<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
                                       or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
For the transition period from                    to
                               -------------------  ----------------------------

                        Commission File Number: 0-23636

                       EXCHANGE NATIONAL BANCSHARES, INC.
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)

            MISSOURI                                   43-1626350
---------------------------------                  --------------------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification No.)


             132 EAST HIGH STREET, JEFFERSON CITY, MISSOURI 65101
             ----------------------------------------------------
             (Address of principal executive offices)     (Zip Code)

                                 (573) 761-6100
   --------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



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

         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. [X] Yes [ ] No

         As of May 1, 2002, the registrant had 2,834,145 shares of common stock,
par value $1.00 per share, outstanding.

                               Page 1 of 27 pages
                      Index to Exhibits located on page 27




                                       1
<PAGE>



                         PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                         MARCH 31, 2002              DECEMBER 31, 2001
                                                                   -------------------------     -------------------------
<S>                                                                            <C>                           <C>
ASSETS
Loans:
   Commercial                                                                  $ 140,107,299                 $ 137,235,054
   Real estate - construction                                                     26,425,000                    25,820,000
   Real estate - mortgage                                                        253,571,941                   254,324,049
   Consumer                                                                       45,672,778                    46,984,529
                                                                   -------------------------     -------------------------
                                                                                 465,777,018                   464,363,632
   Less allowance for loan losses                                                  6,850,251                     6,673,586
                                                                   -------------------------     -------------------------
        Loans, net                                                               458,926,767                   457,690,046
Investment in debt and equity securities:
   Available-for-sale, at fair value                                             180,203,370                   181,649,054

Federal funds sold                                                                62,399,848                    54,481,931
Cash and due from banks                                                           20,097,490                    31,127,216
Premises and equipment                                                            15,788,285                    15,193,390
Accrued interest receivable                                                        5,659,550                     6,019,680
Goodwill                                                                          23,407,734                    23,407,734
Intangible assets                                                                  1,079,150                     1,153,820
Other assets                                                                       5,487,786                     5,102,465
                                                                   -------------------------     -------------------------
Total assets                                                                   $ 773,049,980                 $ 775,825,336
                                                                   =========================     =========================
</TABLE>


Continued on next page



                                       2
<PAGE>


               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                         MARCH 31, 2002              DECEMBER 31, 2001
                                                                   -------------------------     -------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                            <C>                           <C>
Demand deposits                                                                $  68,955,032                 $  78,637,109
Time deposits                                                                    501,501,696                   501,157,081
                                                                   -------------------------     -------------------------
        Total deposits                                                           570,456,728                   579,794,190
Federal funds purchased and
   securities sold under agreements to repurchase                                 66,567,384                    61,644,544
Interest-bearing demand notes to U.S. Treasury                                     1,913,883                       388,122
Other borrowed money                                                              42,804,202                    43,137,614
Accrued interest payable                                                           2,659,494                     3,059,714
Other liabilities                                                                  9,338,588                     9,448,504
                                                                   -------------------------     -------------------------
        Total liabilities                                                        693,740,279                   697,472,688
                                                                   -------------------------     -------------------------

Stockholders' equity:
   Common stock - $1 par value; 15,000,000 shares
      authorized; 2,863,493 issued and outstanding                                 2,863,493                     2,863,493
   Surplus                                                                        21,985,575                    21,970,425
   Retained earnings                                                              54,174,033                    52,783,864
   Accumulated other comprehensive income                                          1,094,006                     1,542,272
   Treasury stock, 29,348 shares at cost                                            (807,406)                     (807,406)
                                                                   -------------------------     -------------------------
        Total stockholders' equity                                                79,309,701                    78,352,648
                                                                   -------------------------     -------------------------
Total liabilities and stockholders' equity                                     $ 773,049,980                 $ 775,825,336
                                                                   =========================     =========================
</TABLE>



See accompanying notes to unaudited condensed consolidated financial statements.





                                      3
<PAGE>


               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                           THREE MONTHS ENDED
                                                                                                 MARCH 31,
                                                                                     2002                          2001
<S>                                                                             <C>                           <C>
Interest income                                                                 $ 10,293,328                  $ 13,252,930

Interest expense                                                                   4,388,398                     7,323,740
                                                                   -------------------------     -------------------------

Net interest income                                                                5,904,930                     5,929,190

Provision for loan losses                                                            234,000                       248,000
                                                                   -------------------------     -------------------------

Net interest income after provision for loan losses                                5,670,930                     5,681,190

Noninterest income                                                                 1,304,600                     1,092,238

Noninterest expense                                                                4,220,710                     4,125,723
                                                                   -------------------------     -------------------------

Income before income taxes                                                         2,754,820                     2,647,705

Income taxes                                                                         826,164                       886,258
                                                                   -------------------------     -------------------------

Net income                                                                        $1,928,656                    $1,761,447
                                                                   =========================     =========================

Basic earnings per share                                                               $0.68                         $0.62
                                                                                       =====                         =====
Diluted earnings per share                                                             $0.68                         $0.62
                                                                                       =====                         =====

Weighted average shares of
    common stock outstanding
        Basic                                                                      2,834,145                     2,863,493
        Diluted                                                                    2,837,604                     2,863,493

Dividends per share:
     Declared                                                                          $0.19                         $0.19
                                                                                       =====                         =====

     Paid                                                                              $0.19                         $0.19
                                                                                       =====                         =====
</TABLE>


           See accompanying notes to unaudited condensed consolidated
                             financial statements.



                                       4
<PAGE>


               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED MARCH 31,
                                                                        --------------------------------------
                                                                           2002                       2001
                                                                        ------------             -------------
<S>                                                                     <C>                      <C>
Cash flows from operating activities:
Net income                                                              $  1,928,656             $  1,761,447
   Adjustments to reconcile net income to net
      cash provided by operating activities:
        Provision for loan losses                                            234,000                  248,000
        Depreciation expense                                                 292,568                  320,966
        Net amortization (accretion) of debt securities
           premiums and discounts                                            206,213                 (471,673)
        Amortization of intangible assets                                     74,670                  375,977
        Decrease in accrued interest receivable                              360,130                  638,140
        Increase in other assets                                            (191,556)                (464,534)
        (Decrease) increase in accrued interest payable                     (400,220)                 235,490
        (Decrease) increase in other liabilities                            (109,916)                 831,716
       Other, net                                                             15,153                    6,122
   Origination of mortgage loans for sale                                (22,471,951)             (16,586,431)
   Proceeds from the sale of mortgage loans
      held for sale                                                       22,769,528               16,820,943
   Gain on sale of mortgage loans                                           (297,577)                (234,512)
   Loss (gain) on dispositions of premises and equipment                         298                  (18,021)
                                                                        ------------             ------------
        Net cash provided by operating activities                          2,409,996                3,463,630
                                                                        ------------             ------------
Cash flows from investing activities:
   Net (increase) decrease in loans                                       (1,582,236)               4,540,266
   Purchases of available-for-sale debt securities                       (26,091,373)             (41,173,429)
   Proceeds from maturities of available-for-sale
      debt securities                                                     15,516,654               27,745,000
   Proceeds from calls of available-for-sale debt securities              11,135,000               11,995,420
   Purchases of premises and equipment                                      (887,762)                (599,157)
   Proceeds from dispositions of premises
      and equipment                                                              --                 1,374,313
   Proceeds from sales of other real estate
      owned and repossessions                                                148,672                  229,650
                                                                        ------------             ------------
        Net cash (used) provided in investing activities                  (1,761,045)               4,112,063
                                                                        ------------             ------------
</TABLE>

Continued on next page


                                       5
<PAGE>


               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
                                                                                   MARCH 31,
                                                                      ------------------------------------
                                                                         2002                    2001
                                                                      -----------              -----------
<S>                                                                   <C>                      <C>
Cash flows from financing activities:
   Net decrease in demand deposits                                    (9,682,077)              (5,489,949)
   Net (decrease) increase in interest-bearing
      transaction accounts                                            (3,960,278)               5,702,322
   Net increase in time deposits                                       4,304,893                1,760,872
   Net increase in federal funds purchased and
      securities sold under agreements to repurchase                   4,922,840               16,427,373
   Net increase (decrease) in interest-bearing
      demand notes to U.S. Treasury                                    1,525,761                 (298,730)
    Repayment of Federal Home Loan Bank
       borrowings                                                       (333,412)                (734,357)
   Repayment of other borrowed money                                        --                 (1,000,000)
   Cash dividends paid                                                  (538,487)                (544,063)
                                                                    ------------             ------------
        Net cash (used) provided in financing activities              (3,760,760)              15,823,468
                                                                    ------------             ------------

Net (decrease) increase in cash and cash equivalents                  (3,111,809)              23,399,161
                                                                    ------------             ------------
Cash and cash equivalents, beginning of period                        85,609,147               48,924,481
                                                                    ------------             ------------

Cash and cash equivalents, end of period                            $ 82,497,338             $ 72,323,642
                                                                    ============             ============

Supplemental disclosure of cash flow information-
   Cash paid (received) during period for:
      Interest                                                      $  4,788,618             $  7,156,952
      Income taxes                                                          --                   (139,380)
Supplemental schedule of noncash
   investing activities-
      Other real estate and repossessions
         acquired in settlement of loans                                 111,515                  221,728
      Transfer of securities from held-to-maturity
          to available-for-sale                                             --                 22,675,700



</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements.

                                       6
<PAGE>
               EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                   Three Months Ended March 31, 2002 and 2001

         Exchange National Bancshares, Inc. ("Bancshares" or the "Company") is a
bank holding company registered under the Bank Holding Company Act of 1956.
Bancshares' activities currently are limited to ownership of the outstanding
capital stock of The Exchange National Bank of Jefferson City (ENB), Union State
Bancshares, Inc. (Union), which owns 100% of Citizens Union State Bank and Trust
of Clinton (CUSB), and Mid Central Bancorp, Inc. (Mid Central), which owns 100%
of Osage Valley Bank of Warsaw (OVB). Bancshares acquired ENB on April 7, 1993,
Union on November 3, 1997 and Mid Central on January 3, 2000. In addition,
Bancshares acquired Calhoun Bancshares, Inc. (Calhoun) and its wholly owned
subsidiary, Citizens State Bank of Calhoun on May 4, 2000. Immediately upon
acquisition, Calhoun Bancshares, Inc. was dissolved and Citizens State Bank was
merged with Union State Bank and Trust with the surviving institution being
renamed Citizens Union State Bank and Trust of Clinton (CUSB). On June 16, 2000
Bancshares acquired CNS Bancorp, Inc. (CNS) and its wholly owned subsidiary,
City National Savings Bank, FSB. Immediately upon acquisition, CNS Bancorp, Inc.
was dissolved and City National Savings Bank, FSB was merged with ENB. All
acquisitions were accounted for as purchase transactions.

         The accompanying unaudited condensed consolidated financial statements
include all adjustments that in the opinion of management are necessary in order
to make those statements not misleading. Certain amounts in the 2001 condensed
consolidated financial statements have been reclassified to conform to the 2002
condensed consolidated presentation. Such reclassifications have no effect on
previously reported net income or stockholders' equity. Operating results for
the period ended March 31, 2002 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2002.

         It is suggested that these unaudited condensed consolidated interim
financial statements be read in conjunction with Bancshares's audited
consolidated financial statements included in its 2001 Annual Report to
Shareholders under the caption "Consolidated Financial Statements" and
incorporated by reference into its Annual Report on Form 10-K for the year ended
December 31, 2001 as Exhibit 13.

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United State of America have been condensed and
omitted. Bancshares believes that these financial statements contain all
adjustments (consisting of normal recurring accruals) necessary to present
fairly Bancshares' consolidated financial position as of March 31, 2002 and
December 31, 2001 and the consolidated statements of earnings and cash flows for
the three months ended March 31, 2002 and 2001.


                                       7
<PAGE>

         The following table reflects, for the three months periods ended March
31, 2002 and 2001, the numerators (net income) and denominators (average shares
outstanding) for the basic and diluted net income per share computations:

<TABLE>
<CAPTION>
                                                                                              THREE MONTHS ENDED
                                                                                                   MARCH 31,
                                                                                  ----------------------------------------
                                                                                     2002                          2001
                                                                                  ----------                    ----------
<S>                                                                               <C>                           <C>
              Net income, basic and diluted                                       $1,928,656                    $1,761,447
              Average shares outstanding                                           2,834,145                     2,863,493
              Effect of dilutive stock options                                         3,459                            --
              Average shares outstanding
                                                                                  ----------                    ----------
                   Including dilutive stock options                                2,837,604                     2,863,493
              Net income per share, basic                                              $0.68                         $0.62
                                                                                  ==========                    ==========
              Net income per share, diluted                                            $0.68                         $0.62
                                                                                  ==========                    ==========
</TABLE>


         For the three-month periods ended March 31, 2002 and 2001, unrealized
holding gains and losses on investments in debt and equity securities
available-for-sale were Bancshares' only other comprehensive income component.
Comprehensive income for the three-month periods ended March 31, 2002 and 2001
is summarized as follows:

<TABLE>
<CAPTION>

                                                                                         THREE MONTHS ENDED
                                                                                               MARCH 31,
                                                                                ----------------------------------------
                                                                                   2002                          2001
                                                                                ----------                    ----------
<S>                                                                             <C>                           <C>
Net income                                                                      $1,928,656                    $1,761,447
      Other comprehensive (loss) income:
         Net unrealized holding (losses) gains on
            investments in debt and equity securities
            available-for-sale, net of taxes                                      (448,266)                    1,118,642
                                                                                ----------                    ----------
         Total other comprehensive (loss) income                                  (448,266)                    1,118,642
                                                                                ----------                    ----------
Comprehensive income                                                            $1,480,390                    $2,880,089
                                                                                ==========                    ==========

</TABLE>



                                       8
<PAGE>



         Through the respective branch network, ENB, CUSB and OVB provide
similar products and services in three defined geographic areas. The products
and services offered include a broad range of commercial and personal banking
services, including certificates of deposit, individual retirement and other
time deposit accounts, checking and other demand deposit accounts, interest
checking accounts, savings accounts and money market accounts. Loans include
real estate, commercial, installment and other consumer loans. Other financial
services include automatic teller machines, trust services, credit related
insurance, and safe deposit boxes. The revenues generated by each business
segment consist primarily of interest income, generated from the loan and debt
and equity security portfolios, and service charges and fees, generated from the
deposit products and services. The geographic areas are defined to be
communities surrounding Jefferson City, Clinton and Warsaw, Missouri. The
products and services offered to customers primarily within their respective
geographical areas. The business segments results that follow are consistent
with Bancshares's internal reporting system which is consistent, in all material
respects, with accounting principles generally accepted in the United States of
America and practices prevalent in the banking industry.

<TABLE>
<CAPTION>

                                                                            MARCH 31, 2002


                                                              CITIZENS            OSAGE
                                       THE EXCHANGE         UNION STATE        VALLEY BANK
                                     NATIONAL BANK OF         BANK AND             OF
                                      JEFFERSON CITY          TRUST OF           WARSAW           CORPORATE
                                                              CLINTON                             AND OTHER             TOTAL
                                     ------------------    ---------------    --------------    ---------------    ----------------
<S>                                       <C>                 <C>               <C>                 <C>               <C>
Balance sheet information:
   Loans, net of allowance
      for loan losses                    $305,444,650        $115,669,264      $37,812,853               ----        $458,926,767
   Debt and equity securities             102,316,882          50,065,613       27,820,875               ----         180,203,370
   Goodwill                                 4,382,098          14,912,760        4,112,876               ----          23,407,734
   Intangible assets                             ----             841,650             ----             237,500          1,079,150
   Total assets                           460,845,625         237,271,049       74,916,899              16,407        773,049,980
   Deposits                               328,501,516         187,062,724       60,691,268          (5,798,780)       570,456,728
   Stockholders' equity                    48,348,743          35,265,530        9,274,658         (13,579,230)        79,309,701
                                     ==================    ===============    ==============    ===============   ================
</TABLE>


<TABLE>
<CAPTION>
                                                                           DECEMBER 31, 2001


                                                              CITIZENS            OSAGE
                                       THE EXCHANGE         UNION STATE        VALLEY BANK
                                     NATIONAL BANK OF         BANK AND             OF
                                      JEFFERSON CITY          TRUST OF           WARSAW           CORPORATE
                                                              CLINTON                             AND OTHER             TOTAL
                                     ------------------    ---------------    --------------    ---------------    ----------------
<S>                                       <C>                 <C>               <C>                <C>                <C>
 Balance sheet information:
   Loans, net of allowance
      for loan losses                    $301,142,563        $118,802,018      $37,745,465               ----        $457,690,046
   Debt and equity securities             103,947,535          47,964,827       29,736,692               ----         181,649,054
   Goodwill                                 4,382,098          14,912,760        4,112,876               ----          23,407,734
   Intangible assets                             ----             878,820             ----            275,000           1,153,820
   Total assets                           458,792,287         241,965,161       76,326,052         (1,258,164)        775,825,336
   Deposits                               332,433,328         191,926,170       61,984,563         (6,549,871)        579,794,190
   Stockholders' equity                    48,018,123          34,899,318        9,219,276        (13,784,069)         78,352,648
                                     ==================    ===============    ==============    ===============    ================
</TABLE>


                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED MARCH 31, 2002

                                                            CITIZENS            OSAGE
                                      THE EXCHANGE           UNION           VALLEY BANK
                                     NATIONAL BANK         STATE BANK            OF
                                      OF JEFFERSON         AND TRUST           WARSAW            CORPORATE
                                          CITY                 OF                                AND OTHER           TOTAL
                                                            CLINTON
                                    -----------------    ---------------    --------------     --------------    ---------------
<S>                                       <C>                <C>                 <C>               <C>               <C>
Statement of earnings:
   Total interest income                $ 6,152,237        $ 3,025,081        $1,116,010               ----       $10,293,328
   Total interest expense                 2,360,702          1,262,455           500,221            265,020         4,388,398
                                    -----------------    ---------------    --------------     --------------    ---------------
   Net interest income                    3,791,535          1,762,626           615,789           (265,020)         5,904,930
   Provision for loan losses                150,000             75,000             9,000               ----            234,000
   Noninterest income                       965,399            283,580            55,621               ----          1,304,600
   Noninterest expense                    2,470,097          1,283,319           343,340            123,954          4,220,710
   Income taxes                             671,150            189,791            97,523           (132,300)           826,164
                                    -----------------  ---------------    --------------     --------------    ---------------
   Net income (loss)                      1,465,687            498,096           221,547           (256,674)         1,928,656
                                    =================  ===============    ==============     ==============    ===============
</TABLE>

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED MARCH 31, 2001

                                                            CITIZENS            OSAGE
                                      THE EXCHANGE        UNION STATE        VALLEY BANK
                                     NATIONAL BANK          BANK AND             OF
                                      OF JEFFERSON          TRUST OF           WARSAW            CORPORATE
                                          CITY              CLINTON                              AND OTHER           TOTAL
                                    -----------------    ---------------    --------------     --------------    ---------------
<S>                                       <C>                  <C>                <C>              <C>               <C>
Statement of earnings:
   Total interest income                $ 7,822,664        $ 4,009,931        $ 1,414,625             5,710        $13,252,930
   Total interest expense                 4,118,607          2,229,208            622,323           353,602          7,323,740
                                    -----------------  ---------------     --------------     --------------    ---------------
   Net interest income                    3,704,057          1,780,723            792,302          (347,892)         5,929,190
   Provision for loan losses                150,000             75,000             23,000              ----            248,000
   Noninterest income                       854,358            186,868             51,012              ----          1,092,238
   Noninterest expense                    2,485,724          1,215,842            343,000            81,157          4,125,723
   Income taxes                             616,870            259,263            153,425          (143,300)           886,258
                                  -----------------    ---------------     --------------     --------------   ---------------
   Net income (loss)                      1,305,821            417,486            323,889          (285,749)         1,761,447
                                  =================    ===============     ==============     ==============    ===============
</TABLE>




                                       10
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE STATEMENTS MADE IN
THIS REPORT ON FORM 10-Q ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE WORDS "SHOULD", "EXPECT", "ANTICIPATE", "BELIEVE", "INTEND",
"MAY", "HOPE", "FORECAST" AND SIMILAR EXPRESSIONS MAY IDENTIFY FORWARD LOOKING
STATEMENTS. IN PARTICULAR, STATEMENTS THAT THE PERIODIC REVIEW OF OUR LOAN
PORTFOLIO KEEPS MANAGEMENT INFORMED OF POSSIBLE LOAN PROBLEMS AND THAT THE
ALLOWANCE FOR LOAN LOSSES ADEQUATELY COVERS ANY EXPOSURE ON SPECIFIC CREDITS ARE
ALL FORWARD-LOOKING STATEMENTS. OUR COMPANY'S ACTUAL RESULTS, FINANCIAL
CONDITION, OR BUSINESS COULD DIFFER MATERIALLY FROM ITS HISTORICAL RESULTS,
FINANCIAL CONDITION, OR BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL
CONDITION, OR BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS
THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY
THE FORWARD LOOKING STATEMENTS HEREIN INCLUDE MARKET CONDITIONS AS WELL AS
CONDITIONS SPECIFICALLY AFFECTING THE BANKING INDUSTRY GENERALLY AND FACTORS
HAVING A SPECIFIC IMPACT ON BANCSHARES INCLUDING, BUT NOT LIMITED TO,
FLUCTUATIONS IN INTEREST RATES AND IN THE ECONOMY; THE IMPACT OF LAWS AND
REGULATIONS APPLICABLE TO BANCSHARES AND CHANGES THEREIN; COMPETITIVE CONDITIONS
IN THE MARKETS IN WHICH BANCSHARES CONDUCTS ITS OPERATIONS, INCLUDING
COMPETITION FROM BANKING AND NON-BANKING COMPANIES WITH SUBSTANTIALLY GREATER
RESOURCES THAN BANCSHARES, SOME OF WHICH MAY OFFER AND DEVELOP PRODUCTS AND
SERVICES NOT OFFERED BY BANCSHARES; AND THE ABILITY OF BANCSHARES TO RESPOND TO
CHANGES IN TECHNOLOGY. ADDITIONAL FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES WERE DISCUSSED UNDER THE CAPTION "FACTORS THAT MAY AFFECT FUTURE
RESULTS OF OPERATIONS, FINANCIAL CONDITION, OR BUSINESS," IN OUR COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001, AS WELL AS
THOSE DISCUSSED ELSEWHERE IN OUR COMPANY'S REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.




                                       11
<PAGE>



          Net income for the three months ended March 31, 2002 of $1,929,000
increased $168,000 when compared to the first quarter of 2001. Earnings per
common share for the first quarter of 2002 of $0.68 increased 6 cents or 9.7%
when compared to the first quarter of 2001. On January 1, 2002 our Company
adopted Statement of Financial Accounting Standard No. 142, Goodwill and Other
Intangible Assets (SFAS 142). Under SFAS 142 goodwill is no longer amortized.
The amount of goodwill amortization included in net income in the first quarter
of 2001 was approximately $298,000, or $0.10 per share.

          The following table provides a comparison of fully taxable equivalent
earnings, including adjustments to interest income and tax expense for interest
on tax-exempt loans and investments.

          (DOLLARS EXPRESSED IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                     ------------------------
                                                       2002             2001
                                                     -------          -------
<S>                                                  <C>              <C>
Interest income                                      $10,293          $13,253
Fully taxable equivalent (FTE) adjustment                209              208
                                                     -------          -------
Interest income (FTE basis)                           10,502           13,461
Interest expense                                       4,388            7,324
                                                     -------          -------
Net interest income (FTE basis)                        6,114            6,137
Provision for loan losses                                234              248
                                                     -------          -------
Net interest income after provision for
   loan losses (FTE basis)                             5,880            5,889
Noninterest income                                     1,305            1,074
Noninterest expense                                    4,221            4,108
                                                     -------          -------
Earnings before income taxes (FTE basis)               2,964            2,855
                                                     -------          -------
Income taxes                                             826              886
FTE adjustment                                           209              208
                                                     -------          -------
Income taxes (FTE basis)                               1,035            1,094
                                                     -------          -------
Net income                                           $ 1,929          $ 1,761
                                                     =======          =======
</TABLE>


          Net interest income on a fully taxable equivalent basis decreased
$23,000 or 0.37% to $6,114,000 or 3.54% of average earning assets for the first
quarter of 2002 compared to $6,137,000 or 3.73% of average earning assets for
the same period of 2001. The provision for loan losses for the three months
ended March 31, 2002 was $234,000 compared to $248,000 for the same period of
2001.

                                       12
<PAGE>


          Noninterest income and noninterest expense for the three-month periods
ended March 31, 2002 and 2001 were as follows:

(DOLLARS EXPRESSED IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                                             MARCH 31,                         INCREASE (DECREASE)
                                                     --------------------------             -------------------------
                                                       2002               2001              AMOUNT               %
                                                     -------            -------             ------             ------
<S>                                                  <C>                <C>                 <C>                <C>
NONINTEREST INCOME
   Service charges on deposit accounts                 $ 610              $ 456             $ 154               33.8%
   Trust department income                               121                109                12               11.0
   Brokerage income                                        3                 23               (20)             (87.0)
   Mortgage loan servicing fees                          102                114               (12)             (10.5)
   Gain on sales of mortgage loans                       298                235                63               26.8
   Credit card fees                                       35                 37                (2)              (5.4)
   Other                                                 136                118                18               15.3
                                                     -------            -------             -----
                                                     $ 1,305            $ 1,092             $ 213               19.5%
                                                     =======            =======             =====

NONINTEREST EXPENSE
   Salaries and employee benefits                    $ 2,303            $ 2,101             $ 202                9.6%
   Occupancy expense                                     256                246                10                4.1
   Furniture and equipment expense                       433                385                48               12.5
   FDIC insurance assessment                              37                 34                 3                8.8
   Advertising and promotion                              89                 76                13               17.1
   Postage, printing and supplies                        202                162                40               24.7
   Legal, examination, and
      professional fees                                  212                124                88               71.0
   Credit card expenses                                   23                 24                (1)              (4.2)
   Credit investigation and loan
      collection expenses                                 29                 46               (17)             (37.0)
   Amortization of goodwill                               --                298              (298)            (100.0)
   Amortization of intangible assets                      75                 78                (3)              (3.8)
   Other                                                 562                552                10                1.8
                                                     -------            -------             -----
                                                     $ 4,221            $ 4,126               $95                2.3%
                                                     =======            =======             =====
</TABLE>


          Noninterest income increased $213,000 or 19.5% to $1,305,000 for the
first quarter of 2002 compared to $1,092,000 for the same period of 2001.
Service charges on deposit accounts increased $154,000 or 33.8% due to new
overdraft programs at ENB and CUSB. This program has generated an increase of
$134,000 in insufficient funds fees collected this year compared to the same
period last year. Brokerage income declined $20000 or 87.0% due to decreased
sales volumes in 2002. The $12,000 or 10.5% decrease in mortgage loan servicing
fees is due to an increase in amortization of mortgage servicing rights. The
amortization of mortgage servicing rights is charged against servicing income.
Gains on sales of mortgage loans increased $63,000 or 26.8% due to an increase
in volume of loans originated and sold to the secondary market from
approximately $16,586,000 in the first quarter of 2001 to approximately
$22,472,000 for the first quarter of 2002.


                                       13
<PAGE>


          Noninterest expense increased $95,000 or 2.3% to $4,221,000 for the
first quarter of 2002 compared to $4,126,000 for the first quarter of 2001.
Salaries and benefits increased $202,000 or 9.6%. This increase is due to normal
salary increases and higher health insurance premiums. The $48,000 or 12.5%
increase in furniture and equipment expense is primarily the result of increase
equipment service contracts. The $40,000 or 24.7% increase in postage, printing
and supplies is primarily due to timing differences in the purchase of postage
for mailing equipment at the banks. The $88,000 or 71.0% increase in legal and
professional fees reflects consulting fees for project management related to a
core data processing conversion project at the three banks. The $298,000 or
100.0% decrease in amortization of intangibles reflects the discontinuance of
the amortization of goodwill as required by SFAS 142. The periodic amortization
of goodwill has been replaced by an annual impairment test.

          Income taxes as a percentage of earnings before income taxes as
reported in the condensed consolidated financial statements was 30.0% for the
first quarter of 2002 compared to 33.5% for the first quarter of 2001. After
adding a fully taxable equivalent adjustment to both income taxes and earnings
before income taxes for tax-exempt income on loans and investment securities,
the fully taxable equivalent ratios of income taxes as a percentage of earnings
before income taxes were 34.9% for the first quarter of 2002 and 38.3% for the
first quarter of 2001. The decrease in effective tax rates for first quarter of
2002 compared to first quarter of 2001 is due to tax-exempt income making up a
larger portion of our Company's income in 2002 versus 2001.


NET INTEREST INCOME

          Fully taxable equivalent net interest income decreased $23,000 or
0.37% for the three-month period ended March 31, 2002 compared to the same
period in 2001.

          The following table presents average balance sheets, net interest
income, average yields of earning assets, and average costs of interest bearing
liabilities on a fully taxable equivalent basis for the three month periods
ended March 31, 2002 and 2001.


                                       14
<PAGE>


(DOLLARS EXPRESSED IN THOUSANDS)

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED                            THREE MONTHS ENDED
                                            MARCH 31, 2002                                MARCH 31, 2001
                                 --------------------------------------        -------------------------------------
                                                 Interest         Rate                        Interest         Rate
                                 Average         Income/        Earned/        Average         Income/       Earned/
                                 Balance        Expense/1/      Paid/1/        Balance       Expense/1/      Paid/1/
                                 --------       ----------      -------       --------       ----------      -------
<S>                              <C>            <C>             <C>           <C>             <C>             <C>
ASSETS
Loans:/2/
   Commercial                    $139,291         $ 2,266         6.60%       $148,563        $ 3,251         8.87%
   Real estate                    280,661           4,905         7.09         259,404          5,383         8.42
   Consumer                        44,652             970         8.81          55,893          1,254         9.10
Investment securities/3/
   U.S. Treasury and
      U.S. Gov't Agencies         136,370           1,394         4.15         121,401          2,330         7.78
   State and municipal             38,669             666         6.98          39,022            696         7.23
   Other                            4,959              52         4.25           4,051             45         4.51
Federal funds sold                 53,604             231         1.75          34,886            458         5.32
Interest-bearing
   deposits                         2,359              18         3.09           3,364             44         5.30
                                 --------         -------         ----        --------        -------         ----

   Total interest earning
      assets                      700,565          10,502         6.08         666,584         13,461         8.19
All other assets                   70,724                                       72,560
Allowance for loan
   losses                          (6,736)                                      (6,983)
                                 --------                                     --------
   Total assets                  $764,553                                     $732,161
                                 ========                                     ========

</TABLE>


Continued on next page


                                       15
<PAGE>


<TABLE>
<CAPTION>

                                           THREE MONTHS ENDED                           THREE MONTHS ENDED
                                             MARCH 31, 2002                               MARCH 31, 2001
                                 -------------------------------------       --------------------------------------
                                               Interest         Rate                        Interest         Rate
                                  Average       Income/        Earned/        Average         Income/       Earned/
                                  Balance      Expense/1/      Paid/1/        Balance       Expense/1/      Paid/1/
                                 --------      ----------      -------       --------       ----------      -------
<S>                              <C>             <C>            <C>          <C>               <C>          <C>

LIABILITIES AND
   STOCKHOLDERS'
   EQUITY
NOW accounts                     $ 89,244        $ 241          1.10%        $ 91,507           $ 648        2.87%
Savings                            48,994          128          1.06           44,617             307        2.79
Money market                       61,318          212          1.40           58,732             583        4.03
Deposits of $100,000
   and over                        45,557          443          3.94           52,585             823        6.35
Other time deposits               254,721        2,520          4.01          269,479           3,937        5.93
                                 --------        -----                       --------         -------
   Total time deposits            499,834        3,544          2.88          516,920           6,298        4.94

Federal funds purchased
   and securities sold
   under agreements to
   repurchase                      63,314          257          1.65           28,763             363        5.12
Interest-bearing demand
   notes to US Treasury             1,008            4          1.61              790              11        5.65
Other borrowed money               42,893          583          5.51           41,414             652        6.38
                                 --------        -----                       --------         -------
   Total interest-bearing
      liabilities                 607,049        4,388          2.93          587,887           7,324        5.05
                                                 -----                                        -------

Demand deposits                    66,789                                      58,636
Other liabilities                  11,455                                      11,120
                                 --------                                    --------

Total liabilities                 685,293                                     657,643
Stockholders' equity               79,260                                      74,518
                                 --------                                    --------

   Total liabilities and
      stockholders' equity       $764,553                                    $732,161
                                 ========                                    ========

Net interest income                            $ 6,114                                        $ 6,137
                                               =======                                        =======

Net interest margin/4/                                          3.54%                                        3.73%
                                                                =====                                        =====

</TABLE>


/1/  Interest income and yields are presented on a fully taxable equivalent
     basis using the Federal statutory income tax rate. Such adjustments were
     $209,000 in 2002 and $208,000 in 2001.

/2/  Non-accruing loans are included in the average amounts outstanding.

/3/  Average balances based on amortized cost.

/4/  Net interest income divided by average total interest earning assets.

          The following table presents, on a fully taxable equivalent basis, an
analysis of changes in net interest income resulting from changes in average
volumes of earning assets and interest bearing liabilities and average rates
earned and paid. The change in interest due to the combined rate/volume variance
has been allocated to rate and volume changes in proportion to the absolute
dollar amounts of change in each.


                                       16
<PAGE>



(DOLLARS EXPRESSED IN THOUSANDS)
<TABLE>
<CAPTION>

                                     THREE MONTHS ENDED MARCH 31, 2002
                                               COMPARED TO
                                     THREE MONTHS ENDED MARCH 31, 2001
                                     ----------------------------------
                                                      CHANGE DUE TO
                                      TOTAL        --------------------
                                     CHANGE        VOLUME         RATE
                                     ------        ------       -------
<S>                                  <C>           <C>          <C>

INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS:
Loans: /1/
Commercial                           $(985)        $(193)         (792)
   Real estate /2/                    (478)          417          (895)
   Consumer                           (284)         (245)          (39)
Investment securities:
   U.S. Treasury and U.S.
      Government agencies             (936)          259        (1,195)
   State and municipal /2/             (30)           (6)          (24)
   Other                                 7            10            (3)
Federal funds sold                    (227)          173          (400)
Interest-bearing deposits              (26)          (11)          (15)
                                    -------         -----       -------
      Total interest income         (2,959)          404        (3,363)


INTEREST EXPENSE:
NOW accounts                          (407)          (16)         (391)
Savings                               (179)           27          (206)
Money market                          (371)           25          (396)
Deposits of $100,000 and over         (529)          (99)         (281)
Other time deposits                 (1,268)         (206)       (1,211)
Federal funds purchased and
   securities sold under
   agreements to repurchase           (106)          247          (353)
Interest-bearing demand notes
   to U.S. Treasury                     (7)            2            (9)
Other borrowed money                   (69)           22           (91)
                                    -------         -----       -------

      Total interest expense        (2,936)            2        (2,938)
                                    -------         -----       -------

NET INTEREST INCOME ON A FULLY
   TAXABLE EQUIVALENT BASIS          $ (23)          402          (425)
                                    =======         =====       =======
</TABLE>


/1/  Non-accruing loans are included in the average amounts outstanding.

/2/  Interest income and yields are presented on a fully taxable equivalent
     basis using the federal statutory income tax rate. Such adjustments totaled
     $209,000 in 2002 and $208,000 in 2001.


                                       17
<PAGE>


PROVISION AND ALLOWANCE FOR LOAN LOSSES

          The provision for loan losses is based on management's evaluation of
the loan portfolio in light of national and local economic conditions, changes
in the composition and volume of the loan portfolio, changes in the volume of
past due and nonaccrual loans, and other relevant factors. The allowance for
loan losses, which is reported as a deduction from loans, is available for loan
charge-offs. The allowance is increased by the provision charged to expense and
is reduced by loan charge-offs, net of loan recoveries.

          Management formally reviews all loans in excess of certain dollar
amounts (periodically established) at least annually. In addition, on a monthly
basis, management reviews past due, "classified", and "watch list" loans in
order to classify or reclassify loans as "loans requiring attention,"
"substandard," "doubtful," or "loss". During that review, management also
determines what loans should be considered to be "impaired". Management
believes, but there can be no assurance, that these procedures keep management
informed of possible problem loans. Based upon these procedures, both the
allowance and provision for loan losses are adjusted to maintain the allowance
at a level considered adequate by management for probable losses inherent in the
loan portfolio. See additional discussion concerning nonperforming loans under
"Financial Condition."

          The allowance for loan losses was decreased by net loan charge-offs of
$57,000 for the first quarter of 2002 compared to net charge-offs of $111,000
for the first quarter of 2001. The allowance for loan losses was increased by a
provision charged to expense of $234,000 for the first quarter of 2002 compared
to $248,000 for the first quarter of 2001.

          The balance of the allowance for loan losses was $6,850,000 at March
31, 2002 compared to $6,674,000 at December 31, 2001 and $7,077,000 at March 31,
2001. The allowance for loan losses as a percent of outstanding loans was 1.47%
at March 31, 2002 compared to 1.44% at December 31, 2001 and 1.53% at March 31,
2001.

                               FINANCIAL CONDITION

          Total assets decreased $2,775,000 or 0.4% to $773,050,000 at March 31,
2002 compared to $775,825,000 at December 31, 2001. Total liabilities decreased
$3,732,000 or 0.5% to $693,740,000. Stockholders' equity increased $957,000 or
1.2% to $79,310,000.

          Loans increased $1,413,000 or 0.3% to $465,777,000 at March 31, 2002
compared to $464,364,000 at December 31, 2001. Commercial loans increased
$2,872,000; real estate construction loans increased $605,000; real estate
mortgage loans decreased $752,000; and consumer loans decreased $1,312,000. The
decrease in mortgage loans reflects the movement of loans from variable rate
loans that our Company keeps in its portfolio to fixed rate loans that are sold
in the secondary markets. The decrease in consumer loans is reflective of lower
rates in the markets that our Company is unwilling to match, primarily in the
area of automobile financing.



                                       18
<PAGE>


          Nonperforming loans, defined as loans on nonaccrual status, loans 90
days or more past due and still accruing, and restructured loans totaled
$3,874,000 or 0.83% of total loans at March 31, 2002 compared to $3,997,000 or
0.86% of total loans at December 31, 2001. Detail of those balances plus other
real estate and repossessions is as follows:

(DOLLARS EXPRESSED IN THOUSANDS)

<TABLE>
<CAPTION>
                                                   MARCH 31, 2002                      DECEMBER 31, 2001
                                             ----------------------------          ---------------------------
                                                                  % OF                                 % OF
                                             BALANCE          GROSS LOANS          BALANCE         GROSS LOANS
                                             -------          -----------          -------         -----------
<S>                                          <C>                 <C>               <C>                <C>
Nonaccrual loans:
   Commercial                                $ 2,416              .52%             $ 2,518             .54%
   Real estate:
      Construction                                35              .01                   66             .01
      Mortgage                                   930              .20                  842             .18
   Consumer                                      268              .05                  124             .03
                                             -------             -----             -------            -----
                                               3,649             0.78                3,550             .76
                                             -------             -----             -------            -----

Loans contractually past-due 90 days
  or more and still accruing:
      Commercial                                  61              .01                   96             .02
      Real estate:
         Construction                             --               --                   --              --
         Mortgage                                144              .03                  299             .07
      Consumer                                    20              .01                   52             .01
                                             -------             -----             -------            -----
                                                 225              .05                  447             .10
                                             -------             -----             -------            -----

         Restructured loans                       --               --                   --              --
                                             -------             -----             -------            -----

            Total nonperforming loans          3,874             0.83%               3,997            0.86%
                                                                 =====                                =====

            Other real estate                    650                                   650
            Repossessions                        104                                   141
                                             -------                               -------

            Total nonperforming assets       $ 4,628                               $ 4,788
                                             =======                               =======
</TABLE>


          The allowance for loan losses was 176.82% of nonperforming loans at
March 31, 2002 compared to 166.98% of nonperforming loans at December 31, 2001.



                                       19
<PAGE>


          It is our Company's policy to discontinue the accrual of interest
income on loans when the full collection of interest or principal is in doubt,
or when the payment of interest or principal has become contractually 90 days
past due unless the obligation is both well secured and in the process of
collection. A loan remains on nonaccrual status until the loan is current as to
payment of both principal and interest and/or the borrower demonstrates the
ability to pay and remain current. Interest on loans on nonaccrual status at
March 31, 2002 and 2001, which would have been recorded under the original terms
those loans, was approximately $171,000 and $233,000 for the three months ended
March 31, 2002 and 2001, respectively. Approximately $9,000 and $23,000 was
actually recorded as interest income on such loans for the three months ended
March 31, 2002 and 2001, respectively.

          A loan is considered "impaired" when it is probable a creditor will be
unable to collect all amounts due - both principal and interest - according to
the contractual terms of the loan agreement. In addition to nonaccrual loans
included in the table above, which were considered "impaired", management has
identified additional loans totaling approximately $9,681,000 and $9,527,000 at
March 31, 2002 and December 31, 2001, respectively, which are not included in
the nonaccrual table above but are considered by management to be "impaired".
The $9,681,000 of loans identified by management as being "impaired" reflected
various commercial, commercial real estate, real estate, and consumer loans
ranging in size from approximately $1,000 to approximately $3,010,000. The
average balance of nonaccrual and other "impaired" loans for the first three
months of 2002 was approximately $13,701,000. At March 31, 2002 the portion of
the allowance for loan losses allocated to impaired loans was $1,822,000
compared to $1,218,000 at December 31, 2001.

          As of March 31, 2002 and December 31, 2001 approximately $3,486,000
and $7,541,000 of loans not included in the nonaccrual table above or identified
by management as being "impaired" were classified by management as having more
than normal risk. In addition to the classified list, our Company also maintains
an internal loan watch list of loans, which for various reasons, not all related
to credit quality, management is monitoring more closely than the average loan
portfolio. Loans may be added to this list for reasons that are temporary and
correctable, such as the absence of current financial statements of the
borrower, or a deficiency in loan documentation. Other loans are added as soon
as any problem is detected which might affect the borrower's ability to meet the
terms of the loan. This could be initiated by the delinquency of a scheduled
loan payment, a deterioration in the borrower's financial condition identified
in a review of periodic financial statements, a decrease in the value of the
collateral securing the loan, or a change in the economic environment within
which the borrower operates. Once the loan is placed on our Company's watch
list, its condition is monitored closely. Any further deterioration in the
condition of the loan is evaluated to determine if the loan should be assigned
to a higher risk category.

          Investment in debt and equity securities classified as
available-for-sale decreased $1,446,000 or 0.8% to $180,203,000 at March 31,
2002 compared to $181,649,000 at December 31, 2001. Investments classified as
available-for-sale are carried at fair value. During 2002, the market valuation
account was decreased $679,000 to $1,658,000 to reflect the fair value of
available-for-sale investments at March 31, 2002 and the net after tax decrease
resulting from the change in the market valuation adjustment of $448,000
decreased the stockholders' equity component to $1,094,000 at March 31, 2002.

                                       20
<PAGE>

          At December 31, 2001 the market valuation account for the
available-for-sale investments of $2,337,000 increased the amortized cost of
those investments to their fair value on that date and the net after tax
increase resulting from the market valuation adjustment of $1,542,000 was
reflected as a separate positive component of stockholders' equity.

          Cash and cash equivalents, which consist of cash and due from banks
and Federal funds sold, decreased $3,112,000 or 3.6% to $82,497,000 at March 31,
2002 compared to $85,609,000 at December 31, 2001.

          Premises and equipment increased $595,000 or 3.9% to $15,788,000 at
March 31, 2002 compared to $15,193,000 at December 31, 2001. The increase
reflects purchases of premises and equipment of $888,000 offset by depreciation
expense of $293,000.

          Total deposits decreased $9,337,000 or 1.6% to $570,457,000 at March
31, 2002 compared to $579,794,000 at December 31, 2001. The decrease is
primarily in demand deposits and reflects the decline from unusually high
deposits that were built up by customers at year-end.

          Federal funds purchased and securities sold under agreements to
repurchase increased $4,923,000 or 8.0% to $66,567,000 at March 31, 2002
compared to $61,645,000 at December 31, 2001. This increase is due primarily to
higher levels of public fund balances at March 31, 2002.

          The increase in stockholders' equity reflects net income of $1,929,000
less dividends declared of $538,000 and $448,000 change in unrealized holding
losses, net of taxes, on investment in debt and equity securities
available-for-sale.

          No material changes in our Company's liquidity or capital resources
have occurred since December 31, 2001.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

          In September 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133 established
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires an entity
to recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. In September
1999, the FASB issued Statement of Financial Accounting Standards No. 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133, an Amendment of FASB Statement No.
133, which defers the effective date of SFAS 133 from fiscal years beginning
after September 15, 1999 to fiscal years beginning after September 15, 2000. In
September 2000, the FASB issued Statement of Financial Accounting Standards No.
138 - Accounting for Derivative Instruments and Hedging Activities, an Amendment
of FASB Statement No. 133 (SFAS 138), which addresses a limited number of issues
causing implementation difficulties for numerous entities that apply SFAS 133,
as amended. SFAS 138 amends the accounting and reporting standards of SFAS 133,
as amended, for certain derivative instruments, certain hedging activities, and
for decisions made by the FASB relating to the Derivative Implementation Group
(DIG) process. Our Company has adopted SFAS 133 as


                                       21
<PAGE>

amended effective January 1, 2001, but since our Company does not participate in
any derivative or hedging activities, SFAS 133, as amended, had no impact on our
Company's consolidated financial position and results of operations, except for
the transfer of all held-to-maturity securities into available-for-sale
securities as of January 1, 2001 as permitted by SFAS 133. At the time of the
transfer the amortized cost of the securities transferred was $22,463,000 and
the fair value was $22,676,000. The difference was an unrealized gain recorded
net of tax as other comprehensive income.

          In September 2000, the FASB issued SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities
that replaces SFAS No. 125. This Statement provides consistent standards for
distinguishing transfers of financial assets that are sales, from transfers that
are secured borrowings. The standards are based on the consistent application of
the financial components approach, where after a transfer, an entity recognizes
the financial and servicing assets it controls and the liabilities it has
incurred, and derecognizes financial liabilities when extinguished.

          This statement is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. This
Statement was effective for recognition and reclassification of collateral and
for disclosures relating to securitization transactions and collateral for
fiscal years ending after December 31, 2000.

          A transfer of financial assets in which the transferor surrenders
control is accounted for as a sale to the extent that consideration other than
beneficial interests in the transferred assets is received in exchange. This
Statement requires that liabilities and derivatives transferred be initially
measured at fair value, if practicable. Servicing assets and other retained
interest in the transferred assets are to be measured by allocating the previous
carrying amount between the assets and retained interests sold, if any, based on
their relative fair values on the date of transfer.

          This Statement requires that servicing assets and liabilities be
subsequently measured by amortization in proportion to and over the period
estimated net servicing income or loss, and assessment for asset impairment or
increased obligation based on fair value.

          This Statement requires that a liability be derecognized if the debtor
pays the creditor and is relieved of its obligation for the liability, or the
debtor is legally released from being the primary obligor under the liability
either judicially or by the creditor.

          The implementation of this Statement did not have a material effect on
our Company's consolidated financial statements.

          In July 2001, FASB issued Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of SFAS 142. SFAS 142 also required that intangible assets
with definite useful lives be amortized over their respective estimated useful
lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. The amortization of goodwill ceases
upon adoption of SFAS 142, which for calendar year-end companies, was January 1,
2002.

                                       22
<PAGE>

          On January 1, 2002, our Company adopted SFAS 142. At the date of
adoption, our Company had unamortized goodwill of $23,408,000, core deposit
intangibles of $879,000 and consulting/noncompete agreements of $275,000, all of
which were subject to the transition provisions of SFAS 142. Under SFAS 142, our
Company will continue to amortize, on an accelerated basis, its core deposit
intangibles associated with the purchase of Citizens Union State Bank and Trust.
Goodwill associated with the purchase of subsidiaries will no longer be
amortized, but instead, will be tested annually for impairment following our
Company's existing methods of measuring and recording impairment losses. Our
Company is currently in the process of completing the transitional goodwill
impairment test required under SFAS 142 to determine the potential impact, if
any, on the consolidated financial statements. However, our Company does not
believe the results of the transitional goodwill impairment testing will
identify significant impairment losses or have a material effect on the
consolidated financial statements.

<TABLE>
<CAPTION>
                                        MARCH 31, 2002       DECEMBER 31, 2001
                                        --------------       -----------------
<S>                                      <C>                   <C>
Amortized intangible assets:
   Core deposit intangible                 $ 841,650            $ 878,820
   Consulting/Noncompete agreements          237,500              275,000

Unamortized intangible assets:
   Goodwill associated with the
        Purchase of subsidiaries          23,407,734           23,407,734
</TABLE>


        The following is a reconciliation of reported net income to net income
adjusted to reflect the adoption of SFAS 142:

(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
                                                       MARCH 31,
                                             ---------------------------
                                               2002                2001
                                             -------             -------
<S>                                          <C>                 <C>
Net Income:
Reported net income                          $ 1,929             $ 1,761
Add back - goodwill amortization                  --                 298
                                             -------             -------
Adjusted net income                            1,929               2,059
                                             =======             =======

Basic earnings per share:
Reported net income                            $0.68               $0.62
Add back - goodwill amortization                  --                0.10
                                             -------             -------
Adjusted net income                            $0.68               $0.72
                                             =======             =======

Diluted earnings per share:                    $0.68               $0.62
Reported net income                               --                0.10
                                             -------             -------
Noninterest expense                            $0.68               $0.72
                                             =======             =======
</TABLE>


                                       23

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          Our Company's exposure to market risk is reviewed on a regular basis
by the Banks' Asset/Liability Committees and Boards of Directors. Interest rate
risk is the potential of economic losses due to future interest rate changes.
These economic losses can be reflected as a loss of future net interest income
and/or a loss of current fair market values. The objective is to measure the
effect on net interest income and to adjust the balance sheet to minimize the
inherent risk while at the same time maximizing income. Management realizes
certain risks are inherent and that the goal is to identify and minimize those
risks. Tools used by the Banks' management include the standard GAP report
subject to different rate shock scenarios. At March 31, 2002, the rate shock
scenario models indicated that annual net interest income could decrease or
increase by as much as 4% should interest rates rise or fall, respectively,
within 200 basis points from their current level over a one year period compared
to as much as 7% at December 31, 2001.


                                       24
<PAGE>


                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings                                                None

Item 2.  Changes in Securities                                            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

<TABLE>
<CAPTION>

Exhibit No.         Description
-----------         -----------
   <S>              <C>

   3.1              Articles of Incorporation of Bancshares (filed as Exhibit
                    3(a) to Bancshares's Registration Statement on Form S-4
                    (Registration No. 33-54166) and incorporated herein by
                    reference).

   3.2              Bylaws of Bancshares (filed as Exhibit 3.2 to the Company's
                    Annual Report on Form 10-K for the fiscal year ended
                    December 31, 2001 (Commission file number 0-23636) and
                    incorporated herein by reference).

   4                Specimen certificate representing shares of the Company's
                    $1.00 par value common stock (filed as Exhibit 4 to
                    Bancshares's Annual Report on Form 10-K for the fiscal year
                    ended December 31, 1999 (Commission File number 0-23636) and
                    incorporated herein by reference).
</TABLE>



(b)      Reports on Form 8-K.

          No reports were filed on Form 8-K for the three month period ended
March 31, 2002.



                                       25
<PAGE>


                                   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.

                       EXCHANGE NATIONAL BANCSHARES, INC.



        Date                    By /s/ James E. Smith
        ----
                                -----------------------------------
   May  10, 2002                James E. Smith, Chairman of the Board
                                and Chief Executive Officer (Principal
                                Executive Officer)


                                By /s/ Richard G. Rose
                                -----------------------------------
    May 10, 2002                Richard G. Rose, Treasurer (Principal Financial
                                Officer and Principal Accounting Officer)




                                       26
<PAGE>


                       EXCHANGE NATIONAL BANCSHARES, INC.

                                INDEX TO EXHIBITS

                            March 31, 2002 Form 10-Q

<TABLE>
<CAPTION>

Exhibit No.         Description                                                          Page No.
-----------         -----------                                                          --------
<S>                 <C>                                                                    <C>

    3.1             Articles of Incorporation of Bancshares (filed as Exhibit
                    3(a) to Bancshares's Registration Statement on Form S-4
                    (Registration No. 33-54166) and incorporated herein by
                    reference).                                                            **


    3.2             Bylaws of Bancshares (filed as Exhibit 3.2 to the Company's
                    Annual Report on Form 10-K for the fiscal year ended
                    December 31, 2000(Commission file number 0-23636) and
                    incorporated herein by reference).                                     **


    4               Specimen certificate representing shares of the Company's
                    $1.00 par value common stock (filed as Exhibit 4 to
                    Bancshares's Annual Report on Form 10-K for the fiscal year
                    ended December 31, 2000 (Commission file number 0-23636) and
                    incorporated herein by reference).                                     **

</TABLE>




                    **  Incorporated by reference.



                                       27