December 31, 2002, primarily due to
the purchase of $15.5 million of new originations during
the period. For the period, other real estate mortgage loans
increased $9.4 million to $96.4 million at
March 31,2003 from $87.0 million at December 31,
2002. These loans are non-residential participation loans
originated within the Columbus, OH area and secured by real
estate. These changes continue Cornerstones effort to
increase its portfolio of commercial and other real
estate mortgage type loans.






12.



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##### 



WESTERN OHIO FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



---

Cash and cash equivalents decreased by
$13.6 million to $5.7 million on March 31, 2003, from
$19.3 million on December 31, 2002. Cash and cash
equivalents consist of cash, checking deposits and federal funds
deposited at other financial institutions. The decrease was
primarily the result of purchasing loans.

Securities available for sale decreased
$4.9 million from $46.0 million at December 31,
2002, to $41.1 million on March 31, 2003. The decrease
was due to sale of securities of $1.7 million and principal
repayments on existing mortgage-backed securities available for
sale.

Deposits at March 31, 2003 totaled
$217.0 million, a decrease of $2.2 million, or 1.0%
from $219.2 million at December 31, 2002. The decrease
occurred primarily in money market accounts, which decreased
$2.9 million, or 4.4%. Deposits in checking accounts
increased $0.6 million to $30.0 million at March 31,
2003 from $29.4 million at December 31, 2002.
Certificates of Deposit accounts decreased $0.3 million to
$111.5 million at March 31, 2003 compared to
$111.8 million on December 31, 2002.

FHLB advances at March 31, 2003 totaled
$88.3 million, an increase of $7.1 million or 8.0% from
$81.2 million at December 31, 2002. The Bank increased
its advances from the FHLB during the period to fund loan
purchases. The majority of borrowed funds are invested in loans
to leverage the Companys excess capital and improve the
Companys return on equity over time.

Total shareholders equity increased
$129,000 from $43.2 million at December 31, 2002, to
$43.3 million at March 31, 2003. This increase is
primarily due to net income for the period and stock options
exercised, and partially offset by a decrease in accumulated
other comprehensive income of $204,000 and dividend payments of
$433,000.

As of March 31, 2003, the Company had
commitments to make $4.1 million of residential loans and
$4.0 million of non-residential real estate loans. It is
expected that these loans will be funded within 30-90 days.
The Company also had $0.8 million in commitments to fund
loans on residential properties under construction as well as
commitments to disburse $2.1 million on other mortgage
loans. These commitments are anticipated to be filled within
three to six months. Unused commercial lines of credit were
$12.2 million and unused home equity lines of credit were
$15.0 million. Commitments to originate nonmortgage loans
total $649,000.

Results of Operations

Operating results of the Company are affected by
general economic conditions, monetary and fiscal policies of
federal agencies and policies of agencies regulating financial
institutions. The Companys cost of funds is influenced by
interest rates on competing investments and general market rates
of interest. Lending activities are influenced by demand for
real estate and other types of loans, which, in turn, is
affected by the interest rates at which such loans are made,
general economic conditions and the availability of funds for
lending activities.

The Companys net income is primarily
dependent on its net interest income (the difference between
interest income generated on interest-earning assets and
interest expense incurred on interest-bearing liabilities). Net
income is also affected by provisions for loan losses, service
charges, gains on sale of assets, other income, noninterest
expense and income taxes. The Companys net income of
$621,000 for the three months ended March 31, 2003,
represented an increase of $172,000, or 38.07%, compared to the
same period in 2002. The returns on average assets and average
shareholders equity for the three months ended
March 31, 2003, on an annualized basis, were 0.73% and
5.77%, respectively, compared to 0.52%






13.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



---

and 4.24% for the same period in 2002. Basic
earnings per share increased $.10 from $.26 per
share for the three month
period ended March 31, 2002 to $.36 per
share for the period ended March 31, 2003.

Net interest income is the largest component of
the Companys income and is affected by the interest rate
environment and volume and composition of interest-earning
assets and interest-bearing liabilities. Net interest income
totaled $2,393,000 for the three months ended March 31,
2003, compared to $2,397,000 for the same period in 2002. The
decrease of $4,000 for the three month period is due to lower
interest rates on interest earning assets. The Company remains
liability sensitive whereby its interest-bearing liabilities
will generally reprice more quickly than its interest-earning
assets. Therefore, the Companys net interest margin will
generally increase in periods of falling interest rates in the
market and will decrease in periods of rising interest rates.
Cornerstone is more sensitive to rising rates than declining
rates. In a rising interest rate environment, because
Cornerstone has primarily fixed-rate loans in its loan
portfolio, the amount of interest Cornerstone would receive on
its loans would increase relatively slowly as loans are slowly
prepaid and new loans at higher rates are made. Moreover, the
interest Cornerstone would pay on its deposits would increase
relatively rapidly because Cornerstones deposits generally
have shorter periods to repricing.

Interest and fees on loans totaled $4,143,000 for
the three months ended March 31, 2003 compared to $4,745,000 for
the three months ended March 31, 2002. The decrease was due
primarily to a decrease in loan rates. The average yield earned
on the portfolio on an annualized basis, decreased to 6.23% for
the period ended March 31, 2003 from 6.99% for the same
period in 2002.

Interest and dividends on securities totaled
$484,000 for the three months ended March 31, 2003, and
$602,000 for the three months ended March 31, 2002. The
decrease for the three month period was due to lower interest
rates on average securities held for sale.

Interest on deposits totaled $1,352,000 for the
three months ending March 31, 2003 compared to $2,035,000
for the three months ended March 30, 2002. The decrease was
due to lower interest rates on all deposits and the change in
mix from certificates of deposits to checking and money market
accounts.

Interest on FHLB advances was $984,000 for the
three months ending March 31, 2003 compared to $1,037,000
for the three months ending March 31, 2002. The decrease
for the three months ending March 31, 2003 compared to the
same three month period in March 31, 2002, is due to the
lower cost of new advances that were offset by an increase in
average outstanding borrowings from the FHLB of approximately
$2.5 million.

The Company maintains an allowance for loan
losses in an amount, which, in managements judgment, is
adequate to absorb probable losses in the loan portfolio. While
management utilizes its best judgment and information available,
ultimate adequacy of the allowance is dependent on a variety of
factors, including performance of the Companys loan
portfolio, the economy, changes in real estate values and
interest rates and the view of the regulatory authorities toward
loan classifications. The provision for loan losses is
determined by management as the amount to be added to the
allowance for loan losses after net charge-offs have been
deducted to bring the allowance to a level considered adequate
to absorb probable losses in the loan portfolio. The amount of
the provision is based on managements regular review of
the loan portfolio and consideration of such factors as
historical loss experience, changes in size and composition of
the loan portfolio and specific borrower considerations,
including ability of the borrower to repay the loan and the
estimated value of the underlying collateral. The provision for
loan losses totaled $84,000 and for the three months ended
March 31, 2003, which was the same amount as compared to
the three months ending March 31, 2002.






14.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



---

Net charge-offs decreased to $5,000 for the three
months ended March 31, 2003 from $27,000 for the three
months ended March 31, 2002. Due to the decrease in net
charge-offs, the collateral supporting non-performing loans,
area economic conditions, and the level of impaired and
non-performing loans, management believes that the total
allowance of $1.9 million on total loans of $283 million at
March 31, 2003 is adequate. The Corporation will continue
to review its allowance for loan losses and make further
provisions as economic and asset quality conditions dictate.

Noninterest income totaled $825,000 for the three
months ended March 31, 2003 compared to $574,000 for the
same period in 2002. Service charges on loans and deposits
increased $56,000 from $508,000 in March 31, 2002 to
$564,000 for the three month period ended March 31, 2003.
Service charges on deposits, including non-sufficient funds,
increased $55,000 for the three month period ended March 31,
2003 compared to the same period in March 31, 2002. The
Companys overdraft honor program, which provides to most
customers the courtesy of honoring checks drawn on insufficient
balances, up to limits established by management, continues to
be the primary reason for the increase in service charges on
deposits. Additionally, the Company recognized loan sale gains
of $85,000 on loan sales of $4.5 million for the three
months ended March 31, 2003 compared to $60,000 on loan
sales of $3.7 million for the same three months in 2002.
Gains on the sale of investments were $69,000 for the period
March 31, 2003. There were no gains for the period ended
March 31, 2002. Other noninterest income increased from
$6,000 in March 31, 2002 to $107,000 for the period ended
March 31, 2003 due primarily to the cash surrender value
earnings on the Companys bank owned life insurance
policies.

Noninterest expense increased $38,000 for the
three months ended March 31, 2003 compared to the same
period in March 31, 2002. This increase is due to increases
in occupancy, state franchise taxes and other noninterest
expense items. Other noninterest expense consists of items such
as telephone, printing and supplies, loan expenses and check
losses.

The change in income tax is primarily
attributable to the change in income before income taxes. Income
tax expense totaled $267,000 and $230,000, or an effective rate
of 30.1% and 33.9.0%, for the three months ended March 31,
2003 and March 31, 2002 respectively. This effective tax
rate decrease is due primarily to the income on the Bank owned
life insurance policies.






15.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



---

Liquidity

Office of Thrift Supervision (OTS)
regulations presently require Cornerstone Bank to maintain
sufficient liquidity to assure its safe and sound operation. To
that end, Cornerstone Bank maintains investments having
maturities of 5 years or less, sells loans into the secondary
market and borrows funds from the FHLB. These activities are
intended to provide a source of relatively liquid funds on which
Cornerstone may rely, if necessary, to fund deposit withdrawals
or other short-term funding needs. At March 31, 2003
Cornerstone had commitments to originate residential loans
totaling $4.0 million and $4.0 million of non-residential
real estate loans. In addition, Cornerstone had
$0.8 million in commitments to fund loans on residential
properties under construction as well as $2.1 million in
commitments to fund other mortgage loans. Unused commercial
lines of credit were $12.2 million and unused home equity
lines of credit were $15.0 million. Commitments to
originate nonmortgage loans total $649,000. Cornerstone
considers its liquidity sufficient to meet
its outstanding short and long-term needs.

Capital Resources

Cornerstone is required by regulations to meet
certain minimum capital requirements, which must be generally as
stringent as standards established for commercial banks. Current
minimum capital requirements call for tangible capital of 1.5% of
adjusted total assets, core capital (which, for Cornerstone,
consists solely of tangible capital) of 4.0% of adjusted total
assets, except for institutions with the highest examination
rating and acceptable levels of risk, and risk-based capital
(which, for Cornerstone, consists of core capital and general
valuation allowances) of 8.0% of risk-weighted assets (assets
are weighted at percentage levels ranging from 0% to 100%
depending on their relative risk).

The following table summarizes Cornerstones
minimum regulatory capital requirements and actual capital at
March 31, 2003.

|                       |  |                |        |             |  |                      |      |                  |  |        |        |         |  |             |     |   |  |   |        |  |  |  |      |   |  |   |         | 
|---------------------- |  | -------------- | ------ | ----------- |  | -------------------- | ---- | ---------------- |  | ------ | ------ | ------- |  | ----------- | --- | - |  | - | ------ |  |  |  | ---- | - |  | - | ------- | 
|                       |  |                |        |             |  |                      |      |                  |  |        |        |        
|                       |  |                |        |             |  | Minimum              |      | Excess of actual |  |       
|                       |  |                |        | Current     |  | capital over current |      |                 
|                       |  | Actual capital |        | requirement |  | requirement          |      |                 
|                       |  |                |        |             |  |                      |      | Applicable      
|                       |  | Amount         |        | Percent     |  | Amount               |      | Percent          |  | Amount |        | Percent |  | Asset Total
|(Dollars in thousands) |  |                |        |             |  |                      |      |                  |  |        |        |         |  |            
|Tangible capital       |  | $              | 41,518 |             |  |                      | 11.9 | %                |  | $      | 5,261  |         |  |             | 1.5 | % |  | $ | 36,257 |  |  |  | 10.4 | % |  | $ | 350,764 | 
|Core capital           |  |                | 41,518 |             |  |                      | 11.9 |                  |  |        | 14,031 |         |  |             | 4.0 |   |  |   | 27,487 |  |  |  | 7.9  |   |  |   | 350,764 | 
|Risk-based capital     |  |                | 43,122 |             |  |                      | 16.2 |                  |  |        | 21,358 |         |  |             | 8.0 |   |  |   | 21,764 |  |  |  | 8.25 |   |  |   | 266,981 | 

Cornerstone also exceeded the minimum requirements to
be considered well-capitalized under the prompt corrective action
provisions of the Federal Deposit Insurance Corporation Improvement
Act of 1991.






16.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION


QUANTITATIVE AND QUALITATIVE DISCLOSURE


ABOUT MARKET RISK




---



|        |                                                              
|------- | -------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosure
    About Market Risk

The Companys primary market risk exposure
is interest rate risk and, to a lesser extent, liquidity risk.
Interest rate risk is the risk that the Companys financial
condition will be adversely affected due to movements in
interest rates. The income of financial institutions is
primarily derived from the excess of interest earned on
interest-earning assets over the interest paid on
interest-bearing liabilities. One method used to analyze the
Companys sensitivity to changes in interest rates is the
net portfolio value (NPV) methodology.
NPV is generally considered to be the present value of the
difference between expected incoming cash flows on
interest-earning and other assets and expected outgoing cash
flows on interest-bearing and other liabilities.

The following tables present an analysis of the
potential sensitivity of the Banks net present value of
its financial instruments to sudden and sustained changes in the
prevailing interest rates.

|               |   |                        |        |          |  |                   |    |          |  |          |       |       |  |   |        |   |  |  |     |    |  |  |       |       | 
|-------------- | - | ---------------------- | ------ | -------- |  | ----------------- | -- | -------- |  | -------- | ----- | ----- |  | - | ------ | - |  |  | --- | -- |  |  | ----- | ----- | 
|               |   |                        |        |          |  |                  
|               |   | March 31, 2003         |        |          |  | December 31, 2002
|Change in      |   |                        |        |          |  |                  
|Interest Rate  |   | $ Change               |        | % Change |  | NPV               |    | $ Change |  | % Change |       | NPV  
|(Basis Points) |   | In NPV                 |        | In NPV   |  | Ratio             |    | In NPV   |  | In NPV   |       | Ratio
|               |   |                        |        |          |  |                   |    |          |  |          |       |      
|               |   |                       
|               |   | (Dollars in Thousands)
|+200           |   | $                      | (1,560 | )        |  |                   | (4 | )%       |  |          | 12.16 | %     |  | $ | (5,756 | ) |  |  | (12 | )% |  |  | 11.72 | %    
|+100           |   |                        | (100   | )        |  |                   | 0  |          |  |          | 12.37 |       |  |   | (2,103 | ) |  |  | (4  | )  |  |  | 12.57 |      
|               |  |                        |        |         |  |                   |    |         |  |          |       | 12.24 |  |   |        |  |  |  |     |   |  |  |       | 13.01 | 
|(100)          |   |                        | (1,554 | )        |  |                   | (4 | )        |  |          | 11.69 |       |  |   | 978    |   |  |  | 2   |    |  |  | 13.17 |      
|(200)          |   |                        | (3,308 | )        |  |                   | (8 | )        |  |          | 11.12 |       |  |   | 2,234  |   |  |  | 5   |    |  |  | 13.40 |      

Since December 31, 2002 interest rates have
declined to historically low levels. As a result, many of the
Banks deposits are within 200 basis points of a zero
interest rate floor. As the March 31, 2003 table suggests,
should overall rates and loan yields continue to decline, the
Banks inability to reduce rates below the zero floor could
negatively impact Cornerstones NPV and future earnings.
The decline in NPV from prior periods is due to the increase in
prepayments in our loan portfolio and extended duration of our
Federal Home Loan Bank advances.

As with any method of measuring interest rate
risk, certain shortcomings are inherent in the NPV approach. For
example, although certain assets and liabilities may have
similar maturities or periods of repricing, they may react in
different degrees to changes in market interest rates. Also, the
interest rates on certain types of assets and liabilities may
fluctuate in advance of changes in market interest rates, while
interest rates on other types may lag behind changes in market
rates. Further, in the event of a change in interest rates,
expected rates of prepayment on loans and mortgage-backed
securities and early withdrawal levels from certificates of
deposit would likely deviate significantly from those assumed in
making risk calculations.






17.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION


QUANTITATIVE AND QUALITATIVE DISCLOSURE


ABOUT MARKET RISK




---

Item 4.     Controls
and procedures

With the participation and under the supervision
of the Companys management, including the Companys
Chief Executive Officer and Chief Financial Officer, and within
90 day s of the filing date of this quarterly report, the
Companys Chief Executive Officer and Chief Financial
Officer have evaluated the effectiveness of the design and
operation of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and
15d- 14(c) and, based on their evaluation, have concluded that
the disclosure controls and procedures are effective. There were
no significant changes in the Companys internal controls
or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including
any corrective action with regard to significant deficiencies
and material weaknesses.






18.



---



##### 



WESTERN OHIO FINANCIAL CORPORATION


PART II  OTHER INFORMATION




---

|         |  |                                                                                                                 
|-------- |  | ----------------------------------------------------------------------------------------------------------------
|Item 1  |  | Legal Proceedings                                                                                               
|         |  | None                                                                                                            
|        
|Item 2  |  | Changes in Securities and Use of Proceeds                                                                       
|         |  | None                                                                                                            
|        
|Item 3  |  | Defaults Upon Senior Securities                                                                                 
|         |  | None                                                                                                            
|        
|Item 4  |  | Submission of Matters to a Vote of Security
    Holders                                                         
|         |  | None                                                                                                            
|        
|Item 5  |  | Other Information                                                                                               
|         |  | None                                                                                                            
|        
|Item 6  |  | Exhibits and Reports on Form 8-K                                                                                
|         |  | (a) Exhibits                                                                                                    
|         |  | (b) No current reports on Form 8-K were
    filed by the Registrant during the quarter ended March 31,
    2003.






19.



---



##### 



SIGNATURES


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

|      |  |              |  |                                                                                                         
|----- |  | ------------ |  | --------------------------------------------------------------------------------------------------------
|      |  |              |  | WESTERN OHIO FINANCIAL CORPORATION                                                                      
|      |  |              |  |                                                                                                         
|      |  |              |  | (Registrant)                                                                                            
|     
|Date: |  | May 15, 2003 |  | /s/ John W. Raisbeck                                                                                    
|      |  |              |  |                                                                                                         
|      |  |              |  | John W. Raisbeck
    President and Chief Executive Officer
    (Principal Executive Officer)            
|     
|Date: |  | May 15, 2003 |  | /s/ Richard K. Smith                                                                                    
|      |  |              |  |                                                                                                         
|      |  |              |  | Richard K. Smith
    Senior Vice President and Chief Financial Officer
    (Principal Financial Officer)






20.



---



##### 



CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
   CERTIFICATIONS FOR QUARTERLY REPORT ON FORM 10-Q


I, John W. Raisbeck certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1) | I have reviewed this quarterly report on
    Form 10-Q of Western Ohio Financial Corporation;                                                                                                                                                                                                                                                     
|  
|2) | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|  
|3) | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|  
|4) | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;
|
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



|   |                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5) | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and                                                                                                                                                    



|   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6) | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.

Date: May 15, 2003

/s/ John W. Raisbeck




John W. Raisbeck


President and Chief Executive Officer







21.



---



##### 



CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
   CERTIFICATIONS FOR QUARTERLY REPORT ON FORM 10-Q


I, Richard K. Smith certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7) | I have reviewed this quarterly report on
    Form 10-Q of Western Ohio Financial Corporation;                                                                                                                                                                                                                                                     
|  
|8) | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|  
|9) | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   



|    |                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10) | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;
|
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



|    |                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11) | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and                                                                                                                                                    



|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12) | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.

Date: May 15, 2003

/s/ Richard K. Smith




Richard K. Smith


Chief Financial Officer







22.