FIRST WEST VIRGINIA BANCORP INC, 10-K, 1998-03-30

FIRST WEST VIRGINIA BANCORP INC
10-K, 1998-03-30
STATE COMMERCIAL BANKS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT of 1934 [FEE REQUIRED]

For the Fiscal Year Ended December 31, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to .
------------- -------------

Commission File No. 1-13652
First West Virginia Bancorp, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

West Virginia 55-6051901
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1701 Warwood Avenue
Wheeling, West Virginia 26003
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(Address of principal executive offices)

Registrant's telephone number, including area code: (304) 277-1100
----------------

Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common Stock $5.00 Par Value American Stock Exchange

Securities to be registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months ( or for such shorter period than the
registrant was required to file such report(s), and (2) has been subject to
such filing requirements for the past 90 days. [x] Yes [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to
this Form 10-K. [ ]

The aggregate market value of the voting stock held by nonaffiliates of the
registrant, calculated by reference to the closing sale price of First West
Virginia Bancorp's common stock on the AMEX on March 10, 1998, was
$19,451,916.00. (Registrant has assumed that all of its executive officers
and directors are affiliates. Such assumption shall not be deemed to be
conclusive for any other purpose):

The number of shares outstanding of the issuer's common stock as of March 10,
1998:

Common Stock, $5.00 Par Value 1,209,085 shares
____________________________________________

The total number of pages are 108 ; Exhibit Index is located on page 20

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DOCUMENTS INCORPORATED BY REFERENCE

Part of Form 10-K
into which Document
Documents is incorporated
- --------- -----------------------------

Portions of the Annual
Report to Shareholders Part II, Items 5, 6, 7, and 8;
of First West Virginia Part III, Item 13;
Bancorp, Inc. for the Part IV, Item 14
year ended December 31, 1997. -----------------------------

Portions of First West Part III, Items 10,
Virginia Bancorp, Inc.'s 11, 12, and 13
Proxy statement for the
1998 Annual Meeting
of Shareholders. -----------------------------

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FORM 10-K INDEX
---------------

PART I

Item 1 Business 4

Item 2 Properties 13

Item 3 Legal Proceedings 14

Item 4 Submission of Matters to a Vote of
Security Holders 14

PART II

Item 5 Market for the Registrant's Common Stock and
Related Stockholder Matters 14

Item 6 Selected Financial Data 15

Item 7 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 15

Item 8 Financial Statements and Supplementary Data 16

Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 16

PART III

Item 10 Directors and Executive Officers of
Registrant 16

Item 11 Executive Compensation 17

Item 12 Security Ownership of Certain Beneficial
Owners and Management 17

Item 13 Certain Relationships and Related
Transactions 18

PART IV

Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K 18

Signatures 19

Exhibit Index 20

3
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PART 1

Item 1 BUSINESS
- -------------------

General
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First West Virginia Bancorp, Inc. ("Holding Company"), was organized
as a West Virginia business corporation on July 1, 1973 at the request of the
Boards of Directors of the Bank of Warwood, N.A. and Community Savings Bank,
N.A. for the purpose of becoming a bank holding company, under the Bank
Holding Company Act of 1956, as amended. On December 30, 1974 the
shareholders of those banks voted to become constituent banks of the Holding
Company, which reorganization was subsequently accomplished in accordance with
regulatory procedure, and the Holding Company thus became the first bank
holding company in the state of West Virginia. Those banks later merged on
June 30, 1984 under the name "First West Virginia Bank, N.A." In November,
1995, the subsidiary banks of the Holding Company adopted the Common Name of
"Progressive Bank, N.A."

At December 31, 1997, First West Virginia Bancorp, Inc. had two
wholly-owned banking subsidiaries: Progressive Bank, N.A. in Wheeling, West
Virginia and Progressive Bank, N.A.- Buckhannon, in Buckhannon, West Virginia.
Progressive Bank, N. A. is a community bank serving all of Ohio, Brooke and
Marshall counties in the state of West Virginia, and a portion of the west
bank of the Ohio River, located in the State of Ohio. Progressive Bank, N.A.
operates two full-service offices in Ohio county, Wheeling, West Virginia, one
full-service office in Brooke county, Wellsburg, West Virginia, one
full-service office in Marshall county, Moundsville, West Virginia, and has a
full-service Automated Teller Machine (ATM) at West Liberty State College,
Ohio county, West Liberty, West Virginia and one full-service office in
Bellaire, Ohio. On January 4, 1993, Progressive Bank, N.A. acquired the
Wellsburg Banking and Trust Company, Wellsburg, West Virginia which was
converted to a branch office. On August 22, 1997, the merger and plan of
reorganization between First West Virginia Bancorp, Inc. and two of its
subsidiary banks, Progressive Bank, N.A. and Progressive Bank, N.A. - Bellaire
was completed. The former Progressive Bank, N.A.- Bellaire now operates as a
branch of Progressive Bank, N.A. Progressive Bank, N.A. had total assets of
$128,477,209 as of December 31, 1997. Progressive Bank, N.A. - Buckhannon
operates as a community bank serving parts of Upshur and Lewis counties in the
state of West Virginia. Progressive Bank, N.A.- Buckhannon operates a full
service office in Buckhannon, West Virginia and has one full-service office
located in Weston, West Virginia. As of December 31, 1997, Progressive Bank,
N.A.- Buckhannon had total assets of $27,312,080.

Total Holding Company assets as of December 31, 1997, which include
the assets of its operating subsidiary banks, were $156,142,583. The
authorized capital of the Holding Company consists of 2,000,000 shares of
capital stock, par value of $5.00 per share, of which 1,209,085 shares were
issued and outstanding as of December 31, 1997 to 416 shareholders.
Shareholders' equity at that date was $14,128,995.

General Description of Business
- -------------------------------

First West Virginia Bancorp, Inc. operates a multi-bank holding
company and is dependent upon subsidiaries for cash necessary to pay expenses,
and dividends to its stockholders. The Holding Company functions primarily as
the holder of the capital stock of its wholly-owned subsidiary banks.

The subsidiary banks of the Holding company are engaged in the
business of banking and provide a broad range of consumer and commercial
banking products and services to individuals, businesses, professionals and
governments. The services and products have been designed in such a manner as
to appeal to area consumers and business principals. The loan portfolio of
the banks consists primarily of loans secured by real estate to consumers and
businesses. The bank also engages in commercial loans and general consumer
loans to individuals. The subsidiary banks offer a wide range of both
personal and commercial types of deposit accounts and services as a means of
gathering funds. Types of deposit accounts and services available include
non-interest bearing demand checking, interest bearing checking (NOW
accounts), savings, money market, certificates of deposit, individual
retirement accounts, and Christmas Club accounts. The customer base for
deposits is primarily retail in nature.

4
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General Description of Business - continued
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The majority of the bank's lending is concentrated in the upper Ohio
Valley of northern West Virginia and adjacent areas of Ohio and Pennsylvania.
Approximately 80% of the bank's lending activities are around this area. The
overall makeup of the region's economy continues to change from heavy industry
to state-of-the-art manufacturing, information/service-based office
operations, advanced technology/research and a growing tourism industry. This
allows for diversification of the economy to one more balanced between goods
producing firms and service producing companies. The Wheeling MSA has
experienced modest growth. The United States Chamber of Commerce has
projected an increase in the number of manufacturing jobs in this MSA up to
the year 2000; projecting employment to increase by 26.4 percent over the same
time period. In summary, the number of jobs produced in this regional economy
have increased over the past few years. Unemployment is down from past years,
although it still remains at a point above the national and state level. For
the short term the outlook is for a modest but healthy growth to continue.
Given the historical experience of economic difficulties that have prevailed
in this region, unemployment and growth have been less favorable than the
national averages. The region has also seen a decline in population and
number of households as well as an increase in the average age of its
population. As previously noted, several of these trends have begun to
improve over the past several years; however, should unsatisfactory trends
continue to persist, effects on the bank's loan demand, as well as the overall
asset quality, could be adversely affected.

Upshur County is located in the central section of West Virginia,
approximately 150 miles from the bank's major area of concentration, and is
not considered part of a Metropolitan area. Employment and population trends
over the past few years have been somewhat erratic; however, overall trends in
these areas have been positive. Per Capita income has historically been below
both national and state levels. Service industries comprise the largest
segment of employment in this region, with timber and state and local
government making up the next two highest categories.

First West Virginia Bancorp, Inc.'s business is not seasonal. As of
December 31, 1997, none of the subsidiary banks were engaged in any operation
in foreign countries and none has had transactions with customers in foreign
countries.

Competition involving the Holding Company is generally felt at the
subsidiary level. All phases of the banks' business are highly competitive.
As of December 31, 1997 there were 6 commercial banks and 1 federally
chartered savings bank operating in Wheeling in competition with Progressive
Bank, N.A. In the Wellsburg area there was 1 commercial bank with 1 office
and 1 federally chartered savings bank competing with the Wellsburg branch
office of Progressive Bank, N.A. In the Moundsville area there were 2
commercial banks and 1 federally chartered savings bank competing with the
Moundsville branch office. In the Bellaire area there was 1 commercial bank
and 2 federally or state chartered savings banks. In the Buckhannon area
there were 3 commercial banks competing with Progressive Bank,
N.A.-Buckhannon. There were 3 commercial banks located in the Weston area.
These entities, along with insurance companies, small loan companies, credit
unions and the like compete with respect to their lending activities and also
in attracting demand and time deposits, NOW accounts and money market funds.
A comparison of total deposits and total assets indicates that Progressive
Bank, N.A., Wheeling, ranks 5th in the Wheeling area, 3rd in the Wellsburg
area, 4th in the Moundsville area among the commercial banks and savings and
loan associations, and 4th in the Bellaire area. Progressive Bank, N.A.-
Buckhannon ranks 3rd in the Buckhannon area and 4th in Weston.

Supervision and Regulation
- --------------------------

The Holding Company is subject to the provisions of the Federal Bank
Holding Company Act of 1956, as amended, and to the supervision of the Board
of Governors of the Federal Reserve System. The Bank Holding Company Act
requires the Holding Company to secure the prior approval of the Federal
Reserve Board before it can acquire all or substantially all of the assets of
any bank, or acquire ownership or control of any voting shares of any bank,
if, after such acquisition, it would own or control 5% or more of the voting
shares of such bank. Similarly, a bank holding company is

5
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Supervision and Regulation - continued
- --------------------------------------

prohibited under the Act from engaging in, or acquiring direct or indirect
control of 5% or more of the voting shares of any company engaged in
non-banking activities unless the Federal Reserve Board, by order or
regulation, has found such activities to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In making
determinations as to permitted non-banking activities, the Federal Reserve
Board considers whether the performance of these activities by a bank holding
company would offer benefits to the public which outweigh possible adverse
effects. As a bank holding company, the Holding Company is required to file
with the Federal Reserve Board an annual report and any additional information
that the Federal Reserve Board may require pursuant to the Bank Holding
Company Act. The Federal Reserve Board also makes examinations of the Holding
Company and its non-banking subsidiaries. The Holding Company is also
required to register with the Office of the Commissioner of Banking of West
Virginia and file reports as requested. The Commissioner has the power to
examine the Holding Company and its subsidiaries.

The Holding Company is also deemed an "affiliate" of its subsidiary
banks under the Federal Reserve Act which imposes certain restrictions on
loans between the Holding Company and its subsidiary banks, investments by the
subsidiaries in the stock of the Holding Company, on the taking of stock of
the Holding Company by the subsidiaries as collateral for loans to any
borrower, on purchases by the subsidiaries of certain assets from the Holding
Company, and the payment of dividends by the subsidiaries to the Holding
Company.

Federal Reserve Board approval is required before the Holding Company
or a non-bank subsidiary of the Holding Company may begin to engage in any
permitted non-banking activity. The Federal Reserve Board is empowered to
differentiate between activities which are initiated by a bank holding company
or a subsidiary and activities commenced by acquisition of a going concern.

The operations of the Holding Company's subsidiary banks, being
national banks, are subject to the regulations of a number of regulatory
agencies including the regulations of a number of regulatory authorities
including the Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System and the applicable state Departments
of Banking. Representatives of the Comptroller of the Currency regulate and
conduct examinations of the subsidiary banks. The subsidiary banks are
required to furnish regular reports to the Comptroller of the Currency and the
Federal Deposit Insurance Corporation. The Comptroller of the Currency has
the authority to prevent national banks from engaging in an unsafe or unsound
bank practice and may remove officers or directors. It may be noted that the
subsidiary banks of a bank holding company are subject to certain restrictions
imposed by the banking laws on extensions of credit to the bank holding
company or other subsidiaries.

Being a West Virginia corporation, the Holding Company is also subject
to the corporate laws of the State of West Virginia as set forth in the West
Virginia Corporation Act.

The Financial Institutions Reform, Recovery, and Enforcement Act
("FIRREA") was enacted in August, 1989. This legislation created a new
liability as a depository institution insured by the Federal Deposit Insurance
corporation, ("the FDIC"), can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989 in
connection with (i) the default of a commonly controlled FDIC-insured
depository institution or (ii) any assistance provided by the FDIC to a
commonly controlled FDIC-insured depository institution in danger of default.
Default is defined generally as the appointment of a conservator or receiver
and "in danger of default" is defined generally as the existence of certain
conditions indicating that default is likely to occur in the absence of
regulatory assistance.

6
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Capital Requirements
- --------------------

The Federal Reserve Board and the Office of the Comptroller of the
Currency require a minimum "tier 1" capital to be at least 3% of total assets
("Leverage Ratio"). For all but the most highly rated banks, the minimum
Leverage Ratio requirement will be 4% to 5% of total assets. Tier 1 capital
consists of: (i) common stockholders' equity, noncumulative perpetual
preferred stock and minority interests in consolidated subsidiaries; (ii)
minus intangible assets (other than certain purchased mortgage and credit card
servicing rights); and (iii) minus certain losses, and minus investments in
certain securities of subsidiaries.

In addition, each national bank also must maintain a "tier 1 risk-based
capital ratio" of 4%. The "tier 1 risk-based capital ratio" is defined
in OCC regulations as the ratio to tier 1 capital to "risk-weighted assets".
A bank's total risk-weighted assets are determined by: (i) converting each of
its off-balance sheet items to an on-balance sheet credit equivalent amount;
(ii) assigning each on-balance sheet asset and the credit equivalent amount of
each off-balance sheet item to one of the five risk categories established in
the OCC regulations; and (iii) multiplying the amounts in each category by
the risk factor assigned to that category. The sum of the resulting amounts
constitutes total risk-weighted assets.

Each national bank is also required to maintain a "total risk-based
capital ratio" of at least 8%. The "total risk-based capital ratio" is
defined in the OCC regulations as the ratio of total qualifying capital to
risk-weighted assets (as defined before). Total capital, for purposes of the
risk-based capital requirement, consists of the sum of tier 1 capital (as
defined for purposes of the Leverage Ratio) and supplementary capital.
Supplementary capital includes such items as cumulative perpetual preferred
stock, long-term and intermediate-term preferred stock, term subordinated debt
and general valuation loan and lease loss allowances (but only in an amount of
up to 1.25% of total risk-weighted assets). The maximum amount of
supplementary capital that may be counted towards satisfaction of the total
capital requirement is limited to 100% of core capital. Additionally, term
subordinated debt and intermediate-term preferred stock may only be included
in supplementary capital up to 50% of tier 1 capital.

Capital requirements higher than the generally applicable minimum
requirements may be established for a particular national bank if the OCC
determines that the bank's capital is or may become inadequate in view of its
particular circumstances. Individual minimum capital requirements may be
imposed where a bank is receiving special supervisory attention, has a high
degree of exposure to interest rate risk, or poses other safety or soundness
concerns. Deficient capital may result in the suspension of an institution's
deposit insurance.

As of December 31, 1997, the subsidiaries of First West Virginia
Bancorp, Inc. had capital in excess of the applicable minimum requirements.

Federal Deposit Insurance Corporation Improvement Act of 1991
- -------------------------------------------------------------

The Holding Company may also be subject to certain provisions of the
Federal Deposit Insurance Corporation Improvements Act of 1991 ("FDICIA").
FDICIA requires the Federal Reserve Board of Governors to adopt certain
regulations establishing safety and soundness standards for bank holding
companies. Many of the provisions of the regulation became effective in
December, 1993. Additional provisions will be implemented through the
adoption of regulation by various federal banking agencies.

Under OCC regulations, any national bank that receives notice that it
is undercapitalized, significantly undercapitalized or critically
undercapitalized must file a capital restoration plan with the OCC addressing,
among other things, the manner in which the association will increase its
capital to comply with all applicable capital standards. Under the prompt
corrective action regulations adopted by the OCC, an institution will be
considered: (i) "well capitalized" if the institution has a total risk-based
capital ratio of 10% or greater, a tier 1 risk- based capital ratio of 6% or
greater, and Leverage Ratio of 5% or greater (provided the institution is not
subject to an order, written agreement, capital directive or prompt corrective
action to meet and maintain a specified capital level for any

7
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Federal Deposit Insurance Corporation Improvement Act of 1991 - continued
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capital measure); (ii) "adequately capitalized" if the institution has a
total risk- based capital ratio of 8% or greater, a tier 1 risk-based capital
ratio of 4% or greater, and a Leverage Ratio of 4% or greater (3% or greater
if the institution is rated composite 1 in its most recent report of
examination); (iii) "undercapitalized" if the institution has a total risk-
based capital ratio of less than 8%, or a tier 1 risk-based capital ratio of
less than 4%, or a Leverage Ratio of less than 4% (3% if the institution is
rated composite 1 in its most recent report of examination); (iv)
"significantly undercapitalized" if the institution has a total risk-based
capital ratio of less than 6%, or a tier 1 risk-based capital ratio of less
than 3%, or a Leverage Ratio that is less than 3%; and (v) "critically
undercapitalized" if the institution has a ratio of tangible equity to total
assets that is less than 2%. The regulations also permit the OCC to determine
that an institution should be placed in a lower category based on the
existence of an unsafe and unsound condition or on other information, such as
the institution's examination report, after written notice.

The degree of regulatory intervention mandated by FDICIA and the
prompt corrective action regulations are tied to a national bank's capital
category, with increasing scrutiny and more stringent restrictions being
imposed as a bank's capital declines. The prompt corrective actions specified
by FDICIA for undercapitalized banks include increased monitoring and periodic
review of capital compliance efforts, a requirement to submit a capital
restoration plan, restrictions on dividends and total asset growth, and
limitations on certain new activities (such as opening new branches and
engaging in acquisitions and new lines of business) without OCC approval.
Banks that are significantly undercapitalized or critically undercapitalized
may be required to raise additional capital so that the bank will be
adequately capitalized or be acquired by, or combined with, another bank if
grounds exist for appointing a receiver. Further, the OCC may restrict such
banks from (i) entering into any material transaction without prior approval
of the OCC; (ii) making payments on subordinated debt; (iii) extending
credit for any highly leveraged transaction; (iv) making any material change
in accounting methods; (v) engaging in certain affiliate transactions; (vi)
paying interest on deposits in excess of the prevailing rates of interest in
the region where the institution is located; (vii) paying excess compensation
or bonuses; and (viii) accepting deposits from correspondent depository
institutions. In addition, the OCC may require that such banks; (a) hold a
new election for directors, dismiss any director or senior executive officer
who held office for more than 180 days immediately before the institution
became undercapitalized, or employ qualified senior executive officers; and
(b) divest or liquidate any subsidiary which the OCC determines poses a
significant risk to the institution.

Any company which controls a significantly undercapitalized national
bank may be required to (i) divest or liquidate any affiliate other than an
insured depository institution; or (ii) divest the bank if the OCC determines
that divestiture would improve the bank's financial condition and future
prospects. Generally a conservator or receiver must be appointed for a
critically undercapitalized bank no later than 90 days after the bank becomes
critically undercapitalized, subject to a limited exception for banks which
are in compliance with an approved capital restoration plan and which the OCC
certifies as not likely to fail. Additionally, the OCC may impose such other
restrictions on a capital-deficient bank as the OCC deems necessary or
appropriate for the safety and soundness of the bank, its depositors and
investors, including limitations on investments and lending activities. The
failure by a bank to materially comply with an approved capital plan
constitutes an unsafe or unsound practice.

FDICIA and the regulations promulgated by the OCC pursuant thereto
also require any company that has control of an "undercapitalized" national
bank, in conjunction with the submission of a capital restoration plan by the
bank, to guarantee that the bank will comply with the plan and provide
appropriate assurances of performance. The aggregate liability of any such
controlling company under such guaranty is limited to the lesser of: (i) 5% of
the bank's assets at the time it became undercapitalized; or (ii) the amount
necessary to bring the bank into capital compliance at the time the bank fails
to comply with the terms of its capital plan.

8
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Insurance of Deposits
- ---------------------

The subsidiary bank's deposits are insured by the FDIC through the
Bank Insurance Fund ("BIF") up to a maximum of $100,000 for each insured
depositor. The insurance premium payable by each BIF member is based on the
institution's assessment base (generally total deposit accounts subject to
certain adjustments). The premiums are paid quarterly based on semiannual
assessments. The FDIC promulgated regulations establishing a risk-based
assessment system for each semiannual period commencing with the first
semiannual payment yearly.

Under the risk-based assessment system, each institution is assigned
to one of three capital groups and to one of three supervisory subgroups for
purposes of determining an assessment rate. The capital group is determined
by the institution's regulatory capital position. The supervisory subgroup
assignments are based on a determination by the FDIC's Director of the
Division of Supervision. Institutions may request a review of the supervisory
subgroup assignment. Under this formula, well-capitalized institutions
classified as Subgroup "A" (financially sound institutions with only a few
minor weaknesses) will pay the most favorable assessment rate while
undercapitalized institutions classified as Subgroup "C" (institutions which
pose a substantial probability of loss to the Bank Insurance Fund (BIF) unless
corrective action is taken) will pay the least favorable assessment rate.

Effective August 8, 1995, the FDIC Board established a process for
increasing and lowering all rates for BIF institutions semiannually, if
conditions warrant a change. Under this new system, the Board will have the
flexibility to adjust the entire BIF assessment rate schedule twice a year,
but only within a range of 5% above or below the premium schedule adopted,
without first having to seek public comment. Any adjustments above or below
the 5% range requires public comment, prior to adjusting the assessment rate
schedule.

During 1995, the FDIC Board of Directors reduced the assessment rates
to BIF insured financial institutions. On August 8, 1995, the FDIC Board of
Directors voted to reduce the deposit insurance premiums paid by most BIF
members as a result of achieving the designated reserve level of 1.25% of
insured deposits. These assessment rates for BIF institutions were effective
as of June 1, 1995, and ranged from .04% to .31% depending upon the assessment
category into which the insured institution is placed. Under this assessment
rate schedule for BIF institutions, the best rated institutions paid an annual
rate of four cents per $100 of domestic deposits, which was down from the 23
cents per hundred in effect prior to June 1, 1995. The weakest institutions
continued to pay the 31 cents per $100 of domestic deposits. On November 14,
1995, the FDIC Board of Directors again reduced the insurance premiums paid on
deposits by BIF members. Assessment rates were lowered by 4% from the rates
in effect at June 1, 1995, and were effective as of the first semiannual
period in 1996. The new assessment rates ranged from 0% to 27%, subject to
the statutory requirement that all BIF institutions pay at least $2,000
annually for FDIC insurance. Under this assessment rate schedule, the best
rated institutions would pay the statutory annual minimum of $2,000, while the
weakest institutions would pay an annual rate of 27 cents per $100 of domestic
deposits.

<PAGE>
Insurance of Deposits - continued
- ---------------------------------

On November 26, 1996, the FDIC Board of Directors voted to retain the
BIF assessment schedule of 0% to 27% for the first semi annual period of 1997.
The Board also eliminated the $2,000 minimum annual assessment. In connection
with the elimination of the mandatory minimum assessments, the Board decided
to refund the minimum assessment of $500 paid by certain BIF insured
institutions for the fourth quarter of 1996. In addition, the FDIC Board of
Directors voted to collect an additional assessment (termed the FICO
assessment) against BIF-assessable deposits as a result of the enactment of
the Deposit Insurance Funds Act of 1996. The Deposit Insurance Funds Act of
1996 authorized the Financing Corporation (FICO) to impose periodic
assessments on depository institutions that are BIF members in order to spread
the cost of interest payments on outstanding FICO bonds over a larger number
of institutions. Prior to enactment of this law, the Savings Association
Insurance Fund (SAIF) member institutions were entirely responsible for the
cost of funding these interest payments. The FICO assessment will fluctuate
based on a defined rate applied to deposits held in periods after the date of
legislation. The FICO assessment annual rate for BIF insured institutions is
approximately 1.29 basis points on BIF-assessable deposits.

Insurance on deposits may be terminated by the FDIC after notice and
hearing, upon a finding by the FDIC that a national bank has engaged in unsafe
or unsound practices, is in an unsafe or unsound condition to continue
operations, or has violated any applicable law, rule, regulation, order or
condition imposed by, or written agreement with, the FDIC. Additionally, the
FDIC may temporarily suspend insurance on new deposits received by a national
bank that has no tangible capital and no goodwill included in core capital.

Monetary Policies
- -----------------

The earnings of the Holding Company are dependent upon the earnings of
its wholly-owned subsidiary banks. The earnings of these subsidiary banks are
affected by the policies of regulatory authorities, including the Comptroller
of the Currency, the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation. The policies and regulations of the
regulatory agencies have had and will continue to have a significant effect on
deposits, loans and investment growth, as well as the rate of interest earned
and paid, and therefore will affect the earnings of the subsidiary banks and
the Holding Company in the future, although the degree of such impact cannot
accurately be predicted.

Employees
- ---------

As of December 31, 1997, the Holding Company had 7 part-time
employees. As of December 31, 1997, the subsidiary banks of the Holding
Company had a total of 71 full-time employees and 14 part-time employees. No
employees are union participants or subject to a collective bargaining
agreement.

Interstate Banking
- ---------------------

The Bank Holding Company Act prohibits acquisition by the Holding
Company of 5% or more of the voting shares of, or interest in, all or
substantially all of the assets of any bank without prior approval of the
Federal Reserve Board. Regulations in the state of West Virginia have
permitted the reciprocal interstate branching or acquisition of banks and bank
holding companies since July 1, 1997. Similarly, regulations in the state of
Ohio have permitted interstate acquisitions of banks and bank holding
companies since October 17, 1985. Many other states have adopted legislation
which would permit interstate acquisitions by their banks and bank holding
companies and which would also permit entry by West Virginia bank holding
companies. Such legislation, however, contains various restrictions and
conditions. In 1997, the state of Ohio passed regulations which permit
interstate branching.

10
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Securities Laws and Compliance
- ---------------------------------

As of February 13, 1995, the Holding Company's common stock was
registered with the Securities and Exchange commission ("SEC") under the
Securities Exchange Act of 1934, as amended ("1934 Act"). This registration
requires ongoing compliance with the 1934 Act and its periodic filing
requirements as well as a wide range of Federal and State securities laws.
These requirements include, but are not limited to, the filing of annual,
quarterly and other reports with the SEC, certain requirements as to the
solicitation of proxies from shareholders as well as other proxy rules, and
compliance with the reporting requirements and "short-swing" profit rules
imposed by section 16 of the 1934 Act. While compliance with these additional
rules and regulations will add to the complexity of the Holding company
operation, management of the Holding company believes that the added expense
and administrative burdens will be well offset by the increased visibility,
access to capital markets and other benefits which it has anticipated from
this registration.

Acquisitions of or Affiliations With Other Banks or Bank Holding Companies
- ---------------------------------------------------------------------------

The Board of Directors of the Company from time to time has had
exploratory discussions with other banks and bank holding companies with which
an affiliation might be desirable. While all such discussions have been quite
amicable, there are presently no understandings, agreements, or letters of
intent to affiliate. Undoubtedly, exploratory discussions with other banks
and bank holding companies will continue from time to time. The Board of
Directors of the Company remains committed to obtaining a high return on the
shareholders' investment, consistent with sound and prudent banking practices,
and believes that the acquisition of or affiliation with selected banks, bank
holding companies and permitted non-banking activities is a desirable means to
accomplish that objective. The Company has authorized but unissued shares of
stock which might be issued from time to time to raise additional capital or
for other bank affiliations or other corporate purposes.

The Board of Directors of the Holding Company prefers to remain
autonomous and presently has no plans to merge the Holding Company into a
larger bank holding company or to encourage an acquisition by a larger bank
holding company.

Statistical Information
- -----------------------

The statistical information noted below is provided pursuant to Guide
3, Statistical Disclosure by Bank Holding Companies. Page references are to
the Annual Report to Shareholders for the year ended December 31, 1997, and
such pages are incorporated herein by reference.

Page
1. Distribution of Assets, Liabilities and Stockholders' equity;
Interest Rates and Interest Differential

a. Average Balance Sheets 4

b. Analysis of Net Interest Earnings 4

c. Rate Volume Analysis of Changes in
Interest Income and Expense 5

11
<PAGE>
Statistical Information - continued
- -----------------------------------

Page
2. Investment Portfolio

a. Book Value of Investments

Book values of investment securities at December 31, 1997
and 1996 are as follows (in thousands):

December 31, December 31,
1997 1996
----------- ------------

Securities held to maturity:
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $ - $ 800
Obligations of states
and political subdivisions 4,778 4,764
----------- ------------
Total held to maturity $ 4,778 $ 5,564
----------- ------------
Securities available for sale :
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $ 32,027 $ 39,495
Obligations of states
and political subdivisions 516 507
Corporate debt securities 209 614
Mortgage-backed securities 7,287 3,741
Equity Securities 627 519
----------- ------------
Total available for sale 40,666 44,876
----------- ------------
Total $ 45,444 $ 50,440
=========== ============

b. Maturity Schedule of Investments 7

c. Securities of Issuers Exceeding 10% of Stockholders' Equity N/A

The Corporation does not have any securities of Issuers,
other than U.S. Government and U.S. Government agencies and
corporations, which exceed 10% of Stockholders' Equity.

3. Loan Portfolio

a. Types of Loans 29

b. Maturities and Sensitivity to Changes in
Interest Rates 9

c. Risk Elements 11

d. Other Interest Bearing Assets N/A

4. Summary of Loan Loss Experience 10, 12, 13 ,14

5. Deposits

a. Breakdown of Deposits by Categories,
Average Balance and Average Rate Paid 4

b. Maturity Schedule of Time Certificates of
Deposit and Other Time Deposits of $100,000 or more 31

6. Return on Equity and Assets 2

7. Short-Term Borrowings 14, 33

<PAGE>
Item 2 PROPERTIES
- ------------------

The Holding Company and its subsidiary banks owned and/or leased
property as of December 31, 1997 as described below.

Progressive Bank, N.A. presently owns the land and building at 1701
Warwood Avenue, Wheeling, West Virginia where the bank's Warwood offices are
located. The two-story building has been totally renovated and has
approximately 15,500 square feet in total area. The office has three drive-in
facilities adjacent to the rear of the building and customer parking to the
north side of the building. A lot on North Seventeenth Street, southwest of
the building, is used for employee parking. A two-story home located at 1709
Warwood Avenue was purchased in 1985 for the purpose of providing rental
income and employee parking space. That property is currently used as office
space and is rented to a law firm under a month-to-month lease. Progressive
Bank, N.A. also owns a lot adjacent to the bank for future expansion.

Progressive Bank, N.A. also owns the building and approximately 50% of
the land at 875 National Road, Wheeling, West Virginia at which the Woodsdale
branch is located. The Woodsdale branch has expanded its one-story building to
a total of approximately 6,050 square feet in area in 1994. This expansion
was accomplished by the purchase of approximately 6,600 square feet of land
located immediately west of the existing bank office property in 1993. The
office has four lane drive-in facility at the rear of the building and one
drive-in automatic teller machine in the front of the building. The remaining
portion of the land is leased to the bank until 2003 with 2 ten-year options
to renew.

Progressive Bank, N.A. also owns the Wellsburg branch office located
at 744 Charles Street, Wellsburg, West Virginia. This office is a 3 story
building with over 8,400 square feet of total area. This office includes an
on-premises drive-in facility.

Progressive Bank, N.A. has a license agreement to operate the
Moundsville supermarket branch office located at 1306 Lafayette Avenue,
Moundsville, West Virginia. The license is for a five year term commencing
December 1, 1994, with two five year options to renew.

Progressive Bank, N.A. owns the building and land for the Bellaire
branch office located at 426 34th Street, Bellaire, Ohio, including its drive-
in facilities at the rear of the building. The bank office is housed in a
one-story building, which includes office space in its basement for a total of
4,500 square feet of office area. The bank also leases a lot adjacent to the
parking lot from the Holding Company.

The Holding Company also owns property located at 868 National Road,
Wheeling, West Virginia. The Holding Company acquired this property for
purposes of future expansion. The property is currently subject to a
commercial lease.

Progressive Bank, N.A.- Buckhannon purchased one of two parcels of
land and the building occupied by its full-service banking facility in
Buckhannon, West Virginia on January 14, 1988. The remaining parcel of land
is currently being leased, but the Holding Company has an option to buy the
property if it chooses to do so. The Buckhannon office is a one story
building with approximately 1,760 square feet of office area. The office has
a 3 lane drive-in facility located at the rear of the building. On November
14, 1995, Progressive Bank, N.A.- Buckhannon entered into a lease agreement
for the land and building for its Weston branch office. The Weston branch
office is located at #10 Market Square Shopping Center, Weston, West Virginia.
This lease is for a period of five years commencing March 1, 1996, with three
successive five year options to renew.

The Holding Company does not have any encumbrances or capital leases
on its personal property.

13
<PAGE>
Item 3 Legal Proceedings
- --------------------------

The nature of the business of the Holding Company's subsidiaries
generates a certain amount of litigation involving matters arising in the
ordinary course of business. However, there are no proceedings now pending or
threatened before any court or administrative agency to which the Holding
Company or its subsidiaries are a party or to which their property is subject.

Item 4 Submission of Matters to Vote of Security Holders
- ---------------------------------------------------------

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

PART II

Item 5 Market for Registrant's Common Stock and Related Stockholder Matters
- -----------------------------------------------------------------------------

As of December 31, 1997, the Holding Company had 416 shareholders of
record who collectively held 1,209,085 of the 2,000,000 authorized shares of
the Holding Company, par value $5.00 per share.

On February 13, 1995, the Holding Company's common stock was filed and
became effective under section 12(g) of the Securities and Exchange Act of
1934. On February 21, 1995, the Holding Company was approved for listing its
securities on the American Stock Exchange's Emerging Company Marketplace and
began trading under the symbol FWV.EC on March 8, 1995. The Holding Company
subsequently filed Form 8A to register its common stock under Section 12(b) of
the Securities and Exchange Act of 1934 which became effective on March 1,
1995. On June 16, 1995, the Holding Company was approved for listing its
securities on the American Stock Exchange primary list and began trading under
the symbol FWV on June 20, 1995.

The following table sets forth the high and low sales prices of the
common stock of the Holding Company as reported by the American Stock
Exchange.

Period Stock Prices
------------- --------------------------------
Low High
--------- ---------
1997
-------------
4th Quarter $ 24.75 $ 26.00
* 3rd Quarter $ 18.42 $ 26.67
* 2nd Quarter $ 16.67 $ 18.59
* 1st Quarter $ 16.00 $ 17.00

1996
-------------

* 4th Quarter $ 16.17 $ 16.83
* 3rd Quarter $ 14.25 $ 14.67
* 2nd Quarter $ 14.00 $ 14.67
* 1st Quarter $ 14.00 $ 14.59

* Restated to reflect a 50% common stock dividend, declared September 9, 1997.

14
<PAGE>
Dividends

The Holding Company has paid regular quarterly cash dividends since it
became a bank holding company in 1975, and assuming the ability to do so, it
is anticipated that the Holding Company will continue to declare regular
quarterly cash dividends. Total dividends declared and paid by the Holding
Company in 1997 were $.54 per share and $.47 per share for 1996.

The following table sets forth annual dividend, net income and ratio
of dividends to net income of the Holding Company for 1997, 1996 and 1995.
The values stated have been adjusted for the fifty percent stock dividend to
stockholders of record on October 1, 1997; the four percent stock dividend to
stockholders of record on December 2, 1996; and the two percent common stock
dividend to stockholders of record as of December 1, 1995.

DIVIDEND HISTORY OF HOLDING COMPANY
-----------------------------------
(per share)
Ratio-
Dividends to
Dividend Net Income Net Income
-------- ---------- ----------
1997 .54 1.60 33.8%
1996 .47 1.36 34.6%
1995 .34 1.22 27.9%

The ability of the Holding Company to pay dividends will depend on the
earnings of its subsidiary banks and their financial condition, as well as
other factors such as market conditions, interest rates and regulatory
requirements. Therefore, no assurances may be given as to the continuation of
the Holding Company's ability to pay dividends or maintain its present level
of earnings. See Note 16 to the audited Consolidated Financial Statements for
a discussion on subsidiary dividends.

The common stock of the Holding Company is not subject to any
redemption provisions or restrictions on alienability. The common stock is
entitled to share pro rata in dividends and in distributions in the event of
dissolution or liquidation. There are no options, warrants, privileges or
other rights with respect to Holding Company stock at the present time, nor
are any such rights proposed to be issued.

Item 6 Selected Financial Data
- -------------------------------

Selected Financial Data on page 2 of the Annual Report to Shareholders
of First West Virginia Bancorp, Inc. for the year ended December 31, 1997,
included in this report as Exhibit 13.1, is incorporated herein by reference.

Item 7 Management's Discussion and Analysis of Financial Condition and
- -----------------------------------------------------------------------
Results of Operations
---------------------

Management's Discussion and Analysis of Financial Condition and Results of
Operations on Pages 3 through 16 of the Annual Report to Shareholders of First
West Virginia Bancorp, Inc. for the year ended December 31, 1997, included in
this report as Exhibit 13.1, is incorporated herein by reference.

<PAGE>
Item 8 Financial Statements and Supplementary Data
- ---------------------------------------------------

The report of independent auditors and consolidated financial
statements, included on pages 19 through 41 of the Annual Report to
Shareholders of First West Virginia Bancorp, Inc. for the year ended December
31, 1997, included in this report as Exhibit 13.1, are incorporated herein by
reference. Selected quarterly financial data included on page 17 of the
Annual Report to Shareholders of First West Virginia Bancorp, Inc. for the
year ended December 31, 1997, included in this report as Exhibit 13.1, is
incorporated herein by reference.

Item 9 Changes In and Disagreements with Accountants on Accounting and
- ---------------------------------------------------------------------------
Financial Disclosure
--------------------

Not Applicable

PART III

Item 10 Directors and Executive Officers of Registrant
- -----------------------------------------------------------

(a) Directors of the Registrant
---------------------------

The information required by Item 10 of FORM 10-K related to Directors of the
Registrant appears in the First West Virginia Bancorp, Inc.'s 1998 Proxy
Statement dated March 17, 1998 for Annual Meeting of Stockholders to be held
April 14, 1998, included in this report as Exhibit 99, is incorporated herein
by reference.

Executive Officers of the Registrant
- ----------------------------------------

The following table sets forth selected information about the
principal officers of the Holding Company.

<TABLE>
<CAPTION>
TABLE
- --------------------------------------------------------------------------------------------------------
Name Age All Positions with Holding Company and Subsidiaries
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
George F. Beneke 84 Chairman of the Board of the Holding Company since
1979; Director of the Holding Company since 1973;
Director of Progressive Bank, N.A. since 1958
- --------------------------------------------------------------------------------------------------------
Ronald L. Solomon 58 President and Chief Executive Officer of the Holding
Company since 1978; Vice Chairman of the Board of
Progressive Bank, N.A. since 1985; Chief Executive
Officer and Director of Progressive Bank, N.A. since
1978; Vice Chairman of the Board and Director of
Progressive Bank, N.A. - Buckhannon since 1986
- --------------------------------------------------------------------------------------------------------
Laura G. Inman 56 Vice Chairman of the Board of the Holding Company since
1995; Senior Vice President of the Holding Company 1993-
1995; Senior Vice President of Progressive Bank, N.A. since
1993; Director of the Holding Company and Director of
Progressive Bank, N.A. since 1993.
- --------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
Executive Officers of the Registrant - continued
- ----------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Charles K. Graham 52 Executive Vice President of the Holding
Company since 1986; Vice President of the
Holding Company 1979-1986; President of
Progressive Bank, N.A. since 1985; Executive Vice
President of Progressive Bank, N.A. 1979-1985; and
Director of Progressive Bank, N.A.- Buckhannon
since 1986
- --------------------------------------------------------------------------------------------------------
Beverly A. Barker 44 Senior Vice President and Treasurer of the
Holding Company since 1995; Senior Vice President,
Secretary and Treasurer of the Holding Company
1993-1995; Vice President, Secretary / Treasurer
of the Holding Company 1990-1993; Executive Vice
President, Cashier of Progressive Bank, N.A. since
1995; Vice President, Cashier and Secretary of
Progressive Bank, N.A. 1990-1995
- --------------------------------------------------------------------------------------------------------
Francie P. Reppy 37 Controller of the Holding Company since 1992;
Controller of Progressive Bank, N.A. since 1992
- --------------------------------------------------------------------------------------------------------
Connie R. Tenney 42 Vice President of the Holding Company since 1996;
President, Chief Executive Officer, Cashier and
Secretary of Progressive Bank, N.A.- Buckhannon
since 1995; Director of Progressive Bank, N.A. -
Buckhannon since 1990; Executive Vice President,
Cashier and Secretary of Progressive Bank, N.A.-
Buckhannon 1990-1995; Cashier and Secretary 1986-1990
- --------------------------------------------------------------------------------------------------------
David E. Yaeger 42 Vice President of the Holding Company since 1996;
Senior Vice President of Progressive Bank, N.A.
since 1997; President and Chief Executive Officer
of Progressive Bank, N.A.- Bellaire from 1994-1997
- --------------------------------------------------------------------------------------------------------
</TABLE>

With the exception of Connie R. Tenney, all the principal officers of
the Holding Company reside in or near Wheeling, West Virginia. Connie R.
Tenney resides near Buckhannon, West Virginia.

With the exception of Laura G. Inman, who has been employed by the
Holding Company since January, 1993, and David E. Yaeger, who has been
employed by the Holding Company since October, 1994, each of the executive
officers of the Holding Company has been employed as an officer or employee of
the Holding Company for more than 5 years. Laura G. Inman served as chairman
and president of Wellsburg Banking and Trust company of Wellsburg, West
Virginia from 1969, until that bank's merger into Progressive Bank, N.A. in
1993. David E. Yaeger was previously employed by Norwest Bank Minnesota, N.A.
from 1981 until 1994 and held several positions including Assistant Vice
President of Commercial Lending.

Item 11 Executive Compensation
- ------------------------------

The information required by Item 11 of FORM 10-K related to Executive
Compensation appears in the First West Virginia Bancorp, Inc.'s 1998 Proxy
Statement dated March 17, 1998 for Annual Meeting of Stockholders to be held
April 14, 1998, included in this report as Exhibit 99, is incorporated herein
by reference.

Item 12 Security Ownership of Certain Beneficial Owners and Management
- ----------------------------------------------------------------------------

The information required by Item 12 of FORM 10-K appears in the First
West Virginia Bancorp, Inc.'s 1998 Proxy Statement dated March 17, 1998 for
Annual Meeting of Stockholders held April 14, 1998, included in this report as
Exhibit 99, is incorporated herein by reference.

<PAGE>
Item 13 Certain Relationships and Related Transactions
- ------------------------------------------------------

The information required by Item 13 of FORM 10-K appears in the First
West Virginia Bancorp, Inc.'s 1998 Proxy Statement dated March 17, 1998 for
Annual Meeting of Stockholders held April 14, 1998, included in this report as
Exhibit 99, is incorporated herein by reference and in Note 11 of the Notes to
Consolidated Financial Statements appearing at Page 35 of the Annual Report to
Shareholders for the year ended December 31, 1997, included in this report as
Exhibit 13.1, and incorporated herein by reference.

PART IV

Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8
- ---------------------------------------------------------------------

(a) Financial Statements Filed; Financial Statement Schedules
---------------------------------------------------------

The following consolidated financial statements of First West Virginia
Bancorp, Inc. and subsidiaries, included in the Annual Report to Shareholders
for the year ended December 31, 1997, are incorporated by reference in Item 8:

Exhibit 13.1

Page Number

Report of Certified Public Accountant.......................................19

Consolidated Balance Sheet (December 31, 1997 and December 31, 1996)........20

Consolidated Statements of Income (Years ended December 31, 1997,
1996 and 1995).............................................................21

Consolidated Statements of Changes in Stockholders' Equity (Years ended
December 31, 1997, 1996 and 1995)...........................................22

Consolidated Statements of Cash Flows (Years ended December 31, 1997,
1996 and 1995).............................................................23

Notes to Consolidated Financial Statements (Years ended December 31,
1997, 1996 and 1995)....................................................24-41

(b) Reports on Form 8-K
-----------------------

No reports on Form 8-K were filed during the fourth quarter of 1997.

The exhibits listed in the Exhibit Index on page 20 of this FORM 10-K
are filed herewith or incorporated by reference.

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

First West Virginia Bancorp, Inc.
---------------------------------
(Registrant)
By: /s/ Ronald L. Solomon
---------------------------------
Ronald L. Solomon
President and Chief Executive Officer/Director

Pursuant to the requirements of the Securities Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signatures Title Date
- ---------- ----------- ----

/s/ Ronald L. Solomon President, Chief Executive March 10, 1998
- ------------------------ Officer and Director
Ronald L. Solomon

/s/ Francie P. Reppy Controller March 10, 1998
- ------------------------
Francie P. Reppy

/s/ George F. Beneke Director March 10, 1998
- ------------------------
George F. Beneke

/s/ Sylvan J. Dlesk Director March 10, 1998
- ------------------------
Sylvan J. Dlesk

/s/ Thomas A. Noice Director March 10, 1998
- ------------------------
Thomas A. Noice

/s/ Laura G. Inman Director March 10, 1998
- ------------------------
Laura G. Inman

/s/ James C. Inman, Jr. Director March 10, 1998
- ------------------------
James C. Inman, Jr.

/s/ R. Clark Morton Director March 10, 1998
- ------------------------
R. Clark Morton

/s/ William G. Petroplus Director March 10, 1998
- ------------------------
William G. Petroplus

<PAGE>
EXHIBIT INDEX

The following exhibits are filed herewith and/or are incorporated herein by
reference.

Exhibit
Number Description
- ------- -----------
3.1 Certificate and Articles of Incorporation of First West Virginia
Bancorp, Inc. Incorporated herein by reference.

3.2 Bylaws of First West Virginia Bancorp, Inc.
Incorporated herein by reference.

10.1 Employment Contract dated January 1, 1998 between
First West Virginia Bancorp, Inc. and Ronald L. Solomon.
Filed herewith and incorporated herein by reference.

10.2 Employment Contract dated January 1, 1998 between
First West Virginia Bancorp, Inc. and Charles K. Graham.
Filed herewith and incorporated herein by reference.

10.3 Lease dated July 20, 1993 between Progressive Bank, N.A., formerly
known as "First West Virginia Bank, N.A.", and Angela I. Stauver.
Incorporated herein by reference.

10.4 Lease dated March 26, 1992 between First West Virginia Bancorp, Inc.
and the estate of Thomas L. Stockert, Jr., and the Tom Stockert
Corporation. Incorporated herein by reference.

10.5 Lease dated February 1, 1989 between First West Virginia Bancorp,
Inc. and Progressive Bank, N.A., formerly known as "Farmers
and Merchants National Bank in Bellaire." Incorporated herein by
reference.

10.6 Banking Services License Agreement dated October 26, 1994 between
Progressive Bank, N.A., formerly known as "First West Virginia Bank,
N.A.", and The Kroger Co. Incorporated herein by reference.

10.7 Lease dated November 14, 1995 between Progressive Bank, N.A.
- Buckhannon and First West Virginia Bancorp, Inc. and O.V. Smith
& Sons of Big Chimney, Inc. Incorporated herein by reference.

11.1 Statement regarding computation of per share earnings.
Filed herewith and incorporated herein by reference.

12.1 Statement regarding computation of ratios.
Filed herewith and incorporated herein by reference.

13.1 Annual Report to Shareholders, as listed in Part II, Item 8
Filed herewith and incorporated herein by reference.

13.2 Management's Report on Financial Statements
Filed herewith and incorporated herein by reference.

22.1 Subsidiaries of the Holding Company.
Filed herewith and incorporated herein by reference.

24 Consent of S.R. Snodgrass, A.C.
Filed herewith and incorporated herein by reference.

27 Financial Data Schedule

99 Proxy statement for the Annual Shareholders meeting to be held
April 14, 1998 Filed herewith and incorporated herein by reference.

<PAGE>

EXHIBIT 10.1

Employment Contract dated January 1, 1998 between First West
Virginia Bancorp, Inc. and Ronald L. Solomon

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made in duplicate on this 1st day of January, 1998
between FIRST WEST VIRGINIA BANCORP, INC., a West Virginia corporation,
(Bancorp), and RONALD L. SOLOMON, (Executive).

W I T N E S S E T H :

WHEREAS, Bancorp is desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of entering into the employ of
Bancorp and its subsidiaries in such capacity, for the period and on the terms
and conditions set forth herein:
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending to be
legally bound, do hereby agree as follows:

1. EMPLOYMENT
Bancorp does hereby employ Executive as its President and Chief
Executive Officer and Executive does hereby accept the employment as
President and Chief Executive Officer of Bancorp upon the terms herein
set forth.

Executive shall exercise (subject to the control of the Board of
Directors and Stockholders) a general supervision of the affairs of
Bancorp and its subsidiaries and shall devote his full business time
and attention to the business and affairs of Bancorp and its
subsidiaries and use his best efforts to promote the interests of
Bancorp and/or its subsidiaries.

Executive shall discharge his duties faithfully and to the best of his
ability, and generally shall perform all duties incident to the office
or offices, and such other duties as may be assigned to him by the
Board of Directors.

Executive shall hold such other office of offices in Bancorp or its
subsidiaries as the Board of Directors may elect or appoint him to and
perform the duties of such offices.

<PAGE>
2. TERM
Executive's employment hereunder shall be effective from and after the
date hereof and shall continue for three (3) years hereafter, unless
earlier terminated as provided herein.

3. COMPENSATION
In consideration for all services to be rendered by Executive to
Bancorp and any of its subsidiaries:
(a) Bancorp shall cause to be paid to Executive a salary of no less
than $103,596.00 per annum for a period of three years commencing
on the date hereof, payable in equal bi-weekly installments.
Prior to the first and second anniversaries hereof, the Board of
Directors shall review Executive's salary and make such
adjustments in the rate thereof as it shall deem appropriate.
All references herein to compensation to be paid to Executive are
to the gross amounts thereof which are due hereunder. Bancorp
shall cause to be deducted therefrom all taxes which may be
required to be deducted or withheld under any provision of the
law (including but not limited to Social Security payments and
income tax withholding) now in effect or which may become
effective anytime during the term of this Agreement. Executive
may participate in any health (including medical and major
medical insurance), accident and disability insurance programs
which Bancorp may maintain for the benefit of Bancorp executive
employees.

4. TERMINATION
The term of this Agreement is three (3) years as above provided. In
the event of termination of the employment of Executive by Bancorp for
any reason other than a cause defined below, Executive shall be
entitled to the full compensation provided by this Agreement. In the
event of voluntary termination by the Executive, his compensation
shall cease on the effective date of such termination. As used
herein, the term "cause" shall mean:
(a) A willful and intentional act of Executive intended to inure or
having the effect of injuring the reputation, business or
business relationship of Bancorp;
(b) Any breach of any covenant contained in this Agreement by
Executive;
(c) Repeated or continuous failure, neglect or refusal to perform by
Executive of his duties hereunder;

<PAGE>
(d) Commission by Executive of any act or any failure by Executive to
act involving serious criminal conduct or moral turpitude of
which reflects materially and adversely on Bancorp.

5. CHANGE OF CONTROL OR DUTIES
If Executive terminates his employment following a Change of Control
or a Change of Duties, or if he terminates his employment following
both a Change of Control and a Change of Duties, he shall be entitled
to receive certain severance benefits,. A Change of Duties is defined
as:
(a) Any assignment of the Executive to any duties other than those
specified in this Agreement;
(b) Removal, without cause, of Executive from any position specified
in this Agreement;
(c) A reduction in his compensation or fringe benefits; or
(d) A change in the location of his employment without his consent
following a Change of Control.
A Change of Control is defined as:
(a) The acquisition by any person or group outside the present
Directors and their beneficial ownership of twenty percent (20%)
or more of the stock of Bancorp subsequent to the date of this
Agreement;
(b) The approval of Bancorp of an agreement for the merger of Bancorp
into another corporation not controlled by Bancorp;
(c) The entry by Bancorp into an Agreement for the sale of
substantially all of the assets of Bancorp to a Third party; or
(d) The approval by stockholders of a plan of liquidation of Bancorp.
In such event, Executive shall be entitled to payment of five(5)
times his then current annual base salary and to his incentive
compensation payments not yet received. He shall also be
completely vested in any supplemental retirement benefits then in
existence, and any other fringe benefits, including life,
accident, disability, health and dental insurance plans then in
existence and, if applicable, at the time of termination, use of
an automobile maintained by Bancorp shall be continued by Bancorp
for three (3) years following the date of his termination. If
the employment of the Executive is terminated by reason of
disability, he shall continue to receive his base salary and
incentive

<PAGE>
compensation payments and shall remain eligible for participation of
any of Bancorp's life, accident disability, health and dental
insurance plans then in existence for (6) months from the time of his
disability.

6. INSURANCE
Bancorp, in its sole discretion, may apply for insurance in its own
Name and for its own benefit covering executive for life, medical or
disability insurance, in any amount deemed advisable and Executive
shall have no right, title or interest therein. Executive shall
submit to any required examination and shall execute and assign and/or
deliver such application and policies necessary to effectuate such
insurance coverage.

7. NOTICES
All notices, requests, demands and other communication hereunder shall
be in writing, and shall be deemed to have been duly given if
personally delivered or mailed:
(a) If to Executive, addressed to him at 11 Timber View Drive,
Wheeling, WV 26003.
(b) If to Corporation, addressed to it at: Bancorp, P.O. Box 4075,
Wheeling, WV 26003, or to such other place as either party may
notify the other.

8. CONSTRUCTION OF AGREEMENT
This Agreement was executed by the parties in accordance with and
shall be governed and interpreted in accordance with the laws of West
Virginia.

9. BENEFITS AND BURDENS
This Agreement shall inure to the benefit of and be binding on
Bancorp, its successors and assigns, and any corporation which Bancorp
may merge or consolidate or to which Bancorp may sell substantially
all of its business and assets, and shall inure to the benefit of and
be binding on Executive, his executor, administrators, heirs and legal
representatives. Since Executive's duties and services hereunder are
special, personal and unique in nature, Executive may not transfer,
sell or otherwise assign his rights, obligations or benefits under
this Agreement.

10. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
relating to the subject

<PAGE>
matter hereof and supersedes all previous discussions, negotiations
and agreements between the parties, whether written or oral, with
respect to the subject matter hereof. This Agreement cannot be
modified, altered or amended except by a writing, signed by both
parties.

11. SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or enforceability shall not affect or
impair the validity or enforceability of the remaining provisions of
this Agreement, which shall continue to be bound thereby.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.

/s/ Ronald L. Solomon
----------------------------------
RONALD L. SOLOMON

FIRST WEST VIRGINIA BANCORP, INC.

BY:/s/ George F. Beneke
--------------------------------------
ITS CHAIRMAN OF THE BOARD

<PAGE>
EXHIBIT 10.2

Employment Contract dated January 1, 1998 between First West
Virginia Bancorp, Inc. and Charles K. Graham

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made in duplicate on this 1st day of January, 1998
between FIRST WEST VIRGINIA BANCORP, INC., a West Virginia corporation,
(Bancorp), and CHARLES K. GRAHAM, (Executive).

W I T N E S S E T H :

1. EMPLOYMENT
Bancorp does hereby employ Executive as its Executive Vice President
and Executive does hereby accept the employment as Executive Vice
President of Bancorp upon the terms herein set forth.

Executive shall hold such other office of offices in Bancorp or its
subsidiaries as the Board of Directors may elect or appoint him to and
perform the duties of such offices.

<PAGE>
2. TERM
Executive's employment hereunder shall be effective from and after the
date hereof and shall continue for three (3) years hereafter, unless
earlier terminated as provided herein.

3. COMPENSATION
In consideration for all services to be rendered by Executive to
Bancorp and any of its subsidiaries:
(a) Bancorp shall cause to be paid to Executive a salary of no less
than $73,704.00 per annum for a period of three years commencing
on the date hereof, payable in equal bi-weekly installments.
Prior to the first and second anniversaries hereof, the Board of
Directors shall review Executive's salary and make such
adjustments in the rate thereof as it shall deem appropriate.
All references herein to compensation to be paid to Executive are
to the gross amounts thereof which are due hereunder. Bancorp
shall cause to be deducted therefrom all taxes which may be
required to be deducted or withheld under any provision of the
law (including but not limited to Social Security payments and
income tax withholding) now in effect or which may become
effective anytime during the term of this Agreement. Executive
may participate in any health (including medical and major
medical insurance), accident and disability insurance programs
which Bancorp may maintain for the benefit of Bancorp executive
employees.

<PAGE>
(d) Commission by Executive of any act or any failure by Executive to
act involving serious criminal conduct or moral turpitude or
which reflects materially and adversely on Bancorp.

<PAGE>
compensation payments and shall remain eligible for participation
of any of Bancorp's life, accident disability, health and dental
insurance plans then in existence for (6) months from the time of
his disability.

6. INSURANCE
Bancorp, in its sole discretion, may apply for insurance in its own
name and for its own benefit covering executive for life, medical or
disability insurance, in any amount deemed advisable and Executive
shall have no right, title or interest therein. Executive shall
submit to any required examination and shall execute and assign and/or
deliver such application and policies necessary to effectuate such
insurance coverage.

7. NOTICES
All notices, requests, demands and other communication hereunder shall
be in writing, and shall be deemed to have been duly given if
personally delivered or mailed:
(a) If to Executive, addressed to him at 8 Nottingham Drive,
Wheeling, WV 26003.
(b) If to Corporation, addressed to it at: Bancorp, P.O. Box 4075,
Wheeling, WV 26003, or to such other place as either party may
notify the other.

8. CONSTRUCTION OF AGREEMENT
This Agreement was executed by the parties in accordance with and
shall be governed and interpreted in accordance with the laws of West
Virginia.

10. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
relating to the subject

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.

/s/ Charles R. Graham
-----------------------------------------
CHARLES K. GRAHAM

FIRST WEST VIRGINIA BANCORP, INC.

BY:/s/ George F. Beneke
-----------------------------------------
ITS CHAIRMAN OF THE BOARD

<PAGE>

EXHIBIT 11.1

Statement Regarding Computation of Per Share Earnings

<PAGE>
Computation of Earnings Per Share
- ---------------------------------

The following formula was used to calculate the earnings per share, page 21,
Consolidated Statements of Income for the year ended December 31, 1997, 1996
and 1995, included in this report as Exhibit 13.1.

(Calculation) (Ratio)

Net Income/Weighted average shares of common stock outstanding for the period
= Earnings Per Share

December 31,
1997 1996 1995
---------- ---------- ----------

Weighted Average
Shares Outstanding 1,209,085 1,209,085 1,209,085

Net Income $1,930,568 $1,643,994 $1,470,347

Per Share Amount $ 1.60 $ 1.36 $ 1.22

No common stock equivalents exist.

<PAGE>
EXHIBIT 12.1

Statement Regarding Computation of Ratios

<PAGE>
Computation of Ratios
- ----------------------

The following formulas were used to calculate the ratios in Financial
Information and Supplementary Data, page 42, Selected Financial Data for the
years ended December 31, 1997, 1996, 1995, 1994 and 1993, included in this
report.

(Calculation)
Net Income/Weighted average shares of common stock outstanding for the period
= Earnings Per Share

<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Net Income $ 1,930,568 $ 1,643,994 $ 1,470,347 $ 1,287,713 $ 1,192,614

Weighted Average
Shares Outstanding 1,209,085 1,209,085 1,209,085 1,208,987 1,206,498

Per Share Amount $ 1.60 $ 1.36 $ 1.22 $ 1.07 $ .99
</TABLE>

(Calculation)
Cash dividends/ Shares issued
= Cash dividends declared per share
<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Cash dividends $ 652,936 $ 573,698 $ 410,525 $ 448,535 $ 410,130

Shares issued 1,209,085 1,209,085 1,209,085 1,209,085 1,209,085

Per Share Amount $ .54 $ .47 $ .34 $ .37 $ .34
</TABLE>

(Calculation)
Stockholders' Equity/ Shares issued
= Book Value per share
<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Stockholders' Equity $14,128,995 $12,649,278 $11,709,207 $10,367,843 $ 9,755,475

Shares issued 1,209,085 1,209,085 1,209,085 1,209,085 1,209,085

Per Share Amount $ 11.69 $ 10.46 $ 9.68 $ 8.58 $ 8.07

<PAGE>
(Calculation)
Net Income / Total average assets
= Return on Average Assets

(In thousands)
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Net Income $ 1,931 $ 1,644 $ 1,470 $ 1,288 $ 1,193

Total Average Assets $ 153,290 $ 137,810 $ 124,145 $ 117,996 $ 115,765

Return on Average Assets 1.26% 1.19% 1.18% 1.09% 1.03%
</TABLE>

(Calculation)
Net Income/Average stockholders' equity
= Return on Average Equity
<TABLE>
<CAPTION>
(In thousands)
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Net Income $ 1,931 $ 1,644 $ 1,470 $ 1,288 $ 1,193

Total Average
Stockholders' Equity $ 13,400 $ 12,186 $ 11,170 $ 10,253 $ 9,252

Return on Average Equity 14.41% 13.49% 13.16% 12.56% 12.89%
</TABLE>

(Calculation)
Average Equity / Average stockholders' equity
= Average Equity to Average Assets
<TABLE>
<CAPTION>

(In thousands)
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Total Average
Stockholders' Equity $ 13,400 $ 12,186 $ 11,170 $ 10,253 $ 9,252

Total Average Assets $ 153,290 $ 137,810 $ 124,145 $ 117,996 $ 115,765

Average Equity
to Average Assets 8.74% 8.84% 9.00% 8.69% 7.99%
</TABLE>

<PAGE>
(Calculation)
Cash dividends per share/Net income per share
= Dividend Payout Ratio
<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Cash dividends
per share $ .54 $ .47 $ .34 $ .37 $ .34

Net income per share $ 1.60 $ 1.36 $ 1.22 $ 1.07 $ .99

Dividend Payout Ratio 33.75% 34.56% 27.87% 34.58% 34.34%
</TABLE>

(Calculation)
Loans/ Total deposits
= Loan to Deposit Ratio
<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------

<S> <C> <C> <C> <C> <C>
Loans $ 95,373,653 $ 80,416,680 $ 72,006,276 $ 61,667,148 $ 55,838,361

Total deposits $137,044,813 $125,271,069 $114,895,154 $105,730,236 $105,790,970

Loan to Deposit Ratio 69.59% 64.19% 62.67% 58.32% 52.78%
</TABLE>

<PAGE>

EXHIBIT 13.1

Annual Report to Shareholders

<PAGE>
INSERT INSIDE FRONT COVER OF ANNUAL REPORT

<PAGE>
(FIRST WEST VIRGINIA BANCORP LETTERHEAD)
P.O. Box 6671
Wheeling, WV 26003

Dear Shareholders,

It is with great pleasure that I present to you the record earnings
performance contained in the 1997 Annual Report of First West Virginia
Bancorp, Inc. Consolidated net income for 1997 was $1,930,568 or $1.60 per
share, a 17.4% increase over the $1,643,994 or $1.36 per share earned for
1996. The Holding Company ended the year 1997 with total assets of
$156,142,583, an increase of 8.0% over the $144,545,710 reported in 1996.
Total stockholders' equity at December 31, 1997 was $14,128,995, an increase
of 11.7% over the prior year. The book value per share was $11.69 at December
31, 1997 as compared to $10.46 a year earlier.

During 1997, the board of directors declared and paid cash dividends
of $.54 per share compared to $.47 per share during 1996, which represents an
increase of 14.9% over the prior year. Additionally, on September 9, 1997 the
Board of Directors declared a three-for-two stock split in the effect of a 50%
stock dividend payable to shareholders of record on October 1, 1997.

The merger and plan of reorganization between First West Virginia
Bancorp, Inc. and two of its subsidiary banks, Progressive Bank, N.A.,
Wheeling, West Virginia and Progressive Bank, N.A. - Bellaire, Bellaire, Ohio,
was completed during the third quarter of 1997. The former Progressive Bank,
N.A. - Bellaire now operates as a branch bank of Progressive Bank, N.A.,
Wheeling, West Virginia.

In our continued commitment to our sales, service and quality
initiative, First West Virginia Bancorp, Inc. strives to provide competitive
products and quality services to bank customers. During the second quarter of
1997, the Progressive Gold money market account was introduced in order to
meet the customer demand for an insured money market account and to enhance
our existing deposit products. The Progressive Gold money market account
provides an optimum return with $100,000 FDIC coverage.

The board of directors of First West Virginia Bancorp, Inc. elected
William G. Petroplus to the board. Mr. Petroplus is an attorney at law and a
senior partner with the firm of Petroplus & Gaudino located in Wheeling, West
Virginia. He has been a member of the board of directors of Progressive Bank,
N.A., since 1986. Mr. Petroplus was elected to fulfill the unexpired term
created by the resignation of Robert A. Heyl. Mr. Heyl, a former director of
Progressive Bank, N.A. - Bellaire, had served as a member of the board of
directors of First West Virginia Bancorp, Inc. since 1988. Mr. Heyl resigned
due to illness and his experience, support and dedication to the corporation
will be sadly missed.

First West Virginia Bancorp, Inc. has been built on a philosophy of
safety and soundness, service and commitment to our customers and strategic
growth. We will continue this approach in the years ahead as we embark upon
the new millennium.

As always, my gratitude goes to our loyal customers and
shareholders, as well as hard-working directors, officers and employees for
their ongoing support which led our organization to attain record earnings
once again.

Sincerely,

/s/ Ronald L. Solomon

Ronald L. Solomon
President and Chief Executive Officer

<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------

Table One
SELECTED FINANCIAL DATA
(In thousands, except per share data
- -----------------------------------------------------------------------------------------------------
First West Virginia Bancorp, Inc.

Years ended
December 31,
-----------------------------------------------------------
1997 1996 1995 1994 1993
--------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS

Total interest income $ 11,507 $ 10,067 $ 8,937 $ 7,783 $ 8,054
Total interest expense 4,745 3,925 3,421 2,868 3,319
Net interest income 6,762 6,142 5,516 4,915 4,735
Provision for loan losses 131 71 50 77 116
Total other income 639 568 738 725 666
Total other expenses 4,377 4,182 4,007 3,641 3,528
Income before income taxes 2,893 2,457 2,198 1,922 1,757
Net income 1,931 1,644 1,470 1,288 1,193

PER SHARE DATA (1)

Net income $ 1.60 $ 1.36 $ 1.22 $ 1.07 .99
Cash dividends declared (2) .54 .47 .34 .37 .34
Book value per share 11.69 10.46 9.68 8.58 8.07

AVERAGE BALANCE SHEET SUMMARY

Total loans, net $ 86,609 $ 74,469 $ 66,058 $ 56,991 $ 56,264
Investment securities 51,754 48,557 46,020 50,282 47,755
Deposits - Interest Bearing 120,589 112,768 100,488 95,980 94,852
Long-term debt - - - 44 754
Stockholders' equity 13,400 12,186 11,170 10,253 9,252
Total Assets 153,290 137,810 124,145 117,996 115,765

BALANCE SHEET
Investments $ 45,444 $ 50,440 $ 45,996 $ 45,551 $ 50,099
Loans 95,374 80,417 72,006 61,667 55,838
Other Assets 15,325 13,689 9,953 9,445 10,303
---------- --------- ---------- --------- ---------
Total Assets $ 156,143 $ 144,546 $ 127,955 $ 116,663 $116,240
========== ========= ========= ========= =========
Deposits $ 137,045 $ 125,271 $ 114,895 $ 105,730 $105,791
Repurchase Agreements 4,075 5,931 749 105 -
Other Liabilities 894 695 602 460 694
Shareholders' Equity 14,129 12,649 11,709 10,368 9,755
---------- --------- ---------- --------- ---------
Total Liabilities and
Shareholders' Equity $ 156,143 $ 144,546 $ 127,955 $ 116,663 $116,240
=========- ========= ========= ========= =========
SELECTED RATIOS
Return on average assets 1.26% 1.19% 1.18% 1.09% 1.03%
Return on average equity 14.41% 13.49% 13.16% 12.56% 12.89%
Average equity to average assets 8.74% 8.84% 9.00% 8.69% 7.99%
Dividend payout ratio (1) (2) 33.75% 34.56% 27.87% 34.58% 34.34%
Loan to Deposit ratio 69.59% 64.19% 62.67% 58.32% 52.78%
</TABLE>

(1) Adjusted for 3 for 2 stock split in the effect of a fifty (50) percent
common stock dividend, declared September 9, 1997, payable on October 27, 1997
to shareholders of record as of October 1, 1997; the 4 percent common stock
dividend to stockholders of record as of December 2, 1996, a 2 percent common
stock dividend to stockholders of record as of December 1, 1995 and the
two-for-one stock split effective April 15, 1994.

(2) Cash dividends and the related payout ratio are based on historical
results of the Holding Company and do not include cash dividends of acquired
subsidiaries prior to the dates of consummation.
- -----------------------------------------------------------------------------
2

<PAGE>
First West Virginia Bancorp, Inc.
Management's Discussion and Analysis of the Financial Condition and
Results of Holding Company Operations
---------------------------------------------------------------

First West Virginia Bancorp, Inc., a West Virginia corporation
headquartered in Wheeling, West Virginia commenced operations in July, 1973
and has two wholly-owned subsidiaries: Progressive Bank, N.A., which operates
in Wheeling, Wellsburg, and Moundsville, West Virginia and Bellaire, Ohio; and
Progressive Bank, N.A.-Buckhannon, which operates in Buckhannon and Weston,
West Virginia. Following is a discussion and analysis of the significant
changes in the financial condition and results of operations of First West
Virginia Bancorp, Inc., (the Holding Company), and its subsidiaries for the
years ended December 31, 1997, 1996 and 1995. This discussion and analysis
should be read in conjunction with the Consolidated Financial Statements and
the Notes, thereto.

OVERVIEW

The Holding Company reported net income of $1,930,568 for the year ended
December 31, 1997 as compared to $1,643,994 for the year ended December 31,
1996. The 17.4% increase in earnings during 1997 over 1996 can be primarily
attributed to increased net interest income and noninterest income, partially
offset by increased operating expenses and the provision for loan losses.
Earnings per common share were $1.60 in 1997 compared to $1.36 in 1996.

Operational earnings improved with net interest income increasing $620,713 or
10.1%, to $6,762,362 during 1997 as compared to the same period in 1996. The
increase results primarily from the growth in the loan portfolio.

The return on average assets (ROA), which measures the effectiveness of asset
utilization to produce net income, increased in 1997 to 1.26%, up from 1.19%
in 1996. The return on average equity (ROE), which measures the return on the
stockholders' investment, was 14.41% in 1997 and compares favorably over the
13.49% earned in 1996.

The Holding Company ended the year 1997 with total assets of $156,142,583 an
increase of 8.0% over the $144,545,710 reported for the year ended December
31, 1996. Loans net of reserves increased in 1997 by $14,899,512 to
$94,155,890, as compared to $79,256,378 reported at December 31, 1996. Total
deposits increased in 1997 by $11,773,744, from $125,271,069 at December 31,
1996 to $137,044,813 at December 31, 1997, primarily due to the increase in
Time deposits.

Non-performing assets were $839,000 at December 31, 1997, up 19.5%, from
$702,000 at December 31, 1996. The allowance for loan losses amounted to
$1,217,763 at December 31, 1997 or 1.3% of total loans, compared to $1,160,302
or 1.4% of total loans at December 31, 1996.

The Board of Directors declared and paid cash dividends of $.54 per share
during 1997 as compared to $.47 in 1996. On September 9, 1997, the Board of
Directors also declared a 50% Stock Dividend to its shareholders of record as
of October 1, 1997. Accordingly, the Holding Company issued 402,978 shares of
common stock on October 27, 1997.

Table One is a five year summary of Selected Financial Data of the Holding
Company. The sections that follow discuss in more detail the information
summarized in Table One.

EARNINGS ANALYSIS

Net Interest Income

Net interest income, which is the difference between interest earned on loans
and investments and interest paid on deposits and other liabilities, is the
primary source of earnings for the Holding Company. Changes in the volume and
mix of earning assets and interest bearing liabilities combined with changes
in market rates of interest greatly affect net interest income. Tables Two
and Three analyze the changes in net interest income for the three years ended
December 31, 1997, 1996, and 1995.

Net interest income was $6,762,362 in 1997, an increase of $620,713 or 10.1%,
from 1996, following an increase in 1996 of $625,768 or 11.3% from 1995. The
increase in net interest income for 1997 and 1996 was primarily attributable
to the growth in the loan portfolio. Interest and fees on loans and lease
financing increased $1,085,701 or 15.9% from 1996 to 1997 and $772,538 or
12.7% from 1995 to 1996. The increased interest income on loans and lease
financing for both years resulted from increases in the average loan volume of
$12,140,000 in 1997 and $8,411,000 in 1996. Increases in installment,
commercial and residential real estate loans primarily contributed to the loan
growth during 1997. Growth in commercial real estate, installment and
commercial loans primarily contributed to the increase in 1996. The average
yield on loans decreased .04% from 9.19% in 1996 to 9.15% in 1997. There was
no change in the average yield on loans between 1996 and 1995.

3
<PAGE>
- ------------------------------------------------------------------------------

Table Two
Average Balance Sheets and Interest Rate Analysis (in thousands)

The following table presents an average balance sheet, interest earned on
interest bearing assets, interest paid on interest bearing liabilities,
average interest rates and interest differentials for the years ended December
31, 1997, 1996, and 1995. Average balance sheet information as of December
31, 1997, 1996, and 1995 was compiled using the daily average balance sheet.
Loan fees and unearned discounts were included in income for average rate
calculation purposes. Non-accrual loans were included in the average balance
computations; however, no interest was included in income subsequent to the
non-accrual status classification.

<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996 December 31, 1995
-------------------------- -------------------------- --------------------------
Average Average Average Average Average Average
Volume Interest Rate Volume Interest Rate Volume Interest Rate
-------- -------- ------ -------- -------- ------ -------- -------- ------
(expressed in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment securities:
U.S. Treasury and other U. S.
Government agencies $ 45,157 $ 2,861 6.34% $ 42,203 $ 2,501 5.93% $ 39,411 $ 2,206 5.60%
Obligations of states and
political subdivisions 5,470 264 4.83% 4,869 247 5.07% 4,666 248 5.32%
Other securities 1,127 69 6.12% 1,485 101 6.80% 1,943 122 6.28%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total Investment securities: 51,754 3,194 6.17% 48,557 2,849 5.87% 46,020 2,576 5.60%
Interest bearing deposits 533 28 5.25% 1,556 81 5.21% 88 5 5.68%
Federal funds sold 6,561 357 5.44% 5,590 295 5.28% 4,835 287 5.94%
Loans, net of unearned income 86,609 7,928 9.15% 74,469 6,842 9.19% 66,058 6,069 9.19%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total earning assets 145,457 11,507 7.91% 130,172 10,067 7.73% 117,001 8,937 7.64%

Cash and due from banks 4,104 4,000 3,747
Bank premises and equipment 3,178 3,313 2,928
Other assets 1,741 1,496 1,552
Allowance for possible loan losses (1,190) (1,171) (1,083)
-------- -------- --------
Total Assets $153,290 $137,810 $124,145
======== ======== ========

LIABILITIES
Certificates of deposit $ 55,149 $ 2,945 5.34% $ 45,579 $ 2,286 5.02% $ 36,080 $ 1,734 4.81%
Savings deposits 41,376 1,102 2.66% 39,594 997 2.52% 42,326 1,152 2.72%
Interest bearing demand deposits 24,064 509 2.12% 23,880 515 2.16% 22,082 518 2.35%
Federal funds purchased and
Repurchase agreements 5,118 189 3.69% 3,715 127 3.42% 462 17 3.68%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total interest bearing liabilities 125,707 4,745 3.77% 112,768 3,925 3.48% 100,950 3,421 3.39%
Demand deposits 13,235 12,128 11,387
Other liabilities 948 728 638
-------- -------- --------
Total Liabilities 139,890 125,624 112,975
STOCKHOLDERS' EQUITY 13,400 12,186 11,170
-------- ------- --------
Total Liabilities
and Stockholders' Equity $153,290 $137,810 $124,145
======== ======== ========

Net yield on earning assets $ 6,762 4.65% $ 6,142 4.72% $ 5,516 4.71%
======== ====== ======== ====== ======== ======
</TABLE>
The fully taxable equivalent basis of interest income from obligations of
states and political subdivisions has been determined using a combined Federal
and State corporate income tax rate of 40% for 1997, 1996, and 1995,
respectively. The effect of this adjustment is presented below (in
thousands).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Obligations of states and
political subdivisions:
Investment securities $ 5,470 $ 440 8.04% $ 4,869 $ 412 8.46% $ 4,666 $ 413 8.86%
Loans 86,609 8,018 9.26% 74,469 6,912 9.28% 66,058 6,124 9.27%
======== ======== ====== ======== ======== ====== ======== ======== ======
Total earning assets $145,457 $ 11,773 8.09% $130,172 $ 10,302 7.91% $117,001 $ 9,157 7.83%
======== ======== ====== ======== ======== ====== ======== ======== ======
Taxable equivalent net yield on
earning assets $ 7,028 4.83% $ 6,377 4.90% $ 5,736 4.90%
======== ====== ======== ====== ======== ======
</TABLE>
- ------------------------------------------------------------------------------
4
<PAGE>
- ------------------------------------------------------------------------------

Table Three
Rate Volume Analysis of Changes in Interest Income and Expense
(in thousands)

The effect on interest income and interest expense for the years ended
December 31, 1997, 1996, and 1995 due to changes in average volume and rate
from the prior year, is presented below. The effect of a change in average
volume has been determined by applying the average rate to the change in
volume. The change in rate has been determined by applying the average volume
in the earlier year by the change in rate. The change in interest due to both
rate and volume has been allocated to volume and rate changes in proportion to
the relationship of the absolute dollar amounts of change in each.

1997 Compared to 1996 1996 Compared to 1995 1995 Compared to 1994
Increase (Decrease) Increase (Decrease) Increase (Decrease)
Due to Change in: Due to Change in: Due to Change in:
--------------------------- --------------------------- ---------------------------
Net Net Net
Average Increase Average Increase Average Increase
Volume Rate (decrease) Volume Rate (decrease) Volume Rate (decrease)
------- ------- ------- ------- ------- ------- ------- ------- -------
(expressed in thousands)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME FROM:
- -----------------------
U.S. Treasury and other U.S.
Government agencies $ 175 $ 185 $ 360 $ 156 $ 139 $ 295 $ (250) $ 141 $ (109)
Obligations of states and
political subdivisions 30 (13) 17 11 (12) (1) 49 (8) 41
Other securities (24) (8) (32) (29) 8 (21) (24) (2) (26)
Interest bearing deposits (53) - (53) 86 (11) 75 (5) 2 (3)
Federal funds sold 51 11 62 45 (36) 9 42 86 128
Loans, net of unearned income 1,116 (30) 1,086 773 - 773 787 336 1,123
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest earned 1,295 145 1,440 1,042 88 1,130 599 555 1,154

INTEREST EXPENSE ON:
- -----------------------
Time deposits 480 179 659 456 96 552 251 368 619
Savings deposits 45 60 105 (75) (80) (155) (77) (13) (90)
Interest bearing demand deposits 4 (10) (6) 42 (45) (3) 16 (4) 12
Federal funds purchased and
Repurchase agreements 48 14 62 120 (10) 110 19 (4) 15
Long-term debt - - - - - - (3) - (3)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest paid 577 243 820 543 (39) 504 206 347 553
------- ------- ------- ------- ------- ------- ------- ------- -------
Net interest differential $ 718 $ (98) $ 620 $ 499 $ 127 $ 626 $ 393 $ 208 $ 601
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

Presented below is the effect on volume and rate variances of the adjustment
of interest income on obligations of states and political subdivisions to the
fully taxable equivalent basis using a combined Federal and State corporate
income tax rate of 40% for the years ended 1997, 1996, 1995, and 1994,
respectively.

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Obligations of states and
political subdivisions:
Investment securities $ 51 $ (23) $ 28 $ 18 $ (19) $ (1) $ 81 $ (13) $ 68
Loans 1,127 (21) 1,106 780 8 788 794 344 1,138
======= ======= ======= ======= ======= ======= ======= ======= =======
Total interest earned $ 1,327 $ 144 $ 1,471 $ 1,056 $ 89 $ 1,145 $ 638 $ 558 $ 1,196
======= ======= ======= ======= ======= ======= ======= ======= =======

Net interest differential $ 750 $ (99) $ 651 $ 513 $ 128 $ 641 $ 432 $ 211 $ 643
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
- ------------------------------------------------------------------------------
5
<PAGE>
Net Interest Income - Continued

The increase in the average yield earned combined with the increase in the
average volume of investment securities also contributed to the increase in
net interest income during 1997 and 1996. In 1997, interest income on
investment securities increased $343,159 or 12.0% from 1996, compared to the
increase in 1996 of 273,401 or 10.6% from 1995. The average volume of
investment securities increased $3,197,000 in 1997 and $2,537,000 in 1996
which contributed to increased interest income. The average yield on
investment securities increased .3%, from 5.87% in 1996 to 6.17% in 1997 and
increased .27% from 5.60% in 1995 to 5.87% in 1996.

Interest expense in 1997 increased $819,038 or 20.9% from 1996, compared to an
increase in 1996 of $504,581 or 14.8% from 1995. The increases in interest
expense for both 1997 and 1996 were primarily the result of deposit growth.
During 1997, the average volume of interest bearing deposits increased
$11,536,000 or 10.6% as compared to 1996, and increased $8,565,000 or 8.5% in
1996 as compared to 1995. Average volume increases of interest bearing
deposits during 1997 and 1996 were primarily the result of the growth in
certificates of deposit.

The average yield paid on interest bearing liabilities increased .29%, from
3.48% in 1996 to 3.77% in 1997, and follows an increase of .09%, from 3.39% in
1995 to 3.48% in 1996. The increase in the average yield on interest bearing
liabilities during 1997 was primarily the result of a shift in the interest
bearing deposit mix from demand and savings deposits to certificates of
deposit, which were higher yielding combined with an increase in average rates
paid on repurchase agreements.

The changes in the volume and mix of earning assets and interest bearing
liabilities combined with the changes in the market rates of interest resulted
in net interest yields on average earning assets of 4.83% for 1997, as
compared to 4.90% and 4.90% earned during 1996 and 1995, respectively.

Noninterest Income

Service charges represent the major component of noninterest income. These
charges are earned from assessments made on checking and savings accounts.
Service charges increased $50,192 in 1997, up 13.7%, from 1996, as compared to
a decrease of 1.8% from 1995 to 1996. The increase in service charges in 1997
was primarily due to an increase in the number of charges assessed on deposit
accounts. The decrease in service charges in 1996 were primarily due to a
decrease in charges assessed on deposit accounts.

Sales of investment securities by the subsidiary banks are generally limited
to the needs established under the liquidity policies. During 1997, the
subsidiary banks accounted for securities gains of $2,772 and securities
losses of $4,063 and were attributable to sales of securities available for
sale. During 1996, securities losses were $711 and were also attributable to
sales of securities available for sale by a subsidiary bank. Securities gains
of $170,075 were realized in 1995. All securities gains in 1995 were
attributable to the holding company's sales of marketable equity securities
available for sale.

Other operating income is comprised of fees from safe deposit box rentals,
sales of checkbooks, sales of cashier's checks and money orders, utility
collections, ATM charges and card fees, home equity credit line fees, credit
life commissions, credit card fees and commissions and various other charges
and fees related to normal customer banking relationships. In 1997, other
operating income was $224,584, an increase of $21,555 or 10.6% over 1996, and
follows an increase of $6,852, or 3.5%, over 1995. During 1997, increases in
income earned on checkbook sales, utility bill collections and safe deposit
box rent combined with an increase in lease income on property owned by the
Company primarily contributed to the increase in other operating income.
During 1996, increases in fees earned for utility bill collections and ATM
cards combined with an increase in lease income on property owned by the
corporation, offset by a premium for lease servicing arising from the early
sale of equipment in 1995 primarily contributed to the increase in other
operating income.

Non-Interest Expense

Salary and employee benefits is the largest component of non-interest expense.
For the year 1997, salary and employee benefits increased $161,549 or 7.6%
over the same period in 1996. During 1996, salary and employee benefits
increased $141,653 or 7.2% over 1995. The increase in salary and benefits in
1997 was primarily due to normal annual merit adjustments. The increase for
1996 was primarily due to the hiring of additional personnel by a subsidiary
bank for a branch office which opened in April, 1996 and normal annual merit
adjustments in salaries.

<PAGE>
- ------------------------------------------------------------------------------

Table Four
Investment Portfolio
(in thousands)

The maturity distribution using book value including accretion of discounts
and amortization of premiums (expressed in thousands) and approximate yield of
investment securities at December 31, 1997 and December 31, 1996 are presented
in the following table. Tax equivalent yield basis was used on tax exempt
obligations. Approximate yield was calculated using a weighted average of
yield to maturities.

<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
---------------------------------------- ----------------------------------------
Securities Securities Securities Securities
Held to Maturity Available for Sale Held to Maturity Available for Sale
----------------- ----------------- ----------------- -----------------
Amount Yield Amount Yield Amount Yield Amount Yield
-------- ------ -------- ------ -------- ------ -------- ------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and other U.S.
Government Agencies

Within One Year $ - -% $ 7,794 6.11% $ - -% $ 6,714 5.74%
After One But
Within Five Years - - 21,970 6.38 800 5.02 29,280 6.27
After Five But
Within Ten Years - - 2,263 6.94 - - 3,501 6.83
After Ten Years - - - - - - - -
-------- ------ -------- ------ -------- ------ -------- ------
- - 32,027 6.35 800 5.02 39,495 6.23

States & Political Subdivisions

Within One Year 436 6.31 - - 200 7.57 - -
After One But
Within Five Years 3,238 7.16 - - 2,723 7.53 - -
After Five But
Within Ten Years 941 7.55 516 7.46 1,678 7.89 507 7.58
After Ten Years 163 7.72 - - 163 7.72 - -
-------- ------ -------- ------ -------- ------ -------- ------
4,778 7.18 516 7.46 4,764 7.66 507 7.58

Corporate Debt Securities

Within One Year - - - - - - 404 7.60
After One But
Within Five Years - - 209 7.83 - - 210 7.78
-------- ------ -------- ------ -------- ------ -------- ------
- - 209 7.83 - - 614 7.66

Mortgage-Backed Securities - - 7,287 6.55 - - 3,741 6.95

Equity Securities - - 627 5.45 - - 519 6.15
-------- ------ -------- ------ -------- ------ -------- ------
Total $ 4,778 7.18% $ 40,666 6.39% $ 5,564 7.28% $ 44,876 6.32%
======== ====== ======== ====== ======== ====== ======== ======
</TABLE>

- ------------------------------------------------------------------------------

7
<PAGE>
Non-Interest Expense Continued

The major components of other operating expenses include: stationery and
supplies, directors fees, service expense, postage and transportation, other
taxes, advertising, and regulatory assessment and deposit insurance. Other
operating expenses increased $9,239 or .7% in 1997 over 1996 and decreased
$107,202 or 7.6% in 1996. Increased service expense, other taxes and
regulatory assessment and deposit insurance expenses, offset in part by
decreased stationery and supplies expense and other expenses primarily
contributed to the increase in other operating expenses during 1997.

The decrease in other operating expenses during 1996 was primarily due to the
reduction in the Federal Deposit Insurance Corporation (FDIC) insurance
assessment and the decrease in advertising expense, offset in part by
increased postage and transportation expense, other taxes and other expenses.
The regulatory assessment and deposit insurance expenses decreased $117,457 or
63.5%, in 1996 over 1995.

Income Taxes

Income tax expense for the period ended December 31, 1997 was $962,856, an
increase of $149,703 over 1996. The increase was primarily due to the
increase in pre-taxable income of $436,277. Components of the income tax
expense for December 31, 1997 were $824,174 for federal taxes and $138,682 for
West Virginia corporate net income taxes. Income tax expense for the period
ended December 31, 1996 increased by $85,926 over 1995. Increases in income
tax expense were primarily due to changes in pre-taxable income of $259,573 in
1996 over 1995.

For federal income tax purposes, tax-exempt income is based on qualified
state, county, and municipal bonds and loans. Tax-exempt income was $400,081
in 1997; $352,306 in 1996; and $329,042 in 1995. The state of West Virginia
recognizes tax-exempt income based on the average of certain investments and
loans held during the tax reporting period. Such items included as nontaxable
are federal obligations and securities, obligations of West Virginia and West
Virginia political subdivisions, investments of loans primarily secured by
liens or security agreements on residential property and other real estate in
the form of a mobile home, modular home or double-wide located in West
Virginia. Nontaxable West Virginia income attributable to the foregoing items
was approximately $1,269,000 in 1997; $1,025,000 in 1996; and $925,000 in
1995.

Federal income tax rates and West Virginia corporate net income tax rates were
consistent at 34% and 9%, respectively, for the years ended December 31, 1997,
1996 and 1995. Additional information regarding income taxes is contained in
Note 7 to the Consolidated financial statements.

Balance Sheet Analysis

Investments

Investment securities decreased $4,996,235 or 9.9% from $50,440,189 at
December 31, 1996, to $45,443,954 at December 31, 1997 and increased by
$4,444,707 or 9.7% from $45,995,482 at December 31, 1995 to $50,440,189 at
December 31, 1996. The decrease in investment securities was used to fund the
increased loan growth during 1997. The increase in investment securities at
December 31, 1996 was primarily the result of increased deposit growth.

The investment portfolio is managed to attempt to achieve an optimum mix of
asset quality, liquidity and maximum yield on investment. The investment
portfolio is comprised of U.S. Treasury securities, U.S. Government agency and
corporation securities, obligations of states and political subdivisions,
corporate debt securities, mortgage-backed securities and equity securities.
Taxable securities comprised 88.4% of total securities at December 31, 1997,
as compared to 89.5% at December 31, 1996. Other than the normal risks
inherent in purchasing U.S. Treasury securities, U.S. Government agency and
corporation securities, and obligations of states and political subdivisions,
i.e. interest rate risk, management has no knowledge of other market or credit
risk involved in these investments. The Holding Company does not have any
high risk hybrid/derivative instruments.

Investment securities that are classified available for sale are available for
sale at any time based upon management's assessment of changes in economic or
financial market conditions. These securities are carried at market value and
the unrealized holding gains and losses, net of taxes, are reflected as a
separate component of stockholders' equity until realized. Investment
securities held to maturity are securities purchased with the intent and
ability to hold until their maturity. Securities classified as held to
maturity are carried at cost, adjusted for amortization of premiums and
accretion of discounts. As of December 31, 1997, the Holding Company had
approximately 89% of the investment portfolio classified as available for
sale, while 11% was classified as held to maturity.

8
<PAGE>
- ------------------------------------------------------------------------------

Table Five
Loan Portfolio - Maturities and sensitivities of Loans to Changes in Interest
Rates

The following table presents the contractual maturities of loans other than
installment loans and residential mortgages for all banks as of December 31,
1997 and December 31, 1996 (in thousands):

December 31, 1997
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
------------ ------------ ----------

Commercial $ 1,088 $ 7,769 $ 3,520
Real Estate - construction 333 - -
--------- --------- ---------
Total $ 1,421 $ 7,769 $ 3,520
========= ========= =========

December 31, 1996
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
------------ ------------ ----------

Commercial $ 957 $ 5,444 $ 3,937
Real Estate - construction 312 28 78
--------- --------- ---------
Total $ 1,269 $ 5,472 $ 4,015
========= ========= =========

The following table presents an analysis of fixed and variable rate loans as
of December 31, 1997 and December 31, 1996 along with the contractual
maturities of loans other than installment loans and residential mortgages (in
thousands):

December 31, 1997
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
------------ ------------ -----------

Fixed Rates $ 1,122 $ 6,326 $ 1,237
Variable Rates 299 1,443 2,283
--------- --------- ---------
Total $ 1,421 $ 7,769 $ 3,520
========= ========= =========

December 31, 1996
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
---------------------------- ----------

Fixed Rates $ 509 $ 4,767 $ 1,498
Variable Rates 760 705 2,517
--------- --------- ---------
Total $ 1,269 $ 5,472 $ 4,015
========= ========= =========

- ------------------------------------------------------------------------------

9
<PAGE>
Investments - Continued

As the investment portfolio consists primarily of fixed rate debt securities,
changes in the market rates of interest will effect the carrying value of
securities available for sale, adjusted upward or downward under the
requirements of FAS 115. Market rates of interest were improved at December
31, 1997, therefore the carrying value of securities available for sale was
increased by $195,928. The corporation had reduced the carrying value of
securities available for sale by $125,968 at December 31, 1996. The market
value of securities classified as held to maturity was above book value by
$59,428 and $23,164 at December 31, 1997 and December 31, 1996, respectively.

Loans

Loans were $95,373,653 at December 31, 1997, an increase of $14,956,973 or
18.6% from 1996, and follows an increase in 1996 of $8,410,404 or 11.7% from
1995. The loan growth during 1997 can be attributed primarily to increases in
installment loans, commercial loans and residential real estate loans, which
increased approximately $5,108,000, $4,819,000 and $3,716,000, respectively.
Increases in third party paper with various automobile dealers contributed to
the increase in installment loans in 1997. Commercial loan increases during
1997 were primarily as a result of expansion of area businesses due to the
extension of a subsidiary bank's market area. Residential real estate loans
increased in 1997 primarily as a result of new purchases and refinancing due
to offering competitive mortgage rates and local servicing.

Real estate residential loans which include real estate construction, real
estate farmland, and real estate residential loans comprised thirty-five
percent (35%) of the loan portfolio. Commercial loans which include real
estate secured by non-farm, non-residential and commercial and industrial
loans comprised thirty-eight percent (38%) of the loan portfolio. Installment
loans comprised twenty-three percent (23%) of the loan portfolio. Other loans
which include nonrated industrial development obligations, direct financing
leases and other loans comprised four percent (4%) of the loan portfolio. The
changes in the composition of the loan portfolio from 1996 to 1997 were a 1%
increase in installment loans, a 1% increase in other loans, a 1% decrease in
commercial loans and a 1% decrease in residential real estate loans. From
1995 to 1996, the changes in the composition of the loan portfolio were a 3%
increase in commercial loans, a 2% increase in installment loans, a 1%
decrease in other loans and a 4% decrease in residential real estate loans.

Non-performing assets included non-accrual loans on which the collectibility
of the full amount of interest is uncertain; loans which have been
renegotiated to provide for a reduction or deferral of interest on principal
because of a deterioration in the financial position of the borrower; loans
past due ninety days or more as to principal or interest; and other real
estate owned. A five year summary of non-performing assets is presented in
Table Six.

Total non-performing loans were $839,000 at December 31, 1997 and $702,000 at
December 31, 1996. Total non-performing loans increased $137,000 in 1997, as
compared to the increase of $194,000 in 1996. Loans classified as non-accrual
were $540,000 or .6% of total loans as of December 31, 1997, as compared to
$353,000 or .4% of total loans at December 31, 1996. There were no loans
classified as renegotiated at December 31, 1997 and 1996. The decrease in
renegotiated loans from 1994 to 1995 was primarily due to the reclassification
of one commercial real estate loan to performing loan status. The decrease in
renegotiated loans from 1993 to 1994 was primarily due to the reclassification
of two commercial real estate loans totaling $754,000 to performing loan
status. Loans past due 90 days or more decreased $81,000 during 1997, after
increasing $207,000 during 1996. Loans past due 90 days or more have remained
fairly consistent over the past five years. Other real estate owned increased
$31,000 in 1997 over 1996. Since 1993, other real estate owned has been
steadily declining due to the sale of the properties by the subsidiary banks.
Management continues to monitor the non-performing assets to ensure against
deterioration in collateral values.

Allowance for Loan Losses

The corporation maintains an allowance for loan losses to absorb probable loan
losses. Table Seven presents a five year summary of the Allowance for Loan
Losses. The allowance for loan losses represented 1.3% and 1.4% of loans
outstanding as of December 31, 1997 and 1996, respectively. Net loan charge-
offs were $73,039 during 1997 as compared to $58,990 in 1996. The net
charge-offs during 1997 were primarily consumer loans. In 1996, net loan
charge-offs were primarily residential real estate and consumer loans.
The increase in personal bankruptcies has contributed to the increase in net
charge-offs on consumer type loans. Net loan charge-offs amounted to
$(152,467) in 1995. During 1995, the net loan charge-offs were primarily
due to a recovery received on one commercial loan in bankruptcy.

For the year ended December 31, 1997, the provision for possible loan losses
was $130,500 compared to $70,600, and $49,600 at December 31, 1996 and 1995,
respectively. The increased loan growth combined with the increase in net
charge-offs and in non-performing assets in 1997 has prompted the increase in
the provision for loan losses.

<PAGE>
- ------------------------------------------------------------------------------

Table Six
Risk Elements

Loans which are in the process of collection, but are contractually past due
90 days or more as to interest or principal, renegotiated, non-accrual loans
and other real estate are as follows ( in thousands):

December 31,
----------------------------------------------------
1997 1996 1995 1994 1993

<S> <C> <C> <C> <C> <C>
Past Due 90 Days or More:
Real Estate - residential $ 45 $ 250 $ 33 $ 32 $ 197
Commercial 70 2 - 2 1
Installment 104 48 60 17 24
-------- -------- -------- -------- --------
$ 219 $ 300 $ 93 $ 51 $ 222
-------- -------- -------- -------- --------

Renegotiated:
Real Estate - residential $ - $ - $ - $ - $ -
Commercial - - - 232 1,026
Installment - - - - -
-------- -------- -------- -------- --------
$ - $ - $ - $ 232 $ 1,026
-------- -------- -------- -------- --------

Non-accrual:
Real Estate - residential $ 139 $ 26 $ 56 $ 18 $ 62
Commercial 353 299 256 218 260
Installment 48 28 39 25 16
-------- -------- -------- -------- --------
$ 540 $ 353 $ 351 $ 261 $ 338
-------- -------- -------- -------- --------

Other Real Estate $ 80 $ 49 $ 64 $ 64 $ 283
-------- -------- -------- -------- --------

Total non-performing assets $ 839 $ 702 $ 508 $ 608 $ 1,869
======== ======== ======== ======== ========

Total non-performing assets
to total loans and
other real estate 0.88% 0.87% 0.70% 0.98% 3.33%
</TABLE>
Generally, all Banks recognize interest income on the accrual basis, except
for certain loans which are placed on a non-accrual status. Loans are placed
on a non-accrual status, when in the opinion of management doubt exists as to
its collectibility. In accordance with the Office of the Comptroller of the
Currency Policy, banks may not accrue interest on any loan which either the
principal or interest is past due 90 days or more unless the loan is both well
secured and in the process of collection.

The amount of interest income that would have been recognized had the loans
performed in accordance with their original terms was approximately $34,600
and $29,000 for the periods ended December 31, 1997 and 1996, respectively.

As of December 31, 1997, there are no loans known to management other than
those previously disclosed about which management has any information about
possible credit problems of borrowers which causes management to have serious
doubts as to the borrower's ability to comply with present loan repayment
terms.

- ------------------------------------------------------------------------------

<PAGE>
- ------------------------------------------------------------------------------

Table Seven
Analysis of Allowance for Possible Loan Losses

The following table presents a summary of loans charged off and recoveries of
loans previously charged off by type of loan (in thousands).

<TABLE>
<CAPTION>
Summary of Loan Loss Experience
---------------------------------------------------------
December 31,
---------------------------------------------------------
1997 1996 1995 1994 1993

<S> <C> <C> <C> <C> <C>
Balance at Beginning of period
Allowance for Possible
Loan Losses $ 1,160 $ 1,149 $ 947 $ 896 $ 750
Loans Charged Off:
Real Estate - residential 18 35 1 - 11
Commercial - - 11 2 44
Installment 67 49 44 44 80
--------- --------- --------- --------- ---------
85 84 56 46 135

Recoveries:
Real Estate - residential - - - - 1
Commercial 3 1 194 3 2
Installment 9 24 15 17 6
--------- --------- --------- --------- ---------
12 25 209 20 9

Net Charge-offs 73 59 (153) 26 126
Purchased Reserves -- -- - - 156
Additions Charged to Operations 131 70 49 77 116
--------- --------- --------- --------- ---------
Balance at end of period: $ 1,218 $ 1,160 $ 1,149 $ 947 $ 896
========= ========= ========= ========= =========

Average Loans Outstanding $ 86,609 $ 74,469 $ 66,058 $ 56,991 $ 56,264
========= ========= ========= ========= =========

Ratio of net charge-offs
to Average loans
outstanding for the period 0.08% 0.08% (0.23)% 0.05% 0.22%

Ratio of the Allowance for Loan
Losses to Loans Outstanding for
the period 1.28% 1.44% 1.60% 1.54% 1.60%

</TABLE>

The additions to the allowance for loan losses are based on management's
evaluation of characteristics of the loan portfolio, current and anticipated
economic conditions, past loan experiences, net loans charged-off, specific
problem loans and delinquencies, and other factors.

- ------------------------------------------------------------------------------

12
<PAGE>
- ------------------------------------------------------------------------------

Table Eight
Loan Portfolio - Allocation of allowance for possible loan losses

The following table presents an allocation of the allowance for possible loan
losses at each of the five year periods ended December 31, 1997 ( expressed in
thousands). The allocation presented below is based on the historical average
of net charge offs per category combined with the change in loan growth and
management's review of the loan portfolio.

December 31,
--------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
--------------- --------------- ---------------- -------------- ----------------
Percent Percent Percent Percent Percent
of loans of loans of loans of loans of loans
in each in each in each in each in each
category category category category category
to total to total to total to total to total
Amount loans Amount loans Amount loans Amount loans Amount loans
------ ----- ------ ----- ------ ----- ---- ----- ---- ------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real estate -
residential $ 202 34.6% $ 192 36.5% $ 215 39.9% $ 216 43.1% $ 216 43.1%
Commercial 622 38.0 619 39.1 618 36.5 420 34.7 382 35.9
Installment 343 23.6 298 21.6 265 20.0 260 19.3 248 17.6
Others 20 3.8 20 2.8 20 3.6 20 2.9 20 3.4
Unallocated 31 - 31 - 31 - 31 - 30 -
------ ----- ------ ----- ------ ----- ------ ----- ------ ------
Total $1,218 100.0% $1,160 100.0% $1,149 100.0% $ 947 100.0% $ 896 100.0%
====== ===== ====== ===== ====== ===== ====== ===== ====== ======
</TABLE>
- ------------------------------------------------------------------------------

13
<PAGE>
Allowance for Loan Losses - Continued

The corporation has allocated the allowance for possible loan losses to
specific portfolio segments based upon historical net charge-off experience,
changes in the level of non-performing assets, local economic conditions and
management experience as presented in Table Seven. The Corporation has
historically maintained the allowance for loan losses at a level greater than
actual charge-offs. In determining the allocation of the allowance for
possible loan losses, charge-offs for 1998 are anticipated to be within the
historical ranges. Although a subjective evaluation is determined by
management, the corporation believes it has appropriately assessed the risk of
loans in the loan portfolio and has provided for an allowance which is
adequate based on that assessment. Because the allowance is an estimate, any
change in the economic conditions of the corporation's market area could
result in new estimates which could affect the corporation's earnings.
Management monitors loan quality through reviews of past due loans and all
significant loans which are considered to be potential problem loans on a
monthly basis. The internal loan review function provides for an independent
review of commercial, real estate, and installment loans in order to measure
the asset quality of the portfolio. Management's review of the loan portfolio
has not indicated any material amount of loans, not disclosed in the
accompanying tables and discussions which are known to have possible credit
problems that cause management to have serious doubts as to the ability of
each borrower to comply with their present loan repayment terms.

Deposits

A stable core deposit base is the major source of funds for Holding Company
subsidiaries. The deposit mix depends upon many factors including competition
from other financial institutions, depositor interest in certain types of
deposits, changes in the interest rate and the corporation's need for certain
types of deposit growth. Total deposits were $137,044,813 at December 31,
1997 as compared to $125,271,069 at December 31, 1996, an increase of 9.4%,
and follows an increase of 9.0% between 1996 and 1995. The increase in total
deposits during 1997 and 1996 was primarily in time deposits. Time deposits
grew by $6,824,615 or 13.3% in 1997, and follows an increase of $12,684,113 or
33.0% in 1996. Time deposits of $100,000 or more increased approximately
$1,472,000 at December 31, 1997 as compared to December 31, 1996. The
increase in time deposits was primarily the result of special promotions
offered by the subsidiary banks throughout 1996 and 1997.

Repurchase Agreements

Repurchase agreements represent short-term borrowings, usually overnight to 30
days. Repurchase agreements were $4,074,996 at December 31, 1997, a decrease
of $1,855,695 in 1997 as compared to 1996. The decrease in repurchase
agreements in 1997 as compared to 1996 was primarily attributable to a decline
in the number of commercial customers that used repurchase agreements.

Capital Resources

A strong capital base is vital to continued profitability because it promotes
depositor and investor confidence and provides a solid foundation for future
growth. Stockholders' equity increased 10.0% in 1997 entirely from current
earnings after quarterly dividends, and an increase of 1.7% resulting from the
effect of the change in the net unrealized gain (loss) on securities available
for sale. The increase in stockholders' equity in 1997 follows an increase of
9.1% in 1996 entirely from current earnings after quarterly dividends, and a
decrease of 1.1% resulting from the effect of the change in the net unrealized
gain (loss) on securities available for sale. Stockholders' equity amounted
to 9.0% of total assets at the end of 1997 as compared to 8.8% at December 31,
1996.

The Holding Company's primary source of funds for payment of dividends to
shareholders is from the dividends from its subsidiary banks. Earnings from
subsidiary bank operations are expected to remain adequate to fund payment of
stockholders' dividends and internal growth. In management's opinion, the
subsidiary banks have the capability to upstream sufficient dividends to meet
the cash requirements of the Holding Company. Additional information
concerning the payment of dividends by the Holding Company is discussed in
Note 16 of the Consolidated Financial Statements.

On September 9, 1997, the Holding Company declared a 50% common stock dividend
to stockholders of record on October 1, 1997. Accordingly, 402,978 shares of
common stock were issued on October 27, 1997. A 4 percent common stock
dividend was declared by the Holding Company on November 12, 1996 to
stockholders of record on December 2, 1996. As a result, 30,839 shares of
common stock were issued on December 16, 1996.

The Holding Company is subject to regulatory risk-based capital guidelines
administered by the Federal Reserve Board. These risk-based capital
guidelines establish minimum capital ratios of Total capital, Tier 1 Capital,
and Leverage to assess the capital adequacy of bank holding companies.
Additional information on capital amounts, ratios and minimum regulatory
requirements can be found in Note 18 of the Consolidated Financial Statements.

14
<PAGE>
Interest Rate Risk

Changes in interest rates can affect the level of income of a financial
institution depending on the repricing characteristics of its assets and
liabilities. This is termed interest rate risk. If a financial institution is
asset sensitive, more of its assets will reprice in a given time frame than
liabilities. This is a favorable position in a rising rate environment and
would enhance income. If an institution is liability sensitive, more of its
liabilities will reprice in a given time frame than assets. This is a
favorable position in a falling rate environment. Financial institutions
allocate significant time and resources to managing interest rate risk because
of the impact that changes in interest rates can have to earnings.

The initial step in the process of maintaining a corporation's interest rate
sensitivity involves the preparation of a basic "gap" analysis of earning
assets and interest bearing liabilities as reflected in the following table.
The analysis measures the difference or the "gap" between the amount of assets
and liabilities repricing within a given time period.

This information is used to manage a corporation's asset and liability
positions. Management uses this information as a factor in decisions made
about maturities of investment of cash flows, classification of investment
securities purchases as available-for-sale or held-to-maturity, emphasis of
variable rate or fixed rate loans and short or longer term deposit products in
marketing campaigns, and deposit account pricing to alter asset and liability
repricing characteristics. The overall objective is to minimize the impact to
the margin of any significant change in interest rates.

The information presented in the following Interest Rate Risk table contains
assumptions and estimates used by management in determining repricing
characteristics and maturity distributions. As noted in the following table,
the cumulative gap at one year is approximately $(6,177,000), which indicates
the corporation's interest bearing liabilities are more than earning assets at
December 31, 1997. As the table presented is as of a point in time and
conditions change on a daily basis, any conclusions made may not be indicative
of future results.

Interest Rate Risk Table - December 31, 1997
<TABLE>
<CAPTION>
(less (greater Non-
than) 3 3 - 12 1 - 3 than) 3 Interest
Months Months Years Years Bearing Total
------- ------- ------ ------- ------- -------

<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Fed Funds Sold $ 6,932 $ $ $ $ $ 6,932
Investments 2,918 9,911 13,824 18,791 45,444
Loans 11,779 19,889 27,618 35,508 580 95,374
Other Assets 97 9,514 9,611
Allowance for Loan
and Lease Losses (1,218) (1,218)
-------- -------- ------- ------- ------- --------

TOTAL ASSETS: $ 21,726 $ 29,800 $41,442 $54,299 $ 8,876 $156,143
======== ======== ======= ======= ======= ========

NOW and Savings $ 3,651 $ 10,891 $10,213 $29,746 $ $ 54,501
MMDA 10,445 10,445
CD's < 100,000 5,433 16,116 12,474 11,986 46,009
CD's > 100,000 4,296 2,796 4,170 685 11,947
Demand Deposits 14,143 14,143
Other Liabilities 894 894
Repurchase Agreements 4,075 4,075
Stockholders' Equity 14,129 14,129
-------- -------- ------- ------- ------- --------

TOTAL LIABILITIES
AND CAPITAL: $27,900 $29,803 $26,857 $42,417 $29,166 $156,143
======= ======= ======= ======== ======= ========
GAP (6,174) (3) 14,585 11,882 (20,290)
GAP/ Total Assets (3.95%) (0.00%) 9.34% 7.61% (12.99%)
Cumulative GAP (6,174) (6,177) 8,408 20,290 0
Cumulative GAP/Total Assets (3.95%) (3.96%) 5.38% 12.99% 0.00%

</TABLE>
The above analysis contains repricing and maturity assumptions and estimates
used by management.
- ------------------------------------------------------------------------------

15
<PAGE>
Liquidity

Liquidity management ensures that funds are available to meet loan
commitments, deposit withdrawals, and operating expenses. Funds are provided
by loan repayments, investment securities maturities, or deposits, and can be
raised by liquidating assets or through additional borrowings. The Holding
Company had investment securities with an estimated market value of
$40,665,808 classified as available for sale at December 31, 1997. These
securities are available for sale at any time based upon management's
assessment in order to provide necessary liquidity should the need arise. In
addition, the Holding Company's subsidiary banks, Progressive Bank, N.A., and
Progressive Bank, N.A.- Buckhannon, are members of the Federal Home Loan Bank
of Pittsburgh (FHLB). Membership in the FHLB provides an additional source of
short-term and long-term funding, in the form of collateralized advances. At
December 31, 1997, Progressive Bank, N.A. and Progressive Bank, N.A.-
Buckhannon, had an available line of approximately $1,835,000 and $551,000,
respectively, without purchasing any additional capital stock from the FHLB.
As of December 31, 1997 and 1996, there were no borrowings outstanding
pursuant to these agreements.

At December 31, 1997 and December 31, 1996, the Holding Company had
outstanding loan commitments and unused lines of credit totaling $7,321,000
and $8,317,000, respectively. As of December 31, 1997, management placed a
high probability for required funding within one year of approximately
$5,092,000. Approximately $1,991,000 is principally unused home equity and
credit card lines on which management places a low probability for required
funding.

Other Matters

First West Virginia Bancorp, Inc. and its subsidiary banks are heavily
dependent on technology to process information. Therefore, the banks need to
ensure that information systems and applications are century compliant,
supporting the Year 2000. The Board of Directors and management of First West
Virginia Bancorp, Inc. and its subsidiary banks have established a Year 2000
Plan, ("the Plan"). Accordingly, a Year 2000 Project committee has been
formed to develop an overall strategy and to monitor the Plan's reporting
requirements. The Plan involves five phases which include: Awareness,
Assessment, Renovation, Validation, and Implementation. The first two phases
of the Plan, which include Awareness and Assessment, have been completed in
accordance with the timetables established in the Plan. The expected
timetables for completion of the remaining phases are as follows: Renovation
phase, third quarter of 1997 through fourth quarter of 1998; Validation phase,
third quarter of 1998 through first quarter of 1999; Implementation phase,
first quarter of 1999. The estimated costs of the Year 2000 issue are not
expected to have a material impact to the results of operations, liquidity and
capital resources of the Company.

16
<PAGE>
- ------------------------------------------------------------------------------
First West Virginia Bancorp, Inc.
Summarized Quarterly Financial Information
- ------------------------------------------------------------------------------

A summary of selected quarterly financial information follows:

First Second Third Fourth
1997 Quarter Quarter Quarter Quarter
------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Total interest income $ 2,698,339 $ 2,845,165 $ 2,954,722 $ 3,008,583
Total interest expense 1,087,969 1,161,352 1,224,185 1,270,941
Net interest income 1,610,370 1,683,813 1,730,537 1,737,642
Provision for loan losses 25,500 36,000 34,500 34,500
Investment Securities Gain (Loss) - - - (1,291)
Total other income 174,106 153,694 172,615 139,807
Total other expenses 1,044,887 1,091,516 1,116,343 1,124,623
Income before income taxes 714,089 709,991 752,309 717,035
Net income 476,607 474,485 502,677 476,799
Net income per share (1) .39 .39 .42 .40

</TABLE>

First Second Third Fourth
1996 Quarter Quarter Quarter Quarter
------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Total interest income $ 2,372,377 $ 2,473,455 $ 2,556,220 $ 2,665,006
Total interest expense 916,012 958,753 993,702 1,056,942
Net interest income 1,456,365 1,514,702 1,562,518 1,608,064
Provision for loan losses 14,400 14,400 16,800 25,000
Investment Securities Gain (Loss) (1,050) 339 - -
Total other income 136,416 143,670 148,902 139,487
Total other expenses 1,016,692 1,040,824 1,038,297 1,085,853
Income before income taxes 560,639 603,487 656,323 636,698
Net income 374,361 405,277 435,046 429,310
Net income per share (1) .31 .34 .36 .35

</TABLE>

First Second Third Fourth
1995 Quarter Quarter Quarter Quarter
------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Total interest income $ 2,064,169 $ 2,194,348 $ 2,312,087 $ 2,366,105
Total interest expense 760,643 848,967 902,119 909,099
Net interest income 1,303,526 1,345,381 1,409,968 1,457,006
Provision for loan losses 29,400 13,400 3,800 3,000
Investment Securities Gain -- 65,475 - 104,600
Total other income 164,515 126,750 155,558 121,407
Total other expenses 1,003,933 987,471 920,319 1,095,289
Income before income taxes 434,708 536,735 641,407 584,724
Net income 294,323 358,502 418,489 399,033
Net income per share (1) .24 .30 .35 .33

(1) Adjusted for the 3 for 2 stock split in the effect of a 50% stock
dividend to stockholders of record as of October 1, 1997, payable
October 27, 1997, a 4 percent common stock dividend to stockholders
of record as of December 2, 1996, and a 2 percent common stock
dividend to stockholders of record as of December 1, 1995.

- -------------------------------------------------------------------------------

17
<PAGE>
- -----------------------------------------------------------------------------

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The Corporation's consolidated financial statements and the related
information appearing in this Annual Report were prepared by management in
accordance with generally accepted accounting principles and where appropriate
reflect management's best estimates and judgment. The financial statements
and the information related to those statements contained in the Annual Report
are the responsibility of management.

The accounting systems of the Corporation include internal
accounting controls which safeguard the Corporation's assets from material
loss or misuse and ensure that transactions are properly authorized and
recorded in its financial records, and designed to provide reasonable
assurance as to the integrity and reliability of the financial records. There
are inherent limitations in all systems of internal control based on the
recognition that the cost of such systems should not exceed the benefits to be
derived. The accounting system and related controls are reviewed by a
program of internal audits performed by the internal auditor and independent
auditors.

Our independent auditors are responsible for auditing the
Corporation's financial statements in accordance with generally accepted
auditing standards and to provide an objective, independent review of the
fairness of reported operating results and financial position of the
Corporation.

The Corporation's internal auditor and independent auditors have
direct access to the Audit committee of the Board of Directors. This
committee, which is composed of five outside directors, meets periodically
with the internal auditor, the independent auditors, and management to ensure
the financial accounting and audit process is properly conducted.

- -----------------------------------------------------------------------------

<PAGE>
SNODGRASS
Certified Public Accountants

Independent Auditor's Report
----------------------------

Board of Directors
First West Virginia Bancorp, Inc.
Wheeling, West Virginia

We have audited the accompanying consolidated balance sheets of First West
Virginia Bancorp, Inc. and subsidiaries as of December 31, 1997 and 1996, and
the related consolidated statements of income, changes in stockholders'
equity, and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First West Virginia Bancorp,
Inc. and subsidiaries at December 31, 1997 and 1996, and the results of its
operations, changes in stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.

/s/S. R. Snodgrass, A.C.

Wheeling, West Virginia
January 21, 1998

S.R. Snodgrass, A.C.
980 National Road Wheeling, WV 26003-6400 Phone: 304-233-5030 Facsimile:
304-233-3062

19
<PAGE>
First West Virginia Bancorp Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS

</TABLE>
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
------------- -------------
ASSETS

<S> <C> <C>
Cash and due from banks $ 4,718,516 $ 4,589,502
Due from banks - interest bearing 96,967 81,558
------------- -------------
Total cash and cash equivalents 4,815,483 4,671,060
Federal funds sold 6,932,000 5,461,000
Investment Securities:
Available for Sale (at market value) 40,665,808 44,875,887
Held to Maturity (market value of $4,837,574
and $5,587,466, respectively) 4,778,146 5,564,302
Loans, net of unearned income 95,373,653 80,416,680
Less allowance for loan losses (1,217,763) (1,160,302)
------------- -------------
Net loans 94,155,890 79,256,378
Premises and equipment, net 3,085,087 3,249,425
Accrued income receivable 1,075,701 948,026
Other assets 630,420 511,536
Intangible assets 4,048 8,096
------------- -------------
Total assets $ 156,142,583 $ 144,545,710
============= =============

LIABILITIES

Noninterest bearing deposits:

Demand $ 14,142,125 $ 12,359,041
Interest bearing deposits

Demand 22,908,421 23,560,313
Savings 42,037,038 38,219,101
Time 57,957,229 51,132,614
------------- -------------
Total deposits 137,044,813 125,271,069
------------- -------------
Repurchase agreements 4,074,996 5,930,691
Accrued interest on deposits 432,870 385,289
Other liabilities 460,909 309,383
------------- -------------
Total liabilities 142,013,588 131,896,432
------------- -------------

STOCKHOLDERS' EQUITY

Common Stock - 2,000,000 shares authorized at $5 par value:
1,209,085 shares issued at December 31, 1997 and
806,107 shares issued at December 31, 1996 6,045,425 4,030,535
Surplus 3,764,000 3,764,000
Retained earnings 4,196,076 4,935,303
Net unrealized gain (loss) on securities available for sale 123,494 (80,560)
------------- -------------
Total stockholders' equity 14,128,995 12,649,278
------------- -------------
Total liabilities and stockholders' equity $ 156,142,583 $ 144,545,710
============= =============
</TABLE>

The accompanying notes are an integral part of the financial statements.

20
<PAGE>
First West Virginia Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31,
1997 1996 1995
----------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME

Interest and fees on loans and lease financing:

Taxable $ 7,791,705 $ 6,736,781 $ 5,988,515
Tax-exempt 135,969 105,192 80,920
Investment securities:

Taxable 2,905,180 2,581,467 2,307,702
Tax-exempt 264,112 247,114 248,122
Dividends 22,862 20,414 19,770
Other interest income 29,843 80,742 5,171
Interest on federal funds sold 357,138 295,348 286,509
----------- ---------- ----------
Total interest income 11,506,809 10,067,058 8,936,709
----------- ---------- ----------
INTEREST EXPENSE

Deposits 4,555,542 3,798,076 3,404,322
Other borrowings 188,905 127,333 16,506
----------- ---------- ----------
Total interest expense 4,744,447 3,925,409 3,420,828
----------- ---------- ----------
Net interest income 6,762,362 6,141,649 5,515,881

PROVISION FOR POSSIBLE LOAN LOSSES 130,500 70,600 49,600
----------- ---------- ----------
Net interest income after provision

for possible loan losses 6,631,862 6,071,049 5,466,281
----------- ---------- ----------

NONINTEREST INCOME

Service charges and other fees 415,638 365,446 372,053
Securities gains (losses) (1,291) (711) 170,075
Other operating income 224,584 203,029 196,177
----------- ---------- ----------
Total noninterest income 638,931 567,764 738,305

NONINTEREST EXPENSE

Salary and employee benefits 2,280,673 2,119,124 1,977,471
Net occupancy expense of premises 789,128 764,213 624,010
Other operating expenses 1,307,568 1,298,329 1,405,531
----------- ---------- ----------
Total noninterest expense 4,377,369 4,181,666 4,007,012
----------- ---------- ----------

Income before income taxes 2,893,424 2,457,147 2,197,574

INCOME TAXES 962,856 813,153 727,227
----------- ---------- ----------
Net income $ 1,930,568 $ 1,643,994 $ 1,470,347
=========== ========== ==========

WEIGHTED AVERAGE SHARES OUTSTANDING 1,209,085 1,209,085 1,209,085
=========== ========== ==========

EARNINGS PER COMMON SHARE $1.60 $1.36 $1.22
=========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.

21
<PAGE>
<TABLE>
<CAPTION>

First West Virginia Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Net unrealized
Gain (Loss) on
Common Stock Securities
-------------------------- Retained Available
Shares Amount Surplus Earnings for Sale Total
------------ ------------ ------------ ------------ ------------ ------------

<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 $ 760,232 $ 3,801,160 $ 2,918,246 $ 3,888,127 $ (239,690) $ 10,367,843

NET INCOME - - - 1,470,347 - 1,470,347

CASH DIVIDEND
($.34 PER SHARE) - - - (410,525) - (410,525)

CASH PAID IN LIEU OF FRACTIONAL
SHARES ON STOCK DIVIDEND - - - (3,626) - (3,626)

2% COMMON STOCK DIVIDEND AT
FAIR MARKET VALUE 15,036 75,180 248,094 (323,274) - -

CHANGE IN FAIR VALUE OF
SECURITIES AVAILABLE FOR SALE - - - - 285,168 285,168
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1995 775,268 $ 3,876,340 $ 3,166,340 $ 4,621,049 $ 45,478 $ 11,709,207

NET INCOME - - - 1,643,994 - 1,643,994

CASH DIVIDEND
($.47 PER SHARE) - - - (573,698) - (573,698)

CASH PAID IN LIEU OF FRACTIONAL
SHARES ON STOCK DIVIDEND - - - (4,187) - (4,187)

4% COMMON STOCK DIVIDEND AT
FAIR MARKET VALUE 30,839 154,195 597,660 (751,855) - -

CHANGE IN FAIR VALUE OF
SECURITIES AVAILABLE FOR SALE - - - - (126,038) (126,038)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1996 $ 806,107 $ 4,030,535 $ 3,764,000 $ 4,935,303 $ (80,560) $ 12,649,278

NET INCOME - - - 1,930,568 - 1,930,568

CASH DIVIDEND
($.54 PER SHARE) - - - (652,936) - (652,936)

CASH PAID IN LIEU OF FRACTIONAL
SHARES ON STOCK DIVIDEND - - - (1,969) - (1,969)

50% COMMON STOCK DIVIDEND AT
PAR VALUE 402,978 2,014,890 - (2,014,890) - -

CHANGE IN FAIR VALUE OF
SECURITIES AVAILABLE FOR SALE - - - - 204,054 204,054
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 $ 1,209,085 $ 6,045,425 $ 3,764,000 $ 4,196,076 $ 123,494 $ 14,128,995
============ ============ ============ ============ ============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements

22
<PAGE>
<TABLE>
<CAPTION>
First West Virginia Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,
1997 1996 1995
------------- ------------- -------------

<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income $ 1,930,568 $ 1,643,994 $ 1,470,347
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 130,500 70,600 49,600
Depreciation and amortization 370,743 382,789 299,639
Loss on disposal of equipment -- 776 12,976
Amortization of investment securities, net (47,749) (10,963) 31,340
Investment security losses (gains) 1,291 711 (170,075)
Increase in interest receivable (127,675) (24,703) (107,584)
Increase in interest payable 47,581 70,682 82,464
Other, net (85,201) 78,879 79,736
------------- ------------- -------------
Net cash provided by operating activities 2,220,058 2,212,765 1,748,443
------------- ------------- -------------
INVESTING ACTIVITIES
Net increase in federal funds sold (1,471,000) (3,183,000) (259,000)
Net increase in loans, net of charge offs (15,042,430) (8,494,283) (10,395,535)
Proceeds from sales of securities available for sale 1,487,344 1,250,868 183,275
Proceeds from maturities of securities available for sale 23,350,000 21,615,000 10,482,400
Proceeds from maturities of securities held to maturity 2,010,000 235,000 5,210,000
Principal collected on mortgage-backed securities 944,930 415,482 393,403
Purchases of securities available for sale (21,194,040) (27,341,216) (15,192,854)
Purchases of securities held to maturity (1,233,644) (806,587) (934,242)
Recoveries on loans previously charged-off 12,418 24,889 208,874
Purchases of premises and equipment (202,358) (499,219) (498,827)

------------- ------------- -------------
Net cash used in investing activities (11,338,780) (16,783,066) (10,802,506)
------------- ------------- -------------
FINANCING ACTIVITIES
Net increase in deposits 11,773,745 10,375,915 9,164,918
Dividends paid (654,905) (577,885) (414,151)
Increase (decrease) in short-term borrowings (1,855,695) 5,181,467 644,030
------------- ------------- -------------
Net cash provided by financing activities 9,263,145 14,979,497 9,394,797
------------- ------------- -------------
INCREASE IN CASH AND
CASH EQUIVALENTS 144,423 409,196 340,734

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 4,671,060 4,261,864 3,921,130
------------- ------------- -------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 4,815,483 $ 4,671,060 $ 4,261,864
============= ============= =============
</TABLE>

The accompanying notes are an integral part of the financial statements

23
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of First West Virginia Bancorp, Inc.
(the "Corporation") and its subsidiaries conform with generally accepted
accounting principles and with general practices within the banking industry.
The following is a summary of the significant policies:

Nature of Operations
- --------------------

First West Virginia Bancorp, Inc. provides a variety of banking services to
individuals and businesses through the branch network of its two affiliate
banks (the "Banks"). The Banks operate seven full service branches located in
Wheeling (2), Wellsburg, Moundsville, Buckhannon, and Weston, West Virginia
and Bellaire, Ohio. Primary deposit products consist of checking accounts,
savings accounts, and certificates of deposit. Primary lending products
consist of commercial and residential real estate loans, consumer loans, and
business loans.

Principles of Consolidation
- ----------------------------

The consolidated financial statements of the Corporation include the financial
statements of the parent and its wholly-owned subsidiaries, Progressive Bank,
N.A. and Progressive Bank, N.A.-Buckhannon. All significant intercompany
transactions and accounts have been eliminated in consolidation.

Investment Securities
- ----------------------

Investment securities are classified based on management's intention on the
date of purchase. Securities which management has the intent and ability to
hold to maturity are classified as held to maturity and reported at amortized
cost. The Corporation uses the interest method to amortize premiums and
accrete discounts. All other securities are classified as available for sale
and carried at fair value, with net unrealized gains and losses included in
stockholders' equity on an after-tax basis. In addition, marketable equity
securities are carried at fair value with net unrealized gains and losses
included in stockholders' equity, net of tax. The Corporation does not
currently conduct short term purchase and sale transactions of investment
securities which would be classified as trading securities.

Gains or losses on dispositions of investment securities are computed by using
the adjusted cost of the specific certificates sold. Securities gains or
losses are shown separately as non-interest income in the Consolidated
Statements of Income.

Interest and Fees on Loans
- --------------------------

Interest income on loans is accrued based on the principal outstanding. It is
the Corporation's policy to discontinue the accrual of interest when either
the principal or interest is past due 90 days or more, unless the loan is both
well secured and in the process of collection.

24
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Interest and Fees on Loans (Continued)
- --------------------------

As of January 1, 1995, the Corporation adopted the provisions of FAS No. 114
and No. 118, "Accounting for Creditors for Impairment of a Loan." It is the
Corporation's policy not to recognize interest income on specific impaired
loans unless the likelihood of future loss is remote. Interest payments
received on such loans are applied as a reduction of the loan principal
balance. Since the adoption of FAS 114 and 118, the Corporation had no loans
which management has determined to be impaired.

Loan origination and commitment fees and certain direct loan origination costs
are deferred and the net amount amortized over the contractual life of the
related loans or commitments as an adjustment of the related loan's yield.

Direct Financing Leases
- ------------------------
The leasing operation of the corporation consists of the leasing of various
types of equipment under leases classified as direct financing leases.
Interest and service charges, net of initial direct costs, are deferred and
reported as income in decreasing amounts over the term of the lease so as to
provide an approximate constant yield on the outstanding principal balance.

Allowance For Loan Losses
- -------------------------

The allowance for loan losses is maintained at a level which, in management's
judgment, is adequate to absorb credit losses inherent in the loan portfolio.
The amount of the allowance is based on management's evaluation of the
collectibility of the loan portfolio, including the nature of the portfolio,
credit concentrations, trends in historical loss experience, specific impaired
loans, and economic conditions. Allowances for impaired loans are generally
determined based on collateral values or the present value of estimated cash
flows. The allowance is increased by a provision for loan losses, which is
charged to expense and reduced by charge-offs, net of recoveries. Because of
uncertainties inherent in the estimation process, management's estimate of
credit losses inherent in the loan portfolio and the related allowance may
change in the near term.

Premises and Equipment
- ----------------------

Premises and equipment are stated at cost, less accumulated depreciation and
amortization. Provisions for depreciation and amortization are computed
generally using the straight-line method on the estimated useful lives of the
assets.

When units of property are disposed of, the premises and equipment accounts
are relieved of the cost and the accumulated depreciation related to such
units. Any resulting gains or losses are credited to or charged against
income. Cost of repairs and maintenance is charged to expense as incurred.
Major renewals and betterments are capitalized at cost.

25
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes
- ------------

The Corporation accounts for income taxes under the asset and liability
method. Income tax expense is reported as the total of current income taxes
payable and the net change in deferred income taxes provided for temporary
differences. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying values of assets and liabilities for
financial reporting purposes and the values used for income tax purposes.
Deferred income taxes are recorded at the statutory Federal and state tax
rates in effect at the time that the temporary differences are expected to
reverse.

The Corporation files a consolidated Federal income tax return which includes
all its subsidiaries. Income tax expense is allocated among the parent company
and its subsidiaries as if each had filed a separate return.

Use of Estimates
- ----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Earnings Per Common Share
- --------------------------

Earnings per common share are calculated by dividing net income by the
weighted-average number of shares of common stock outstanding during the year.
The Corporation has no securities which would be considered potential common
stock.

Stock Dividends
- ---------------
On November 14, 1995, the Corporation declared a 2% common stock dividend to
stockholders of record on December 1, 1995. On November 12, 1996, the
Corporation declared a 4% stock dividend to stockholders of record on December
2, 1996. On September 9, 1997, the Corporation declared a 50% stock dividend
to stockholders of record on October 1, 1997. All common share data include
the effect of the stock dividends.

Purchase Method of Accounting
- -------------------------------

Net assets of organizations acquired in purchase transactions are recorded at
fair value at the date of the transaction. The cost of core deposits and the
excess of cost over net assets of affiliates purchased is being amortized over
a ten year period on the straight-line method. Annual amortization expense
was approximately $4,000 for 1997, $31,300 for 1996, and $35,500 for 1995.

Reclassifications
- ------------------

Certain prior year amounts have been reclassified to conform to the 1997
presentation.

26
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 2 - INVESTMENT SECURITIES

The estimated market values of investment securities are as follows at
December 31, 1997 and 1996:

<TABLE>
<CAPTION>
December 31, 1997
-----------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Securities held to maturity: (Expressed in Thousands)
----------------------------
Obligations of states and political subdivisions $ 4,778 $ 61 $ (1) $ 4,838
--------- --------- --------- ---------

Total held to maturity 4,778 61 (1) 4,838
--------- --------- --------- ---------
Securities available for sale:
------------------------------
U.S. Treasury securities and obligations of
U.S. Government corporations and agencies 31,920 121 (14) 32,027
Obligations of states and political subdivisions 503 13 - 516
Corporate debt securities 204 5 - 209
Mortgage-backed securities 7,231 72 (16) 7,287
Equity securities 612 17 (2) 627
--------- --------- --------- ---------

Total available for sale 40,470 228 (32) 40,666
--------- --------- --------- ---------

Total $ 45,248 $ 289 $ (33) $ 45,504
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>

December 31, 1996
-----------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Securities held to maturity: (Expressed in Thousands)
----------------------------
U.S. Treasury securities and obligations of
U.S. Government corporations and agencies $ 800 $ - $ (11) $ 789
Obligations of states and political subdivisions 4,764 43 (9) 4,798
--------- --------- --------- ---------

Total held to maturity 5,564 43 (20) 5,587
--------- --------- --------- ---------

Securities available for sale:
------------------------------
U.S. Treasury securities and obligations of
U.S. Government corporations and agencies 39,657 71 (233) 39,495
Obligations of states and political subdivisions 503 4 - 507
Corporate debt securities 608 6 - 614
Mortgage-backed securities 3,716 40 (15) 3,741
Equity securities 518 1 - 519
--------- --------- --------- ---------

Total available for sale 45,002 122 (248) 44,876
--------- --------- --------- ---------

Total $ 50,566 $ 165 $ (268) $ 50,463
========= ========= ========= =========
</TABLE>
27
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 2 - INVESTMENT SECURITIES (CONTINUED)

The amortized cost and estimated market value of investment securities at
December 31, 1997, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.

<TABLE>
<CAPTION>
Securities Securities
Held to Maturity Available for Sale
----------------------- -----------------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
---------- ---------- ---------- ----------
(Expressed in Thousands)

<S> <C> <C> <C> <C>
Due in one year or less $ 436 $ 438 $ 7,790 $ 7,794

Due after one year through five years 3,238 3,266 22,089 22,179

Due after five years through ten years 941 964 2,748 2,779

Due after ten years 163 170 - -
---------- ---------- ---------- ----------
4,778 4,838 32,627 32,752

Mortgage-backed securities - - 7,231 7,287

Equity securities - - 612 627
---------- ---------- ---------- ----------

Total $ 4,778 $ 4,838 $ 40,470 $ 40,666
========== ========== ========== ==========
</TABLE>

Proceeds from sales of securities available for sale during the years ended
December 31, 1997, 1996, and 1995, were $1,487,344, $1,250,868, and
$183,275, respectively. Gross gains of $2,772 and gross losses of $4,063 in
1997, gross gains of $425 and gross losses of $1,136 in 1996, and gross gains
of $170,075 in 1995, were realized on those sales. Assets carried at
$18,079,000 and $14,158,000 at December 31, 1997 and 1996, respectively, were
pledged to secure United States Government and other public funds and for
other purposes as required or permitted by law.

In accordance with guidance issued by the Financial Accounting Standards
Board, the Corporation reassessed the appropriateness of the classifications
of all securities in December, 1995. As a result, securities with an
amortized cost of $18,411,939 and unrealized loss of $112,961 were transferred
from the held to maturity category to the available for sale category at that
time.

28
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 3 - LOANS AND LEASES

Loans outstanding at December 31, 1997 and 1996, are as follows:

<TABLE>
<CAPTION>
(Expressed in Thousands)
1997 1996
---------- ----------

<S> <C> <C>
Real estate-construction $ 334 $ 418
Real estate-farmland 122 12
Real estate-residential 32,610 28,920
Real estate-secured by non-farm, non-residential 23,925 21,145
Commercial and industrial loans 12,377 10,338
Installment and other loans to individuals 22,487 17,379
Non-rated industrial development obligations 3,517 1,593
Direct financing leases 70 334
Other loans 40 368
---------- ----------
Total 95,482 80,507
Less unearned interest and deferred fees 108 90
---------- ----------
Net loans $ 95,374 $ 80,417
========== ==========
</TABLE>
The elements of the investment in direct financing leases at December 31
are as follows:
<TABLE>
<CAPTION>
(Expressed in Thousands)
1997 1996
---------- ----------

<S> <C> <C>
Rentals receivable $ 24 $ 194
Estimated residual value of leased assets 47 154
---------- ----------
Subtotal 71 348
Unearned income (1) (14)
---------- ----------

Total net investment in direct financing leases $ 70 $ 334
========== ==========
</TABLE>

The Corporation had no loans at December 31, 1997 and 1996, that were
specifically classified as impaired. Non-accrual loans amounted to $540,000
and $354,000 at December 31, 1997, and 1996, respectively. The amount of
interest income that would have been recognized had the loans performed in
accordance with their original terms was $34,600 and $29,000 for 1997 and
1996, respectively.

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 4 - ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
December 31,
1997 1996 1995
----------- ----------- -----------

<S> <C> <C> <C>
Balance, beginning of year $ 1,160,302 $ 1,148,692 $ 946,625
Additions charged to operating expense 130,500 70,600 49,600
Recoveries 12,418 24,889 208,874
----------- ----------- -----------
Total 1,303,220 1,244,181 1,205,099
Less loans charged-off 85,457 83,879 56,407
----------- ----------- -----------

Balance, end of year $ 1,217,763 $ 1,160,302 $ 1,148,692
=========== =========== ===========

</TABLE>

The entire allowance represents a valuation reserve which is available for
future charge-offs of loans and leases.

NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment are stated at cost, less accumulated depreciation,
as follows:

<TABLE>
<CAPTION>
Original
December 31, Useful Life
1997 1996 Years
----------- ----------- -----------

<S> <C> <C>
Land $ 794,116 $ 794,116
Land improvements 223,004 223,004 20
Leasehold improvements 396,898 394,847 25
Buildings 2,909,684 2,856,663 20 - 50
Furniture, fixtures & equipment 2,140,792 2,004,493 3 - 20
----------- -----------
Total 6,464,494 6,273,123
Less accumulated depreciation 3,379,407 3,023,698
----------- -----------

Premises and equipment, net $ 3,085,087 $ 3,249,425
=========== ===========

Charges to operations for depreciation approximated $366,695, $351,511,
and $264,091 for 1997, 1996, and 1995, respectively.

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 6 - DEPOSITS

The composition of the banks' deposits at December 31 follows:

</TABLE>
<TABLE>
<CAPTION>
(Expressed in Thousands)
1997
-------------------------------------------------------
Demand
-------------------------
Noninterest Interest
Bearing Bearing Savings Time
---------- ---------- ---------- ----------

<S> <C> <C> <C> <C>
Individuals, partnerships and corporations $ 13,203 $ 20,483 $ 40,292 $ 55,994
United States Government 40 - - -
States and political subdivisions 87 2,426 1,745 1,653
Commercial banks 169 - - 300
Other depository institutions 4 - - 10
Certified and official checks 639 - - -
---------- ---------- ---------- ----------
Total $ 14,142 $ 22,909 $ 42,037 $ 57,957
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>

(Expressed in Thousands)
1996
-------------------------------------------------------
Demand
-------------------------
Noninterest Interest
Bearing Bearing Savings Time
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Individuals, partnerships and corporations $ 10,981 $ 20,046 $ 37,808 $ 50,205
United States Government 210 - - -
States and political subdivisions 246 3,514 411 818
Commercial banks - - - 100
Other depository institutions 207 - - 10
Certified and official checks 715 - - -
---------- ---------- ---------- ----------
Total $ 12,359 $ 23,560 $ 38,219 $ 51,133
========== ========== ========== ==========
</TABLE>

Time deposits include certificates of deposit issued in denominations of
$100,000 or more which amounted to $11,947,000 and $10,475,000 at December 31,
1997 and 1996, respectively.

A maturity distribution of time certificates of deposit of $100,000 or more at
December 31, 1997, follows:

Due in three months or less $ 4,297,000
Due after three months through six months 1,128,000
Due after six months through twelve months 1,668,000
Due after one year through five years 4,854,000
------------
Total $ 11,947,000
============

31
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 7 - INCOME TAX

The provisions for income taxes at December 31 consist of:

1997 1996 1995
---------- ---------- ----------

Currently payable:
Federal $ 928,070 $ 734,047 $ 679,884
State 154,279 112,528 109,119
Deferred:
Federal (103,896) (29,825) (54,675)
State (15,597) (3,597) (7,101)
---------- ---------- ----------
Income tax expense $ 962,856 $ 813,153 $ 727,227
========== ========== ==========

The following temporary differences gave rise to the deferred tax asset at
December 31:

1997 1996
----------- -----------
Allowance for loan losses $ 293,441 $ 257,119
Deferred loan fees 36,863 30,560
Accrued interest on non-performing loans 33,825 27,712
Deferred compensation 64,698 26,730
Deferred directors fees 19,885 17,865
Depreciation due to purchase accounting adjustments (61,584) (71,228)
Deferred state income tax (2,887) (11,757)
Other, net (17,188) (11,885)
----------- -----------

Total deferred tax asset - federal 367,053 265,116
Total deferred tax asset - state 50,553 34,956
----------- -----------
417,606 300,072

Deferred tax assets (liabilities) arising from
market adjustments of securities available
for sale Federal (63,618) 41,501
State (8,816) 3,907
----------- -----------

Total deferred tax assets $ 345,172 $ 345,480
=========== ===========

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 7 - INCOME TAX (CONTINUED)

A reconciliation between the amount of reported income tax expense and the
amount computed by applying the statutory federal income tax rate to income
before income taxes for the year ended December 31 is as follows:

<TABLE>
<CAPTION>
1997 1996 1995
------------------ ------------------ ------------------
Amount Percent Amount Percent Amount Percent
---------- ------ ---------- ------ ---------- ------

<S> <C> <C> <C> <C> <C> <C>
Computed tax at statutory
Federal rate $ 983,764 34.0% $ 835,430 34.0% $ 747,175 34.0%
Plus state income taxes net
Of federal tax benefits 91,530 3.2 71,894 2.9 67,332 3.1
---------- ------ ---------- ------ ---------- ------

1,075,294 37.2 907,324 36.9 814,507 37.1

Increase (decrease) in taxes
resulting from:
Tax exempt income (137,389) (4.7) (106,073) (4.3) (111,874) (5.1)
Nondeductible interest expense 16,602 0.6 6,825 0.3 11,078 0.5
Nondeductible goodwill 1,376 0.0 7,696 0.3 8,686 0.4
Others - net 6,973 0.2 (2,619) (0.1) 4,830 0.2
---------- ------ ---------- ------ ---------- ------

Actual tax expense $ 962,856 33.3% $ 813,153 33.1% $ 727,227 33.1%
========== ====== ========== ====== ========== ======

</TABLE>

NOTE 8 - EMPLOYEE BENEFIT PLANS

The Corporation has a non-contributory profit-sharing plan for employees
meeting certain service requirements. The Corporation makes annual
contributions to the profit-sharing plan based on income of the Corporation as
defined. Total expenses for the plan were $127,600, $116,300, and $106,300
for the years ended December 31, 1997, 1996, and 1995, respectively.

In 1996, the Corporation implemented a non-qualified, deferred compensation
plan for certain corporate officers. Under the plan, the officers can elect
to defer part of their annual bonus. The Corporation incurred no additional
salary and benefits expense as a result of the plan.

NOTE 9 - REPURCHASE AGREEMENTS

Repurchase agreements represent borrowings of a short duration, usually less
than 30 days. The securities underlying the agreements were under the Banks'
control. Information related to these borrowings is summarized below:
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------

<S> <C> <C> <C>
Balance at end of year $ 4,074,996 $ 5,930,691 $ 749,224
Average balance during the year 5,117,789 3,703,803 457,849
Maximum month-end balance 5,922,489 5,930,691 859,954
Weighted-average rate during the year 3.69% 3.42% 3.55%
Rate at December 31 3.22% 4.07% 2.79%
</TABLE>

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 10 - COMMITMENTS AND CONTINGENCIES

The subsidiary banks are a party to financial instruments with
off-balance-sheet risk in the normal course of business to meet the financing
needs of their customers. These financial instruments include commitments to
extend credit and standby letters of credit. These instruments involve, to
varying degrees, elements of credit risk in excess of the amount recognized in
the balance sheet. The contract amounts of these instruments reflect the
extent of involvement the Corporation has in particular classes of financial
instruments.

The corporation's exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend credit
and standby letters of credit is represented by the contractual amount of
those instruments. The Corporation uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments.

The following represents financial instruments whose contract amounts
represent credit risk:

1997 1996
------------ ------------

Commitments to extend credit $ 7,273,000 $ 7,987,000
Standby letters of credit 48,000 330,000

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Corporation evaluates
each customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Corporation upon extension of
credit, is based on management's credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable, inventory,
property, plant and equipment, and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the
Corporation to guarantee the performance of a customer to a third party.
These guarantees are primarily issued to support public and private borrowing
arrangements. All of the standby letters of credit expire in 1998. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers.

As members of the Federal Home Loan Bank of Pittsburgh (FHLB), the subsidiary
Banks have the ability to borrow funds from the FHLB at prevailing interest
rates. At December 31, 1997, the subsidiary Banks had unused lines of credit
available with the FHLB in the aggregate amount of $2,386,000. There were no
outstanding borrowings at December 31, 1997.

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 11 - RELATED PARTY TRANSACTIONS

Directors and officers of the corporation and its subsidiaries, and their
associates, were customers of, and had other transactions with the subsidiary
Banks in the normal course of business. All loans and commitments included in
such transactions were made on substantially the same terms, including
interest and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk
of collectibility. Such loans totaled $3,257,242 at December 31, 1997, and
$4,720,986 at December 31, 1996.

The following is an analysis of loan activity to directors, executive
officers, and associates of the Corporation and its subsidiaries:

December 31,
1997 1996
------------ ------------

Balance, January 1 $ 4,720,986 $ 4,832,062
New loans during the period 671,023 1,218,597
Repayments during the period (2,134,767) (1,329,673)
------------ ------------

Ending balance $ 3,257,242 $ 4,720,986
============ ============

NOTE 12 - CONCENTRATIONS OF CREDIT RISK

Most of the affiliate Banks' loans and commitments have been granted to
customers in the Banks' primary market areas of Northern and Central West
Virginia and Eastern Ohio. In the normal course of business, however, the
Banks have purchased participations and originated loans outside of their
primary market areas. The aggregate loan balances outstanding in any one
geographic area, other than the Banks' primary lending areas, do not exceed
10% of total loans. No specific industry concentrations exceeded 10% of total
exposure. The concentrations of credit by type of loan are set forth in Note
3.

NOTE 13 - LEASES

At December 31, 1997, the Corporation's Bank affiliates leased certain land
used for banking purposes under long-term leases, expiring at various dates.
These leases contain renewal options and generally provide that the
Corporation will pay for insurance, taxes, and maintenance.

As of December 31, 1997, the future minimum rental payments required under
noncancelable operating leases with initial terms in excess of one year, are
as follows:

December 31, 1998 $ 107,000
December 31, 1999 90,750
December 31, 2000 56,000
December 31, 2001 36,000
December 31, 2002 32,000
Thereafter 336,000

Rental expense under operating leases approximated $107,000 in 1997; $104,000
in 1996; and $87,000 in 1995.

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 14 - OTHER OPERATING EXPENSES

Other operating expenses at December 31 included the following:

<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------

<S> <C> <C> <C>
Directors fees $ 132,200 $ 122,300 $ 120,750
Stationery and supplies 135,751 143,710 147,859
Regulatory assessment and deposit insurance 80,152 67,592 185,049
Advertising 101,816 104,568 119,798
Postage and transportation 118,915 118,247 106,078
Other taxes 116,892 89,509 78,465
Service Expense 131,284 106,511 105,735
Other 490,558 545,892 541,797
---------- ---------- ----------

Total $1,307,568 $1,298,329 $1,405,531
========== ========== ==========
</TABLE>

NOTE 15 - RESTRICTION ON CASH

The subsidiary Banks are required to maintain an average reserve balance with
the Federal Reserve Bank or in cash on hand. The average required reserve
balances for the years ended December 31, 1997 and 1996, were $709,000 and
$655,000, respectively.

NOTE 16 - LIMITATIONS ON DIVIDENDS

The approval of the Comptroller of the Currency is required to pay dividends
if the total of all dividends declared by a national bank in any calendar year
exceeds the total of its net profits (as defined) for the year, combined with
its retained net profits of the preceding two years. Under this formula, the
subsidiary Banks can declare dividends in 1998, without approval of the
Comptroller of the Currency, of approximately $2,400,000, plus an additional
amount equal to the Bank's net profit for 1998 up to the date of any such
dividend declaration. The subsidiary Banks are the primary source of funds to
pay dividends to the stockholders of First West Virginia Bancorp, Inc.

NOTE 17 - CASH FLOWS INFORMATION

For the purpose of presentation in the Statement of Cash Flows, cash and cash
equivalents are defined as cash on hand and amounts due from banks.

Cash payments for interest in 1997, 1996, and 1995, were $4,696,866,
$3,854,727, and $3,338,364, respectively. Cash payments for income taxes for
1997, 1996, and 1995 were $1,081,701, $872,395, and $803,600, respectively.

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 18 - REGULATORY MATTERS

The affiliate Banks are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Banks must meet specific capital guidelines that involve quantitative measures
of the Banks' assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Banks' capital amounts
and classifications are also subject to qualitative judgments by the
regulators about components, risk, weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the banks to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk- weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1997,
that the Banks meet all capital adequacy requirements to which they are
subject.

As of December 31, 1997, the most recent notifications from the Office of the
Comptroller of the Currency categorized the Banks as well capitalized under
the regulatory framework for prompt corrective action. To be categorized as
well capitalized, the Banks must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are
no conditions or events since those notifications that management believes
have changed the institutions' category.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
------------------ ------------------ ------------------
(Amounts Expressed in Thousands) Amount Ratio Amount Ratio Amount Ratio
--------- ------- --------- ------- --------- -------

<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1997:
Total Capital $ 14,862 15.4% $ 7,719 8.0% $ 9,649 10.0%
(to Risk Weighted Assets)
Tier I Capital $ 13,656 14.2% $ 3,860 4.0% $ 5,789 6.0%
(to Risk Weighted Assets)
Tier I Capital $ 13,656 8.7% $ 4,705 3.0% $ 7,842 5.0%
(to Average Assets)

As of December 31, 1996:
Total Capital $ 13,424 16.0% $ 6,732 8.0% $ 8,415 10.0%
(to Risk Weighted Assets)
Tier I Capital $ 12,406 14.7% $ 3,366 4.0% $ 5,049 6.0%
(to Risk Weighted Assets)
Tier I Capital $ 12,406 8.6% $ 4,313 3.0% $ 7,188 5.0%
(to Average Assets)
</TABLE>

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 19 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The reported fair values of financial instruments are based on a variety of
factors. Where possible, fair values represent quoted market prices for
identical or comparable instruments. In other cases, fair values have been
estimated based on assumptions concerning the amount and timing of estimated
future cash flows and assumed discount rates reflecting varying degrees of
risk. Intangible values assigned to customer relationships are not reflected
in the reported fair values. Accordingly, the fair values may not represent
actual values of the financial instruments that could have been realized as of
year end or that will be realized in the future.

The following methods and assumptions were used by the Corporation in
estimating the fair value disclosures for financial instruments:

Cash and Short-term Investments: The carrying amount for cash and short-term
investments is a reasonable estimate of fair value. Short-term investments
consist of federal funds sold.

Investment Securities: Fair values for investment securities are based on
quoted market prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments.

Loans: Fair values for loans are estimated for portfolios of loans with
similar financial characteristics. Loans are segregated by type such as
commercial, real estate, and consumer. Each loan category is further
segmented into fixed and adjustable rate interest terms and by performing and
non-performing categories. The fair value is calculated by discounting
scheduled cash flows through the estimated maturity using estimated discount
rates which reflect credit and interest rate risks inherent to the loan.

Deposits: The carrying amount for noninterest bearing and interest bearing
demand deposits and savings deposits is considered to be a reasonable estimate
of fair value. Fair values for time deposits are estimated using discounted
cash flow analysis. Discount rates reflect rates currently offered for
deposits of similar remaining maturities.

Short-Term Borrowings: The carrying amount for short-term borrowings which
consist of repurchase agreements is considered to be a reasonable estimate of
fair value.

Off-Balance Sheet Instruments: The fair value of commitments is estimated
using the fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present creditworthiness
of the counterparties. The amount of fees currently charged on commitments
are determined to be insignificant and, therefore, the carrying value and fair
value of off-balance sheet instruments are not shown.

38
<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 19 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The estimates of fair values of financial instruments are summarized as
follows at December 31:
<TABLE>
<CAPTION>
(Expressed in Thousands)
1997 1996
----------------------- -----------------------

Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Financial assets:
Cash and short-term investments $ 11,747 $ 11,747 $ 10,132 $ 10,132
Investment securities 45,444 45,503 50,440 50,463
Loans (1) 94,086 94,836 78,922 79,567

Financial liabilities:
Deposits 137,045 137,371 125,271 125,018
Short-term borrowings 4,075 4,075 5,931 5,931
</TABLE>

(1) Excludes net leases with a carrying amount of $70,000 and $334,000
at December 31, 1997 and 1996, respectively.

<PAGE>
NOTE 20 - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

Presented below are the condensed balance sheets, statements of income, and
statements of cash flows for First West Virginia Bancorp, Inc.

BALANCE SHEETS

December 31,
1997 1996
----------- -----------
ASSETS
Cash $ 281,141 $ 267,641
Investment in common stock - available
for sale (at market value) 97,162 1,947
Investment in subsidiary banks 13,693,981 12,236,514
Land and buildings, net 188,280 199,679
Other assets 84,088 54,933
----------- -----------

Total assets $14,344,652 $12,760,714
=========== ===========

LIABILITIES
Accrued expenses $ 25,370 $ 32,817
Deferred compensation 190,287 78,619
----------- -----------
Total liabilities 215,657 111,436

STOCKHOLDERS' EQUITY 14,128,995 12,649,278
=========== ===========

Total liabilities and stockholders'
equity $14,344,652 $12,760,714
=========== ===========

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 20 - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF INCOME
<TABLE>
<CAPTION>

Year Ended December 31,
1997 1996 1995
---------- ---------- ----------

<S> <C> <C> <C>
INCOME
Dividends from subsidiary banks $ 733,600 $ 585,400 $ 530,680
Rental income 52,000 48,258 29,550
Gain on sale of investments - - 170,075
Other income 100,507 67,238 67,212
---------- ---------- ----------

Total income 886,107 700,896 797,517
---------- ---------- ----------

EXPENSES
Salary and employee benefits 111,668 78,619 -
Interest expense 2,190 1,995 1,802
Occupancy expense 11,399 11,400 11,400
Other expenses 138,614 105,949 144,948
---------- ---------- ----------

Total expenses 263,871 197,963 158,150
---------- ---------- ----------

Income before income taxes and
equity in undistributed income
of subsidiaries 622,236 502,933 639,367

INCOME TAX BENEFIT (EXPENSE) 45,757 29,859 (43,413)

EQUITY IN UNDISTRIBUTED INCOME
OF SUBSIDIARIES 1,262,575 1,111,202 874,393
---------- ---------- ----------

Net income $1,930,568 $1,643,994 $1,470,347
========== ========== ==========
</TABLE>
40

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997, 1996 AND 1995

NOTE 20 - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

Year Ended December 31,
1997 1996 1995
---------- ---------- ----------

<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $1,930,568 $1,643,994 $1,470,347
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 15,447 15,448 15,448
Change in deferred tax benefit (42,842) (29,213) 1,770
Undistributed earnings of affiliates (1,262,575) (1,111,202) (874,393)
Changes in operating assets
and liabilities:
Other assets 4,266 (2,291) 5,142
Deferred compensation 109,607 78,619 -
Other liabilities (7,447) 4,835 (5,209)
Gain on sale of securities - - (170,075)
---------- ---------- ----------

Net cash provided by
operating activities 747,024 600,190 443,030
---------- ---------- ----------

INVESTING ACTIVITIES
Proceeds from sale of securities - - 183,275
Purchase of investment securities (78,619) - -
---------- ---------- ----------

Net cash provided by (used in)
investing activities (78,619) - 183,275
---------- ---------- ----------

FINANCING ACTIVITIES
Dividends paid (654,905) (577,885) (414,151)
---------- ---------- ----------

Net cash used in
financing activities (654,905) (577,885) (414,151)
---------- ---------- ----------

INCREASE IN CASH
AND CASH EQUIVALENTS 13,500 22,305 212,154

CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 267,641 245,336 33,182
---------- ---------- ----------

CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 281,141 $ 267,641 $ 245,336
========== ========== ==========
</TABLE>

Supplemental disclosures:

Interest expense note: Cash payments for interest were $2,190, $1,995, and
$1,802 in 1997, 1996, and 1995, respectively.

Income taxes note: The parent company made income tax payments of $4,200,
$1,000, and $40,800 in 1997, 1996, and 1995, respectively.

<PAGE>
----------------------------------------------

First West Virginia Bancorp, Inc.

DIRECTORS

George F. Beneke. . . Chairman of the Board, First West Virginia Bancorp, Inc.

Retired Attorney at Law

President, The Beneke Corporation

Sylvan J. Dlesk. . . . . . . . . . . . . . . . . . . . President, Dlesk, Inc.

Ben R. Honecker. . . . . . . . . . . . . . . . . . . . . . . Attorney at Law

Laura G. Inman. . . . . . . . Vice Chairman, First West Virginia Bancorp, Inc.

Senior Vice President, Progressive Bank, N.A.

James C. Inman, Jr. . . . . . . . . . . . . . . . . . . Retired Bank Executive

R. Clark Morton. . . . . . . . . Chairman of the Board, Progressive Bank, N.A.

Attorney at Law

Karl W. Neumann. . . . . . . . . . . . . . . . . . Retired Insurance Executive

Thomas A. Noice. . . . . . . . . . . . . . . . . . . . .Retired Bank Executive

William G. Petroplus. . . . . . . . . . . . . . . . . . . . .Attorney at Law

Peter C. Schuetz. . . . . . . . . . . . . . . . . . . Retired Dairy Consultant

Ronald L. Solomon. . . . . . . . . . . .President and Chief Executive Officer,
First West Virginia Bancorp, Inc.

Vice Chairman, Chief Executive Officer, Progressive Bank, N.A.

Vice Chairman, Progressive Bank, N.A. Buckhannon

OFFICERS

George F. Beneke. . . . . . . . . . . . . . . . . . . . .Chairman of the Board

Laura G. Inman. . . . . . . . . . . . . . . . . . . . . . . . .Vice Chairman

Ronald L. Solomon. . . . . . . . . . . . President and Chief Executive Officer

Charles K. Graham. . . . . . . . . . . . . . .Executive Vice President - Loans

Beverly A. Barker. . . . . . . . . . . . . . .Senior Vice President, Treasurer

Francie P. Reppy. . . . . . . . . . . . . . . . . . . . . . . . . . Controller

Connie R. Tenney. . . . . . . . . . . . . . . . . . . . . . . . Vice President

David E. Yaeger. . . . . . . . . . . . . . . . . . . . . . . . .Vice President

Stephanie A. LaFlam. . . . . . . . . . . . . . . . . . . . . . . . . Secretary

----------------------------------------------

<PAGE>
----------------------------------------------

SUBSIDIARY
Progressive Bank N.A.
Wheeling, WV 26003

DIRECTORS OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C>
Dominic V. Agostino James C. Inman, Jr. R. Clark Morton, Chairman of the Board
George F. Beneke Laura G. Inman Ronald L. Solomon, Vice Chairman & Chief Executive Officer
Dr. Clyde D. Campbell H. Dennis Long Charles K. Graham, President
Robert R. Cicogna R. Clark Morton Beverly A. Barker, Executive Vice President/Cashier
Gary P. DeVendra Karl W. Neumann Laura G. Inman, Senior Vice President
Sylvan J. Dlesk William G. Petroplus David E. Yaeger, Senior Vice President
Charles K. Graham Thomas L. Sable Francie P. Reppy, Controller
C. Gary Hill Peter C. Schuetz Gary S. Martin, Vice President/Marketing Coordinator
Ben R. Honecker Ronald L. Solomon Brad D. Winwood, Vice President
Stephanie A. LaFlam, Executive Secretary
EMERITUS DIRECTOR Deborah A. Kloeppner, Assistant Vice President/Office Manager Bellaire
Susan E. Reinbeau, Assistant Vice President/Office Manager Woodsdale
Harry N. Duvall William T. Nickerson Michele L. Stanley, Assistant Vice President/Human Resource Manager/
T. Stewart Hopkins Edward P. Otte Assistant Office Manager Warwood
David E. Wharton, Assistant Vice President/Office Manager Warwood
Bryan S. Ramsey, Business Development/Loan Officer
Mitzi K. Mattern, Credit Card Manager/Office Manager Wellsburg
Lisa M. Minor, Office Manager Moundsville
Shirrel A. Czap, Assistant Office Manager Bellaire
Robin L. Snyder, Operations Supervisor Wellsburg
Laura K. Snedeker, Manager Bookkeeping/Proof Operations
Debra M. Tomlin, Loan Officer
</TABLE>

SUBSIDIARY
Progressive Bank, N.A. - Buckhannon
Buckhannon, WV 26201

DIRECTORS OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C>
Margaret D. Brown Dale F. Riggs Dale F. Riggs, Chairman
William L. Fury Ronald L. Solomon Ronald L. Solomon, Vice Chairman
Charles K. Graham Douglas M. Stewart Connie R. Tenney, President/Chief Executive Officer/Cashier/Secretary
J. Burton Hunter, III Connie R. Tenney Larry J. Chidester, Assistant Vice President
David R. Rexroad J. David Thomas J. Burton Hunter, III, Assistant Secretary
Rickie E. Rice Cathy Sue Wingler, Assistant Cashier
Robin K. Forinash, Office Manager Weston

</TABLE>

----------------------------------------------

43
<PAGE>
Progressive Bank N.A. - Wheeling

(Photograph) (Photograph)

Wellsburg Office Belaire Office
Wellsburg, WV Bellaire, OH

(Photograph)

Woodsdale Office
Wheeling, WV

(Photograph) (Photograph)

Warwood Office Moundsville Kroger Store Office
Wheeling, WV Moundsville, WV

Progressive Bank, N.A. - Buckhannon

(Photograph) (Photograph)

Buckhannon Office Weston Office
Buckhannon, WV Weston, WV

<PAGE>
First West Virginia Bancorp, Inc. and Subsidiaries

Corporate Information
- ------------------------------------------------------------------------------

Corporate Office:

First West Virginia Bancorp, Inc.
1701 Warwood Avenue
Wheeling, WV 26003
(304) 277-1100

Transfer Agent:

Any inquiries related to stockholder records, stock transfers, changes of
ownership, and changes of address should be sent to the transfer agent at the
following address:

Investor Relations Department
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-9982
1-800-368-5948

Stock Trading Information:

First West Virginia Bancorp, Inc.'s common stock is traded on the American
Stock Exchange, Inc. primary list under the symbol FWV.

Annual Meeting

The Annual Meeting of Stockholders will be held at 4:00 p.m, on Tuesday,
April 14, 1998, at the Warwood Office of Progressive Bank, N.A., 1701 Warwood
Avenue, Wheeling, WV 26003.

Form 10-K

Upon written request any shareholder of record on December 31, 1997, may
obtain a copy of the Corporation's 1997 Form 10-K Report (to be filed with the
Securities and Exchange Commission before March 31, 1998) by writing to Ronald
L. Solomon, President, First West Virginia Bancorp, Inc., 875 National Road,
Wheeling, WV 26003.

<PAGE>

EXHIBIT 13.2

Management Report on Financial Statements

<PAGE>
- ------------------------------------------------------------------------------
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

- ------------------------------------------------------------------------------

<PAGE>

EXHIBIT 22.1

Subsidiaries of the Holding Company

<PAGE>
SUBSIDIARIES OF THE HOLDING COMPANY

1. Progressive Bank, N.A. of Wheeling, West Virginia, a national
banking association with offices in Wheeling, Wellsburg, and Moundsville, West
Virginia and Bellaire, Ohio.

2. Progressive Bank, N.A. - Buckhannon of Buckhannon, West
Virginia, a national banking association with offices in Buckhannon and
Weston, West Virginia.

<PAGE>

EXHIBIT 24

Consent of Independent Auditors

<PAGE>
SNODGRASS
Certified Public Accountants

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference of our report dated January 21,
1998 relative to the consolidated balance sheet of First West Virginia
Bancorp, Inc. as of December 31, 1997 and the related consolidated statements
of income, changes in stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1997. Said report is included in
the 1997 Annual Report to Shareholders of First West Virginia Bancorp, Inc.
(Exhibit 13.1 to this Form 10-K).

/s/ S.R. Snodgrass A.C.

Wheeling, West Virginia
March 11, 1998

S.R. Snodgrass, A.C.
980 National Road Wheeling, WV 26003-6400 Phone: 304-233-5030 Facsimile:
304-233-3062

<ARTICLE> 9
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1997
<CASH> 4,718
<INT-BEARING-DEPOSITS> 97
<FED-FUNDS-SOLD> 6,932
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 40,666
<INVESTMENTS-CARRYING> 4,778
<INVESTMENTS-MARKET> 4,838
<LOANS> 95,374
<ALLOWANCE> 1,218
<TOTAL-ASSETS> 156,143
<DEPOSITS> 137,045
<SHORT-TERM> 4,075
<LIABILITIES-OTHER> 894
<LONG-TERM> 0
0
0
<COMMON> 6,045
<OTHER-SE> 8,084
<TOTAL-LIABILITIES-AND-EQUITY> 156,143
<INTEREST-LOAN> 7,928
<INTEREST-INVEST> 3,192
<INTEREST-OTHER> 387
<INTEREST-TOTAL> 11,507
<INTEREST-DEPOSIT> 4,556
<INTEREST-EXPENSE> 4,745
<INTEREST-INCOME-NET> 6,762
<LOAN-LOSSES> 131
<SECURITIES-GAINS> (1)
<EXPENSE-OTHER> 4,377
<INCOME-PRETAX> 2,893
<INCOME-PRE-EXTRAORDINARY> 2,893
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,931
<EPS-PRIMARY> 1.60
<EPS-DILUTED> 1.60
<YIELD-ACTUAL> 4.83
<LOANS-NON> 540
<LOANS-PAST> 219
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,160
<CHARGE-OFFS> 85
<RECOVERIES> 12
<ALLOWANCE-CLOSE> 1,218
<ALLOWANCE-DOMESTIC> 1,187
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 31

</TABLE>

<PAGE>

NOTICE OF ANNUAL MEETING OF THE
SHAREHOLDERS OF
FIRST WEST VIRGINIA BANCORP, INC.

Wheeling, West Virginia
March 17, 1998

TO OUR SHAREHOLDERS:

Please take notice that the Annual Meeting of Shareholders of First
West Virginia Bancorp, Inc., a West Virginia corporation, will be held at the
Warwood Office of Progressive Bank, N.A., 1701 Warwood Avenue, Wheeling, West
Virginia, at 4:00 p.m., on April 14, 1998. Shareholders of record at the
close of business on March 10, 1998 will be entitled to vote.

While the Board of Directors sincerely hopes that all of you will
attend the meeting, we nevertheless urge you to COMPLETE, DATE, SIGN AND
RETURN THE PROXY FORM, ENCLOSED, AS SOON AS POSSIBLE. A self-addressed
stamped envelope is provided for the purpose. You should return the proxy
whether or not you plan to attend the meeting in person. If you do attend the
meeting, you may withdraw the proxy and vote in person if you so desire.

The purposes of the Annual Meeting are as follows:

1. To elect four directors;

2. To transact such other business as may lawfully be brought before the
meeting.

By order of the Board of Directors.

Ronald L. Solomon
President

<PAGE>

FIRST WEST VIRGINIA BANCORP, INC.
1701 Warwood Avenue, Wheeling, West Virginia 26003

PROXY STATEMENT
For Annual Meeting of Shareholders to be Held April 14, 1998

The proxy statement is furnished to the shareholders of First West Virginia
Bancorp, Inc., (the "Company"), in connection with the solicitation of proxies
for use at the Annual Meeting of Shareholders to be held April 14, 1998, and
at all adjournments thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This proxy statement and the
enclosed form of proxy are first being mailed to shareholders on or about
March 17, 1998.

Whether or not you expect to be personally present at the meeting, you are
requested to fill in, sign, date and return the enclosed form of proxy. Any
person giving such proxy has the right to revoke it at any time before it is
voted by giving notice to the Secretary of the Company. All shares
represented by duly executed proxies in the accompanying form will be voted
unless revoked prior to the voting thereof. A proxy may be revoked at any
time before it is voted at the meeting by executing a later dated proxy, or by
voting in person at the meeting, or by filing a written revocation with the
judges of election. The presence, in person or by proxy, of a majority of the
outstanding shares of common stock is required to constitute a quorum.
Assuming the presence of a quorum, the election of directors described below
will be by a majority vote. Any other business to come before the meeting
shall be determined as provided in the Company's Articles of Incorporation.

The close of business on March 10, 1998 has been fixed as the record date for
the determination of shareholders entitled to vote at the Annual Meeting of
Shareholders. As of the record date, there were outstanding and entitled to
be voted at such meeting 1,209,085 shares of common stock. The holders of the
common stock will be entitled to one vote for each share of common stock held
of record on the record date. In the election for directors votes may be
cumulated as provided by law. Please see Voting, below.

A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1997 accompanies this proxy statement.

The solicitation of this proxy is made by the Board of Directors of the
Company. The solicitation will be by mail and the expense thereof will be
paid by the Company. In addition, solicitation of proxies may be made by
telephone or other means by directors, officers or regular employees of the
Company.

I. Election of Directors

Nominees and Continuing Directors

The Board of Directors is divided into three classes, with the terms of office
of each class ending in successive years. Four directors of the Company are
to be elected to Class III, for terms expiring at the Annual Meeting in 2001
or until their respective successors have been elected and have qualified.
Certain information with respect to the nominees for election as directors
proposed by the Company and

<PAGE>
the other directors whose terms of office as directors will continue after the
Annual Meeting is set forth below. Should any one or more of the nominees be
unable or unwilling to serve (which is not expected), the proxies (except
proxies marked to the contrary) will be voted for such other person or persons
as the Board of Directors of the Company may recommend.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE
NOMINEES FOR DIRECTOR.
Shares of
the Company's
Served as Common Stock
Name, Age, Principal Occupation Director Beneficially
or Position, Other Directorships (13)(14) Since (1) Owned (2)
- ----------------------------------------- --------- --------------

To be elected to Class III, for terms ending in 2001
- ----------------------------------------------------

R. Clark Morton, 69 1965 34,238(3)
Attorney-at-Law, Partner, Herndon, Morton,
Herndon & Yaeger; Chairman of the Board
and Director of Progressive Bank, N.A.

William G. Petroplus, 50 1998 5,050(4)
Attorney-at-Law, Partner, Petroplus &
Gaudino; Director of Progressive Bank, N.A.

Peter C. Schuetz, 72 1979 34,194
President and General Manager, Town and
Country Dairy; Retired Consultant, United Dairy;
Director of Progressive Bank, N.A.

Ronald L. Solomon, 58 1978 16,028(5)
President and Chief Executive Officer
of the Company; Vice Chairman of the
Board and Chief Executive Officer
and Director of Progressive Bank, N.A.;
Vice Chairman of the Board and Director
of Progressive Bank, N.A.-Buckhannon

<PAGE>

Shares of
the Company's
Served as Common Stock
Name, Age, Principal Occupation Director Beneficially
or Position, Other Directorships (13)(14) Since (1) Owned (2)
- ----------------------------------------- --------- --------------

Class I Directors, to continue in office until 1999

George F. Beneke, 84 1958 70,482(6)
President of the Beneke Corporation;
Retired Attorney-at-Law; Chairman of the
Board and Director of the Company;
Director of Progressive Bank, N.A.

Laura G. Inman, 56 1993 88,499(7)
Vice Chairman of the Board and Director
of the Company; Senior Vice President
and Director of Progressive Bank, N.A.

Karl W. Neumann, 77 1964 36,766(8)
Retired Insurance Executive; Director
of Progressive Bank, N.A.

Class II Directors, to continue in office until 2000
- ----------------------------------------------------

Sylvan J. Dlesk, 59 1988 95,479(9)
President of Dlesk, Inc., President of Ohio
Valley Carpeting, Inc. and President of Tri-State
Floor Installations, Inc.,; Director of
Progressive Bank, N.A.

Benjamin R. Honecker, 78 1973 23,592(10)
Attorney-at-Law, Partner, Honecker & Bippus;
Director of Progressive Bank, N.A.

James C. Inman, Jr., 56 1993 88,499(11)
Retired Bank Executive; Director of
Progressive Bank, N.A.

Thomas A. Noice, 75 1988 6,598(12)
Retired Bank Executive; Trustee-Treasurer,
Belmont Community Hospital, Bellaire, Ohio

<PAGE>

Notes (1) Includes service with the Company's predecessors.
- -----

(2) Beneficial ownership of First West Virginia common stock is
stated as of February 12, 1998. Under rules of the Securities
and Exchange Commission, persons who have power to vote or
dispose of securities, either alone or jointly with others,
are deemed to be the beneficial owners of such securities.
Shares owned separately by spouses are included in the column
totals but are identified in the footnotes which follow. Each
person reflected in the table has both sole voting power and
sole investment power with respect to the shares included in
the table, except as described in the footnotes.

(3) Includes 17,482 shares owned by Patricia H. Morton, his wife,
and 8,680 shares owned jointly by R. Clark Morton and Patricia
H. Morton.

(4) Includes 636 shares owned jointly by William G. Petroplus and
Sheree A. Petroplus; 318 shares owned by Sheree A. Petroplus,
his wife; 318 shares owned by Kristen G.Petroplus, his
daughter, for which William G. Petroplus acts as custodian;
and 318 shares owned jointly by Alyssa R. Petroplus, his
daughter, for which William G. Petroplus acts as custodian.

(5) Includes 16,028 shares owned jointly by Mr. Solomon and
Patricia H. Solomon, his wife.

(6) Includes 28,252 shares held by WesBanco Bank Wheeling, as
trustee under the will of Sarah E. Beneke, deceased, and
includes 10,417 shares owned by the Beneke Corporation, of
which Mr. Beneke is a principal.

(7) Includes 12,999 shares owned by James C. Inman, Jr., her
husband.

(8) Includes 15,984 shares owned by Elizabeth H. Neumann, his
wife.

(9) Includes 95,376 shares owned jointly by Mr. Dlesk and Rosalie
J. Dlesk, his wife.

(10) Excludes 3,949 shares owned jointly by Elizabeth R. Honecker,
his daughter, and Janet L. Honecker, his wife, as to which
shares Mr. Honecker disclaims beneficial ownership.

(11) Includes 75,500 shares owned by Laura G. Inman, his wife.

(12) Includes 718 shares owned jointly by Judith A. Noice, wife of
Thomas A. Noice, and Julia Vejvoda and 5,880 shares owned
jointly by Thomas A. Noice and Judith A. Noice.

(13) The subsidiaries of the Company are: Progressive Bank, N.A,
Wheeling, WV and Progressive Bank, N.A. - Buckhannon,
Buckhannon, WV.

(14) Each of the nominees and continuing directors has had the same
position or other executive positions with the same employer
during the past five years.

<PAGE>

Certain Business Relationships

Mr. Petroplus is an attorney with Petroplus & Gaudino,
attorneys-at-law, of Wheeling, WV, which firm serves as general counsel to the
Company.

Mr. Morton is an attorney with Herndon, Morton, Herndon & Yaeger,
attorneys-at-law, of Wheeling, West Virginia, which firm serves as special
counsel to the Company.

Mr. Honecker is also an attorney-at-law and has provided legal
services to the Company's subsidiary banks.

Board of Directors and Committees

There were 12 regular meetings and four special meetings of the Board
of Directors of the Company during 1997. All of the incumbent directors
attended at least 75 percent of the meetings. Each non-employee director is
compensated at the rate of $500.00 per regular meeting and, for 1997, was
compensated at the rate of $500.00 for the first special meeting and $150.00
for each of the remaining three special meetings. Committee members are paid
$150.00 for attendance at each committee meeting. The standing committees of
the Board are: Audit Committee, Personnel and Salary Committee, and Budget
and Marketing Committee. The Company does not have a nominating committee.

The functions of the Audit Committee are to review the Company's
annual audit report with management, independent auditors and internal auditor
and to review the effectiveness of the Company's internal controls and related
matters. The committee met three times during 1997. The members of the
committee consist of non-salaried directors and presently include S. J. Dlesk,
chairman, Ben R. Honecker, R. Clark Morton, Karl W Neumann and Peter C.
Schuetz.

The functions of the Personnel and Salary Committee are to review and
recommend the salaries and annual bonuses of all executive officers; recommend
the annual contribution to the employees' profit sharing plan; and monitor the
senior management and succession plans. The Board of Directors reviews the
committee recommendations for final action thereon. Company performance is
considered in establishing the annual budget for salary increases and is the
initial part of the review process. Company performance factors, including
net income and return on equity, and individual performance are considered in
setting annual bonuses. The committee met three times during 1997. The
members of the committee consist of non-salaried directors and presently
include Ben R. Honecker, chairman, George F. Beneke, James C. Inman, Jr., R.
Clark Morton and Thomas A. Noice.

The functions of the Budget and Marketing Committee are to approve
and review the annual subsidiary banks' budgets and to review the marketing
efforts and strategies of the subsidiary banks. The committee met four times
during 1997. The members of the committee consist of non-salaried directors
and presently include George F. Beneke, chairman, S. J. Dlesk, James C. Inman,
Jr., Karl W Neumann and Peter C. Schuetz.

<PAGE>

II. Executive Compensation

The following table shows all compensation awarded to, earned by or
paid to the Company's President and Chief Executive Officer, Ronald L.
Solomon, and Executive Vice President, Charles K. Graham, for all services
rendered by them in all capacities to First West Bancorp, Inc. and its
subsidiaries for 1997. No other executive officer of First West Virginia
Bancorp, Inc. had total annual salary and bonus exceeding $100,000 for the
year.

SUMMARY COMPENSATION TABLE
--------------------------

Annual Compensation

Other All
Annual Other
Year Salary Bonus(4) Compensation Compensation
Name and Position

<S> <C> <C> <C> <C> <C>
Ronald L. Solomon, 1997 $ 102,996.00 $ 80,959.00 $ 6,812.40(1) $ 14,675.13(3)
President and Chief
Executive Officer of 1996 $ 99,996.00 $ 62,762.00 $ 8,939.25(1) $ 15,769.50(3)
the Company; Vice
Chairman of Board of 1995 $ 99,492.00 $ 50,653.00 $ 7,097.52(1) $ 14,680.30(3)
Directors & CEO of
Progressive Bank, N.A.;
and Vice Chairman of
Progressive Bank, N.A.-
Buckhannon

Charles K. Graham, 1997 $ 72,492.00 $ 57,069.00 $ 4,815.00(2) $ 10,121.28(3)
Executive Vice
President of the 1996 $ 69,996.00 $ 43,884.00 $ 6,214.96(2) $ 10,804.12(3)
Company; President of
Progressive Bank, N.A.; 1995 $ 68,100.00 $ 34,629.00 $ 4,127.52(2) $ 9,849.53(3)
Director of Progressive
Bank, N.A.-Buckhannon
</TABLE>

(1) This amount includes the value of Mr. Solomon's Board fees paid by a
subsidiary bank and membership to the Wheeling Country Club and Fort
Henry Club.

(2) This amount includes the value of Mr. Graham's Board fees paid by a
subsidiary bank and membership to the Wheeling Country Club and
Allegheny Club.

(3) This amount includes contributions made to Company's Profit Sharing
Plan.

(4) This amount includes deferred compensation.

<PAGE>

Shareholder Performance Graph

Set forth below is a line graph which compares the percentage change
in the cumulative total shareholder return on the Company's common stock
against the cumulative total shareholder return on stocks included on both the
Standard & Poor's (S&P ) 500 Index and the SNL Index for banks with assets
under $500,000,000.00 for the period March 8, 1995 through December 31, 1997.
An initial investment of $100.00 (Index Value equals $100) and ongoing
dividend reinvestment is assumed throughout.

<TABLE>
<CAPTION>
Period Ending
- -----------------------------------------------------------------------------------------------------------
Index 3/8/95 6/30/95 12/31/95 6/30/96 12/31/96 6/30/97 12/31/97
- -----------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
First West Virginia
Bancorp, Inc. 100.00 125.06 158.21 160.87 188.38 218.83 296.40

S&P 500 100.00 113.68 130.10 143.23 159.85 192.79 213.19

SNL <500M Bank Index 100.00 108.51 130.01 143.93 167.34 207.71 285.26

</TABLE>

<PAGE>

Board Compensation Committee Report on Executive Compensation

The Personnel and Salary Committee ( the "Committee") has the
responsibility for recommending to the Board of Directors of the Company, and
subject to final approval by the Board of Directors of the Company, the annual
salary, raise and bonus determinations for the Executive Officers of the
Company. The Committee endeavors to determine executive compensation in a
manner designed to provide competitive compensation sufficient to retain and
attract key executives, but based primarily on the overall performance of the
Company.

Company performance is considered in establishing the annual budget
for any executive salary increase and is the initial part of the review
process of the Committee. The determination of bonuses, as detailed below, is
predicated on the Company's earnings in the previous year, the increase in
corporate net worth and individual performance. The Committee also
periodically evaluates terms and conditions of employment agreements offered
to certain Executive Officers of the Company (See, Employment Contracts) to
ensure that they continue to support the best interests of the Company's
shareholders and are consistent with the goals and objectives of the Company.

However, the Committee also is acutely aware that the purpose of our
Executive Officers is to generate earnings for the shareholders of the
Company. Therefore, the Committee's philosophy for determining its
recommendations to the Board of Directors for executive bonuses does not
deviate from this avowed purpose. The Committee's recommendations have
historically involved two basic steps. The first step is an earnings plateau
which establishes the annual percentage return to the Company (based on
corporate net worth) which was expected to be reached. The amount of return
in excess of that expected percentage forms the basis for the bonus pool. The
philosophy underlying this first earnings plateau is as follows.

Earnings to the extent of the determined percentage of corporate net
worth are intended to provide for the following purposes:

(a) Payment of income taxes thereon.
(b) Payment of regularly established quarterly dividends.
(c) Provide for increases in subsequent executive salaries
attributable to inflation.
(d) Provide for an increase to the regularly established quarterly
dividend for the next year in the same percentage as the
percentage of salary raises granted executives to compensate
for inflation.
(e) Provide for growth of corporate net worth.

Earnings in excess of that percentage of corporate net worth are
available for distributions for bonuses to Executive Officers. While there is
no formalized plan for bonus distributions to Executive Officers,
historically, and for the year ended December 31, 1997, the Committee has
divided that excess into $100,000.00 increments and determined what percentage
of such increment will be paid as executive bonuses. In addition to bonus
payments, from each such increment comes a payment for income taxes thereon,
a payment for a special year end dividend to shareholders and a payment to
provide for growth of corporate net worth. Each $100,000.00 increment has
been treated in the same manner until the excess earnings have been exhausted.

The underlying philosophy of the Committee's determinations makes
first and foremost the provision for the shareholders of the Company.

<PAGE>

The compensation of Ronald L. Solomon, President and Chief Executive
Officer of the Company and Charles K. Graham, Executive Vice President of the
Company, as well as the other Executive Officers of the Company, is comprised
of a base salary which is directly related to the responsibilities of their
respective positions and a bonus which is related to the Company's
performance. Mr. Solomon and Mr. Graham work together as a corporate team
and, as such, bear the principal burden of corporate management decisions,
with Mr. Solomon, as Chief Executive Officer, bearing final responsibility.
Therefore, these two Executive Officers have participated more heavily in the
division of bonus awards. Their performance was reflected in the substantial
increase in corporate net worth for the year ended December 31, 1997, and was
greatly appreciated by the Committee. All compensation recommendations of the
Committee for the year ended December 31, 1997, were approved by the Board of
Directors of the Company.

With respect to the Executive Officers of the Company, the Committee
believes their respective compensation levels to be commensurate with those of
similarly positioned executive in similar corporations.

Members of the Committee as of the year ending December 31, 1997, were
Ben R. Honecker, Chairman, George F. Beneke, James C. Inman, Jr., R. Clark
Morton and Thomas A. Noice.

Employment Contracts

The Company has entered into written employment agreements with Ronald
L. Solomon, President and Chief Executive Officer of the Company and Charles
K. Graham, Executive Vice President of the Company, at their respective annual
base salaries for three year terms, which agreements are renewed annually in
January of each year. The agreements provide that Messrs. Solomon and Graham
will receive a severance benefit equal to the annual base salary they would
have received had they continued to be employed by the Company throughout the
term of the existing agreement, as well as participation in any health
(including medical and major medical insurance), accident and disability
insurance programs which the Holding Company may maintain for the benefit of
its executive officers. In the event of termination as a result of a change of
control or a change of duties, Messrs. Solomon and Graham will receive as
severance benefits five (5) times their annual base salary and any incentive
compensation payments not yet received, as well as complete vesting in any
supplemental retirement benefits then in existence. Additionally, Messrs.
Solomon and Graham, for a period of three years, may participate in any other
fringe benefits, including life, accident, disability, health and dental
insurance plans then in existence and, if applicable, at the time of
termination, the use of an automobile maintained by the Holding Company.
These agreements also provide for the payment of such minimum salary and
benefits for a period of six months following the disability of either Mr.
Solomon or Mr. Graham. These agreements may be terminated for certain defined
causes by the Company without payment of additional minimum salary or other
benefits.

<PAGE>
Compensation Committee Interlocks and Insider Participation

As indicated, the Personnel and Salary Committee has responsibility
for annual raises and bonuses to the executive officers of the Company. The
members of the committee consist of non-salaried directors and presently
include Ben R. Honecker, chairman, George F. Beneke, James C. Inman, Jr., R.
Clark Morton and Thomas A. Noice. Mr. Inman was formerly an officer of
Wellsburg Banking and Trust Company, Wellsburg, West Virginia, which bank
merged into Progressive Bank, N.A., a subsidiary of the Company. Mr. Noice
was formerly an officer of Farmers & Merchants National Bank in Bellaire,
Bellaire, Ohio, which bank merged into Progressive Bank, N.A., a subsidiary of
the Company. The Personnel and Salary Committee meets annually, during the
fourth quarter of each year, to review the overall progress and projections to
year end. All actions by the Personnel and Salary Committee are presented to
the full Board of Directors for final approval.

James C. Inman, Director of the Company and of Progressive Bank, N.A.,
is a member of the Personnel and Salary Committee. Mr. Inman is the spouse of
Laura G. Inman, Vice Chairman of the Board and Director of the Company, and
also Senior Vice President and Director of Progressive Bank, N.A. However,
Mrs. Inman has voluntarily withdrawn from participation in the Company's
executive bonus program. No other family relationships exist between the
Personnel and Salary Committee and the Company's executive officers, nor do
any of the directors of the Company serve on personnel committees of any other
corporation.

Executive Officers; Additional Compensation

The subsidiary banks have paid bonuses in each of the preceding five
years to their executive officers. Decisions as to the issuance of a bonus
and the amount paid in each year are determined by the Company's Board of
Directors. The aggregate amount of bonuses to the executive officers of the
Company accrued for 1995 and paid in 1996 was $143,300.00; accrued for 1996
and paid in 1997 was $165,600.00 and accrued as of December 31, 1997 was
$221,200.00. The 1997 accrual for bonuses will be paid in 1998.

Other than bonuses paid to its executive officers, neither the Company
nor its existing subsidiaries has any type or plan of additional compensation
that may discriminate in scope, terms or operation in favor of the officers or
directors of the Company.

The Company does maintain a noncontributory profit-sharing plan for
employees of its existing subsidiaries who are 21 years of age or older and
who have worked for the bank in excess of one year and who are not parties to
a collective bargaining agreement. This plan has received a favorable
determination letter from the Internal Revenue Service. The Company makes
contributions to the profit-sharing plan based upon a discretionary
contribution ranging from zero percent to 15 percent of total compensation as
fixed by appropriate action of the banks before the close of the year. This
contribution is distributed according to a two-tiered integrated allocation
formula. In the first tier, the allocation is made by taking each
participant's compensation in excess of $15,000.00 and multiplying that amount
by the Old Age, Survivors and Disability Index (OASDI) rate. This amount is
then distributed to the employees' separate retirement accounts. Any amount
of the total contribution remaining undistributed by the first tier is then
allocated and distributed to the employees' retirement accounts on a pro rata
basis based upon the percentage of each employee's compensation compared to
total compensation. Employees

<PAGE>
are entitled to the balances in their separate retirement accounts at either
normal retirement age, disability or death, but the amount of such benefits
cannot accurately be predicted due to the discretionary nature of the
contributions. Contributions during 1995 amounted to $107,300, of which
$47,144.80 accrued to the benefit of the 7 persons who are executive officers
of the Company. For 1996 the contribution was $116,300.00, of which
$55,367.18 accrued to the benefit of the 7 persons. Contributions during 1997
amounted to $127,600.00, of which $52,848.74 accrued to the benefit of the 7
persons.

The Company also has a non-qualified deferred compensation plan for
its executive officers. Under the plan, each executive officer may elect to
defer up to 50 percent of their bonus. The executive officers are generally
entitled to the balances in their separate deferred compensation accounts at
either normal retirement age, disability or death, or other termination of
employment. The amount of such benefits cannot be accurately predicted due to
the discretionary nature of the underlying bonus and the deferral percentage.

III. Security Ownership of Management and Certain Beneficial Owners
Security Ownership of Management

The following table sets forth, as of February 12, 1998, the name and
address of each director and nominee who owns of record to be the beneficial
owner of more than 5 percent of the Company's 1,209,085 issued and outstanding
shares of stock, the number of shares beneficially owned, the percentage of
stock so owned, and the percent of stock beneficially owned by all directors
and executive officers of the Company as a group. The "beneficial ownership"
of a security by an individual is determined in accordance with the rules of
the Securities and Exchange Commission.

Name & Shares of Stock Percent
Address Beneficially Owned of Total
_______ __________________ ________

George F. Beneke 70,482(1) 5.83%
Oglebay View Acres
Wheeling, WV 26003

Sylvan J. Dlesk 95,479(2) 7.90%
Highland Park
Wheeling, WV 26003

James C. Inman, Jr. 88,499(3) 7.32%
R.D. 1
Wellsburg, WV 26070

Laura G. Inman 88,499(4) 7.32%
R.D. 1
Wellsburg, WV 26070

Officers and Directors 423,149 35.00%
as a Group (16 persons)

<PAGE>

Notes (1)Includes 28,252 shares held by WesBanco Bank Wheeling, as trustee
- ----- under the will of Sarah E. Beneke, deceased, and includes 10,417
shares owned by the Beneke Corporation, of which Mr. Beneke is a
principal.

(2)Includes 95,376 shares owned jointly by Mr. Dlesk and Rosalie J.
Dlesk, his wife.

(3)Includes 75,500 shares owned by Laura G. Inman, his wife.

(4)Includes 12,999 shares owned by James C. Inman, Jr., her husband.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of February 12, 1998, the name and
address of the only person other than the persons listed in the table above
known by the Board of Directors of the Company to be the beneficial owner of
more than 5 percent of the Company's Common stock.

Name & Shares of Stock Percent
Address Beneficially Owned(1) of Total
- ------- --------------------- --------

Karen G. Younkins 83,367 6.90%
29 Ferncliff Road
Oakmont Hills
Wheeling, WV 26003

Note (1)Includes 5,472 shares owned by Terry D. Younkins, her husband.
____

IV. Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and beneficial owners of more than
ten percent of the common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC). Reporting persons
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms filed by them.
Based on a review of the copies of Section 16(a) forms received by the
Company, and on written representations from reporting persons concerning the
necessity of filing a Form 5 - Annual Statement of Changes in Beneficial
Ownership, the Company believes that, during 1997, all filing requirements
applicable to reporting persons were met.

<PAGE>
V. Transactions with Management and Others

Management personnel of the Company and its subsidiary banks have had
and expect to continue to have banking transactions with the banks in the
ordinary course of business. Extensions of credit to such persons are made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons.
Management believes that these transactions do not involve more than a normal
risk of collectibility or present other unfavorable features.

None of the directors, executive officers, beneficial owners or
immediate family members have an interest or are involved in any transactions
with the Company or its banks in which the amount involved exceeds $60,000.00,
or was not subject to the usual terms and conditions, or was not determined by
competitive bids. Similarly, no director, executive officer or beneficial
owner has an equity interest in excess of 10 percent in a business or
professional entity that has made payments to or received payments from the
Company or its banks in 1995, 1996 or 1997 which exceed 5 percent of either
party's gross revenue for those periods, respectively.

VI. Voting

The affirmative vote of the holders of a majority of the shares
entitled to vote which are present in person or represented by proxy at the
1998 Annual Meeting is required to elect directors and to act on any other
matters properly brought before the meeting. Shares represented by proxies
which are marked "withhold authority" with respect to the election of any one
or more nominees for election as directors and proxies which are marked to
deny discretionary authority on other matters will be counted for the purpose
of determining the number of shares represented by proxy at the meeting. Such
proxies will thus have the same effect as if the shares represented thereby
were voted against such nominee or nominees or against such other matters. If
a broker indicates on a proxy that the broker does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter.

In the election for directors every shareholder entitled to vote shall
have the right to vote, in person or by proxy, the number of shares owned by
him or her for as many persons as there are directors to be elected and for
whose election he or she has a right to vote, or to cumulate his or her votes
by giving one candidate as many votes as the number of such directors
multiplied by the number of his or her shares shall equal, or by distributing
such votes on the same principal among any number of such candidates. Such
rights may be exercised by a clear indication of the shareholder's intent on
the form of proxy.

VII. Independent Auditors

S.R. Snodgrass, A.C. were the auditors for the year ended December 31,
1997, and the Audit Committee has selected them as auditors for the year
ending December 31, 1998. Shareholder ratification of this selection is not
required. A representative of S.R. Snodgrass, A.C. will be present at the
meeting with the opportunity to make a statement and/or to respond to
appropriate questions from shareholders.

<PAGE>

VIII. Shareholder Proposals

Proposals of shareholders intended to be presented at the 1998 Annual
Meeting scheduled to be held on April 13, 1999 must be received by the Company
by November 20, 1998 for inclusion in the Company's proxy statement and proxy
relating to that meeting. Upon receipt of any such proposal, the Company will
determine whether or not to include such proposal in the proxy statement and
proxy in accordance with regulations governing the solicitation of proxies.

In order for a shareholder to nominate a candidate for director, under
the Company's Bylaws nominations must be made in writing and shall be
delivered or mailed to the president of the Company or to the chairman of the
Board not less than 14 days nor more than 40 days prior to any meeting of
shareholders called for the election of directors, provided, however, that if
less than 21 days' notice of the meeting is given to shareholders, such
nominations shall be mailed or delivered to the president of the Company or
the chairman of the Board not later than the close of business on the seventh
day following the day on which the notice of the meeting was mailed. Such
notification shall contain the following information to the extent known to
the notifying shareholder: (a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the total number of
shares of stock of the Company that will be voted by him or her for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of stock of the Company owned by the
notifying shareholder. Nominations not made in accordance with such procedure
may, in the discretion of the presiding officer, be disregarded, and upon the
presiding officer's instructions, the vote teller shall disregard all votes
cast for each such nominee.

In order for a shareholder to bring other business before a
shareholder meeting, timely notice must be received by the Company. Such
notice must include a description of the proposed business, the reasons
therefor, and other specified matters. These requirements are separate from
and in addition to the requirements a shareholder must meet to have a proposal
included in the Company's proxy statement.

In each case the notice must be given to the Secretary of the Company,
whose address is 1701 Warwood Avenue, Wheeling, West Virginia 26003. Any
shareholder desiring a copy of the Company's Bylaws will be furnished one
without charge upon written request to the Secretary.

IX. Legal Proceedings

The Company is unaware of any litigation other than ordinary routine
litigation incident to the business of the Company, to which it or any of its
subsidiaries is a party or of which any of their property is the subject.

X. Other Matters

The Company knows of no other matters to come before the meeting. If
any other matters properly come before the meeting, the proxies solicited
hereby will be voted on such matters in accordance with the judgment of the
persons voting such proxies.

<PAGE>

PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE First West Virginia Bancorp, Inc. With- For All
ANNUAL MEETING 1. ELECTION OF DIRECTORS: For hold Except
OF SHAREHOLDERS
APRIL 14, 1998

R. Clark Morton
The undersigned does hereby appoint William G. Petroplus
GEORGE F. BENEKE, LAURA G. INMAN and Peter C. Schuetz
KARL W. NEUMANN or any of them, the true Ronald L. Solomon
and lawful attorneys in fact, agents and
proxies of the undersigned to represent the
undersigned at the Annual Meeting of the
Shareholders of FIRST WEST VIRGINIA BANCORP,
INC., to be held on April 14, 1998, commencing
at 4:00 p.m., at the Warwood Office of the INSTRUCTION: To withhold
authority to vote for any Company at 1701 Individual nominee, mark
Warwood Avenue, Wheeling, West Virginia, and "For All Except" and write
at any and all adjournments of said meeting, that nominee's name in the
and to vote all the shares of Common Stock of Space provided below.
the Company standing on the books of the Company
in the name of the undersigned as specified
and in their discretion on such other business
as may properly come before the meeting. --------------------------

The undersigned hereby
acknowledges receipt of
Notice of said Annual Meeting
and accompanying Proxy
Statement each dated
March 17, 1998.

This Proxy will be voted as
specified, if no
specification is made, this
Proxy will be "FOR" the
nominees named.

THIS PROXY IS SOLICITED ON
BEHALF OF THE
BOARD OF DIRECTORS

Please be sure to sign and date Date
this Proxy in the box below. ----------------

---------------------------------------------------------
Shareholder sign above Co-holder (if any) sign above

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Detach above card, sign, date and mail in postage paid envelope provided.

First West Virginia Bancorp, Inc.
YOUR VOTE IS IMPORTANT TO US
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY