<HTML> <BODY> <CENTER> <P><B><FONT FACE="Courier New"><FONT SIZE=-1>UNITED STATES</FONT></FONT></B> <BR><B><FONT FACE="Courier New"><FONT SIZE=-1>SECURITIES AND EXCHANGE COMMISSION</FONT></FONT></B> <BR><B><FONT FACE="Courier New"><FONT SIZE=-1>WASHINGTON, D.C. 20549</FONT></FONT></B> <BR><B><FONT FACE="Courier New"><FONT SIZE=-1>FORM 10-Q</FONT></FONT></B></CENTER> <P><FONT SIZE=-1><B>[</B>X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT> <BR><FONT SIZE=-1>EXCHANGE ACT OF 1934</FONT> <P><FONT SIZE=-1>For the quarterly period ended June 30, 1999</FONT> <BR> <P><BR> <CENTER> <P><FONT SIZE=-1>or</FONT></CENTER> <BR> <P><BR> <P><FONT SIZE=-1>[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT> <BR><FONT SIZE=-1>EXCHANGE ACT OF 1934</FONT> <P><FONT SIZE=-1>For the transition period from_____________________ to ___________________</FONT> <P><FONT SIZE=-1>Commission file number 0-13222</FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT> <BR><FONT SIZE=-1>(Exact name of registrant as specified in its charter)</FONT></CENTER> <DIR> <DIR><FONT SIZE=-1> PENNSYLVANIA 23-2265045</FONT> <BR><FONT SIZE=-1>(State or other jurisdiction of (I.R.S. Employer</FONT> <BR><FONT SIZE=-1>incorporation or organization) Identification No.)</FONT></DIR> </DIR> <P><BR><FONT SIZE=-1> 15 South Main Street, Mansfield, Pennsylvania 16933</FONT> <BR><FONT SIZE=-1> (Address of principal executive offices) (Zip Code)</FONT> <P><FONT SIZE=-1>Registrant's telephone number, including area code: (570) 662-2121</FONT> <BR> <P><FONT SIZE=-1>Indicate by checkmark whether the registrant (1) has filed all reports</FONT> <BR><FONT SIZE=-1>to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934</FONT> <BR><FONT SIZE=-1>during the preceding 12 months (or for such shorter period that the</FONT> <BR><FONT SIZE=-1>registrant was required to file such reports), and (2) has been subject to</FONT> <BR><FONT SIZE=-1>such filing requirements for the past 90 days. Yes__X___ No_____</FONT> <P><FONT SIZE=-1>The number of shares outstanding of the Registrant's Common Stock, as of</FONT> <BR><FONT SIZE=-1>August 5, 1999 2,800,563 shares of Common Stock, par value $1.00.</FONT> <P><FONT SIZE=-1><PAGE></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT SIZE=-1>Citizens Financial Services, Inc.</FONT> <P><FONT SIZE=-1>Form 10-Q</FONT> <P><FONT SIZE=-1>INDEX</FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT SIZE=-1> Page</FONT> <P><FONT SIZE=-1>Part I FINANCIAL INFORMATION (UNAUDITED)</FONT> <P><FONT SIZE=-1>Item 1-Financial Statements</FONT> <P><FONT SIZE=-1> Consolidated Balance Sheet as of June 30, 1999,</FONT> <BR><FONT SIZE=-1> December 31, 1998 and June 30, 1998 1</FONT> <P><FONT SIZE=-1> Consolidated Statement of Income for the Three Months and</FONT> <BR><FONT SIZE=-1> Six Months Ended June 30, 1999 and 1998 2</FONT> <P><FONT SIZE=-1> Consolidated Statement of Comprehensive Income for the Three</FONT> <BR><FONT SIZE=-1> Months and Six Months Ended June 30, 1999 and 1998 3</FONT> <P><FONT SIZE=-1> Consolidated Statement of Cash Flows for the Six Months Ended</FONT> <BR><FONT SIZE=-1> June 30, 1999 and 1998 4</FONT> <P><FONT SIZE=-1> Notes to Consolidated Financial Statements 5</FONT> <P><FONT SIZE=-1>Item 2 -Management's Discussion and Analysis of Financial Condition</FONT> <BR><FONT SIZE=-1> and Results of Operations 6-18</FONT> <P><FONT SIZE=-1>Item 3-Quantitative and Qualitative Disclosure About Market Risk 18</FONT> <P><FONT SIZE=-1>Part II OTHER INFORMATION AND SIGNATURES</FONT> <P><FONT SIZE=-1>Item 1-Legal Proceedings 19</FONT> <P><FONT SIZE=-1>Item 2-Changes in Securities 19</FONT> <P><FONT SIZE=-1>Item 3-Defaults upon Senior Securities 19</FONT> <P><FONT SIZE=-1>Item 4-Submission of Matters to a Vote of Security Holders 19</FONT> <P><FONT SIZE=-1>Item 5-Other Information 19</FONT> <P><FONT SIZE=-1>Item 6-Exhibits and Reports on Form 8-K 19</FONT> <P><FONT SIZE=-1> Signatures 20</FONT> <P><FONT SIZE=-1><PAGE></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="787" > <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED BALANCE SHEET</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>ASSETS:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Cash and due from banks:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 6,615,784 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 7,175,095 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$ 7,422,729 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Interest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>50,396 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>129,708 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,921,855 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Total cash and cash equivalents</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,666,180 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,304,803 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12,344,584 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Available-for-sale securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>88,117,409 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>93,082,429 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>21,457,755 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Held-to-maturity securities (estimated market value $62,781,000)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>62,116,508 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Loans (net of allowance for loan losses 1999, $2,274,000; </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>December 31, 1998 $2,292,000; June 30, 1998, $2,213,000)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>212,597,844 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>203,582,637 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>193,680,740 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>881,750 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>528,630 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>418,866 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,947,710 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,605,686 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,689,941 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Accrued interest receivable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,043,130 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,188,372 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,093,614 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,314,271 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,271,240 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,736,338 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL ASSETS</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$318,568,294 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$313,563,797 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="18"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$299,538,346 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>LIABILITIES:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Deposits:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 22,132,349 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 20,977,843 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$19,809,458 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Interest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>260,251,254 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>253,215,120 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>243,038,127 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>282,383,603 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>274,192,963 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>262,847,585 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,461,279 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,333,610 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,902,280 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Accrued interest payable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,709,017 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,362,596 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,730,513 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,176,302 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,076,164 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,218,630 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL LIABILITIES</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>290,730,201 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>284,965,333 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>272,699,008 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>STOCKHOLDERS' EQUITY:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Common Stock</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>$1.00 par value; authorized 10,000,000 shares;</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>issued and outstanding 2,773,434 shares in 1999</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>and at December 31, 1988, 2,746,564 shares </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>at June 30, 1998, respectively</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,773,434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,773,434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,746,564 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Additional paid-in capital</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,912,967 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,912,967 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,180,760 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Retained earnings</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,013,155 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>16,934,349 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>16,714,028 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>28,699,556 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,620,750 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,641,352 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Accumulated other comprehensive (loss) income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(861,463)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>977,714 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>197,986 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,838,093 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>28,598,464 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,839,338 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="59%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$318,568,294 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$313,563,797 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="13%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$299,538,346 </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> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 1</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="744" > <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>CONSOLIDATED STATEMENT OF INCOME</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="45%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="40%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Three Months Ended</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="15%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Six Months Ended</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="24%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="19%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>INTEREST INCOME:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Interest and fees on loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 4,461,615 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 4,343,598 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 8,910,631 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 8,646,808 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing deposits with banks</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>49,437 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>94,241 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>54,922 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>130,447 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Investment securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Taxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>917,887 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,135,146 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,915,700 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,365,807 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Nontaxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>239,778 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>103,259 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>464,732 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>170,560 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Dividends</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>40,784 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>23,721 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>76,404 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>45,235 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>TOTAL INTEREST INCOME</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,709,501 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,699,965 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,422,389 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,358,857 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>INTEREST EXPENSE:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,838,614 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,849,998 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,630,712 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,654,209 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>52,512 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>107,110 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>147,432 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>218,176 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>TOTAL INTEREST EXPENSE</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,891,126 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,957,108 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,778,144 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,872,385 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>NET INTEREST INCOME</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,818,375 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,742,857 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,644,245 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,486,472 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Provision for loan losses</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>60,000 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>52,500 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>120,000 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>105,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>NET INTEREST INCOME AFTER PROVISION FOR</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>LOAN LOSSES</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,758,375 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,690,357 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,524,245 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,381,472 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>OTHER OPERATING INCOME:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Service charges</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>366,525 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>270,290 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>655,767 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>481,928 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Trust</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>104,545 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>73,715 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>204,231 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>166,230 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>130,898 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>92,490 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>264,268 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>138,036 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16" BGCOLOR="#FFFFFF"><FONT FACE="Courier New"><FONT SIZE=-2>Arbitration settlement</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>43,871 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>28,595 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>111,548 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Realized securities gains, net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>131,562 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>77,580 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>227,045 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>172,377 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>TOTAL OTHER OPERATING INCOME</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>733,530 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>557,946 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,379,906 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,070,119 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>OTHER OPERATING EXPENSES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Salaries and employee benefits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,064,855 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>945,607 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,076,429 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,872,826 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Occupancy </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>131,723 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>126,679 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>267,912 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>262,634 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Furniture and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>174,067 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>178,738 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>340,013 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>357,434 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>132,915 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>88,638 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>315,559 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>156,275 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>726,869 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>633,196 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,458,919 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,337,481 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>TOTAL OTHER OPERATING EXPENSES</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,230,429 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,972,858 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,458,832 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,986,650 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Income before provision for income taxes</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,261,476 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,275,445 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,445,319 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,464,941 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Provision for income taxes</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>308,325 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>360,631 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>603,816 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>703,411 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Net Income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 953,151 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 914,814 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,841,503 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,761,530 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"><B><FONT FACE="Courier New"><FONT SIZE=-2>Earnings Per Share</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.34 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.33 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.66 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.64 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="18"><B><FONT FACE="Courier New"><FONT SIZE=-2>Cash Dividend Declared</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.140 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.130 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.275 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 0.255 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="57%" HEIGHT="16"><FONT FACE="Courier New"><FONT SIZE=-2>Weighted average number of shares outstanding</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="14%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,773,434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,773,434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,773,434 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="10%" HEIGHT="16"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,773,434 </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> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 2</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="1043" > <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>CITIZENS FINANCIAL SERVICES, INC. </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="5" WIDTH="54%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="3%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="8%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="6" WIDTH="24%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>(UNAUDITED) </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="6" WIDTH="14%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="3%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="2%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="7" WIDTH="18%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="3%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="3%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="9" WIDTH="30%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Three Months Ended </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="3%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="8" WIDTH="20%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Six Months Ended </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="13%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="8" WIDTH="29%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="14" WIDTH="38%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Net income </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$ 953,151</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>$914,814 </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$1,841,503 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,761,530 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Other comprehensive income: </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Unrealized gains(losses) on avialable for sale securities </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$(1,735,383)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$(55,365)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$(3,013,677)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$(391,656)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Less: Reclassification adjustment for gain included in net income </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(131,562)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(1,866,945)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(77,580)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(132,945)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>227,045 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(2,786,632)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>172,377 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(219,279)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Other comprehensive income before tax </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(1,866,945)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(132,945)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(2,786,632)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(219,279)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="41%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Income tax expense related to other comprehensive income </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(634,761)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="10" WIDTH="17%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>(45,201)</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(947,455)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(74,555)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Other comprehensive income, net of tax </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(1,232,184)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(87,744)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(1,839,177)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(144,724)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>Comprehensive income </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>$ (279,033)</FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>$827,070 </FONT></FONT></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-2>$ 2,326</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,616,806 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="33%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="17%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="6%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="5%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="5" WIDTH="9%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="4%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="15%" HEIGHT="9"></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> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 3</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="770" > <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="3" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>CONSOLIDATED STATEMENT OF CASH FLOWS</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>(UNAUDITED)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="39%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Six Months Ended</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="39%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="81%" HEIGHT="9"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Net income</FONT></FONT></TD> <TD VALIGN=CENTER WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 1,841,503 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 1,761,530 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="81%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Adjustments to reconcile net income to net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>cash provided by operating activities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for loan losses</FONT></FONT></TD> <TD VALIGN=CENTER WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>120,000 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>105,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Provision for depreciation and amortization</FONT></FONT></TD> <TD VALIGN=CENTER WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>383,114 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>379,424 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Amortization and accretion of investment securities</FONT></FONT></TD> <TD VALIGN=CENTER WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>219,057 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1> 164,782 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Deferred income taxes</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(14,487)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12,094 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Realized gains on securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(227,045)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(172,377)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Realized gains on loans sold</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(15,425)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(34,061)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Gain on sales or disposals of premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(377)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Originations of loans held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,217,375)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,963,032)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9" 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="9" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,232,800 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9" BGCOLOR="#FFFFFF"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,997,093 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>(Gains)Losses on sale of foreclosed assets</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(34,400)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,629 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Decrease in accrued</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Interest receivable and other assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9,767 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>182,971 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="30"><FONT FACE="Courier New"><FONT SIZE=-1>Decrease in accrued interest payable</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>and other liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="30"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(553,440)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="30"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(313,988)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash provided by operating activities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,743,692 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,126,065 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="81%" HEIGHT="9"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM INVESTING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Available-for-sale securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sales of available-for-sale securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>22,121,441 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9,236,406 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from maturity and principal</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Repayments of securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,493,133 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,500,000 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Purchase of securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(28,428,197)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(7,696,171)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Held-to-maturity securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from maturity and principal</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Repayments of securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,127,273 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Purchase of securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(8,369,580)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Net increase in loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(9,666,927)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(4,118,131)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Capital expenditures</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(674,858)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(260,955)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from sales of premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,480 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><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="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>213,001 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>54,796 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash used in investing activities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(7,937,927)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,526,362)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="81%" HEIGHT="9"><B><FONT FACE="Courier New"><FONT SIZE=-1>CASH FLOWS FROM FINANCING ACTIVITIES:</FONT></FONT></B></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Net increase in deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,190,639 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,064,811 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Proceeds from long-term borrowings</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>288,155 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>192,873 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Repayments of long-term borrowings</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(218,900)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(194,063)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Net (decrease)increase in short-term borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,941,585)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>39,275 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Dividends paid</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(762,697)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(700,374)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>Net cash provided by financing activities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,555,612 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5,402,522 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"><FONT FACE="Courier New"><FONT SIZE=-1>Net (decrease)increase in cash and cash equivalents</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(638,623)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,002,225 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,304,803 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,342,359 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="9"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="9"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="61%" HEIGHT="12"><FONT FACE="Courier New"><FONT SIZE=-1>CASH AND CASH EQUIVALENTS AT END OF PERIOD</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="20%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 6,666,180 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="12"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 12,344,584 </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> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 4</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>CITIZENS FINANCIAL SERVICES, INC.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>(Unaudited)</FONT></FONT></CENTER> <BR> <P><BR> <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 June 30, 1999, 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, 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>In June 1998, the Financial Accounting Standards Board issued Statement No. 133, (SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This Statement establishes accounting and reporting standards for derivative instruments and for hedging activities. The Company implemented this statement effective October 1, 1998 and has reclassified all of its securities as available-for-sale. The impact of the reclassification resulted in a significant change in net unrealized holding gains on available-for-sale securities during the 4<SUP>th</SUP> quarter of 1998.</FONT></FONT> <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 2,773,434 for 1999 and 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL</FONT></FONT> <BR><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 (the "Company"). Our Company's consolidated financial condition and results of operations consist almost entirely of our wholly owned subsidiary's (First Citizens National Bank) financial conditions and results of operations. Our discussion should be read in conjunction with the preceding June 30, 1999 Financial Report. The results of operations for the six months ended June 30, 1999 and 1998 are not necessarily indicative of the results to be expected 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> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>*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 quarterly reports on Form 10-K to be filed by our Company and any current reports on Form 8-K filed by our Company.</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>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. 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 (available-for-sale and held-to-maturity securities) decreased by $5 million or 5.3% from December 31, 1998, virtually the same as a decrease of $5 million from June 30, 1998. Proceeds from maturing investments were applied to borrowings and new loans.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>From 1990 through 1996, the concentration of our Company's investment portfolio shifted to U.S. Treasury securities and, until two years ago, no new investments had been made in state and political subdivisions. During 1997, 1998 and 1999, we have been selling U. S. Treasury notes to restructure the investment portfolio. We then invested the proceeds by purchasing AAA municipal bonds, investment grade corporate bonds and U S agency mortgage backed securities.</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>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> <P><FONT FACE="Courier New"><FONT SIZE=-1>As shown in the following tables, the change in loans grew by $19 million compared to the 1998 period, the result of continued demand and attractive interest rates. In addition,</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>$2.1 million in conforming mortgage loans were originated and sold on the secondary market through the Federal Home Loan Mortgage Corporation, providing over $15,000 of income in origination fees and premiums on loans sold. 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.</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="701" > <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Real estate:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Residential</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$138,519 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>64.5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$132,287 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>64.3</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$125,941 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>64.3</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,581 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.8</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>27,164 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13.2</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,969 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13.8</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Agricultural</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,642 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9,266 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,151 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.2</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Loans to individuals</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>for household,</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Family and other purchases</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14,655 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.8</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14,489 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13,557 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.9</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial and other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11,060 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.1</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12,457 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10,162 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.2</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>State and political subdivision loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14,459 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.7</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10,272 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11,182 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.7</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>214,916 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>205,935 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>195,962 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>44 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>60 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>68 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Net loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$214,872 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$205,875 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$195,894 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1999/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1999/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31, 1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Real estate:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Residential</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,232 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.7 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12,578 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10.0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>417 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>612 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2.3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Agricultural</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(624)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(6.7)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>491 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Loans to individuals</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>for household,</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Family and other purchases</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>166 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.1 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,098 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8.1 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Commercial and other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(1,397)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(11.2)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>898 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8.8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>State and political subdivision loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,187 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>40.8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>3,277 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29.3 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,981 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.4 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18,954 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9.7 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> </TR> </TABLE> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>Commercial lending activity is primarily focused 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 in 1999.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Deposits changed by $19.5 million or 7.4% during the June 30, 1999/1998 period. Deposit growth increased primarily because of competitive pricing of our money market deposit accounts and certificates of deposit.</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="701" > <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1997</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Amount</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Percent</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$22,133 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.8</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$20,978 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.7</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$19,809 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.5</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>34,984 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.4</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>37,113 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>13.5</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>32,968 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>12.5</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Savings deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>28,316 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,421 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9.6</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>26,973 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10.3</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Money market deposit accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>44,091 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>15.6</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>39,584 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14.4</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>37,307 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>14.2</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>152,860 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>54.1</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>150,097 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>54.7</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>145,791 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>55.5</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$282,384 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$274,193 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$262,848 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>100.0</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1999/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1999/</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>December 31, 1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30, 1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="22%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Noninterest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,155 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,324 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11.7 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(2,129)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(5.7)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,016 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6.1 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Savings deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,895 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.2 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,343 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5.0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Money market deposit accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4,507 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11.4 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>6,784 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>18.2 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>2,763 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7,069 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>4.8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>8,191 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>3.0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>19,536 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>7.4 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="34%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="18"></TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Borrowed funds decreased $1.9 million during the first six months of 1999 compared with almost no change during the 1998 period. The decrease in 1999 resulted from repayments of short-term borrowing to the Federal Home Loan Bank, a result of strong deposit growth. 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> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 8</FONT></FONT></CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></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> June 30, December 31,</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1> 1999 1998</FONT></FONT> <BR><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 $30,413 14.70% $29,296 14.99%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 16,547 8.00% 15,632 8.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 20,684 10.00% 19,540 10.00%</FONT></FONT> <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 $28,026 13.55% $26,893 13.96%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 8,274 4.00% 7,816 4.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 12,410 6.00% 11,724 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 $28,026 8.90% $26,893 8.66%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>For capital adequacy purposes 12,594 4.00% 12,423 4.00%</FONT></FONT> <BR><FONT FACE="Courier New"><FONT SIZE=-1>To be well capitalized 15,742 5.00% 15,529 5.00%</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>The decrease in market value of our investment securities resulting in an unrealized loss of $861,000 this period compared to unrealized income of $978,000 December 31, 1998.</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. The purchases are to be funded by using available excess capital.</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 six month period ending June 30, 1999 was $1,842,000, an increase of $80,000 or 4.5% over the $1,762,000 for the 1998 related period. Earnings per share was $.66 during the first six months of 1999 compared with $.64 during the comparable 1998 period.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Net income for the three month period was $953,000, an increase of $38,000 or 4.2% over the $915,000 for the 1998 related period.</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. Net interest income for the current six month period, after provision for loan losses, was $5,524,000, an increase of $143,000 or 2.7% compared with an increase of $29,000 or .5% during the same period in 1998.</FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 9</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="764" > <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="6" WIDTH="49%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Analysis of Average Balanaces and Interest Rates (1)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1997</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" 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="9%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" 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="9%" 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="29%" HEIGHT="10"></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="9%" 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="9%" 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> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Balance</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="9%" 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="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>ASSETS</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </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="9%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>%</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="9%" 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="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Short-term investments:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" 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="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,264</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>55</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.90%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,699</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>130</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.58%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,594</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>70</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.44%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total short-term investments</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,264</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>55</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.90%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,699</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>130</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.58%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,594</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>70</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.44%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Investment securities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Taxable</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>67,504</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,992</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.90%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>77,268</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,411</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.24%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>83,719</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,668</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.37%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Tax-exempt (3)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>20,164</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>704</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.98%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,152</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>259</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7.24%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>605</FONT></FONT></DIV> </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 WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>12.56%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total investment securities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>87,668</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,696</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.15%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>84,420</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,670</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.33%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>84,324</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,706</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.42%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total All Investments</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>89,932</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,751</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.12%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>89,119</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,800</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.28%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>86,918</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,776</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.39%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Residential mortgage loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>133,782</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,652</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.52%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>123,353</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,479</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> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>114,416</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,220</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.20%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Commercial and farm loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>48,741</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,143</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.87%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>45,699</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,123</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.37%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>43,241</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,090</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.75%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans to state and political subdivisions</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,271</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>473</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.46%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>10,520</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>452</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.66%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9,758</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>410</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.47%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14,557</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>804</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11.14%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>13,846</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>747</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>10.88%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14,659</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>810</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11.14%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Loans, net of</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Discount (2)(3)(4)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>208,351</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9,072</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.78%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>193,418</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8,801</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.18%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>182,074</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8,530</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9.45%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-earning assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>298,283</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,823</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7.99%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>282,537</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,601</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.28%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>268,992</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>11,306</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>8.48%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Cash and due from banks</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,319</FONT></FONT></DIV> </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>6,446</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,397</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Bank premises and equipment</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,838</FONT></FONT></DIV> </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>5,753</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,789</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,152</FONT></FONT></DIV> </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>1,731</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,761</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-interest bearing assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15,309</FONT></FONT></DIV> </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>13,930</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15,947</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Total assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>313,592</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" 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>296,467</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>284,939</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="14"><FONT FACE="Courier New"><FONT SIZE=-2>LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="14"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="14"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-bearing liabilities:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>NOW accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>35,352</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>314</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.79%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>32,772</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>368</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.26%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>31,672</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>376</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.39%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Savings accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>27,317</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>252</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.86%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,576</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>292</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.22%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>27,901</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>307</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.22%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Money market accounts</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>39,693</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>860</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.37%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>36,346</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>864</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.79%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26,749</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>594</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.48%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Sub-total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>102,362</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,426</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.81%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>95,694</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,524</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.21%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>86,322</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,277</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2.98%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Certificates of deposit</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>151,790</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,204</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.59%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>144,994</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,130</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.74%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>143,610</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4,143</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.82%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-bearing deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>254,152</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,630</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.47%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>240,688</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,654</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.74%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>229,932</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,420</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.75%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other borrowed funds</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,920</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>148</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5.04%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>7,041</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>218</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.24%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>9,095</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>280</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6.21%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total interest-bearing liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>260,072</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,778</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.48%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>247,729</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,872</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.78%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>239,027</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,700</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.81%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Demand deposits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>21,467</FONT></FONT></DIV> </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>19,525</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>18,624</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Other liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,720</FONT></FONT></DIV> </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>2,863</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3,918</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-interest-bearing liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>25,187</FONT></FONT></DIV> </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>22,388</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>22,542</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Stockholders' equity</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>28,333</FONT></FONT></DIV> </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>26,350</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>23,370</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total liabilities and stockholders'</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Equity</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>313,592</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" 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>296,467</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>284,939</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>6,045</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,729</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>5,606</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="11"></TD> </TR> </TABLE> <BR> <BR> <TABLE BORDER=0 CELLSPACING=0 CELLPADDING=2 WIDTH="764" > <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest spread (5)</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.51%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.50%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>3.67%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Net interest income as a percentage of average</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Interest-earning assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.09%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.09%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>4.20%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Ratio of interest-earning assets to interest-bearing</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="29%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Liabilities</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" 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="9%" 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="29%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" 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="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="6" WIDTH="71%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(1) Averages are based on daily averages.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="9" WIDTH="95%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>(2) Includes loan origination and commitment fees.</FONT></FONT></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>(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="4" WIDTH="54%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>a statutory federal income tax rate of 34%.</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="8%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="9" WIDTH="95%" 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 in interest-earning assets.</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="7%" HEIGHT="12"></TD> </TR> <TR> <TD VALIGN=TOP COLSPAN="10" HEIGHT="53"><FONT FACE="Courier New"><FONT SIZE=-2>(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities.</FONT></FONT></TD> </TR> </TABLE> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 10</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>As described in the table above, the yield on earning assets, on a tax-equivalent basis, was 7.99% and 8.28% during the first six months of 1999 and 1998, respectively (a decline of 29 basis points). The cost of funds was 4.48% and 4.78% during the same six month period (a decrease of 30 basis points).</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Previously we have experienced the narrowing of our interest margin percentage. The trend has stopped and become stable during the six months of 1999. Our longer term interest-bearing liabilities are repricing as fast or faster than our interest-earning assets. The current yield curve has become steeper during 1999 increasing our future opportunity to increase margin with new business and as the existing investments and loans mature or repay. We continue to review various pricing and investment strategies to enhance deposit growth while maintaining or expanding the current interest margin.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Analysis of Changes in Net Interest Income of a Tax Equivalent Basis (in thousands)</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="748" > <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="7" WIDTH="65%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Analysis of Changes in Net Interest Income on a Tax-Equivalent Basis (1)</FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="30%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 vs. 1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP COLSPAN="3" WIDTH="31%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998 vs. 1997</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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 WIDTH="10%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change in</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change in</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Change in</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total </FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Volume </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Change </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Volume </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>Rate</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Change </FONT></FONT></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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 WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>$ (61)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ (14)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ (75)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 58 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" 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>$ 60 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"><FONT FACE="Courier New"><FONT SIZE=-2>Total short-term investments </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(61)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(14)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(75)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>58 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" 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>60 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>(291)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(128)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(419)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(201)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" 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>(257)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>451 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(6)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>445 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>229 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(8)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>221 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>160 </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> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>26 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>28 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(64)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(36)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>410 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(237)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>173 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>391 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(132)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>259 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>102 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(82)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>20 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>104 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(71)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>33 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>31 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(10)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>21 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>33 </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> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>42 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>39 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>18 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>57 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" 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>(19)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(63)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>582 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(311)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>271 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>484 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(213)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>271 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>681 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(459)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>222 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>570 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(275)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>295 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> </TABLE> <TABLE BORDER CELLPADDING=2 WIDTH="744" > <TR> <TD VALIGN=TOP WIDTH="35%" 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 WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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 WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>33 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(87)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(54)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>14 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(22)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(8)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>8 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(48)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(40)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(15)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(15)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>94 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(98)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(4)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>212 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>58 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>270 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>181 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(107)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>74 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>42 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(55)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(13)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>316 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(340)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(24)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>253 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(19)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>234 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>(47)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(23)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(70)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(64)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" 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>(62)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>269 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(363)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(94)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></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 WIDTH="10%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(17)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>172 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="10"></TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="10"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="35%" 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>$ 412 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ (96)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 316 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="4%" HEIGHT="11"></TD> <TD VALIGN=TOP WIDTH="9%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 381 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="10%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ (258)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="11%" HEIGHT="11"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 123 </FONT></FONT></DIV> </TD> </TR> </TABLE> <BR> <TABLE BORDER=0 CELLSPACING=0 CELLPADDING=2 WIDTH="571" > <TR> <TD VALIGN=TOP HEIGHT="8"><FONT FACE="Arial"><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> <TR> <TD VALIGN=CENTER> </TD> </TR> </TABLE> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 11</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The above table details the change in net interest income and shows an increase of $681,000 resulting from volume changes in investments and loans. The volume of interest expense increased the cost of interest-bearing deposits and borrowings by $269,000. The positive gain from volume of $412,000 when combined with decrease of income due to rate of $96,000 resulted in a net increase of $316,000 compared to a net increase of $123,000 for the same period in 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>The provision for loan losses was $60,000 and $120,000 for the three-month and six-month periods ended June 30, 1999 compared to $52,500 and $105,000 for the same periods in 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>This provision was appropriate given management's quarterly review of the allowance for loan losses that is based on the following information: migration analysis of delinquent and non accrual loans, estimated future losses on loans, recent review of large problem credits, local and national economic conditions, historical loss experience, OCC qualitative adjustments, purchase of loans through acquisitions and peer comparisons.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>OTHER OPERATING INCOME</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="415" > <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Service charges</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 656 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$ 482 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Trust</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>204 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>166 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>264 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>138 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Arbitration settlement</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>112 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Realized securities gains, net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>227 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>172 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$1,380 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$1,070 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999/1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Service charges</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>174 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>36.1 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Trust</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>38 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>22.9 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>126 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>91.3 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Arbitration settlement</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(83)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(74.1)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Realized securities gains, net</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>55 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>32.0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>310 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>29.0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> </TR> </TABLE> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>Other income was $734,000 and $1,380.000 for the three-month and six-month periods ended June 30, 1999 compared to $558,000 and $1,070,119 for the same periods in 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Service charges were $367,000 and $656,000 for the three-month and six-month periods ended June 30, 1999 compared to $270,000 and $482,000 for the same periods in 1998. 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>Trust income was $105,000 and $204,000 for the three-month and six-month periods ended June 30, 1999 compared to $74,000 and $166,000 for the same periods in 1998. This increase is the result of a change in our fee structure and additional business.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Other income was $131,000 and $264,000 for the three-month and six-month periods ended June 30, 1999 compared to $93,000 and $138,000 for the same periods in 1998. This increase was a result of increases in mortgage servicing fees and insurance income.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Gains on sales of investment securities available-for-sale were $132,000 and $227,000 for the three-month and six-month periods ended June 30, 1999 compared to $78,000 and $172,000 for the same periods in 1998. This increase is primarily the result of continuation of the restructuring of the investment portfolio by selling U. S Treasury Notes and using the proceeds to purchase other securities.</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, recently, is to apply service charges on business 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</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="415" > <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>June 30,</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Salaries and employee benefits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$2,076 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$1,873 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Occupancy </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>268 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>263 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Furniture and equipment </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>340 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>357 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>316 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>156 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,459 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1,338 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$4,459 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>$3,987 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>1999/1998</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP COLSPAN="2" WIDTH="37%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Change</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>$</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>%</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Salaries and employee benefits</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>203 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>10.8 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Occupancy </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>5 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>1.9 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Furniture and equipment </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(17)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>(4.8)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Professional fees</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>160 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>102.6 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-1>Other</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>121 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>9.0 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="63%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-1>Total</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>472 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="19%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-1>11.8 </FONT></FONT></DIV> </TD> </TR> </TABLE> <P><FONT FACE="Courier New"><FONT SIZE=-1>Other Operating Expenses were $2.2 million and $4.5 million for the three-month and six-month periods ended June 30, 1999 compared to $2 million and $4 million for the same periods in 1998.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Salaries and employee benefits were $1,065,000 and $2,076,000 for the three-month and six-month periods ended June 30, 1999 compared to $946,000 and $1,873,000 for the same periods in 1998. This increase was a result of normal merit increases.</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>Professional fees were $133,000 and $316,000 for the three-month and six-month periods ended June 30, 1999 compared to $89,000 and $156,000 for the same periods in 1998. This increase reflects management's efforts to implement strategic growth initiatives and process improvements.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Other operating expenses were $727,000 and $1,459,000 for the three-month and six-month periods ended June 30, 1999 compared to $633,000 and $1,337,000 for the same periods in 1998. The increase reflects the cost of loan promotions and other normal operating expenses.</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 $308,000 and $604,000 for the three-month and six-month periods ended June 30, 1999 compared to $361,000 and $703,000 for the same periods in 1998. The decrease was primarily a result of increased levels of tax exempt income.</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, a slightly negative net cash was provided 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. Another significant uses of funds are capital expenditures. Surplus funds are then invested in investment securities.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Capital expenditures were $675,000 in 1999, $414,000 more than 1998, primarily the result of the acquisition of property that is now our operations center described below.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>These purchases will allow greater operating efficiency and provide our customers with a higher quality product.</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 administration and/or operations facility. We expect the costs of acquisition and remodeling to be approximately $1.4 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 May 2000.</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>Our Company continues to plan for an approximate $2 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 late 1999 or early 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>Liquidity is achieved primarily from temporary or short-term investments in the Federal Home Loan Bank of Pittsburgh, PA ("FHLB"), and investments that mature less than one year. The Company also has a maximum borrowing capacity at the FHLB 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> <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.</FONT></FONT> <BR> <TABLE BORDER CELLPADDING=2 WIDTH="645" > <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="16"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30,</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="48%" HEIGHT="16"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>December 31, </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1997</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1996</FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1995</FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing loans:</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Non-accruing loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$ 269 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,495 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,169 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$844 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$762 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Impaired loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,290 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>382 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>382 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>414 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>697 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Accrual loans - 90 days or</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>More past due</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>60 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>15 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>170 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>723 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>689 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-performing loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,619 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,892 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,721 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1,981 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>2,148 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Foreclosed assets held for sale</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>882 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>529 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>238 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>164 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>208 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-2>Total non-performing assets</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,501 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,421 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,959 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,145 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,356 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP ROWSPAN="2" WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing loans as a percent of loans net of unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.75%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.92%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>0.90%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.09%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.33%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP ROWSPAN="2" WIDTH="41%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-2>Non-performing assets as a percent of loans net of unearned income</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.16%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.18%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.02%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.18%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.46%</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Allowance for possible loan losses: </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>June 30, </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP COLSPAN="4" WIDTH="48%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>December 31, </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1999 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1998 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1997 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1996 </FONT></FONT></CENTER> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <CENTER><FONT FACE="Courier New"><FONT SIZE=-2>1995 </FONT></FONT></CENTER> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Balance at beginning of period </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,292 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,138 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,995 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,833 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,721 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Charge-offs </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(177)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(112)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(83)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(64)</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>(69)</FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Recoveries </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>39 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>48 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>16 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>21 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>18 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Provision for loan losses </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>120 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>218 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>210 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>205 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>163 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-2>Balance at end of period </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,274 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,292 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$2,138 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,995 </FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>$1,833 </FONT></FONT></DIV> </TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="17"><FONT FACE="Courier New"><FONT SIZE=-2>Allowance for losses as a percent </FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="17"></TD> </TR> <TR> <TD VALIGN=TOP WIDTH="41%" HEIGHT="18"><FONT FACE="Courier New"><FONT SIZE=-2>of total loans</FONT></FONT></TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.06%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.13%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.11%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.09%</FONT></FONT></DIV> </TD> <TD VALIGN=TOP WIDTH="12%" HEIGHT="18"> <DIV ALIGN=right><FONT FACE="Courier New"><FONT SIZE=-2>1.13%</FONT></FONT></DIV> </TD> </TR> </TABLE> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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 Company does not accrue interest income 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> <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 (individuals over 59 1/2 have the option of changing their interest rate annually) 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 uses 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>Numerous interest rate simulations using a variety of assumptions are used by us to evaluate our interest rate risk exposure. A shock analysis at June 30, 1999, indicated that a 200 basis point movement in interest rates in either direction would not have a significant adverse 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>YEAR 2000 COMPUTER PROBLEM</FONT></FONT> <UL> <LI> <I><FONT FACE="Courier New"><FONT SIZE=-1>Bank's State of Readiness</FONT></FONT></I></LI> </UL> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>We are aware of the possibility of exposure by banks to a computer problem known as the "Year 2000 Problem" or the "Millennium Bug" (the inability of some computer programs to distinguish between the year 1900 and the year 2000). If not corrected, some computer applications could fail or create erroneous results by or at the Year 2000. This could cause entire system failures, miscalculations, and disruptions of normal business operations including, among other things, a temporary inability to process transactions, send statements, or engage in similar day to day business activities. The extent of the potential impact of the Year 2000 Problem in not yet known, and if not timely corrected, it could affect the global economy.</FONT></FONT> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>We have assessed the extent of vulnerability of our Company's computer systems to the problem. Our Company's conversion, in August 1997, to Jack Henry and Associates (JHA) for core banking application software and the purchase of a new IBM AS/400 hardware system on which to run the core processing software, has greatly minimized our exposure to these problems. The JHA Silverlake System software was certified by the Information Technology Association of America (ITAA) on March 16, 1998 while the IBM AS\400 received the first ever Year 2000 certification by that organization. Most internal testing and validation for these primary mission critical systems was successfully completed in November 1998. The testing process of other critical systems was completed in June 1999.</FONT></FONT></DIR> <UL> <LI> <I><FONT FACE="Courier New"><FONT SIZE=-1>Risk Assessment of Year 2000</FONT></FONT></I></LI> </UL> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>We believe that, with modifications to existing software and conversions to new software, the Year 2000 problem will not pose a significant operational problem for us. However, because most computer systems are, by their very nature, interdependent, it is possible that non-compliant third party computers could impact our Company's computer systems. Additionally, we have taken steps to communicate with the third parties, such as wire transfer systems, telephone systems, electric companies and other utility companies with which we do business to coordinate Year 2000 compliance but could be adversely affected if they or the unrelated third parties are unsuccessful. We have assessed the impact the Year 2000 may have on our large loan (credit risk) and deposit customers and have determined that there is little risk to our bank.</FONT></FONT></DIR> <UL> <LI> <I><FONT FACE="Courier New"><FONT SIZE=-1>Cost of Year 2000</FONT></FONT></I></LI> </UL> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>As described above, our primary systems are Year 2000 compliant, therefore, little programming costs will be incurred. Most of the costs incurred in addressing this problem are related to planning and internal testing and validation which are expected to be expensed as incurred. The financial impact to our Company of Year 2000 compliance was $39,000 in 1998. As of the 2nd quarter of 1999, our Y2K expense was $13,000 and future expenditures are not anticipated to be material to our Company's financial position or results of operations for the remainder of 1999. However, there can be no guarantee that these estimates will be achieved and actual results could differ materially from these plans.</FONT></FONT></DIR> <UL> <LI> <I><FONT FACE="Courier New"><FONT SIZE=-1>Contingency Plans</FONT></FONT></I></LI> </UL> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>We, in conjunction with our Year 2000 and Disaster Recovery consultants, have modified our disaster recover plans to include the response to a Year 2000 problem in a most likely worst case scenario. The Y2K Business Continuation Contingency Plan involves the use of manual labor to compensate for the temporary loss of certain automated computer systems or third party vendors.</FONT></FONT></DIR> <UL> <LI> <I><FONT FACE="Courier New"><FONT SIZE=-1>Customer Awareness</FONT></FONT></I></LI> </UL> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>We have educated our employees and informed customers of our Year 2000 efforts and the actions they can take to minimize the impact on their financial activities. We have held seminars, mailed brochures, and have reported our status in our annual and quarterly reports to our shareholders.</FONT></FONT></DIR> <FONT FACE="Courier New"><FONT SIZE=-1>GENERAL</FONT></FONT> <P><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 level of inflation over the last few years has been declining.</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>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; expanding the power of banks by removing restrictions on bank underwriting activities; tightening the regulation of bank derivatives' activities; allowing commercial enterprises to own banks; and permitting bank holding companies or our Company to own or control affiliates that engage in securities, mutual funds and insurance activities.</FONT></FONT> <P><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> <P><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 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, 1998.</FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 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>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 - Nothing to report.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 5 - Other Information - Nothing to report.</FONT></FONT> <P><FONT FACE="Courier New"><FONT SIZE=-1>Item 6 -Exhibits and reports on Form 8-K.</FONT></FONT> <OL TYPE="a"> <OL TYPE="a"> <LI> <FONT FACE="Courier New"><FONT SIZE=-1>Exhibits.</FONT></FONT></LI> <BR> <P> <P><FONT FACE="Courier New"><FONT SIZE=-1>(3)(i) - Articles of Incorporation of the Corporation, as amended. (Incorporated by Reference to Exhibit (3)(i) to the Annual Report of Form 10-K for the fiscal year ended December 31, 1998, as filed with the Commission on March 17, 1999.)</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> <P><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>(b) Reports on Form 8-K - None.</FONT></FONT></OL> </OL> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Page 19</FONT></FONT></CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <BR> <BR> <BR> <BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>Signatures</FONT></FONT></CENTER> <BR> <P><BR> <BR> <BR> <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> <BR> <BR> <BR> <CENTER> <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></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>August 10, 1999 <U>/s/ Richard E. Wilber</U></FONT></FONT> <BR> <P><BR> <CENTER> <P><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></CENTER> <BR> <P><BR> <BR> <BR> <BR> <BR> <BR> <P><FONT FACE="Courier New"><FONT SIZE=-1>August 10, 1999 <U>/s/ Thomas C. Lyman</U></FONT></FONT> <BR> <P><BR> <CENTER> <P><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> <P><FONT FACE="Courier New"><FONT SIZE=-1>Page 20</FONT></FONT></CENTER> <BR> <P><BR> <P><FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <P><BR> <CENTER> <P><FONT FACE="Courier New"><FONT SIZE=-1>EXHIBITS INDEX</FONT></FONT></CENTER> <DIR> <DIR> <DIR><FONT FACE="Courier New"><FONT SIZE=-1>(3)(i) - Articles of Incorporation of the Corporation, as amended. (Incorporated by Reference to Exhibit (3)(i) to the Annual Report of Form 10-K for the fiscal year ended December 31, 1998, as filed with the Commission on March 17, 1999.)</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> <P><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></DIR> </DIR> </DIR> <CENTER><FONT FACE="Courier New"><FONT SIZE=-1>Page 21</FONT></FONT></CENTER> <FONT FACE="Courier New"><FONT SIZE=-1><PAGE></FONT></FONT> <BR> <TABLE> <CAPTION> </CAPTION> <TR> <TD></TD> </TR> </TABLE> </BODY> </HTML> </TABLE>