FIRST WEST VIRGINIA BANCORP INC, 10-K, 1999-03-30

FIRST WEST VIRGINIA BANCORP INC
10-K, 1999-03-30
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, 1998

[ ] 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, 1999, was
$21,092,915.25. (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,
1999:

Common Stock, $5.00 Par Value 1,257,252 shares
- ----------------------------------------------

The total number of pages are 113 ; Exhibit Index is located on page 20

<PAGE>
2

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, 1998. ------------------------------

Portions of First West Part III, Items 10,
Virginia Bancorp, Inc.'s 11, 12, and 13
Proxy statement for the
1999 Annual Meeting
of Shareholders. ------------------------------

<PAGE>
3
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

<PAGE>
4

PART 1

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

General
- -------

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, 1998, 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
one full-service office in Bellaire, Ohio. Progressive Bank, N.A. also has
two full-service Automated Teller Machines (ATM) located at West Liberty State
College, Ohio county, West Liberty, West Virginia and at 8th and Commerce
Street, Brooke County, Wellsburg, West Virginia. 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 $142,546,029 as of December 31,
1998. 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, 1998, Progressive Bank, N.A. - Buckhannon
had total assets of $28,409,266.

Total Holding Company assets as of December 31, 1998, which include
the assets of its operating subsidiary banks, were $171,395,079. 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 1,257,252 shares were
issued and outstanding as of December 31, 1998 to 405 shareholders.
Shareholders' equity at that date was $15,460,938.

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.

<PAGE>
5
General Description of Business - continued
- -------------------------------------------

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.
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, 1998, 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, 1998 there were 7 commercial banks operating in Wheeling in
competition with Progressive Bank, N.A. In the Wellsburg area there was 1
commercial bank and 1 federally chartered savings bank competing with the
Wellsburg branch office of Progressive Bank, N.A. There were 2 commercial
banks competing with the Moundsville branch office. In the Bellaire area
there were 2 commercial banks and 1 federally chartered savings bank. 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, 3rd 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 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.

<PAGE>
6
Supervision and Regulation - continued
- --------------------------------------

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.

<PAGE>
7
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, 1998, 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<PAGE>
8

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

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 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.

<PAGE>
9
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 system, the FDIC 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.

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. The FICO assessment annual rate is approximately 1.29 basis
points on BIF-assessable deposits. During 1998, there were no BIF assessments
paid.

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.

<PAGE>
10
Employees
- ----------

As of December 31, 1998, the Holding Company had 7 part-time
employees. As of December 31, 1998, 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.

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.

<PAGE>
11
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, 1998, 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
2. Investment Portfolio

a. Book Value of Investments
Book values of investment securities
at December 31, 1998 and 1997 are as
follows (in thousands):

December 31, December 31,
1998 1997
----------- ------------

Securities held to maturity:
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $ -- $ --
Obligations of states
and political subdivisions 11,350 4,778
------ ------
Total held to maturity $11,350 $ 4,778
------ ------
Securities available for sale :
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $35,107 $32,027
Obligations of states
and political subdivisions 516 516
Corporate debt securities 455 209
Mortgage-backed securities 6,503 7,287
Equity Securities 804 627
------ ------
Total available for sale 43,385 40,666
------ ------
Total $54,735 $45,444
====== ======

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.<PAGE>
12

<PAGE>
12
Statistical Information - continued
- -------------------------------------

3. Loan Portfolio

a. Types of Loans 27

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 29

6. Return on Equity and Assets 2

7. Short-Term Borrowings 14, 31
<PAGE>
13
Item 2 PROPERTIES
- ----------------------------

The Holding Company and its subsidiary banks owned and/or leased
property as of December 31, 1998 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. This office also services the full service
automated teller machine located at 8th and Commerce Streets, Wellsburg, West
Virginia. Progressive Bank, N.A. has a land lease for the 8th and Commerce
Streets property until year 2005.

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 owns 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
was purchased on October 31, 1998. 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.

<PAGE>
14
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. The Company is unaware of any litigation other
than ordinary routine litigation incidental 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 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, 1998, the Holding Company had 405 shareholders of
record who collectively held 1,257,252 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
-------- --------
1998
------------

4th Quarter $ 23.63 $ 28.88
3rd Quarter $ 25.00 $ 29.88
2nd Quarter $ 28.38 $ 31.00
1st Quarter $ 24.00 $ 28.13

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

* Market prices were restated to reflect a 50%
common stock dividend, declared September 9, 1997.

<PAGE>
15
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 1998 were $.58 per share and $.52 per share for 1997.

The following table sets forth annual dividend, net income and ratio of
dividends to net income of the Holding Company for 1998, 1997 and 1996. The
values stated have been adjusted for the four percent common stock dividend to
shareholders of record as of October 1, 1998; the fifty percent common stock
dividend to shareholders of record on October 1, 1997; and the four percent
stock dividend to stockholders of record on December 2, 1996.

DIVIDEND HISTORY OF HOLDING COMPANY
-------------------------------------
(per share)
Ratio -
Dividends to
Dividend Net Income Net Income
------------ ------------ --------------

1998 .58 1.62 35.8%
1997 .52 1.54 33.8%
1996 .46 1.31 35.1%

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, 1998,
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, 1998,
included in this report as Exhibit 13.1, is incorporated herein by reference.

<PAGE>
16
Item 8 Financial Statements and Supplementary Data
- --------------------------------------------------------

The report of independent auditors and consolidated financial
statements, included on pages 19 through 37 of the Annual Report to
Shareholders of First West Virginia Bancorp, Inc. for the year ended December
31, 1998, 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, 1998, 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 1999
Proxy Statement dated March 16, 1999 for Annual Meeting of Stockholders to
be held April 13, 1999, 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 85 Emeritus Chairman of the Board of the Holding Company since
1998; Chairman of the Board of the Holding Company from 1979 to
1998; Director of the Holding Company since 1973;
Director of Progressive Bank, N.A. since 1958
- --------------------------------------------------------------------------------------------------------
Laura G. Inman 57 Chairman of the Board of the Holding Company since 1998;
Vice Chairman of the Board of the Holding Company 1995-
1998; 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.
- --------------------------------------------------------------------------------------------------------
Ronald L. Solomon 59 Vice Chairman of the Board of the Holding Company since 1998;
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
- --------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
17
Executive Officers of the Registrant - continued
- -------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles K. Graham 53 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 45 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 38 Controller of the Holding Company since 1992;
Controller of Progressive Bank, N.A. since 1992
- --------------------------------------------------------------------------------------------------------
Connie R. Tenney 43 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 43 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 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. 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 1999 Proxy
Statement dated March 16, 1999 for Annual Meeting of Stockholders to be held
April 13, 1999, includedin 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 1999 Proxy Statement dated March 16, 1999 for
Annual Meeting of Stockholders held April 13, 1999, included in this report as
Exhibit 99, is incorporated herein by reference.

<PAGE>
18

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 1999 Proxy Statement dated March 16, 1999 for
Annual Meeting of Stockholders held April 13, 1999, 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 Pages 31 and 32 of the Annual
Report to Shareholders for the year ended December 31, 1998, 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, 1998, are incorporated by reference in Item 8:

Exhibit 13.1
Page Number

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

Consolidated Balance Sheet (December 31, 1998
and December 31, 1997). ........................20

Consolidated Statements of Income (Years
ended December 31, 1998, 1997 and 1996) ................21

Consolidated Statements of Changes in
Stockholders' Equity (Years ended December 31, 1998,
1997 and 1996).......................................................22

Consolidated Statements of Cash Flows (Years
ended December 31, 1998, 1997 and 1996)................................23

Notes to Consolidated Financial Statements
(Years ended December 31, 1998, 1997 and 1996) ..................24 - 37

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

No reports on Form 8-K were filed during the fourth quarter of 1998.

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

<PAGE>
19

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
Vice Chairman, 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
------------ ------- ------

Vice Chairman, President
/s/ Ronald L. Solomon Chief Executive Officer March 11, 1999
- ------------------------- and Director
Ronald L. Solomon

/s/ Francy P. Reppy Controller March 11, 1999
- -------------------------
Francie P. Reppy

/s/ George F. Beneke Director March 11, 1999
- -------------------------
George F. Beneke

/s/ Sylvan J. Dlesk Director March 11, 1999
- -------------------------
Sylvan J. Dlesk

/s/ Karl W. Neumann Director March 11, 1999
- -------------------------
Karl W. Neumann

/s/ Laura G. Inman Director March 11, 1999
- -------------------------
Laura G. Inman

/s/ James C. Inman, Jr. Director March 11, 1999
- -------------------------
James C. Inman, Jr.

/s/ R. Clark Morton Director March 11, 1999
- -------------------------
R. Clark Morton

/s/ William G. Petroplus Director March 11, 1999
- -------------------------
William G. Petroplus

/s/ Benjamin R. Honecker Director March 11, 1999
- -------------------------
Benjamin R. Honecker

/s/ Thomas A. Noice Director March 11, 1999
- -------------------------
Thomas A. Noice

<PAGE>
20

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, 1999 between
First West Virginia Bancorp, Inc. and Ronald L. Solomon.
Filed herewith and incorporated herein by reference.

10.2 Employment Contract dated January 1, 1999 between
First West Virginia Bancorp, Inc. and Charles K. Graham.
Filed herewith and incorporated herein by reference.

Filed herewith and incorporated herein by reference.

10.3 Employment Contract dated January 1, 1999 between
First West Virginia Bancorp, Inc. and Beverly A. Barker.
Filed herewith and incorporated herein by reference.

10.4 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.

10.5 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.

10.8 Lease dated May 20, 1998 between Progressive Bank, N.A.
and Robert Scott Lumber Company. Filed herewith and 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
Filed herewith and incorporated herein by reference.

99 Proxy statement for the Annual Shareholders meeting to be held
April 13, 1999 Filed herewith and incorporated herein by reference.

<PAGE>
21

EXHIBIT 10.1

Employment Contract dated January 1, 1999 between First West
Virginia Bancorp, Inc. and Ronald L. Solomon

<PAGE>
22
EMPLOYMENT AGREEMENT

THIS AGREEMENT made in duplicate on this 1st day of January, 1999
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 Vice Chairman,
President and Chief Executive Officer and Executive does hereby
accept the employment as Vice Chairman, 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>
23

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 $106,596.00 per annum for a period of three years
commencing on the date hereof, payable in equal monthly
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>
24

(d) Commission by Executive of any act or any failure by
Executive to act involvingserious criminal conduct or moral
turpitude or 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>
25

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 Stratford Springs
Condo 301, 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>
26

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.

--------------------------------------------
RONALD L. SOLOMON

FIRST WEST VIRGINIA BANCORP, INC.

BY: Laura G. Inman
---------------------------------------------
ITS CHAIRMAN OF THE BOARD

<PAGE>
27

EXHIBIT 10.2

Employment Contract dated January 1, 1999 between First West
Virginia Bancorp, Inc. and Charles K. Graham
<PAGE>
28

EMPLOYMENT AGREEMENT

THIS AGREEMENT made in duplicate on this 1st day of January, 1999
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 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>
29

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 $76,204.00 per annum for a period of three years
commencing on the date hereof, payable in equal monthly
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>
30

(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.

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 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.
<PAGE>
31

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.

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>
32

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.

-------------------------------------------
CHARLES K. GRAHAM

FIRST WEST VIRGINIA BANCORP, INC.

BY: Laura G. Inman
-------------------------------------------
ITS CHAIRMAN OF THE BOARD

<PAGE>
33

EXHIBIT 10.3

Employment Contract dated January 1, 1999 between First West
Virginia Bancorp, Inc. and Beverly A. Barker
<PAGE>
34

EMPLOYMENT AGREEMENT

THIS AGREEMENT made in duplicate on this 1st day of January, 1999
between FIRST WEST VIRGINIA BANCORP, INC., a West Virginia corporation,
(Bancorp), and BEVERLY A. BARKER, (Executive).

W I T N E S S E T H :

1. EMPLOYMENT
Bancorp does hereby employ Executive as its Senior Vice President
and Treasurer and Executive does hereby accept the employment as
Senior Vice President and Treasurer 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 her
full business time and attention to the business and affairs of
Bancorp and its subsidiaries and use her best efforts to promote
the interests of Bancorp and/or its subsidiaries.

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

<PAGE>
35

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 $60,496.00 per annum for a period of three
years commencing on the date hereof, payable in
equal monthly 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,
her 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 her duties hereunder;

<PAGE>
36

(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.

5. CHANGE OF CONTROL OR DUTIES
If Executive terminates her employment following a Change of
Control or a Change of Duties, or if she terminates her
employment following both a Change of Control and a Change
of Duties, she 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 her compensation or fringe benefits; or
(d) A change in the location of her employment without her
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 her then current annual base salary and to her
incentive compensation payments not yet received. She
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 her termination. If the employment of the
Executive is terminated by reason of disability, she shall
continue to receive her base salary and incentive

<PAGE>
37

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 her disability.

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 her at 66406 Greenbrier Dr.,
St. Clairsville, OH 43950
(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, her 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 her rights, obligations or benefits under
this Agreement.

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

<PAGE>
38

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

----------------------------------------
BEVERLY A. BARKER

FIRST WEST VIRGINIA BANCORP, INC.

BY: Laura G. Inman
----------------------------------------
ITS CHAIRMAN OF THE BOARD

<PAGE>
39

EXHIBIT 10.8

Lease dated May 20, 1998 between Progressive Bank, N.A.
and Robert Scott Lumber Company.
<PAGE>
40

LAND LEASE FOR ATM

THIS LEASE is made this 20th day of May , 1998, by
-------------- ------------------
and between ROBERT SCOTT LUMBER COMPANY, a West Virginia Corporation (Lessor)
and PROGRESSIVE BANK, N.A. WHEELING, of Wheeling, West Virginia (Lessee).

WHEREAS, the Lessee desires to install, operate, and maintain an
automatic teller machine (ATM) upon certain property currently owned by the
Lessor, and the parties intend that their agreements regarding such
arrangement be stated in this lease.

NOW, THEREFORE, in consideration of the mutual covenants of the parties
herein made and undertaken, it is agreed:

1. LEASED PREMISES.
--------------- Lessor leases to Lessee land approximating 96 square
feet situated on the west side of West Virginia State Route 2, just north of
8th Street, Wellsburg, WV, and being a portion of Lots 229 and 230 of the
General Plan of the Town of Wellsburg, Brooke County, West Virginia, said
leased premises depicted generally in the attached sketch, for the purpose of
installing, operating, and maintaining an ATM. The precise location of the
leased premises shall be determined by field measurements upon layout of the
improvements, including the curbcut onto State Route 2.

2. TERM.
----- Lessor demises the leased premises for a term of seven (7)
years, commencing on or about June 1, 1998, the inception date to be precisely
determined at the time Lessee or its contractors shall commence construction,
and terminating on May 31, 2005, unless earlier terminated upon a default of
performance of the lease by Lessee.

3. RENT.
----- Lessee shall pay to Lessor as rent for the leased premises
during the seven year term of the lease the total sum of Thirty Three Thousand
Dollars ($33,000.00), payable in monthly installments of Five Hundred Dollars
($500.00), in advance each month, beginning on the first day of the 18th month
following the inception of this lease, as determined by the start of
construction under Paragraph 2. In addition, Lessee agrees to make payment
for the undertaking and completion of certain improvements to both the leased
premises and the surrounding parking lot/traffic movement areas also owned by
the Lessor, as depicted in the attached site plan. The description and
anticipated cost of said improvements is attached to this lease in the quote
of Pete Grubich Contracting dated 4/27/98, and is Eight Thousand Five Hundred
Fifty Dollars ($8,550.00). The payment by Lessee for such surrounding site
work shall be in lieu of any payment by Lessee of rent for the first 18 months
of the lease term.

4. CONSTRUCTION AND OWNERSHIP OF LEASEHOLD IMPROVEMENTS.
-----------------------------------------------------
Lessee shall be responsible to construct at its own expense the ATM machine,
and all associated improvements, including utility installations, necessary to
place it into operation in accordance with Lessee's specifications. Lessor
shall have no obligation to pay any of such costs or expenses, and shall be
held harmless by Lessee against any claim for mechanics' or materialmen liens
associated with such improvements to the leasehold premises, or to the
surrounding

<PAGE>
41

premises owned by Lessor. At the termination of this lease, whether by lapse
of time or otherwise, all ATM improvements then and at such time upon or
within the described leased premises shall belong to Lessee, and Lessee, at
its sole expense, shall within 60 days after the termination of this lease,
remove such improvements, and shall restore or finish the footprint area of
said ATM premises to the condition then-existing of the surrounding
parking/traffic movement area. Any improvements to the parking/traffic flow
areas undertaken at the inception or during the term of this lease shall
remain the property of the Lessor.

5. REPAIRS.
-------- Repair and maintenance of the ATM machine shall be the sole
responsibility of Lessee. Neither Lessor nor any of its agents or employees
shall attempt to repair, modify, or alter in any way whatsoever the Lessee's
ATM improvements. Lessee shall perform such maintenance and repair of the
parking/traffic movement area as it deems necessary or desirable to facilitate
smooth traffic flow and use of its ATM. Unless agreed otherwise, Lessor shall
have no obligation to perform maintenance or repairs to the parking/traffic
movement areas to facilitate access to or use of the ATM leased premises.

6. SOLE OCCUPANCY AND ACCESS.
-------------------------- Lessee shall have sole possession and
occupancy of the leased premises and the ATM improvements thereupon, and shall
have access at all times thereto for purposes of maintaining and servicing the
improvements. Lessor agrees not to cause, not to tolerate or permit others to
cause, any obstruction or restriction of access of Lessee or the traveling
public to the ATM over the intended ingress/egress easements.

7. UTILITIES.
---------- Lessee shall acquire and pay for any and all utilities as
may be required by Lessee for the illumination of the leased premises and for
normal operation of the ATM machine and its related equipment.

8. INDEMNIFICATION.
--------------- Lessee shall indemnify, hold harmless and defend
the Lessor, its shareholders, directors, officers, and employees, against any
and all claims or losses of any third party for personal or bodily injury, or
property damage, resulting from or in any way arising out of the installation,
maintenance, operation, use, or benefit to Lessee of said ATM, including any
and all costs of litigation, and such claims or losses due to electrical power
failure, criminal mischief, burglary, or robbery, but excluding from this
provision any claims or losses occasioned by the negligent, willful, or
reckless acts or omissions of the Lessor, or its employees or agents.

9. QUIET ENJOYMENT.
---------------- Lessor hereby covenants with Lessee that, provided
Lessee has performed its covenants and agreements under this lease, Lessee
shall have quiet, exclusive, and peaceful possession of the leased premises,
on the terms herein provided, for the term of this lease or any extension
hereof. Lessor warrants that it has title to the leased premises and that no
agreement, lien or encumbrance otherwise interferes with its right to make
this agreement.

10. INGRESS AND EGRESS.
------------------- Lessor hereby grants a nonexclusive easement
for ingress and egress to the leased premises across the surrounding parking
lot/traffic movement areas which are the subject of the Grubich paving
contract, such easement to remain appurtenant to the leasehold premises for so
long as this lease shall remain in existence and not be otherwise
<PAGE>
42

terminated, for the use of Lessee, its employees and agents, its customers,
and other ATM card holders intending to make use of the Lessee's ATM machine.
Any directional pavement markings or signage deemed necessary or required by
Lessee for the safe and convenient operation of its ATM shall be the sole
responsibility of the Lessee and Lessor shall have no obligation to maintain
same once installed; provided, Lessee shall confer with Lessor prior to
installation of any markings or signage to minimize or avoid any interference
with Lessor's ongoing business.

11. This agreement contains the entirety of the parties' agreements and
understandings, and changes hereto must be in writing to be enforceable as a
part of this agreement. The provisions of this lease shall apply to, bind,
and inure to the benefit of the Lessor and Lessee, and their respective
successors and assigns.

ROBERT SCOTT LUMBER CO., Lessor: PROGRESSIVE BANK, N.A.,
WHEELING, Lessee:

By: C.H. Beall, III, President By: Ronald L. Solomon
--------------------------------- -------------------------------
Authorized Officer Authorized Officer

STATE OF WEST VIRGINIA,
COUNTY OF BROOKE, to-wit:

The foregoing instrument was acknowledged before me this day of
------
, 1998, by , on behalf of Robert Scott Lumber
- ------------- --------------------
Company, a West Virginia Corporation, as its duly authorized officer.

----------------------------
Notary Public

My commission expires:

STATE OF WEST VIRGINIA,
COUNTY OF Ohio , to-wit:
------------------

The foregoing instrument was acknowledged before me this 20th day of
-------
May , 1998 by Ronald L. Solomon , on
-------------------- --------------------------------------
behalf of Progressive Bank, N.A. Wheeling, as its duly authorized officer.

Debra M. Tomlin
------------------------------------
Notary Public

My commission expires:

<PAGE>
43

EXHIBIT 11.1

Statement Regarding Computation of Per Share Earnings
<PAGE>
44

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, 1998, 1997
and 1996, 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,
1998 1997 1996
------- ------- -------

Weighted Average
Shares Outstanding 1,257,252 1,257,252 1,257,252

Net Income $2,033,025 $1,930,568 $1,643,994

Per Share Amount $1.62 $1.54 $1.31

No common stock equivalents exist.

<PAGE>
45

EXHIBIT 12.1

Statement Regarding Computation of Ratios
<PAGE>
46

Computation of Ratios
- ---------------------------------

The following formulas were used to calculate the ratios in Financial
Information and Supplementary Data, page 47, Selected Financial Data for the
years ended December 31, 1998, 1997, 1996, 1995 and 1994, included in this
report.

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

<TABLE>
<CAPTION>
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Net Income $ 2,033,025 $ 1,930,568 $ 1,643,994 $ 1,470,347 $ 1,287,713

Weighted Average
Shares Outstanding 1,257,252 1,257,252 1,257,252 1,257,252 1,257,154

Per Share Amount $1.62 $1.54 $1.31 $1.17 $1.02
</TABLE>

(Calculation)
Cash dividends/ Shares issued
= Cash dividends declared per share

<TABLE>
<CAPTION>
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Cash dividends $ 732,677 $ 652,936 $ 573,698 $ 410,525 $ 448,535

Shares issued 1,257,252 1,257,252 1,257,252 1,257,252 1,257,154

Per Share Amount $.58 $.52 $.46 $.33 $.36
</TABLE>

(Calculation)
Stockholders' Equity/ Shares issued
= Book Value per share

<TABLE>
<CAPTION>
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Stockholders' Equity $15,460,938 $14,128,995 $12,649,278 $11,709,207 $10,367,843

Shares issued 1,257,252 1,257,252 1,257,252 1,257,252 1,257,154

Per Share Amount $12.30 $11.24 $10.06 $ 9.31 $ 8.25
</TABLE>

<PAGE>
47

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

<TABLE>
<CAPTION>
(In thousands)
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Income $ 2,033 $ 1,931 $ 1,644 $ 1,470 $ 1,288

Total Average Assets $ 164,630 $ 153,290 $ 137,810 $ 124,145 $ 117,996

Return on Average Assets 1.23% 1.26% 1.19% 1.18% 1.09%
</TABLE>

(Calculation)
Net Income / Average stockholders' equity
= Return on Average Equity

<TABLE>
<CAPTION>
(In thousands)
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Net Income $ 2,033 $ 1,931 $ 1,644 $ 1,470 $ 1,288

Total Average
Stockholders' Equity $ 14,697 $ 13,400 $ 12,186 $ 11,170 $ 10,253

Return on Average Equity 13.83% 14.41% 13.49% 13.16% 12.56%
</TABLE>

(Calculation)
Average Equity / Average stockholders' equity
= Average Equity to Average Assets

<TABLE>
<CAPTION>
(In thousands)
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Total Average
Stockholders' Equity $ 14,697 $ 13,400 $ 12,186 $ 11,170 $ 10,253

Total Average Assets $ 164,630 $ 153,290 $ 137,810 $ 124,145 $ 117,996

Average Equity
to Average Assets 8.93% 8.74% 8.84% 9.00% 8.69%
</TABLE>

<PAGE>
48

(Calculation)
Cash dividends per share / Net income per share
= Dividend Payout Ratio

<TABLE>
<CAPTION>
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Cash dividends
per share $ .58 $ .52 $ .46 $ .33 $ .36

Net income per share $ 1.62 $ 1.54 $ 1.31 $ 1.17 $ 1.02

Dividend Payout Ratio 35.80% 33.77% 35.11% 28.21% 35.29%
</TABLE>

(Calculation)
Loans/ Total deposits
= Loan to Deposit Ratio

<TABLE>
<CAPTION>
December 31,
1998 1997 1996 1995 1994
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C>
Loans $103,555,319 $95,373,653 $80,416,680 $72,006,276 $61,667,148

Total deposits $147,784,819 $137,044,813 $125,271,069 $114,895,154 $105,730,236

Loan to Deposit Ratio 70.07% 69.59% 64.19% 62.67% 58.32%
</TABLE>

<PAGE>
49

EXHIBIT 13.1

Annual Report to Shareholders

<PAGE>
50

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

Dear Shareholders,

I am pleased to present to you the record earnings performance
contained in the 1998 Annual Report of First West Virginia Bancorp, Inc.
Consolidated net income for 1998 was $2,033,025 or $1.62 per share, a 5.3%
increase over the $1,930,568 or $1.54 per share earned for 1997. Total assets
for the Holding Company increased 9.8% over the prior year to $171,395,079, at
December 31, 1998 as compared to $156,142,583 at December 31, 1997. Total
stockholders' equity increased to $15,460,938, an increase of 9.4% over the
prior year. The book value per share was $12.30 at December 31, 1998 as
compared to $11.24 a year earlier.

During 1998, the Board of Directors declared and paid cash dividends
of $.58 per share, an increase of 11.5% over the $.52 per share paid during
1997. Additionally, on September 8, 1998 the Board of Directors declared a 4%
common stock dividend payable to shareholders of record on October 1, 1998.

As evidence of our continued commitment to small businesses within
the community, in May, 1998 the United States Small Business Administration
honored Progressive Bank, N.A. Wheeling as one of its top 10 lenders in West
virginia. In November, 1998, Progressive Bank, N.A. Wheeling was again
recognized by the United States Small Business Administration as one of the
top 25 lenders in the Pittsburgh, Pennsylvania lending area.

During the third quarter of 1998, Progressive Bank, N.A. Wheeling
installed an automated teller machine in Wellsburg, West Virginia. This ATM
enhances our Wellsburg branch office by providing an additional banking outlet
for our customers.

It is with deep sorrow that we note the passing of Peter C. Schuetz,
longtime director of First West Virginia Bancorp, Inc. and Director of
Progressive Bank, N.A. His experience, support and dedication has left its
mark on the growth of the Corporation over the years and for many years to
come.

The history of First West Virginia Bancorp, Inc. has been built on a
philosophy of safety and soundness, service and commitment to our customers
and strategic growth. This approach has brought success to the Corporation
and will continue to lead our community banks in the years ahead.

I would be remiss not to express my gratitude to our loyal customers
and shareholders, as well as directors, officers and employees, all of whom
are an integral part of our organization. As always, your comments and
suggestions are appreciated.

Sincerely,

Ronald L. Solomon

Ronald L. Solomon
Vice Chairman, President
and Chief Executive Officer

<PAGE>
51
- ----------------------------------------------------------------------------

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

Years ended
December 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Total interest income $ 12,452 $ 11,507 $ 10,067 $ 8,937 $ 7,783
Total interest expense 5,324 4,745 3,925 3,421 2,868
Net interest income 7,128 6,762 6,142 5,516 4,915
Provision for loan losses 256 131 71 50 77
Total other income 787 639 568 738 725
Total other expenses 4,674 4,377 4,182 4,007 3,641
Income before income taxes 2,985 2,893 2,457 2,198 1,922
Net income 2,033 1,931 1,644 1,470 1,288

PER SHARE DATA (1)
Net income $ 1.62 $ 1.54 $ 1.31 $ 1.17 $ 1.02
Cash dividends declared (2) .58 .52 .46 .33 .36
Book value per share 12.30 11.24 10.06 9.31 8.25

AVERAGE BALANCE SHEET SUMMARY
Total loans, net $ 99,345 $ 86,609 $ 74,469 $ 66,058 $ 56,991
Investment securities 48,543 51,754 48,557 46,020 50,282
Deposits - Interest Bearing 127,520 120,589 112,768 100,488 95,980
Long-term debt -- -- -- -- 44
Stockholders' equity 14,697 13,400 12,186 11,170 10,253
Total Assets 164,630 153,290 137,810 124,145 117,996

BALANCE SHEET
Investments $ 54,735 $ 45,444 $ 50,440 $ 45,996 $ 45,551
Loans 103,555 95,374 80,417 72,006 61,667
Other Assets 13,105 15,325 13,689 9,953 9,445
------- ------- ------- ------- -------
Total Assets $171,395 $156,143 $144,546 $127,955 $116,663
======= ======= ======= ======= =======
Deposits $147,785 $137,045 $125,271 $114,895 $105,730
Repurchase Agreements 6,994 4,075 5,931 749 105
Other Liabilities 1,155 894 695 602 460
Shareholders' Equity 15,461 14,129 12,649 11,709 10,368
------- ------- ------- ------- -------
Total Liabilities and
Shareholders' Equity $171,395 $156,143 $144,546 $127,955 $116,663
======= ======== ======= ======= =======
SELECTED RATIOS
Return on average assets 1.23% 1.26% 1.19% 1.18% 1.09%
Return on average equity 13.83% 14.41% 13.49% 13.16% 12.56%
Average equity to average assets 8.93% 8.74% 8.84% 9.00% 8.69%
Dividend payout ratio (1) (2) 35.80% 33.77% 35.11% 28.21% 35.29%
Loan to Deposit ratio 70.07% 69.59% 64.19% 62.67% 58.32%
</TABLE>

(1) Adjusted for a 4 percent common stock dividend to stockholders of record
as of October 1, 1998, a 3 for 2 stock split in the effect of a fifty
(50) percent common stock to shareholders of record as of October 1,
1997, a 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>
52

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, 1998, 1997 and 1996. 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 $2,033,025 for the year ended
December 31, 1998 as compared to $1,930,568 for the year ended December 31,
1997. The 5.3% increase in earnings during 1998 over 1997 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 $1.62 in 1998 compared to $1.54 in 1997.

Operational earnings improved with net interest income increasing $365,910 or
5.4%, to $7,128,272 during 1998 as compared to the same period in 1997. 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, was 1.23% in 1998 and 1.26% in 1997. The
return on average equity (ROE), which measures the return on the stockholders'
investment, was 13.83% in 1998 and 14.41% in 1997.

The Holding Company ended the year 1998 with total assets of $171,395,079 an
increase of 9.8% over the $156,142,583 reported for the year ended December
31, 1997. Loans net of reserves increased in 1998 by $8,276,517 to
$102,432,407, as compared to $94,155,890 reported at December 31, 1997. Total
deposits increased in 1998 by $10,740,006, from $137,044,813 at December 31,
1997 to $147,784,819 at December 31, 1998, primarily due to the increase in
Time deposits.

Non-performing assets were $664,000 at December 31, 1998, down 20.9%, from
$839,000 at December 31, 1997. The allowance for loan losses amounted to
$1,122,912 at December 31, 1998 or 1.1% of total loans, compared to $1,217,763
or 1.3% of total loans at December 31, 1997.

The Board of Directors declared and paid cash dividends of $.58 per share
during 1998 as compared to $.52 in 1997. On September 8, 1998, the Board of
Directors also declared a four percent common stock dividend to its
shareholders of record as of October 1, 1998. Accordingly, the Holding
Company issued 48,167 shares of common stock on October 26, 1998.

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, 1998, 1997, and 1996.

Net interest income was $7,128,272 in 1998, an increase of $365,910 or 5.4%,
from 1997, following an increase in 1997 of $620,713 or 10.1% from 1996. The
increase in net interest income for 1998 and 1997 was primarily attributable
to the growth in the loan portfolio. Interest and fees on loans and lease
financing increased $1,150,799 or 14.5% from 1997 to 1998 and $1,085,701 or
15.9% from 1996 to 1997. The increased interest income on loans and lease
financing for both years resulted from increases in the average loan volume of
$12,736,000 in 1998 and $12,140,000 in 1997. Increases in commercial,
residential real estate, and installment loans primarily contributed to the
loan growth during 1998. Growth in installment, commercial and residential
real estate loans primarily contributed to the increase in 1997. The average
yield on loans decreased slightly from 9.15% in 1997 to 9.14% in 1998 and
decreased from 9.19% in 1996 to 9.15% in 1997.

---------------------------------------------------------------
3
<PAGE>
53
- -----------------------------------------------------------------------

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, 1998, 1997, and 1996. Average balance sheet information as
of December 31, 1998, 1997, and 1996 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, 1998 December 31, 1997 December 31, 1996
----------------------------- ------------------------------ ----------------------------
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 $ 38,387 $ 2,399 6.25% $ 45,157 $ 2,861 6.34% $ 42,203 $ 2,501 5.93%
Obligations of states and
political subdivisions 8,155 382 4.68% 5,470 264 4.83% 4,869 247 5.07%
Other securities 2,001 124 6.20% 1,127 69 6.12% 1,485 101 6.80%
-------- ------- ------- -------- -------- ------- ------- ----- -------
Total Investment securities: 48,543 2,905 5.98% 51,754 3,194 6.17% 48,557 2,849 5.87%
Interest bearing deposits 2,607 138 5.29% 533 28 5.25% 1,556 81 5.21%
Federal funds sold 6,085 330 5.42% 6,561 357 5.44% 5,590 295 5.28%
Loans, net of unearned income 99,345 9,078 9.14% 86,609 7,928 9.15% 74,469 6,842 9.19%
-------- ------- ------- -------- -------- ------- ------- ----- -------
Total earning assets 156,580 12,451 7.95% 145,457 11,507 7.91% 130,172 10,067 7.73%

Cash and due from banks 4,369 4,104 4,000
Bank premises and equipment 3,056 3,178 3,313
Other assets 1,785 1,741 1,496
Allowance for possible loan losses (1,160) (1,190) (1,171)
-------- -------- --------
Total Assets $164,630 $ 153,290 $137,810
======== ======== ========

LIABILITIES
Certificates of deposit $ 60,277 $ 3,356 5.57% $ 55,149 $ 2,945 5.34% $ 45,579 $ 2,286 5.02%
Savings deposits 43,418 1,270 2.93% 41,376 1,102 2.66% 39,594 997 2.52%
Interest bearing demand deposits 23,825 471 1.98% 24,064 509 2.12% 23,880 515 2.16%
Federal funds purchased and
Repurchase agreements 6,600 227 3.44% 5,118 189 3.69% 3,715 127 3.42%
-------- ------- ----- ------- -------- ------- ------- -------- ------
Total interest bearing liabilities 134,120 5,324 3.97% 125,707 4,745 3.77% 112,768 3,925 3.48%
Demand deposits 14,720 13,235 12,128
Other liabilities 1,093 948 728
-------- ------- --------
Total Liabilities 149,933 139,890 125,624
STOCKHOLDERS' EQUITY 14,697 13,400 12,186
-------- ------- --------
Total Liabilities
and Stockholders' Equity $164,630 $153,290 $137,810
======== ======= ========

Net yield on earning assets $ 7,127 4.55% $ 6,762 4.65% $ 6,142 4.72%
======= ====== ======= ====== ======= =====
</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 1998, 1997, and 1996,
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 $ 8,155 $ 637 7.81% $ 5,470 $ 440 8.04% $ 4,869 $ 412 8.46%
Loans 99,345 9,215 9.28% 86,609 8,018 9.26% 74,469 6,912 9.28%
========= ======= ===== ========= ======= ====== ======= ======= =====
Total earning assets $ 156,580 $12,843 8.20% $ 145,457 $11,773 8.09% $130,172 $10,302 7.91%
========= ======= ===== ========= ======= ====== ======= ======= =====
Taxable equivalent net yield on
earning assets $ 7,519 4.80% $ 7,028 4.83% $ 6,377 4.90%
======= ====== ======= ====== ======= =====
</TABLE>

---------------------------------------------------------------
4
<PAGE>
54
- ---------------------------------------------------------------------
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, 1998, 1997, and 1996 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.

<TABLE>
<CAPTION>
1998 Compared to 1997 1997 Compared to 1996 1996 Compared to 1995
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)
INTEREST INCOME FROM:
- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and other U. S.
Government agencies $ (429) $ (33) $ (462) $ 175 $ 185 $ 360 $ 156 $ 139 $ 295
Obligations of states and
political subdivisions 130 (12) 118 30 (13) 17 11 (12) (1)
Other securities 53 2 55 (24) (8) (32) (29) 8 (21)
Interest bearing deposits 109 1 110 (53) -- (53) 86 (11) 75
Federal funds sold (26) (1) (27) 51 11 62 45 (36) 9
Loans, net of unearned income 1,165 (15) 1,150 1,116 (30) 1,086 773 -- 773
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest earned 1,002 (58) 944 1,295 145 1,440 1,042 88 1,130

INTEREST EXPENSE ON:
- -----------------------
Time deposits 273 138 411 480 179 659 456 96 552
Savings deposits 54 114 168 45 60 105 (75) (80) (155)
Interest bearing demand deposits (5) (33) (38) 4 (10) (6) 42 (45) (3)
Federal funds purchased and
Repurchase agreements 55 (17) 38 48 14 62 120 (10) 110
Long-term debt -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest paid 377 202 579 577 243 820 543 (39) 504
------- ------- ------- ------- ------- ------- ------- ------- -------
Net interest differential $ 625 $ (260) $ 365 $ 718 $ (98) $ 620 $ 499 $ 127 $ 626
======= ======= ======= ======= ======= ======= ======= ======= =======
</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 1998, 1997, 1996,
and 1995, respectively.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Obligations of states and
political subdivisions:
Investment securities $ 216 $ (19) $ 197 $ 51 $ (23) $ 28 $ 18 $ (19) $ (1)
Loans 1,179 18 1,197 1,127 (21) 1,106 780 8 788
======= ======= ======= ======= ======= ======= ======= ======= =======
Total interest earned $ 1,102 $ (32) $ 1,070 $ 1,327 $ 144 $1,471 $1,056 $ 89 $ 1,145
======= ======= ======= ======= ======= ======= ======= ======= =======

Net interest differential $ 725 $ (234) $ 491 $ 750 $ (99) $ 651 $ 513 $ 128 $ 641
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

---------------------------------------------------------------
5
<PAGE>
55

Net Interest Income - Continued

The decrease in the average volume in investment securities resulted in the
overall decrease in interest earned on investment securities during 1998.
Interest income on investment securities during 1998 decreased $286,947 or
9.0% from 1997. In 1997, interest income on investment securities increased
$343,159 or 12.0% from 1996. 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. The average
volume of investment securities decreased $3,211,000 in 1998 and follows an
increase of $3,197,000 in 1997. The average yield on investment securities
decreased .19%, from 6.17% in 1997 to 5.98% in 1998 and increased .30% from
5.87% in 1996 to 6.17% in 1997.

Interest expense in 1998 increased $579,394 or 12.2% from 1997, compared to an
increase in 1997 of $819,038 or 20.9% from 1996. The increases in interest
expense for both 1998 and 1997 were primarily the result of deposit growth.
During 1998, the average volume of interest bearing deposits increased
$6,931,000 or 5.7% as compared to 1997, and increased $11,536,000 or 10.6% in
1997 as compared to 1996. Average volume increases of interest bearing
deposits during 1998 and 1997 were primarily the result of the growth in
certificates of deposit.

The average yield paid on interest bearing liabilities increased .20%, from
3.77% in 1997 to 3.97% in 1998, and follows an increase of .29%, from 3.48% in
1996 to 3.77% in 1997. The increase in the average yield on interest bearing
liabilities during 1998 was primarily the result of an increase in the
interest rates paid on certificates of deposit and savings deposits. During
1997, the increase in the average yield on interest bearing liabilities 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 4.80% for 1998, as
compared to 4.83% and 4.90% earned during 1997 and 1996, 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 $75,196 in 1998, up 18.1%, from 1997, as compared to
an increase of 13.7% from 1996 to 1997. The increase in service charges in
both 1998 and 1997 was primarily due to an increase in the number of 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 1998, the
Holding Company accounted for securities gains of $2,786 and securities losses
of $1,608 and were attributable to sales of marketable equity securities. In
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.

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 1998, other
operating income was $294,346, an increase of $69,762 or 31.1% over 1997, and
follows an increase of $21,555, or 10.6%, over 1996. The increase in other
operating income during 1998 was primarily due to the increased ATM charges.
In 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.

Non-Interest Expense

Salary and employee benefits is the largest component of non-interest expense.
For the year 1998, salary and employee benefits increased $134,189 or 5.9%
over the same period in 1997. During 1997, salary and employee benefits
increased $161,549 or 7.6% over 1996. The increase in salary and employee
benefits in both 1998 and 1997 was primarily due to normal annual merit
adjustments.

---------------------------------------------------------------
6
<PAGE>
56
- -------------------------------------------------------------------------

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, 1998 and December 31, 1997 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, 1998 December 31, 1997
--------------------------------------------- --------------------------------------------
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 $ -- --% $ 5,775 6.01 % $ -- -- % $ 7,794 6.11 %
After One But
Within Five Years -- -- 18,815 5.92 -- -- 21,970 6.38
After Five But
Within Ten Years -- -- 10,517 6.23 -- -- 2,263 6.94
After Ten Years -- -- -- -- -- -- -- --
------- ----- ------- ------ -------- ------ -------- -----
-- -- 35,107 6.03 -- -- 32,027 6.35

States & Political Subdivisions

Within One Year 950 7.71 -- -- 436 6.31 -- --
After One But
Within Five Years 5,099 6.52 -- -- 3,238 7.16 -- --
After Five But
Within Ten Years 5,121 6.48 516 7.45 941 7.55 516 7.46
After Ten Years 180 6.06 -- -- 163 7.72 -- --
------- ----- ------- ------ -------- ------ -------- -----
11,350 6.59 516 7.45 4,778 7.18 516 7.46

Corporate Debt Securities

Within One Year -- -- 349 5.94 -- -- -- --
After One But
Within Five Years -- -- 106 7.98 -- -- 209 7.83

------- ----- ------- ------ -------- ------ -------- -----
-- -- 455 6.42 -- -- 209 7.83

Mortgage-Backed Securities -- -- 6,503 6.35 -- -- 7,287 6.55

Equity Securities -- -- 804 5.30 -- -- 627 5.45

------- ----- ------- ------ -------- ------ -------- -----
Total $ 11,350 6.59 % $ 43,385 6.09 % $ 4,778 7.18 % $ 40,666 6.39 %
======= ===== ======= ===== ======= ====== ======== =====
</TABLE>
---------------------------------------------------------------
7
<PAGE>
57

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 $155,239 or 11.9% in 1998 over 1997 and increased
$9,239 or .7% in 1997. The increase in other operating expenses during 1998
was primarily due to the increase in other expenses, service expense,
stationery and supplies expense, other taxes and postage expense. 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.

Income Taxes

Income tax expense for the period ended December 31, 1998 was $951,803, a
decrease of $11,053 over 1997. The decrease was primarily due to the increase
in tax exempt income during 1998. Components of the income tax expense for
December 31, 1998 were $784,036 for federal taxes and $167,767 for West
Virginia corporate net income taxes. Income tax expense for the period ended
December 31, 1997 increased by $149,703 over 1996. Increases in income tax
expense were primarily due to changes in pre-taxable income of $436,277 in
1997 over 1996.

For federal income tax purposes, tax-exempt income is based on qualified
state, county, and municipal bonds and loans. Tax-exempt income was $586,837
in 1998; $400,081 in 1997; and $352,306 in 1996. 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 $1,211,000 in 1998; $1,269,000 in 1997; and $1,025,000 in
1996.

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, 1998,
1997 and 1996. Additional information regarding income taxes is contained in
Note 7 to the Consolidated financial statements.

Balance Sheet Analysis

Investments

Investment securities increased $9,291,446 or 20.4% from $45,443,954 at
December 31, 1997, to $54,735,400 at December 31, 1998 and follows a decrease
of $4,996,235 or 9.9% from $50,440,189 at December 31, 1996 to $45,443,954 at
December 31, 1997. The increase in investment securities at December 31, 1998
was primarily the result of increased deposit growth. The decrease in
investment securities during 1997 was used to fund the increased loan 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 78.3% of total securities at December 31, 1998,
as compared to 88.4% at December 31, 1997. 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, 1998, the Holding Company had
approximately 79% of the investment portfolio classified as available for
sale, while 21% was classified as held to maturity.

---------------------------------------------------------------
8
<PAGE>
58

- ---------------------------------------------------------------------------
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,
1998 and December 31, 1997 (in thousands):

December 31, 1998
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
------------ ------------ ----------

Commercial $ 858 $ 6,024 $ 6,379
Real Estate - construction 41 -- --
--------- --------- ---------
Total $ 899 $ 6,024 $ 6,379
========= ========= =========

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
========= ========= =========

The following table presents an analysis of fixed and variable rate loans as
of December 31, 1998 and December 31, 1997 along with the contractual
maturities of loans other than installment loans and residential mortgages (in
thousands):
December 31, 1998
---------------------------------------
After one
In one Year Through After
Year or Less Five Years Five Years
------------ ------------ -----------

Fixed Rates $ 626 $ 4,922 $ 2,266
Variable Rates 273 1,102 4,113
--------- --------- ---------
Total $ 899 $ 6,024 $ 6,379
========= ========= =========

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
========= ========= =========

---------------------------------------------------------------
9
<PAGE>
59
- ---------------------------------------------------------------------------

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, 1998 and December 31, 1997, therefore the carrying value of securities
available for sale were increased by $253,924 and $195,928, respectively.
The market value of securities classified as held to maturity was above book
value by $74,498 and $59,428 at December 31, 1998 and December 31, 1997,
respectively.

Loans

Loans were $103,555,319 at December 31, 1998, an increase of $8,181,666 or
8.6% from 1997, and follows an increase in 1997 of $14,956,973 or 18.6% from
1996. The loan growth during 1998 can be attributed primarily to increases in
commercial loans, residential real estate loans and installment loans which
increased approximately $2,825,000, $2,361,000 and $2,235,000, respectively.
Commercial loan increases during 1998 were primarily as a result of expansion
of area businesses and new businesses combined with the increased
participation in the Small Business Administration program. Residential real
estate loans increased in 1998 primarily as a result of new purchases and
refinancing due to offering competitive mortgage rates and local servicing.
Increases in third party paper with various automobile dealers primarily
contributed to the increase in installment loans in 1998.

Real estate residential loans which include real estate construction, real
estate farmland, and real estate residential loans comprised thirty-four
percent (34%) 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-four percent (24%) 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 1997 to 1998 were a 1%
increase in installment loans and a 1% decrease in residential real estate
loans. From 1996 to 1997, the changes in the composition of the loan
portfolio 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.

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 $664,000 at December 31, 1998 and $839,000 at
December 31, 1997. Total non-performing loans decreased $175,000 in 1998, as
compared to the increase of $137,000 in 1997. Loans classified as non-accrual
were $396,000 or .4% of total loans as of December 31, 1998, as compared to
$540,000 or .6% of total loans at December 31, 1997. There were no loans
classified as renegotiated at December 31, 1998 and 1997. 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. Loans past due
90 days or more increased $49,000 during 1998, after decreasing $81,000 during
1997. Loans past due 90 days or more have remained fairly consistent over the
past five years. Other real estate owned decreased $80,000 in 1998 over 1997
due to the sale of the properties by a subsidiary bank. 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 1.1% and 1.3% of loans
outstanding as of December 31, 1998 and 1997, respectively. Net loan charge-
offs were $350,851 during 1998 as compared to $73,039 in 1997. The net
charge-offs during 1998 and 1997 were primarily 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, 1998, the provision for possible loan losses
was $256,000 compared to $130,500, and $70,600 at December 31, 1997 and 1996,
respectively. The increased loan growth combined with the increase in net
charge-offs and in non-performing assets in 1998 and 1997 has prompted the
increase in the provision for loan losses.

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.

---------------------------------------------------------------
10

<PAGE>
60
- -------------------------------------------------------------------------

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):

<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------
1998 1997 1996 1995 1994

<S> <C> <C> <C> <C> <C>
Past Due 90 Days or More:
Real Estate - residential $ 76 $ 45 $ 250 $ 33 $ 32
Commercial 4 70 2 -- 2
Installment 188 104 48 60 17
------- ------- --------- --------- ---------
$ 268 $ 219 $ 300 $ 93 $ 51
------- ------- --------- --------- ---------

Renegotiated:
Real Estate - residential $ -- $ -- $ -- $ -- $ --
Commercial -- -- -- -- 232
Installment -- -- -- -- --
------- ------- --------- --------- ---------
$ -- $ -- $ -- $ -- $ 232
------- ------- --------- --------- ---------

Non-accrual:
Real Estate - residential $ 106 $ 139 $ 26 $ 56 $ 18
Commercial 184 353 299 256 218
Installment 106 48 28 39 25
------- ------- --------- --------- ---------
$ 396 $ 540 $ 353 $ 351 $ 261
------- ------- --------- --------- ---------
Other Real Estate $ -- $ 80 $ 49 $ 64 $ 64
------- ------- --------- --------- ---------

Total non-performing assets $ 664 $ 839 $ 702 $ 508 $ 608
====== ====== ======== ========= =========

Total non-performing assets
to total loans and
other real estate 0.64% 0.88% 0.87% 0.70% .98%
</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 $33,000 and $34,600 for the periods ended
December 31, 1998 and 1997, respectively.

As of December 31, 1998, 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.

---------------------------------------------------------------
11
<PAGE>
61

- --------------------------------------------------------------------------
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,
----------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Balance at Beginning of period
Allowance for Possible
Loan Losses $ 1,218 $ 1,160 $ 1,149 $ 947 $ 896
Loans Charged Off:
Real Estate - residential 65 18 35 1 --

Commercial 134 -- -- 11 2

Installment 173 67 49 44 44
-------- -------- ---------- ---------- ----------
372 85 84 56 46

Recoveries:
Real Estate - residential 5 -- -- -- --

Commercial -- 3 1 194 3

Installment 16 9 24 15 17
-------- -------- ---------- ---------- ----------
21 12 25 209 20

Net Charge-offs 351 73 59 (153) 26

Purchased Reserves -- -- -- -- --

Additions Charged to Operations 256 131 70 49 77
-------- -------- ---------- ---------- ----------
Balance at end of period: $ 1,123 $ 1,218 $ 1,160 $ 1,149 $ 947
======= ======= ========= ========= =========

Average Loans Outstanding $ 99,345 $ 86,609 $ 74,469 $ 66,058 $ 56,991
======= ======= ========= ========= =========

Ratio of net charge-offs
to Average loans
outstanding for the period 0.35% 0.08% 0.08% (0.23)% 0.05%

Ratio of the Allowance for Loan
Losses to Loans Outstanding for
the period 1.08% 1.28% 1.44% 1.60% 1.54%
</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>
62

- ----------------------------------------------------------------------
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, 1998
(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,
--------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------- --------------- ---------------- -------------- ----------------
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 $ 208 34.2% $ 202 34.6% $ 192 36.5% $ 215 39.9% $216 43.1%
Commercial 490 37.8 622 38.0 619 39.1 618 36.5 420 34.7
Installment 374 23.8 343 23.6 298 21.6 265 20.0 260 19.3
Others 20 4.2 20 3.8 20 2.8 20 3.6 20 2.9
Unallocated 31 -- 31 -- 31 -- 31 -- 31 --
------ ----- ------ ----- ------ ----- ---- ----- ---- ------
Total $1,123 100.0% $1,218 100.0% $1,160 100.0% $1,149 100.0% $947 100.0%
====== ===== ====== ===== ====== ===== ==== ===== ==== ======

---------------------------------------------------------------
13
<PAGE>
63

Allowance for Loan Losses - Continued

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 1999 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 $147,784,819 at December 31,
1998 as compared to $137,044,813 at December 31, 1997, an increase of 7.8%,
and follows an increase of 9.4% between 1997 and 1996. The increase in total
deposits during 1998 and 1997 was primarily in time deposits. Time deposits
grew by $4,280,219 or 7.4% in 1998, and follows an increase of $6,824,615 or
13.3% in 1997. Time deposits of $100,000 or more decreased approximately
$1,689,000 at December 31, 1998 as compared to December 31, 1997. The
increase in time deposits was primarily the result of special promotions
offered by the subsidiary banks throughout 1998 and 1997. At December 31,
1998, noninterest bearing deposits comprised 10% of total deposits and
interest bearing deposits which include NOW, money market, savings and time
deposits comprised 90% of total deposits. There were no changes in the
deposit mix from December 31, 1997 to December 31, 1998.

Repurchase Agreements

Repurchase agreements represent short-term borrowings, usually overnight to 30
days. Repurchase agreements were $6,994,024 at December 31, 1998, an increase
of $2,919,028 in 1998 as compared to 1997. The increase in repurchase
agreements in 1998 as compared to 1997 was primarily due to an increase in
balances maintained by existing commercial customers combined with the
increase 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 9.2% in 1998 entirely from current
earnings after quarterly dividends, and an increase of .2% resulting from the
effect of the change in the net unrealized gain (loss) on securities available
for sale. The increase in stockholders' equity in 1998 follows an increase of
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. Stockholders' equity amounted
to 9.0% of total assets at the end of 1998 and 1997.

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 8, 1998, the Holding Company declared a four percent common stock
dividend to stockholders of record on October 1, 1998. As a result, 48,167
shares of common stock were issued on October 26, 1998. The Holding Company
declared a 50% common stock dividend on September 9, 1997 to stockholders of
record on October 1, 1997. Accordingly, 402,978 shares of common stock were
issued on October 27, 1997.

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>
64

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 $(5,053,000), which indicates
the corporation's interest bearing liabilities are more than earning assets at
December 31, 1998. 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, 1998

</TABLE>
<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 $ 4,092 $ $ $ $ $ 4,092
Investments 5,300 6,331 14,733 28,371 54,735
Loans 19,435 27,289 23,019 33,398 414 103,555
Other Assets 300 9,836 10,136
Allowance for Loan
and Lease Losses (1,123) (1,123)
-------- -------- ------- ------- ------- --------

TOTAL ASSETS: $ 29,127 $ 33,620 $37,752 $61,769 $ 9,127 $171,395
======== ======== ======= ======= ======= ========

NOW and Savings $ 2,553 $ 7,522 $10,897 $34,316 $ $ 55,288
MMDA 15,118 15,118
CD's < 100,000 8,518 20,939 11,485 11,037 51,979
CD's > 100,000 2,906 3,250 3,429 673 10,258
Demand Deposits 15,142 15,142
Other Liabilities 1,155 1,155
Repurchase Agreements 6,994 6,994
Stockholders' Equity 15,461 15,461
-------- -------- ------- ------- ------- --------

TOTAL LIABILITIES
AND CAPITAL: $36,089 $ 31,711 $25,811 $46,026 $31,758 $171,395
======= ======= ======= ======== ======= ========
GAP (6,962) 1,909 11,941 15,743 (22,631)
GAP/ Total Assets (4.06%) 1.11% 6.97% 9.19% (13.20%)
Cumulative GAP (6,962) (5,053) 6,888 22,631 0
Cumulative GAP/Total Assets (4.06%) (2.95%) 4.02% 13.20% 0.00%
</TABLE>

The above analysis contains repricing and maturity assumptions and
estimates used by management.

---------------------------------------------------------------
15
<PAGE>
65

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
$43,385,571 classified as available for sale at December 31, 1998. 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, 1998, Progressive Bank, N.A. and Progressive Bank, N.A.-
Buckhannon, had an available line of approximately $2,570,000 and $694,000,
respectively, without purchasing any additional capital stock from the FHLB.
As of December 31, 1998 and 1997, there were no borrowings outstanding
pursuant to these agreements.

At December 31, 1998 and December 31, 1997, the Holding Company had
outstanding loan commitments and unused lines of credit totaling $8,070,000
and $7,321,000, respectively. As of December 31, 1998, management placed a
high probability for required funding within one year of approximately
$4,958,000. Approximately $2,753,000 is principally unused home equity and
credit card lines on which management places a low probability for required
funding.

Year 2000 Readiness Disclosure

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 Awareness Phase
provided for the establishment of a Year 2000 committee and to develop an
overall strategy for the banks. The Assessment Phase included the
identification of all hardware, software, networks, automated teller machines,
mission critical systems and customer and vendor interdependencies affected by
Year 2000. The committee has identified software and hardware which will be
affected by the Year 2000 change. We have contacted our vendors and continue
to monitor their progress on a quarterly basis. Additionally, large
commercial customers have been assessed for Year 2000 risk and assigned a risk
rating. Customers with high risk ratings are being reviewed on a periodic
basis. Any new material commercial customers are evaluated for Year 2000
risk.

The Year 2000 Project Committee has identified the bank's mission critical
systems. The committee has established the following definition of Year 2000
compliance: A vendor or software system would be classified as Year 2000
compliant if certification from the vendor was received stating that the
product will correctly process, provide and/or receive date data for the Year
2000 and that the product performs accurately in a test conducted by the bank
with the product interfacing with all relevant systems. Internal testing is a
crucial part of the Plan. We have established our testing strategies,
methodology and have developed test scripts for our mission critical systems.
In order to facilitate testing, we have created a testing environment which
mirrors our production system. Testing of in-house applications, including
ACH processing, was completed during the third and fourth quarters of 1998.
Verification of the testing was completed by December 31, 1998. Based on our
Year 2000 definition, we have concluded that our mission critical hardware and
software systems are Year 2000 compliant.

The Company has also established a business resumption plan which will be
reviewed on a quarterly basis. 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>
66

- -----------------------------------------------------------------------------
First West Virginia Bancorp, Inc.
Summarized Quarterly Financial Information
- -----------------------------------------------------------------------------

A summary of selected quarterly financial information follows:

First Second Third Fourth
1998 Quarter Quarter Quarter Quarter
--------- --------- --------- ---------

Total interest income $3,017,292 $3,062,636 $3,148,133 $3,224,052
Total interest expense 1,276,939 1,325,792 1,363,263 1,357,847
Net interest income 1,740,353 1,736,844 1,784,870 1,866,205
Provision for loan
losses 46,500 56,500 76,500 76,500
Investment Securities
Gain (1,608) -- 2,786 --
Total other income 191,504 183,293 215,373 195,010
Total other expenses 1,109,594 1,125,921 1,172,069 1,266,218
Income before income
taxes 774,155 737,716 754,460 718,497
Net income 519,740 501,192 515,715 496,378
Net income per share (1) .41 .40 .41 .40

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

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) .38 .38 .40 .38

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

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) .30 .32 .35 .34

(1) Adjusted for the 4 percent common stock dividend to stockholders of
record as of October 1, 1998; the 3 for 2 stock split in the effect of
a 50% stock dividend to stockholders of record as of October 1, 1997;
and the 4 percent common stock dividend to stockholders of record as
of December 2, 1996.

---------------------------------------------------------------
17
<PAGE>
67

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

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.

---------------------------------------------------------------
18

<PAGE>
68

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, 1998 and 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, 1998. 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, 1998 and 1997, 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, 1998, in conformity with
generally accepted accounting principles.

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

Wheeling, West Virginia
January 13, 1999

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

---------------------------------------------------------------
19

<PAGE>
69

First West Virginia Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS

December 31,
1998 1997
------------ ------------
ASSETS

Cash and due from banks $ 4,720,682 $ 4,718,516
Due from banks - interest bearing 299,430 96,967
------------ ------------
Total cash and cash equivalents 5,020,112 4,815,483
Federal funds sold 4,092,000 6,932,000
Investment securities:
Available for sale (at fair value) 43,385,571 40,665,808
Held to maturity (fair value of $11,424,327
and $4,837,574 respectively) 11,349,829 4,778,146
Loans, net of unearned income 103,555,319 95,373,653
Less allowance for loan losses (1,122,912) (1,217,763)
------------ ------------
Net loans 102,432,407 94,155,890
Premises and equipment, net 3,204,730 3,085,087
Accrued income receivable 1,242,606 1,075,701
Other assets 667,824 634,468
------------ ------------
Total assets $171,395,079 $156,142,583
============ ============
LIABILITIES

Noninterest bearing deposits:
Demand $ 15,141,249 $ 14,142,125
Interest bearing deposits:
Demand 25,130,312 22,908,421
Savings 45,275,810 42,037,038
Time 62,237,448 57,957,229
------------ ------------
Total deposits 147,784,819 137,044,813
Repurchase agreements 6,994,024 4,074,996
Accrued interest on deposits 472,097 432,870
Other liabilities 683,201 460,909
------------ ------------
Total liabilities 155,934,141 142,013,588
------------ ------------
STOCKHOLDERS' EQUITY

Common stock - 2,000,000 shares authorized
at $5 par value:
1,257,252 shares issued at December 31, 1998 and
1,209,085 shares issued at December 31, 1997 6,286,260 6,045,425
Surplus 4,739,381 3,764,000
Retained earnings 4,275,249 4,196,076
Accumulated other comprehensive income 160,048 123,494
------------ ------------
Total stockholders' equity 15,460,938 14,128,995
------------ ------------
Total liabilities and stockholders' equity $171,395,079 $156,142,583
============ ============

The accompanying notes are an integral part of the financial statements.
---------------------------------------------------------------
20
<PAGE>
70
First West Virginia Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31,
1998 1997 1996
---------- ---------- ----------

INTEREST INCOME
Interest and fees on loans
and lease financing:
Taxable $ 8,873,747 $ 7,791,705 $ 6,736,781
Tax-exempt 204,726 135,969 105,192
Investment securities:
Taxable 2,494,614 2,905,180 2,581,467
Tax-exempt 382,111 264,112 247,114
Dividends 28,482 22,862 20,414
Other interest income 138,252 29,843 80,742
Interest on federal funds sold 330,181 357,138 295,348
---------- ---------- ----------
Total interest income 12,452,113 11,506,809 10,067,058
---------- ---------- ----------
INTEREST EXPENSE
Deposits 5,096,756 4,555,542 3,798,076
Other borrowings 227,085 188,905 127,333
---------- ---------- ----------
Total interest expense 5,323,841 4,744,447 3,925,409
---------- ---------- ----------
Net interest income 7,128,272 6,762,362 6,141,649

PROVISION FOR POSSIBLE LOAN LOSSES 256,000 130,500 70,600
---------- ---------- ----------
Net interest income after provision
for possible loan losses 6,872,272 6,631,862 6,071,049

NONINTEREST INCOME
Service charges and other fees 490,834 415,638 365,446
Securities gains (losses) 1,178 (1,291) (711)
Other operating income 294,346 224,584 203,029
---------- ---------- ----------
Total noninterest income 786,358 638,931 567,764
---------- ---------- ----------
NONINTEREST EXPENSE
Salary and employee benefits 2,414,862 2,280,673 2,119,124
Net occupancy expense of premises 796,133 789,128 764,213
Other operating expenses 1,462,807 1,307,568 1,298,329
---------- ---------- ----------
Total noninterest expense 4,673,802 4,377,369 4,181,666
---------- ---------- ----------
Income before income taxes 2,984,828 2,893,424 2,457,147

INCOME TAXES 951,803 962,856 813,153
---------- ---------- ----------
Net income $ 2,033,025 $ 1,930,568 $ 1,643,994
========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING 1,257,252 1,257,252 1,257,252
========== ========== ==========
EARNINGS PER COMMON SHARE $1.62 $1.54 $1.31
========== ========== ==========

The accompanying notes are an integral part of the financial statements.
---------------------------------------------------------------
21
<PAGE>
71
<TABLE>
<CAPTION>
First West Virginia Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Accumulated
Other
Common Stock Compre- Compre-
------------------------- Retained hensive hensive
Shares Stock Surplus Earnings Income Income Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 $ 775,268 $ 3,876,340 $ 3,166,340 $ 4,621,049 $ 45,478 $11,709,207
Comprehensive income
Net income - - - 1,643,994 - $ 1,643,994 1,643,994
Other comprehensive income,
net of tax:
Unrealized gains on securities
net of reclassification
adjustment (see disclosure) - - - - (126,038) (126,038) (126,038)
-----------
Comprehensive income $ 1,517,956
===========
Cash dividend ($.46 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) - -
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1996 806,107 4,030,535 3,764,000 4,935,303 (80,560) 12,649,278
Comprehensive income
Net income - - - 1,930,568 - $ 1,930,568 1,930,568
Other comprehensive income,
net of tax:
Unrealized gains on securities
net of reclassification
adjustment (see disclosure) - - - - 204,054 204,054 204,054
-----------
Comprehensive income $ 2,134,622
===========
Cash dividend ($.52 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 fair market value 402,978 2,014,890 - (2,014,890) - -
----------- ----------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1997 1,209,085 6,045,425 3,764,000 4,196,076 123,494 14,128,995
Comprehensive income
Net income - - - 2,033,025 - $ 2,033,025 2,033,025
Other comprehensive income,
net of tax:
Unrealized gains on securities
net of reclassification
adjustment (see disclosure) - - - - 36,554 36,554 36,554
-----------
Comprehensive income $ 2,069,579
===========
Cash dividend ($.58 per share) - - - (732,677) - (732,667)
Cash paid in lieu of fractional
shares on stock dividend - - - (4,959) - (4,959)
4% common stock dividend
at fair market value 48,167 240,835 975,381 (1,216,216) - -
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1998 $ 1,257,252 $ 6,286,260 $ 4,739,381 $ 4,275,249 $ 160,048 $15,460,938
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Disclosure of reclassification amount
Unrealized holding gains (losses)
arising during period $ 37,296 $203,240 $(126,486)
Less reclassification adjustment for
gains (losses) included in net income 742 (814) (448)
-------- -------- ---------
Net unrealized gains (losses)
on securities $ 36,554 $204,054 $(126,038)
======== ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
---------------------------------------------------------------
22
<PAGE>
72
First West Virginia Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,
1998 1997 1996
----------- ----------- -----------

OPERATING ACTIVITIES
Net income $ 2,033,025 $ 1,930,568 $ 1,643,994
Adjustments to reconcile net
income to net cash provided by
operating activities:
Provision for loan losses 256,000 130,500 70,600
Depreciation and amortization 377,721 370,743 382,789
Loss on disposal of equipment - - 776
Amortization of investment
securities, net (83,194) (47,749) (10,963)
Investment security losses (gains) (1,178) 1,291 711
Increase in interest receivable (166,905) (127,675) (24,703)
Increase in interest payable 39,227 47,581 70,682
Other, net 163,445 (85,201) 78,879
----------- ----------- -----------
Net cash provided by
operating activities 2,618,141 2,220,058 2,212,765
----------- ----------- -----------
INVESTING ACTIVITIES
Net (increase) decrease in
federal funds sold 2,840,000 (1,471,000) (3,183,000)
Net increase in loans,
net of charge-offs (8,554,313) (15,042,430) (8,494,283)
Proceeds from sale of securities
available for sale 6,543 1,487,344 1,250,868
Proceeds from maturities of
securities available for sale 34,648,171 23,350,000 21,615,000
Proceeds from maturities of
securities held to maturity 976,000 2,010,000 235,000
Principal collected on mortgage-
backed securities 2,962,199 944,930 415,482
Purchases of securities available
for sale (40,194,992) (21,194,040) (27,341,216)
Purchases of securities held
to maturity (7,546,999) (1,233,644) (806,587)
Recoveries on loans previously
charged-off 21,796 12,418 24,889
Purchases of premises and
equipment (493,316) (202,358) (499,219)
----------- ------------ -----------
Net cash used in investing
activities (15,334,911) (11,338,780) (16,783,066)
----------- ----------- ------------
FINANCING ACTIVITIES
Net increase in deposits 10,740,006 11,773,745 10,375,915
Dividends paid (737,635) (654,905) (577,885)
Increase (decrease) in short-
term borrowings 2,919,028 (1,855,695) 5,181,467
----------- ----------- -----------
Net cash provided by
financing activities 12,921,399 9,263,145 14,979,497
----------- ----------- -----------
INCREASE IN CASH AND
CASH EQUIVALENTS 204,629 144,423 409,196

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 4,815,483 4,671,060 4,261,864
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 5,020,112 $ 4,815,483 $ 4,671,060
=========== =========== ===========

The accompanying notes are an integral part of the financial statements
---------------------------------------------------------------
23

<PAGE>
73
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996

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. 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 securities 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.

The Corporation accounts for impaired loans in accordance with 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

---------------------------------------------------------------
24
<PAGE>
74

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

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 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. On September 8, 1998, the Corporation declared a 4% stock dividend
to stockholders of record on October 1, 1998. 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 1998, $4,000 for 1997, and $31,300 for 1996.

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

Certain prior year amounts have been reclassified to conform to the 1998
presentation.

---------------------------------------------------------------
25
<PAGE>
75

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 2 - INVESTMENT SECURITIES

The estimated market values of investment securities are as follows at
December 31, 1998 and 1997:

<TABLE>
<CAPTION>
December 31, 1998
------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------

Securities held to maturity: (Expressed in Thousands)
----------------------------
<S> <C> <C> <C> <C>
Obligations of states and political subdivisions $ 11,350 $ 108 $ (34) $ 11,424
--------- --------- -------- ---------
Total held to maturity 11,350 108 (34) 11,424
--------- --------- -------- ---------

Securities available for sale:
------------------------------
U.S. Treasury securities and obligations of
U.S. Government corporations and agencies 34,942 219 (54) 35,107
Obligations of states and political subdivisions 504 12 - 516
Corporate debt securities 453 4 (2) 455
Mortgage-backed securities 6,461 51 (9) 6,503
Equity securities 772 49 (17) 804
--------- --------- -------- ---------

Total available for sale 43,132 335 (82) 43,385
--------- --------- -------- ---------

Total $ 54,482 $ 443 $ (116) $ 54,809
========= ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------

Securities held to maturity: (Expressed in Thousands)
----------------------------
<S> <C> <C> <C> <C>
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>

---------------------------------------------------------------
26
<PAGE>
76

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 2 - INVESTMENT SECURITIES (CONTINUED)

The amortized cost and estimated market value of investment securities
at December 31, 1998, 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 $ 950 $ 956 $ 6,103 $ 6,124

Due after one year through
five years 5,099 5,143 18,814 18,921

Due after five years
through ten years 5,121 5,151 10,981 11,033

Due after ten years 180 174 -- --
----------- --------- ---------- -----------
11,350 11,424 35,898 36,078

Mortgage-backed securities -- -- 6,461 6,503

Equity securities -- -- 773 804
----------- --------- ---------- -----------

Total $ 11,350 $ 11,424 $ 43,132 $ 43,385
=========== ========== ========== ===========
</TABLE>

Proceeds from sales of securities available for sale during the years
ended December 31, 1998, 1997, and 1996, were $5,366, $1,487,344, and
$1,250,868, respectively. Gross gains of $2,786 and gross losses of
$1,608 in 1998; gross gains of $2,772 and gross losses of $4,063 in 1997;
and gross gains of $425 and gross losses of $1,136 in 1996 were realized
on those sales. Assets carried at $24,687,000 and $18,079,000 at
December 31, 1998 and 1997, respectively, were pledged to secure United
States Government and other public funds and for other purposes as
required or permitted by law.

NOTE 3 - LOANS AND LEASES

Loans outstanding at December 31, 1998 and 1997, are as follows:

<TABLE>
<CAPTION>
(Expressed in Thousands)
1998 1997
------------ ------------

<S> <C> <C>
Real estate-construction $ 41 $ 334
Real estate-farmland 133 122
Real estate-residential 35,253 32,610
Real estate-secured by non-farm, non-residential 25,866 23,925
Commercial and industrial loans 13,261 12,377
Installment and other loans to individuals 24,722 22,487
Non-rated industrial development obligations 3,563 3,517
Direct financing leases -- 70
Other loans 819 40
------------ ------------
Total 103,658 95,482
Less unearned interest and deferred fees 103 108
------------ ------------
Net loans $ 103,555 $ 95,374
============ ============
</TABLE>

---------------------------------------------------------------
27
<PAGE>
77
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 3 - LOANS AND LEASES (CONTINUED)
The elements of the investment in direct financing leases at December 31
are as follows:
(Expressed in Thousands)
1998 1997
---------- ----------

Rentals receivable $ -- $ 24
Estimated residual value
of leased assets -- 47
---------- ----------
Subtotal -- 71
Unearned income -- (1)
---------- ----------

Total net investment in
direct financing leases $ -- $ 70
========== ==========

The Corporation had no loans at December 31, 1998 and 1997, that were
specifically classified as impaired. Non-accrual loans amounted to $396,000
and $540,000 at December 31, 1998, and 1997, respectively. The amount of
interest income that would have been recognized had the loans performed in
accordance with their original terms was $33,000 and $34,600 for 1998 and
1997, respectively.

NOTE 4 - ALLOWANCE FOR LOAN LOSSES

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

December 31,
1998 1997 1996
---------- ---------- ----------

Balance, beginning of year $ 1,217,763 $ 1,160,302 $ 1,148,692
Additions charged to
operating expense 256,000 130,500 70,600
Recoveries 21,796 12,418 24,889
---------- ---------- ----------
Total 1,495,559 1,303,220 1,244,181
Less loans charged-off 372,647 85,457 83,879
---------- ---------- ----------

Balance, end of year $ 1,122,912 $ 1,217,763 $ 1,160,302
========== ========== ==========

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:
Original
December 31, Useful Life
1998 1997 Years
---------- ---------- ----------

Land $ 1,116,585 $ 794,116
Land improvements 231,554 223,004 20
Leasehold improvements 396,898 396,898 25
Buildings 2,938,842 2,909,684 20 - 50
Furniture, fixtures & equipment 2,199,750 2,140,792 3 - 20
---------- ----------
Total 6,883,629 6,464,494
Less accumulated depreciation 3,678,899 3,379,407
---------- ----------

Premises and
equipment, net $ 3,204,730 $ 3,085,087
========== ==========

Charges to operations for depreciation approximated $373,673, $366,695, and
$351,511 for 1998, 1997, and 1996, respectively.

---------------------------------------------------------------
28

<PAGE>
78

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 6 - DEPOSITS

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

<TABLE>
<CAPTION>
(Expressed in Thousands)
1998
-------------------------------------------------
Demand
------------------------
Noninterest Interest
Bearing Bearing Savings Time
----------- --------- -------- ---------

<S> <C> <C> <C> <C>
Individuals, partnerships and corporations $ 13,876 $ 22,213 $ 43,717 $ 60,150
United States Government 65 - - -
States and political subdivisions 249 2,917 1,559 1,872
Commercial banks - - - -
Other depository institutions 119 - - 216
Certified and official checks 832 - - -
-------- -------- -------- --------
Total $ 15,141 $ 25,130 $ 45,276 $ 62,238
======== ======== ======== ========
</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>

Time deposits include certificates of deposit issued in denominations
of $100,000 or more which amounted to $10,258,000 and $11,947,000 at
December 31, 1998 and 1997, respectively.

A maturity distribution of time certificates of deposit of $100,000 or
more at December 31, 1998, follows:

Due in three months or less $ 2,906,000
Due after three months through six months 1,173,000
Due after six months through twelve months 2,077,000
Due after one year through five years 4,102,000
------------
Total $ 10,258,000
============

NOTE 7 - INCOME TAX

The provisions for income taxes at December 31 consist of:

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
<S> <C> <C> <C>
Currently payable:
Federal $ 849,935 $ 928,070 $ 734,047
State 178,101 154,279 112,528
Deferred:
Federal (65,899) (103,896) (29,825)
State (10,334) (15,597) (3,597)
----------- ----------- ----------
Income tax expense $ 951,803 $ 962,856 $ 813,153
=========== =========== ==========
</TABLE>

---------------------------------------------------------------
29
<PAGE>
79

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 7 - INCOME TAX (CONTINUED)

The following temporary differences gave rise to the deferred tax asset
at December 31:
<TABLE>
<CAPTION>
1998 1997
------------ ------------

<S> <C> <C>
Allowance for loan losses $ 280,709 $ 293,441
Deferred loan fees 34,896 36,863
Accrued interest on non-performing loans 39,432 33,825
Deferred compensation 98,815 64,698
Deferred directors fees 21,802 19,885
Depreciation due to purchase accounting adjustments (27,832) (61,584)
Deferred state income tax (22,291) (2,887)
Other, net (4,654) (17,188)
------------ ------------

Total deferred tax asset - federal 420,877 367,053
Total deferred tax asset - state 65,561 50,553
------------ ------------
486,438 417,606

Deferred tax assets (liabilities) arising from market
adjustments of securities available for sale
Federal (82,449) (63,618)
State (11,427) (8,816)
------------ ------------

Total deferred tax assets $ 392,562 $ 345,172
============ ============
</TABLE>

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>
1998 1997 1996
------------------ ------------------ ------------------
Amount Percent Amount Percent Amount Percent
---------- ----- ---------- ----- ---------- -----

<S> <C> <C> <C> <C> <C> <C>
Computed tax at statutory
Federal rate $1,014,842 34.0 % $ 983,764 34.0 % $ 835,430 34.0 %
Plus state income taxes net
Of federal tax benefits 110,726 3.7 91,530 3.2 71,894 2.9
---------- ----- ---------- ----- ---------- -----
1,125,568 37.7 1,075,294 37.2 907,324 36.9

Increase (decrease) in taxes
resulting from:
Tax exempt income (199,870) (6.6) (137,389) (4.7) (106,073) (4.3)
Nondeductible interest expense 25,260 0.8 16,602 0.6 6,825 0.3
Nondeductible goodwill 1,376 0.0 1,376 0.0 7,696 0.3
Others - net (531) 0.0 6,973 0.2 (2,619) (0.1)
---------- ----- ---------- ----- ---------- -----

Actual tax expense $ 951,803 31.9 % $ 962,856 33.3 % $ 813,153 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 $143,100, $127,600, and $116,300
for the years ended December 31, 1998, 1997, and 1996, respectively.

In 1998, the Corporation amended the profit-sharing plan to add a 401(k)
feature. The Corporation matches a portion of the employee's contribution up
to 4% of their salary. The expense related to the 401(k) plan was $15,119 in
1998.

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.

---------------------------------------------------------------
30

<PAGE>
80

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

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:

1998 1997 1996
----------- ----------- -----------

Balance at end of year $ 6,994,024 $ 4,074,996 $ 5,930,691
Average balance during
the year 6,598,665 5,117,789 3,703,803
Maximum month-end balance 9,218,303 5,922,489 5,930,691
Weighted-average rate
during the year 3.44% 3.69% 3.42%
Rate at December 31 2.31% 3.22% 4.07%

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:
1998 1997
------------ ------------

Commitments to extend credit $ 7,978,000 $ 7,273,000
Standby letters of credit 92,000 48,000

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 1999. 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, 1998, the subsidiary Banks had unused lines of credit
available with the FHLB in the aggregate amount of $3,264,000. There were no
outstanding borrowings at December 31, 1998.

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 $4,320,419 at December 31, 1998, and
$3,257,242 at December 31, 1997.
---------------------------------------------------------------
31
<PAGE>
81

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

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

December 31,
1998 1997
------------ ------------

Balance, January 1 $ 3,257,242 $ 4,720,986
New loans during the period 2,766,412 671,023
Repayments during the period (1,703,235) (2,134,767)
------------ ------------
Ending balance $ 4,320,419 $ 3,257,242
============ ============

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, Eastern Ohio, and Southwestern Pennsylvania. 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, 1998, 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, 1998, the future minimum rental payments required under
noncancelable operating leases with initial terms in excess of one year, are
as follows:

December 31, 1999 $ 81,750
December 31, 2000 62,000
December 31, 2001 42,000
December 31, 2002 38,000
December 31, 2003 38,000
Thereafter 312,500

Rental expense under operating leases approximated $103,000 in 1998; $107,000
in 1997; and $104,000 in 1996.

NOTE 14 - OTHER OPERATING EXPENSES

Other operating expenses at December 31 included the following:

1998 1997 1996
---------- ---------- ----------

Directors fees $ 121,800 $ 132,200 $ 122,300
Stationery and supplies 161,921 135,751 143,710
Regulatory assessment and
deposit insurance 75,381 80,152 67,592
Advertising 107,511 101,816 104,568
Postage and transportation 131,445 118,915 118,247
Other taxes 135,831 116,892 89,509
Service Expense 161,715 131,284 106,511
Other 567,203 490,558 545,892
---------- ---------- ----------

Total $1,462,807 $1,307,568 $1,298,329
========== ========== ==========
---------------------------------------------------------------
32

<PAGE>
82
First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

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, 1998 and 1997, were $835,000 and
$709,000, 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 1999, without approval of the
Comptroller of the Currency, of approximately $2,500,000, plus an additional
amount equal to the Bank's net profit for 1999 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 1998, 1997, and 1996, were $5,284,614,
$4,696,866, and $3,854,727, respectively. Cash payments for income taxes for
1998, 1997, and 1996 were $1,055,685, $1,081,701, and $872,395, respectively.

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, 1998,
that the Banks meet all capital adequacy requirements to which they are
subject.

As of December 31, 1998, 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>
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, 1998:
Total Capital $ 16,031 15.0% $ 8,557 8.0% $ 10,696 10.0%
(to Risk Weighted Assets)
Tier I Capital $ 14,908 13.9% $ 4,279 4.0% $ 6,418 6.0%
(to Risk Weighted Assets)
Tier I Capital $ 14,908 8.7% $ 5,121 3.0% $ 8,534 5.0%
(to Average Assets)
</TABLE>

---------------------------------------------------------------
33

<PAGE>
83

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 18 - REGULATORY MATTERS (CONTINUED)

<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)
</TABLE>

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 isconsidered 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.

---------------------------------------------------------------
34
<PAGE>
84

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

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:
(Expressed in Thousands)
1998 1997
------------------ -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------

Financial assets:
Cash and short-term
investments $ 9,112 $ 9,112 $ 11,747 $ 11,747
Investment securities 54,735 54,810 45,444 45,503
Loans (1) 102,432 105,871 94,086 94,836

Financial liabilities:
Deposits 147,785 149,260 137,045 137,371
Short-term borrowings 6,994 6,994 4,075 4,075

(1) Excludes net leases with a carrying amount of $-0- and $70,000 at
December 31, 1998 and 1997, respectively.

NOTE 20 - COMPREHENSIVE INCOME

In June, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting and display of
comprehensive income in a full set of financial statements. The Corporation
adopted this statement on January 1, 1998, and has reclassified information in
the 1997 and 1996 financial statements to reflect application of the
provisions of this statement. Unrealized gains and losses on securities
available for sale are the only components of other comprehensive income that
apply to the Corporation.

1998 1997 1996
------- -------- ---------
Before-tax amount $57,995 $323,741 $(199,965)

Tax effect (21,441) (119,687) 73,927
------- -------- ---------
Net-of-tax amount $36,554 $204,054 $(126,038)
======= ======== =========

---------------------------------------------------------------
35
<PAGE>
85

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 21 - 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,
1998 1997
----------- -----------

ASSETS
Cash $ 299,717 $ 281,141
Investment in common stock - available
for sale (at market value) 226,281 97,162
Investment in subsidiary banks 15,026,356 13,693,981
Land and buildings, net 120,090 188,280
Other assets 109,292 84,088
----------- -----------

Total assets $15,781,736 $14,344,652
=========== ===========

LIABILITIES
Accrued expenses $ 30,165 $ 25,370
Deferred compensation 290,633 190,287
----------- -----------

Total liabilities 320,798 215,657

STOCKHOLDERS' EQUITY 15,460,938 14,128,995
----------- -----------
Total liabilities and
stockholders' equity $15,781,736 $14,344,652
=========== ===========

STATEMENTS OF INCOME

Year Ended December 31,
1998 1997 1996
----------- ----------- -----------
INCOME
Dividends from
subsidiary banks $ 769,600 $ 733,600 $ 585,400
Rental income 40,000 52,000 48,258
Gain on sale of investments 1,178 - -
Other income 128,220 100,507 67,238
----------- ----------- -----------

Total income 938,998 886,107 700,896
----------- ----------- -----------

EXPENSES
Salary and employee
benefits 100,346 111,668 78,619
Interest expense 2,400 2,190 1,995
Occupancy expense 11,399 11,399 11,400
Other expenses 129,469 138,614 105,949
----------- ----------- -----------
Total expenses 243,614 263,871 197,963
----------- ----------- -----------

Income before income
taxes and equity in
undistributed income
of subsidiaries 695,384 622,236 502,933

INCOME TAX BENEFIT (EXPENSE) 30,399 45,757 29,859

EQUITY IN UNDISTRIBUTED
INCOME OF SUBSIDIARIES 1,307,242 1,262,575 1,111,202
----------- ----------- -----------

Net income $ 2,033,025 $ 1,930,568 $ 1,643,994
=========== =========== ===========

---------------------------------------------------------------
36

<PAGE>
86

First West Virginia Bancorp, Inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998, 1997 AND 1996

NOTE 21 - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CASH FLOWS

Year Ended December 31,
1998 1997 1996
----------- ----------- -----------

OPERATING ACTIVITIES
Net income $ 2,033,025 $ 1,930,568 $ 1,643,994
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 15,447 15,447 15,448
Change in deferred
tax benefit (37,952) (42,842) (29,213)
Undistributed earnings
of affiliates (1,307,242) (1,262,575) (1,111,202)
Changes in operating
assets and liabilities:
Other assets 2,000 4,266 (2,291)
Deferred compensation 100,346 109,607 78,619
Other liabilities 4,795 (7,447) 4,835
Gain on sale of securities (1,178) - -
----------- ----------- -----------

Net cash provided by
operating activities 809,241 747,024 600,190
----------- ----------- -----------

INVESTING ACTIVITIES
Proceeds from sale of
securities 6,543 - -
Proceeds from sale of land 56,791 - -
Purchase of investment
securities (116,364) (78,619) -
----------- ----------- -----------

Net cash provided by
(used in) investing
activities (53,030) (78,619) -
----------- ----------- -----------

FINANCING ACTIVITIES
Dividends paid (737,635) (654,905) (577,885)
----------- ----------- -----------

Net cash used in
financing activities (737,635) (654,905) (577,885)

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

INCREASE IN CASH
AND CASH EQUIVALENTS 18,576 13,500 22,305

CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 281,141 267,641 245,336
----------- ----------- -----------

CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 299,717 $ 281,141 $ 267,641
=========== =========== ===========

Supplemental disclosures:

Interest expense note: Cash payments for interest were $2,400, $2,190, and
$1,995 in 1998, 1997, and 1996, respectively.

Income taxes note: The parent company made income tax payments of
$10,500,$4,200, and $ 1,000 in 1998, 1997, and 1996, respectively.

---------------------------------------------------------------
37

<PAGE>
87
-----------------------------------------------------

First West Virginia Bancorp, Inc.

DIRECTORS

George F. Beneke. . . . . . . . . . . . Chairman Emeritus,
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. . . . . . . . . . . . . Chairman,
First West Virginia Bancorp, Inc.

Senior Vice President,
Progressive Bank, N.A.

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

R. Clark Morton. . . . . . . . . . . . .Attorney at Law

Karl W. Neumann. . . . . . . . . . . . .Chairman of the Board,
Progressive Bank, N.A.

Retired Insurance Executive

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

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

Ronald L. Solomon. . . . . . . Vice Chairman, 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 Emeritus

Laura G. Inman. . . . . . . . . . . . . Chairman of the Board

Ronald L. Solomon. . . . . . . . . . . .Vice Chairman, President and
Chief Executive Officer

Charles K. Graham. . . . . . . . . . . .Executive Vice President

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

---------------------------------------------------------------
3
<PAGE>
88
-------------------------------------------------------

SUBSIDIARY
Progressive Bank N.A.
Wheeling, WV 26003

DIRECTORS OFFICERS

George F. Beneke James C. Inman, Jr. Karl W. Neumann, Chairman
of the Board
Dr. Clyde D. Campbell Laura G. Inman Ronald L. Solomon, Vice Chairman
& Chief Executive Officer
Robert R. Cicogna H. Dennis Long Charles K. Graham, President
Gary P. DeVendra R. Clark Morton Beverly A. Barker, Executive
Vice President/Cashier
Sylvan J. Dlesk Karl W. Neumann Laura G. Inman, Senior
Vice President
Charles K. Graham William G. Petroplus David E. Yaeger,
Senior Vice President
C. Gary Hill Thomas L. Sable Francie P. Reppy, Controller
Ben R. Honecker Ronald L. Solomon Gary S. Martin, Vice
President/Marketing Coordinator
Brad D. Winwood, Vice President
Stephanie A. LaFlam,
Executive Secretary
EMERITUS DIRECTORS 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
Harold O. Thomas, Senior Business
Development Officer
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

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

DIRECTORS OFFICERS

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 Debra A. Hamner, Office Manager
Weston

---------------------------------------------------------------
39
<PAGE>
89

Progressive Bank N.A. - Wheeling

(Photograph) (Photograph)

Wellsburg Office Bellaire 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

---------------------------------------------------------------
40
<PAGE>
90

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
13, 1999, 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, 1998, may
obtain a copy of the Corporation's 1998 Form 10-K Report (to be filed with the
Securities and Exchange Commission before March 31, 1999) by writing to Ronald
L. Solomon, President, First West Virginia Bancorp, Inc., 875 National Road,
Wheeling, WV 26003

---------------------------------------------------------------
41

<PAGE>
91

EXHIBIT 13.2

Management Report on Financial Statements

<PAGE>
92
- --------------------------------------------------------------------------

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

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

<PAGE>
93

EXHIBIT 22.1

Subsidiaries of the Holding Company

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>
94

EXHIBIT 24

Consent of Independent Auditors

<PAGE>
95
SNODGRASS
Certified Public Accountants

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference of our report dated January 13,
1999 relative to the consolidated balance sheet of First West Virginia
Bancorp, Inc. as of December 31, 1998 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, 1998. Said report is included in
the 1998 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 15, 1999

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-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 4,721
<INT-BEARING-DEPOSITS> 299
<FED-FUNDS-SOLD> 4,092
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,385
<INVESTMENTS-CARRYING> 11,350
<INVESTMENTS-MARKET> 11,424
<LOANS> 103,555
<ALLOWANCE> 1,123
<TOTAL-ASSETS> 171,395
<DEPOSITS> 147,785
<SHORT-TERM> 6,994
<LIABILITIES-OTHER> 1,155
<LONG-TERM> 0
0
0
<COMMON> 6,286
<OTHER-SE> 9,175
<TOTAL-LIABILITIES-AND-EQUITY> 171,395
<INTEREST-LOAN> 9,078
<INTEREST-INVEST> 2,905
<INTEREST-OTHER> 468
<INTEREST-TOTAL> 12,452
<INTEREST-DEPOSIT> 5,097
<INTEREST-EXPENSE> 5,324
<INTEREST-INCOME-NET> 7,128
<LOAN-LOSSES> 256
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 4,674
<INCOME-PRETAX> 2,985
<INCOME-PRE-EXTRAORDINARY> 2,985
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,033
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
<YIELD-ACTUAL> 4.80
<LOANS-NON> 396
<LOANS-PAST> 268
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,218
<CHARGE-OFFS> 372
<RECOVERIES> 21
<ALLOWANCE-CLOSE> 1,123
<ALLOWANCE-DOMESTIC> 1,092
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 31

</TABLE>

<PAGE>
97

EXHIBIT 99

Proxy Statement for the annual shareholders meeting to be held on April 13,
1999

<PAGE>
98

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

Wheeling, West Virginia
March 16, 1999

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 13, 1999. Shareholders of
record at the close of business on March 8, 1999 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 three 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>
99
FIRST WEST VIRGINIA BANCORP, INC.
1701 Warwood Avenue, Wheeling, West Virginia 26003

PROXY STATEMENT
For Annual Meeting of Shareholders to be Held April 13, 1999

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 13, 1999, 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 16, 1999.

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 8, 1999 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 1,257,252 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, 1998 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. Three directors of
the Company are to be elected to Class I, for terms expiring at the Annual
Meeting in 2002 or until their respective successors have been elected and
have qualified. Certain information

<PAGE>
100

with respect to the nominees for election as directors proposed by the Company
and 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 I, for terms
ending in 2002
- -----------------------------------
George F. Beneke, 85 1958 73,612(3)
President of the Beneke Corporation;
Retired Attorney-at-Law; Emeritus Chairman
of the Board and Director of the Company;
Director of Progressive Bank, N.A.

Laura G. Inman, 57 1993 92,544(4)
Chairman of the Board and Director
of the Company; Senior Vice President
and Director of Progressive Bank, N.A.

Karl W. Neumann, 78 1964 38,236(5)
Retired Insurance Executive; Director
of Progressive Bank, N.A.

Class II Directors, to continue in
office until 2000
- ----------------------------------
Sylvan J. Dlesk, 60 1988 99,298(6)
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, 79 1973 24,535(7)
Attorney-at-Law, Partner, Honecker & Bippus;
Director of Progressive Bank, N.A.

<PAGE>
101

Class II Directors, to continue in office until 2000

James C. Inman, Jr., 57 1993 92,544(8)
Retired Bank Executive; Director of
Progressive Bank, N.A.

Thomas A. Noice, 76 1988 6,236(9)
Trustee-Treasurer, Belmont Community Hospital,
Bellaire, Ohio; Retired Bank Executive

Class III Directors, to continue in
office until 2001
- ------------------------------------
R. Clark Morton, 70 1965 35,607(10)
Attorney-at-Law, Partner, Herndon, Morton,
Herndon & Yaeger; Chairman of the Board
and Director of Progressive Bank, N.A.

William G. Petroplus, 51 1998 5,249(11)
Attorney-at-Law, Partner, Petroplus &
Gaudino; Director of Progressive Bank, N.A.

Ronald L. Solomon, 59 1978 16,668(12)
Vice Chairman, 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

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

(2) Beneficial ownership of First West Virginia common stock is
stated as of February 11, 1999. 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
<PAGE>
102

(3) Includes 29,382 shares held by WesBanco Bank Wheeling, as
trustee under the will of Sarah E. Beneke, deceased, and
includes 11,145 shares owned by the Beneke Corporation, of
which Mr. Beneke is a principal.

(4) Includes 14,024 shares owned by James C. Inman, Jr., her
husband.

(5) Includes 16,623 shares owned by Elizabeth H. Neumann, his wife.

(6) Includes 99,191 shares owned jointly by Mr. Dlesk and Rosalie
J. Dlesk, his wife.

(7) Excludes 4,106 shares owned jointly by Elizabeth R. Honecker,
his daughter, and Janet L. Honecker, his wife, as to which
shares Mr. Honecker disclaims beneficial ownership.

(8) Includes 78,520 shares owned by Laura G. Inman, his wife.

(9) Includes 746 shares owned jointly by Judith A. Noice, wife of
Thomas A. Noice, and Julia Vejvoda and 5,480 shares owned
jointly by Thomas A. Noice and Judith A. Noice.

(10) Includes 18,181 shares owned by Patricia H. Morton, his wife,
and 9,027 shares owned jointly by R. Clark Morton and Patricia
H. Morton.

(11) Includes 661 shares owned jointly by William G. Petroplus and
Sheree A. Petroplus; 330 shares owned by Sheree A. Petroplus,
his wife; 330 shares owned by Kristen G. Petro plus, his
daughter, for which William G. Petroplus acts as custodian; and
330 shares owned jointly by Alyssa R. Petroplus, his daughter,
for which William G. Petroplus acts as custodian.

(12) Includes 16,668 shares owned jointly by Mr. Solomon and
Patricia H. Solomon, his wife.

(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.

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.

<PAGE>
103

Board of Directors and Committees

There were 12 regular meetings and two special meetings of the
Board of Directors of the Company during 1998. With the exception of George
F. Beneke who attended 71 percent of the 1998 directors' meetings, all other
incumbent directors attended at least 75 percent of such meetings. Each non-
employee director is compensated at the rate of $550.00 per regular meeting
and, for 1998, was compensated at the rate of $175.00 for each special
meeting. Committee members are paid $175.00 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 1998. The members of the
committee consist of non-salaried directors and presently include Ben R.
Honecker, chairman, George F. Beneke, R. Clark Morton, Karl W Neumann, and
William G. Petroplus.

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 one time during
1998. The members of the committee consist of non-salaried directors and
presently include S.J. Dlesk, chairman, George F. Beneke, Ben R. Honecker,
James C. Inman, Jr., 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 1998. The members of the committee consist of non-salaried directors
and presently include Karl W. Neumann, chairman, George F. Beneke, S. J.
Dlesk, Laura G. Inman, and R. Clark Morton.

<PAGE>
104

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, and Senior Vice
President and Treasurer, Beverly A. Barker for all services rendered by them
in all capacities to First West Bancorp, Inc. and its subsidiaries for 1998.
No other executive officer of First West Virginia Bancorp, Inc. had total
annual salary and bonus exceeding $100,000 for the year.

<TABLE>
<CAPTION>
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, Vice 1998 $ 103,596.00 $ 75,749.00 $ 4,528.04(1) $ 16,466.82(3)
Chairman, President and Chief
Executive Officer of the 1997 $ 102,996.00 $ 80,959.00 $ 6,812.40(1) $ 14,675.13(3)
Company; Vice Chairman of
Board of Directors & CEO of 1996 $ 99,996.00 $ 62,762.00 $ 8,939.25(1) $ 15,769.50(3)
Progressive Bank, N.A.;
and Vice Chairman of
Progressive Bank, N.A.-
Buckhannon

Charles K. Graham, 1998 $ 73,704.00 $ 53,870.00 $ 3,898.04(2) $ 11,500.01(3)
Executive Vice
President of the 1997 $ 72,492.00 $ 57,069.00 $ 4,815.00(2) $ 10,121.28(3)
Company; President of
Progressive Bank, N.A.; 1996 $ 69,996.00 $ 43,884.00 $ 6,214.96(2) $ 10,804.12(3)
Director of Progressive
Bank, N.A.-Buckhannon

Beverly A. Barker, Senior 1998 $ 57,996.00 $ 42,518.00 $ - $ 8,838.01(3)
Vice President and Treasurer
of the Company, Executive 1997 $ 55,500.00 $ 43,576.00 $ - $ 7,598.73(3)
Vice President of
Progressive Bank, N.A. 1996 $ 53,496.00 $ 33,617.00 $ - $ 8,092.00(3)
</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
and 401-K Plan.

(4) This amount includes deferred compensation.

<PAGE>
105

Shareholder Performance Graph

Set forth below is a line graph prepared by SNL Securities L.C.
("SNL"), 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 SNL Index for banks with assets under $500,000,000.00 for the period
March 8, 1995 through December 31, 1998. An
initial investment of $100.00 (Index Value equals $100) and ongoing dividend
reinvestment is assumed throughout.

Period Ending
- ----------------------------------------------------------------------------
Index 3/8/95 12/31/95 12/31/96 12/31/97 12/31/98
- ----------------------------------------------------------------------------

First West Virginia
Bancorp, Inc. 100.00 158.22 188.39 296.42 338.85

S&P 500 100.00 130.10 159.85 213.19 274.12

SNL <500M Bank Index 100.00 130.01 167.34 285.26 260.47

<PAGE>
106

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 its executive bonus
program does not deviate from this avowed purpose. The plan consists of 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, 1998, 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.

The compensation of Ronald L. Solomon, Vice Chairman, President
and Chief Executive Officer of the Company, Charles K. Graham, Executive Vice
President of the Company, and Beverly A. Barker, Senior

<PAGE>
107
Vice President and Treasurer 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, Mr. Graham, and
Mrs. Barker 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 three 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, 1998, and was greatly appreciated by the
Committee. All compensation recommendations of the Committee for the year
ended December 31, 1998, 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, 1998,
were S.J. Dlesk, , chairman George F. Beneke, Ben R. Honecker, James C.
Inman, Jr., and Thomas A. Noice.

Employment Contracts

The Company has entered into written employment agreements with
Ronald L. Solomon, Vice Chairman, President and Chief Executive Officer of the
Company, Charles K. Graham, Executive Vice President of the Company, and
Beverly A. Barker, Senior Vice President and Treasurer 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 Mr.
Solomon, Mr. Graham, and Mrs. Barker 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 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, Mr.
Solomon, Mr. Graham and Mrs. Barker will receive as severance benefits equal
to 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, Mr. Solomon, Mr. Graham,
and Mrs. Barker, 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 the automobile then used by such employee and
maintained by the 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, Mr. Graham or Mrs. Barker. These agreements
may be terminated for certain defined causes by the Company without payment of
additional minimum salary or other benefits.

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 S.J. Dlesk, chairman, George F. Beneke, Ben R. Honecker, James C.
Inman, Jr., 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

<PAGE>
108
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, 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 1996 and paid in 1997 was $165,600.00; accrued for
1997 and paid in 1998 was $221,200.00 and accrued as of December 31, 1998 was
$206,400.00. The 1998 accrual for bonuses will be paid in 1999.

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, have
worked for the bank in excess of one year and 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 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 1996 amounted to $116,300.00, of which
$55,367.18 accrued to the benefit of the 7 persons who are executive officers
of the Company. For 1997 the contribution was $127,600.00, of which
$52,848.74 accrued to the benefit of the 7 persons. Contributions during 1998
amounted to $143,100.00, of which $54,585.39 accrued to the benefit of the 7
persons.

In 1998 the Company amended its profit sharing plan to add a
401(k) feature. That feature qualifies as a tax-deferred savings plan under
Section 401(k) of the Internal Revenue Code (The "401(k) Plan") for Company
employees who are at least 21 years old and who have completed one year of
service with the bank. Under the 401(k) Plan, eligible employees may
contribute up to 15% of their gross salary to the 401(k) Plan or $10,000.00,
whichever is less. Each participating employee is fully vested in
contributions made by such employee. The bank has elected to provide a
matching contribution for participants which elect to make

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109

employee 401(k) contributions. The matching contribution is 50% of the
participant's contribution up to 2% of the participant's covered compensation
and 25% of the participant's contribution up to the next 2% of the
participant's covered compensation. The 401(k) Plan also permits the bank to
make discretionary contributions year to year which, if made, allocated to
eligible employees prorata based on compensation. Discretionary contributions
are integrated for social security. The Company's share of the contribution
during 1998 was $15,998.00.

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 11, 1999, 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 1,257,252 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. Unless
otherwise noted, sole voting power and sole investment power with respect to
the shares shown in the table below are held either by each individual listed
or by such individual together with their spouse.

Name & Shares of Stock Percent
Address Beneficially Owned of Total
- ------- ------------------ --------

George F. Beneke 73,612(1) 5.85%
Oglebay View Acres
Wheeling, WV 26003

Sylvan J. Dlesk 99,298(2) 7.90%
Highland Park
Wheeling, WV 26003

James C. Inman, Jr. 92,544(3) 7.36%
R.D. 1
Wellsburg, WV 26070

Laura G. Inman 92,544(4) 7.36%
R.D. 1
Wellsburg, WV 26070

Officers and Directors 405,013 32.21%
as a Group (15 persons)

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110

Notes (1)Includes 29,382 shares held by WesBanco Bank Wheeling, as trustee
under the will of Sarah E. Beneke, deceased, and includes 11,145
shares owned by the Beneke Corporation, of which Mr. Beneke is a
principal.

(2)Includes 99,191 shares owned jointly by Mr. Dlesk and Rosalie J.
Dlesk, his wife.

(3)Includes 78,520 shares owned by Laura G. Inman, his wife.

(4)Includes 14,024 shares owned by James C. Inman, Jr., her husband.

Other than those individuals listed above, as of February 11,
1999, no person was known by the Company to be the beneficial owner of more
than 5 percent of the Company's stock.

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 10
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 1998, all filing requirements applicable to reporting persons were met.

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 1996, 1997 or 1998 which exceed 5 percent of either
party's gross revenue for those periods, respectively.

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111

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
1999 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. Under applicable law, there are no
dissenter's rights of appraisal as to the election of directors.

VII. Independent Auditors

S.R. Snodgrass, A.C. were the auditors for the year ended
December 31, 1998, and the Audit Committee has selected them as auditors for
the year ending December 31, 1999. 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.

VIII. Shareholder Proposals

Proposals of shareholders intended to be presented at the 1999
Annual Meeting scheduled to be held on April 11, 2000 must be received by the
Company by November 17, 1999 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

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112

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.

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113

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 13, 1999

George F. Beneke
The undersigned does hereby Laura G. Inman
appoint SYLVAN J. DLESK, Karl W. Neuman
BENJAMIN R. HONECKER and R.
CLARK MORTON or any of them,
the true and lawful attorneys
in fact, agents and proxies of
the undersigned to represent INSTRUCTION: To withhold authority to vote
the undersigned at the Annual for any individual nominee, mark "For All
Meeting of the Shareholders of Except" and write that nominee's name in
FIRST WEST VIRGINIA BANCORP, the space provided below.
INC., to be held on April 13,
1999, commencing at 4:00 p.m., -----------------------------------------
at the Warwood Office of the
authority to vote for any
Company at 1701 Warwood Avenue,
Wheeling, West "For All Except"
and write Virginia, and at any
and all adjournments of the
space provided below. said
meeting, and to vote all the
shares of Common Stock of the
Company standing on the books
of the Company in the name of
the undersigned as specified The undersigned hereby acknowledges
and in their discretion on such receipt of Notice of said Annual Meeting
other business as may properly and accompanying Proxy Statement each
come before the meeting. dated March 16, 1999.

This Proxy will be voted as specified,
if no specification is made, this Proxy
will be "FOR" the nominees made.

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