##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

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



For the quarterly period ended June 30, 2004



OR



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------



For the transition period from  to



Commission File Number: 33-53596



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FC BANC CORP..

(Exact name of small business issuer as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Ohio                                                           |  | 34-1718070                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



105 Washington
Square, Bucyrus, Ohio 44820

(Address of principal executive offices)



(419) 562-7040

(Issuers telephone number)





(Former name, former address and former fiscal year, if changed since last report)



APPLICABLE ONLY TO CORPORATE ISSUERS



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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months or such shorter period that the issuer was required to file such reports and
(2) has been subject to such filing requirements for the past 90 days:    Yes  x    No ̈



State the
number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: August 12, 2004  578,899 common shares



Transitional Small Business Disclosure Format (Check one):    Yes ̈No  x



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##### Table of Contents

INDEX



|           |  |                                                                                                   |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                   |  |                                                                                       |  | Page
|PART I     |  | FINANCIAL INFORMATION (UNAUDITED)                                                                 |  |                                                                                      
|           |  |                                                                                                  
|           |  | Consolidated Balance Sheet June 30, 2004 and December 31, 2003                                    |  | 3                                                                                    
|           |  |                                                                                                  
|           |  | Consolidated Statements of Income Three and six months ended June 30, 2004 and 2003               |  | 4                                                                                    
|           |  |                                                                                                  
|           |  | Consolidated Statements of Comprehensive Income three and six months ended June 30, 2004 and 2003 |  | 5                                                                                    
|           |  |                                                                                                  
|           |  | Consolidated Statements of Cash Flows six months ended June 30, 2004 and 2003.                    |  | 6                                                                                    
|           |  |                                                                                                  
|           |  | Notes to Consolidated Financial Statements                                                        |  | 7                                                                                    
|           |  |                                                                                                  
|           |  | Managements Discussion and Analysis of Financial Condition and Results of Operations             |  | 10                                                                                   
|           |  |                                                                                                  
|           |  | Controls and Procedures                                                                           |  | 17                                                                                   
|           | 
|           |  |                                                                                                  
|           |  |                                                                                                  
|PART II    |  | OTHER INFORMATION                                                                                 |  | 18                                                                                   
|           |  |                                                                                                   | 
|           |  | Item 1.                                                                                           |  | Legal Proceedings                                                                     |  | 18  
|           |  |                                                                                                   | 
|           |  | Item 2.                                                                                           |  | Change in Securities, Use of Proceeds, and Small Business Issuer of Equity Securities |  | 18  
|           |  |                                                                                                   | 
|           |  | Item 3.                                                                                           |  | Defaults upon Senior Securities                                                       |  | 18  
|           |  |                                                                                                   | 
|           |  | Item 4.                                                                                           |  | Submission of Matters to a Vote of Security Holders                                   |  | 18  
|           |  |                                                                                                   | 
|           |  | Item 5.                                                                                           |  | Other information                                                                     |  | 18  
|           |  |                                                                                                   | 
|           |  | Item 6.                                                                                           |  | Exhibits and Reports of Form 8-K                                                      |  | 18  
|           | 
|SIGNATURES |  | 20                                                                                               



2



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##### Table of Contents

FC BANC CORP.



CONSOLIDATED BALANCE SHEET (UNAUDITED)



(In thousands, except share data)



|                                                                                                               |  |               |                    |   |              |   |         |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------- | ------------------ | - | ------------ | - | ------- | -
|                                                                                                               |  | June 30, 2004 |                    |   | December 31, |  
|                                                                                                               |  |               | 2003 (as restated) |  
|ASSETS                                                                                                         |  |               |                    |   |              |   |         |  
|Cash and due from banks                                                                                        |  | $             | 3,544              |   |              | $ | 3,936   |  
|Federal funds sold                                                                                             |  |               |                   |   |              |   |        |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Cash and cash equivalents                                                                                      |  |               | 3,544              |   |              |   | 3,936   |  
|                                                                                                               |  |              
|Investment securities available for sale - at market                                                           |  |               | 57,239             |   |              |   | 47,668  |  
|                                                                                                               |  |              
|Loans receivable                                                                                               |  |               | 78,400             |   |              |   | 87,022  |  
|Allowance for loan losses                                                                                      |  |               | (1,035             | ) |              |   | (1,194  | )
|                                                                                                               |  |               |                    |   |              |   |         |  
|Net loans receivable                                                                                           |  |               | 77,365             |   |              |   | 85,828  |  
|                                                                                                               |  |              
|Office premises and equipment - at depreciated cost                                                            |  |               | 6,877              |   |              |   | 6,746   |  
|                                                                                                               |  |              
|Bank owned life insurance                                                                                      |  |               | 2,943              |   |              |   | 2,874   |  
|                                                                                                               |  |              
|Accrued interest and other assets                                                                              |  |               | 2,889              |   |              |   | 2,012   |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Total assets                                                                                                   |  | $             | 150,857            |   |              | $ | 149,064 |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                           |  |               |                    |   |              |   |         |  
|Deposits                                                                                                       |  |               |                    |   |              |   |         |  
|Noninterest-bearing                                                                                            |  |               | 12,484             |   |              |   | 13,116  |  
|Interest-bearing                                                                                               |  |               | 88,223             |   |              |   | 89,352  |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Total deposits                                                                                                 |  |               | 100,707            |   |              |   | 102,468 |  
|                                                                                                               |  |              
|Short-term borrowings                                                                                          |  |               | 14,474             |   |              |   | 8,472   |  
|                                                                                                               |  |              
|Other borrowings                                                                                               |  |               | 21,846             |   |              |   | 23,728  |  
|                                                                                                               |  |              
|Accrued interest payable and other liabilities                                                                 |  |               | 1,021              |   |              |   | 1,192   |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Total liabilities                                                                                              |  |               | 138,048            |   |              |   | 135,860 |  
|Stockholders equity                                                                                           |  |               |                    |   |              |   |         |  
|Common stock, 4,000,000 shares authorized, no par value; 665,632 shares issued                                 |  |               | 832                |   |              |   | 832     |  
|Additional paid-in capital                                                                                     |  |               | 1,358              |   |              |   | 1,361   |  
|Retained earnings                                                                                              |  |               | 13,400             |   |              |   | 13,165  |  
|Less 86,733 and 89,983 shares of treasury stock at June 30, 2004 and December 31, 2003, respectively - at cost |  |               | (2,194             | ) |              |   | (2,270  | )
|Accumulated other comprehensive income (loss)                                                                  |  |               | (587               | ) |              |   | 116     |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Total stockholders equity                                                                                     |  |               | 12,809             |   |              |   | 13,204  |  
|                                                                                                               |  |               |                    |   |              |   |         |  
|Total liabilities and stockholders equity                                                                     |  | $             | 150,857            |   |              | $ | 149,064 |  
|                                                                                                               |  |               |                    |   |              |   |         |  



See accompanying notes to
unaudited consolidated financial statements



3



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##### Table of Contents

FC Banc Corp, Inc.



CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)



(In thousands, except
share data)



|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|--------------------------------------------------- |  | ------------------------ | ----- | -------------------------- | ---- | - | ----- |  | - | ----- | - |  | - | -----
|                                                    |  | Six months endedJune 30, |       | Three months endedJune 30,
|                                                    |  | 2004                     |       |                            | 2003 |   | 2004  |  |   | 2003 
|Interest income                                     |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Interest and fees on loans                          |  | $                        | 2,482 |                            |      | $ | 2,553 |  | $ | 1,191 |   |  | $ | 1,255
|Interest and dividends on investment securities     |  |                          | 1,002 |                            |      |   | 1,057 |  |   | 517   |   |  |   | 525  
|Interest on federal funds sold                      |  |                          | 12    |                            |      |   | 3     |  |   | 9     |   |  |   |     
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Total interest income                               |  |                          | 3,496 |                            |      |   | 3,613 |  |   | 1,717 |   |  |   | 1,780
|Interest expense                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Interest on deposits                                |  |                          | 842   |                            |      |   | 906   |  |   | 423   |   |  |   | 454  
|Interest on borrowed funds                          |  |                          | 469   |                            |      |   | 475   |  |   | 233   |   |  |   | 254  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Total interest expense                              |  |                          | 1,311 |                            |      |   | 1,381 |  |   | 656   |   |  |   | 708  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Net interest income                                 |  |                          | 2,185 |                            |      |   | 2,232 |  |   | 1,061 |   |  |   | 1,072
|Provision for loan losses                           |  |                          | 50    |                            |      |   | 50    |  |   | 50    |   |  |   | 50   
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Net interest income after provision for loan losses |  |                          | 2,135 |                            |      |   | 2,182 |  |   | 1,011 |   |  |   | 1,022
|Other income                                        |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Services charges and other income                   |  |                          | 455   |                            |      |   | 345   |  |   | 239   |   |  |   | 134  
|Bank owned life insurance earnings                  |  |                          | 74    |                            |      |   | 64    |  |   | 32    |   |  |   | 32   
|Gain on sale of investment                          |  |                          |      |                            |      |   | 163   |  |   |      |   |  |   | 84   
|Gain on sale of loans                               |  |                          | 42    |                            |      |   |      |  |   | 25    |   |  |   |     
|Gain on sale of other assets                        |  |                          |      |                            |      |   | 97    |  |   |      |   |  |   | 97   
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Total other income                                  |  |                          | 571   |                            |      |   | 669   |  |   | 296   |   |  |   | 347  
|Other expenses                                      |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Salaries and employee benefits                      |  |                          | 1,053 |                            |      |   | 1,038 |  |   | 566   |   |  |   | 457  
|Net occupancy and equipment                         |  |                          | 385   |                            |      |   | 390   |  |   | 186   |   |  |   | 192  
|Legal and professional fees                         |  |                          | 144   |                            |      |   | 184   |  |   | 89    |   |  |   | 102  
|State taxes                                         |  |                          | 89    |                            |      |   | 78    |  |   | 46    |   |  |   | 40   
|Other operating                                     |  |                          | 636   |                            |      |   | 358   |  |   | 311   |   |  |   | 252  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Total other expenses                                |  |                          | 2,307 |                            |      |   | 2,191 |  |   | 1,198 |   |  |   | 1,043
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Income before income taxes                          |  |                          | 399   |                            |      |   | 660   |  |   | 109   |   |  |   | 326  
|Federal income taxes expense (benefit)              |  |                          | (2    | )                          |      |   | 107   |  |   | (23   | ) |  |   | 53   
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|NET INCOME                                          |  | $                        | 401   |                            |      | $ | 553   |  | $ | 132   |   |  | $ | 273  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|EARNINGS PER SHARE                                  |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Basic                                               |  | $                        | .69   |                            |      | $ | .96   |  | $ | .23   |   |  | $ | .47  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Diluted                                             |  | $                        | .69   |                            |      | $ | .96   |  | $ | .23   |   |  | $ | .47  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      
|Dividends per share                                 |  | $                        | .38   |                            |      | $ | .36   |  | $ | .19   |   |  | $ | .18  
|                                                    |  |                          |       |                            |      |   |       |  |   |       |   |  |   |      



See accompanying notes to
unaudited consolidated financial statements



4



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##### Table of Contents

FC BANC CORP.



CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)



(In
thousands)



|                                                                         |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|------------------------------------------------------------------------ |  | ------------------------ | ------ | -------------------------- | ---- | - | ---- |  | - | ------ | - |  | - | ---
|                                                                         |  | Six months endedJune 30, |        | Three months endedJune 30,
|                                                                         |  | 2004                     |        |                            | 2003 |   | 2004 |  |   | 2003  
|Less:                                                                    |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|Net earnings                                                             |  | $                        | 401    |                            |      | $ | 553  |  | $ | 132    |   |  | $ | 273
|                                                                         |  |                          |        |                           
|Other comprehensive income (loss):                                       |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|Unrealized gains (losses) on available for sale securities               |  |                          | (1,066 | )                          |      |   | 367  |  |   | (1,610 | ) |  |   | 426
|Less: Reclassification adjustment for gain included in net income        |  |                          |       |                            |      |   | 163  |  |   |       |   |  |   | 84 
|                                                                         |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|Other comprehensive gain (loss), before tax                              |  |                          | (1,066 | )                          |      |   | 204  |  |   | (1,610 | ) |  |   | 342
|                                                                         |  |                          |        |                           
|Less: Income tax expense (benefit) related to other comprehensive income |  |                          | (363   | )                          |      |   | 69   |  |   | (548   | ) |  |   | 116
|                                                                         |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|                                                                         |  |                          |        |                           
|Other comprehensive gain (loss)                                          |  |                          | (703   | )                          |      |   | 135  |  |   | (1,062 | ) |  |   | 226
|                                                                         |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    
|                                                                         |  |                          |        |                           
|Comprehensive income                                                     |  | $                        | (302   | )                          |      | $ | 688  |  | $ | (930   | ) |  | $ | 499
|                                                                         |  |                          |        |                            |      |   |      |  |   |        |   |  |   |    



See accompanying notes to
unaudited consolidated financial statements



5



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##### Table of Contents

FC BANC CORP.



CONSOLIDATED
STATEMENTS OF CASH FLOWS



For the six months ended June 30,



(In thousands)



|                                                                                              |  |      |         |   |      |   |         |  
|--------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                              |  | 2004 |         |   | 2003 |  
|Cash flows from operating activities:                                                         |  |      |         |   |      |   |         |  
|Net earnings for the period                                                                   |  | $    | 401     |   |      | $ | 553     |  
|Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |  |      |         |   |      |   |         |  
|Investment gains, net                                                                         |  |      |        |   |      |   | (163    | )
|Provision for loan losses                                                                     |  |      | 50      |   |      |   | 50      |  
|Gain from disposal of premises and equipment                                                  |  |      |        |   |      |   | (97     | )
|Originations from sale of loans                                                               |  |      | (11,864 | ) |      |   |        |  
|Proceeds from sale of loans                                                                   |  |      | 11,906  |   |      |   |        |  
|Gain from sale of loans                                                                       |  |      | (42     | ) |      |   |        |  
|Depreciation, amortization, and accretion                                                     |  |      | 433     |   |      |   | 657     |  
|Deferred income taxes                                                                         |  |      | (11     | ) |      |   | 99      |  
|Net change in:                                                                                |  |      |         |   |      |   |         |  
|Accrued interest receivable                                                                   |  |      | (52     | ) |      |   | (69     | )
|Accrued interest payable                                                                      |  |      | 18      |   |      |   | 1       |  
|Other assets                                                                                  |  |      | (814    | ) |      |   | 205     |  
|Other liabilities                                                                             |  |      | 734     |   |      |   | (296    | )
|                                                                                              |  |      |         |   |      |   |         |  
|Net cash provided by operating activities                                                     |  |      | 759     |   |      |   | 940     |  
|Cash flows from investing activities:                                                         |  |      |         |   |      |   |         |  
|Purchase of securities designated as available for sale                                       |  |      | (27,209 | ) |      |   | (23,082 | )
|Proceeds from sales securities                                                                |  |      |        |   |      |   | 2,902   |  
|Proceeds from maturity and repayment of securities designated as available for sale           |  |      | 15,770  |   |      |   | 11,542  |  
|Purchase of regulatory stock                                                                  |  |      | (44     | ) |      |   | (18     | )
|Net decrease (increase) in loans                                                              |  |      | 8,463   |   |      |   | (5,576  | )
|Sale of premises and equipment                                                                |  |      |        |   |      |   | 102     |  
|Purchase of premises and equipment                                                            |  |      | (350    | ) |      |   | (68     | )
|                                                                                              |  |      |         |   |      |   |         |  
|Net cash provided by (used in) investing activities                                           |  |      | (3,370  | ) |      |   | (14,198 | )
|                                                                                              |  |      |         |   |      |   |         |  
|Cash flows provided by (used in) financing activities:                                        |  |      |         |   |      |   |         |  
|Net increase (decrease) in deposit accounts                                                   |  |      | (1,757  | ) |      |   | 5,163   |  
|Net increase in short-term borrowed funds                                                     |  |      | 6,002   |   |      |   | 445     |  
|Proceeds from long-term FHLB advances                                                         |  |      |        |   |      |   | 9,000   |  
|Repayments of borrowings                                                                      |  |      | (1,882  | ) |      |   | (530    | )
|Purchase of treasury stock                                                                    |  |      | (28     | ) |      |   |        |  
|Proceeds from the exercise of stock options                                                   |  |      | 103     |   |      |   | 29      |  
|Cash dividends paid                                                                           |  |      | (219    | ) |      |   | (207    | )
|                                                                                              |  |      |         |   |      |   |         |  
|Net cash used in financing activities                                                         |  |      | 2,219   |   |      |   | 13,900  |  
|                                                                                              |  |      |         |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                                          |  |      | (392    | ) |      |   | 642     |  
|Cash and cash equivalents at beginning of period                                              |  |      | 3,936   |   |      |   | 4,825   |  
|                                                                                              |  |      |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                                    |  | $    | 3,544   |   |      | $ | 5,467   |  
|                                                                                              |  |      |         |   |      |   |         |  
|Supplemental disclosure of cash flow information:                                             |  |      |         |   |      |   |         |  
|Cash paid during the period for interest                                                      |  | $    | 1,293   |   |      | $ | 1,376   |  
|                                                                                              |  |      |         |   |      |   |         |  
|Cash paid during the period for income taxes                                                  |  | $    | 50      |   |      | $ |        |  
|                                                                                              |  |      |         |   |      |   |         |  
|Recognition of mortgage servicing rights in accordance with SFAS No. 140                      |  | $    | 76      |   |      | $ |        |  
|                                                                                              |  |      |         |   |      |   |         |  



See accompanying notes to
unaudited consolidated financial statements



6



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##### Table of Contents

FC BANC CORP.



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS



For the six and three
months ended June 30, 2004 and 2003



1. Basis of Presentation



In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary for a fair presentation of FC Banc Corp.s (Company or Bancorp) financial position as of June 30, 2004, and December 31, 2003, and the results of operations for the
three months ended June 30, 2004 and 2003, and the cash flows for the three months ended June 30, 2004 and 2003. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that these consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-KSB. The results of operations for the three months ended June 30, 2004, are not necessarily indicative of the results which may be expected
for the entire fiscal year.



The Company maintains a stock option plan for key
officers, employees, and non-employee directors. The Company accounts for the plan under provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Under this opinion, no compensation
expense has been recognized with respect to the plan because the exercise price of the Companys employee stock options equals the market price of the underlying stock on the grant date.



Had compensation expense for the stock option plans been recognized in accordance with the
fair value accounting provisions of FAS No. 123, Accounting for Stock-Based Compensation, net income applicable to common stock and basic and diluted net income per common share for the three months ended June 30, 2004 would have been as
follows:



|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|---------------------------------------------- |  | ---------------- | --- | ------------------ | - | ---- |  | ---- | --- |  | - | ---
|                                               |  | Six months ended |     | Three months ended
|                                               |  | 2004             |     | 2003               |   | 2004 |  | 2003
|Net earnings (In thousands)                    |  |                  |     |                    |   |      |  |      |     |  |   |    
|As reported                                    |  | $                | 401 |                    | $ | 553  |  | $    | 132 |  | $ | 273
|Less proforma expense related to stock options |  |                  | 10  |                    |   | 14   |  |      | 5   |  |   | 9  
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|Pro-forma                                      |  | $                | 391 |                    | $ | 539  |  | $    | 127 |  | $ | 264
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|Earnings per share                             |  |                  |     |                    |   |      |  |      |     |  |   |    
|Basic                                          |  |                  |     |                    |   |      |  |      |     |  |   |    
|As reported                                    |  | $                | .69 |                    | $ | .96  |  | $    | .23 |  | $ | .47
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|Pro-forma                                      |  | $                | .68 |                    | $ | .93  |  | $    | .22 |  | $ | .46
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|Diluted                                        |  |                  |     |                    |   |      |  |      |     |  |   |    
|As reported                                    |  | $                | .69 |                    | $ | .96  |  | $    | .23 |  | $ | .47
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    
|Pro-forma                                      |  | $                | .67 |                    | $ | .93  |  | $    | .22 |  | $ | .46
|                                               |  |                  |     |                    |   |      |  |      |     |  |   |    



2. Earnings Per Share



There are no convertible securities which would affect the numerator in
calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statement of Income will be used as the numerator. The following table sets forth the composition of the weighted-average common shares
(denominator) used in the basic and diluted earnings per share computation.



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##### Table of Contents

|                                    |  |                                  |  |                                    |  |         |  |        
|----------------------------------- |  | -------------------------------- |  | ---------------------------------- |  | ------- |  | -------
|                                    |  | For the six months endedJune 30, |  | For the three months endedJune 30,
|                                    |  | 2004                             |  | 2003                               |  | 2004    |  | 2003   
|Weighted-average common shares      |  |                                  |  |                                    |  |         |  |        
|outstanding (basic)                 |  | 577,852                          |  | 574,620                            |  | 579,016 |  | 574,620
|Dilutive effect of assumed exercise |  |                                  |  |                                    |  |         |  |        
|of stock options                    |  | 3,245                            |  | 2,013                              |  | 2,743   |  | 1,522  
|                                    |  |                                  |  |                                    |  |         |  |        
|Weighted-average common shares      |  |                                  |  |                                    |  |         |  |        
|outstanding (diluted)               |  | 581,098                          |  | 576,633                            |  | 581,758 |  | 576,142
|                                    |  |                                  |  |                                    |  |         |  |        



There were no options that were
anti-dilutive as of June 30, 2004. Options to purchase 14,500 shares of common stock at prices from $28.00 to $28.50 for the three and six month periods ended June 30, 2003 were not included in the computation of diluted EPS because to do so would
have been anti-dilutive.



3. Recent Accounting Pronouncements



In December 2003, the FASB issued a revision to Interpretation 46,
Consolidation of Variable Interest Entities, which established standards for identifying a variable interest entity (VIE) and for determining under what circumstances a VIE should be consolidated with its primary beneficiary. Application of this
Interpretation is required in financial statements of public entities that have interests in special-purpose entities for periods ending after December 15, 2003. Application by public entities, other than small business issuers, for all other types
of VIEs is required in financial statements for periods ending after March 15, 2004. Small business issuers must apply this Interpretation to all other types of VIEs at the end of the first reporting period ending after December 15, 2004. The
adoption of this Interpretation has not and is not expected to have a material effect on the Companys financial position or results of operations.



4. Regulatory Capital



The following Companys actual capital ratios are presented in the following table which shows the Company met all regulatory capital requirements. The capital position of the Bank does not differ significantly
from the Companys.



|                   |  |                        |        |       |                              |   |        |                                                                    |        |  |      |        |  |       |        |  |       |  
|------------------ |  | ---------------------- | ------ | ----- | ---------------------------- | - | ------ | ------------------------------------------------------------------ | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                   |  | Actual                 |        |       | For capitaladequacy purposes |   |        | To be well-  capitalized underprompt correctiveaction
provisions |       
|                   |  | Amount                 |        | Ratio |                              |   | Amount |                                                                    | Ratio  |  |      | Amount |  | Ratio |       
|                   |  | (Dollars in thousands) |       
|Risk-based capital |  | $                      | 13,844 |       | 14.35                        | % |        | 3                                                                  | $5,289 |  | 38.0 | %      |  | 3     | $6,611 |  | 310.0 | %
|                   |  |                        |        |       |                              |  
|Core capital       |  | $                      | 12,646 |       | 13.10                        | % |        | 3                                                                  | $3,861 |  | 34.0 | %      |  | 3     | $5,792 |  | 36.0  | %
|                   |  |                        |        |       |                              |  
|Tangible capital   |  | $                      | 12,646 |       | 13.10                        | % |        | 3                                                                  | $1,448 |  | 31.5 | %      |  | 3     | $4,827 |  | 35.0  | %



|5. | Employee Benefit Plans
|-- | ----------------------



Directors Retirement



The Company maintains a directors retirement plan which provides that any director with 15 years of continuous service will receive an annual retirement
benefit equal to that directors board fees in the year before retirement. The annual retirement benefit will be paid for 15 years. The plan has been amended to provide for pro rata benefits for any director who is unable to satisfy the 15
years of continuous service



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##### Table of Contents

requirement due to the mandatory directors retirement provision upon reaching 70 years of age. The
Bank has purchased individual life insurance contracts with respect to this program. The Bank is the owner and beneficiary of the insurance contracts. The expense charged to operations was $20 for each of the six month periods ended June 30, 2004
and 2003, respectively, and $10 for each of the three month periods ended June 30, 2004 and 2003, respectively.



Executive Compensation



The Company and the Bank entered into an Amended and Restated Salary Continuation Agreement dated July 10, 2001, with the former president. The former
president was dismissed on February 19, 2002. The Agreement provided that a benefit be paid for 15 years once he reaches normal retirement age of 65 if his employment is terminated before he attains the age of 65. The former president is entitled to
an early termination retirement benefit of $47,000 per year when he attains normal retirement age. The Company has recorded an accrual of $216,000 which represents the estimated present value (using a discount rate of 8 percent) of the total future
distributions. The Company has purchased an individual life insurance contract with respect to the retirement portion of this program. The Company is the owner and beneficiary of the insurance contract. The former president is a general creditor of
the Company with respect to this retirement benefit. The expense charged to operations was $10 for each of the six month periods ended June 30, 2004 and 2003, respectively, and $5 for each of the three month periods ended June 30, 2004 and 2003,
respectively.



Postretirement Benefits



The Bank sponsors a noncontributory postretirement plan providing health
care coverage. The Banks funding policy is to contribute as billed with their normal health care plan.



The aggregate expense charged to operations was $14 for each of the six month periods ended June 30, 2004 and 2003, respectively, and $7 for each of the
three month periods ended June 30, 2004 and 2003, respectively.



Postretirement expense for 2004 and 2003 includes the following components:



|                                      |  |                  |    |                    |   |      |  |      |    |  |   |   
|------------------------------------- |  | ---------------- | -- | ------------------ | - | ---- |  | ---- | -- |  | - | --
|                                      |  | Six months ended |    | Three months ended
|                                      |  | June 30,         |    | June 30,          
|                                      |  | 2004             |    | 2003               |   | 2004 |  | 2003
|Service cost                          |  | $                | 4  |                    | $ | 4    |  | $    | 2  |  | $ | 2 
|Interest cost                         |  |                  | 17 |                    |   | 17   |  |      | 8  |  |   | 8 
|Amortization of transition obligation |  |                  | 5  |                    |   | 5    |  |      | 3  |  |   | 3 
|Amortization of prior service cost    |  |                  | 8  |                    |   | 8    |  |      | 4  |  |   | 4 
|                                      |  |                  |    |                    |   |      |  |      |    |  |   |   
|Total                                 |  | $                | 34 |                    | $ | 34   |  | $    | 17 |  | $ | 17
|                                      |  |                  |    |                    |   |      |  |      |    |  |   |   

The weighted-average discount rate used in determining the accumulated postretirement benefit
obligation was 6 percent in 2004 and and 2003.



|6. | Effect of restatement
|-- | ---------------------



The consolidated retained earnings as presented for the fiscal year ended December 31, 2003, have been restated by $83,000, net of tax, to reflect the correction of an
error for the method of accounting for an indexed post-retirment benefit on the behalf of a former senior executive officer. The third-party adminstrator recently informed the Company that the banking regulatory authorities had determined that their
method of accruing for future benefits under the Plan were not in accordance with current accounting standards. The Company, in previous periods, has relied on the third-party information to accrue annual expense in relation to the Plan.



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##### Table of Contents

FC BANC CORP.



MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS



Safe Harbor Clause



This report contains certain forward-looking statements. The Company desires to take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protection of such safe harbor with respect to all such forward-looking statements. These
forward-looking statements, which are included in Managements Discussion and Analysis, describe future plans or strategies and include the Companys expectations of future financial results. The words believe,
expect, anticipate, estimate, project, and similar expressions identify forward-looking statements. The Companys ability to predict results or the effect of future plans or strategies is
inherently uncertain. Factors which could affect actual results include interest rate trends, the general economic climate in the Companys market area and the country as a whole, loan delinquency rates, and changes in federal and state
regulations. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.



|General | 
|------- | 



FC Banc Corp was established on February 1, 1994 as a bank holding company whose activities are primarily limited to holding the stock of The Farmers Citizens Bank, Bucyrus, Ohio (Bank). Farmers Citizens Bank was chartered on
October 1, 1907, and officially opened for business on January 6, 1908. Farmers Citizens Bank has provided continuous customer service to Crawford County for more than 90 years. The Bank conducts a general banking business in north central Ohio that
consists of attracting deposits from the general public and applying those funds to the origination of loans for residential, consumer and non-residential purposes. The Banks principal types of lending are in commercial real estate,
residential real estate, and consumer. The banks lending policies specify loan to value ratios low enough to minimize the risk. Another factor that minimizes the risk is our knowledge of the market area. Farmers Citizens Bank is a community bank and
this helps us in knowing our customers and market area. Also, the bank is continuously reviewing its underwriting procedures and policies. In the consumer loan area, the bank specializes in home equity loans and loans for late model cars. Usually,
the collateral held is sufficient to minimize risk. The Banks profitability is significantly dependent on net interest income. That is the difference between interest income generated from interest-earning assets (i.e., loans and investments)
and the interest expense paid on interest-bearing liabilities (i.e., customer deposits and borrowed funds). Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and interest received or
paid on these balances. The level of interest rates paid or received by the Bank can be significantly influenced by a number of environmental factors, such as governmental monetary policy, that are outside of management control.



The consolidated financial information presented herein has been prepared in conformity with
the standards of the Public Company Accounting Oversight Board (United States) (PCAOB). In preparing consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from such estimates.



The Company is subject to regulation by the Board of Governors of the Federal Reserve System,
which limits the activities in which the Company and the Bank may engage. The Bank is supervised by the State of Ohio, Division of Financial Institutions and its deposits are insured up to applicable limits under the Bank Insurance Fund
(BIF) of the Federal Deposit Insurance Corporation (FDIC). The Bank is a member of the Federal Reserve System and is subject to its supervision. The Company and the Bank must file with the U.S. Securities and Exchange
Commission, the Federal Reserve Board and Ohio Division of Financial Institutions the prescribed periodic reports containing full and accurate statements of its affairs.



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##### Table of Contents

The Bank has four banking offices located in Crawford, Morrow and Knox Counties, Ohio. The primary market area of the
Bank is North Central Ohio, which includes Crawford, Morrow, Knox and contiguous counties. The Banks main office is about 60 miles north of the state capital, Columbus, Ohio. Our Bank has various competition in all of the markets we serve. In
Bucyrus there are five other financial institutions. In each of Cardington and Fredericktown, there is one. All of our markets are within a short distance to other markets that present another dozen or so competitors. In addition, there are no less
than ten mortgage companies in each and every market we serve. In our direct markets, the Bank has approximately a 24% market share of deposits. The economy of our markets is driven by several major components: Manufacturing, retail trade,
governmental service, general service, and agricultural. Census data indicates a positive trend in our Morrow and Knox counties areas and a steady trend in Crawford County. The general economic conditions of all three of our markets is reflective of
the State of Ohio and to a certain extent our national economy. Overall, the general outlook for the national economy has shown positive signs. The local economy also reflects that of the national economic trends.



Discussion of Financial Condition Changes from December 31, 2003 to June 30, 2004



At June 30, 2004, the Corporations assets totaled $150.9 million, an
increase of $1.8 million, or 1.2%, compared to the level reported at December 31, 2003. The increase in assets was primarily comprised of a $9.6 million increase in investment securities, which was partially offset by a $8.5 million decrease in
loans receivable.



Cash and cash equivalents totaled $3.5 million at June 30,
2004, a decrease of $392,000, or 10.0%, from December 31, 2003. Investment securities totaled $57.2 million at June 30, 2004, an increase of $9.6 million, or 20.1%, from December 31, 2003, due primarily to purchases of investment securities of $14.8
million, partially offset by maturities and repayments of investment securities totaling $5.2 million.



Loans receivable totaled $77.4 million at June 30, 2004, a decrease of $8.5 million, or 9.9%, from December 31, 2003 levels. The decrease was due primarily to the sale of $12.0 million in long-term fixed rate loans.
The allowance for loan losses totaled $1.0 million at June 30, 2004, as compared to $1.2 million at December 31, 2003.



Deposit liabilities totaled $100.7 million at June 30, 2004, a decrease of $1.8 million, or 1.7%, compared to December 31, 2003 levels. The decrease was due primarily to
managements decision to refrain from pricing deposits at the upper end of the competitive market place.



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##### Table of Contents

FC BANC CORP.



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (CONTINUED)



Discussion of Financial Condition Changes from June 30, 2003 to June 30, 2004 (continued)



Stockholders equity totaled $12.7 million at June 30, 2004, a decrease of $551,000, or 4.1%, over December 31, 2003 levels. The
decrease resulted primarily from $703,000 decrease in the unrealized gain (loss) on investments available for sale, cash dividends of $219,000, and the purchase of 905 shares of treasury stock at an aggregate price of $28,000, which were partially
offset by the proceeds from exercise of stock options totaling $104,000 and net earnings of $401,000.



The Banks liquidity, primarily represented by cash and cash equivalents, is a result of its operating, investing and financing activities. Principal sources of funds are deposits, loan and mortgage-backed
security repayments, maturities of securities and other funds provided by operations. The Bank also has the ability to borrow from the Federal Home Bank of Cincinnati (FHLB) as well as the Federal Reserve Bank of Cleveland
(FRB or Fed). While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan and mortgage-backed security prepayments are more influenced by interest rates, general economic
conditions and competition. The Bank maintains investments in liquid assets based upon managements assessment of (i) the need for funds, (ii) expected deposit flows, (iii) the yields available on short-term liquid assets and (iv) the
objectives of the asset/liability management program. In the ordinary course of business, part of such liquid investments is composed of deposits at correspondent banks. Although the amount on deposit at such banks often exceeds the $100,000 limit
covered by FDIC insurance, the Bank monitors the capital and financial condition of such institutions to ensure that such deposits do not expose the Bank to undue risk of loss.



The Asset/Liability Management Committee of the Company is responsible for liquidity management. This committee, which is comprised of
various managers, has an Asset/Liability Policy that covers all assets and liabilities, as well as off-balance sheet items that are potential sources and uses of liquidity. The Companys liquidity management objective is to maintain the ability
to meet commitments to fund loans and to purchase securities, as well as to repay deposits and other liabilities in accordance with their terms. The Companys overall approach to liquidity management is to ensure that sources of liquidity are
sufficient in amounts and diversity to accommodate changes in loan demand and deposit fluctuations without a material adverse impact on net income. The Committee monitors the Companys liquidity needs on an ongoing basis. Currently the Company
has several sources available for both short- and long-term liquidity needs. These include, but are not restricted to advances from the FHLB, Federal Funds and borrowings from the Fed and other correspondent banks.



The Bank is subject to various regulatory capital requirements administered by its primary
federal regulator, the FRB. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material affect on the Company and the consolidated
financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Banks capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgements by the
regulators about components, risk-weighing, and other factors.



Qualitative
measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum amounts and ratios of: total risk-based capital and Tier I capital to risk-weighted assets (as defined by the regulations), and Tier I capital to
average assets (as defined). Management believes, as of June 30, 2003, that the Bank meets all of the capital adequacy requirements to which it is subject.



As of December 31, 2003, the most recent notification from the FDIC, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective
action. To remain categorized as well capitalized, the Bank will



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##### Table of Contents

have to maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as specified by the regulators.
There are no conditions or events since the most recent notification that management believes have changed the Banks prompt corrective action category.



Comparison of Operating Results for the Six Month Periods Ended June 30, 2004 and 2003



General



The Corporations net earnings totaled $401,000 for the six months ended June 30, 2004, a decrease of $152,000, or 27.5%, compared to the $553,000 of net earnings
reported for the same period in 2003. The decrease in earnings resulted primarily from a $98,000, or 2.1% decrease in other income, coupled with a $116,000, or 5.3% increase in general, administrative and other expense, which were partially offset
by a $40,000, or 21.7% decrease in legal and professional fees and a $109,000 decrease in the provision for federal income taxes.



Net Interest Income



Interest income on loans decreased by $71,000, or 2.8%, during the six months ended June 30, 2004, compared to the 2003 period, due primarily to the sale of $12.0 million in real estate loans during first quarter
2004. The sale was completed in an effort to improve the Banks interest rate risk in the face of the projected rising interest rate environment. The loan sale proceeds were redeployed as investment securities with decreased yields and shorter
durations. Interest income on investment securities and interest-bearing deposits decreased by $46,000, or 4.3%, due to a decrease in the average yield period to period, partially offset an increase in the average portfolio balance outstanding.



Interest expense on deposits decreased by $64,000, or 4.3%, during the six
months ended June 30, 2004, compared to the 2003 period, due primarily to a decrease in the average cost of deposits year to year, to 1.65% in the 2004 period, coupled with a decrease in the average balance of deposits outstanding. The cost of
borrowings decreased $6,000 compared to the 2003 period, primarily due to a decrease in the average balance of Federal Home Loan Bank Advances outstanding.



As a result of the foregoing changes in interest income and interest expense, net interest income decreased by $47,000, or 2.1%, to a total of $2.2 million for the six
months ended June 30, 2004.



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##### Table of Contents

FC BANC CORP.



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (CONTINUED)



Comparison of Operating Results for the Nine Month Periods Ended June 30, 2004 and 2003 (continued)



Provision for Losses on Loans



A provision for losses on loans is charged to earnings to bring the total allowance for loan losses to a level considered appropriate by management based upon an analysis
of historical experience, the volume and type of lending conducted by the Bank, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to the Banks market area, and other
factors related to the collectibility of the Banks loan portfolio. As a result of such analysis, management recorded a $50,000 provision for losses on loans during the six month period ended June 30, 2004, compared to $50,000 in the comparable
2003 period. The current period provision was predicated primarily upon managements ongoing assessment as to changes in the mix of assets in the nonperforming loan portfolio. There can be no assurance that the loan loss allowance of the Bank
will be adequate to cover losses on nonperforming loans in the future.



Other Income



Other income totaled $571,000 for the six months
ended June 30, 2004, a decrease of $98,000, or 14.6%, compared to the same period in 2003. The decrease was due primarily to the a $97,000 non-recurring gain on sale of property during the 2003 period, partially offset by a $42,000 increase on gain
on sale of loans and a $10,000, or 15.6% increase in bank owned life insurance earnings. The $97,000 non-recurring gain on the sale of property was the result of the sale of a branch facility that was no longer in service.



General, Administrative and Other Expense



General, administrative and other expense totaled $2.3 million for the six months ended June
30, 2004, an increase of $116,000, or 5.3%, compared to the same period in 2003. This increase resulted primarily from a $45,000, or 4.3%, increase in employee compensation and benefits coupled with a $248,000, or 69.3%, increase in other operating
expenses, which were partially offset by a $40,000, or 21.7% decrease in legal and professional fees. The increase in employee compensation and benefits was due primarily to decreased deferred loan cost credit activity, the costs for hiring
additional staffing, and normal merit increases year to year. The increase in other operating expense resulted primarily due to changes in the Banks computer operations and technology plans as the Bank has shifted to outsource all item
processing arrangements.



Federal Income Taxes



The provision for federal income taxes decreased by $109,000 for the six months ended June
30, 2004, primarily as a result of increased tax exempt income during the current year.



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##### Table of Contents

FC BANC CORP.



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (CONTINUED)



Comparison of Operating Results for the Three Month Periods Ended June 30, 2004 and 2003



General



The Corporations net earnings totaled $132,000 for the three months ended June 30, 2004, a decrease of $141,000, or 51.6%, compared to the $273,000 of net earnings
reported for the same period in 2003. The decrease in earnings resulted primarily from a $155,000, or 14.9% increase in general, administrative and other expense, coupled with a $51,000 decrease in other income, which were partially offset by a
$76,000 decrease in the provision for federal income taxes.



Net Interest
Income



Interest income on loans decreased by $64,000, or 5.1%, during the
three months ended June 30, 2004, compared to the 2003 period, due primarily to a decrease in the average yield period to period. The Banks loan portfolio decreased as a result of the loan sale activity as previously discussed. Interest income
on investment securities and interest-bearing deposits increased by $1,000, as the decrease in the average yield period to period was partially offset by the increase in the average portfolio balance outstanding.



Interest expense on deposits decreased by $31,000, or 6.8%, during the three months ended
June 30, 2004, compared to the 2003 period, due primarily to a decrease in the average cost of deposits year to year. Interest expense on borrowings increased by $21,000, or 8.3%, due to a decrease in the average balance of Federal Home Loan Bank
advances outstanding.



As a result of the foregoing changes in interest income
and interest expense, net interest income decreased by $11,000, or 1.0%, to a total of $1.1 million for the three months ended June 30, 2004.



Provision for Losses on Loans



A provision for losses on loans is charged to earnings to bring the total allowance for loan losses to a level considered appropriate by management based upon an analysis
of historical experience, the volume and type of lending conducted by the Bank, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to the Banks market area, and other
factors related to the collectibility of the Banks loan portfolio. As a result of such analysis, management recorded a $50,000 provision for losses on loans during the three month period ended June 30, 2004, compared to $50,000 in the
comparable 2003 period. The current period provision was predicated primarily upon managements ongoing assessment as to changes in the mix of assets in the nonperforming loan portfolio. There can be no assurance that the loan loss allowance of
the Bank will be adequate to cover losses on nonperforming loans in the future.



Other Income



Other income totaled $296,000 for the three
months ended June 30, 2004, a decrease of $51,000, or 14.7%, compared to the same period in 2003. The decrease was due primarily to the a $97,000 non-recurring gain on sale of property during the 2003 period, partially offset by a $25,000 increase
on gain on sale of loans and a $21,000, or 9.6% increase in bank owned life insurance earnings. The $97,000 non-recurring gain on the sale of property was the result of the sale of a branch facility that was no longer in service.



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##### Table of Contents

FC BANC CORP.



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (CONTINUED)



Comparison of Operating Results for the Three Month Periods Ended June 30, 2004 and 2003 (continued)



General, Administrative and Other Expense



General, administrative and other expense totaled $1.2 million for the three months ended June 30, 2004, an increase of $155,000, or 14.9%, compared to the same period
in 2003. This increase resulted primarily from a $59,000, or 23.4%, increase in other operating expenses coupled with a $109,000 or 23.9% increase in employee compensation and benefits, which were partially offset by a $13,000, or 12.7%, decrease in
legal and professional fees and a $6,000, or 3.1% decrease in occupancy and equipment expense. The increase in other operating expense resulted primarily from costs associated with changes in the Banks computer and technology plans year to
year. The increase in employee compensation and benefits was due primarily to decreased deferred loan lost credit activity, additional staffing, and normal merit increases year to year. The increase in other operating expense resulted primarily due
to changes in the Banks computer operations and technology plans as the Bank has shifted to outsource all item processing arrangements.



Federal Income Taxes



The provision for federal income taxes decreased by $76,000 for the three months ended June 30, 2004, primarily as a result of increased tax exempt income during the current year.



Credit Quality Risk



The following table identifies amounts of loan losses and non-performing loans. Past due loans are those that were contractually past due 90
days or more as to interest or principal payments (dollars in thousands).



|                                                                  |  |               |     |   |                   |   |     |  
|----------------------------------------------------------------- |  | ------------- | --- | - | ----------------- | - | --- | -
|                                                                  |  | June 30, 2004 |     |   | December 31, 2003 |  
|Non-accruing loans                                                |  | $             | 442 |   |                   | $ | 191 |  
|Impaired loans                                                    |  |               |    |   |                   |   |    |  
|Accrual loans  90 days or more past due                          |  |               | 135 |   |                   |   | 8   |  
|                                                                  |  |               |     |   |                   |   |     |  
|                                                                  |  |              
|Total non-performing loans                                        |  |               | 577 |   |                   |   | 199 |  
|                                                                  |  |              
|Foreclosed assets held for sale                                   |  |               |    |   |                   |   |    |  
|                                                                  |  |               |     |   |                   |   |     |  
|                                                                  |  |              
|Total non-performing assets                                       |  |               | 577 |   |                   |   | 199 |  
|                                                                  |  |               |     |   |                   |   |     |  
|                                                                  |  |              
|Non-performing loans as a percent of loans net of unearned income |  |               | .75 | % |                   |   | .23 | %
|                                                                  |  |              
|Non-performing loans as a percent of assets                       |  |               | .38 | % |                   |   | .13 | %



A loan is placed on non-accrual when
payment terms have been seriously violated (principal and/or interest payments are 90 days or more past due, deterioration of the borrowers ability to repay, or significant decrease in value of the underlying loan collateral) and stays on
non-accrual until the loan is brought current as to principal and interest. The classification of a loan or other asset as non-accruing does not indicate that loan principal and interest will not be collectible. The Bank adheres to the policy of the
Federal Reserve that banks may not accrue interest on any loan when the principal or interest is past due and has remained unpaid for 90 days or more unless the loan is both well secured and in the process of collection



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##### Table of Contents

ITEM 3 CONTROLS AND PROCEDURES



The Company
carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures as of June 30, 2004, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls
and procedures were effective as of June 30, 2004, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings.



There was no change in the Companys internal control over financial reporting that
occurred during the Companys fiscal quarter ended June 30, 2004, that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

FC BANC CORP.



PART II



ITEM 1. Legal Proceedings



Not
applicable



ITEM 2. Changes in Securities, Use of Proceeds, and Small Business Issuer Purchases of Equity Securities



The following tabular format provides the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the
issuer or any affiliated purchaser, as defined in § 240.10b-18(a)(3) of this chapter, of shares or other units of any class of the issuers equity securities that is registered by the issuer pursuant to section 12 of the
Exchange Act.



ISSUER PURCHASES OF EQUITY SECURITIES



|                               |  |                                                 |  |                                            |  |                                                                                                 |  |                                                                                                                        
|------------------------------ |  | ----------------------------------------------- |  | ------------------------------------------ |  | ----------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|Period                         |  | (a) Total Number of Shares (or Units) Purchased |  | (b) Average Price Paid per Share (or Unit) |  | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |  | (d) Maximum Number (or Approximate DollarValue) of Shares (orUnits) that May Yet BePurchased Under thePlans or Programs
|April 1, 2004  April 30, 2004 |  | 152                                             |  | $29                                        |  | 0                                                                                               |  | 0                                                                                                                      
|                               |  |                                                 |  |                                           
|May 1, 2004  May 31, 2004     |  | 0                                               |  | 0                                          |  | 0                                                                                               |  | 0                                                                                                                      
|                               |  |                                                 |  |                                           
|June 1, 2004  June 30, 2004   |  | 368                                             |  | $31                                        |  | 0                                                                                               |  | 0                                                                                                                      
|                               |  |                                                 |  |                                           
|Total                          |  | 520                                             |  | $29                                        |  | 0                                                                                               |  | 0                                                                                                                      



All 520 common shares
were repurchased pursuant to private transactions with shareholders.



ITEM 3. Defaults Upon Senior Securities



Not applicable



|ITEM | 4. Submission of Matters to a Vote of Security Holders
|---- | ------------------------------------------------------



On April 28, 2004, the Corporation held its Annual Meeting of Shareholders.



The following matters were submitted to the shareholders, for which the following votes were cast:



| | 1. | Each of the following three directors nominated were elected to terms of three (3) years expiring in 2007 by the following votes:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------



|                  |  |              |  |                 
|----------------- |  | ------------ |  | ----------------
|John R. Christman |  | For: 418,119 |  | Withheld: 30,210
|                  |  |             
|Terry L. Gernert  |  | For: 419,312 |  | Withheld: 29,017
|                  |  |             
|John O. Spreng Jr |  | For: 434,951 |  | Withheld: 13,378



ITEM 5. Other Information



Not
applicable



ITEM 6. Exhibits and Reports on Form 8-K



Reports on Form 8-K: None.



|          |  |                                                                                                                                         
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibits: |  |                                                                                                                                         
|31.1      |  | Written Statement of Chief Executive Officer furnished Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350
|          | 
|31.2      |  | Written Statement of Chief Financial Officer furnished Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350
|          | 
|32.1      |  | Written Statement of Chief Executive Officer furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350
|          | 
|32.2      |  | Written Statement of Chief Financial Officer furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350



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##### Table of Contents

Exhibit 3.1 Amended and Restated Articles of Incorporation of FC Banc Corp., filed as Exhibit 3 to Form 10-KSB for
the fiscal year ended December 31, 2000 and incorporated herein by reference.



Exhibit 3.2 Code of regulations of FC Banc Corp., filed as Exhibit 3 to Form 10-KSB for the fiscal year ended December 31, 2000 and incorporated herein by reference.



Exhibit 4 For definition of rights of security holders please refer to Exhibit 3 on Form 10-KSB for the fiscal year ended December
31, 2000 and incorporated herein by reference.



Exhibit 10.1 Employment
Agreement dated November 19,2002, for John R. Christman, President of Company and Chief Executive Officer of Bank, filed as Exhibit 10 to Form 10-KSB for the fiscal year ended December 31, 2002 and incorporated herein by reference.



Exhibit 10.2 The FC Banc Corp 1997 Stock Option Plan is incorporated herein by
reference to the registrants proxy statement filed March 29, 2004 with the United States Securities and Exchange Commission.



Exhibit 10.3 Change of Control Agreement dated March 1, 2003, for Anne K. Spreng Ferris, Vice President of the Bank, filed as Exhibit 10.3 to Form 10-QSB for the
quarter ended March 31, 2003 and incorporated herein by reference.



Exhibit
10.4 Amended and Restated Farmers Citizens Bank Director Retirement Agreements, filed as Exhibits 10.5 through 10.11 to the registrants 10-KSB for the fiscal year ended December 31, 2000 and incorporated herein by reference.



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##### Table of Contents

FC BANC CORP.



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.



|                      |  |     |  |                        
|--------------------- |  | --- |  | -----------------------
|Date: August 13, 2004 |  | By: |  | /s/ John R. Christman  
|                      |  |     |  | John R. Christman      
|                      |  |     |  | President and Chief    
|                      |  |     |  | Executive Officer      
|                      |  |    
|Date: August 13, 2004 |  | By: |  | /s/ Robert W. Siegel   
|                      |  |     |  | Robert W. Siegel       
|                      |  |     |  | Vice President,        
|                      |  |     |  | Chief Financial Officer



20