<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML> <HEAD> <TITLE> UNITED STATES</TITLE> </HEAD> <BODY> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>UNITED STATES</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>SECURITIES AND EXCHANGE COMMISSION</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>WASHINGTON, D.C. 20549</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>FORM 10-Q</FONT></FONT></CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>EXCHANGE ACT OF 1934</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>For the quarterly period ended March 31, 2000</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>or</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>EXCHANGE ACT OF 1934</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>For the transition period from_____________________ to ___________________</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Commission file number 0-13222</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>(Exact name of registrant as specified in its charter)</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1> PENNSYLVANIA 23-2265045</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>(State or other jurisdiction of (I.R.S. Employer</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>incorporation or organization) Identification No.)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>15 South Main Street, Mansfield, Pennsylvania 16933</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>(Address of principal executive offices) (Zip Code)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Registrant's telephone number, including area code: (570) 662-2121</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Indicate by checkmark whether the registrant (1) has filed all reports</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>during the preceding 12 months (or for such shorter period that the</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>registrant was required to file such reports), and (2) has been subject to</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>such filing requirements for the past 90 days. Yes__X___ No_____</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The number of shares outstanding of the Registrant's Common Stock, as of</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>May 2, 2000 2,745,401 shares of Common Stock, par value $1.00.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Citizens Financial Services, Inc.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Form 10-Q</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>INDEX</FONT></FONT></CENTER> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>Page</FONT></FONT></DIV> <FONT FACE="Courier New"><FONT SIZE=-1>Part I FINANCIAL INFORMATION (UNAUDITED)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 1-Financial Statements</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Consolidated Balance Sheet as of March 31, 2000,</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> December 31, 1999 1</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Consolidated Statement of Income for the</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Three Months Ended March 31, 2000 and 1999 2</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Consolidated Statement of Comprehensive Income for the</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Three Months Ended March 31, 2000 and 1999 3</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Consolidated Statement of Cash Flows for the Three Months Ended</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> March 31, 2000 and 1999 4</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Notes to Consolidated Financial Statements 5</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 2 -Management's Discussion and Analysis of Financial Condition</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> and Results of Operations 5-16</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 3-Quantitative and Qualitative Disclosure About Market Risk 17</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Part II OTHER INFORMATION AND SIGNATURES</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 1-Legal Proceedings 18</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 2-Changes in Securities 18</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 3-Defaults upon Senior Securities 18</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 4-Submission of Matters to a Vote of Security Holders 18</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 5-Other Information 18</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 6-Exhibits and Reports on Form 8-K 18-19</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Signatures &nbs 20</FONT></FONT> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="626" > <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED BALANCE SHEET</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>ASSETS:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Cash and due from banks:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 6,306,171</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 8,363,742</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Interest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>311,674</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>158,051</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Total cash and cash equivalents</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,617,845</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,521,793</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Available-for-sale securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>89,617,692</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>91,695,667</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP ROWSPAN="2" WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Loans (net of allowance for loan losses 2000, $2,374,000; December 31, 1999, $2,270,000)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>231,962,470</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>229,159,271</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>441,054</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>573,054</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,004,077</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,942,078</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Accrued interest receivable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,251,814</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,120,148</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,924,980</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,767,268</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL ASSETS</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$339,819,932</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$340,779,279</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>LIABILITIES:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Deposits:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 24,443,767</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 23,434,754</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Interest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>260,271,920</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>260,882,983</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>284,715,687</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>284,317,737</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>24,629,018</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>25,852,980</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Accrued interest payable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,988,885</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,557,303</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,476,950</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>968,646</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL LIABILITIES</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>312,810,540</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>313,696,666</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>STOCKHOLDERS' EQUITY:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Common Stock</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>$1.00 par value; authorized 10,000,000 shares;</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Issued 2,800,563 shares in 2000 and</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>at December 31, 1999, respectively</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,800,563</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,800,563</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Additional paid-in capital</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,374,160</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,374,160</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Retained earnings</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,969,208</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,432,375</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>30,143,931</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29,607,098</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Accumulated other comprehensive (loss)</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,185,372)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,064,150)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Less: Treasury Stock at cost</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>55,162 shares at March 31, 2000</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(949,167)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>26,585 shares at December 31, 1999</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(460,335)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,009,392</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,082,613</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL LIABILITIES AND</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="64%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$339,819,932</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$340,779,279</FONT></FONT></DIV> </TD> </TR> </TABLE> <P><FONT FACE="Courier New">The accompanying notes are an integral part of these financial statements.</FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>1</FONT></FONT></CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="758" > <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED STATEMENT OF INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="47%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three Months Ended</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="47%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>INTEREST INCOME:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Interest and fees on loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$4,879,236 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$4,449,017 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Interest-bearing deposits with banks</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10,422 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,485 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Investment securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Taxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,012,032 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>997,813 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Nontaxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>232,900 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>224,954 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Dividends</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>109,943 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>35,619 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL INTEREST INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,244,533 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,712,888 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>INTEREST EXPENSE:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,933,560 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,792,098 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>408,845 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>94,920 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL INTEREST EXPENSE</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>3,342,405 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,887,018 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>NET INTEREST INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,902,128 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,825,870 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for loan losses</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>99,999 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>60,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>NET INTEREST INCOME AFTER</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>PROVISION FOR LOAN LOSSES</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,802,129 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,765,870 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>OTHER OPERATING INCOME:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Service charges</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>405,691 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>289,242 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Trust</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>116,991 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>99,686 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>99,769 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>133,371 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-1>Arbitration settlement</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>28,595 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Realized securities gains, net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>19,622 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>95,482 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL OTHER OPERATING INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>642,073 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>646,376 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>OTHER OPERATING EXPENSES:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Salaries and employee benefits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,081,089 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,011,575 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Occupancy </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>141,456 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>136,190 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Furniture and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>178,031 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>165,945 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>131,189 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>182,644 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>730,080 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>732,049 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL OTHER OPERATING EXPENSES</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,261,845 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,228,403 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Income before provision for income taxes</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,182,357 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,183,843 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for income taxes</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>244,845 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>295,491 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Net Income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 937,512 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 888,352 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Earnings Per Share</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$ 0.34 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 0.32 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Cash Dividend Declared</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ .145 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ .135 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="53%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Weighted average number of shares outstanding</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,756,675 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="24%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,800,563 </FONT></FONT></DIV> </TD> </TR> </TABLE> <BR> <P><FONT FACE="Courier New">The accompanying notes are an integral part of these financial statements.</FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New">2</FONT></CENTER> <P><FONT FACE="Courier New"><PAGE></FONT> <BR> <BR> <BR> <BR> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="764" > <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="5" ROWSPAN="2" WIDTH="58%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three Months Ended</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>March 31</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 937,512 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>$ 888,352 </FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Other comprehensive income:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Unrealized gains(losses) on available for sale securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(164,048)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(824,204)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Less: Reclassification adjustment for gain included in net income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(19,622)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(183,670)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(95,482)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(919,686)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Other comprehensive income before tax</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(183,670)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(919,686)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Income tax expense related to other comprehensive income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(62,448)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(312,693)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Other comprehensive income, net of tax</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(121,222)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(606,993)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Comprehensive income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 816,290 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 281,359 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="42%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> </TR> </TABLE> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>The accompanying notes are an integral part of these financial statements.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>3</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="770" > <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED STATEMENT OF CASH FLOWS</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="41%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three Months Ended</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="41%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 937,512 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 888,352 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Adjustments to reconcile net income to net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Cash provided by operating activities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for loan losses</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>99,999 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>60,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for depreciation and amortization</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>205,812 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>190,721 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Amortization and accretion of investment securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>56,380 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>114,800 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Deferred income taxes</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(50,748)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>16,251 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Realized gains on securities</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(19,622)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(95,482)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Realized gains on loans sold</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,800)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(9,180)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Losses (Gains) on sales or disposals of </FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,699 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(377)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Originations of loans held for sale</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(270,975)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(998,500)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sales of loans held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>272,775 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,007,680 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Gains on sale of foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(8,400)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(11,607)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>(Increase) decrease in interest receivable and</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>other assets</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(203,375)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,207 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Decrease in interest payable and other liabilities</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(60,114)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(320,902)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash provided by operating activities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>960,143 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>846,963 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM INVESTING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Available-for-sale securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sales of available-for-sale securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,805,150 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,843,777 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from maturity and principal repayments</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>of securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>876,295 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,536,541 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Purchase of securities</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(4,823,897)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(9,133,405)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net increase in loans</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,868,248)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,900,017)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Capital expenditures</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(243,318)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(484,034)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sales of premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,480 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sale of foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>105,450 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>50,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash (used) provided in investing activities</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,148,568)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,917,342 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM FINANCING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net increase in deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>397,950 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>569,966 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from long-term borrowings</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>698,950 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>249,033 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Repayments of long-term borrowings</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(149,841)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(203,172)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net decrease in short-term borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,773,070)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(3,152,144)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Acquisition of Treasury Stock</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(488,832)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Dividends paid</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(400,680)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(374,414)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash used by financing activities</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,715,523)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,910,731)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-1>Net decrease in cash and cash equivalents</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="21%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,903,948)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(146,426)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-1>CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,521,793 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,304,803 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-1>CASH AND CASH EQUIVALENTS AT END OF PERIOD</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 6,617,845 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 7,158,377 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-1>Supplemental Disclosures of Cash Flow Information:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-1>Interest paid</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 3,910,823 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 3,488,337 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11" BGCOLOR="#FFFFFF"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="11" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-1>Income taxes paids</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ - </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="11" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ - </FONT></FONT></DIV> </TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>The accompanying notes are an integral part of these financial statements.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>4</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> (Unaudited)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Note 1 - Basis of Presentation</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The consolidated financial statements include the accounts of Citizens Financial Services, Inc. and its wholly-owned subsidiary, First Citizens National Bank (the "bank"), (collectively, the "company"). All material inter-company balances and transactions have been eliminated in consolidation.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The accompanying interim financial statements have been prepared by the company without audit and, in the opinion of management, reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the company's financial position as of March 31, 2000, and the results of operations for the interim periods presented. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. For further information refer to the consolidated financial statements and footnotes thereto incorporated by reference in the company's Annual Report on Form 10-K for the year ended December 31, 1999.</FONT></FONT> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>Note 2 - Earnings per Share</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Earnings per share calculations give retroactive effect to stock dividends declared by the company. The number of shares used in the earnings per share and dividends per share calculation was 2,756,675 for 2000 and 2,800,563 for 1999.</FONT></FONT> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>CONDITION AND RESULTS OF OPERATIONS</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The following is management's discussion and analysis of the significant changes in the results of operations, capital resources and liquidity presented in its accompanying consolidated financial statements for Citizens Financial Service, Inc., a bank holding company and its subsidiary. Our company's consolidated financial condition and results of operations consist almost entirely of our wholly owned subsidiary First Citizens National Bank. The financial conditions and results of operations. You should read our discussion should be read in conjunction with the preceding March 31, 2000 Financial Report. The results of operations for the three months ended March 31, 2000 and 1999 are not necessarily indicative of the results you may expect for the full year.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Forward-looking statements may prove inaccurate. We have made forward-looking statements in this document, and in documents that we incorporate by reference, that are subject to risks and uncertainties. Forward-looking statements include the information concerning possible or assumed future results of operations of Citizens Financial Services, Inc., First Citizens National Bank, or the combined company. When we use such words as "believes", "expects", "anticipates", or similar expressions, we are making forward-looking statements.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>You should note that many factors, some of which are discussed elsewhere in this document and in the documents we incorporate by reference, could affect the future financial results. These factors include, but are not limited to, the following:</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> *operating, legal and regulatory risks;</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *economic, political and competitive forces affecting our banking,</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> securities, asset management and credit services;</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *risk that our analysis of these risks and forces could be incorrect</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> and/or the strategies developed to address them could be unsuccessful.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Readers should carefully review the risk factors described in other documents our company files from time to time with the Securities and Exchange Commission, including the annual report on Form 10-K to be filed by our company and any current reports on Form 8-K filed by our company.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>5</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company currently engages in the general business of banking throughout our service area of Potter, Tioga and Bradford counties in North Central Pennsylvania and Allegany, Steuben, Chemung and Tioga counties in Southern New York. We maintain our central office in Mansfield, Pennsylvania. Presently we operate banking facilities in Mansfield, Blossburg, Ulysses, Genesee, Wellsboro, Troy, Sayre, Canton, Gillett and the Wellsboro Weis Market store. Additionally, we have automatic teller machines (ATMs) located in Soldiers and Sailors Memorial Hospital in Wellsboro, Mansfield Wal-Mart and at Mansfield University. Our company's lending and deposit products and investment services are offered primarily within the vicinity of the service area.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>On April 18, 2000, our company executed an agreement whereby we will be acquiring all Bradford County Pennsylvania offices of Sovereign Bank. These six offices located in Sayre, Troy, State Line, Leraysville and Towanda, have total deposits of nearly $80 million. We will also receive Sovereign's Bradford County loan portfolio totaling approximately $30 million. We expect the consummation date for this acquisition to be around September 30, 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company faces strong competition in the communities it serves from other commercial banks, savings banks, and savings and loan associations, some of which are substantially larger institutions than our subsidiary. In addition, personal and corporate trust services are offered by insurance companies, investment counseling firms, and other business firms and individuals.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We also compete with credit unions, issuers of money market funds, securities brokerage firms, consumer finance companies, mortgage brokers and insurance companies. These entities are strong competitors for virtually all types of financial services.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>In recent years, the financial services industry has experienced tremendous change to competitive barriers between bank and non-bank institutions. We not only must compete with traditional financial institutions, but also with other business corporations that have begun to deliver competing financial services. Competition for banking services is based on price, nature of product, quality of service, and in the case of certain activities, convenience of location.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company offers the following trust and investment services:</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> *Investment management accounts that assume managerial duties for</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> investment accounts.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *Custody services for safekeeping and preservation of assets.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *Mutual funds that provide an asset allocation program.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *Personal trust services that include stand-by, living and testamentary</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> trusts.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *Estate planning and administration to provide financial planning.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> *Retirement plan services for individuals and businesses.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>FINANCIAL CONDITION</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>INVESTMENTS</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The investment portfolio, including available-for-sale and held-to-maturity securities, decreased by $2.1 million or 2.27% from December 31, 1999 to March 31, 2000. Primarily the result of principal payments received on mortgage-backed securities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>LOANS</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Historically, loans have been originated by our company to customers in North Central Pennsylvania and the Southern Tier of New York. Loans have been originated primarily through direct loans to our existing customer base, with new customers generated by referrals from real estate brokers, building contractors, attorneys, accountants and existing customers. We also do a limited amount of indirect loans through new and used car dealers in the primary lending area.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>6</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>As shown in the following tables, the change in loans grew by $2.9 million or 1.3% for the period compared to the December 31, 1999, reflecting a normal seasonal slow down. Residential mortgage lending is a principal business activity and one our company expects to continue by providing a full complement of competitively priced conforming, nonconforming and home equity mortgages (dollars in thousands).</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="692" > <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="29%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="29%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Real estate:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Residential</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$142,710 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>60.9</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$143,877 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>62.2</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>32,453 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13.8</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>32,159 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13.9</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Agricultural</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11,891 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.1</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9,392 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.1</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Loans to individuals</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>for household,</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>family and other purchases</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>15,621 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.7</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>15,569 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.7</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial and other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13,103 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.6</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12,313 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.3</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>State and political subdivision loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,582 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.9</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,148 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.8</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>234,360 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>231,458 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>24 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Net loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$234,336 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$231,429 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31, 2000/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31, 1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Real estate:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Residential</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,167)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(0.8)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>294 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0.9 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Agricultural</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,499 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26.6 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Loans to individuals</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>for household,</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>family and other purchases</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>52 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0.3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial and other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>790 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.4 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>State and political subdivision loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2.4 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,902 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="20%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> </TABLE> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>We focus our commercial lending activity primarily on small businesses and our company's commercial lending officers have been successful in attracting new business loans.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We expect loans to state and political subdivisions will continue to increase for the remainder of 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>There was virtually no change in total deposits during the March 31, 2000 period. However, money market funds decreased as customers moved funds to certificates of deposit to "lock-in" higher long term rates.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>7</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(dollars in thousands)</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="698" > <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31, 2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="26%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$24,445 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8.6</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$23,435 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8.3</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>36,873 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.9</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>36,081 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.7</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Savings deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,504 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9.7</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,276 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9.2</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Money market deposit accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>34,082 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>39,831 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14.0</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>161,812 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>56.8</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>158,695 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>55.8</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$284,716 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$284,318 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31, 2000/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31, 1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,010 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>792 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2.2 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Savings deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,228 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.7 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Money market deposit accounts</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(5,749)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>(14.4)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>3,117 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2.0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>398 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0.1 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="48%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="18%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="17%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="13"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Borrowed funds decreased $1.2 million during the first three months of 2000. The company's daily cash requirements or short-term investments are met by using the financial instruments available through the Federal Home Loan Bank.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>CAPITAL</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The company has computed its risk-based capital ratios as follows (dollars</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>in thousands):</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> March 31, December 31,</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> 2000 1999</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Amount Ratio Amount Ratio</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Total capital (to risk-weighted assets)</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>company $30,673 13.76% $30,610 14.09%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 17,836 8.00% 17,382 8.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 22,294 10.00% 21,728 10.00%</FONT></FONT> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>Tier I capital (to risk-weighted assets)</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>company $28,300 12.69% $28,341 13.04%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 8,918 4.00% 8,691 4.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 13,377 6.00% 13,037 6.00%</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Tier I capital (to average assets)</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>company $28,300 8.27% $28,341 8.32%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 13,690 4.00% 13,620 4.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 17,112 5.00% 17,025 5.00%</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>8</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>See the discussion of liquidity below for details regarding future expansion</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>plans and the impact on capital.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Due to the significant rise in market interest rate levels during 1999 and 2000, our available-for-sale investment portfolio continued to decline in value by $100,000 net of federal taxes. Dividend payments, stock repurchase and the rise in market rates resulted the decline in our total shareholders' equity of $73,000 from December 31, 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>July 30, 1999 our company began a plan to purchase, in open market or privately negotiated transactions, up to 135,000 shares of its outstanding common stock. A total of 55,162 shares have been repurchase at a cost of $1 million as of March 31, 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>RESULTS OF OPERATIONS</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Net income for the three month period ending March 31, 2000 was $938,000, an increase of $49,000 or 5.5% over the $888,000 for the 1999 related period. Earnings per share was $.34 during the first three months of 2000 compared with $.32 during the comparable 1999 period. Details of the reasons for this increase are discussed on the following pages (dollars in thousands).</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Net interest income, the most significant component of earnings, is the amount by which interest generated from earning assets exceeds interest expense on liabilities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Net interest income for the three month period ending March 31, 2000, after provision for loan losses, was $2,802,000 an increase of $36,000 compared to an increase of $75,000 at March 31, 1999.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>9</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-2>Analysis of Average Balances and Interest Rates (1)</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="776" > <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="25%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>March 31, 2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="23%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>March 31, 1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="22%" HEIGHT="11"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>March 31, 1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Average</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Balance</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Interest</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Balance</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Interest</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Balance</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Interest</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Rate</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>ASSETS</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Short-term investments:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing deposits at banks</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>796</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>10</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.05</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>408</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.97</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,635</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>36</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.54</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Investment securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Taxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>72,990</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,144</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.27</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>70,457</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,035</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.88</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>76,236</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,252</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.57</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Tax-exempt (3)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>20,634</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>353</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.84</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>19,724</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>341</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.92</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,061</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>102</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.73</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total investment securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>93,624</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,497</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.40</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>90,181</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,376</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.10</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>82,297</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,354</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.58</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Residential mortgage loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>143,415</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,997</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.40</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>132,546</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,827</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.65</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>123,627</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,732</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.96</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Commercial and farm loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>57,294</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,292</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.07</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>49,341</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,157</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.51</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>45,794</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,112</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.85</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans to state and political subdivisions</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>18,492</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>380</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.26</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>10,051</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>211</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.51</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>10,256</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>221</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.74</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15,355</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>340</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.91</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14,616</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>326</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.05</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>12,900</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>313</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.84</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans, net of</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Discount (2)(3)(4)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>234,556</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,009</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.59</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>206,554</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,521</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.88</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>192,577</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,378</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.22</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-earning assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>328,976</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,516</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7.97</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>297,143</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,902</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.06</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>277,509</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,768</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.43</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Cash and due from banks</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,844</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,016</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,142</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Bank premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,927</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,757</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,760</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,092</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,752</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,967</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-interest bearing assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>13,863</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14,469</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>16,374</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Total assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>342,839</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>311,668</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>294,378</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="39%" HEIGHT="14"><FONT FACE="Courier New"><FONT SIZE=-2>LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="14"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing liabilities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>35,668</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>163</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.84</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>34,984</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>155</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.80</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>32,146</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>180</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.27</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Savings accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,607</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>108</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.63</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,782</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>124</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.88</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,452</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>144</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.21</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Money market accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>36,147</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>433</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.82</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>39,246</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>418</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.32</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>35,601</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>425</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.84</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>160,983</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,229</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.57</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>151,348</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,095</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.61</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>144,677</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,055</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.76</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>259,405</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,933</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.55</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>252,360</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,792</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.49</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>238,876</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,804</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.76</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>27,695</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>409</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.94</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,335</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>95</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.25</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,191</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>111</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.26</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-bearing liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>287,100</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,342</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.68</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>259,695</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,887</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.51</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>246,067</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,915</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.80</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Demand deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>22,993</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>20,333</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>19,060</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,721</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,142</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,105</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-interest-bearing liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,714</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>23,475</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>22,165</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Stockholders' equity</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>29,025</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>28,498</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,146</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total liabilities and stockholders'</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Equity</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>342,839</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>311,668</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>294,378</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,174</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,015</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,853</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest spread (5)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.28%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.55%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.63%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest income as a percentage</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Of average interest-earning assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.88%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.12%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.17%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Ratio of interest-earning assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>To interest-bearing liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.15</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.14</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.13</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="30%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="39%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(1) Averages are based on daily averages.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="3" WIDTH="47%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(2) Includes loan origination and commitment fees.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="8" WIDTH="85%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="10" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>a statutory federal income tax rate of 34%.</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="10" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-2>in interest-earning assets.</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="10" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="4" WIDTH="54%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>and the average rate paid on interest-bearing liabilities.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> </TABLE> <BR> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>We have experienced a narrowing interest margin percentage during 1999 and the first quarter of 2000, continuing the trend in recent years. The 1998 flat yield curve limited our opportunity to increase margin with new business as the existing investments and loans mature or repay. When the yield curve became steeper in 1999, interest rates began to rise resulting in our short-term liabilities repricing faster than our short term assets. Currently the yield curve is slightly inverted (not a normal up slope) beyond 10 years. However, most of the</FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE> </BLOCKQUOTE> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>10</FONT></FONT></CENTER> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>company's investments, loans, deposits and borrowings are priced or repriced along the three month to five year portion of the yield curve. We continue to review various pricing and investment strategies to enhance deposit growth while maintaining or expanding the current interest margin.</FONT></FONT></BLOCKQUOTE> <FONT FACE="Courier New"><FONT SIZE=-1> We continue to review various pricing and investment strategies to enhance deposit growth</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> while maintaining or expanding the current interest margin.</FONT></FONT> <BR> <BR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>Analysis of Changes in Net Interest Income on a Tax Equivalent Basis (in thousands) for the Three Month Period Ended March 31,</FONT></FONT></DIR> </DIR> <TABLE BORDER CELLPADDING=2 WIDTH="782" > <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"> </TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="31%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>2000 vs. 1999 (1)</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="34%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 vs. 1998 (1)</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change in</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Total</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change in</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Total</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Volume</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>In Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="14%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Volume</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>In Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest Income: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Short-term investments: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing deposits</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-2>at banks </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(28)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(3)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(31)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Investment securities: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Taxable </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>38 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>71 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>109 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(91)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(126)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(217)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Tax-exempt </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>16 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(4)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>12 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>236 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>239 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total investment securities </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>54 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>67 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>121 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>145 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(123)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>22 </FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Residential mortgage loans </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>226 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(56)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>170 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>185 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(91)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>94 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Commercial and farm loans </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>177 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(42)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>135 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>82 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(37)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>45 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans to state and political subdivisions </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>174 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(5)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>169 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(4)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(5)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(9)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other loans </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>16 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(2)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>33 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(20)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>13 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans, net of </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Discount </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>593 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(105)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>488 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>296 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(153)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>143 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total Interest Income </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>652 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(38)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>614 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>413 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(279)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>134 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest Expense: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing deposits: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>NOW accounts </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>19 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(44)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(25)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Savings accounts </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(1)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(15)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(16)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(22)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(20)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Money Market accounts </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(26)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>41 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>136 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(143)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(7)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Certificates of deposit </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>134 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>134 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>90 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(50)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>40 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-bearing deposits </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>110 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>31 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>141 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>247 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(259)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(12)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other borrowed funds </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>79 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>235 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>314 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(21)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(16)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest expense </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>189 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>266 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>455 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>252 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(280)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(28)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest income </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>463</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="12%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(304)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>159 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>161 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>162 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="32%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="2%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="11"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="13" ROWSPAN="2" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(1) The portion of the total change attributable to both volume and rate changes during the year has been allocated to volume and rate components based upon the absolute dollar amount of the change in each component prior to allocation.</FONT></FONT></TD> </TR> </TABLE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>As can be seen from the preceding tables, tax equivalent net interest income rose from $2,853,000 in 1998 to $3,015,000 in 1999 and increased to $3,174,000 in 2000. In the period ending March 31, 2000, net interest income increased $159,000 while overall spread decreased from 3.55% to 3.28%. The increased volume of interest-earning assets generated an increase in interest income of $652,000 while increased volume of interest-bearing liabilities produced $189,000 of interest expense. The change in volume resulted in an increase of $463,000 in net interest income. The net change in rate was a negative $304,000 resulting in a total positive net change of $159,000 when combined with change in volume. The yield on interest-earning assets decreased 9 basis points from 8.06% to 7.97% and the average interest rate on interest-bearing liabilities increased 17 basis points from 4.51% to 4.68%. We are currently evaluating ways to improve the interest spread.</FONT></FONT></BLOCKQUOTE> <FONT FACE="Courier New"><FONT SIZE=-1>The provision for loan losses was $100,000 for the three-month period ended March 31, 2000 compared to $60,000 for the same period in 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>This provision was appropriate given management's quarterly review of the allowance for loan losses that is based on the following information: migration analysis of delinquent and non accrual loans, estimated future losses on loans, recent review of large problem credits, local and national economic conditions, historical loss experience, OCC qualitative adjustments, purchase of loans through acquisitions and peer comparisons.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>11</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>OTHER OPERATING INCOME (dollars in thousands)</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="560" > <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three months ended</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="27%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="28%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Service charges</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$405 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$289 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>116 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>40.1 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Trust</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>117 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>17 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>17.0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>133 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(33)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(24.8)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Arbitration settlement</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(29)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Realized securities gains, net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>20 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>95 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(75)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(78.9)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$642 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$646 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(4)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(0.6)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="13"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>As indicated in the table above, other income was $642,000 for the three-month period ended March 31, 2000 compared to $646,000 for the same period in 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The increase in service charges is directly attributable to increased checking account, ATM and MasterMoney Card charges.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The trust income increase is the result of a change in our fee structure and additional business.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The decrease in other income was primarily a result of an adjustment to insurance income.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We continue to evaluate means of increasing other operating income to off-set the loss of net interest income described above. Our approach is to apply service charges on transaction accounts by charging fees on transaction activity (reduced by earnings credit based on customers' balances) to more equitably recover costs. We expect to continue this analysis for our other products.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>OTHER OPERATING EXPENSES (dollars in thousands)</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="584" > <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="31%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three months ended</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="31%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="32%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Salaries and employee benefits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$1,081 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$1,011 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>70 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.9 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Occupancy </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>142 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>136 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.4 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Furniture and equipment </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>178 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>166 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.2 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>131 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>183 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(52)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(28.4)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>730 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>732 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(0.3)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$2,262 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$2,228 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>34 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.5 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="37%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="16%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="15%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="16%" HEIGHT="13"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Other operating expenses detailed above were $2.3 million for the three-month period ended March 31, 2000 compared to $2.2 million for the same period in 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The increase in salaries and employee benefits was a result of normal merit increases.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Occupancy and furniture and equipment expense had very little change in either period.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The other operating expense increase reflects the cost of loan promotions and other normal operating expenses.</FONT></FONT> <BR> <BR> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="584" > <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>PROFESSIONAL FEES (dollars in thousands)</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="24%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Three months ended</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="24%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>March 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Other professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>113</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>165</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(52)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(31.5)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Legal fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>-</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Examinations and audits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>- </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>131</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="13" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>183</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(52)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(28.4)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="50%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="13"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Professional fees increase reflects management's efforts to implement strategic growth initiatives and process improvements most of which were completed in 1999.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>12</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Provision for Income Taxes</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The provision for income taxes was $245,000 for the three-month period ended March 31, 2000 compared to $296,000 for the same period in 1999. The decrease was primarily a result of increased levels of tax exempt income.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>In November 1999, we entered into a limited partnership agreement to establish a low income housing project in Bradford County, Pa. As a result of this agreement we expect to receive approximately $900,000 of tax credits over a ten year period once the project has been completed.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>BRANCH ACQUISITION</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>On April 18, 2000, our company executed an agreement whereby we will be acquiring all Bradford County Pennsylvania offices of Sovereign Bank. These six offices located in Sayre, Troy, State Line, Leraysville and Towanda, have total deposits of nearly $80 million. We will also receive Sovereign's Bradford County loan portfolio totaling approximately $30 million. The consummation date for this acquisition is expected to be around September 30, 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our acquisition of Sovereign Bank's loans consist primarily of small business and consumer loans. Future growth in residential mortgage lending in anticipated.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>$80 million from the Bradford County offices to be acquired will provide a significant addition to our core deposit base and will have a positive impact upon our liquidity.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The consummation of the acquisition of Bradford County branches will enable us to eliminate all of our short-term and long-term borrowings from the Federal Home Loan Bank.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We believe this transaction will increase earnings in 2001 and beyond.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>LIQUIDITY</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>As detailed in the Consolidated Statement of Cash Flows, our company incurred a negative net cash flow from operating, investing and financing activities during the 1999 period. The major components have been discussed previously in the financial condition section relating to investments, loans and deposits.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Liquidity is a measure of our company's ability to efficiently meet normal cash flow requirements of both borrowers and depositors. To maintain proper liquidity, we use funds management policies along with our investment policies to assure we can meet our financial obligations to depositors, credit customers and stockholders. Liquidity is needed to meet depositors' withdrawal demands, extend credit to meet borrowers' needs, provide funds for normal operating expenses and cash dividends, and fund other capital expenditures.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company's historical activity in this area can be seen in the Consolidated Statement of Cash Flows from investing and financing activities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Cash generated by operating activities, investing activities and financing activities influences liquidity management. The most important source of funds is the deposits that are primarily core deposits (deposits from customers with other relationships). Short-term debt from the Federal Home Loan Bank supplements our company's availability of funds.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company's use of funds is shown in the investing activity section of the Consolidated Statement of Cash Flows, where the net increase in loans is detailed. Other significant uses of funds include capital expenditures. Surplus funds are then invested in investment securities.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>13</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Capital expenditures during the first quarter of 2000 were $243,000, $241,000 less than the same period in 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>On February 8, 1999, we acquired a property near the Mansfield Wal-Mart consisting of a large office building on 2 acres, to be used as an operations facility. The cost of acquisition and the expected remodeling will be approximately $1.8 million</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>In addition, our company has contracted with Wal-Mart to include a First Citizens branch in their new Supercenter scheduled to be opened August 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company continues to plan for an approximate $2.4 million renovation or replacement of the Mansfield community office. This effort has been in various stages of planning for more than nine years. We expect construction to take place in 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We believe our company has sufficient resources to complete these projects from our normal operations and that they will have a long-term positive effect on revenues, efficiency and the capacity for future growth.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company achieves liquidity primarily from temporary or short-term investments in the Federal Home Loan Bank of Pittsburgh, PA, and investments that mature in less than one year. The company also has a maximum borrowing capacity at the Federal Home Loan Bank of approximately $89 million as an additional source of liquidity.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Apart from those matters described above, management does not currently believe that there are any current trends, events or uncertainties that would have a material impact on capital.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>14</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>CREDIT QUALITY RISK</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>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).</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="764" > <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>March 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="47%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>December 31, </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>2000</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1997</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1996</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing loans:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Non-accruing loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 303 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 421 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,495 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,169 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 844 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Impaired loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>847 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,334 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>382 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>382 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>414 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Accrual loans - 90 days or</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>More past due</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>228 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>78 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>170 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>723 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-performing loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,378 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,833 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,892 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,721 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,981 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>441 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>573 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>529 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>238 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>164 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-performing assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,819 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,406 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,421 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,959 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,145 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="39%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="13"></TD> </TR> </TABLE> <TABLE BORDER CELLPADDING=2 WIDTH="770" > <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing loans as a percent</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>of loans net of unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.59%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.79%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.92%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.90%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.09%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing assets as a percent</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>of loans net of unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.78%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.04%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.18%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.02%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.18%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Allowance for possible loan loasses: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>March 31, </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="8" WIDTH="48%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>December 31, </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>2000 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1997 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1996 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Balance at beginning of period </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,270 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,292 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,138 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,995 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,833 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Charge-offs </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="15%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(22)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(551)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(112)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(83)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(64)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Recoveries </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>54 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>48 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>16 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>21 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Provision for loan losses </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>100 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>475 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>218 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>210 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>205 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>Balance at end of period </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,374 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,270 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,292 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,138 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 1,995 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-2>Allowance for losses as a percent </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="12"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"><FONT FACE="Courier New"><FONT SIZE=-2>of total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.01%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.98%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.13%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.11%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.09%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="38%" HEIGHT="13"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="14%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="12%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="13"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="11%" HEIGHT="13"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Interest does not accrue on impaired loans. Subsequent cash payments received are applied to the outstanding principal balance or recorded as interest income, depending upon management's assessment of its ultimate ability to collect principal and interest.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>INTEREST RATE AND MARKET RISK MANAGEMENT</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The objective of interest rate sensitivity management is to maintain an appropriate balance between the stable growth of income and the risks associated with maximizing income through interest sensitivity imbalances and the market value risk of assets and liabilities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Because of the nature of our operations, we are not subject to foreign currency exchange or commodity price risk and, since our company has no trading portfolio, it is not subject to trading risk.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Currently our company has equity securities that represent only 4% of our investment portfolio and, therefore, equity risk is not significant.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>15</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The primary components of interest-sensitive assets include adjustable-rate loans and investments, loan repayments, investment maturities and money market investments. The primary components of interest-sensitive liabilities include maturing certificates of deposit, IRA certificates of deposit and short-term borrowings. Savings deposits, NOW accounts and money market investor accounts are considered core deposits and are not short-term interest sensitive (except for the top-tier money market investor accounts which are paid current market interest rates).</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Gap analysis, one of the methods used by us to analyze interest rate risk, does not necessarily show the precise impact of specific interest rate movements on our company's net interest income because the repricing of certain assets and liabilities is discretionary and is subject to competitive and other pressures. In addition, assets and liabilities within the same period may, in fact, be repaid at different times and at different rate levels. We have not experienced the kind of earnings volatility that might be indicated from gap analysis.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Our company currently uses a computer simulation model to better measure the impact of interest rate changes on net interest income. We use the model as part of our risk management process that will effectively identify, measure, and monitor our company's risk exposure.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>We us numerous interest rate simulations employing a variety of assumptions are used by us to evaluate our interest rate risk exposure. A shock analysis at March 31, 2000, indicated that a 200 basis point movement in interest rates in either direction would have a minor impact on our company's anticipated net interest income over the next twenty-four months.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>GENERAL</FONT></FONT> <BLOCKQUOTE> <BR><FONT FACE="Courier New"><FONT SIZE=-1>The majority of assets and liabilities of a financial institution are monetary in nature and, therefore, differ greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. However, inflation does have an important impact on the growth of total assets and on noninterest expenses, which tend to rise during periods of general inflation. The recent action by the Federal Reserve of increasing short-term interest rates will help ensure that the level of inflation remains at a relatively low level.</FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>Various congressional bills have been passed and other proposals have been made for significant changes to the banking system, including provisions for: limitation on deposit insurance coverage; changing the timing and method financial institutions use to pay for deposit insurance; and tightening the regulation of bank derivatives' activities.</FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley Act of 1999, which is also known as the Financial Services Modernization Act. The act repeals some depression-era banking laws and will permit banks, insurance companies and securities firms to engage in each others' business after complying with certain conditions and regulations which are yet to be finalized. The act grants to community banks the power to enter new financial markets as a matter of right that larger institutions have managed to do on an ad hoc basis. At this time, our company has no plans to pursue these additional possibilities.</FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>Our company does not believe that the Financial Services Modernization Act will have an immediate positive or negative material impact on our operations. However, the act may have the result of increasing the amount of competition that our company faces from larger financial service companies, many of whom have substantially more financial resources than our company, which may now offer banking services in addition to insurance and brokerage products.</FONT></FONT></BLOCKQUOTE> <BLOCKQUOTE><FONT FACE="Courier New"><FONT SIZE=-1>Aside from those matters described above, we do not believe that there are any trends, events or uncertainties which would have a material adverse impact on future operating results, liquidity or capital resources. We are not aware of any current recommendations by the regulatory authorities (except as described herein) which, if they were to be implemented, would have such an effect, although the general cost of compliance with numerous and multiple federal and state laws and regulations does have, and in the future may have, a negative impact on our company's results of operations.</FONT></FONT></BLOCKQUOTE> <FONT FACE="Courier New"><FONT SIZE=-1>Item 3- Quantitative and Qualitative Disclosure About Market Risk</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>In the normal course of conducting business activities, the company is exposed to market</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>16</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>risk, principally interest rate risk, through the operations of its banking subsidiary. Interest rate risk arises from market driven fluctuations in interest rates that affect cash flows, income, expense and values of financial instruments and was disussed previously in this Form 10-Q. Interest rate risk is managed by management and a committee of the board of directors.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>No material changes in market risk strategy occurred during the current period. A detailed discussion of market risk is provided in the SEC Form 10-K for the period ended December 31, 1999.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>17</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>PART II - OTHER INFORMATION AND SIGNATURES</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 1 - Legal Proceedings</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Management is not aware of any litigation that would have a material</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>adverse effect on the consolidated financial position of the company. Any</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>pending proceedings are ordinary, routine litigation incidental to the</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>business of the company and its subsidiary. In addition, no material</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>proceedings are pending or are known to be threatened or contemplated against</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>the company and its subsidiary by government authorities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 2 - Changes in Securities - - Nothing to report.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 3 - Defaults Upon Senior Securities - Nothing to report.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 4 - Submission of Matters to a Vote of Security Holders.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Results of the voting at the Annual Meeting of Shareholders held on April 18, 1999 at 12:00 p.m. at the Tioga County Fairgrounds Youth Building, Whitneyville, Pennsylvania, 16901</FONT></FONT> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>1. Election of Class 1 Directors whose term will expire in 2003</FONT></FONT> <BR> <DIR> <DIR> <DIR> <DIR> <DIR> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>For Withhold Authority</FONT></FONT></DIR> </DIR> </DIR> </DIR> </DIR> </DIR> </DIR> </DIR> <FONT FACE="Courier New"><FONT SIZE=-1>Bruce L. Adams 2,129,147 53,852</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>William D. Van Etten 2,129,147 53,852</FONT></FONT></DIR> </DIR> <FONT FACE="Courier New"><FONT SIZE=-1> Continuing Directors:</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> Mark L. Dalton Class 2 Term Expires 2001</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> John E. Novak Class 2 Term Expires 2001</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Rudolph J. van der Heil Class 2 Term Expires 2001</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Carol J. Tama Class 1 Term Expires 2002</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> R. Lowell Coolidge Class 1 Term Expires 2002</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Richard E. Wilber Class 1 Term Expires 2002</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> John M. Thomas, M.D. Class 1 Term Expires 2002</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Larry J. Croft Class 1 Term Expires 2002</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>2. Proposal to Amend Article Twelfth of the Articles of Incorporation of Citizens Financial Services, Inc., as amended, to read in full an its entirety as follows: "TWELFTH: Commencing with the 2000 Annual Meeting of Shareholders, no Director of the Corporation shall be eligible to stand for election or continue to serve as a Director at the next Annual Meeting if, as of the date of the Annual Meeting change, such Director has attainde the age of 70 years.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1> For 1,956,236 Against 172,870 Abstain 53,897</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 5 - Other Information - Nothing to report.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>18</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 6 -Exhibits and reports on Form 8-K.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(a) Exhibits.</FONT></FONT> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>(3)(i) - Articles of Incorporation of the Corporation, as amended.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(3)(ii)- By-laws of the Corporation, as amended. (Incorporated by Reference to Exhibit (3)(ii) to the Annual Report of Form 10-K for the fiscal year ended December 31, 1995, as filed with the Commission on March 26, 1996.)</FONT></FONT></DIR> </DIR> </DIR> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>(4) - Instruments Defining the Rights of Stockholders. (Incorporated by reference to the Registrant's Registration Statement No.2-89103 on Form S-14, as filed with the Commission on February 17, 1984.)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(10) - Material Contracts. Employment Agreement between our company and Richard E. Wilber. (Incorporated by Reference to Exhibit (10)to the Annual Report of Form 10-K for the fiscal year ended December 31, 1998, as filed with the Commission on March 17, 1998.)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(11) - Computation of Earnings Per Share included on page 5 of this Form 10-Q.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(27) - Financial Data Schedules, which are submitted electronically to the Securities and Exchange Commission for information only and not filed.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(99) - Independent accountant's review of financial statements for the period ended March 31, 2000.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(b)Reports on Form 8-K. Press release dated April 19, 2000 and filed May 9, 2000.</FONT></FONT></DIR> </DIR> </DIR> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>19</FONT></FONT></CENTER> <P><BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <BR> <DIR> <DIR> <DIR> </DIR> </DIR> </DIR> <FONT FACE="Courier New"><FONT SIZE=-1>Signatures</FONT></FONT> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>Pursuant to the requirements of the Securities Exchange Act of 1934, the</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>undersigned Registrant has duly caused this report to be signed on its behalf</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>by the undersigned hereunto duly authorized.</FONT></FONT> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1> Citizens Financial Services, Inc.</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> (Registrant)</FONT></FONT> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>May 10, 2000 <U>/s/ Richard E. Wilber</U></FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> By: Richard E. Wilber</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> President</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> (Principal Executive Officer)</FONT></FONT> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>May 10, 2000 <U>/s/ Thomas C. Lyman</U></FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> By: Thomas C. Lyman</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Treasurer</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> (Principal Financial Officer &</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> Principal Accounting Officer)</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>20</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>EXHIBITS INDEX</FONT></FONT> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>(3)(i) - Articles of Incorporation of the Corporation, as amended.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(3)(ii)- By-laws of the Corporation, as amended. (Incorporated by Reference to Exhibit (3)(ii) to the Annual Report of Form 10-K for the fiscal year ended December 31, 1995, as filed with the Commission on March 26, 1996.)</FONT></FONT></DIR> </DIR> </DIR> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>(4) - Instruments Defining the Rights of Stockholders. (Incorporated by reference to the Registrant's Registration Statement No.2-89103 on Form S-14, as filed with the Commission on February 17, 1984.)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(10) - Material Contracts. Employment Agreement between our company and Richard E. Wilber. (Incorporated by Reference to Exhibit (10)to the Annual Report of Form 10-K for the fiscal year ended December 31, 1998, as filed with the Commission on March 17, 1998.)</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(11) - Computation of Earnings Per Share included on page 5 of this Form 10-Q.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(27) - Financial Data Schedule, which are submitted electronically to the Securities and Exchange Commission for information only and not filed.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(99) - Independent accountant's review of financial statements for the period ended March 31, 2000.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>21</FONT></FONT></CENTER> </DIR> </DIR> </DIR> <FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> </BODY> </HTML>