CITIZENS BANCSHARES INC /OH/
S-4, 1998-09-16
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
 
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1998
 
                                                           REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-4
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                            ------------------------
 
                           CITIZENS BANCSHARES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                <C>                                <C>
               OHIO                               6022                            34-1372535
 (STATE OR OTHER JURISDICTION OF      (PRIMARY STANDARD INDUSTRIAL     (I.R.S. EMPLOYER IDENTIFICATION
  INCORPORATION OR ORGANIZATION)        CLASSIFICATION CODE NO.)                     NO.)
</TABLE>
 
                  10 East Main Street, Salineville, Ohio 43945
                                 (330) 679-2328
    (ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
                           MARTY E. ADAMS, President
                              10 East Main Street
                            Salineville, Ohio 43945
                                 (330) 679-2328
             (NAME, ADDRESS, INCLUDING ZIP CODE & TELEPHONE NUMBER,
                   INCLUDING AREA CODE OF AGENT FOR SERVICE)
                            ------------------------
 
                                   COPIES TO:
 
<TABLE>
<S>                                                 <C>
             M. PATRICIA OLIVER, ESQ.                             WILLIAM APPLETON, ESQ.
         Squire, Sanders & Dempsey L.L.P.                         Baker & Hostetler, LLP
                  4900 Key Tower                                     312 Walnut Street
                 127 Public Square                                      Suite 2650
            Cleveland, Ohio 44114-1304                            Cincinnati, Ohio 45202
</TABLE>
 
                            ------------------------
 
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
 
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box:  [ ]
 
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering:  [ ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:  [ ]
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
    TITLE OF EACH CLASS                  PROPOSED MAXIMUM   PROPOSED MAXIMUM
       OF SECURITIES     AMOUNT TO BE     OFFERING PRICE        AGGREGATE          AMOUNT OF
     TO BE REGISTERED    REGISTERED(1)       PER UNIT       OFFERING PRICE(2)   REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------
<S> <C>                  <C>             <C>                <C>                 <C>              <C>
    Common Stock           5,249,750           N.A.            $53,050,280          $15,650
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
 
(1) The number of shares of common stock, without par value ("Bancshares Common
    Shares"), of Citizens Bancshares, Inc., an Ohio corporation ("Bancshares")
    to be registered pursuant to this Registration Statement is based upon the
    number of shares of common stock, consisting of Class A common shares, par
    value $50 per share, and Class B common shares, par value $50 per share
    (collectively, "Bank Common Shares"), of The Ohio Bank, an Ohio banking
    association ("Bank"), presently outstanding, multiplied by the exchange
    ratio of 63.25 shares of Bancshares Common Shares for each share of Bank
    Common Shares.
 
(2) Amount arrived at pursuant to Rule 457(f)(2) based on the book value of the
    acquired company of $639.16 on August 31, 1998.
                            ------------------------
 
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2
 
                               THE OHIO BANK LOGO
 
                             236 SOUTH MAIN STREET
                              FINDLAY, OHIO 45840
 
                                           , 1998
 
Dear Shareholder:
 
     You are cordially invited to attend a Special Meeting of shareholders of
The Ohio Bank to be held on             , 1998, at                  .m., local
time, at                . The accompanying Notice of the Special Meeting of
Shareholders, Proxy Statement/Prospectus and Proxy Card set forth the formal
business to be transacted at the Special Meeting. I encourage you to review
these materials and to attend the Special Meeting.
 
     At the Special Meeting, you will be asked to consider and vote upon a
proposal to adopt the Agreement and Plan of Merger dated as of July 22, 1998, by
and between Ohio Bank and Citizens Bancshares, Inc., a holding company organized
and existing under the laws of Ohio, providing for the merger of an interim bank
subsidiary of Bancshares with and into Ohio Bank. Following the merger, the
combined organization of which Ohio Bank will be an integral part will have
approximately $4.7 billion in assets, 163 branches and over 2,550 employees and
be the seventh largest banking organization in Ohio.
 
     Holders of Class A Common Shares of Ohio Bank will have one vote per share,
and holders of Class B Common Shares of Ohio Bank will have twenty votes per
share, on the merger proposal. Holders of Class A Common Shares and Class B
Common Shares will vote together as one class on the merger proposal.
 
     Upon consummation of the merger, you will receive 63.25 common shares of
Bancshares for each Ohio Bank Common Share that you hold. Cash will be paid in
lieu of fractional shares. The exchange of Ohio Bank Common Shares for common
shares of Bancshares is intended to qualify generally as tax-free to Ohio Bank,
Bancshares, and holders of Ohio Bank Common Shares for federal income tax
purposes.
 
     Consummation of the merger is subject to certain conditions, including, but
not limited to, obtaining the requisite vote of the shareholders of Ohio Bank
and the approval of the merger by various regulatory agencies.
 
     Ohio Bank's financial advisor, Danielson Associates, Inc., has rendered an
opinion dated July 21, 1998, and updated to the date hereof, to the Ohio Bank
Board of Directors to the effect that, as of the date hereof and based upon and
subject to certain matters stated in such opinion, the exchange ratio of 63.25
Bancshares Common Shares for each Ohio Bank Common Share is fair to the
shareholders of Ohio Bank from a financial point of view.
 
     If the accompanying Proxy Card is executed properly and returned to Ohio
Bank in time to be voted at the Special Meeting, the shares represented thereby
will be voted in accordance with the instructions marked thereon. Executed but
unmarked proxies will be voted for approval of the merger proposal. The presence
of a shareholder at the Special Meeting will not automatically revoke such
shareholder's proxy. A shareholder may, however, revoke a proxy at any time
prior to its exercise by filing a written notice of revocation with or
delivering a duly executed proxy bearing a later date to Gary L. Cole, Corporate
Secretary, The Ohio Bank, 236 South Main Street, Findlay, Ohio 45840, or by
attending the Special Meeting and advising the Secretary of the shareholder's
intent to vote the shares.
 
     Approval of the merger proposal requires the affirmative vote of the
holders of a majority of the voting power of the outstanding Ohio Bank Common
Shares. Certain directors and executive officers of Ohio Bank who
<PAGE>   3
 
collectively own Class A Common Shares and Class B Common Shares representing a
majority of the voting power have agreed to vote such shares in favor of the
merger proposal.
 
     The Ohio Bank Board of Directors has unanimously concluded that the merger
is fair to, and in the best interests of, Ohio Bank and its shareholders and
unanimously recommends that you vote for the merger proposal.
 
     I urge you to vote FOR the merger proposal and to sign, date and return the
accompanying Proxy Card as soon as possible, even if you plan to attend the
Special Meeting. This procedure will not prevent you from voting in person, but
will ensure that your vote is counted if you are unable to attend.
 
                                          Very truly yours,
 
                                          Richard R. Hollington, Jr.
                                          Chairman
 
               WE ENCOURAGE YOU TO SIGN, DATE AND PROMPTLY RETURN
                      YOUR PROXY IN THE ENCLOSED ENVELOPE
         REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE SPECIAL MEETING.
<PAGE>   4
 
                               THE OHIO BANK LOGO
 
                             236 SOUTH MAIN STREET
                              FINDLAY, OHIO 45840
 
                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
 
                                           , 1998
 
To the Shareholders of The Ohio Bank:
 
     A special meeting of shareholders of The Ohio Bank will be held on
            , 1998, at                               .m. at
                              . A Proxy Card and Proxy Statement/Prospectus for
the Special Meeting are enclosed.
 
     The Special Meeting is for the purpose of considering and voting upon a
proposal to:
 
          Adopt the Agreement and Plan of Merger, dated as of July 22, 1998 by
     and between Ohio Bank and Citizens Bancshares, Inc. providing for the
     merger of an interim bank subsidiary of Bancshares with and into Ohio Bank,
     and approve the transactions contemplated thereby. A copy of the merger
     agreement is attached as Appendix A to the accompanying Proxy
     Statement/Prospectus.
 
     The Board of Directors of Ohio Bank has fixed the close of business on
            , 1998, as the record date for the determination of the shareholders
of Ohio Bank entitled to notice of and to vote at the Special Meeting.
 
     Holders of Class A Common Shares of Ohio Bank will have one vote per share,
and holders of Class B Common Shares of Ohio Bank will have twenty votes per
share, on the merger proposal. Approval of the proposal requires the affirmative
vote of the holders of outstanding Class A Common Shares and Class B Common
Shares representing a majority of the voting power of such classes voting as one
class. Certain directors and executive officers of the Bank who collectively own
Class A Common Shares and Class B Common Shares representing a majority of the
voting power of such classes have agreed to vote such shares in favor of the
merger proposal.
 
     The Bank Board of Directors has unanimously concluded that the merger is in
the best interests of the Bank and its shareholders and unanimously recommends
that you vote for the merger proposal.
 
     It is important that your shares be represented at the Special Meeting. You
are urged to complete and sign the accompanying Proxy Card, which is solicited
by the Board of Directors of Ohio Bank, and to mail it promptly in the enclosed
envelope. All proxies are important, so please complete each Proxy Card sent to
you and return it in the envelope provided.
 
                                          Richard R. Hollington, Jr.
                                          Chairman
<PAGE>   5
 
                         CITIZENS BANCSHARES, INC. LOGO
                                   PROSPECTUS
                   SHARES OF COMMON STOCK, WITHOUT PAR VALUE
 
                               THE OHIO BANK LOGO
                                PROXY STATEMENT
                        SPECIAL MEETING OF SHAREHOLDERS
                                           , 1998
 
     This Proxy Statement/Prospectus is being furnished to shareholders of
record on             , 1998 of The Ohio Bank, a bank organized and existing
under the laws of the State of Ohio ("Bank"), in connection with the
solicitation of proxies by Bank for use at the special meeting of shareholders
(the "Special Meeting"). The Special Meeting of Bank (the "Bank Special
Meeting") is to be held at                on             , 1998 at
                              .m., local time.
 
     At the Bank Special Meeting, Bank's shareholders will be asked to approve
the following:
 
          An Agreement and Plan of Merger, dated as of July 22, 1998 (the
     "Merger Agreement"), by and between Bank and Citizens Bancshares, Inc.
     ("Bancshares"), and the transactions contemplated thereby, including the
     merger of an interim bank subsidiary of Bancshares with and into Bank (the
     "Merger"). A copy of the Merger Agreement is attached to this Proxy
     Statement/Prospectus as Appendix A and is incorporated herein by reference.
 
     The shares of Bank represented by proxy will be voted at the Bank Special
Meeting as specified by the shareholders of Bank. Executed but unmarked proxies
will be voted FOR the Merger. Upon consummation of the Merger, each outstanding
share of common stock of Bank, consisting of Class A Common shares, par value
$50 per share, and Class B Common shares, par value $50 per share (collectively,
the "Bank Common Shares"), other than shares held by shareholders who exercise
their right to be dissenting shareholders, will be converted into 63.25 common
shares of Bancshares, without par value ("Bancshares Common Shares"), upon the
terms set forth in the Merger Agreement (the "Exchange Ratio"). Dissenters'
rights are described in the section entitled "PROPOSED MERGER -- Rights of
Dissenting Shareholders." For a more detailed description of the Merger
Agreement, the terms of the Merger and the Exchange Ratio, see "PROPOSED
MERGER."
 
     Holders of Class A Common Shares will have one vote per share, and holders
of Class B Common Shares will have twenty votes per share, on the Merger
Proposal. Holders of Class A Common Shares and Class B Common Shares shall vote
together as one class on the Merger Proposal. Approval of the Merger Proposal
requires the affirmative vote of the holders of outstanding Class A Common
Shares and Class B Common Shares of Bank representing a majority of the voting
power of such classes voting as one class. Certain directors and executive
officers of Bank who collectively own Class A Common Shares and Class B Common
Shares representing a majority of the voting power of such classes have agreed
to vote such shares in favor of the Merger Proposal. A copy of the voting
agreement is attached to this Proxy Statement/Prospectus as Appendix E and is
incorporated herein by reference.
 
     This Proxy Statement/Prospectus constitutes the Proxy Statement of Bank and
the Prospectus of Bancshares covering the Bancshares Common Shares to be issued
pursuant to the Merger.
 
     This Proxy Statement/Prospectus and the accompanying Proxy Card are first
being mailed to Bank shareholders on or about             , 1998.
 
   THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
   OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
  FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE SAVINGS
          ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
 
    THE SECURITIES TO BE OFFERED IN CONNECTION WITH THE MERGER HAVE NOT BEEN
 APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
 REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE REGULATORY AUTHORITY
   PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS
     PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
       The date of this Proxy Statement/Prospectus is             , 1998.
<PAGE>   6
 
                                 THE OHIO BANK
 
                           CITIZENS BANCSHARES, INC.
 
                           PROXY STATEMENT/PROSPECTUS
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
AVAILABLE INFORMATION.......................................  iii
INCORPORATION BY REFERENCE..................................  iii
SUMMARY.....................................................    1
COMPARATIVE MARKET VALUE DATA...............................    7
COMPARISON OF CERTAIN UNAUDITED PER SHARE DATA..............    7
SELECTED FINANCIAL DATA OF BANCSHARES (HISTORICAL)..........    9
SELECTED FINANCIAL DATA OF MID AM (HISTORICAL)..............   11
SELECTED FINANCIAL DATA OF BANK (HISTORICAL)................   12
BANK, BANCSHARES AND MID AM UNAUDITED PRO FORMA COMBINED
  SELECTED FINANCIAL DATA...................................   14
BANCSHARES AND MID AM UNAUDITED PRO FORMA COMBINED SELECTED
  FINANCIAL DATA............................................   15
INFORMATION WITH RESPECT TO BANCSHARES......................   16
  Year 2000.................................................   17
  Recent Developments.......................................   17
INFORMATION WITH RESPECT TO BANK............................   18
  Management's Discussion and Analysis of Financial
     Condition and Results of Operations....................   27
  Year 2000.................................................   34
INFORMATION CONCERNING THE BANK SPECIAL MEETING.............   37
  General...................................................   37
  Solicitation, Voting and Revocability of Proxies..........   37
PROPOSED MERGER.............................................   38
  Bank Background and Reasons for the Merger................   38
  Recommendation of the Bank Board of Directors.............   39
  Opinion of Bank's Financial Advisor.......................   39
  Pro Forma Merger Analysis.................................   40
  Comparable Companies......................................   40
  Comparable Transaction Analysis...........................   41
  Other Analysis............................................   41
  Bancshares Background and Reasons for the Merger..........   41
  Description of the Merger.................................   42
  Consideration for Bank Common Shares......................   42
  Payment of Cash in Lieu of Fractional Shares..............   42
  Other Provisions of the Merger Agreement..................   43
     Representations and Warranties.........................   43
     Conditions to the Merger...............................   43
     Amendments; Termination................................   44
  Federal Income Tax Consequences of the Merger.............   44
  Accounting Treatment......................................   44
</TABLE>
 
                                        i
<PAGE>   7
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
  Interest of Bank Management in the Merger.................   45
  Expenses of the Merger....................................   45
  Regulatory Approvals......................................   45
  Effective Time of the Merger..............................   46
  Operations of Bank After the Merger.......................   46
  Business Pending the Merger...............................   46
  Stock Option Agreement....................................   46
  Surrender of Certificates.................................   47
  Resale of Bancshares Common Shares........................   47
  Rights of Dissenting Shareholders.........................   48
DESCRIPTION OF BANCSHARES CAPITAL SHARES....................   49
  General...................................................   49
  Description of Control Share Acquisition Provisions.......   49
  Procedures................................................   50
  Requirements for Approval.................................   50
  Violation of Restriction..................................   50
COMPARISON OF CERTAIN RIGHTS OF HOLDERS OF COMMON SHARES BY
  SKY FINANCIAL, BANK AND BANCSHARES........................   51
  Introduction..............................................   51
  Authorized Shares.........................................   51
  Amendments to Articles of Incorporation or Code of
     Regulations............................................   51
  Special Meeting of Shareholders...........................   52
  Number of Directors; Classified Board of Directors........   52
  Removal of Directors......................................   53
  Advance Notice of Director Nominations....................   53
  Cumulative Voting.........................................   54
  Control Share Acquisitions................................   54
  Business Combination Provisions...........................   54
  Vote Required to Approve Merger, Consolidation, Sale of
     Substantially All Assets...............................   55
  Indemnification...........................................   55
  Shareholder Rights Plan...................................   56
  Preemptive Rights.........................................   56
PRO FORMA FINANCIAL INFORMATION.............................   57
EXPERTS.....................................................   64
LEGAL OPINIONS..............................................   64
INDEMNIFICATION.............................................   64
PROPOSALS FOR 1999 ANNUAL MEETING...........................   65
THE OHIO BANK FINANCIAL STATEMENTS..........................  F-1
APPENDICES:
  A. Agreement and Plan of Merger dated as of July 22,
     1998...................................................  A-1
  B. Dissenters' Rights Under Section 1701.85 of the Ohio
     Revised Code...........................................  B-1
  C. Fairness Opinion of Danielson Associates, Inc. dated as
     of July 21, 1998, and updated as of the date hereof....  C-1
  D. Stock Option Agreement dated as of July 23, 1998.......  D-1
  E.  Voting Agreement dated as of July 22, 1998............  E-1
</TABLE>
 
                                       ii
<PAGE>   8
 
                             AVAILABLE INFORMATION
 
     Bancshares is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by
Bancshares can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C., and at its Regional Office
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The public can obtain information on the
operation of the Public Reference Section of the Commission by calling the
Commission at (800) SEC-0330. The Commission also maintains a Web site that
contains reports, proxy statements and other information filed electronically by
Bancshares. The Commission's Internet address is http://www.sec.gov. Bancshares
Common Shares are quoted on the Nasdaq National Market and reports, proxy
statements and other information concerning Bancshares are available for
inspection and copying at prescribed rates at the office of the National
Association of Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006.
 
     Bancshares has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act of 1933, as amended (the "1933 Act"), covering the
Bancshares Common Shares to be issued in connection with the Merger. This Proxy
Statement/Prospectus was filed with the Registration Statement as the Prospectus
of Bancshares; however, it does not contain all of the information set forth in
the Registration Statement. The Registration Statement and the exhibits thereto
can be inspected at the Commission's public reference room, Room 1024, 450 5th
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, as well as the
Commission's Regional Office listed above.
 
     No person has been authorized to give any information or make any
representations not contained herein, and, if given or made, such information or
representation must not be relied upon as having been authorized. This Proxy
Statement/Prospectus does not constitute an offer to sell any securities other
than the securities to which it relates or an offer to sell any securities
covered by this Proxy Statement/Prospectus in any jurisdiction where, or to any
person to whom, it is unlawful to make such an offer. Neither the delivery
hereof nor any distribution of securities by Bancshares made hereunder shall,
under any circumstances, create an implication that there has been no change in
the facts herein set forth since the date hereof.
 
     All information concerning Bancshares contained in this Proxy
Statement/Prospectus has been furnished by Bancshares and all information
concerning Bank has been furnished by Bank.
 
                           INCORPORATION BY REFERENCE
 
     The following documents filed with the Commission under the 1934 Act by
Citizens Bancshares, Inc. are incorporated by reference into this Proxy
Statement/Prospectus: (a) Bancshares' Annual Report on Form 10-K for the year
ended December 31, 1997; (b) the portions of Bancshares' Proxy Statement for the
annual meeting of Shareholders held on May 11, 1998 that have been incorporated
by reference into the 1997 Bancshares 10-K; (c) Bancshares' Quarterly Reports on
Form 10-Q for the three months ended March 31, 1998 and for the three months
ended June 30, 1998; (d) Bancshares' Current Reports on Form 8-K, dated January
2, 1998, February 12, 1998, May 21, 1998, June 2, 1998, June 25, 1998, July 24,
1998, July 29, 1998 and September   , 1998, on Form 8-K/A, dated June 25, 1998
and on Form 8-A, dated September   , 1998.
 
     The following documents filed with the Commission under the 1934 Act by Mid
Am Inc. are incorporated by reference into this Proxy Statement/Prospectus: (a)
Mid Am's Annual Report on Form 10-K for the year ended December 31, 1997; (b)
the portions of Mid Am's Proxy Statement for the annual meeting of Shareholders
held on April 24, 1998 that have been incorporated by reference into the 1997
Mid Am 10-K; (c) Mid Am's Quarterly Reports on Form 10-Q for the three months
ended March 31, 1998 and for the three months ended June 30, 1998; (d) Mid Am's
Current Reports on Form 8-K, dated January 28, 1998, May 7, 1998, May 21, 1998
and August 3, 1998.
 
     All documents filed by Bancshares pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Proxy Statement/Prospectus and
prior to the date of the Special Meeting shall be deemed to be
 
                                       iii
<PAGE>   9
 
incorporated by reference in this Proxy Statement/Prospectus and to be a part
hereof from the date of filing such documents.
 
     In addition to the foregoing, the Bancshares Schedule 13D, dated May 29,
1998, and the Bancshares Schedule 13D, dated July 10, 1998, are incorporated
herein by reference.
 
     Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Proxy Statement/Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that is
also deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement/Prospectus.
 
     The information relating to Bancshares and Bank contained in this Proxy
Statement/Prospectus should be read together with the information in the
documents incorporated by reference.
 
     THIS PROXY STATEMENT INCORPORATES BY REFERENCE CERTAIN DOCUMENTS WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST FROM TRACEY L. REEDER, ASSISTANT CORPORATE SECRETARY,
CITIZENS BANCSHARES, INC., 10 EAST MAIN STREET, SALINEVILLE, OHIO 43945, (330)
679-2328. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST TO
BANCSHARES SHOULD BE MADE BY             , 1998.
 
     THIS PROXY STATEMENT/PROSPECTUS CONTAINS CERTAIN FORWARD LOOKING STATEMENTS
WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF
BANCSHARES FOLLOWING THE CONSUMMATION OF THE MERGER. THESE FORWARD LOOKING
STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD
LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1)
EXPECTED COST SAVINGS FROM THE MERGER CANNOT BE FULLY REALIZED; (2) DEPOSIT
ATTRITION, CUSTOMER LOSS OR REVENUE LOSS FOLLOWING THE MERGER IS GREATER THAN
EXPECTED (3) COMPETITIVE PRESSURE IN THE BANKING INDUSTRY INCREASES
SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE
BUSINESSES OF BANCSHARES AND BANK ARE GREATER THAN EXPECTED; (5) CHANGES IN THE
INTEREST RATE ENVIRONMENT THAT MAY REDUCE MARGINS; AND (6) GENERAL ECONOMIC
CONDITIONS, EITHER NATIONALLY OR IN THE AREA IN WHICH THE COMBINED COMPANY WILL
BE DOING BUSINESS, ARE LESS FAVORABLE THAN EXPECTED. FURTHER INFORMATION ON
OTHER FACTORS THAT COULD AFFECT THE FINANCIAL RESULTS OF BANCSHARES AFTER THE
MERGER IS INCLUDED IN THE COMMISSION FILINGS INCORPORATED BY REFERENCE HEREIN.
 
                                       iv
<PAGE>   10
 
                                    SUMMARY
 
     This summary is necessarily general and abbreviated and has been prepared
to assist the shareholders of Bank in their review of the Proxy
Statement/Prospectus. The summary is not intended to be a complete explanation
of the matters covered in the Proxy Statement/Prospectus and is qualified in all
respects by reference to the more detailed information contained in the Proxy
Statement/Prospectus and the Appendices hereto, which the shareholders of Bank
are urged to read carefully.
 
                             PARTIES TO THE MERGER
 
Citizens Bancshares,
Inc........................  Bancshares is a bank holding company organized and
                             existing under the laws of the State of Ohio and
                             registered with the "Board of Governors of the
                             Federal Reserve System (the "Federal Reserve
                             Board") pursuant to the Bank Holding Company Act of
                             1956, as amended (the "BHC Act"). Bancshares is a
                             holding company for (i) The Citizens Banking
                             Company, a wholly owned commercial bank subsidiary
                             organized and existing under the banking laws of
                             the State of Ohio ("Citizens"); (ii) Century
                             National Bank and Trust Company, a wholly owned
                             commercial bank subsidiary organized under the laws
                             of the United States ("CNB"); (iii) Freedom
                             Express, Inc., a wholly owned courier company; and
                             (iv) Freedom Financial Life Insurance Company, a
                             wholly owned reinsurance company.
 
                             At June 30, 1998, Bancshares had total consolidated
                             assets of approximately $1.8 billion and total
                             shareholders' equity of approximately $159 million.
                             For the year ended December 31, 1997, Bancshares'
                             return on average total assets and return on
                             average common shareholders' equity was 1.34% and
                             15.23%, respectively (all amounts are restated to
                             reflect the March 1998 merger of Unibank with and
                             into Citizens and the May 1998 merger of Century
                             Financial Corporation ("CFC") with and into
                             Bancshares). Bancshares Common Stock is currently
                             traded on the Nasdaq National Market System under
                             the symbol "CICS."
 
                             The mailing address of Bancshares' principal
                             executive offices is 10 East Main Street,
                             Salineville, Ohio 43945, and its telephone number
                             is (330) 679-2328.
 
The Ohio Bank..............  Bank is a state banking association organized and
                             existing under the laws of the State of Ohio and
                             whose deposits are insured by the FDIC.
 
                             Bank engages in commercial and consumer banking and
                             trust services through eighteen (18) branch
                             offices. During the five-year period beginning in
                             1993 and ending in 1997, Bank's combined total
                             assets have grown from approximately $363 million
                             in 1993 to approximately $579.4 million in 1997. As
                             of December 31, 1997, Bank had total consolidated
                             deposits of $522.3 million, consolidated total
                             assets of approximately $579.4 million and total
                             shareholders' equity of approximately $49.9
                             million, and had a total of 268 full-time and 189
                             part time employees.
 
                             Bank's principal executive offices are located at
                             236 South Main Street, Findlay, Ohio 45840. The
                             telephone number of Bank's executive offices is
                             (419) 424-4000.
 
                              RECENT DEVELOPMENTS
 
                             On May 20, 1998, Bancshares and Mid Am, Inc. ("Mid
                             Am"), a bank holding company organized and existing
                             under the laws of the State of Ohio and
                             headquartered in Bowling Green, Ohio, entered into
                             a definitive
                                        1
<PAGE>   11
 
                             Agreement and Plan of Merger as amended and
                             restated as of August 5, 1998 (the "Mid Am
                             Agreement"), which provides for the affiliation of
                             Mid Am with Bancshares in a transaction expected to
                             be accounted for as a pooling of interests. As of
                             June 30, 1998, Mid Am had total consolidated assets
                             of $2.3 billion and shareholders' equity of $163
                             million. Mid Am had net income of $8.4 million for
                             the six months ended June 30, 1998 and net income
                             of $30.8 million for the year ended December 31,
                             1997. Mid Am is a holding company for five bank
                             subsidiaries with a total of 83 banking offices
                             located in western Ohio along the Interstate 75
                             corridor and in southern Michigan. Mid Am also owns
                             seven financial services subsidiaries which engage
                             in lines of business which are closely related to
                             banking. Through its bank subsidiaries, Mid Am
                             offers a wide range of lending, depository, trust,
                             and related financial services to individual and
                             business customers. Through its financial services
                             subsidiaries, Mid Am offers specialty lending,
                             investment, trust, collection and related financial
                             services to individual and business customers. Mid
                             Am's market area is economically diverse, with a
                             base of manufacturing, service industries,
                             transportation and agriculture, and is not
                             dependent upon any single industry or employer.
 
                             The Mid Am Agreement provides that the affiliation
                             will be effected by means of a merger (the "Mid Am
                             Merger") of Mid Am with and into Bancshares. In the
                             Mid Am Merger, each outstanding share of Mid Am
                             common stock, no par value (other than those common
                             shares, if any, with respect to which dissenters'
                             rights are exercised), will be converted into 0.77
                             shares of Bancshares Common Shares in a tax-free
                             exchange. Bancshares expects to issue 19,170,700
                             shares (including shares issuable upon the exercise
                             of outstanding stock options) in the Mid Am Merger.
                             In connection with the transactions contemplated by
                             the Mid Am Agreement, Bancshares and Mid Am entered
                             into Stock Option Agreements whereby each of them
                             may purchase up to 19.9% of the other's common
                             shares under certain circumstances.
 
                             The merger of Mid Am with and into Bancshares has
                             been structured as a merger-of-equals transaction
                             with Mid Am shareholders and Bancshares
                             shareholders owning 50.9% and 49.1%, respectively,
                             of the combined company immediately after the
                             effective time of the merger. The combined company
                             will have over $4 billion in assets, 145 branches
                             and over 2,300 employees. Assuming the receipt of
                             the requisite approval by the Bancshares and Mid Am
                             shareholders, the Mid Am Merger is expected to be
                             consummated on October 2, 1998. Upon consummation
                             of the Mid Am Merger, Bancshares' name will be
                             changed to Sky Financial Group, Inc. ("Sky
                             Financial"). Following the Mid Am Merger and the
                             subsequent merger involving Bank, the combined
                             organization will have approximately $4.7 billion
                             in assets, 163 branches and over 2,550 employees.
 
                             Pursuant to the terms of the Mid Am Agreement, the
                             Board of Directors of the combined entity will
                             consist of twenty-two (22) members. Eleven (11)
                             directors will be nominated by Bancshares, and
                             eleven (11) directors will be nominated by Mid Am.
                             Mr. Edward J. Reiter, Chairman of the Board and
                             Chief Executive Officer of Mid Am, will become the
                             Senior Chairman of the Board of Directors of the
                             combined entity. Mr. David R. Francisco, President
                             and Chief Operating Officer of Mid Am, will become
 
                                        2
<PAGE>   12
 
                             Chairman of the Board of Directors and Chief
                             Executive Officer of the combined entity, and Mr.
                             Marty E. Adams, President and Chief Executive
                             Officer of Bancshares, will become the President
                             and Chief Operating Officer of the combined entity.
                             In addition, certain officers of the combined
                             entity will sit on a management executive committee
                             consisting of at least eight (8) persons, one-half
                             of whom will be selected by the Chairman of the
                             Board and Chief Executive Officer of Mid Am and
                             one-half of whom will be selected by the President
                             and Chief Executive Officer of Bancshares. Mr.
                             Reiter will serve as a chairman of the management
                             executive committee. If an Executive Committee of
                             the Board of Directors of the combined entity is
                             formed within three years after the Effective Time
                             it will contain equal numbers of members selected
                             by directors of Bancshares, and selected by
                             directors of Mid Am. For a description of the
                             make-up of the Board of Directors after
                             consummation of the Merger, see "Interest of Bank
                             Management in the Merger."
 
                INFORMATION CONCERNING THE BANK SPECIAL MEETING
 
General....................  The Bank Special Meeting will be held at
                                                 , on             , 1998
                             at               .m., local time. The purpose of
                             the Bank Special Meeting is to consider and vote
                             upon the Merger Agreement and the transactions
                             contemplated thereby, as hereinafter described,
                             including the conversion of Bank Common Shares into
                             Bancshares Common Shares and the merger of an
                             interim bank subsidiary of Bancshares with and into
                             Bank on the terms described in this Proxy
                             Statement/Prospectus. A copy of the Merger
                             Agreement is attached to this Proxy Statement/
                             Prospectus as Appendix A and is incorporated in
                             this Proxy Statement/Prospectus by reference.
 
Solicitation and Voting of
Proxies....................  All shareholders of record of Bank on             ,
                             1998 (the "Record Date") will be entitled to vote
                             at the Bank Special Meeting. The affirmative vote,
                             in person or by proxy, of the holders of not less
                             than a majority of the voting power of the issued
                             and outstanding Bank Common Shares is required for
                             approval of Merger Agreement. Certain directors and
                             executive officers of the Bank who collectively own
                             Class A Common Shares and Class B Common Shares
                             representing a majority of the voting power have
                             agreed to vote such shares in favor of the Merger
                             Proposal.
 
                                PROPOSED MERGER
 
The Merger Agreement.......  Bancshares and Bank have entered into a Merger
                             Agreement, pursuant to which an interim bank
                             subsidiary formed by Bancshares will merge with and
                             into Bank. Consummation of the Merger, however, is
                             subject to the approval of the Bank shareholders of
                             the Merger Agreement and the transactions
                             contemplated thereby. The Merger is expected to
                             qualify as a pooling-of-interests for accounting
                             and financial reporting purposes. For a description
                             of the Merger Agreement, which is incorporated by
                             reference herein in its entirety, see "PROPOSED
                             MERGER."
 
                             Bancshares and Bank have also entered into a Stock
                             Option Agreement dated as of July 23, 1998 that
                             grants Bancshares a binding option to purchase up
                             to 5.42% of Bank's Common Shares in certain
                             circumstances. The Stock Option Agreement is
                             attached as Appendix D to this Proxy
 
                                        3
<PAGE>   13
 
                             Statement Prospectus. For a description of the
                             Stock Option Agreement, see "PROPOSED MERGER."
 
Consideration for Bank
Common Shares..............  Upon consummation of the Merger, each Bank Common
                             Share outstanding (other than dissenting shares)
                             will be converted into 63.25 Bancshares Common
                             Shares, plus cash in lieu of fractional shares (the
                             "Exchange Ratio"). For a complete description of
                             the consideration to be received by Bank
                             shareholders, see "PROPOSED MERGER -- Consideration
                             for Bank Common Shares."
 
Bank Background and Reasons
for the Merger.............  Bank's Board of Directors has unanimously concluded
                             that the Merger would be in the best interests of
                             Bank's shareholders, depositors, other customers
                             and employees. The Board of Directors believes that
                             the Merger offers Bank and its shareholders an
                             attractive opportunity to participate in a company
                             with enhanced financial strength that should be
                             able to compete more effectively in Ohio. The Board
                             of Directors also believes that this enhanced
                             financial strength will increase opportunities for
                             growth as a combined company, and will offer
                             greater flexibility in meeting the challenges
                             affecting the banking and financial services
                             industries.
 
Bancshares Background and
  Reasons for the Merger...  Bancshares' Board of Directors has concluded that
                             the Merger would be in the best interests of
                             Bancshares' shareholders, depositors, other
                             customers and employees, as well as those of its
                             subsidiary banks. The Merger is consistent with
                             Bancshares' overall strategic acquisition program
                             and, in particular, its interest in expanding
                             Bancshares' facilities and services in Ohio.
                             Bancshares' philosophy of emphasizing customer
                             service and satisfaction, promoting local and
                             branch level decision-making power by employees and
                             making strong, ongoing commitments to each
                             community it and its subsidiary banks serve are
                             consistent with Bank's management philosophies and
                             its long-standing reputation of service to Ohio. In
                             addition, the current products and services offered
                             by Bank are similar to, and in many respects
                             complement, the products and services provided by
                             Bancshares and its subsidiary banks. Bancshares
                             anticipates that the additional products and
                             services that will become available to Bank
                             customers as a result of the Merger will provide
                             opportunities for expanded and new customer
                             relationships. Bancshares also believes that the
                             Merger can be accomplished with little or no
                             resulting dilution in the per share earnings of
                             Bancshares Common Shares. See "PROPOSED MERGER  --
                             Bancshares' Background and Reasons for the Merger."
 
Bank Fairness Opinion......  Danielson Associates, Inc. has rendered an original
                             opinion to Bank's Board of Directors, dated July
                             21, 1998, [and updated to the date hereof,] that
                             the Merger is fair from a financial point of view
                             to the Bank shareholders. For additional
                             information, see "PROPOSED MERGER -- Fairness
                             Opinion of Danielson Associates, Inc." The opinion
                             of Danielson Associates, Inc. is attached as
                             Appendix C to this Proxy Statement/ Prospectus.
                             Bank shareholders are urged to read such opinion in
                             its entirety for a description of the procedures
                             followed and matters considered in connection
                             therewith.
 
                                        4
<PAGE>   14
 
Interest of Bank Management
in the Merger..............  Upon consummation of the Mid Am Merger and the
                             Merger involving Bank, the size of the Bancshares
                             Board of Directors will expand to twenty-five (25)
                             members and it is anticipated that the current
                             directors and executive officers of Bancshares will
                             remain directors and executive officers thereof
                             subject to the changes outlined above under PARTIES
                             TO THE MERGER -- Citizens Bancshares, Inc. "Recent
                             Developments." Three members of Bank's Board of
                             Directors, including Richard R. Hollington, Jr.,
                             Chairman of Bank, will be elected to serve on the
                             Bancshares Board of Directors, with one of such
                             persons to be designated for membership on the
                             Executive Committee of the Board of Directors if
                             such committee is formed. In addition, a member of
                             Bank's management will be selected by Bancshares to
                             serve on the Management Executive Committee of
                             Bancshares. Mr. Richard R. Hollington, Jr., the
                             Chairman of the Board of Bank, will become a Vice
                             Chairman of Bancshares and thereafter Mr. James
                             McBane, the current Chairman of the Bancshares
                             Board of Directors (who will become Vice Chairman
                             upon completion of the Mid Am Merger) will become
                             the First Vice Chairman of the Sky Financial Board
                             of Directors. Mr. Richard Hollington III, the Chief
                             Operating Officer of Bank, will become Senior Vice
                             President -- Integration Manager of Sky Financial.
                             In connection with the Merger, Mr. Jack Donaldson
                             will enter into an employment agreement with Bank
                             and severance agreements will go into effect with
                             several other Bank officers. See "PROPOSED
                             MERGER -- Operations of Bank After the Merger."
 
Recommendation of the Board
of Directors...............  The Boards of Directors of Bancshares and Bank have
                             unanimously approved the Merger Agreement and
                             believe that the Merger is fair to and in the best
                             interests of their respective shareholders. The
                             Bank Board of Directors unanimously recommends that
                             its shareholders adopt the Merger Agreement. See
                             "PROPOSED MERGER -- Recommendation of the Bank
                             Board of Directors."
 
Dissenters' Rights of Bank
  Shareholders.............  Holders of Bank Common Shares may exercise their
                             right to become dissenting shareholders to the
                             extent, and in strict compliance with the
                             procedure, specified in Section 1701.85 of the Ohio
                             Revised Code. HOLDERS OF BANK COMMON SHARES WHO
                             WANT TO EXERCISE THEIR DISSENTERS' RIGHTS MUST NOT
                             VOTE IN FAVOR OF THE MERGER AGREEMENT AT THE
                             SPECIAL MEETING AND MUST SEND WRITTEN DEMANDS FOR
                             PAYMENT FOR THEIR BANK COMMON SHARES WITHIN TEN
                             DAYS AFTER THE SPECIAL MEETING. See "PROPOSED
                             MERGER -- Rights of Dissenting Shareholders" and
                             the text of Section 1701.85 of the Ohio Revised
                             Code attached to this Proxy Statement/Prospectus as
                             Appendix B.
 
Federal Income Tax
Consequences of the
  Merger...................  It is intended that the Merger will be treated as a
                             reorganization within the meaning of Section 368(a)
                             of the Internal Revenue Code of 1986, as amended
                             (the "IRC"), and that, accordingly, for federal
                             income tax purposes no gain or loss will be
                             recognized by Bank or Bancshares as a result of the
                             Merger. The obligation of Bank to consummate the
                             Merger is conditioned upon the receipt by it of an
                             opinion of its counsel, reasonably satisfactory in
                             form and substance to it, to the effect that (i)
                             the Merger will
 
                                        5
<PAGE>   15
 
                             constitute a tax-free reorganization within the
                             meaning of Section 368(a)(i)(A) of the IRC, (ii) no
                             gain or loss will be recognized by Bank as a
                             consequence of the Merger, and (iii) no gain or
                             loss will be recognized by the shareholders of Bank
                             pursuant to the terms of the Merger (except for the
                             effect of any cash received pursuant to dissenters'
                             rights or paid in lieu of the issuance of
                             fractional shares). Shareholders who exercise
                             dissenters' rights and receive cash for their Bank
                             Common Shares will be treated as having received a
                             distribution in redemption of their shares which
                             will result in such shareholders receiving income
                             for federal income tax purposes.
 
                             All Bank shareholders should read carefully the
                             description under "PROPOSED MERGER -- Federal
                             Income Tax Consequences of the Merger," and should
                             consult their own tax advisors concerning these
                             matters.
 
Conditions; Amendments;
  Termination..............  Completion of the Merger is conditioned upon
                             approval of the Merger Agreement by the
                             shareholders of Bank and certain regulatory
                             authorities and upon certain other conditions
                             described in this Proxy Statement/Prospectus. The
                             Merger Agreement may not be amended except by a
                             written agreement executed by the parties.
 
                             The Merger Agreement may be terminated as follows:
                             (i) by mutual consent of the parties; (ii) by Bank
                             if the Average NMS Closing Price (as defined below)
                             is less than $26.00; (iii) by either party if the
                             transactions contemplated by the Merger Agreement
                             are not consummated by March 31, 1999, or (iv) by
                             either party in the event of a material breach by
                             the other party.
 
                             Prior to exercise by Bank of its right of
                             termination in the event that the Average NMS
                             Closing Price is less than $26.00, Bancshares may
                             offer to distribute to Bank shareholders under the
                             Merger Agreement an additional number of Bancshares
                             Common Shares at least sufficient to offset the
                             amount by which the average NMS Closing Price is
                             below $26.00 plus some additional number of
                             Bancshares Common Shares. For purposes of the
                             Merger Agreement, the term "Average NMS Closing
                             Price" is defined as the arithmetic mean of the NMS
                             Closing Price (i.e., the reported price at the
                             close of the trading day) for the ten trading days
                             immediately preceding the fifth (5th) trading day
                             prior to consummation of the Merger. Bank shall
                             have the opportunity to accept or reject any such
                             offer. If Bank rejects such offer, Bank may then
                             terminate the Merger Agreement.
 
                             See "PROPOSED MERGER -- Other Provisions of the
                             Merger Agreement."
 
Comparative Rights of Bank
and Bancshares
  Shareholders.............  The rights of shareholders of Bancshares and
                             shareholders of Bank, respectively, while similar
                             in many respects, also differ in some respects. For
                             a description of the relative rights of the holders
                             of Bancshares Common Shares and Bank Common Shares
                             under the respective charter documents, as well as
                             a description of the charter documents of Sky
                             Financial Group, Inc. upon completion of the Mid Am
                             Merger, see "COMPARATIVE RIGHTS OF BANK
                             SHAREHOLDERS."
 
                                        6
<PAGE>   16
 
                         COMPARATIVE MARKET VALUE DATA
 
     Bancshares Common Shares began trading on the Nasdaq National Market under
the symbol "CICS" as of June 1, 1993. Neither class of Bank Common Shares is
listed for trading on a securities exchange or an automated dealer quotation
system, and no comparative market price data is available. The information
presented in the following table reflects the last reported sale price for
Bancshares on (i) July 21, 1998, the last trading day preceding the public
announcement of the Merger Proposal and (ii)             , 1998, a date shortly
prior to the date of this Proxy Statement/Prospectus. No assurance can be given
as to what the market price of Bancshares Common Shares will be if and when the
Merger is consummated. The equivalent per share basis has been calculated by
multiplying the last reported sale price of Bancshares Common Shares on the
dates indicated by the Exchange Ratio of 63.25.
 
<TABLE>
<CAPTION>
                                                                              EQUIVALENT VALUE OF
                                                 CLOSING SALE PRICE PER     BANCSHARES COMMON SHARES
                     DATE                       BANCSHARES COMMON SHARE      PER BANK COMMON SHARE
                     ----                       ------------------------    ------------------------
<S>                                             <C>                         <C>
July 21, 1998.................................           $35.25                    $2,229.56
       , 1998.................................
</TABLE>
 
                 COMPARISON OF CERTAIN UNAUDITED PER SHARE DATA
 
     The following summary presents selected comparative unaudited per share
data for Bancshares, Mid Am and Bank on an historical basis, on a pro forma
combined basis, and with respect to Bank, on an equivalent pro forma combined
basis, assuming the Mid Am Merger and the Merger involving Bank had been
effective during the periods presented and accounted for under the
pooling-of-interests accounting method. Pro forma data is derived accordingly.
The information shown below should be read in conjunction with the historical
financial data and statements of Bancshares and Mid Am incorporated by reference
herein, including the respective notes thereto. See "Available Information,"
"Incorporation of Certain Information by Reference," " -- Selected Financial
Data of Bancshares (Historical)," "-- Selected Financial Data of Bank
(Historical)," -- Selected Financial Data of Mid Am (Historical)" and "The
Merger -- Accounting Treatment."
 
     The per share data set forth herein are presented for comparative purposes
only and are not necessarily indicative of the future combined financial
position, the results of the future operations or the actual results or combined
financial position of Bancshares that would have been achieved had the Mid Am
Merger and the Merger involving Bank been consummated as of the dates or for the
periods indicated. While no assurance can be given, Bancshares expects that it
will achieve substantial benefits from the Mid Am Merger and the Merger
involving Bank, including operating cost savings and revenue enhancements.
However, the pro forma comparative unaudited per share data do not reflect any
direct costs, potential savings or revenue enhancements which are expected to
result from the consolidation of operations of Bank and Bancshares (including
Mid Am) and, therefore, do not purport to be indicative of results which may be
expected for any other interim or annual period.
 
                                        7
<PAGE>   17
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
              HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
 
<TABLE>
<CAPTION>
                                           AS OF AND FOR THE SIX     AS OF AND FOR THE YEAR ENDED
                                           MONTHS ENDED JUNE 30,             DECEMBER 31,
                                           ----------------------    -----------------------------
                                             1998         1997        1997       1996       1995
                                           ---------    ---------    -------    -------    -------
<S>                                        <C>          <C>          <C>        <C>        <C>
NET INCOME PER COMMON SHARE:
HISTORICAL
  Bancshares
     Basic...............................   $  0.52      $  0.69     $  1.27    $  1.23    $  1.06
     Diluted.............................      0.52         0.68        1.26       1.22       1.06
  Mid Am
     Basic...............................      0.67         0.69        1.27       1.04       0.96
     Diluted.............................      0.66         0.65        1.22       0.98       0.92
  Bank
     Class A.............................     44.63        35.33       75.62      68.20      66.67
     Class B.............................     40.57        32.12       68.74      62.00      60.61
PRO FORMA COMBINED
  Basic..................................      0.70         0.76        1.42       1.25       1.14
  Diluted................................      0.69         0.74        1.40       1.22       1.11
EQUIVALENT AMOUNT OF BANK (a)
  Basic..................................     44.28        48.07       89.82      79.06      72.11
  Diluted................................     43.64        46.81       88.55      77.17      70.21
DIVIDENDS PER COMMON SHARE:
HISTORICAL
  Bancshares.............................   $  0.31      $  0.27     $  0.56    $  0.42    $  0.25
  Mid Am.................................      0.32         0.29        0.60       0.55       0.52
  Bank
     Class A.............................     10.34         7.04       15.18      12.98      10.78
     Class B.............................      9.40         6.40       13.80      11.80       9.80
     Pro forma equivalent amount of Bank
       (a)...............................     19.61        17.08       35.42      26.25      15.81
BOOK VALUE PER COMMON SHARE:
HISTORICAL
  Bancshares.............................   $  8.96         8.30     $  8.84    $  7.89    $  7.16
  Mid Am.................................      6.94         7.15        7.45       7.12       6.95
  Bank...................................    633.14       561.70      600.61     536.51     490.25
PRO FORMA COMBINED.......................      8.71         8.82        9.30       8.55       8.04
EQUIVALENT AMOUNT OF BANK (a)............    550.91       557.87      588.23     540.70     508.53
</TABLE>
 
- ---------------
 
(a) The equivalent pro forma per share data for Bank are computed by multiplying
    pro forma combined information by 63.25, the Exchange Ratio.
 
                                        8
<PAGE>   18
 
               SELECTED FINANCIAL DATA OF BANCSHARES (HISTORICAL)
 
     The following table sets forth selected historical financial data of
Bancshares and has been derived from its financial statements. Such selected
historical financial data should be read in conjunction with Bancshares' audited
consolidated financial statements, including the respective notes thereto, and
unaudited interim financial information, in each case incorporated herein by
reference. The interim financial information has been derived from unaudited
financial statements of Bancshares, which, in the opinion of management, include
all adjustments, consisting only of normal recurring adjustments, necessary for
fair statement of the results for the unaudited interim periods. Results for the
interim periods are not necessarily indicative of results which may be expected
for any other interim or annual period. See "Incorporation of Certain
Information by Reference".
 
<TABLE>
<CAPTION>
                                        FOR THE SIX MONTHS
                                          ENDED JUNE 30,                       FOR THE YEAR ENDED DECEMBER 31,
                                      -----------------------   --------------------------------------------------------------
                                         1998         1997         1997         1996         1995         1994         1993
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                          (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                                   <C>          <C>          <C>          <C>          <C>          <C>          <C>
Interest income.....................  $   69,527   $   63,381   $  131,667   $  117,982   $  110,791   $   98,948   $   94,893
Interest expense....................      33,569       29,684       63,209       51,417       48,623       39,985       40,163
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net interest income.................      35,958       33,697       68,458       66,565       62,168       58,963       54,730
Provision for loan losses...........       3,409        1,215        4,335        2,279        2,504        2,895        5,418
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net interest income after provision
  for loan losses...................      32,549       32,482       64,123       64,286       59,664       56,068       49,312
Other income........................       6,028        4,951       10,991        8,735        7,531        7,184        7,956
Other expenses......................      25,628       19,961       43,228       41,737       40,172       40,560       40,284
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
Income before income taxes..........      12,949       17,472       31,886       31,284       27,023       22,692       16,984
Income taxes........................       3,770        5,340        9,466        9,554        8,229        6,746        4,442
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net Income..........................  $    9,179   $   12,132   $   22,420   $   21,730   $   18,794   $   15,946   $   12,542
                                      ==========   ==========   ==========   ==========   ==========   ==========   ==========
Cash dividends declared.............  $    5,524   $    4,476   $    9,462   $    7,503   $    5,472   $    3,570   $    2,891
                                      ==========   ==========   ==========   ==========   ==========   ==========   ==========
Per share data(1):
  Basic net income..................  $      .52   $      .69   $     1.27   $     1.23   $     1.06   $     0.90   $     0.71
  Diluted net income................  $      .52   $      .68   $     1.26   $     1.22   $     1.06   $     0.90   $     0.71
  Cash dividends declared...........  $      .31   $      .25   $     0.56   $     0.42   $     0.25   $     0.15   $     0.09
  Book value at period-end..........  $     8.96   $     8.30   $     8.84   $     7.89   $     7.16   $     6.01   $     5.69
  Weighted average shares
    outstanding (basic).............      17,701       17,654       17,671       17,708       17,783       17,783       17,783
  Weighted average shares
    outstanding diluted.............      17,812       17,747       17,778       17,768       17,806       17,788       17,783
  Shares outstanding at
    period-end......................      17,739       17,721       17,721       17,684       17,796       17,785       17,779
Balance Sheet Data:
  Total assets......................  $1,804,478   $1,696,230   $1,791,023   $1,543,029   $1,441,695   $1,360,022   $1,317,368
  Securities available for sale.....     523,108      401,819      432,306      334,024      331,505      160,424      142,045
  Securities held to maturity.......           0       93,629       87,207       88,371       74,851      256,373      291,251
  Loans, net of unearned income.....   1,142,430    1,064,678    1,127,846    1,002,454      927,014      855,685      784,610
  Allowance for loan losses.........      20,454       16,069       18,276       15,629       14,856       15,693       14,715
  Deposits..........................   1,400,225    1,288,428    1,380,313    1,232,344    1,179,399    1,113,959    1,112,830
  Federal Home Loan Bank advances...     151,805       86,206      160,765       60,923       96,380       87,932       60,198
  Total shareholders' equity at
    period-end......................     159,016      146,846      156,667      139,461      127,425      106,891      101,123
Average Balances:
  Total assets......................  $1,800,706   $1,613,130   $1,674,298   $1,469,112   $1,398,458   $1,337,933   $1,262,090
  Total earning assets..............   1,687,033    1,530,649    1,582,715    1,399,017    1,332,638    1,271,933    1,195,927
  Deposits..........................   1,397,635    1,257,801    1,294,597    1,205,123    1,156,198    1,120,987    1,098,863
  Net loans.........................   1,125,464    1,019,726    1,054,380      941,848      866,871      802,484      743,248
  Shareholders' equity..............     157,127      142,534      147,166      132,138      118,074      104,601       95,505
</TABLE>
 
                                        9
<PAGE>   19
 
<TABLE>
<CAPTION>
                                        FOR THE SIX MONTHS
                                          ENDED JUNE 30,                       FOR THE YEAR ENDED DECEMBER 31,
                                      -----------------------   --------------------------------------------------------------
                                         1998         1997         1997         1996         1995         1994         1993
                                      ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                          (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                                   <C>          <C>          <C>          <C>          <C>          <C>          <C>
Significant Ratios:
  Return on average assets..........        1.03         1.52         1.34%        1.48%        1.34%        1.19%        0.99%
  Return on average shareholders'
    equity..........................       11.78        17.16        15.23        16.44        15.92        15.24        13.13
  Average shareholders' equity to
    average assets..................        8.73         8.84         8.79         8.99         8.44         7.82         7.57
  Average loans as a percent of
    average deposits................       81.89        82.34        82.74        80.21        77.12        73.60        68.72
  Shareholders' equity as a percent
    of period-end assets............        8.81         8.66         8.75         9.04         8.84         7.86         7.68
  Allowance for loan losses as a
    percent of loans................        1.79         1.51         1.62         1.56         1.60         1.83         1.88
  Net charge-offs a percent of
    average loans...................         .22          .15         0.16         0.16         0.38         0.23         0.25
  Dividends declared as a percent of
    net income......................       60.18        36.89        42.20        34.53        29.12        22.39        23.05
  Net interest margin, fully taxable
    equivalent......................        4.46         4.60         4.47         4.91         4.80         4.76         4.71
  Nonperforming loans to total
    loans...........................         .51          .73         0.59         0.32         0.49         1.23         0.92
  Nonperforming assets to total
    assets..........................         .33          .47         0.38         0.31         0.45         0.92         0.87
  Allowance for loan losses to
    nonperforming loans.............      351.20       206.86       274.87       483.72       326.08       149.13       202.94
  Noninterest expenses as a percent
    of average assets...............        2.32         2.50         2.58         2.84         2.87         3.03         3.19
  Operating efficiency ratio........       48.33        50.14        52.86        53.87        56.11        60.06        63.60
</TABLE>
 
- ---------------
 
(1) Per share data has been restated to reflect the 1998 two-for-one stock
    split, the 1995 three-for-two stock split and all acquisitions accounted for
    as poolings of interests.
 
                                       10
<PAGE>   20
 
                 SELECTED FINANCIAL DATA OF MID AM (HISTORICAL)
 
     The following table sets forth selected historical financial data of Mid Am
and has been derived from its financial statements. Such selected historical
financial data should be read in conjunction with Mid Am's audited consolidated
financial statements, including the respective notes thereto, and unaudited
interim financial information, in each case incorporated herein by reference.
The interim financial information has been derived from unaudited financial
statements of Mid Am, which, in the opinion of management, include all
adjustments, consisting only of normal recurring adjustments, necessary for fair
statement of the results for the unaudited interim periods. Results for the
interim periods are not necessarily indicative of results which may be expected
for any other interim or annual period. See "Incorporation of Certain
Information by Reference."
 
<TABLE>
<CAPTION>
                                   FOR THE SIX MONTHS
                                     ENDED JUNE 30,                       FOR THE YEAR ENDED DECEMBER 31,
                                 -----------------------   --------------------------------------------------------------
                                    1998         1997         1997         1996         1995         1994         1993
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                     (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                              <C>          <C>          <C>          <C>          <C>          <C>          <C>
CONSOLIDATED STATEMENT OF
  EARNINGS DATA
Interest income................  $   87,538   $   83,942   $  171,202   $  164,983   $  162,543   $  140,571   $  139,387
Interest expense...............      42,508       39,661       81,676       80,069       80,316       59,564       61,057
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net interest income............      45,030       44,281       89,526       84,914       82,227       81,007       78,330
Provision for credit losses....       2,450        2,759        5,527        4,537        3,002        1,224        3,991
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net interest income after
  provision for credit
  losses.......................      42,580       41,522       83,999       80,377       79,225       79,783       74,339
Non-interest and other
  income.......................      39,316       33,884       66,569       49,501       35,955       32,554       34,002
Non-interest and other
  expense......................      58,694       50,039      104,052       91,419       78,416       78,579       72,962
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
Income before income taxes.....      23,202       25,367       46,516       38,459       36,764       33,758       35,379
Applicable income taxes........       7,313        8,637       15,635       12,467       11,797       10,505       10,698
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net income.....................  $   15,889   $   16,730   $   30,881   $   25,992   $   24,967   $   23,253   $   24,681
                                 ----------   ----------   ----------   ----------   ----------   ----------   ----------
Net income available to common
  shareholders.................  $   15,889   $   16,125   $   30,276   $   23,585   $   22,216   $   20,336   $   21,763
                                 ==========   ==========   ==========   ==========   ==========   ==========   ==========
CONSOLIDATED STATEMENT OF
  CONDITION DATA (PERIOD END)
Total assets...................  $2,281,982   $2,192,441   $2,191,875   $2,180,974   $2,204,751   $2,078,789   $2,067,371
Securities available for
  sale.........................     421,020      389,239      385,961      432,791      461,997      212,437      238,125
Investment and mortgage-backed
  securities held to
  maturity.....................           0            0            0            0            0      252,009      270,623
Loans held for sale............       4,046        6,590       11,376        7,927       12,642       12,963       88,131
Loans, net of unearned
  income.......................   1,649,323    1,615,579    1,619,895    1,574,880    1,475,651    1,433,289    1,265,945
Allowance for credit losses....      18,824       16,754       17,625       15,672       14,859       14,722       15,157
Total deposits.................   1,811,696    1,767,936    1,760,312    1,832,909    1,860,142    1,736,492    1,769,083
Debt and FHLB Advances.........     179,463       84,597      122,604       42,247       48,405       65,434       28,070
Shareholders' equity...........     163,205      174,527      180,760      193,204      194,838      185,252      183,425
Weighted average common shares
  outstanding - basic..........      23,567       23,309       23,836       22,734       23,070       23,009       22,610
Weighted average common shares
  outstanding -diluted.........      24,128       25,728       25,227       26,554       27,241       27,356       26,965
PER COMMON SHARE DATA
Cash dividends declared........  $     0.32   $     0.29   $     0.60   $     0.55   $     0.52   $     0.49   $     0.45
Shareholders' equity...........        6.99         7.15         7.45         7.12         6.95         6.29         6.41
Basic net income...............        0.67         0.69   $     1.27   $     1.04   $     0.96   $     0.88   $     0.96
Diluted net income.............        0.66         0.65         1.22         0.98         0.92         0.85         0.92
SELECTED FINANCIAL RATIOS
Return on average total
  assets.......................        1.43%        1.56%        1.42%        1.20%        1.17%        1.14%        1.23%
Return on average common
  shareholders' equity.........       19.37        19.51        17.58        15.01        14.51        13.88        16.39
Net interest margin............        4.44         4.52         4.50         4.32         4.23         4.38         4.30
Average loans to average
  deposits.....................       91.56        90.84        91.99        82.75        81.11        76.94        71.54
Leverage ratio.................        7.96         9.00         9.06         8.44         8.37         8.66         8.19
Average total shareholders'
  equity to average total
  assets.......................        7.39         8.66         8.38         8.82         8.93         9.16         8.65
Allowance for credit losses to
  period end loans.............        1.14         1.04         1.09         1.00         1.01         1.03         1.20
Allowance for credit losses to
  total non-performing loans...      291.84       249.54       387.70       236.63       173.22       231.99       170.67
Non-performing loans to period
  end loans....................        0.39         0.42         0.28         0.42         0.58         0.44         0.70
Net charge-offs to average
  loans........................        0.15         0.21         0.22         0.25         0.20         0.12         0.41
</TABLE>
 
                                       11
<PAGE>   21
 
                  SELECTED FINANCIAL DATA OF BANK (HISTORICAL)
 
     The following table sets forth selected historical financial data of Bank
and has been derived from its financial statements. Such selected historical
financial data should be read in conjunction with Bank's audited consolidated
financial statements, including the respective notes thereto, and unaudited
interim financial information. The interim financial information has been
derived from unaudited financial statements of Bank, which, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for fair statement of the results for the unaudited
interim periods. Results for the interim periods are not necessarily indicative
of results which may be expected for any other interim or annual period.
 
<TABLE>
<CAPTION>
                                FOR THE SIX MONTHS
                                  ENDED JUNE 30,                FOR THE YEAR ENDED DECEMBER 31,
                                -------------------   ----------------------------------------------------
                                  1998       1997       1997       1996       1995       1994       1993
                                --------   --------   --------   --------   --------   --------   --------
                                             (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                             <C>        <C>        <C>        <C>        <C>        <C>        <C>
SELECTED FINANCIAL CONDITION
  AND OTHER DATA:
Total amount of:
  Assets......................  $599,548   $569,964   $579,405   $539,031   $442,347   $410,580   $363,287
  Cash and cash equivalents...    15,312     18,049     15,893     20,569     16,155     16,495     10,894
  Securities available for
    sale......................   143,369    130,340    142,932    134,825    112,529     29,691         --
  Securities held to
    maturity..................        --         --         --         --         --     52,408     88,436
  Loans -- net................   420,155    400,552    400,161    367,030    296,300    290,682    252,491
  Deposits....................   530,975    506,019    522,316    486,473    397,449    347,774    328,994
  Other borrowings............    11,317     12,338      2,326      3,927        755     17,385      2,000
  Shareholders' equity........    52,551     46,621     49,851     44,530     40,690     34,496     29,695
</TABLE>
 
<TABLE>
<CAPTION>
                                 SIX MONTHS ENDED
                                     JUNE 30,                       YEAR ENDED DECEMBER 31,
                                -------------------   ----------------------------------------------------
                                  1998       1997       1997       1996       1995       1994       1993
                                --------   --------   --------   --------   --------   --------   --------
<S>                             <C>        <C>        <C>        <C>        <C>        <C>        <C>
SUMMARY OF EARNINGS:
Interest and dividend
  income......................  $ 23,375   $ 21,786   $ 44,662   $ 40,085   $ 34,514   $ 28,382   $ 26,473
Interest expense..............    11,425     10,690     22,032     19,450     15,581     11,141     10,811
                                --------   --------   --------   --------   --------   --------   --------
Net interest income...........    11,950     11,096     22,630     20,635     18,933     17,241     15,662
Provision for loan losses.....       528        528      1,066        897        966        869        762
                                --------   --------   --------   --------   --------   --------   --------
Net interest income after
  provision for loan losses...    11,422     10,568     21,564     19,738     17,967     16,372     14,900
Noninterest income............     2,630      2,112      4,607      4,008      3,126      2,997      3,493
Noninterest expense...........     8,874      8,626     17,503     15,975     13,465     12,539     11,767
                                --------   --------   --------   --------   --------   --------   --------
Income before income tax......     5,178      4,054      8,668      7,771      7,628      6,830      6,626
Income tax expense............     1,625      1,242      2,649      2,343      2,322      2,078      2,069
                                --------   --------   --------   --------   --------   --------   --------
Net income....................  $  3,553   $  2,812   $  6,019   $  5,428   $  5,306   $  4,752   $  4,557
                                ========   ========   ========   ========   ========   ========   ========
PER SHARE DATA:
Earnings per share
  Class A Basic...............  $  44.63   $  35.33   $  75.62   $  68.20   $  66.67   $  61.58   $  59.50
  Class B Diluted.............     40.57      32.12      68.74      62.00      60.61      55.98      54.09
Cash dividends declared
  Class A Basic...............     10.34       7.04      15.18      12.98      10.78      10.34       9.90
  Class B Diluted.............      9.40       6.40      13.80      11.80       9.80       9.40       9.00
Book value....................    633.14     561.70     600.61     536.51     490.25     415.61     371.19
</TABLE>
 
                                       12
<PAGE>   22
 
<TABLE>
<CAPTION>
                                 AT OR FOR THE SIX
                                   MONTHS ENDED
                                     JUNE 30,                AT OR FOR THE YEAR ENDED DECEMBER 31,
                                -------------------   ----------------------------------------------------
                                  1998       1997       1997       1996       1995       1994       1993
                                --------   --------   --------   --------   --------   --------   --------
<S>                             <C>        <C>        <C>        <C>        <C>        <C>        <C>
SELECTED FINANCIAL RATIOS:
Return on average assets......     1.21%      1.02%      1.07%      1.07%      1.27%      1.25%      1.27%
Return on average
  shareholders' equity........     13.88      12.44      12.87      13.01      14.30      15.04      16.47
Average shareholders' equity
  to average assets...........      8.68       8.19       8.35       8.25       8.85       8.34       7.83
Average loans as a percent of
  average deposits............     77.96      76.16      78.25      75.34      79.65      84.53      75.76
Shareholders' equity as a
  percent of period-end
  assets......................      8.77       8.18       8.60       8.26       9.20       8.59       8.17
Allowance for loan losses as a
  percent of total loans......      1.15       1.12       1.11       1.10       1.20       1.11       1.20
Net charge-offs as a percent
  of average total loans......      0.24       0.19       0.18       0.12       0.21       0.25       0.23
Dividends declared as a
  percent of net income.......     23.19      19.91      20.07      19.03      16.19      16.67      16.63
Net interest margin...........      4.25       4.25       4.26       4.32       4.76       4.79       4.62
Nonperforming loans to total
  loans.......................      0.49       0.43       0.54       0.37       0.64       0.55       0.51
Nonperforming assets to total
  assets......................      0.41       0.34       0.42       0.31       0.51       0.44       0.36
Allowance for loan losses to
  nonperforming loans.........    234.31     257.99     205.65     299.27     188.98     217.61     232.25
Noninterest expense as a
  percent of average assets...      3.01       3.13       3.12       3.16       3.21       3.31       3.29
Operating efficiency ratio....     60.86      65.31      62.81      63.34      59.62      60.76      60.29
</TABLE>
 
                                       13
<PAGE>   23
 
                          BANK, BANCSHARES AND MID AM
              UNAUDITED PRO FORMA COMBINED SELECTED FINANCIAL DATA
 
     The following table sets forth selected unaudited pro forma condensed
combined financial data of Bancshares, Mid Am and Bank giving effect to the
mergers involving Bancshares, Mid Am and Bank as of the beginning of the
earliest period presented, after giving effect to the pro forma adjustments
described in the Notes to Unaudited Pro Forma Condensed Combined Financial
Statements contained elsewhere in this Proxy Statement/Prospectus. The mergers
involving Bancshares, Mid Am and Bank are expected to be accounted for as
poolings of interests. Such selected unaudited pro forma financial data should
be read in conjunction with Bancshares, Mid Am and Bank Unaudited Pro Forma
Condensed Combined Financial Statements, including the notes thereto. The
Bancshares, Mid Am and Bank Unaudited Pro Forma Condensed Combined Balance Sheet
is not necessarily indicative of the actual financial condition that would have
existed had the mergers involving Bancshares, Mid Am and Bank been consummated
on the date indicated or that may be achieved in the future. The Bancshares, Mid
Am and Bank Unaudited Pro Forma Condensed Combined Income Statements are not
necessarily indicative of the results that would have occurred had the mergers
involving Bancshares, Mid Am and Bank been consummated as of the beginning of
the earliest period presented below, or that may exist in the future. See
"Incorporation of Certain Information by Reference" and "Bancshares, Mid Am and
Bank Unaudited Pro Forma Combined Financial Statements."
 
<TABLE>
<CAPTION>
                                 SIX MONTHS ENDED
                                     JUNE 30,                   YEARS ENDED DECEMBER 31,
                             ------------------------    --------------------------------------
                                1998          1997          1997          1996          1995
                             ----------    ----------    ----------    ----------    ----------
                                      (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                          <C>           <C>           <C>           <C>           <C>
INCOME STATEMENT DATA:
Net interest income........  $   92,938    $   89,074    $  180,614    $  172,114    $  163,328
Provision for loan
  losses...................       6,387         4,502        10,928         7,713         6,472
Net income.................      28,621        31,674        59,320        53,150        49,067
Net income available to
  common shareholders......      28,621        31,069        58,715        50,743        46,316
PER COMMON SHARE DATA:
Net income - basic.........  $     0.70    $     0.76    $     1.42    $     1.25    $     1.14
Net income - diluted.......        0.69          0.74          1.40          1.22          1.11
Book value at period end...        8.71          8.82          9.30          8.55          8.04
Weighted average shares
  outstanding - basic......      41,098        40,852        41,275        40,463        40,797
Weighted average shared
  outstanding - diluted....      41,641        42,808        42,453        43,465        44,032
BALANCE SHEET DATA (AT
  PERIOD-END):
Total assets...............  $4,694,408    $4,463,516    $4,562,303    $4,263,034    $4,088,793
Net loans..................   3,176,676     3,047,806     3,123,377     2,920,990     2,681,892
Total deposits.............   3,742,896     3,568,306     3,662,941     3,551,726     3,436,990
Total shareholders'
  equity...................     353,172       367,994       387,278       377,195       362,953
RATIOS:
Return on average assets...        1.25%         1.48%         1.34%         1.28%         1.24%
Return on average common
  equity...................       15.44%        17.68%        16.04%        15.33%        15.02%
Average total equity to
  average assets...........        8.08%         8.67%         8.53%         8.81%         8.75%
</TABLE>
 
                                       14
<PAGE>   24
 
                   BANCSHARES AND MID AM UNAUDITED PRO FORMA
                        COMBINED SELECTED FINANCIAL DATA
 
     The following table sets forth selected unaudited pro forma condensed
combined financial data of Bancshares and Mid Am giving effect to the merger of
Bancshares and Mid Am as of the beginning of the earliest period presented,
after giving effect to the pro forma adjustments described in the Notes to
Unaudited Pro Forma Condensed Combined Financial Statements contained elsewhere
in this Proxy Statement/Prospectus. The merger of Bancshares and Mid Am is
expected to be accounted for as a pooling of interests. Such selected unaudited
pro forma financial data should be read in conjunction with the Bancshares and
Mid Am Unaudited Pro Forma Condensed Combined Financial Statements, including
the notes thereto. The Bancshares and Mid Am Unaudited Pro Forma Condensed
Combined Balance Sheet is not necessarily indicative of the actual financial
condition that would have existed had the merger of Bancshares and Mid Am been
consummated on the date indicated or that may be achieved in the future. The
Bancshares and Mid Am Unaudited Pro Forma Condensed Combined Income Statements
are not necessarily indicative of the results that would have occurred had the
merger of Bancshares and Mid Am been consummated as of the beginning of the
earliest period presented below, or that may exist in the future. See
"Incorporation of Certain Information by Reference" and "Bancshares and Mid Am
Unaudited Pro Forma Combined Financial Statements."
 
<TABLE>
<CAPTION>
                                 SIX MONTHS ENDED
                                     JUNE 30,                   YEAR ENDED DECEMBER 31,
                             ------------------------    --------------------------------------
                                1998          1997          1997          1996          1995
                             ----------    ----------    ----------    ----------    ----------
                                      (IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S>                          <C>           <C>           <C>           <C>           <C>
INCOME STATEMENT DATA:
Net interest income........  $   80,988    $   77,978    $  157,984    $  151,479    $  144,395
Provision for loan
  losses...................       5,859         3,974         9,862         6,816         5,506
Net income.................      25,068        28,862        53,301        47,722        43,761
Net income available to
  common shareholders......      25,068        28,257        52,696        45,315        41,010
PER COMMON SHARE DATA:
Net income - basic.........  $     0.70    $     0.79    $     1.46    $     1.29    $     1.15
Net income - diluted.......  $     0.69    $     0.77    $     1.43    $     1.25    $     1.13
Book value at period end...  $     8.52    $     8.81    $     9.27    $     8.56    $     8.08
Weighted average shares
  outstanding - basic......      35,848        35,602        36,025        35,213        35,547
Weighted average shared
  outstanding - diluted....      36,391        37,558        37,203        38,215        38,784
BALANCE SHEET DATA (AT
  PERIOD-END):
Total assets...............  $4,093,460    $3,888,671    $3,982,898    $3,724,003    $3,646,446
Net loans..................   2,756,521     2,647,434     2,723,216     2,553,960     2,385,592
Total deposits.............   3,211,921     3,056,363     3,140,625     3,065,253     3,039,541
Total shareholders'
  equity...................     304,221       321,373       337,427       332,665       322,263
RATIOS:
Return on average assets...        1.25%         1.54%         1.38%         1.31%         1.24%
Return on average common
  equity...................       15.67         18.43         16.53         15.67         15.12
Average total equity to
  average assets...........        7.99          8.74          8.54          8.89          8.74
</TABLE>
 
                                       15
<PAGE>   25
 
                                  INTRODUCTION
 
     This Proxy Statement/Prospectus is being furnished to holders of Bank
Common Shares in connection with the solicitation of proxies by the Board of
Directors of Bank for use at the Bank Special Meeting. This Proxy
Statement/Prospectus also serves as a prospectus for Bancshares Common Shares
which will be issued upon the effectiveness of the Merger.
 
     At the Bank Special Meeting, the shareholders of Bank will be asked to
approve and adopt the Merger Proposal.
 
     All information contained in this Proxy Statement/Prospectus relating to
Bancshares has been furnished by Bancshares. All information contained in this
Proxy Statement/Prospectus relating to Bank has been furnished by Bank.
 
                     INFORMATION WITH RESPECT TO BANCSHARES
 
     Bancshares is a bank holding company organized in 1982 under the laws of
the State of Ohio and is registered with the Federal Reserve Board pursuant to
the BHC Act and engaged in the business of commercial and retail banking. These
activities account for substantially all of Bancshares' revenue, operating
income and assets. Bancshares is a holding company for two wholly owned
subsidiary banks, a wholly owned reinsurance company and a wholly owned courier
company. Citizens, owned by Bancshares since its formation in 1982, was
organized and chartered under the banking laws of the State of Ohio in 1902.
Citizens is an insured bank under the Federal Deposit Insurance Act ("FDIA").
This subsidiary accounts for approximately 72% of Bancshares' consolidated
assets. The primary market area for Citizens is eastern Ohio and consists of all
of Columbiana County, all of Carroll County, portions of Stark and Mahoning
Counties and the northern 75% of Jefferson County. A secondary market is the
southern portion of Jefferson County, the panhandle of West Virginia north of
Follansbee, and a smaller portion of Pennsylvania south of Beaver and west of
Darlington to the Ohio border. Citizens competes not only with locally-owned
commercial banks and savings and loans, but also with larger regional financial
institutions in offering consumer and commercial financial service products. On
May 12, 1998, Bancshares acquired Century, and CNB became a wholly owned
commercial bank subsidiary of Bancshares organized under the laws of the United
States. CNB engages in full service commercial and consumer banking and trust
services through thirteen branch offices in southwestern Pennsylvania. CNB
accounts for approximately 25% of Bancshares' consolidated assets. Freedom
Financial Life Insurance Company ("Freedom Financial"), owned by Bancshares
since August 1985, was organized and chartered under the laws of the State of
Arizona in that same year. Freedom Financial provides credit life and accident
and health insurance coverage to Citizens' loan customers. Freedom Financial
accounts for less than one percent of Bancshares' consolidated assets. Freedom
Express, Inc. ("Freedom Express"), owned by Bancshares since August 5, 1994, was
organized and chartered under the laws of the State of Ohio in 1984. Freedom
Express transports papers and documents in Ohio, Pennsylvania and West Virginia.
Freedom Express accounts for less than one percent of Bancshares' consolidated
assets. On August 1, 1997, Citizens acquired ValueNet, Inc., an Internet access
company. This is the first step in a plan to begin offering Internet banking to
all of Bancshares' customers in 1998. A part of Bancshares' long term strategy
is to be an active acquiror of financial institutions so as to leverage its
operations and position itself to enhance shareholder value. Since 1984,
Bancshares has made 15 acquisitions totaling approximately $1.3 billion in
assets. At June 30, 1998, Bancshares had total consolidated assets of
approximately $1.8 billion and total shareholders' equity of approximately $159
million. As of December 31, 1997 and December 31, 1996, Bancshares had total
consolidated assets of approximately $1.79 billion and $1.54 million and total
shareholders' equity of $156.7 million and $139.5 million, respectively.
 
     Bancshares is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases,
negotiations frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values and, therefore, some dilution of
Bancshares' book value and net income per common share may occur in connection
with any future transactions.
 
                                       16
<PAGE>   26
 
     Bancshares' principal executive offices are located at 10 East Main Street,
Salineville, Ohio 43945. The telephone number of Bancshares' executive offices
is (330) 679-2328. Upon consummation of the Mid Am Merger, Bancshares executive
offices will be located at 221 South Church Street, Bowling Green, Ohio 43402
and the telephone number will be (419) 327-6300.
 
     Year 2000. The Year 2000 issue deals with the fact that many computer
applications, if not corrected, could fail or create erroneous results by or at
the year 2000 because many existing computer programs use only two digits to
identify a year in the date field and those programs were not designed or
developed while considering the impact of the upcoming change in the century for
Bancshares and its subsidiaries. In order to assess the Year 2000 issue,
Bancshares has established a project group that represents functional areas to
be affected by Year 2000 changes. The Year 2000 project group meets regularly to
review Bancshares' progress. All data processing systems have been identified
and all major systems and most lesser systems have been assessed for Year 2000
compliance. This assessment indicates that there will be no material impact of
Bancshares' operations or budgets to bring systems into compliance by year end
1998. Most security and environmental systems have also been assessed with no
material impact indicated. Regardless of the Year 2000 compliance of the
corporation's systems, there is not complete assurance that Bancshares will not
be adversely affected to the extent other entities not affiliated with
Bancshares, such as vendors, service suppliers and loan and other counterparties
are unsuccessful in properly addressing this issue.
 
     For additional information regarding Bancshares and its business reference
is made to the 1997 Bancshares 10-K, the Form 10-Q, for the quarter ended June
30, 1998 and the Form 8-K, dated June 25, 1998, which are incorporated by
reference to this Proxy Statement/Prospectus. For information regarding the
voting securities and principal holders thereof of Bancshares, please see the
portions of the 1998 Proxy Statement of Bancshares incorporated by reference to
the 1997 Bancshares 10-K.
 
     Recent Developments. On May 20, 1998, Bancshares and Mid Am, Inc. ("Mid
Am"), a bank holding company organized and existing under the laws of the State
of Ohio and headquartered in Bowling Green, Ohio, entered into a definitive
Agreement and Plan of Merger as amended and restated as of August 5, 1998 (the
"Mid Am Agreement"), which provides for the affiliation of Mid Am with
Bancshares in a transaction expected to be accounted for as a pooling of
interests. As of June 30, 1998, Mid Am had total consolidated assets of $2.3
billion and shareholders' equity of $163 million. Mid Am had net income of $15.9
million for the six months ended June 30, 1998 and net income of $30.8 million
for the year ended December 31, 1997. Mid Am is a holding company for five bank
subsidiaries with a total of 83 banking offices located in western Ohio along
the Interstate 75 corridor and in southern Michigan. Mid Am also owns seven
financial services subsidiaries which engage in lines of business which are
closely related to banking. Through its bank subsidiaries, Mid Am offers a wide
range of lending, depository, trust, and related financial services to
individual and business customers. Through its financial services subsidiaries,
Mid Am offers specialty lending, investment, trust, collection and related
financial services to individual and business customers. Mid Am's market area is
economically diverse, with a base of manufacturing, service industries,
transportation and agriculture, and is not dependent upon any single industry or
employer.
 
     The Mid Am Agreement provides that the affiliation will be effected by
means of a merger (the "Mid Am Merger") of Mid Am with and into Bancshares. In
the Mid Am Merger, each outstanding share of Mid Am common stock, no par value
(other than those common shares, if any, with respect to which dissenter's
rights are exercised), will be converted into 0.77 shares of Bancshares Common
Shares in a tax-free exchange. Bancshares expects to issue 19,170,700 shares in
the Mid Am Merger. In connection with the transactions contemplated by the Mid
Am Agreement, Bancshares and Mid Am entered into Stock Option Agreements whereby
Bancshares may purchase up to 19.9% of Mid Am common shares under certain
circumstances.
 
     The merger of Mid Am with and into Bancshares has been structured as a
merger-of-equals transaction with Mid Am shareholders and Bancshares
shareholders owning 50.9% and 49.1%, respectively, of the combined company
immediately after the effective time of the merger. The combined company will
have over $4 billion in assets, 145 branches and over 2,300 employees. Assuming
the receipt of the requisite approval by the Bancshares and Mid Am shareholders,
the Mid Am Merger is expected to be consummated on October 2, 1998. Upon
consummation of the Mid Am Merger, Bancshares' name will be changed to Sky
Financial Group, Inc. Following
 
                                       17
<PAGE>   27
 
the Mid Am Merger and the subsequent merger of Bank and Bancshares, the combined
organization of which Bank will be an integral part will have over $4.7 billion
in assets, 163 branches and over 2,550 employees.
 
     Pursuant to the terms of the Mid Am Agreement, the Board of Directors of
the combined entity will initially consist of twenty-two (22) members. Eleven
(11) directors will be nominated by Bancshares, and eleven (11) directors will
be nominated by Mid Am. Mr. Edward J. Reiter, Chairman of the Board and Chief
Executive Officer of Mid Am, will become the Senior Chairman of the Board of
Directors of the combined entity. Mr. David R. Francisco, President and Chief
Operating Officer of Mid Am, will become Chairman of the Board of Directors and
Chief Executive Officer of the combined entity, and Mr. Marty E. Adams,
President and Chief Executive Officer of Bancshares, will become the President
and Chief Operating Officer of the combined entity. In addition, certain
officers of the combined entity will sit on a management executive committee
consisting of at least eight (8) persons, one-half of whom will be selected by
the Chairman of the Board and Chief Executive Officer of Mid Am and one-half of
whom will be selected by the President and Chief Executive Officer of
Bancshares. Mr. Reiter will serve as a chairman of the management executive
committee. If an Executive Committee of the Board of Directors of the combined
entity is formed within three years after the Effective Time it will contain
equal numbers of members selected by directors of Bancshares, and selected by
directors of Mid Am. For a description of the make-up of the Board of Directors
after completion of the Merger, see "Interest of Bank Management in the Merger."
 
     The Mid Am Agreement may be terminated, and the Mid Am Merger abandoned, at
any time prior to the effective time of the Merger by mutual consent of Mid Am
and Bancshares. In addition, the Mid Am Agreement may be terminated, and the Mid
Am Merger abandoned, prior to the effective time by either Mid Am or Bancshares
if: (i) the other party breaches, and does not timely cure any breach of, a
representation, warranty, covenant or other agreement contained in the Mid Am
Agreement; (ii) any consent or approval of certain regulatory authorities is
denied or the permanent withdrawal of the application has been requested; (iii)
the Bancshares shareholders or the Mid Am shareholders fail to approve the Mid
Am Agreement, or the Bancshares shareholders fail to approve the Bancshares
Articles Amendment or the Bancshares Code of Regulations Amendment; (iv) the Mid
Am Merger has not been consummated by March 31, 1999; or (v) the other party's
board of directors has failed to recommend approval of the Mid Am Merger,
withdrawn such recommendation or materially modified or changed such
recommendation.
 
                        INFORMATION WITH RESPECT TO BANK
 
     The Ohio Bank is a state-chartered bank based in Findlay, Ohio. Bank
commenced operations in 1887, serving only Hancock County, Ohio until 1985.
Beginning in 1985, Bank expanded its territory through a series of acquisitions
and branch openings. Today Bank operates in five regions -- Hancock County,
Seneca County, Putnam County, Franklin County and Chagrin Falls -- with a total
of 18 banking offices. Bank's newest branch is located in Franklin County, which
includes Columbus, Ohio and its suburbs. Bank's principal executive offices are
located at 236 South Main Street, Findlay, Ohio 45840. The telephone number of
Bank's executive offices is (419) 424-4000.
 
     Bank engages in full service commercial and consumer banking and trust
services through its branch offices. During the five-year period beginning in
1993 and ending in 1997, Bank's combined total assets have grown from
approximately $363.2 million in 1993 to approximately $579.4 million in 1997. As
of December 31, 1997, Bank had total deposits of $522.3 million, consolidated
total assets of approximately $579.4 million and total shareholders' equity of
approximately $49.9 million, and had a total of 268 full-time and 189 part-time
employees.
 
     Bank offers a broad range of traditional retail, deposit and loan services
through its regional locations, including checking and savings accounts, time
deposits, IRAs, ATMs, safe deposit facilities, personal loans, commercial loans,
real estate mortgage loans, installment loans and night depository facilities.
In addition, Bank provides third-party administrator and trust and investment
services for employee benefit and profit-sharing programs, as well as general
trust and investment services.
 
                                       18
<PAGE>   28
 
     Loans. Bank grants residential real estate, commercial real estate,
consumer and commercial loans to customers located primarily in its regional
areas. No material industry or group concentrations exist in Bank's loan
portfolio.
 
     Commercial, industrial and agricultural loans are generally offered at
variable rates and include operating lines of credit and term loans made to
small businesses primarily on the basis of their ability to repay the loan from
cash flow from operations. Such loans are typically secured by business assets
such as equipment and inventory.
 
     Residential real estate loans and home equity lines of credit, which are
secured by the borrower's residence, carry primarily adjustable rates, although
fixed-rate loans are also originated. Such loans are made on the basis of the
borrower's ability to make repayment from employment and other income. Bank
generally makes these loans in amounts of 80% or less of the value of the
collateral. An appraisal is obtained from a qualified real estate appraiser for
substantially all loans secured by real estate.
 
     Construction loans are secured by residential and business real estate,
generally occupied by the borrower on completion. While not contractually
required to do so, Bank usually makes the permanent loan at the end of the
construction phase. Construction loans are generally made in amounts of 80% or
less of the value of the collateral.
 
     Consumer installment loans to individuals include loans secured by
automobiles and other consumer assets, including second mortgages on personal
residences. Credit card and overdraft protection loans are unsecured personal
lines of credit to individuals with reasonably assured sources of income and
satisfactory credit histories.
 
     Loan Portfolio. The following table sets forth the classification of loans
of Bank by major categories as of December 31 of the following years:
 
<TABLE>
<CAPTION>
                                        1997        1996        1995        1994        1993
                                      --------    --------    --------    --------    --------
                                                     (IN THOUSANDS OF DOLLARS)
<S>                                   <C>         <C>         <C>         <C>         <C>
Commercial, financial and
  agricultural......................  $220,010    $196,764    $159,836    $158,035    $144,449
Real estate construction............    46,327      35,472      26,430      18,345      12,389
Residential real estate mortgage and
  home equity.......................   104,109      95,040      76,286      77,019      52,971
Consumer............................    32,587      34,977      33,580      39,892      40,888
Real estate mortgage loans held for
  sale..............................     1,603       8,877       3,768         666       4,869
                                      --------    --------    --------    --------    --------
          Total loans...............  $404,636    $371,130    $299,900    $293,957    $255,566
                                      ========    ========    ========    ========    ========
</TABLE>
 
     There were no foreign loans outstanding during any period presented. At
December 31, 1997, there were no concentrations of loans greater than 10% of
total loans which are not otherwise disclosed as a category of loans in the
table above.
 
                                       19
<PAGE>   29
 
     The following table sets forth the maturities of loans based on contractual
terms and assuming no amortization or prepayments, excluding residential real
estate mortgage loans, consumer loans and loans held for sale, as of December
31, 1997:
 
<TABLE>
<CAPTION>
                                                                     MATURING
                                                 -------------------------------------------------
                                                 ONE YEAR    ONE THROUGH    AFTER FIVE
                                                 OR LESS     FIVE YEARS       YEARS        TOTAL
                                                 --------    -----------    ----------    --------
                                                             (IN THOUSANDS OF DOLLARS)
<S>                                              <C>         <C>            <C>           <C>
FIXED RATE
Commercial, financial and agricultural.........  $ 6,233       $22,117       $ 16,271     $ 44,621
Real estate construction.......................    3,576           235          5,359        9,170
                                                 -------       -------       --------     --------
          Total................................  $ 9,809       $22,352       $ 21,630     $ 53,791
                                                 =======       =======       ========     ========
VARIABLE RATE
Commercial, financial and agricultural.........  $25,635       $45,962       $103,792     $175,389
Real estate construction.......................   12,534        10,298         14,325       37,157
                                                 -------       -------       --------     --------
          Total................................  $38,169       $56,260       $118,117     $212,546
                                                 =======       =======       ========     ========
</TABLE>
 
     Non-performing loans. The following table sets forth nonaccrual, past due
and restructured loans.
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                ----------------------------------------------
                                                 1997      1996      1995      1994      1993
                                                ------    ------    ------    ------    ------
                                                          (IN THOUSANDS OF DOLLARS)
<S>                                             <C>       <C>       <C>       <C>       <C>
Loans accounted for on a nonaccrual basis.....  $1,634    $1,002    $1,657    $  770    $  591
Accruing loans which are contractually past
  due 90 days or more as to interest or
  principal payments..........................     542       368       248       735       733
Loans which are "troubled debt restructurings"
  as defined in Statement of Financial
  Accounting standards No. 15 (excluding loans
  included in the items above):...............  $   --    $   --    $   --    $   --    $   --
                                                ------    ------    ------    ------    ------
          Totals                                $2,176    $1,370    $1,905    $1,505    $1,324
                                                ======    ======    ======    ======    ======
</TABLE>
 
     Bank ceases to accrue interest on loans when management believes that
collection of interest is doubtful and loans are past due as to principal and
interest 90 days or more. In certain circumstances interest accruals are
continued on past due loans deemed by management to be fully collectible. When
loans are placed on nonaccrual, any accrued interest is charged against interest
income.
 
     During the year ended December 31, 1997, interest income of $171,000 would
have been recorded on non-accruing loans had such loans been accruing pursuant
to contractual terms. During such period, interest income of $53,000 was
received and recorded on such loans.
 
     Information regarding impaired loans at December 31, 1997, 1996 and 1995 is
set forth in the following table:
 
<TABLE>
<CAPTION>
                                                               1997      1996      1995
                                                              ------    ------    ------
                                                              (IN THOUSANDS OF DOLLARS)
<S>                                                           <C>       <C>       <C>
Year-end impaired loans with no allowance for loan losses
  allocated.................................................  $   --    $   --    $   --
Year-end impaired loans with allowance for loan losses
  allocated.................................................   1,619     1,034     1,582
Amount of the allowance allocated...........................     522       314       473
</TABLE>
 
     Impaired loans are comprised of commercial and commercial real estate
loans, and are carried at present value of expected cash flows, discounted at
the loan's effective interest rate or at fair value of collateral, if the loan
is collateral dependent. A portion of the allowance for loan losses is allocated
to impaired loans.
 
                                       20
<PAGE>   30
 
     Smaller-balance homogeneous loans are evaluated for impairment in total.
Such loans include residential first mortgage and construction loans secured by
one- to four-family residences, consumer, credit card and home equity loans.
Such loans are included in nonaccrual and past due disclosures above, but not in
impaired loan totals. Commercial loans and mortgage loans secured by other
properties are evaluated individually for impairment. In addition, loans held
for sale are excluded from consideration of impairment. When analysis of
borrower operating results and financial condition indicates that borrower's
underlying cash flows are not adequate to meet its debt service requirements,
the loan is evaluated for impairment. Impaired loans, or portions thereof, are
charged off when deemed uncollectible.
 
     At December 31, 1997, there were approximately $1,084,000 of loans
representing the remaining balances of loans classified as substandard for
regulatory purposes excluding those previously disclosed. These loans and their
potential loss exposure have been considered in management's analysis of the
adequacy of the allowance for loan losses. These loans do not represent trends
or uncertainties which management reasonably expects will materially impact
future operating results, liquidity, or capital resources.
 
     Other Real Estate Owned. Other real estate owned ("OREO") includes property
acquired in foreclosure proceedings or under agreements with delinquent
borrowers. There is no material other real estate owned by Bank.
 
     Analysis of Allowance for Loan Losses. The allowance for loan losses
balance and provision charged to expense are determined by management based on
periodic reviews of the loan portfolio, past loan loss experience, economic
conditions and various other circumstances which are subject to change over
time. In making this judgment, management reviews selected large loans as well
as impaired loans, other delinquent, nonaccrual and problem loans and loans to
industries experiencing economic difficulties. The collectibility of these loans
is evaluated after considering current operating results and financial position
of the borrower, estimated market value of collateral, guarantees and Bank's
collateral position versus other creditors. Judgments, which are necessarily
subjective, as to probability of loss and amount of such loss are formed on
these loans, as well as other loans taken together. At June 30, 1998, Bank had
an allowance for loan losses of $4,897,000.
 
     The following table sets forth the historical relationship between Bank's
loan charge offs and recoveries and allowance for loan losses as of December 31
for the years indicated:
 
<TABLE>
<CAPTION>
                                        1997        1996        1995        1994        1993
                                      --------    --------    --------    --------    --------
                                                     (IN THOUSANDS OF DOLLARS)
<S>                                   <C>         <C>         <C>         <C>         <C>
LOANS
  Loans outstanding at end of 
     period (1).....................  $404,636    $371,130    $299,900    $293,957    $255,566
                                      ========    ========    ========    ========    ========
  Average loans outstanding during
     period (1).....................  $394,065    $341,417    $299,829    $272,958    $258,247
                                      ========    ========    ========    ========    ========
</TABLE>
 
- ---------------
(1) Net of deferred loan fees, loan discounts and loans in process.
 
                                       21
<PAGE>   31
 
<TABLE>
<CAPTION>
                                                 1997      1996      1995      1994      1993
                                                ------    ------    ------    ------    ------
                                                          (IN THOUSANDS OF DOLLARS)
<S>                                             <C>       <C>       <C>       <C>       <C>
ALLOWANCE FOR LOAN LOSSES
  Balance at beginning of period..............  $4,100    $3,600    $3,275    $3,075    $2,900
  Loans charged off:
     Commercial, financial and agricultural...    (558)     (239)     (288)     (205)     (218)
     Real estate construction.................      --        --        --        --        --
     Residential real estate mortgage and home
       equity.................................      --        --        --        (8)       (2)
     Consumer.................................    (275)     (313)     (580)     (621)     (805)
                                                ------    ------    ------    ------    ------
          Total loans charged off.............    (833)     (552)     (868)     (834)   (1,025)
                                                ------    ------    ------    ------    ------
  Recoveries of loans previously charged off:
     Commercial, financial and agricultural...      38        50        56        21        18
     Real estate construction.................      --        --        --        --        --
     Residential real estate mortgage and home
       equity.................................      --        --        --         1        --
     Consumer.................................     104       105       171       143       420
                                                ------    ------    ------    ------    ------
          Total loan recoveries...............     142       155       227       165       438
                                                ------    ------    ------    ------    ------
  Net loans charged off.......................    (691)     (397)     (641)     (669)     (587)
  Provision charged to operating expense......   1,066       897       966       869       762
                                                ------    ------    ------    ------    ------
  Balance at end of period....................  $4,475    $4,100    $3,600    $3,275    $3,075
                                                ======    ======    ======    ======    ======
Ratio of net charge-offs to average loans
  outstanding for period......................     .18%      .12%      .21%      .25%      .23%
</TABLE>
 
     While management's periodic analysis of the adequacy of allowance for loan
losses may allocate portions of the allowance for specific problem-loan
situations, the entire allowance is available for any loan charge-offs that
occur.
 
     The following table sets forth the allowance for loan losses allocated by
type of loan and related ratios for the periods indicated:
 
<TABLE>
<CAPTION>
                                              ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
                         --------------------------------------------------------------------------------------
                                      PERCENTAGE OF                 PERCENTAGE OF                 PERCENTAGE OF
                                      LOANS IN EACH                 LOANS IN EACH                 LOANS IN EACH
                         ALLOWANCE     CATEGORY TO     ALLOWANCE     CATEGORY TO     ALLOWANCE     CATEGORY TO
                          AMOUNT       TOTAL LOANS      AMOUNT       TOTAL LOANS      AMOUNT       TOTAL LOANS
                         ---------    -------------    ---------    -------------    ---------    -------------
                             DECEMBER 31, 1997             DECEMBER 31, 1996             DECEMBER 31, 1995
                         --------------------------    --------------------------    --------------------------
                                                       (IN THOUSANDS OF DOLLARS)
<S>                      <C>          <C>              <C>          <C>              <C>          <C>
Commercial, financial
  and agricultural.....   $1,870          54.37%        $1,476          53.02%        $1,199          53.30%
Real estate
  construction.........       93          11.45             77           9.56             53           8.80
Real estate mortgage
  and home equity......      260          25.73            231          25.61            191          25.44
Consumer...............      488           8.05            525           9.42            537          11.20
Real estate mortgage
  loans held for
  sale.................       --            .40             --           2.39             --           1.26
Unallocated............    1,764             --          1,791             --          1,620             --
                          ------         ------         ------         ------         ------         ------
         Total.........   $4,475         100.00%        $4,100         100.00%        $3,600         100.00%
                          ======         ======         ======         ======         ======         ======
</TABLE>
 
                                       22
<PAGE>   32
 
<TABLE>
<CAPTION>
                                                   ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
                                             --------------------------------------------------------
                                                          PERCENTAGE OF                 PERCENTAGE OF
                                                          LOANS IN EACH                 LOANS IN EACH
                                             ALLOWANCE     CATEGORY TO     ALLOWANCE     CATEGORY TO
                                              AMOUNT       TOTAL LOANS      AMOUNT       TOTAL LOANS
                                             ---------    -------------    ---------    -------------
                                                 DECEMBER 31, 1994             DECEMBER 31, 1993
                                             --------------------------    --------------------------
<S>                                          <C>          <C>              <C>          <C>
Commercial, financial and agricultural.....   $1,106          53.76%        $1,011          56.51%
Real estate construction...................       37           6.24             25           4.85
Real estate mortgage and home equity.......      193          26.20            132          20.73
Consumer...................................      638          13.57            654          16.00
Real estate mortgage loans held for sale...       --            .23             --           1.91
Unallocated................................    1,301             --          1,253             --
                                              ------         ------         ------         ------
          Total............................   $3,275         100.00%        $3,075         100.00%
                                              ======         ======         ======         ======
</TABLE>
 
     Investment Securities. Bank maintains a portfolio of investment securities
to provide additional diversification and earnings on funds not being utilized
for loan activity or other purposes. Under its investment policy, Bank may
invest in direct obligations of the U.S. Treasury; securities backed by Federal
agencies; state, county and municipal securities that represent general
obligations of the issuer; revenue bonds rated Baa or higher by Moody's or
Standard & Poor's; money market instruments of federally insured institutions;
and corporate securities rated Baa or higher.
 
     The following table sets forth the carrying value of securities at December
31 for the years indicated:
 
<TABLE>
<CAPTION>
                                                               1997        1996        1995
                                                             --------    --------    --------
                                                                (IN THOUSANDS OF DOLLARS)
<S>                                                          <C>         <C>         <C>
Securities available for sale (at fair value)
  U.S. Treasury securities and obligations of U.S.
     Government agencies and corporations..................  $ 80,604    $ 77,080    $ 67,807
  Obligations of states and political subdivisions.........    24,088      22,233      20,008
  Mortgage-backed securities...............................    35,083      32,545      22,606
                                                             --------    --------    --------
          Total debt securities............................   139,775     131,858     110,421
  Other securities.........................................     3,157       2,967       2,108
                                                             --------    --------    --------
          Total securities available for sale..............  $142,932    $134,825    $112,529
                                                             ========    ========    ========
</TABLE>
 
     The following table sets forth the maturities for each category of debt
securities and the related weighted-average yield of such securities as of
December 31, 1997:
 
<TABLE>
<CAPTION>
                                                           MATURING
                             ---------------------------------------------------------------------
                                                  AFTER ONE        AFTER FIVE
                                ONE YEAR        YEAR THROUGH      YEARS THROUGH         AFTER
                                 OR LESS         FIVE YEARS         TEN YEARS         TEN YEARS
                             ---------------   ---------------   ---------------   ---------------
                             AMOUNT    YIELD   AMOUNT    YIELD   AMOUNT    YIELD   AMOUNT    YIELD
                             -------   -----   -------   -----   -------   -----   -------   -----
                                                   (IN THOUSANDS OF DOLLARS)
<S>                          <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>
Available for sale
  U.S. Treasury securities
     and obligations of
     U.S. Government
     agencies and
     corporations..........  $26,951   5.50%   $47,275   6.00%   $ 6,378   10.84%  $    --     --%
  Obligations of states and
     political
     subdivisions..........      483   7.47%     4,507   8.59%    12,991    8.42%    6,107   8.13%
Mortgage-backed
  securities...............      118   7.56%       117   9.29%     5,562    6.66%   29,286   6.60%
                             -------   ----    -------   ----    -------   -----   -------   ----
          Total............  $27,552   5.54%     1,899   6.23%   $24,931    8.65%  $35,393   6.86%
                             =======   ====    =======   ====    =======   =====   =======   ====
</TABLE>
 
                                       23
<PAGE>   33
 
     The weighted-average yields are calculated using amortized cost of
securities and are based on coupon rates for securities purchased at par value
and on effective interest rates considering amortization or accretion if the
securities were purchased at a premium or discount. The weighted-average yield
on tax-exempt obligations is presented on a taxable equivalent basis based on
Bank's marginal federal income tax rate of 34%. Other securities consist of
Federal Home Loan Bank stock and Federal Reserve Board stock. These securities
bear no stated maturity or yield and are not included in this analysis.
 
     Excluding holdings of U.S. Treasury securities and other agencies and
corporations of the U.S. Government, there were no investments in securities of
any one issuer exceeding 10% of Bank's shareholders' equity at December 31,
1997.
 
     Deposits. A large part of Bank's business is acceptance of commercial and
retail deposits. At December 31, 1997, deposits of public funds (i.e., funds of
governmental agencies and municipalities) were 7.5% of total deposits. This
amount can fluctuate, but generally not by a material amount.
 
     The following table presents the average balances of Bank for each major
category of deposits and the weighted average interest rate paid for
interest-bearing deposits as of December 31 for the years indicated:
 
<TABLE>
<CAPTION>
                                                 AVERAGE                         AVERAGE
                                           AMOUNTS OUTSTANDING                  RATE PAID
                                          YEAR ENDED DECEMBER 31         YEAR ENDED DECEMBER 31
                                     --------------------------------    -----------------------
                                       1997        1996        1995      1997     1996     1995
                                     --------    --------    --------    -----    -----    -----
                                                      (IN THOUSANDS OF DOLLARS)
<S>                                  <C>         <C>         <C>         <C>      <C>      <C>
Noninterest-bearing demand.........  $ 50,905    $ 42,613    $ 36,217     N/A      N/A      N/A
Interest-bearing demand deposits...   105,540      78,187      64,129    3.40%    2.79%    2.61%
Savings deposits...................    65,262      78,404      65,926    3.36     3.16     3.02
Time deposits......................   281,840     253,957     210,150    5.63     5.65     5.59
                                     --------    --------    --------    ----     ----     ----
          Total deposits...........  $503,547    $453,161    $376,422    4.78%    4.63%    4.53%
                                     ========    ========    ========    ====     ====     ====
</TABLE>
 
     The following table sets forth the amount and maturity of certificates of
deposit with balances of more than $100,000 as of December 31, 1997:
 
<TABLE>
<CAPTION>
                                                          (IN THOUSANDS OF DOLLARS)
<S>                                                       <C>
Three months or less....................................           $42,362
Over three through six months...........................            12,679
Over six through twelve months..........................             8,649
Over twelve months......................................            11,439
                                                                   -------
          Total.........................................           $75,129
                                                                   =======
</TABLE>
 
     Competition. Bank operates in a highly-competitive industry due to
statewide and interstate branching by banks, savings and loan associations and
credit unions. In its primary market area of Hancock and surrounding counties,
Bank competes for new deposit dollars and loans with other commercial banks,
large regional banks, community banks, savings and loan associations, credit
unions, finance companies, insurance companies, brokerage firms and investment
companies. The primary factors affecting competition for deposits are interest
rates, cost of services, the quality and range of financial products offered and
the convenience of locations and office hours. The primary factors in competing
for loans are interest rates, loan origination fees and the quality and range of
lending products offered. Other factors which affect competition include the
general availability and reliability of lendable funds/credit, general and local
economic conditions and the quality of service and loan approval turn-around
provided to customers.
 
     Some of Bank's competitors are larger and have more assets than Bank.
Furthermore, because larger financial institutions frequently benefit from
economies of scale, many of Bank's competitors are able to offer more attractive
interest rates, lower cost services and a wider range of services and products.
Bank believes
 
                                       24
<PAGE>   34
 
that it has been successful in the past in competing due to its focus on
building and maintaining comprehensive banking relationships in the community.
 
     Employees. At December 31, 1997, Bank employed 268 employees, 189 of which
were full-time. No employee is represented by a union or collective bargaining
group. Management of Bank believes that their relationships with their employees
are satisfactory.
 
     Regulatory Matters. Bank is subject to supervision, regulation and periodic
examination by the State of Ohio Superintendent of Financial Institutions (the
"State Superintendent"), the Federal Deposit Insurance Corporation (the "FDIC"),
which insures its deposits up to applicable limits, and the Federal Reserve
Board. Bank is also a member of the Federal Reserve System and the Federal Home
Loan Bank (the "FHLB") of Cincinnati. Earnings of Bank are affected by state and
federal laws and regulations, and by policies of various regulatory authorities.
These policies include, for example, statutory maximum lending rates,
requirements on maintenance of reserves against deposits, domestic monetary
policies of the Board of Governors of the Federal Reserve System, United States
fiscal policy, international currency regulations and monetary policies,
consumer compliance and community reinvestment policies, certain restrictions on
banks' relationships with many phases of the securities business and capital
adequacy and liquidity restraints.
 
     Asset and Liability Management and Market Risk. Bank's primary market risk
exposure is interest rate risk and, to a lesser extent, liquidity risk. Interest
rate risk is the risk that Bank's financial condition will be adversely affected
due to movements in interest rates. The income of financial institutions is
primarily derived from the excess of interest earned on interest-earning assets
over the interest paid on interest-bearing liabilities. Accordingly, Bank places
great importance on monitoring and controlling interest rate risk.
 
     The principal goal of asset/liability management -- profit
management -- can be accomplished by establishing decision processes and control
procedures for all bank assets and liabilities. Thus, the full scope of
asset/liability management encompasses the entire balance sheet of Bank. The
broader principal components of asset/liability management include, but are not
limited to liquidity planning, capital planning, gap management and spread
management.
 
     By definition, liquidity is measured by Bank's ability to raise cash at a
reasonable cost or with a minimum of loss. Liquidity planning is necessary so
that Bank will be capable of funding all obligations to its customers at all
times, from meeting their immediate cash withdrawal requirements to fulfilling
their short-term credit needs.
 
     Capital planning is an essential portion of asset/liability management, as
capital is a limited bank resource, which, due to minimum capital requirements,
can place possible restraints on bank growth. Capital planning refers to
maintaining capital standards through effective growth management, dividend
policies and asset/liability strategies.
 
     Gap is defined as the dollar difference between rate sensitive liabilities
with respect to a specified time frame. A gap has three components -- the asset
component, the liability component, and the time component. Gap management
involves the management of all three components.
 
     Gap management is defined as those actions taken to measure and match rate
sensitive assets to rate sensitive liabilities. A rate sensitive asset is any
interest-earning asset, which can be repriced to a market rate in a given time
frame. Similarly, a rate sensitive liability is any interest-bearing liability,
which can have its interest rate changed to a market rate during the specified
time period. Caps and collars may prevent the loans from adjusting to the market
rate.
 
     A negative gap is created when rate sensitive liabilities exceed rate
sensitive assets and, conversely, a positive gap occurs when rate sensitive
assets exceed rate sensitive liabilities. A negative gap position will cause
profits to decline in a rising interest rate environment and a positive gap will
cause profits to decline in a falling interest rate environment. Under either
scenario, profits suffer. Bank's goal is to have acceptable profits under any
interest rate environment. To avoid volatile profits as a result of interest
rate fluctuations, Bank must match interest rate fluctuations and interest rate
sensitivities, while pricing both the asset and liability components to yield a
sufficient interest rate spread so that profits will remain relatively
consistent across interest rate cycles.
 
                                       25
<PAGE>   35
 
     Management of the income statement is called spread management and is
defined as managing investments, loans, and liabilities to achieve and
acceptable spread between Bank's return on its earning assets and its cost of
funds. Gap management without consideration of interest spread can cause
unacceptably low profit margins while assuring that the level of profits is
steady. Spread management without consideration of gap positions can cause
acceptable profits in some interest rate environments and unacceptable profits
in others. A sound asset/liability management program combines gap and spread
management into a single cohesive system. Gap and spread management are the
foundations for effective interest rate risk simulation modeling.
 
     Management believes interest rate risk is best measured by simulation
modeling which calculates expected net interest-earning assets and
interest-bearing liabilities. The model projections are based upon historical
trends and management's expectations of balance sheet growth patterns and
spreads to market rates. Bank monitors exposure to rate changes utilizing four
economic forecasts provided by an external source over a twelve month rolling
period and an interest-rate shock of an instantaneous change in rates of 150
basis points over the same period. The policy limit of Bank for the maximum
negative impact on net interest-income from an instantaneous change in interest
rates over a twelve month period is 9.0 percent. As of December 31, 1997, the
model indicated net interest income would decrease 6.8 percent from a 150 basis
point instantaneous increase in rates, while net interest income would increase
4.1 percent from a 150 basis point instantaneous decrease in rates. Actual
results will differ from simulated due to timing, magnitude and frequency of
interest rate changes and changes in market conditions and management
strategies, among other factors.
 
     Net portfolio value ("NPV") represents the market value of portfolio equity
and is equal to the market value of assets minus the market value of
liabilities. Computations of prospective effects of hypothetical interest rate
changes are based on numerous assumptions, including relative levels of market
interest rates, loan prepayments and deposit decay rates, and should not be
relied upon as indicative of actual results. Further, the computations do not
contemplate any actions that may be taken in response to changes in interest
rates. The NPV calculation is a static snapshot at a point in time, and
therefore does not consider such factors as management intervention or
circumstances such as shifts in the yield curve during an interest rate cycle.
Value at risk analysis is most relevant and useful in assessing the exposure of
the FDIC to banks with minimal or negative capital and earnings.
 
     Certain shortcomings are inherent in the method of analysis presented in
the computation of estimated NPV. Certain assets such as adjustable-rate loans
have features that restrict changes in interest rates on a short-term basis and
over the life of the asset. In addition, the proportion of adjustable-rate loans
in the loan portfolio could decrease in future periods if market interest rates
remain at or decrease below current levels due to refinancing activity. Further,
in the event of a change in interest rates, prepayment and early withdrawal
levels would likely deviate from those assumed in the table. Finally, the
ability of many borrowers to repay their adjustable-rate debt may decrease in
the case of an increase in interest rates.
 
     The following table sets forth the amount of and change in the NPV of Bank
as of December 31, 1997.
 
                              NET PORTFOLIO VALUE
 
<TABLE>
<CAPTION>
CHANGE IN RATES   $ AMOUNT   $ CHANGE   % CHANGE
- ---------------   --------   --------   --------
<S>               <C>        <C>        <C>
  +150 bp         $41,292    $(7,621)    (15.6)%
  +100 bp          43,965     (4,948)    (10.1)
  + 50 bp          46,516     (2,397)     (4.9)
   Base            48,913          0         0
  - 50 bp          51,339      2,426       5.0
  -100 bp          53,625      4,712       9.6
  -150 bp          55,873      6,960      14.2
</TABLE>
 
                                       26
<PAGE>   36
 
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                         RESULTS OF OPERATIONS OF BANK
 
INTRODUCTION
 
     The purpose of this discussion is to provide the reader with a more
thorough understanding of the financial statements. This discussion should be
read in conjunction with the financial statements and related footnotes.
Management is not aware of any trend, events or uncertainties that will have or
are reasonably likely to have a material affect on the liquidity, capital
resources or operations except as discussed herein. In addition, management is
not aware of any current recommendations by regulatory authorities that would
have such effect if implemented. Bank cautions that any forward-looking
statements contained in this report, or made by management of Bank involves
risks and uncertainties and are subject to change based on various important
factors. Actual results could differ materially from those expressed or implied.
Additionally, Bank claims no notification responsibilities should their opinions
change from those expressed herein.
 
ANALYSIS OF FINANCIAL CONDITION
 
  JUNE 30, 1998 AND DECEMBER 31, 1997
 
     Bank's assets totaled $599,548 at June 30, 1998 compared to $579,405 at
December 31, 1997, an increase of $20,143, or 3.5%. The growth in assets was the
result of the growth in loans funded by strong deposit growth and increased
borrowings by Bank.
 
     Total securities increased only $437, or 0.3%, from $142,932 at December
31, 1997 to $143,369 at June 30, 1998. Balances remained stable as a result of
the reinvestment of proceeds from maturities, calls and principal repayments.
Bank invests primarily in U.S. Treasury notes, securities issued by U.S.
government agencies, municipal bonds, and mortgage-backed securities.
Mortgage-backed securities include Federal Home Loan Mortgage Corporation
("FHLMC"), Government National Mortgage Association ("GNMA") and Federal
National Mortgage Association ("FNMA") participation certificates. The entire
securities portfolio was classified as available for sale at June 30, 1998.
Management classifies all securities as available for sale to provide Bank with
the flexibility to move funds into loans as demand warrants. The mortgage-backed
securities portfolio, totaling $45,809 at June 30, 1998, provides Bank with a
constant cash flow stream from principal repayments. Bank held no derivative
securities during any period discussed.
 
     Loans increased $20,416, or 5.0%, from $404,636 at December 31, 1997 to
$425,052 at June 30, 1998. The loan growth occurred primarily in commercial,
financial, and agricultural lending. This area of lending increased $20,095, or
9.1%, as Bank was able to take advantage of strong local economies and new
lending opportunities. Real estate mortgage loan totals declined slightly
because of the increased refinancing and prepayment of existing loans due to
lower available mortgage rates and the increased sale of loans by Bank in the
secondary market. Although pricing has become more competitive in all Bank's
primary lending markets, Bank has not changed its philosophy regarding
underwriting standards.
 
     As a result of the strong loan growth, the gross loan to deposit ratio
increased to 80.1% at June 30,1998 from 77.5% at December 31, 1997.
 
     Total deposits increased $8,659, or 1.7%, from $522,316 at December 31,
1997 to $530,975 at June 30,1998. Noninterest-bearing deposits increased $745,
or 1.2%, while interest-bearing deposits increased $7,914, or 1.7%.
Interest-bearing demand and money market deposits increased from 22.3% of total
interest-bearing deposits at December 31, 1997 to 26.8% of total
interest-bearing deposits at June 30, 1998 due to an increase in volume of
$22,492, or 21.8%. Bank experienced a slight decrease in savings deposits which
decreased from 16.7% of total interest-bearing deposits at December 31, 1997 to
15.9% of total interest-bearing deposits at June 30, 1998. The certificates of
deposit portfolio decreased from 60.9% of total interest-bearing deposits at
December 31, 1997 to 57.4% of total interest-bearing deposits at June 30, 1998.
The shift in the make-up of the deposit portfolio as well as the overall growth
in deposits is attributable to the introduction of a new money market account
indexed to a market rate and the reduction in and simplification of Bank's
deposit products.
 
                                       27
<PAGE>   37
 
Management believes that because of these steps the growth in and turnover of
deposits will remain fairly stable, as Bank deposit products are better able to
compete with other investments.
 
     Other borrowings, primarily advances from the Federal Home Loan Bank,
increased $8,991, from $2,326 at December 31, 1997 to $11,317 at June 30, 1998
to help fund the increase in loans.
 
  DECEMBER 31, 1997 AND 1996
 
     Bank's assets totaled $579,405 at December 31, 1997 compared to $539,031 at
December 31, 1996, an increase of $40,374, or 7.5%. The growth in assets was the
result of the investment of funds provided by strong deposit growth in loans,
securities and other investments.
 
     Total securities increased $8,107, or 6.0%, from $134,825 at December 31,
1996 to $142,932 at December 31, 1997. The increase was the result of the
reinvestment of proceeds from sales of available for sale securities,
maturities, calls and principal repayments, as well as the investment of excess
liquidity and funds provided from increased deposits. The entire securities
portfolio was classified as available for sale at December 31, 1997. The
mortgage-backed securities portfolio totalled $35,083 at December 31, 1997. Bank
held no derivative securities during any period discussed.
 
     Total loans increased $33,506, or 9.0%, from $371,130 at December 31, 1996
to $404,636 at December 31, 1997. Growth was experienced primarily in commercial
and real estate loans. The growth occurred primarily in the Franklin County
region and Bank's newest two markets, Fostoria and Chagrin Falls. The Franklin
County regional market continues to grow with a strong economy. In Fostoria and
Chagrin Falls, Bank has been able to take advantage of new lending
opportunities. The commercial, financial and agricultural portfolio grew
$23,246, or 11.8%, from $196,764 at December 31, 1996 to $220,010 at December
31, 1997, as Bank was able to take advantage of strong local economies and new
lending opportunities. Construction loans, both residential and commercial,
increased $10,855, or 30.6%, from December 31, 1996 to December 31, 1997. Strong
construction loan demand in Bank's markets contributed to the increase.
Residential real estate and home equity loans increased $9,069, or 9.5%, from
$95,040 at December 31, 1996 to $104,109 at December 31, 1997. There was no
concentration of lending to any one industry.
 
     Total deposits increased $35,843, or 7.4%, from $486,473 at December 31,
1996 to $522,316 at December 31, 1997. Noninterest-bearing deposits increased
$10,096, or 20.3%, while interest-bearing deposits increased $25,747, or 5.9%.
Interest-bearing demand and money market deposits increased from 19.6% of total
interest-bearing deposits at December 31, 1996 to 22.3% of total
interest-bearing deposits at December 31, 1997 due to an increase in volume of
$17,857, or 20.9%. Bank experienced a slight decrease in savings deposits from
18.0% of total interest-bearing deposits at December 31, 1996 to 16.7% of total
interest-bearing deposits at December 31, 1997. Certificates of deposit
increased 3.4%, or $9,243. The certificates of deposit portfolio decreased from
62.4% of total interest-bearing deposits at December 31, 1996 to 60.9% of total
interest-bearing deposits at December 31, 1997. Growth in deposits was primarily
attributable to the introduction of new deposit products.
 
     The following table sets forth certain information relating to Bank's
average balance sheet and reflects the average yield on interest-earning assets
and the average cost of interest-bearing liabilities for the periods indicated.
Such yields and costs are derived by dividing income or expense by the average
monthly balance of
 
                                       28
<PAGE>   38
 
interest-earning assets or interest-bearing liabilities, respectively, for the
periods presented. Average balances are derived from daily balances, which
include nonaccruing loans in the loan portfolio.
 
<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                              ---------------------------------------------------------------------------------------------------
                                           1997                              1996                              1995
                              -------------------------------   -------------------------------   -------------------------------
                                AVERAGE     INTEREST              AVERAGE     INTEREST              AVERAGE     INTEREST
                              OUTSTANDING   EARNED/    YIELD/   OUTSTANDING   EARNED/    YIELD/   OUTSTANDING   EARNED/    YIELD/
                                BALANCE       PAID      RATE      BALANCE       PAID      RATE      BALANCE       PAID      RATE
                              -----------   --------   ------   -----------   --------   ------   -----------   --------   ------
<S>                           <C>           <C>        <C>      <C>           <C>        <C>      <C>           <C>        <C>
Interest-earning assets:
  Federal funds sold........   $  3,884     $   214      5.51%   $  3,337     $   183      5.48%   $ 10,693     $   628      5.87%
  Securities (1)
    Taxable.................    110,528       6,776      6.12     112,316       6,804      6.03      69,397       4,112      5.90
    Tax-exempt (2)..........     23,031       1,223      5.49      20,779       1,120      5.57      18,185       1,017      5.63
  Loans (3).................    394,065      36,449      9.25     341,417      31,978      9.37     299,829      28,757      9.59
                               --------     -------              --------     -------              --------     -------
        Total
          interest-earning
          assets............    531,508      44,662      8.40     477,849      40,085      8.39     398,104      34,514      8.67
                                            -------                           -------                           -------
Noninterest-earning
  assets....................     28,969                            28,142                            21,019
                               --------                          --------                          --------
        Total assets........   $560,477                          $505,991                          $419,123
                               ========                          ========                          ========
Interest-bearing
  liabilities:
  Demand deposits...........   $105,540     $ 3,592      3.40    $ 78,187     $ 2,180      2.79    $ 64,129       1,673      2.61
  Savings deposits..........     65,262       2,191      3.36      78,404       2,477      3.16      65,926       1,993      3.02
  Certificates of deposit...    281,840      15,879      5.63     253,957      14,345      5.65     210,150      11,742      5.59
  Other borrowings..........      6,511         370      5.68       8,152         448      5.50       2,962         173      5.84
                               --------     -------              --------     -------              --------     -------
        Total
          interest-bearing
          liabilities.......    459,153      22,032      4.80     418,700      19,450      4.65     343,167      15,581      4.54
                                            -------                           -------                           -------
Noninterest-bearing
  liabilities...............     54,541                            45,559                            38,857
Shareholders' equity........     46,783                            41,732                            37,099
                               --------                          --------                          --------
        Total liabilities &
          shareholders'
          equity............   $560,477                          $505,991                          $419,123
                               ========                          ========                          ========
Net interest income;
  interest rate spread......                $22,630      3.60%                $20,635      3.74%                $18,933      4.13%
                                            =======    ======                 =======    ======                 =======    ======
Net interest margin (net
  interest income as a
  percent of average
  interest-earning
  assets)...................                             4.26%                             4.32%                             4.76%
                                                       ======                            ======                            ======
Average interest-earning
  assets to average
  interest-bearing
  liabilities...............                           115.76%                           114.13%                           116.01%
                                                       ======                            ======                            ======
</TABLE>
 
- ---------------
(1) Average balance includes unrealized gains and losses while yield is based on
    amortized cost.
 
(2) Interest on tax-exempt securities is reported on a historical basis without
    tax-equivalent adjustment. Interest on tax-exempt securities on a tax
    equivalent basis was $1,853 in 1997, $1,697 in 1996 and $1,541 in 1995.
 
(3) Calculated net of deferred loan fees, loan discounts, unearned interest and
    loans in process.
 
     The table below describes the extent to which changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities
have affected Bank's interest income and expense during the years indicated. For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (1) changes in volume
(multiplied by prior year rate); (2) changes in rate (multiplied by prior year
volume); and, (3) total changes in rate and volume. The combined effects of
changes in
 
                                       29
<PAGE>   39
 
both volume and rate, that are not separately identified, have been allocated
proportionately to the change due to volume and change due to rate:
 
<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                       --------------------------------------------------------
                                              1997 VS. 1996                 1996 VS. 1995
                                       ---------------------------    -------------------------
                                           INCREASE                      INCREASE
                                          (DECREASE)                    (DECREASE)
                                            DUE TO                        DUE TO
                                       -----------------              ---------------
                                       VOLUME     RATE      TOTAL     VOLUME    RATE     TOTAL
                                       ------    -------    ------    ------    -----    ------
<S>                                    <C>       <C>        <C>       <C>       <C>      <C>
Interest income attributable to:
  Federal funds sold.................  $   30    $     1    $   31    $ (406)   $ (39)   $ (445)
  Securities:
     Taxable.........................    (109)        81       (28)    2,584      108     2,692
     Tax-exempt......................     124        (21)      103       144      (41)      103
  Loans..............................   4,874       (403)    4,471     3,909     (688)    3,221
                                       ------    -------    ------    ------    -----    ------
          Total interest income......   4,919       (342)    4,577     6,231     (660)    5,571
                                       ------    -------    ------    ------    -----    ------
Interest expense attributable to:
  Demand deposits....................     866        546     1,412       386      121       507
  Savings deposits...................    (434)       148      (286)      391       93       484
  Certificates of deposit............   1,571        (37)    1,534     2,473      130     2,603
  Borrowings.........................     (93)        15       (78)      286      (11)      275
                                       ------    -------    ------    ------    -----    ------
          Total interest expense.....   1,910        672     2,582     3,536      333     3,869
                                       ------    -------    ------    ------    -----    ------
Increase (decrease) in net interest
  income.............................  $3,009    $(1,014)   $1,995    $2,695    $(993)   $1,702
                                       ======    =======    ======    ======    =====    ======
</TABLE>
 
RESULTS OF OPERATIONS
 
  SIX MONTHS ENDED JUNE 30, 1998 AND 1997
 
     Net Income. Net income for the six months ended June 30, 1998 totaled
$3,553 compared to net income of $2,812 for the same period in 1997.
 
     Net Interest Income. Net interest income represents the amount by which
interest income on interest-earning assets exceeds interest paid on
interest-bearing liabilities. Net interest income is the largest component of
Bank's income and is affected by the interest rate environment and the volume
and composition of interest-earning assets and interest-bearing liabilities.
 
     Net interest income was $11,950 for the six months ended June 30, 1998
compared to $11,096 for the same period in 1997. Such increase is the result of
an increased volume of interest-earning assets partially offset by an increase
in interest-bearing liabilities that carried a higher average yield. The average
yield earned on interest-earning assets remained constant over the comparable
periods while the average rate paid on interest-bearing liabilities increased.
The increase in the cost of funds was the result of the shift of funds from
lower yielding demand deposit and savings accounts to higher yielding money
market deposits.
 
     Noninterest Income and Noninterest Expense. Total noninterest income
increased $518, or 24.5%, for the six months ended June 30, 1998, compared to
the same period in 1997. This increase is due to increased trust fee income and
increased gains on loan sales and other miscellaneous income. Gain on loan sales
increased $318 for the six months ended June 30, 1998, compared to the same
period in 1997. The increase is due to increases in residential real estate
loans originated and sold in the secondary market. For the six months ended June
30, 1998, loans originated and sold totaled $53,034 and $50,616, respectively,
compared to $18,153 and $17,107, respectively, for the same period in 1997.
 
     Total noninterest expense increased $248, or 2.9%, for the six months ended
June 30, 1998, compared to the same period in 1997. The increase was primarily
the result of planned general salary and benefit increases for the 1998 year.
The core deposit amortization related to the acquisition of branches from
another bank decreased $161, or 54.2%, for the six months ended June 30, 1998,
compared to the same period in 1997. This was due to
 
                                       30
<PAGE>   40
 
the difference in accelerated amortization between the periods. Other
noninterest expense changes were not significant.
 
     Income Taxes. The provision for income taxes totaled $1,625, for an
effective rate of 31.4%, for the six months ended June 30, 1998, compared to
$1,242, or an effective rate of 30.6%, for the six months ended June 30, 1997.
The difference in income tax expense is primarily attributable to the increase
in income before income taxes.
 
     Provision and Allowance for Loan Losses. The provision for loan losses
represents the charge to income necessary to adjust the allowance for loan
losses to an amount that represents management's assessment of the losses
inherent in Bank's loan portfolio. All lending activity contains associated
risks of loan losses. Management recognizes these credit risks as a necessary
element of its business activity. To assist in identifying and managing
potential loan losses, Bank maintains a loan review function that periodically
evaluates individual credit relationships as well as overall loan-portfolio
conditions. The loan review function assists management to determine the
adequacy of the specific loss reserves and overall portfolio-loss reserves.
 
     The provision for loan losses totaled $528 for each of the six months ended
June 30, 1998 and June 30, 1997. The level of the provision was made possible by
the quality of the loan portfolio remaining stable over the comparable years.
Net charge-offs for the six months ended June 30, 1998 were $106, compared to
net charge-offs of $108 for the same period in 1997.
 
     The allowance for loan losses increased from $4,475 at December 31, 1997 to
$4,897 at June 30, 1998. The increase was primarily due to lower charge-offs
than anticipated. As a percent of loans, the reserve increased from 1.11% of
gross loans to 1.15% over the same period.
 
  YEARS ENDED DECEMBER 31, 1997 AND 1996
 
     Net Income. Net income for 1997 totaled $6,019, increasing over net income
for 1996 of $5,428. Return on average assets was 1.07% for both 1997 and 1996,
while return on average shareholders' equity was 12.87% and 13.01% over the same
two years, respectively.
 
     Net Interest Income. Net interest income was $22,630 at December 31, 1997
compared to $20,635 at December 31, 1996. The $1,995 increase in 1997 over 1996
was the result of an increased volume of interest-earning assets partially
offset by an increase in interest-bearing liabilities that carried a higher
average yield. The average yield earned on interest-earning assets remained
constant over the comparable periods while the average rate paid on
interest-bearing liabilities increased. The increase in the cost of funds was
the result of the shift of funds from lower yielding demand deposit and savings
accounts to higher yielding money market deposits and certificates of deposit.
As part of the new streamlined deposit product line, Bank introduced a new
market indexed money market account offering a competitive rate to attract and
retain deposits. Management has elected to offer attractive, competitive rates
to retain deposits, provided the funds can be invested in income-earning assets
with adequate yields. As a result, Bank's net interest margin, which is
calculated by dividing net interest income by average interest-earning assets,
decreased slightly from 4.32% in 1996 to 4.26% in 1997.
 
     Provision and Allowance for Loan Losses. The provision for loan losses
totaled $1,066 in 1997 compared to $897 in 1996. The level of the provision was
made possible by the quality of the loan portfolio remaining stable over the
comparable years. Net charge-offs for 1997 were $691, which represents .18% of
average loans, compared to net charge-offs of $397, or .12% of average loans in
1996.
 
     The allowance for loan losses increased from $4,100 at December 31, 1996 to
$4,475 at December 31, 1997. As a percent of loans, the reserve increased from
1.10% of gross loans to 1.11% over the same period. Nonperforming loans, defined
as loans on nonaccrual status plus accruing loans past due 90 days or more, were
$1,370, or .37% of gross loans at December 31, 1996 compared to $2,176, or 0.54%
of gross loans at December 31, 1997. Such loans have been considered in
management's analysis of the allowance for loan losses. The allowance was 205.7%
of nonperforming loans at December 31, 1997 compared to 299.3% at December 31,
1996.
 
                                       31
<PAGE>   41
 
     Noninterest Income and Noninterest Expense. Total noninterest income
increased $599, or 14.9%, in 1997 compared to 1996. The increases are due to
increased fee income from Bank's trust department, increased gains on loan
sales, and increased fee income on deposit accounts. The trust fee income
increased $345, or 38.3%, in 1997 compared to 1996 due to continued new business
development and market value increases in managed assets.
 
     Total noninterest expense increased $1,528, or 9.6%, in 1997 compared to
1996. The largest increase was primarily the result of increases in salaries and
employee benefits which made up $886 of the total increase. The increases were
due to general salary increases, additions to staff, implementation of a
stakeholder incentive program, and an amendment to the 401(k) plan which allowed
earlier entry into the plan. The increases and benefit changes were necessary to
support growth and remain competitive in attracting and retaining bankers.
 
     Income Taxes. The provision for income taxes totaled $2,649 in 1997 and
$2,343 in 1996, resulting in effective tax rates of 30.6%, and 30.2%,
respectively. The difference in income tax expense was primarily attributable to
the increase in income before income taxes.
 
  YEARS ENDED DECEMBER 31, 1996 AND 1995
 
     Net Income. Net income for 1996 totaled $5,428, increasing over net income
for 1995 of $5,306. Return on average assets was 1.07% and 1.27% for 1996 and
1995, respectively, while return on average shareholders' equity was 13.01% and
14.30% over the same periods. The decline in return on average assets is due to
the acquisition of certain branches from another bank that added costs without
adding the same level of earnings of existing Bank branches.
 
     Net Interest Income. Net interest income was $20,635 for 1996 compared to
$18,933 for 1995. The $1,702 increase in 1996 over 1995 was the result of an
increased volume of interest-earning assets partially offset by an increase in
interest-bearing liabilities. The increase in earning asset and deposit volumes
is directly attributed to the net acquisition of three branch offices from
another bank. As a result, net deposits assumed totaled $61,397. The net
proceeds were reinvested in loans and securities during the year. The average
yield earned on interest-earning assets decreased 28 basis points over the
comparable periods while the average rate paid on interest-bearing liabilities
increased 11 basis points. As a result, Bank's net interest margin decreased
from 4.76% in 1995 to 4.32% in 1996.
 
     Provision and Allowance for Loan Losses. The provision for loan losses
totaled $897 in 1996 compared to $966 in 1995. The level of the provision was
made possible by the quality of the loan portfolio. Net charge-offs for 1996
were $397, which represents .12% of average loans, compared to net charge-offs
of $641, or .21% of average loans in 1995.
 
     The allowance for loan losses increased from $3,600 at December 31, 1995 to
$4,100 at December 31, 1996. As a percent of loans, the reserve decreased from
1.20% of gross loans to 1.10% over the same period. Nonperforming loans were
$1,370, or .37% of gross loans at December 31, 1996 compared to $1,905, or 0.64%
of gross loans at December 31, 1995. The allowance was 299.3% of nonperforming
loans at December 31, 1996 compared to 189.0% at December 31, 1995.
 
     Noninterest Income and Noninterest Expense. Total noninterest income
increased $882, or 28.2%, in 1996 compared to 1995. The increases are due to
increased fee income from Bank's trust department, increased fee income on
deposit accounts and the adoption of a new accounting standard in 1996 which
changed the method of accounting for loans sold, adding $378 of income that
would not have been recognized prior to such adoption.
 
     Total noninterest expense increased $2,510, or 18.6%, in 1996 compared to
1995. These increases were primarily the result of branch acquisitions and
related conversion costs. Additionally, Bank amortized $468 of the core deposit
premium paid in connection with the acquisition of branches from another bank.
Offsetting some of the expense increase was a $408 reduction in FDIC insurance
cost.
 
     Income Taxes. The provision for income taxes totaled $2,343 in 1996 and
$2,322 in 1995 resulting in effective tax rates of 30.2%, and 30.4%,
respectively.
 
                                       32
<PAGE>   42
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Liquidity. Liquidity is the ability of Bank to fund customers' needs for
borrowing and deposit withdrawals. The purpose of liquidity management is to
assure sufficient cash flow to meet all of the financial commitments. This
ability depends on the institution's financial strength, asset quality and types
of deposit and investment instruments offered by Bank to its customers. Bank's
principal sources of funds are deposits, loan and securities repayments,
maturities of securities, sales of securities available for sale and other funds
provided by operations. Bank also has the ability to borrow from the FHLB. While
scheduled loan repayments and maturing investments are relatively predictable,
deposit flows and early loan and mortgage-backed security prepayments are more
influenced by interest rates, general economic conditions and competition. Bank
maintains investments in liquid assets based upon management's assessment of (1)
need for funds, (2) expected deposit flows, (3) yields available on short-term
liquid assets and (4) objectives of the asset/liability management program.
 
     Cash and cash equivalents decreased $581, or 3.7%, from $15,893 at December
31, 1997 to $15,312 at June 30, 1998, and decreased $4,676, or 22.7%, from
$20,569 at December 31, 1996 to $15,893 at December 31, 1997. Cash and cash
equivalents at December 31, 1997 represented 2.7% of total assets compared to
3.8% of total assets at December 31, 1996. Cash and cash equivalents at June 30,
1998 represented 2.6% of total assets compared to 2.7% of total assets at
December 31, 1997. The decrease is the result of a shift of funds from cash and
cash equivalents to investments. Bank has the ability to borrow up to
approximately $38,400 from the Federal Home Loan Bank and has various federal
fund sources from correspondent banks, should Bank need to supplement its future
liquidity needs in order to meet loan demand or to fund investment
opportunities. Management believes Bank's liquidity position is adequate based
on its high level of cash, cash equivalents, and core deposits and the stability
of its other funding sources.
 
     As summarized in the Statements of Cash Flows, the most significant
transactions which affected Bank's level of cash and cash equivalents, cash
flows and liquidity during the first half of 1998 were the net increase in loans
of $17,761; the receipt of proceeds from maturities and repayments of securities
of $25,821; the receipt of proceeds from the sale of loans originated for sale
of $50,616; the disbursement on loans originated for sale of $53,034; securities
purchases of $26,289 and the net increase in deposits of $8,659. The most
significant transactions which affected Bank's level of cash and cash
equivalents, cash flows and liquidity during 1997 were the net increase in loans
of $42,967; the receipt of proceeds from maturities and repayments of securities
of $23,109; the receipt of proceeds from the sale of loans originated for sale
of $53,184; the disbursement on loans originated for sale of $45,751; securities
purchases of $35,521 and the net increase in deposits of $35,843.
 
     Capital Resources. For the year ended December 31, 1997, total
shareholders' equity increased $5,321 primarily due to earnings retained. The
increase is net of cash dividends paid of $1,208. The dividends consisted of
semi-annual payments in January and July 1997.
 
     For the six months ended June 30, 1998, total shareholders' equity
increased $2,700 primarily due to earnings retained. The increase is net of cash
dividends paid January 1998 of $824.
 
     Tier 1 capital is shareholders' equity excluding the unrealized gain or
loss on securities classified as available for sale and intangible assets. Tier
2 capital, or total capital, includes Tier 1 capital plus the allowance for loan
losses not to exceed 1.25% of risk weighted assets. Risk weighted assets are
Bank's total assets after such assets are assessed for risk and assigned a
weighting factor based on their inherent risk.
 
     Bank meets all regulatory capital requirements. Regulatory minimums call
for a total risk-based capital ratio of 8%, at least half of which must be Tier
1 capital. The ratio of total capital to risk weighted assets was 11.9% at June
30, 1998, while the Tier 1 risk-based capital ratio was 10.8%. Bank's leverage
ratio, defined as Tier 1 capital divided by average assets, of 8.1% at June 30,
1998 exceeded the regulatory minimum for capital adequacy purposes of 4%. The
ratio of total capital to risk weighted assets was 11.8% at December 31, 1997,
while the Tier 1 risk-based capital ratio was 10.8%. Regulatory minimums call
for a total risk-based capital ratio of 8%, at least half of which must be Tier
1 capital. Bank's leverage ratio, defined as Tier 1 capital divided by average
assets, of 8.1% at December 31, 1997 exceeded the regulatory minimum for capital
adequacy purposes of 4%.
 
                                       33
<PAGE>   43
 
IMPACT OF NEW ACCOUNTING STANDARDS
 
     SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," and SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," will be effective for Bank's 1998 financial
statements. SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," will be effective for fiscal years beginning after June 15, 1999,
with early adoption encouraged for any fiscal quarter beginning July 1, 1998 or
later, with no retroactive application. Management believes that the adoption of
these standards will not have a significant impact on Bank's financial
statements.
 
IMPACT OF INFLATION AND CHANGING PRICES
 
     The financial information included herein has been prepared in accordance
with generally accepted accounting principals ("GAAP"). GAAP requires Bank to
measure financial position and operating results primarily in terms of historic
dollars. Changes in the relative value of money due to inflation or recession
are generally not considered.
 
     Management believes that changes in interest rates affect the financial
condition of a financial institution to a far greater degree than changes in the
inflation rate. While interest rates are greatly influenced by changes in the
inflation rate, they do not change at the same rate or in the same magnitude as
the inflation rate. Rather, interest rate volatility is based on changes in the
expected rate of inflation and on changes in monetary and fiscal policies.
 
YEAR 2000 ISSUE
 
     Many computer programs that are in use today use only two digits to
indicate which year is represented. If such computer applications are not
changed to allow the data field to reflect the change in the century, the
application may fail or create erroneous results at the year 2000 due to the
improper sequence of the year changing from "99" to "00."
 
     Management of Bank has conducted an evaluation of all significant computer
systems used in the business of Bank to determine whether such systems will
function at the change of the century. Management determined that most programs
are or will be capable of identifying the turn of the century. In order to
prevent potential credit quality issues, management is also assessing the Year
2000 ("Y2K") compliance status of major loan customers to determine whether or
not such entities are taking steps to ensure their systems will function
properly in the year 2000. Management closely monitors the issue and full
compliance is expected by the end of 1998. Management does not anticipate any
material costs to be incurred to update its systems to be Y2K compliant.
 
     There is the risk that Y2K failure by clients of Bank may have a material
adverse effect on the financial condition and results of operations of Bank. To
minimize this risk, Bank has reviewed each borrower with outstanding
indebtedness to Bank greater than $100,000 to assess the risk to Bank should
that borrower's business be affected by a Y2K issue. All clients evaluated as
high risk have been allocated a specific additional reserve in determining the
adequacy of Bank's loan loss reserve. Notwithstanding these steps, there can be
no assurance that defaults on loans as a result of the Y2K issue will not
negatively affect Bank's operations.
 
MANAGEMENT OF BANK
 
     The following discussion provides certain information with respect to the
executive officers of Bank, who are expected to serve in their capacities as
described below, unless otherwise noted, following the Merger.
 
     Richard R. Hollington, Jr., is Chairman of the Board of Directors. He is a
senior partner with the law firm of Baker & Hostetler LLP, Cleveland, Ohio.
Following the Merger, Mr. Hollington will also serve as an officer of
Bancshares. See "Proposed Merger -- Interest of Bank Management in the Merger."
 
     Jack W. Donaldson is President and Chief Executive Officer.
 
     Gary L. Cole is Corporate Secretary, Treasurer and Executive Vice
President, Private Banking.
 
                                       34
<PAGE>   44
 
     Richard R. Hollington III is currently Vice President of Strategic Planning
and Chief Operating Officer. Following the Merger, he will serve as an officer
of Bancshares. See "Proposed Merger -- Interest of Bank Management in the
Merger."
 
     Following the Merger, James F. Burwell will serve as Chief Operating
Officer of Bank. He is currently President and Chief Executive Officer of First
National Bank, Northwest Ohio. The Merger Agreement contemplates that Mr.
Burwell will become the Chief Executive Officer of Bank upon Mr. Donaldson's
retirement.
 
     Frank R. Goebel is Franklin County Regional President.
 
     Kathleen C. Radebaugh is Northeast Ohio Regional President.
 
     Harold A. Schierloh is Putnam County Regional President.
 
     Thomas J. Weissling is Greater Hancock County Regional President.
 
     Craig F. Fortin is Senior Vice President and Chief Financial Officer.
 
     Mark A. Maiberger is Senior Vice President, Credit Administration and
Operations.
 
     Curtis E. Sheppard is Senior Vice President, Marketing.
 
     Michael C. Spragg is Senior Vice President, Commercial Banking.
 
     Judy K. Webb is Senior Vice President, Human Resources.
 
                                       35
<PAGE>   45
 
                  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
                           BENEFICIAL OWNERS OF BANK
 
     The following table sets forth the beneficial ownership of (a) Bank Common
Shares as of                and (b) Bancshares Common Shares to be received in
the Merger of: (i) each person or entity known to Bank to beneficially own 5% or
more of the outstanding shares of either class of Bank's capital stock, (ii)
each of Bank's directors, (iii) Bank's Chief Executive Officer and each of the
other seven most highly compensated executive officers of Bank ("Named Executive
Officers") and (iv) all directors and executive officers of Bank as a group.
 
<TABLE>
<CAPTION>
                                                                   SHARES BENEFICIALLY OWNED(1)
                                     ----------------------------------------------------------------------------------------
                                                                                                          BANCSHARES COMMON
                                          BANK CLASS A               BANK CLASS B                            SHARES TO BE
                                          COMMON SHARES              COMMON SHARES           TOTAL        RECEIVED IN MERGER
                                     -----------------------    -----------------------    PERCENTAGE    --------------------
                                     NUMBER OF    PERCENT OF    NUMBER OF    PERCENT OF      VOTING      NUMBER OF
                                      SHARES        CLASS        SHARES        CLASS       CONTROL(2)     SHARES      PERCENT
                                     ---------    ----------    ---------    ----------    ----------    ---------    -------
<S>                                  <C>          <C>           <C>          <C>           <C>           <C>          <C>
5% SHAREHOLDERS
 
OTHER DIRECTORS AND NAMED EXECUTIVE
  OFFICERS
  All Directors and executive
    officers as a group (  persons)
</TABLE>
 
- ---------------
 
* Less than one percent.
 
(1) The number of shares of capital stock of Bank outstanding as of
                   was as follows: (i)                Class A Common Shares and
    (ii)                Class B Common Shares.
 
(2) Represents total voting percentage of Class A Common Shares and Class B
    Common Shares, considering that each Class A Common Share has one vote and
    each Class B Common Share has 20 votes.
 
                                       36
<PAGE>   46
 
                INFORMATION CONCERNING THE BANK SPECIAL MEETING
 
GENERAL
 
     This Proxy Statement/Prospectus is being furnished to holders of Bank
Common Shares as part of the solicitation of proxies by the Bank Board of
Directors for use at the Bank Special Meeting to be held on             , 1998
at                .m., at the                               , including any
adjournments or reschedulings thereof. This Proxy Statement/Prospectus and the
accompanying Proxy Card are first being mailed to shareholders of Bank on or
about             , 1998.
 
     The purpose of the Bank Special Meeting is to consider and vote upon the
Merger Proposal. No other business will be transacted at the Bank Special
Meeting.
 
     The Merger is subject to a number of conditions, including the receipt of
required regulatory and shareholder approval. (See "PROPOSED MERGER--"Regulatory
Approvals" and "Other Provisions of the Merger Agreement.")
 
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
 
     The Bank Board has fixed the close of business on             , 1998 (the
"Record Date") as the record date for the determination of the shareholders of
Bank entitled to notice of and to vote at the Bank Special Meeting. Only holders
of record of Bank Common Shares at the close of business on the Record Date will
be entitled to vote on each matter properly presented at the Bank Special
Meeting. On the Record Date,   Class A Common Shares and   Class B Common Shares
were issued and outstanding. Votes may be cast in person or by proxy. Holders of
Class A Common Shares will have one vote per share, and holders of Class B
Common Shares will have twenty votes per share, on the Merger Proposal. Holders
of Class A Common Shares and Class B Common Shares shall vote together as one
class on the Merger Proposal. Pursuant to the Bank Code of Regulations, the
presence of the holders of a majority of the voting power of Bank Common Shares
issued and outstanding, in person or by proxy, is required for and shall
constitute a quorum for the transaction of business at the Bank Special Meeting.
Abstentions and broker non-votes will be counted in establishing the quorum. A
majority of the Bank Common Shares present at the Bank Special Meeting, in
person or by proxy, whether or not constituting a quorum, may vote to, or the
Bank Board in its discretion may, adjourn the Bank Special Meeting from time to
time without further notice. Pursuant to Bank's Articles of Incorporation, as
amended, the affirmative vote of the holders of at least a majority of the
voting power of outstanding Bank Common Shares is required to approve the Merger
Proposal. An abstention and a broker non-vote would thus have the same effect as
a vote against the Merger Proposal.
 
     Only shareholders of record on the Record Date are eligible to give their
proxies. Therefore, shareholders owning shares held in the name of a brokerage
firm, bank, or other institution should sign, date and return their proxy cards
to such brokerage firm, bank or other institution in the envelope provided by
that firm. In addition, brokers who hold shares in street name for customers who
are the beneficial owners of such shares are prohibited from giving a proxy to
vote shares held for such customers on the approval of the Merger Proposal
without specific instructions from such customers. Given that the affirmative
vote of the holders of a majority of the voting power of outstanding Bank Common
Shares is required in order to approve the Merger Proposal, the failure of such
customers to provide specific instructions with respect to their Bank Common
Shares to their broker will have the effect of a vote against the approval of
the Merger Proposal. Failure to return a properly executed proxy card or to vote
at the Bank Special Meeting will have the same effect as a vote against the
Merger Proposal.
 
     Proxies in the accompanying form that are properly executed and returned to
Bank will be voted at the Bank Special Meeting in accordance with the
shareholders' instructions contained in such proxies and, at the discretion of
the Proxy Committee, on such other matters as may properly come before the
meeting. If a shareholder returns a proxy card that is signed, dated and not
marked, that shareholder will be deemed to have voted for the Merger Proposal.
An executed proxy may be revoked at any time prior to its exercise by submitting
another proxy with a later date, by appearing in person at the Bank Special
Meeting and advising the Secretary of the shareholder's intent to vote the
shares or by sending a written, signed and dated revocation that clearly
identifies the proxy
                                       37
<PAGE>   47
 
being revoked to the principal executive offices of Bank at 236 South Main
Street, Findlay, Ohio 45840. A revocation may be in any written form validly
signed by the record holder as long as it clearly states that the proxy
previously given is no longer effective. In addition, shareholders whose Bank
Common Shares are not registered in their own name will need additional
documentation from the record holder of such shares to vote in person at the
Bank Special Meeting.
 
     Proxies may be solicited by mail, telephone, telegraph, telex, telecopier
and advertisement and in person. Solicitation may be made in the same manner by
directors, officers and other representatives of Bank who will not be specially
compensated for such activities, but who may be reimbursed for reasonable
out-of-pocket expenses in connection with such solicitation.
 
     Banks, brokerage houses and other custodians, nominees and fiduciaries will
be requested to forward the solicitation materials to the beneficial owners of
Bank Common Shares, which they hold of record, and Bank will reimburse them for
their reasonable out-of-pocket expenses.
 
     The expenses related to the proxy solicitation for the Bank Special Meeting
will be borne by Bank, except that the cost of preparing and mailing this Proxy
Statement/Prospectus will be borne by Bank and Bancshares.
 
     The directors and executive officers of Bank and their affiliates owned, as
of the Record Date,                Bank Common Shares (     % of the total
number of outstanding shares of Bank Common Shares at such date) representing
     % of the voting power of all outstanding shares. Certain directors and
executive officers of Bank who collectively own Class A Common Shares and Class
B Common Shares representing a majority of the voting power have agreed to vote
such shares in favor of the Merger Proposal.
 
                                PROPOSED MERGER
 
     The following description of certain aspects of the Merger does not purport
to be complete and is qualified in its entirety by reference to the Merger
Agreement which is set forth in Appendix A, attached to and incorporated by
reference in this Proxy Statement/Prospectus. All shareholders are urged to read
the Merger Agreement in its entirety.
 
BANK BACKGROUND AND REASONS FOR THE MERGER
 
     As a result of increasing competitive pressures, consolidation, and
regulatory and other changes in the banking and financial services industry, the
family that holds the controlling interest in Bank had been discussing for
several years the strategic alternatives available to Bank, particularly
relative to liquidity and maintaining shareholder value. In September 1997, Mr.
Richard R. Hollington, Jr., Chairman of Bank, was introduced to Mr. Marty Adams,
President and Chief Executive Officer of Bancshares, and over the course of the
next several months Bank and Bancshares exchanged financial information.
Moreover, in the latter part of 1997, Danielson Associates was asked to review
Bank's position and alternatives, and in January 1998, Danielson Associates
presented its findings to the Board of Directors of Bank. Based on these
findings, a decision was made to explore the possibility of selling Bank, and
Danielson Associates was hired as financial adviser to assist in this process.
 
     With Danielson Associates' assistance, three financial institutions,
including Bancshares, were identified as being likely to be interested in
acquiring Bank. In April 1998, after obtaining confidentiality agreements,
Danielson Associates provided these institutions with an information memorandum
that described, among other things, the financial condition, market position,
asset and deposit mix and loan quality of Bank. Each of these institutions was
asked to submit its best offer for the acquisition of Bank. Discussions of
operating philosophies and possible synergies were held by representatives of
Bank with representatives of these institutions at various times.
 
     During this process, in May 1998, Bancshares agreed to a merger of equals
with Mid Am. Danielson Associates and Bank believed at that time the "merger of
equals" could remove Bancshares from the bidding process. This raised questions
as to whether a possible reduction in the number of potential acquirors would
impact the ability to obtain the best value possible for Bank's shareholders. To
alleviate this concern, two other financial institutions were contacted in May
1998, and each was provided with an information memorandum and
 
                                       38
<PAGE>   48
 
asked to submit an offer to acquire Bank. Furthermore, representatives of Bank,
Bancshares and Mid Am had discussions with respect to the structure of a
possible transaction in light of the "merger of equals" transaction.
 
     During June 1998, representatives of Bank and Bancshares continued their
discussions. Bancshares outlined financial and other aspects of a possible
business combination in non-binding indications of interest delivered to Bank
around the middle of June.
 
     In July 1998, offers were received from four of the five potential
acquirors. Danielson Associates analyzed the offers and then reviewed them with
members of the controlling family, including Bank's Chairman and other family
members who were directors or executive officers of Bank. The financial terms of
two of the offers were clearly superior to the others. One of these offers was
the Bancshares' offer. After careful consideration, it was decided to pursue
final negotiations with Bancshares because the Bancshares' offer was financially
equal to or better than the other three offers and Bancshares' offer provided
for certain important nonfinancial considerations that would benefit employees,
customers and the communities served by Bank.
 
     Accordingly, in July 1998, representatives of Bank and Bancshares and their
respective financial advisors met to finalize negotiations regarding the terms
of a possible merger involving Bancshares and Bank. On July 7, 1998, Bancshares
and Bank reached preliminary agreement on a proposed exchange ratio of 63.25
shares of Bancshares Common Shares for each Bank Common Share. Following that
and other discussions, the parties prepared a definitive merger agreement
substantially on the terms discussed, including pricing, termination provisions,
standard representations, warranties and covenants and customary closing
conditions.
 
     On July 22, 1998, a special meeting of the Bank Board was held to consider
the terms of the potential merger with Bancshares. Danielson Associates made a
presentation on the financial aspects of the Merger and rendered its oral
opinion, subsequently confirmed in writing, that, as of such date, the Exchange
Ratio was fair to the shareholders of Bank from a financial point of view.
 
     After extensive discussion, the Bank Board unanimously determined, based
upon consideration of the various factors discussed below, that the proposed
merger involving Bancshares and Bank was in the best interest of Bank and its
shareholders. The Bank Board unanimously approved the Merger Proposal and the
related transactions contemplated therein.
 
     On July 22, 1998, the Merger Agreement was executed by the parties thereto,
and Bancshares, Bank and Mid Am issued a joint press release announcing the
Merger.
 
     The Board of Directors believes that the Merger offers Bank and its
shareholders an attractive opportunity to participate in a company with enhanced
financial strength that should be able to compete more effectively in Ohio. The
Board of Directors also believes that this enhanced financial strength will
increase opportunities for growth as a combined company, and will offer greater
flexibility in meeting the challenges affecting the banking and financial
services industries.
 
RECOMMENDATION OF THE BANK BOARD OF DIRECTORS
 
     IN VIEW OF ALL THE CONSIDERATIONS DESCRIBED ABOVE, THE BOARD OF DIRECTORS
OF BANK UNANIMOUSLY CONCLUDED THAT THE MERGER IS FAIR TO AND IN THE BEST
INTERESTS OF BANK AND THE BANK SHAREHOLDERS AND RECOMMENDS THAT BANK
SHAREHOLDERS VOTE FOR APPROVAL OF THE MERGER PROPOSAL.
 
OPINION OF BANK'S FINANCIAL ADVISOR
 
     Bank retained Danielson Associates, Inc. ("Danielson Associates") to advise
the Bank Board of Directors as to the Bank's "fair" sale value and the fairness
to its shareholders of the financial terms of the offer to acquire Bank.
Danielson Associates is regularly engaged in the valuation of banks, bank
holding companies, and thrifts in connection with mergers, acquisitions, and
other securities transactions, and has knowledge of, and experience with, the
Ohio banking markets and banking organizations operating in those markets. Bank
selected Danielson Associates because of its prior experience with such firm and
such firm's reputation in the financial services industry.
 
                                       39
<PAGE>   49
 
     In such capacity, Danielson Associates reviewed the Merger Agreement with
respect to the pricing and other terms and conditions of the Merger, but the
decision to accept the offer of Bancshares was ultimately made by the Board of
Directors of Bank. Danielson Associates rendered its oral opinion to the Bank
Board of Directors, which it subsequently confirmed in writing, that as of the
date of such opinion, the financial terms of the Bancshares offer were "fair" to
Bank and its shareholders. No limitations were imposed by the Bank Board of
Directors upon Danielson Associates with respect to the investigation made or
procedures followed by it in arriving at its opinion.
 
     In arriving at its opinion, Danielson Associates (a) reviewed certain
business and financial information relating to Bank and Bancshares, including
annual reports for the fiscal year ended December 31, 1997 and call report data
from 1989 to 1997 including quarterly reports for 1998; (b) discussed the past
and current operations, financial condition and prospects of Bank with its
senior executives; (c) analyzed the pro forma impact of the merger on
Bancshares' earnings per share, capitalization, and financial ratios; (d)
reviewed the reported prices and trading activity for Bancshares Common Shares
and compared them to similar bank holding companies; (e) reviewed and compared
the financial terms, to the extent publicly available, with comparable
transactions; (f) reviewed the Merger Agreement and certain related documents;
and (g) considered such other factors as were deemed appropriate.
 
     Danielson Associates did not obtain any independent appraisal of assets or
liabilities of Bank or Bancshares or their respective subsidiaries. Further,
Danielson Associates did not independently verify the information provided by
Bank or Bancshares and assumed the accuracy and completeness of all such
information.
 
     In arriving at its opinion, Danielson Associates performed a variety of
financial analyses. Danielson Associates believes that its analyses must be
considered as a whole and that consideration of portions of such analyses and
the factors considered therein, without considering all the factors and
analyses, could create an incomplete view of the analyses and the process
underlying Danielson Associates' opinion. The preparation of a fairness opinion
is a complex process involving subjective judgments and is not necessarily
susceptible to partial analysis and summary description.
 
     In its analyses, Danielson Associates made certain assumptions with respect
to industry performance, business and economic conditions, and other matters,
many of which were beyond Bank's or Bancshares' control. Any estimates contained
by Danielson Associates' analyses are not necessarily indicative of the future
results or value, which may be significantly more or less favorable than such
estimates. Estimates of values of companies do not purport to be appraisals or
necessarily reflect the prices at which companies or their securities may
actually be sold.
 
     The following is a summary of selected analyses considered by Danielson
Associates in connection with its opinion letter.
 
PRO FORMA MERGER ANALYSES
 
     Danielson Associates analyzed the changes in the amount of earnings and
book value represented by the receipt of about $191 million at the time of the
Merger Agreement for all of the outstanding Bank Common Shares. The analysis
evaluated, among other things, possible dilution in earnings and capital per
Bancshares Common Share.
 
COMPARABLE COMPANIES
 
     Danielson Associates compared Bank's (a) tangible capital of 7.87% of
assets as of April 30, 1998, (b) .44% of assets nonperforming as of April 30,
1998, and (c) net operating income of 1.78% of average assets for the trailing
twelve month period ending March 31, 1998, with the medians for selected Ohio
banks, which Danielson Associates deemed comparable. The banks included Capital
Holdings, Inc., CoBancorp, Inc., Farmers and Merchants Bancorp, Inc.,
Intercounty Bancshares, Inc., LNB Bancorp, Inc., Mahoning National Bancorp,
Inc., Peoples Bancorp, Inc., Rurban Financial Corp., Second Bancorp, Inc.,
Security Banc Corporation, UNB Corporation and Wayne Bancorp, Inc. Their medians
were (a) tangible capital of 9.22% of assets, (b) .33% of assets nonperforming,
and (c) net operating income of 2.09% of average assets.
 
                                       40
<PAGE>   50
 
     Danielson Associates also compared Bancshares' (a) stock price as of July
20, 1998 of 23.5 times adjusted earnings and 414% of book, (b) dividend yield
based on trailing four quarters as of March 31, 1998 and stock price as of July
20, 1998 of 1.78%, (c) tangible capital as of March 31, 1998 of 8.42% of assets,
(d) non-performing assets as of March 31, 1998 equal to .12% of total assets,
(e) return on average assets during the trailing four quarters ended March 31,
1998 of 1.39% and (f) return on average equity during the same period of 15.11%,
with the medians for selected banks and bank holding companies that Danielson
Associates deemed to be comparable to Bancshares. The selected institutions
included BancFirst Ohio Corporation, First Financial Bancorp and Park National
Corporation in Ohio; Area Bancshares Corporation, Community Trust Bancorp, Inc.,
First Financial Corporation, First Merchants Corporation and National City
Bancshares, Inc. in Indiana. The comparable medians were (a) stock price of 22.7
times earnings and 290% of book, (b) dividend yield of 1.81%, (c) tangible
capital of 8.68% of assets, (d) .36% of assets non-performing, (e) return on
average assets of 1.27% and (f) return on average equity of 12.75%. Danielson
Associates also compared other income, expense, and balance sheet information of
such companies with similar information about Bancshares.
 
COMPARABLE TRANSACTION ANALYSIS
 
     Danielson Associates compared the consideration to be paid in the merger to
the latest twelve months earnings and equity capital of Bank with earnings and
capital multiples paid in acquisitions of banks in Kentucky, Maryland, Ohio,
Pennsylvania and West Virginia through the opinion date. Of these, the most
applicable recent transactions included Bancshares/Century, National City/Fort
Wayne National, Star/Trans Financial and First Commonwealth/Southwest. At the
time Danielson Associates made its analysis, the consideration to be paid in the
merger was 377% of Bank's March 31, 1998 book value and 28.7 times Bank's
adjusted earnings for the trailing four quarters as of March 31, 1998. This
compares to the median multiples of 270% of book value and 26.4 times earnings
for the comparable acquisitions.
 
OTHER ANALYSIS
 
     In addition to performing the analyses summarized above, Danielson
Associates also considered the general market for bank and thrift mergers, the
historical financial performance of Bank and Bancshares, the deposit market
shares of both banks, and the general economic conditions and prospects of those
banks.
 
     No company or transaction used in this composite analysis is identical to
Bank or Bancshares. Accordingly, an analysis of the results of the foregoing is
not mathematical; rather it involves complex consideration and judgments
concerning differences in financial and operating characteristics of the
companies and other factors that could affect the public trading values of the
company or companies to which they are being compared.
 
     The summary set forth above does not purport to be a complete description
of the analyses and procedures performed by Danielson Associates in the course
of arriving at its opinions. In payment for its services as financial adviser to
Bank, Danielson Associates is to be paid upon the closing of the transaction a
fee equal to .35% of the market value of Bancshares Common Shares issued to Bank
shareholders in the Merger.
 
     The full text of the opinion of Danielson Associates dated as of July 21,
1998, which sets forth assumptions made and matters considered, is attached
hereto as Exhibit C to this Proxy Statement/Prospectus. Bank shareholders are
urged to read this opinion in its entirety. Danielson Associates' opinion is
directed only to the consideration to be received by Bank shareholders in the
Merger and does not constitute a recommendation to any Bank shareholder as to
how much such shareholder should vote at the Bank Special Meeting.
 
BANCSHARES BACKGROUND AND REASONS FOR THE MERGER
 
     In late 1996, as part of its ongoing reviewing of acquisition candidates,
Bancshares identified Bank and obtained publicly available financial data for
its review. Subsequently, in September, 1997, Mr. Marty Adams, President and
Chief Executive Officer of Bancshares was introduced to Mr. Richard R.
Hollington, Jr., Chairman of Bank. They discussed the philosophies and
strategies of their respective financial institutions and, over the course of
the next several months, exchanged financial information with each other. In the
first part of 1998, Bancshares received a confidential information memorandum
about Bank from Danielson Associates, Bank's financial adviser. Ohio Bank
representatives then met with Bancshares' representatives at Bancshares' offices
to
                                       41
<PAGE>   51
 
discuss operating philosophies and explore mutual strategies and possible
synergies between the two companies. On May 20, 1998, the Bancshares Board of
Directors held a meeting at which Bancshares' financial adviser, Mr. William
Hickey of Sandler O'Neill, made an initial presentation with respect to Bank. In
light of the May 21, 1998 announcement of a "merger of equals" transaction
between Bancshares and Mid Am, Mr. Adams, along with Mr. David Francisco,
President and Chief Operating Officer of Mid Am, met with Bank representatives
to discuss the structure of a possible transaction involving Bank. Subsequently,
Mr. Adams met several times with Danielson Associates. By letter dated June 19,
1998, Bancshares forwarded a non-binding indication of interest to Bank
outlining the financial and other aspects of a possible strategic business
combination, which was supplemented by a letter dated June 22, 1998. Thereafter
discussions continued, and on July 7, 1998, preliminary agreement was reached on
the Exchange Ratio, and on July 20, 1998, the Merger Agreement was finalized by
the parties. Thereafter, Bancshares sought and received the written consent of
Mid Am to the proposed transactions with Bank, as required by the Mid Am
Agreement. On July 20, 1998, the Bancshares' Board of Directors approved the
Merger Agreement and the transactions contemplated thereby and received an oral
opinion of its financial adviser, Sandler O'Neill that the Merger would be fair
to Bancshares' shareholders from a financial point of view. On July 23, 1998
Bancshares and Bank entered into a Stock Option Agreement. See "PROPOSED
MERGER -- Stock Option Agreement."
 
     Bancshares' Board of Directors has concluded that the Merger would be in
the best interests of Bancshares' shareholders and the depositors, other
customers and employees of its subsidiary banks. The Merger is consistent with
Bancshares' overall strategic acquisition program and, in particular, its
interest in expanding Bancshares' facilities and services in the Ohio counties
of Hancock, Seneca, Putnam, Franklin and Cuyahoga. Bancshares' philosophies of
emphasizing customer service and satisfaction, promoting local and branch level
decision-making power by employees and making strong, ongoing commitments to
each community it and its banking subsidiaries serves are consistent with Bank's
management philosophies and its long-standing reputation of service to Findlay,
Ohio. In addition, the current products and services offered by Bank are similar
to, and in many respects, complement the products and services provided by
Bancshares and its banking subsidiaries. Bancshares anticipates that the
additional products and services that will become available to Bank customers as
a result of the Merger will provide opportunities for expanded and new customer
relationships. Bancshares also believes that the Merger can be accomplished with
little or no resulting dilution in the per share earnings of Bancshares Common
Shares.
 
DESCRIPTION OF THE MERGER
 
     Upon consummation of the transactions contemplated under the Merger
Agreement, an interim bank subsidiary formed and owned by Bancshares will be
merged with and into Bank. Bank will be the surviving corporation after the
Merger and the Articles of Incorporation and Code of Regulations of the interim
bank will remain in effect as they were immediately prior to the Merger.
 
CONSIDERATION FOR BANK COMMON SHARES
 
     Upon consummation of the Merger, each shareholder of Bank who does not
dissent will have the right to receive 63.25 Bancshares Common Shares for each
of his or her Bank Common Shares held (the "Exchange Ratio"), plus cash in lieu
of the issuance of fractional shares.
 
PAYMENT OF CASH IN LIEU OF FRACTIONAL SHARES
 
     No fractional Bancshares Common Shares will be issued in connection with
the Merger. Each Bank shareholder who would otherwise have been entitled to
receive a fraction of a Bancshares Common Share will receive, in lieu thereof,
cash therefor, without interest, at an amount equal to such fractional part of a
Bancshares Common Share multiplied by the last reported sale price per share of
Bancshares Common Shares on the trading day most recently preceding the
Effective Time as reported on the Nasdaq National Market (as reported in the
Wall Street Journal or, if not therein, in another authoritative source).
 
                                       42
<PAGE>   52
 
OTHER PROVISIONS OF THE MERGER AGREEMENT
 
  Representations and Warranties
 
     The Merger Agreement contains representations and warranties by the parties
regarding, among other things, due organization, authority to enter into the
Merger Agreement, capitalization, properties, loans and investments, pending and
threatened litigation, contractual obligations, compliance with applicable laws
and regulations, financial statements and filings with regulatory agencies.
These representations and warranties will not survive consummation of the
Merger. The Merger Agreement includes certain exceptions to Bancshares' and
Bank's representations and warranties, none of which are deemed material to this
transaction.
 
  Conditions to the Merger
 
     The obligations of Bank and Bancshares to consummate the Merger are subject
to, but not limited to the following conditions: (1) the accuracy of Bank's and
Bancshares' representations and warranties and compliance with covenants on and
as of the closing date of the Merger; (2) no material adverse change in the
financial condition, results of operations, business or assets of Bank and
Bancshares; (3) the granting of all necessary regulatory approvals, including
but not limited to the Board of Governors of the Federal Reserve System, the
Securities and Exchange Commission and the Ohio Department of Commerce, Division
of Financial Institutions; (4) the issuance by Bancshares' general counsel and
Bank's counsel of opinions covering certain matters with respect to Bancshares
and Bank, (5) neither the consummation nor performance of the transactions under
the Merger Agreement will conflict with, or result in a material violation of,
or cause Bancshares or Bank or their respective affiliates to suffer any
material adverse consequences under any law or order applicable to, or proposed
to be applicable to them; (6) no temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect, nor shall any proceeding seeking any of the
foregoing be pending; (7) no action shall have been taken or threatened by any
governmental entity which makes consummation of the Merger illegal; (8) the
registration statement with the Securities and Exchange Commission registering
the exchange of the Bancshares Common Shares for Bank Common Shares and all
state securities and "blue sky" permits have become effective and no stop orders
or similar restraining orders shall have been issued; (9) the receipt by
Bancshares of an opinion letter from Crowe, Chizek and Company LLP stating that
the transaction qualifies for treatment as a "pooling of interests" for
financial statement reporting purposes; and (10) the Merger shall have been
approved by the affirmative vote of the holders of a majority of the outstanding
Bank Common Shares.
 
     Bancshares' obligations under the Merger Agreement are also conditioned on,
among other conditions: (1) the holders of no more than (10%) of the Bank Common
Shares having asserted dissenters' rights; (2) Bank conducting business in the
ordinary and usual course; (3) there having been no event constituting an event
of default under any material indenture, agreement, note, mortgage or guaranty
that materially adversely affects Bank's financial condition; (4) the receipt by
Bancshares of a fairness opinion from Sandler O'Neill & Partners, L.P. dated as
of the date of this Proxy Statement/Prospectus stating that the Merger is fair
from a financial point of view to the Bancshares shareholders; (5) the receipt
by Bancshares of an Affiliate Certificate from each Affiliate of Bank in the
form specified in Section 7.2 of the Merger Agreement; and (6) the receipt by
Bancshares from Bank of the Officers' Certificates regarding registration
required pursuant to Section 7.4(a) of the Merger Agreement.
 
     Bank's obligations under the Merger Agreement are also subject to, among
other conditions: (1) the receipt of a fairness opinion from Danielson
Associates, Inc. dated as of the date of this Proxy Statement/Prospectus stating
that the Merger is fair from a financial point of view to Bank shareholders; (2)
the receipt of an opinion of Bank's counsel, reasonably satisfactory in form and
substance to Bank, to the effect that the Merger will constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(A) of the IRC, no gain or
loss will be recognized by Bank as a consequence of the Merger, and no gain or
loss will be recognized by the shareholders of Bank pursuant to the terms of the
Merger (except for the effect of any cash received pursuant to dissenters'
rights or paid in lieu of the issuance of fractional shares); and (3) the
receipt by Bank from Bancshares of the officers' certificates regarding
registration required pursuant to Section 7.4(a) of the Merger Agreement.
 
                                       43
<PAGE>   53
 
     The foregoing disclosure regarding conditions to the Merger represents and
includes all material conditions to the consummation thereof. Amendments;
Termination
 
  Amendments; Termination
 
     The Merger Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment. The Merger Agreement may
be terminated as follows: (i) by mutual consent of the parties; (ii) by Bank if
the Average NMS Closing Price (as that term is defined in the Merger Agreement,
NMS Closing Price shall mean the price per share of the last sale of Bancshares
Common Shares reported on the NASDAQ National Market System at the close of the
trading day by the National Association of Securities Dealers, Inc. and Average
NMS Closing Price shall mean the arithmetic mean of the NMS Closing Prices for
the ten (10) trading days immediately preceding the fifth (5th) trading day
prior to the consummation of the Merger) is less than $26.00; (iii) by Bank
pursuant to Section 9.1(e) of the Merger Agreement; (iv) by either party if the
transactions contemplated by the Merger Agreement are not consummated by March
31, 1999, or (vi) by either party in the event of a material breach by the other
party.
 
     Prior to exercise by Bank of its right of termination in the event that the
average NMS Closing Price is less than $26.00, Bancshares may offer to
distribute to Bank shareholders under the Merger Agreement an additional number
of Bancshares Common Shares sufficient to offset the amount by which the average
NMS Closing Price is below $26.00 plus some additional number of Bancshares
Common Shares. Bank shall have the opportunity to accept or reject any such
offer. If Bank rejects such offer, Bank may then terminate the Merger Agreement.
 
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
     The Merger is structured to qualify as a tax free reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended, such that it is
anticipated that no gain or loss will be recognized by Bank or Bancshares as a
result of the Merger. Nor is it expected that shareholders of Bank will
recognize gain or loss upon the exchange of their Bank Common Shares for newly
issued Bancshares Common Shares, except for cash received in exchange for
fractional interests. Assuming the Merger is treated as a tax-free
reorganization, the federal income tax basis of the Bancshares Common Shares
received by the shareholders of Bank will be the same as the federal income tax
basis of the Bank Common Shares surrendered in exchange therefor and the holding
period of the Bancshares Common Shares received by the shareholders of Bank will
include the holding period of the Bank Common Shares surrendered in exchange
therefor, provided that the Bank Common Shares were held as a capital asset on
the date of the exchange.
 
     Shareholders who exercise their dissenters' rights of appraisal and receive
cash for their Bank Common Shares will be treated as having received a
distribution in redemption of their shares, which will result in such
shareholders realizing income for federal income tax purposes. Furthermore,
shareholders of Bank who receive cash in lieu of fractional interests in
Bancshares Common Shares as a result of the exchange will also be treated as
having received a distribution in redemption of their proportionate interest in
Bank, which will result in such shareholders realizing income for federal income
tax purposes. The amount of such income and the tax treatment thereof will
depend on a number of factual considerations particular to the individual
shareholder.
 
     The discussion of federal income taxes is included herein for general
information only. EACH BANK SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PROPOSED
MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND OTHER
TAX LAWS.
 
ACCOUNTING TREATMENT
 
     The Merger is expected to qualify as a "pooling of interests" for
accounting and financial reporting purposes. The pro forma results of this
accounting treatment are shown in the unaudited pro forma financial information
appearing elsewhere in this Proxy Statement/Prospectus. See "PRO FORMA FINANCIAL
INFORMATION."
 
     As noted above, it is a condition to the obligation of Bancshares and Bank
to consummate the Merger that Bancshares shall have received a letter from its
auditors, Crowe, Chizek and Company LLP, to the effect that the
 
                                       44
<PAGE>   54
 
Merger will qualify as a pooling of interests transaction under generally
accepted accounting principles. Under the pooling-of-interests method of
accounting, the historical basis of the assets and liabilities of Bancshares and
Bank will be combined at the effective date of the Merger and carried forward at
their previously recorded amounts and the shareholders' equity accounts of
Bancshares and Bank will be combined on Bancshares' consolidated balance sheet.
Income and other financial statements of Bancshares issued after consummation of
the Merger will be restated retroactively to reflect the consolidated operations
of Bancshares and Bank as if the Merger had taken place prior to the periods
covered by such financial statements. In order for the Merger to qualify for
pooling-of-interests accounting treatment, substantially all (90% or more) of
the outstanding Bank Common Shares must be exchanged for Bancshares Common
Shares with substantially similar terms. Other criteria must also be satisfied
in order for the Merger to qualify as a pooling of interests, some of which
criteria cannot be satisfied until after the effective time of the Merger.
Furthermore, in order to qualify for pooling of interests accounting treatment,
no affiliate of either Bancshares or Bank may reduce his or her risk relative to
the Bancshares Common Shares received in the Merger until such time as financial
results covering at least 30 days of post-merger combined operations have been
published. In the event such conditions are not met, the Merger would not be
consummated unless the condition was waived by Bancshares and Bank.
 
INTEREST OF BANK MANAGEMENT IN THE MERGER
 
     Upon consummation of the Merger, the size of the Bancshares Board of
Directors will expand to twenty-five (25) members and three (3) members of the
Bank's Board of Directors to be recommended by Bank and selected by Bancshares
will be appointed to serve on the Bancshares Board of Directors (collectively,
the "New Directors"). One of the New Directors will be designated by Bancshares
for membership on the Executive Committee of the Bancshares Board of Directors,
if any such committee is formed. In addition, a member of the Bank's management
team will be selected by Bancshares to serve on the Management Executive
Committee of Bancshares. Furthermore, Mr. Richard R. Hollington, Jr., the
Chairman of the Board of Bank, will become a Vice Chairman of Bancshares and
thereafter Mr. James McBane, the current Chairman of the Board of Bancshares,
(who will become the Vice Chairman of the Board of Sky Financial upon
consummation of the Mid Am Merger) will be designated as the First Vice Chairman
of the Sky Financial Board of Directors. Mr. Richard Hollington III, the Chief
Operating Officer of Bank, will become a Senior Vice President -- Integration
Manager of Sky Financial.
 
     For their services, the New Directors will be compensated as directors of
Bancshares. Bancshares currently pays an annual retainer of $9,800 to directors
of Bancshares. In addition, directors currently receive a fee of $450 for each
Board meeting and $150 for each committee meeting they attend.
 
     At the Effective Time of the Merger, the composition of the Bank Board of
Directors will be changed, such that certain of the current Bank directors shall
continue to serve as directors of the Bank, along with current members of the
Boards of Directors of the various banks which will be merged with and into the
Bank after the consummation of the Merger. See "PROPOSED MERGER -- Operations of
Bank After the Merger."
 
     Furthermore, Bancshares shall have entered into an employment agreement
with Jack Donaldson, President and Chief Executive Officer of Bank and severance
agreements with certain other Bank officers, to take effect at the effective
time of the Merger, all as mutually agreed upon by Bancshares and such officers.
 
EXPENSES OF THE MERGER
 
     Bancshares and Bank shall each bear its respective expenses incurred in
connection with the Merger and the transactions contemplated thereby, including
without limitation, all fees of its respective legal counsel, financial advisors
and accountants. Bancshares shall be responsible for all expenses incident to
obtaining requisite regulatory approvals.
 
REGULATORY APPROVALS
 
     Bancshares is in the process of filing the applications necessary to obtain
the approval for the Merger from the Federal Reserve Board and the Ohio
Department of Commerce (Division of Financial Institutions, Office of
 
                                       45
<PAGE>   55
 
Banks and Savings & Loans). The Merger may not be consummated for 15 days after
approval by the Federal Reserve Board, during which time an action may be
brought by the United States Department of Justice challenging the Merger on
antitrust grounds. Bancshares has no reason to believe the Merger will be
challenged on antitrust grounds.
 
EFFECTIVE TIME OF THE MERGER
 
     As used in this Proxy Statement/Prospectus, "Effective Time" means the date
and time when the Merger becomes effective, which will occur upon the filing
with the Ohio Secretary of State of a certified copy of the Agreement and Plan
of Merger together with a certificate of approval from the Ohio Department of
Commerce, Division of Financial Institutions, Office of Banks and Savings and
Loans in accordance with Section 1121.06 of the Ohio Revised Code.
 
OPERATIONS OF BANK AFTER THE MERGER
 
     Pursuant to the terms of the Merger Agreement, an interim banking
subsidiary of Bank will be merged with and into Bank and Bank shall be the
Surviving Corporation as of the Effective Time and will be a wholly-owned
subsidiary of Bancshares. The Articles of Incorporation and Code of Regulations
of the interim bank existing immediately prior to the Merger shall become the
Articles of Incorporation and Code of Regulations of the Surviving Corporation
until thereafter duly altered, amended or repealed in accordance with applicable
law. Assuming the consummation of the Mid Am Merger, as soon as reasonably
practicable after the Merger and following the receipt of all necessary
regulatory approvals, two of Mid Am's banking affiliates, specifically, American
Community Bank, N.A. and Amerifirst Bank, N.A. will be merged with and into
Bank. In addition two other banking affiliates, specifically, First National
Bank Northwest Ohio and Mid American National Bank & Trust Company will merge
with one another, with Mid American National Bank & Trust Company as the
resulting bank.
 
BUSINESS PENDING THE MERGER
 
     From the date of the Merger Agreement to the Effective Time of the Merger,
Bank shall carry on its business in substantially the same manner as heretofore
and without the written consent of Bancshares, Bank shall not (a) do any of the
things which they represent and warrant in the Merger Agreement have not been
done since December 31, 1997 or the date of the Merger Agreement, as the case
may be, except as necessary to carry out the Merger Agreement on the part of
Bank; (b) engage in any transaction which would be inconsistent with any other
representation or warranty of Bank set forth in the Merger Agreement or which
would cause a breach of any such representation of warranty if made at or
immediately following such transaction; or (c) engage in any lending activities
other than in the ordinary course of business consistent with past practice.
Bank shall send to Bancshares via facsimile transmission a copy of all loan
presentations made to Bank's Board Loan Committee at the same time as such
presentations are transmitted to said committee, to enable one of Bancshares'
senior loan committee members to review, comment and make reasonable
recommendations to the loan committee with respect to such loan presentations.
Bank shall consult with Bancshares prior to hiring any full-time employees at an
annual salary in excess of $25,000, other than replacement employees for
positions then existing. Bank will use its reasonable best efforts to keep its
business organizations intact, to keep available the services of present
employees, and to preserve the goodwill of customers, suppliers, and others
having business relations with them.
 
STOCK OPTION AGREEMENT
 
     On July 23, 1998, Bancshares entered into a Stock Option Agreement with
Bank that grants Bancshares a binding option to purchase up to 5.42% of the
outstanding Bank Common Shares at an exercise price of $400.00 per share in
certain circumstances.
 
     Bancshares may exercise the binding option at any time or upon the
occurrence of any of the following events: (i) Bank enters into an agreement
with any person to merge, consolidate or acquire all or substantially all of the
assets of Bank or for the purchase or acquisition of securities representing 20%
or more of the voting power of Bank; (ii) any person (other than Bancshares)
acquires beneficial ownership or the right to acquire
 
                                       46
<PAGE>   56
 
beneficial ownership of 20% or more of the outstanding Bank Common Shares after
the date of the Stock Option Agreement; (iii) any person makes a bona fide
takeover proposal to Bank by public announcement or written communication that
is or becomes the subject of public disclosure, and, following such bona fide
takeover proposal, the Bank shareholders vote not to approve the Merger between
Bancshares and Bank; (iv) Bank breaches the Stock Option Agreement in any
material respect, which breach shall not have been cured within 15 days after
notice; or (v) Bank breaches the Merger Agreement between Bancshares and Bank
following a bona fide takeover proposal.
 
     Bancshares' binding option may be terminated in any of the following
manners: (i) by mutual consent of Bancshares and Bank; (ii) by either Bancshares
or Bank if the Federal Reserve Board issues an order denying approval of the
Merger of Bancshares and Bank or if any other governmental entity issues a final
permanent order enjoining or otherwise prohibiting consummation of the Merger;
(iii) by either Bancshares or Bank if the Merger has not been consummated on or
before March 31, 1999; or (iv) by either Bancshares or Bank if no Purchase Event
(as defined in the Stock Option Agreement) has occurred and Bank's shareholders
fail to approve the Merger.
 
     A copy of the Stock Option Agreement is attached to this Proxy
Statement/Prospectus as Appendix D and is incorporated herein by reference.
 
SURRENDER OF CERTIFICATES
 
     After the Effective Time, each holder of an outstanding certificate or
certificates for Bank Common Shares converted into Bancshares Common Shares will
be entitled to receive a certificate or certificates representing the number of
whole Bancshares Common Shares into which such holder's Bank Common Shares were
converted and, if applicable, a cash payment in lieu of any fractional share.
Each holder of Bank Common Shares will surrender the outstanding certificate(s)
to Bancshares' designated exchange agent, the Bank of New York (the "Exchange
Agent").
 
     Included with this Proxy Statement/Prospectus is a letter of transmittal
for use by Bank shareholders in surrendering their Bank Common Share
certificates to the Exchange Agent. Upon surrender of the Bank Common Share
certificate(s) for cancellation to the Exchange Agent, together with a completed
letter of transmittal and any other documents reasonably requested, the holder
of the Bank Common Share certificate(s) will be entitled to receive that number
of whole Bancshares Common Shares that such holder has the right to receive
under the Merger Agreement and the surrendered Bank Common Share certificate(s)
will be canceled. Shareholders may submit letters of transmittal and Bank common
share certificates to the Exchange Agent any time on or after the date of the
Special Meeting.
 
     In the event of a lost certificate, the Bank shareholder shall provide, in
lieu of the lost certificate, (i) a request for a replacement certificate, (ii)
an indemnity agreement and (iii) other reasonable items (including an affidavit)
requested by Bank in accordance with Article VI, Section 3 of Bank's Code of
Regulations.
 
     In the event of a transfer of ownership of Bank Common Shares that are not
registered in the transfer records of Bank, a certificate representing the
proper number of Bancshares Common Shares may be issued to a transferee if the
certificate representing such Bank Common Shares is presented to the Exchange
Agent, accompanied by all documents required by Bancshares to evidence and
effect such transfer and to evidence that any applicable stock transfer taxes
have been paid.
 
     After the consummation of the Merger, there will be no transfers on the
stock transfer books of Bank of any Bank Common Shares. If, after the
consummation of the Merger, certificates and letters of transmittal for Bank
Common Shares are properly presented to Bancshares, such certificates will be
canceled and exchanged for the consideration specified in the Merger Agreement,
subject to applicable law and to the extent that Bancshares has not paid such
consideration to a public official pursuant to applicable abandoned property
laws.
 
RESALE OF BANCSHARES COMMON SHARES
 
     No restrictions on the sale or other transfer of the Bancshares Common
Shares issued pursuant to the Merger will be imposed solely as a result of the
Merger, except for restrictions on the transfer of shares issued to any
                                       47
<PAGE>   57
 
Bank shareholder who may be deemed to be an "affiliate" of Bank for purposes of
Rule 145 under the 1933 Act. Generally, "affiliates" of Bank would include
officers, directors and significant shareholders of Bank. The Merger Agreement
requires Bank to cause persons who could be considered to be "affiliates" to
enter into an agreement with Bancshares to the effect that the Bancshares Common
Shares to be acquired by such "affiliates" will not be sold, pledged,
transferred or otherwise disposed of except in compliance with the 1933 Act and
the rules and regulations thereunder. Sales of Bancshares Common Shares by
affiliates of Bancshares are subject to similar transfer restrictions.
 
     Bancshares Common Shares issued to Bank shareholders who may be deemed to
be affiliates may be resold only (i) in transactions permitted by Rule 145
promulgated under the 1933 Act, (ii) pursuant to an effective registration
statement, or (iii) in transactions exempt from registration. Rule 145, as
currently in effect, imposes restrictions on the manner in which such affiliates
may make resales and also on the number of shares that such affiliates, and
others with whom they might act in concert, may sell within any three month
period.
 
RIGHTS OF DISSENTING BANK SHAREHOLDERS
 
     Shareholders of Bank are entitled to certain dissenters' rights pursuant to
Section 1701.85 of the ORC. Section 1701.85 generally provides that shareholders
of Bank will not be entitled to such rights absent compliance with Section
1701.85 and failure to take any one of the required steps may result in the
termination or waiver of such rights. Specifically, any Bank shareholder who is
a record holder of Bank Common Shares on the Record Date and whose shares are
not voted in favor of the Merger may be entitled to be paid the "fair cash
value" of such Bank Common Shares after the Effective Time. To be entitled to
such payment, a shareholder must deliver a written demand for payment therefor
to Bank on or before the tenth day following the Bank Special Meeting and must
otherwise comply with Section 1701.85. Any written demand must specify the
shareholder's name and address, the number and class of shares held by him or
her on the Record Date, and the amount claimed as the "fair cash value" of said
Bank Common Shares. See the text of Section 1701.85 of the ORC attached as
Appendix B to this Proxy Statement/Prospectus for specific information on the
procedure to be followed in exercising dissenters' rights.
 
     If Bank so requests, dissenting shareholders must submit their share
certificates to Bank within fifteen days of such request, for endorsement
thereon by Bank that demand for appraisal has been made and failure to comply
with such request could terminate the dissenting shareholders rights. Such
certificates will be promptly returned to the dissenting shareholders by Bank.
If Bank and any dissenting shareholder cannot agree upon the "fair cash value"
of the Bank Common Shares, either may, within three months after service of
demand by the shareholder, file a petition in the Court of Common Pleas of
Hancock County, Ohio (the "Court") for a determination of the "fair cash value"
of said Bank Common Shares. The Court may appoint one or more appraisers to
determine the "fair cash value" and if the Court approves the appraisers'
report, judgment will be entered therefor, and the costs of the proceedings,
including reasonable compensation of the appraisers, will be assessed or
apportioned as the Court considers equitable.
 
                                       48
<PAGE>   58
 
                    DESCRIPTION OF BANCSHARES CAPITAL SHARES
 
GENERAL
 
     Bancshares has authorized 36,000,000 Common Shares, without par value, of
which 17,748,688 shares are issued and outstanding and 9,571 are held in
treasury. Each outstanding Bancshares Common Share is duly authorized, validly
issued, fully paid and nonassessable. The holders of Bancshares Common Shares
have one vote per share on each matter on which shareholders are entitled to
vote and, in accordance with Ohio law, cumulative voting rights may be requested
in connection with the election of directors. Directors are elected for
staggered, three year terms. Specifically, the Board is divided into three
classes, one of which is elected annually. On liquidation or dissolution of
Bancshares, the holders of Bancshares Common Shares are entitled to share
ratably in such assets as remain after creditors have been paid.
 
     In addition, Bancshares has authorized 200,000 shares of serial preferred
stock ("Serial Shares"), none of which are currently outstanding. The terms of
the Serial Shares are to be established by Bancshares' Board of Directors;
therefore, if Bancshares were to issue Serial Shares in the future, holders
thereof might have preference over the holders of Bancshares Common Shares in
the event of a liquidation or dissolution and may have other rights which are
superior to or in addition to the rights of holders of Bancshares Common Shares.
Serial Shares have a par value of $10.00 per share. Bancshares Common Shares
have no par value. Holders of Bancshares Common Shares have no preemptive
rights, subscription rights or conversion rights.
 
     Bancshares' Board of Directors determines whether to declare dividends and
the amount of any dividends declared. Such determinations by the Board of
Directors take into account Bancshares' financial condition, results of
operations and other relevant factors. While management expects to maintain its
policy of paying regular cash dividends, no assurances can be given that any
dividends will be declared, or, if declared, what the amount of such dividends
will be. See "INFORMATION WITH RESPECT TO BANCSHARES--Market Price of Bancshares
Common Shares."
 
     The Bank of New York is the transfer agent and registrar for Bancshares
Common Shares.
 
DESCRIPTION OF CONTROL SHARE ACQUISITION PROVISIONS
 
     Currently, Bancshares' Articles of Incorporation restrict certain
acquisitions of Bancshares Common Shares that meet the definition of a Control
Share Acquisition. A Control Share Acquisition is defined as the acquisition,
directly or indirectly, by any person, of Bancshares Common Shares that, when
added to all other shares of Bancshares in respect of which such person may
exercise or direct the exercise of voting power, would entitle such person,
immediately after such acquisition, directly or indirectly, to exercise or
direct the exercise of the voting power in the election of directors within any
of the following ranges of such voting power:
 
     (a) One-fifth or more but less than one-third of such voting power;
 
     (b) One-third or more but less than a majority of such voting power;
 
     (c) A majority or more of such voting power.
 
The Articles of Incorporation provide for certain exceptions to this definition,
such as good faith acquisitions not for the purpose of circumventing the
Articles of Incorporation, bequests, inheritances and gifts, pledges or other
security interests created in good faith and not for the purpose of
circumventing the Articles of Incorporation, or pursuant to certain
shareholder-approved mergers, consolidations or majority share acquisitions. If
an acquisition of Bancshares Common Shares qualifies as a Control Share
Acquisition, authorization for such transaction must be obtained at a special
shareholder meeting held in accordance with procedures contained in the Articles
of Incorporation. If these procedures are violated, the person making such
acquisition loses certain shareholder rights.
 
                                       49
<PAGE>   59
 
  Procedures
 
     In order to obtain authorization for a Control Share Acquisition, the
person proposing to make such acquisition must deliver a notice to Bancshares
(the "Notice") including the following information:
 
          (a) The identity of the person who is giving the Notice;
 
          (b) A statement that the Notice is given pursuant to the Articles of
     Incorporation;
 
          (c) The number and class of shares of Bancshares owned, directly or
     indirectly, by the person who gives the Notice;
 
          (d) The range of voting power under which the proposed Control Share
     Acquisition would, if consummated, fall;
 
          (e) A description in reasonable detail of the terms of the proposed
     Control Share Acquisition; and
 
          (f) Reasonable evidence that the proposed Control Share Acquisition,
     if consummated, would not be contrary to law and that the person who is
     giving the Notice has the financial capacity to make the proposed Control
     Share Acquisition.
 
Within ten days of receiving the Notice, the Board of Directors must call a
special meeting of shareholders to be held not later than 50 days after receipt
of the Notice. The purpose of the special meeting of the shareholders is to
consider the proposed Control Share Acquisition; provided, that the Board of
Directors shall have no obligation to call such meeting if they make a
determination within ten days after receipt of the Notice (i) that the Notice
was not given in good faith, (ii) that the proposed Control Share Acquisition
would not be in the best interests of Bancshares and its shareholders or (iii)
that the proposed Control Share Acquisition could not be consummated for
financial or legal reasons.
 
  Requirements for Approval
 
     The person who delivered the Notice may make the proposed Control Share
Acquisition if both of the following occur: (i) the shareholders authorize such
acquisition at the special meeting called by the Board of Directors for that
purpose, at which a quorum is present, by an affirmative vote of a majority of
the shares entitled to vote in the election of directors ("Voting Shares")
represented at such meeting in person or by proxy and by a majority of the
portion of such Voting Shares represented at such meeting in person or by proxy
excluding the votes of "Interested Shares"; and (ii) such acquisition is
consummated, in accordance with the terms so authorized, not later than 360 days
following shareholder authorization of the Control Share Acquisition.
"Interested Shares" are Voting Shares with respect to which any of the following
persons may exercise or direct the exercise of the voting power:
 
          (a) any person whose Notice prompted the calling of the meeting of
     shareholders;
 
          (b) any officer of Bancshares elected or appointed by the directors of
     Bancshares; and
 
          (c) any employee of Bancshares who is also a director of Bancshares.
 
  Violation of Restriction
 
     Bancshares Common Shares issued or transferred to any person in violation
of this restriction are valid only with respect to such amount of shares as does
not result in a violation of the Bancshares Articles of Incorporation, and such
issuance or transfer is null and void with respect to the remainder of such
shares. Any such remainder of shares are called "Excess Shares." Excess Shares
are not entitled to any voting rights, are not considered to be outstanding for
quorum or voting purposes, and are not entitled to receive dividends, interest
or any other distribution with respect to the Excess Shares. Any person who
receives dividends, interest or any other distribution in respect to Excess
Shares holds the distribution as agent for Bancshares and, following a permitted
transfer, for the transferee. Any holder of Excess Shares may transfer the
Excess Shares (together with any distributions thereon) to any person who,
following such transfer, would not own shares in violation of the
 
                                       50
<PAGE>   60
 
Articles of Incorporation. Upon a permitted transfer, Bancshares will pay or
distribute to the transferee any distributions on the Excess Shares not
previously paid or distributed.
 
     Assuming the receipt of the requisite approval by the Bancshares
shareholders at its October 1, 1998 special meeting, the Control Share
Acquisition Provisions found in the Bancshares Articles of Incorporation will be
repealed and Sky Financial Group, Inc. will have no Control Acquisition
Provisions in its Articles of Incorporation upon consummation of the Mid Am
Merger.
 
                   COMPARISON OF CERTAIN RIGHTS OF HOLDERS OF
              COMMON SHARES OF SKY FINANCIAL, BANK AND BANCSHARES
 
INTRODUCTION
 
     As a consequence of the Merger, shareholders of Bank will become
shareholders of Bancshares and, subsequent to the consummation of the Mid Am
Merger, will become shareholders of Sky Financial Group, Inc. ("Sky Financial").
The following is a summary of certain similarities and all material differences
between the rights of holders of Bank Common Shares, the rights of holders of
Bancshares Common Shares and the rights of holders of Sky Financial Common
Shares. As Bank is a bank and Bancshares and Sky Financial are corporations,
organized under the Ohio General Corporation Law (the "OGCL"), these differences
arise from various provisions of the Articles of Incorporation and Code of
Regulations of each of Bank, Bancshares and Sky Financial.
 
     THE FOLLOWING SUMMARY IS NECESSARILY GENERAL AND DOES NOT PURPORT TO BE A
COMPLETE DISCUSSION OF, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE
OGCL AND THE EXISTING ARTICLES OF INCORPORATION AND CODE OF REGULATIONS OF
BANCSHARES, BANK AND SKY FINANCIAL.
 
AUTHORIZED SHARES
 
     Sky Financial. The Sky Financial Articles of Incorporation will provide for
150,000,000 shares of Sky Financial common stock, without par value, and
10,000,000 shares of Sky Financial preferred stock, par value $10.00 per share.
If Sky Financial serial preferred shares were to be issued, the rights of
holders of Sky Financial common stock would be subordinated in certain respects
to the rights of the holders of Sky Financial serial preferred shares.
 
     Bancshares. The Bancshares Articles of Incorporation provide for 36,000,000
shares of Bancshares common stock, without par value, and 200,000 serial
preferred shares, par value $10.00 per share. No serial preferred shares are
currently outstanding.
 
     Bank. The Bank Articles provide for the maximum number of shares which Bank
is authorized to have outstanding to be 88,000 shares, of which 50,411 shares
shall be Class A Common Shares, $50 par value, and 37,589 shares shall be Class
B Common Shares, $50 par value.
 
AMENDMENTS TO ARTICLES OF INCORPORATION OR CODE OF REGULATIONS
 
     Sky Financial. Except for specific provisions relating to an amendment with
respect to Sky Financial serial preferred shares, an amendment to Sky Financial
Articles of Incorporation will require the approval of a majority vote of the
outstanding shares of Sky Financial voting as a class. Notwithstanding the
foregoing, any amendment or addition to Sky Financial Articles of Incorporation
which is inconsistent with or would have the effect of amending certain sections
of Sky Financial Code of Regulations, including provisions governing the number,
classification, election or term of office of directors or removal of directors,
would require the same affirmative vote of shareholders as would be required if
such provision were being amended or revised under Sky Financial Code of
Regulations.
 
     The Sky Financial Code of Regulations will provide for amendments thereto
upon the affirmative vote of the holders of a majority of the shares entitled to
vote; provided, however, that any amendment with respect to the number,
classification, election or term of office of directors or the removal of
directors will require the
 
                                       51
<PAGE>   61
 
affirmative vote of at least 75% of the shares entitled to vote, unless such
amendment has been recommended by at least two-thirds of the Sky Financial board
of directors.
 
     Bancshares. The provisions of the Bancshares Articles of Incorporation and
Code of Regulations governing amendments thereto in effect before the Mid Am
Merger are the same as the provisions in effect for Sky Financial after the Mid
Am Merger.
 
     Bank. The Bank's Articles of Incorporation can be amended upon the
affirmative vote of the holders of a majority of the shares entitled to vote.
The Code of Regulations of Bank provides for amendments thereto upon the
affirmative vote of the holders of a majority of the shares entitled to vote.
 
SPECIAL MEETINGS OF SHAREHOLDERS
 
     Sky Financial. The Sky Financial Code of Regulations will provide that a
special meeting of the shareholders of Sky Financial may be called by any of the
Chairman, Chief Executive Officer, the President, the Chief Operating Officer,
any Executive Vice President and the majority of directors. In addition, holders
representing at least 50% of the outstanding shares entitled to vote at the
special meeting will have the authority to call such meeting.
 
     Bancshares. The provision governing special meetings of shareholders under
the Bancshares Code of Regulations provides that a special meeting of
shareholders of Bancshares may be called by any of the Chairman, the President,
any Vice President and the majority of directors. In addition, holders
representing at least 50% of the outstanding shares entitled to vote at the
special meeting will have the authority to call such meeting.
 
     The Bancshares Code of Regulations require a shareholder to notify
Bancshares of any proposal at least sixty (60) days prior to the shareholders
meeting. Such notice must include a brief description of the proposal, an
explanation for why it is being proposed, and the name, share ownership and
material interest of the shareholder in the proposal, if any.
 
     Bank. A special meeting of the Bank shareholders can be called by the Bank
Board of Directors or by the Chairman or President of Bank. A special meeting
may also be called at the written request of holders of record of not less than
a majority of the Bank Class A Common Shares and Bank Class B Common Shares.
 
     The Bank Code of Regulations contain no provisions for shareholder
proposals.
 
NUMBER OF DIRECTORS; CLASSIFIED BOARD OF DIRECTORS
 
     Sky Financial. The Sky Financial Code of Regulations will provide that the
number of directors shall not be less than five (5) nor more than thirty-five
(35), with the exact number of directors to be determined from time to time by
an 80% majority vote of the directors then in office. The Sky Financial Code of
Regulations provides for a classified board of directors, such that
approximately one-third of the members of the Sky Financial board of directors
are elected each year; consequently, two annual meetings are effectively
required for Sky Financial's shareholders to change a majority of the members of
the Sky Financial board of directors.
 
     For a period of three years after the effective time of the Mid Am Merger,
in the event that a Mid Am Director or a Bancshares Director or a director
otherwise elected or nominated pursuant to the Mid Am Merger Agreement resigns,
is no longer able to serve or does not stand for reelection, (i) if such
director is a Mid Am Director or a nominee of the Mid Am Directors, then the Mid
Am Directors and nominees of the Mid Am Directors serving as directors will have
the exclusive right to select an individual to fill such vacancy and (ii) if
such director is a Bancshares Director or a nominee of the Bancshares Directors,
then the Bancshares Directors and nominees of the Bancshares Directors serving
as directors will have the exclusive right to nominate an individual to fill
such vacancy and the entire board of directors of Sky Financial will either
elect such person as a director or nominate such person for election as a
director.
 
     Any amendment or repeal of the foregoing provisions of Sky Financial Code
of Regulations will require the affirmative vote of at least 75% of the
outstanding shares eligible to vote for the election of directors unless such
amendment or repeal has been recommended by the affirmative vote of at least
two-thirds of the entire Sky
 
                                       52
<PAGE>   62
 
Financial board of directors, in which case only a majority vote of the
outstanding shares eligible to vote will be required.
 
     Bancshares. The Bancshares Code of Regulations provides that the number of
directors shall not be less than nine nor more than 21, with the exact number of
directors to be determined from time to time by a majority vote of the directors
then in office or by the shareholders of Bancshares. The Bancshares shareholders
have fixed the number at 14 directors. The Bancshares Code of Regulations
provides for a classified board of directors, such that approximately one-third
of the members of the Bancshares board of directors are elected each year;
consequently, two annual meetings are effectively required for Bancshares'
shareholders to change a majority of the members of the Bancshares board of
directors.
 
     Any amendment or repeal of the foregoing provisions of the Bancshares Code
of Regulations requires the affirmative vote of at least 75% of the outstanding
shares eligible to vote for the election of directors unless such amendment or
repeal has been recommended by the affirmative vote of at least two-thirds of
the entire Bancshares board of directors, in which case only a majority of the
outstanding shares eligible to vote thereon is required.
 
     Bank. The Bank Code of Regulations provides that the number of the
directors of Bank shall be seventeen (17), all of the same class.
 
REMOVAL OF DIRECTORS
 
     Sky Financial. The Sky Financial Code of Regulations will provide that a
director may be removed only for cause and only by the affirmative vote of 80%
of the entire Sky Financial board of directors. Amendment or repeal of the
foregoing provision requires the vote of holders representing at least 75% of
the outstanding capital stock entitled to vote for the election of directors,
unless such amendment has been recommended by at least two-thirds of the Sky
Financial board of directors then in office, in which case only a majority vote
of the outstanding shares eligible to vote is required.
 
     Bancshares. The Bancshares Code of Regulations provides that a director may
be removed without cause by the affirmative vote of the holders representing no
less than 75% of the outstanding capital stock entitled to vote for the election
of directors. Because shareholders of Bancshares may exercise cumulative voting
rights, no individual director may be removed if the votes of a sufficient
number of shares are cast against such director's removal such that, if
cumulatively voted at an election of all the directors, such votes would be
sufficient to elect at least one director.
 
     Bank. The Bank's Code of Regulations provides that a director may be
removed from office without cause by the affirmative vote of holders of shares
entitling them to exercise a majority of the voting power of Bank (and without
regard to what might be the case if cumulative voting were permitted).
 
ADVANCE NOTICE OF DIRECTOR NOMINATIONS
 
     Sky Financial. The Sky Financial Code of Regulations will provide that
nominations for election to the Sky Financial board of directors may be made by
the Sky Financial board of directors or by any holders of shares of the capital
stock of Sky Financial entitled to vote for the election of directors.
Nominations other than those made by or on behalf of the Sky Financial board of
directors must be made in writing delivered to or mailed and received at the
principal executive offices of Sky Financial no less than 60 days nor more than
90 days prior to the meeting of shareholders at which directors are to be
elected. However, if notice of the meeting is mailed or public disclosure is
made to shareholders less than 75 days before the meeting date, the nomination
must be received no later than the close of business on the 15th day following
the day on which notice of the meeting was mailed or public disclosure made.
Such notice must be accompanied by the written consent of each proposed nominee
to serve as a director of Sky Financial, if elected.
 
     Bancshares. Provisions dealing with the nomination of directors to the
Bancshares Board are identical to the provisions set forth in Sky Financial Code
of Regulations.
 
                                       53
<PAGE>   63
 
     Bank. The Bank's Code of Regulations do not contain any provisions relating
to advance notice of director nominations.
 
CUMULATIVE VOTING
 
     Sky Financial. The Sky Financial Articles of Incorporation will provide
that no shareholder of Sky Financial may cumulate his or her voting power in the
election of directors.
 
     Bancshares. Under the OGCL, every shareholder of Bancshares has the right
to vote cumulatively for the election of directors, provided such shareholder
first serves timely written notice upon Bancshares. Cumulative voting allows
each shareholder to give one candidate as many votes as the number of directors
to be elected multiplied by the number of voting shares held by such
shareholder, or to distribute his votes on the same principle among two or more
candidates.
 
     Bank. The OGCL provisions described above under "Bancshares" apply to Bank.
 
CONTROL SHARE ACQUISITIONS
 
     Sky Financial. The State of Ohio has passed a control share acquisition
statute (the "Control Share Acquisition Statute") designed to make the
non-negotiated acquisition of control of an Ohio corporation through a tender
offer more difficult. The Sky Financial Articles of Incorporation will specify
that the Control Share Acquisition Statute is not applicable to Sky Financial.
 
     Bancshares. The Articles of Incorporation of Bancshares expressly opt out
of the Control Share Acquisition Statute. In its place, the Bancshares Articles
of Incorporation contain a similar provision which may also make the
non-negotiated acquisition of Bancshares through a tender offer more difficult.
See "Description of Control Share Acquisition Provisions."
 
     Bank. The Control Share Acquisition Statute is applicable to Bank.
 
BUSINESS COMBINATION PROVISIONS
 
     Sky Financial. Under Section 1704 of the OGCL, which is applicable to Sky
Financial as well as to Bancshares, a corporation is prohibited from entering
into a "Chapter 1704 transaction" (as defined herein) with the direct or
indirect beneficial owner of 10% or more of the shares of the corporation (a
"10% shareholder") for at least three years after the shareholder attains his
10% ownership unless the board of directors of the corporation approves, before
the shareholder attains his 10% ownership, either the transaction or the
purchase of shares resulting in his 10% ownership. A "Chapter 1704 transaction"
is broadly defined to include, among other things, a merger or consolidation
involving the corporation and the 10% shareholder, a sale or purchase of
substantial assets between the corporation and the 10% shareholder, a
reclassification, recapitalization, or other transaction proposed by the 10%
shareholder that results in an increase in the proportion of shares beneficially
owned by the 10% shareholder, and the receipt by the 10% shareholder of a loan,
guarantee, other financial assistance, or tax benefit not received
proportionately by all shareholders. Even after the three-year period, Ohio law
restricts these transactions between the corporation and the 10% shareholder. At
that time, such a transaction may proceed only if (a) the board of directors of
the corporation had approved the purchase of shares that gave the shareholder
his 10% ownership, (b) the transaction is approved by the holders of shares of
the corporation with at least two-thirds of the voting power of the corporation
(or a different proportion set forth in the articles of incorporation),
including at least a majority of the outstanding shares after excluding shares
held or controlled by the 10% shareholder, or (c) the business combination
results in shareholders, other than the 10% shareholder, receiving a prescribed
fair price plus interest for their shares.
 
     Bancshares. Bancshares is currently subject to Section 1704 of the OGCL.
 
     Bank. Bank is currently subject to Section 1704 of the OGCL.
 
                                       54
<PAGE>   64
 
VOTE REQUIRED TO APPROVE MERGER, CONSOLIDATION, SALE OF SUBSTANTIALLY ALL ASSETS
 
     Sky Financial. Except as otherwise provided by the Sky Financial Articles
of Incorporation or the Sky Financial Code of Regulations, and subject to
Section 1704 of the OGCL, Sky Financial Articles of Incorporation will provide
that notwithstanding any provision of the OGCL which requires a two-thirds vote,
or any other proportion of the voting power of Sky Financial, any amendments to
the Sky Financial Articles of Incorporation may be made from time to time, and
any proposal or proposition requiring the action of shareholders, including the
merger, consolidation of Sky Financial with another corporation, or sale of
substantially all of the assets of Sky Financial, may be authorized from time to
time by the affirmative vote of the holders of shares entitling them to exercise
a majority of the voting power of Sky Financial.
 
     Bancshares. The Bancshares Articles of Incorporation currently requires the
affirmative vote of holders representing at least two-thirds of the outstanding
capital stock of Bancshares entitled to vote in the election of directors for
the adoption of a plan of merger or consolidation, or for the sale of
substantially all of the assets of Bancshares.
 
     Bank. Holders of Bank Class A Common Shares are entitled to one vote per
share. Holders of Bank Class B Common Shares are entitled to twenty votes per
share. Pursuant to the Bank Code of Regulations, however, holders of Bank Class
A Common Shares and Bank Class B Common Shares are not entitled to cumulative
voting for directors. Moreover, pursuant to the Bank Code of Regulations, the
affirmative vote of the holders of record of a majority of the issued and
outstanding Bank Class A Common Shares and Bank Class B Common Shares in
attendance or represented at any meeting at which a quorum is present is
required for mergers, consolidations and the disposition of all or substantially
all of Bank's assets, and all other Bank shareholder acts.
 
INDEMNIFICATION
 
     Sky Financial. The Sky Financial Code of Regulations will provide that Sky
Financial shall indemnify any director or officer and any former director or
officer and any such director or officer who is or has served at the request of
Sky Financial as a director, officer or trustee of another corporation,
partnership, joint venture, trust or other enterprise (and his heirs, executors
and administrators) against expenses, including attorney's fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him by
reason of the fact that he is or was such director, officer or trustee in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent
permitted by applicable law. Such indemnification will not be deemed to restrict
the power of Sky Financial (i) to indemnify employees, agents and others to the
extent not prohibited by law, (ii) to purchase and maintain insurance or furnish
similar protection on behalf of or for any person who is or was a director,
officer or employee of Sky Financial, or any person who is or was serving at the
request of Sky Financial as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or incurred by him in any such
capacity or arising out of his status as such, and (iii) to enter into
agreements with persons of the class identified in clause (ii) above
indemnifying them against any and all liabilities (or such lesser
indemnification as may be provided in such agreements) asserted against or
incurred by them in such capacities.
 
     In addition, Sky Financial will have indemnification agreements with each
of its directors and executive officers which expand such indemnitees' rights in
the event that the OGCL and the Sky Financial Code of Regulations are changed.
Pursuant to the agreements, indemnitees would receive the highest available of
the following: (i) the benefits provided by the Sky Financial Code of
Regulations as of the date of the agreement; (ii) the benefits provided by the
Sky Financial Code of Regulations in effect at the time that indemnification
expenses are incurred; (iii) the benefits allowable under the OGCL which is in
effect on the date of the agreement; (iv) the benefits allowable under the law
of the jurisdiction under which Sky Financial exists at the time indemnifiable
expenses are incurred; (v) the benefits available under liability insurance
obtained by Sky Financial; (vi) the benefits which would have been available to
the indemnitees under a Bancshares insurance policy which was in effect prior to
and expired on May 8, 1986; or (vii) such other benefits are or may be otherwise
available to the indemnitees. The indemnification rights available under the
agreements are subject to
 
                                       55
<PAGE>   65
 
certain exclusions, including a provision that no indemnification shall be made
if a court determines by clear and convincing evidence that the indemnitee has
acted or failed to act with deliberate intent to cause injury to, or with
reckless disregard for the best interests of, Sky Financial.
 
     Bancshares. Bancshares' current indemnification program, including a
provision in the Bancshares Code of Regulations and the protections offered by
indemnification agreements, individual directors and executive officers is
identical to the Sky Financial program described above.
 
     Bank. Under the Bank's Code of Regulations, mandatory indemnification is
available only to Bank Directors.
 
SHAREHOLDERS RIGHTS PLAN
 
     Sky Financial. Sky Financial will have a shareholder rights plan. This plan
may make it more difficult for a potential acquiror to effect a non-negotiated
business combination with Sky Financial.
 
     Bancshares. Bancshares implemented a shareholder's rights plan on July 21,
1998. The shareholder rights plan is not affected by the consummation of the
Merger or the other transactions contemplated in the Merger Agreement.
 
     Bank. Bank does not have a shareholder rights plan.
 
PREEMPTIVE RIGHTS
 
     Sky Financial. Sky Financial will not grant preemptive rights to its
shareholders.
 
     Bancshares. The Bancshares Articles have eliminated preemptive rights for
holders of Bancshares Common Shares.
 
     Bank. The Bank Articles have eliminated preemptive rights for holders of
Bank Class A Common Shares. Holders of Bank Class B Common Shares have
preemptive rights to purchase Bank Class B Common Shares to be issued by Bank.
 
                                       56
<PAGE>   66
 
          UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
 
     The following unaudited pro forma condensed combined balance sheet as of
June 30, 1998 and the pro forma condensed combined income statements for the
six-month periods ended June 30, 1998 and 1997 and for each of the three years
in the period ended December 31, 1997, give effect to the Merger, to be
accounted for as a pooling of interests. The pro forma information is based on
the historical consolidated financial statements of Bancshares, Mid Am and Bank
under the assumptions and adjustments set forth in the accompanying notes to the
pro forma condensed combined financial statements. The pro forma condensed
combined financial statements have been prepared by the managements of
Bancshares, Mid Am and Bank based on their respective consolidated financial
statements. Pro forma per share amounts are based on the conversion rate of 0.77
of a share of Bancshares Common Shares for each Mid Am Common Share in the Mid
Am Merger and the conversion rate of 63.25 shares of Bancshares Common Shares
for each Bank Common Share (including Class A Common Shares and Class B Common
Shares) in the Merger involving Bank.
 
     The pro forma condensed combined financial statements include results of
operations as if the Merger had been consummated as of the beginning of the
earliest period presented. The pro forma condensed combined balance sheet
reflects preliminary estimates by Bancshares, Mid Am and Bank of merger-related
charges to be incurred in connection with the consummation of the mergers;
however, the pro forma condensed combined income statements do not reflect these
charges nor the cost savings anticipated to result from the mergers. The current
estimate of merger-related charges is considered preliminary based on the due
diligence that has been performed to date by management in connection with the
mergers and is subject to change. The actual charges incurred may be higher or
lower than what is currently estimated. Merger-related charges are contingent
upon consummation of the mergers and would be recognized for each merger in the
period in which that merger closes.
 
     The pro forma condensed combined financial statements should be read in
conjunction with the historical consolidated financial statements and notes
thereto of Bancshares, Mid Am and Bank and the supplemental consolidated
financial statements and notes thereto of Bancshares, incorporated by reference
herein. Pro forma financial statements are presented for informational purposes
only and are not necessarily indicative of the results of operations or combined
financial position that would have resulted had the Merger been consummated as
of the beginning of the earliest period indicated, nor are they necessarily
indicative of future results of operations or combined financial position.
 
                                       57
<PAGE>   67
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                 JUNE 30, 1998
 
<TABLE>
<CAPTION>
                                                               CITIZENS AND                             CITIZENS, MID AM
                                                                  MID AM                                 AND OHIO BANK
                                                  PRO FORMA     PRO FORMA                  PRO FORMA       PRO FORMA
                       BANCSHARES     MID AM     ADJUSTMENTS     COMBINED     OHIO BANK   ADJUSTMENTS       COMBINED
                       ----------   ----------   -----------   ------------   ---------   -----------   ----------------
                                                                (IN THOUSANDS)
                                                                  (UNAUDITED)
<S>                    <C>          <C>          <C>           <C>            <C>         <C>           <C>
ASSETS
Cash and due from
  banks..............  $   54,966   $  101,787                  $  156,753    $ 15,312                     $  172,065
Federal funds sold
  and interest-
  bearing deposits...      20,452       28,014                      48,466       2,200                         50,666
Securities...........     523,108      421,020                     944,128     143,369                      1,087,497
Loans, net...........   1,121,976    1,634,545                   2,756,521     420,155                      3,176,676
Premises and
  equipment..........      29,518       53,599                      83,117       8,479                         91,596
Accrued interest
  receivable and
  other assets.......      54,458       43,017    $  7,000(1)      104,475      10,033      $ 1,400(1)     $  115,908
                       ----------   ----------    --------      ----------    --------      -------        ----------
  Total assets.......  $1,804,478   $2,281,982    $  7,000      $4,093,460    $599,548      $ 1,400        $4,694,408
                       ==========   ==========    ========      ==========    ========      =======        ==========
LIABILITIES
Deposits.............  $1,400,225   $1,811,696                  $3,211,921    $530,975                     $3,742,896
Federal funds
  purchased and
  repurchase
  agreements.........      79,873      106,408                     186,281          --                        186,281
Other debt and
  Federal Home Loan
  Bank advances......     151,805      179,463                     331,268      11,317                        342,585
Accrued interest
  payable and other
  liabilities........      13,559       21,210    $ 25,000(1)       59,769       4,705      $ 5,000(1)         69,474
                       ----------   ----------    --------      ----------    --------      -------        ----------
  Total
    liabilities......   1,645,462    2,118,777      25,000       3,789,239     546,997        5,000         4,341,236
SHAREHOLDERS'
  EQUITY.............     159,016      163,205     (18,000)(1)     304,221      52,551       (3,600)(1)       353,172
                       ----------   ----------    --------      ----------    --------      -------        ----------
  Total liabilities
    and shareholders'
    equity...........  $1,804,478   $2,281,982    $  7,000      $4,093,460    $599,548      $ 1,400        $4,694,408
                       ==========   ==========    ========      ==========    ========      =======        ==========
</TABLE>
 
- ---------------
(1) Preliminary estimates of merger-related charges. As a result, an estimated
    $8.4 million current and deferred tax asset is included herein.
 
                                       58
<PAGE>   68
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED COMBINED INCOME STATEMENT
 
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
 
<TABLE>
<CAPTION>
                                                        CITIZENS AND                 CITIZENS, MID AM
                                                           MID AM                     AND OHIO BANK
                                                         PRO FORMA                      PRO FORMA
                               BANCSHARES    MID AM       COMBINED      OHIO BANK        COMBINED
                               ----------    ------     ------------    ---------    ----------------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                            (UNAUDITED)
<S>                            <C>           <C>        <C>             <C>          <C>
INTEREST INCOME
Loans, including fees........   $52,633      $74,596      $127,229       $19,034         $146,263
Securities and other.........    16,894       12,942        29,836         4,341           34,177
                                -------      -------      --------       -------         --------
     Total interest income...    69,527       87,538       157,065        23,375          180,440
INTEREST EXPENSE
Deposits.....................    27,320       34,493        61,813        11,281           73,094
Borrowings...................     6,249        8,015        14,264           144           14,408
                                -------      -------      --------       -------         --------
     Total interest
       expense...............    33,569       42,508        76,077        11,425           87,502
                                -------      -------      --------       -------         --------
NET INTEREST INCOME..........    35,958       45,030        80,988        11,950           92,938
PROVISION FOR LOAN LOSSES....     3,409        2,450         5,859           528            6,387
                                -------      -------      --------       -------         --------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN
  LOSSES.....................    32,549       42,580        75,129        11,422           86,551
OTHER INCOME.................     6,028       39,316        45,344         2,630           47,974
OTHER EXPENSES...............    25,628       58,694        84,322         8,874           93,196
                                -------      -------      --------       -------         --------
INCOME BEFORE INCOME TAXES...    12,949       23,202        36,151         5,178           41,329
INCOME TAXES.................     3,770        7,313        11,083         1,625           12,708
                                -------      -------      --------       -------         --------
NET INCOME...................   $ 9,179      $15,889      $ 25,068       $ 3,553         $ 28,621
                                =======      =======      ========       =======         ========
EARNINGS PER COMMON SHARE
Basic........................   $  0.52      $  0.67      $   0.70       $ 44.63         $   0.70
                                =======      =======      ========       =======         ========
Basic -- Class B.............                                            $ 40.57(1)
                                                                         =======
Diluted......................   $  0.52      $  0.66      $   0.69       $ 44.63         $   0.69
                                =======      =======      ========       =======         ========
Diluted -- Class B...........                                            $ 40.57(1)
                                                                         =======
WEIGHTED AVERAGE SHARES
  OUTSTANDING
Basic........................    17,701       23,567        35,848            46           41,098
                                =======      =======      ========       =======         ========
Basic -- Classic B...........                                                 37(1)
                                                                         =======
Diluted......................    17,812       24,128        36,391            46           41,641
                                =======      =======      ========       =======         ========
Diluted -- Class B...........                                                 37
                                                                         =======
</TABLE>
 
- ---------------
(1) The Ohio Bank has two classes of stock with no potentially dilutive
    securities. Only one class of common stock, without par, will be issued in
    the merger.
 
                                       59
<PAGE>   69
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED COMBINED INCOME STATEMENT
 
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
 
<TABLE>
<CAPTION>
                                                          CITIZENS AND                 CITIZENS, MID AM
                                                             MID AM                     AND OHIO BANK
                                                           PRO FORMA                      PRO FORMA
                                 BANCSHARES    MID AM       COMBINED      OHIO BANK        COMBINED
                                 ----------    ------     ------------    ---------    ----------------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                              (UNAUDITED)
<S>                              <C>           <C>        <C>             <C>          <C>
INTEREST INCOME
Loans, including fees..........   $47,766      $71,195      $118,961      $ 17,690         $136,651
Securities and other...........    15,615       12,747        28,362         4,096           32,458
                                  -------      -------      --------      --------         --------
     Total interest income.....    63,381       83,942       147,323        21,786          169,109
INTEREST EXPENSE
Deposits.......................    24,279       34,413        58,692        10,514           69,206
Borrowings.....................     5,405        5,248        10,653           176           10,829
                                  -------      -------      --------      --------         --------
     Total interest expense....    29,684       39,661        69,345        10,690           80,035
                                  -------      -------      --------      --------         --------
NET INTEREST INCOME............    33,697       44,281        77,978        11,096           89,074
PROVISION FOR LOAN LOSSES......     1,215        2,759         3,974           528            4,502
                                  -------      -------      --------      --------         --------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES....    32,482       41,522        74,004        10,568           84,572
OTHER INCOME...................     4,951       33,884        38,835         2,112           40,947
OTHER EXPENSES.................    19,961       50,039        70,000         8,626           78,626
                                  -------      -------      --------      --------         --------
INCOME BEFORE INCOME TAXES.....    17,472       25,367        42,839         4,054           46,893
INCOME TAXES...................     5,340        8,637        13,977         1,242           15,219
                                  -------      -------      --------      --------         --------
NET INCOME.....................   $12,132      $16,730      $ 28,862      $  2,812         $ 31,674
                                  =======      =======      ========      ========         ========
NET INCOME AVAILABLE TO COMMON
  SHAREHOLDERS.................   $12,132      $16,125      $ 28,257      $  2,812         $ 31,069
                                  =======      =======      ========      ========         ========
EARNINGS PER COMMON SHARE
Basic..........................   $  0.69      $  0.69      $   0.79      $  35.33         $   0.76
                                  =======      =======      ========      ========         ========
Basic -- Class B...............                                           $  32.12(1)
                                                                          ========
Diluted........................   $  0.68      $  0.65      $   0.77      $  35.33         $   0.74
                                  =======      =======      ========      ========         ========
Diluted -- Class B.............                                           $  32.12(1)
                                                                          ========
WEIGHTED AVERAGE SHARES
  OUTSTANDING
Basic..........................    17,654       23,309        35,602            45           40,852
                                  =======      =======      ========      ========         ========
Basic -- Classic B.............                                                 38(1)
                                                                          ========
Diluted........................    17,747       25,728        37,558            45           42,808
                                  =======      =======      ========      ========         ========
Diluted -- Class B.............                                                 38(1)
                                                                          ========
</TABLE>
 
- ---------------
 
(1) The Ohio Bank has two classes of stock with no potentially dilutive
    securities. Only one class of common stock, without par, will be issued in
    the merger.
 
                                       60
<PAGE>   70
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED COMBINED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                          CITIZENS AND                 CITIZENS, MID AM
                                                             MID AM                     AND OHIO BANK
                                                           PRO FORMA                      PRO FORMA
                                BANCSHARES     MID AM       COMBINED      OHIO BANK        COMBINED
                                ----------     ------     ------------    ---------    ----------------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                              (UNAUDITED)
<S>                             <C>           <C>         <C>             <C>          <C>
INTEREST INCOME
Loans, including fees.........   $99,187      $146,266      $245,453       $36,449         $281,902
Securities and other..........    32,480        24,936        57,416         8,213           65,629
                                 -------      --------      --------       -------         --------
     Total interest income....   131,667       171,202       302,869        44,662          347,531
INTEREST EXPENSE
Deposits......................    51,253        69,301       120,554        21,662          142,216
Borrowings....................    11,956        12,375        24,331           370           24,701
                                 -------      --------      --------       -------         --------
     Total interest expense...    63,209        81,676       144,885        22,032          166,917
                                 -------      --------      --------       -------         --------
NET INTEREST INCOME...........    68,458        89,526       157,984        22,630          180,614
PROVISION FOR LOAN LOSSES.....     4,335         5,527         9,862         1,066           10,928
                                 -------      --------      --------       -------         --------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES...    64,123        83,999       148,122        21,564          169,686
OTHER INCOME..................    10,991        66,569        77,560         4,607           82,167
OTHER EXPENSES................    43,228       104,052       147,280        17,503          164,783
                                 -------      --------      --------       -------         --------
INCOME BEFORE INCOME TAXES....    31,886        46,516        78,402         8,668           87,070
INCOME TAXES..................     9,466        15,635        25,101         2,649           27,750
                                 -------      --------      --------       -------         --------
NET INCOME....................   $22,420      $ 30,881      $ 53,301       $ 6,019         $ 59,320
                                 =======      ========      ========       =======         ========
NET INCOME AVAILABLE TO COMMON
  SHAREHOLDERS................   $22,420      $ 30,276      $ 52,696       $ 6,019         $ 58,715
                                 =======      ========      ========       =======         ========
EARNINGS PER COMMON SHARE
Basic.........................   $  1.27      $   1.27      $   1.46       $ 75.61         $   1.42
                                 =======      ========      ========       =======         ========
Basic -- Class B..............                                             $ 68.74(1)
                                                                           =======
Diluted.......................   $  1.26      $   1.22      $   1.43       $ 75.61         $   1.40
                                 =======      ========      ========       =======         ========
Diluted -- Class B............                                             $ 68.74(1)
                                                                           =======
WEIGHTED AVERAGE SHARES
  OUTSTANDING
Basic.........................    17,671        23,836        36,025            46           41,275
                                 =======      ========      ========       =======         ========
Basic -- Classic B............                                                  37(1)
                                                                           =======
Diluted.......................    17,778        25,227        37,203            46           42,453
                                 =======      ========      ========       =======         ========
Diluted -- Class B............                                                  37(1)
                                                                           =======
</TABLE>
 
- ---------------
 
(1) The Ohio Bank has two classes of stock with no potentially dilutive
    securities. Only one class of common stock, without par, will be issued in
    the merger.
 
                                       61
<PAGE>   71
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED COMBINED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1996
 
<TABLE>
<CAPTION>
                                                          CITIZENS AND                 CITIZENS, MID AM
                                                             MID AM                     AND OHIO BANK
                                                           PRO FORMA                      PRO FORMA
                                BANCSHARES     MID AM       COMBINED      OHIO BANK        COMBINED
                                ----------     ------     ------------    ---------    ----------------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                              (UNAUDITED)
<S>                             <C>           <C>         <C>             <C>          <C>
INTEREST INCOME
Loans, including fees.........  $ 90,656      $134,721      $225,377       $31,978         $257,355
Securities and other..........    27,326        30,262        57,588         8,107           65,695
                                --------      --------      --------       -------         --------
     Total interest income....   117,982       164,983       282,965        40,085          323,050
INTEREST EXPENSE
Deposits......................    45,158        73,128       118,286        19,002          137,288
Borrowings....................     6,259         6,941        13,200           448           13,648
                                --------      --------      --------       -------         --------
     Total interest expense...    51,417        80,069       131,486        19,450          150,936
                                --------      --------      --------       -------         --------
NET INTEREST INCOME...........    66,565        84,914       151,479        20,635          172,114
PROVISION FOR LOAN LOSSES.....     2,279         4,537         6,816           897            7,713
                                --------      --------      --------       -------         --------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES...    64,286        80,377       144,663        19,738          164,401
OTHER INCOME..................     8,735        49,501        58,236         4,008           62,244
OTHER EXPENSES................    41,737        91,419       133,156        15,975          149,131
                                --------      --------      --------       -------         --------
INCOME BEFORE INCOME TAXES....    31,284        38,459        69,743         7,771           77,514
INCOME TAXES..................     9,554        12,467        22,021         2,343           24,364
                                --------      --------      --------       -------         --------
NET INCOME....................  $ 21,730      $ 25,992      $ 47,722       $ 5,428         $ 53,150
                                ========      ========      ========       =======         ========
NET INCOME AVAILABLE TO COMMON
  SHAREHOLDERS................  $ 21,730      $ 23,585      $ 45,315       $ 5,428         $ 50,743
                                ========      ========      ========       =======         ========
EARNINGS PER COMMON SHARE
Basic.........................  $   1.23      $   1.04      $   1.29       $ 68.20         $   1.25
                                ========      ========      ========       =======         ========
Basic -- Class B..............                                             $ 62.00(1)
                                                                           =======
Diluted.......................  $   1.22      $   0.98      $   1.25       $ 68.20         $   1.22
                                ========      ========      ========       =======         ========
Diluted -- Class B............                                             $ 62.00(1)
                                                                           =======
WEIGHTED AVERAGE SHARES
  OUTSTANDING
Basic.........................    17,708        22,734        35,213            45           40,463
                                ========      ========      ========       =======         ========
Basic -- Classic B............                                                  38(1)
                                                                           =======
Diluted.......................    17,768        26,554        38,215            45           43,465
                                ========      ========      ========       =======         ========
Diluted -- Class B............                                                  38(1)
                                                                           =======
</TABLE>
 
- ---------------
(1) The Ohio Bank has two classes of stock with no potentially dilutive
    securities. Only one class of common stock, without par, will be issued in
    the merger.
 
                                       62
<PAGE>   72
 
                           CITIZENS BANCSHARES, INC.
                                  MID AM, INC.
                                 THE OHIO BANK
 
                 PRO FORMA CONDENSED COMBINED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1995
 
<TABLE>
<CAPTION>
                                                          CITIZENS AND                 CITIZENS, MID AM
                                                             MID AM                     AND OHIO BANK
                                                           PRO FORMA                      PRO FORMA
                                BANCSHARES     MID AM       COMBINED      OHIO BANK        COMBINED
                                ----------     ------     ------------    ---------    ----------------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                              (UNAUDITED)
<S>                             <C>           <C>         <C>             <C>          <C>
INTEREST INCOME
Loans, including fees.........   $ 83,127     $130,300      $213,427      $ 28,757         $242,184
Securities and other..........     27,664       32,243        59,907         5,757           65,664
                                 --------     --------      --------      --------         --------
          Total interest
            income............    110,791      162,543       273,334        34,514          307,848
INTEREST EXPENSE
Deposits......................     42,413       72,527       114,940        15,408          130,348
Borrowings....................      6,210        7,789        13,999           173           14,172
                                 --------     --------      --------      --------         --------
          Total interest
            expense...........     48,623       80,316       128,939        15,581          144,520
                                 --------     --------      --------      --------         --------
NET INTEREST INCOME...........     62,168       82,227       144,395        18,933          163,328
PROVISION FOR LOAN LOSSES.....      2,504        3,002         5,506           966            6,472
                                 --------     --------      --------      --------         --------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES...     59,664       79,225       138,889        17,967          156,856
OTHER INCOME..................      7,531       35,955        43,486         3,126           46,612
OTHER EXPENSES................     40,172       78,416       118,588        13,465          132,053
                                 --------     --------      --------      --------         --------
INCOME BEFORE INCOME TAXES....     27,023       36,764        63,787         7,628           71,415
INCOME TAXES..................      8,229       11,797        20,026         2,322           22,348
                                 --------     --------      --------      --------         --------
NET INCOME....................   $ 18,794     $ 24,967      $ 43,761      $  5,306         $ 49,067
                                 ========     ========      ========      ========         ========
NET INCOME AVAILABLE TO COMMON
  SHAREHOLDERS................   $ 18,794     $ 22,216      $ 41,010      $  5,306         $ 46,316
                                 ========     ========      ========      ========         ========
EARNINGS PER COMMON SHARE
Basic.........................   $   1.06     $   0.96      $   1.15      $  66.67         $   1.14
                                 ========     ========      ========      ========         ========
Basic -- Class B..............                                            $  60.61(1)
                                                                          ========
Diluted.......................   $   1.06     $   0.92      $   1.13      $  66.67         $   1.11
                                 ========     ========      ========      ========         ========
Diluted -- Class B............                                            $  60.61(1)
                                                                          ========
WEIGHTED AVERAGE SHARES
  OUTSTANDING
Basic.........................     17,783       23,070        35,547            45           40,797
                                 ========     ========      ========      ========         ========
Basic -- Classic B............                                                  38(1)
                                                                          ========
Diluted.......................     17,806       27,241        38,782            45           44,032
                                 ========     ========      ========      ========         ========
Diluted -- Class B............                                                  38(1)
                                                                          ========
</TABLE>
 
- ---------------
 
(1) The Ohio Bank has two classes of stock with no potentially dilutive
    securities. Only one class of common stock, without par, will be issued in
    the merger.
 
                                       63
<PAGE>   73
 
                                    EXPERTS
 
     The consolidated financial statements and supplemental consolidated
financial statements of Bancshares as of December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995, incorporated by reference in this
Proxy Statement/Prospectus have been audited by Crowe, Chizek and Company LLP,
as set forth in its report thereon and incorporated by reference herein. The
financial statements audited by Crowe, Chizek and Company LLP have been
incorporated by reference herein in reliance upon such report given upon their
authority as experts in accounting and auditing.
 
     The financial statements of Bank as of December 31, 1997 and 1996 and for
the years ended December 31, 1997, 1996 and 1995, included in this Proxy
Statement/Prospectus have been audited by Crowe, Chizek and Company LLP, as set
forth in its report thereon and included herein. Such consolidated financial
statements audited by Crowe, Chizek and Company LLP are included herein in
reliance upon such report given upon their authority as experts in accounting
and auditing.
 
     The consolidated financial statements of Century incorporated in this Proxy
Statement/Prospectus by reference to Century's Annual Report on Form 10-K for
the year ended December 31, 1997, included in Bancshares Form 8-K/A, have been
so incorporated in reliance on the report of S.R. Snodgrass, A.C., given upon
the authority of such firm as experts in accounting and auditing.
 
     The financial statements of Mid Am incorporated in this Proxy
Statement/Prospectus by reference to Mid Am's Consolidated Annual Report on Form
10-K for the year ended December 31, 1997, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
 
                                 LEGAL OPINIONS
 
     A legal opinion has been rendered by Squire, Sanders & Dempsey L.L.P. to
the effect that the issuance of the shares of Bancshares Common Shares offered
hereby has been duly authorized by Bancshares and that the Shares, when issued
in accordance with the Merger Agreement, will be duly issued and outstanding and
fully paid and non-assessable.
 
                                INDEMNIFICATION
 
     The Code of Regulations of Bancshares provide that Bancshares will
indemnify any director or officer of Bancshares or any person who is or has
served at the request of Bancshares as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise (and his heirs, executors
and administrators) against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually or reasonably incurred because he
or she is or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative. This indemnification is to the full
extent and according to the procedures and requirements of the Ohio General
Corporation Law.
 
     In addition, Bancshares has entered into indemnification agreements with
each of its directors and executive officers which expand the indemnitees'
rights in the event that Ohio law and Bancshares' Regulations are further
changed. The indemnification rights available under the agreements are subject
to certain exclusions, including a provision that no indemnification shall be
made if a court determines by clear and convincing evidence that the indemnitee
has acted or failed to act with deliberate intent to cause injury to, or with
reckless disregard for the best interests of, Bancshares.
 
     Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers or persons controlling Bancshares pursuant
to the foregoing provisions, Bancshares has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
1933 Act and is therefore unenforceable.
 
                                       64
<PAGE>   74
 
                       PROPOSALS FOR 1999 ANNUAL MEETINGS
 
     The Bancshares 1999 Annual Meeting of Shareholders is scheduled to be held
on March 25, 1999. Any proposals of shareholders of Bancshares intended to be
presented at that meeting must have been received by October 28, 1998, for
inclusion in Bancshares' proxy statement and form of proxy relating to the 1999
Annual Meeting of Shareholders.
 
                                       65
<PAGE>   75
 
                                 THE OHIO BANK
 
                              FINANCIAL STATEMENTS
<PAGE>   76
 
                         INDEX TO FINANCIAL INFORMATION
 
<TABLE>
<S>                                                           <C>
INTERIM FINANCIAL STATEMENTS -- June 30, 1998
  BALANCE SHEETS (UNAUDITED) -- June 30, 1998 and December
     31, 1997...............................................   F-3
  STATEMENTS OF INCOME (UNAUDITED) -- Six Months ended June
     30, 1998 and 1997......................................   F-4
  STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) -- Six
     Months ended June 30, 1998 and 1997....................   F-5
  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY -- Six
     Months ended June 30, 1998 and 1997....................   F-6
  STATEMENTS OF CASH FLOWS (UNAUDITED) -- Six Months ended
     June 30, 1998 and 1997.................................   F-7
  NOTES TO FINANCIAL STATEMENTS -- June 30, 1998............   F-8
FINANCIAL STATEMENTS -- December 31, 1997
  REPORT OF INDEPENDENT AUDITORS............................  F-15
  BALANCE SHEETS -- 1997 and 1996...........................  F-16
  STATEMENTS OF INCOME -- 1997, 1996 and 1995...............  F-17
  STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY -- 1997, 1996
     and 1995...............................................  F-18
  STATEMENTS OF CASH FLOWS -- 1997, 1996 and 1995...........  F-19
  NOTES TO FINANCIAL STATEMENTS -- 1997, 1996 and 1995......  F-20
</TABLE>
 
                                       F-1
<PAGE>   77
 
                                 THE OHIO BANK
 
                          INTERIM FINANCIAL STATEMENTS
                                 JUNE 30, 1998
 
                                       F-2
<PAGE>   78
 
                                 THE OHIO BANK
 
                           BALANCE SHEETS (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                               JUNE 30,      DECEMBER 31,
                                                                 1998            1997
                                                               --------    -----------------
                                                                  (DOLLARS IN THOUSANDS)
                                                                   EXCEPT SHARE AMOUNTS
<S>                                                            <C>         <C>
ASSETS
Cash and cash equivalents...................................   $ 15,312        $ 15,893
Federal funds sold..........................................      2,200           3,200
Securities available for sale, at fair value................    143,369         142,932
Loans
  Total loans...............................................    425,052         404,636
  Allowance for loan losses.................................     (4,897)         (4,475)
                                                               --------        --------
     Loans, net.............................................    420,155         400,161
Premises and equipment, net.................................      8,479           7,985
Accrued interest receivable and other assets................     10,033           9,234
                                                               --------        --------
          Total assets......................................   $599,548        $579,405
                                                               ========        ========
LIABILITIES
Noninterest-bearing demand deposits.........................   $ 60,596        $ 59,851
Interest-bearing demand deposits............................    125,851         103,359
Savings deposits............................................     74,706          77,291
Time deposits less than $100,000............................    198,468         206,686
Time deposits, $100,000 and over............................     71,354          75,129
                                                               --------        --------
          Total deposits....................................    530,975         522,316
Other borrowings............................................     11,317           2,326
Accrued interest, taxes and other expenses..................      4,705           4,912
                                                               --------        --------
          Total liabilities.................................    546,997         529,554
                                                               --------        --------
SHAREHOLDERS' EQUITY
Class A common stock: $50 par value, 50,411 and 45,772
  shares authorized and outstanding, respectively...........      2,289           2,289
Class B common stock: $50 par value, convertible to Class A
  shares, 37,228 shares authorized and outstanding..........      1,861           1,861
Surplus.....................................................      7,417           7,417
Undivided profits...........................................     40,044          37,315
Unrealized gain on securities available for sale, net of
  tax.......................................................        940             969
                                                               --------        --------
          Total shareholder's equity........................     52,551          49,851
                                                               --------        --------
          Total liabilities and shareholders' equity........   $599,548        $579,405
                                                               ========        ========
</TABLE>
 
                See accompanying notes to financial statements.
                                       F-3
<PAGE>   79
 
                                 THE OHIO BANK
 
                        STATEMENTS OF INCOME (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED     SIX MONTHS ENDED
                                                           JUNE 30,              JUNE 30,
                                                      ------------------    ------------------
                                                       1998       1997       1998       1997
                                                      -------    -------    -------    -------
                                                               (DOLLARS IN THOUSANDS)
                                                              EXCEPT PER SHARE AMOUNTS
<S>                                                   <C>        <C>        <C>        <C>
INTEREST INCOME
  Loans, including fees.............................  $ 9,614    $ 9,085    $19,034    $17,690
  Securities
     Taxable........................................    1,814      1,700      3,615      3,436
     Tax-exempt.....................................      313        299        624        592
  Federal funds sold................................       43         32        102         68
                                                      -------    -------    -------    -------
          Total interest income.....................   11,784     11,116     23,375     21,786
                                                      -------    -------    -------    -------
INTEREST EXPENSE
  Deposits..........................................    5,643      5,337     11,281     10,514
  Borrowed funds....................................       91        127        144        176
                                                      -------    -------    -------    -------
          Total interest expense....................    5,734      5,464     11,425     10,690
                                                      -------    -------    -------    -------
NET INTEREST INCOME.................................    6,050      5,652     11,950     11,096
Provision for loan losses...........................      264        264        528        528
                                                      -------    -------    -------    -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
  LOSSES............................................    5,786      5,388     11,422     10,568
                                                      -------    -------    -------    -------
NONINTEREST INCOME
  Trust income......................................      365        297        685        603
  Service charges on deposit accounts...............      394        375        728        720
  Gain on sale of loans.............................      275        141        574        256
  Other income......................................      311        243        643        533
                                                      -------    -------    -------    -------
          Total noninterest income..................    1,345      1,056      2,630      2,112
                                                      -------    -------    -------    -------
NONINTEREST EXPENSE
  Salaries and employee benefits....................    2,392      2,288      4,840      4,488
  Occupancy, fixtures and equipment expense.........      735        715      1,458      1,434
  FDIC insurance....................................       17         15         32         30
  Data processing...................................      272        224        557        449
  State franchise taxes.............................      184        166        368        331
  Core deposit amortization.........................       68        149        136        297
  Other.............................................      735        779      1,483      1,597
                                                      -------    -------    -------    -------
          Total noninterest expense.................    4,403      4,336      8,874      8,626
                                                      -------    -------    -------    -------
INCOME BEFORE INCOME TAXES..........................    2,728      2,108      5,178      4,054
Provision for income taxes..........................      880        642      1,625      1,242
                                                      -------    -------    -------    -------
                                                      $ 1,848    $1, 466    $ 3,553    $ 2,812
                                                      =======    =======    =======    =======
NET INCOME
EARNINGS PER COMMON SHARE:
  CLASS A...........................................  $ 23.21    $ 18.43    $ 44.63    $ 35.33
                                                      =======    =======    =======    =======
  CLASS B...........................................  $ 21.10    $ 16.75    $ 40.57    $ 32.12
                                                      =======    =======    =======    =======
</TABLE>
 
                See accompanying notes to financial statements.
                                       F-4
<PAGE>   80
 
                                 THE OHIO BANK
 
                 STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED    SIX MONTHS ENDED
                                                               JUNE 30,             JUNE 30,
                                                          ------------------    ----------------
                                                           1998       1997       1998      1997
                                                          -------    -------    ------    ------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                       <C>        <C>        <C>       <C>
NET INCOME..............................................  $1,848     $1,466     $3,553    $2,812
OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Unrealized gains/(losses) on securities available for
     sale arising during the period.....................      78        827        (29)     (162)
Reclassification adjustment for amounts realized on
  securities sales included in net income...............      --          1         --         1
 
                                                          ------     ------     ------    ------
COMPREHENSIVE INCOME....................................  $1,926     $2,294     $3,524    $2,651
                                                          ======     ======     ======    ======
</TABLE>
 
                See accompanying notes to financial statements.
                                       F-5
<PAGE>   81
 
                                 THE OHIO BANK
 
           STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
 
                    SIX MONTHS ENDED JUNE 30, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                               UNREALIZED
                                                                               GAIN/(LOSS)
                                COMMON     COMMON                             ON SECURITIES
                                 STOCK      STOCK                UNDIVIDED    AVAILABLE FOR
                                CLASS A    CLASS B    SURPLUS     PROFITS         SALE          TOTAL
                                -------    -------    -------    ---------    -------------    -------
                                                        (DOLLARS IN THOUSANDS)
<S>                             <C>        <C>        <C>        <C>          <C>              <C>
BALANCES AT JANUARY 1, 1997...  $2,271     $1,879     $7,417      $32,504         $459         $44,530
Conversion of 361 shares of
  Class B common stock to
  Class A common stock........      18        (18)
Net income....................                                      2,812                        2,812
Cash dividends -- $7.04 per
  share of Class A and $6.40
  per share of Class B........                                       (560)                        (560)
Change in fair value of
  securities available for
  sale, net of tax............                                                    (161)           (161)
                                ------     ------     ------      -------         ----         -------
BALANCES AT JUNE 30, 1997.....  $2,289     $1,861     $7,417      $34,756         $298         $46,621
                                ======     ======     ======      =======         ====         =======
BALANCES AT JANUARY 1, 1998...  $2,289     $1,861     $7,417      $37,315         $969         $49,851
Net income....................                                      3,553                        3,553
Cash dividends -- $10.34 per
  share of Class A and $9.40
  per share of Class B........                                       (824)                        (824)
Change in fair value of
  securities available for
  sale, net of tax............                                                     (29)            (29)
                                ------     ------     ------      -------         ----         -------
BALANCES AT JUNE 30, 1998.....  $2,289     $1,861     $7,417      $40,044         $940         $52,551
                                ======     ======     ======      =======         ====         =======
</TABLE>
 
                See accompanying notes to financial statements.
                                       F-6
<PAGE>   82
 
                                 THE OHIO BANK
 
                            STATEMENTS OF CASH FLOWS
 
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                 SIX MONTHS ENDED
                                                                     JUNE 30,
                                                              ----------------------
                                                                1998         1997
                                                              ---------    ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income................................................  $  3,553     $  2,812
  Adjustments to reconcile net income to net cash from
     operating activities Depreciation and amortization.....       829          995
     Realized security gains, net...........................         0           (2)
     Federal Home Loan Bank stock dividends.................      (101)         (91)
     Gain on sale of loans..................................      (574)        (256)
     Loans originated for sale..............................   (53,034)     (18,153)
     Proceeds from sale of loans originated for sale........    50,616       17,107
     Provision for loan losses..............................       528          528
     Loss on sale of other real estate......................         0           44
     Provision for deferred income taxes....................        16         (257)
     Net amortization on securities.........................        83           83
     Changes in Interest receivable and other assets........      (935)      (1,827)
       Interest payable and other liabilities...............      (203)       1,226
                                                              --------     --------
     Net cash from operating activities.....................       778        2,209
                                                              --------     --------
CASH FLOWS FROM INVESTING ACTIVITIES
  Securities available for sale Proceeds from sales.........         0        3,000
     Proceeds from maturities and repayments................    25,821        7,356
     Purchases..............................................   (26,289)      (6,106)
  Net change in federal funds sold..........................     1,000       (3,200)
  Net increase in loans.....................................   (17,761)     (33,275)
  Proceeds from loan sales..................................       231          527
  Proceeds from sale of other real estate...................         0          250
  Premises and equipment expenditures.......................    (1,187)        (678)
                                                              --------     --------
     Net cash from investing activities.....................   (18,185)     (32,126)
                                                              --------     --------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposit accounts..........................     8,659       19,546
  Net change in short-term borrowings.......................     6,000        8,421
  Proceeds from long-term Federal Home Loan Bank advances...     3,000            0
  Principal payments on long-term Federal Home Loan Bank
     advances...............................................        (9)         (10)
  Dividends paid............................................      (824)        (560)
                                                              --------     --------
     Net cash from financing activities.....................    16,826       27,397
                                                              --------     --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.....................      (581)      (2,520)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............    15,893       20,569
                                                              --------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................  $ 15,312     $ 18,049
                                                              ========     ========
</TABLE>
 
                See accompanying notes to financial statements.
                                       F-7
<PAGE>   83
 
                                 THE OHIO BANK
 
                         NOTES TO FINANCIAL STATEMENTS
 
                                 JUNE 30, 1998
 
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     The following is a summary of significant accounting policies followed by
The Ohio Bank.
 
     These interim financial statements are prepared without audit and reflect
all adjustments which, in the opinion of management, are necessary to present
fairly the financial position of The Ohio Bank (the "Bank") at June 30, 1998,
and its results of operations and cash flows for the periods presented. All such
adjustments are normal and recurring in nature. The accompanying financial
statements do not purport to contain all necessary financial disclosures
required by generally accepted accounting principles that might otherwise be
necessary in the circumstances, and should be read in conjunction with financial
statements, and notes thereto, of the Bank for the year ended December 31, 1997,
included in its 1997 annual report. Refer to the accounting policies of the Bank
described in the notes to financial statements contained in the Bank's 1997
annual report.
 
     The Bank's revenues, operating income, and assets are primarily from the
banking industry. The Bank operates seventeen offices in Hancock, Putnam,
Franklin, Seneca, Wyandot and Cuyahoga Counties. Loan customers include a wide
range of individuals, businesses, and other organizations. A major portion of
loans are secured by various forms of collateral including real estate, business
assets, consumer property, and other items, although borrower cash flow may also
be a primary source of repayment. The Bank also operates a trust department and
engages in mortgage banking operations.
 
     To prepare financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions based on
available information. These estimates and assumptions affect amounts reported
in the financial statements and the disclosures provided; future results could
differ. The collectibility of loans, fair values of financial instruments, and
status of contingencies are particularly subject to change.
 
     Cash and cash equivalents are defined as cash on hand and demand deposits
with other financial institutions. Net cash flows are reported for customer loan
and deposit transactions, federal funds sold, interest-bearing deposits with
other banks and short-term borrowing transactions.
 
     For the six months ended June 30, 1998 and 1997, the Bank paid interest of
$11,296,000 and $10,400,000 and income taxes of $1,629,000 and $1,583,000.
 
     Significant noncash transactions included transfers from loans to other
real estate owned of $144,000 and $175,000 during the six months ended June 30,
1998 and 1997.
 
     Income tax expense is the sum of current-year income tax due or refundable
and change in deferred tax assets and liabilities. Deferred tax assets and
liabilities are the expected future tax consequences of temporary differences
between carrying amounts and tax bases of assets and liabilities computed using
enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets
to the amount expected to be realized.
 
     Under a new accounting standard adopted on January 1, 1998, Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income," comprehensive income is reported for all periods. Comprehensive income
includes both net income and the change in unrealized gains and losses on
securities available for sale.
 
     Earnings per common share is computed under the provisions of SFAS No. 128,
"Earnings per Share," which was adopted retroactively by the Bank on December
31, 1997. Adoption of SFAS 128 did not change the earnings per share amounts
previously reported by the Bank. Earnings per share computations are based on
the weighted average number of shares of common stock outstanding during the
period. See Note 7 for an explanation of the calculation of earnings per common
share.
 
                                       F-8
<PAGE>   84
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                 JUNE 30, 1998
 
NOTE 2 -- SECURITIES
 
     The amortized cost and estimated fair values of securities are as follows:
 
<TABLE>
<CAPTION>
                                                                     JUNE 30, 1998
                                                  ---------------------------------------------------
                                                                 GROSS         GROSS
                                                  AMORTIZED    UNREALIZED    UNREALIZED    ESTIMATED
                                                    COST         GAINS         LOSSES      FAIR VALUE
                                                  ---------    ----------    ----------    ----------
                                                                (DOLLARS IN THOUSANDS)
<S>                                               <C>          <C>           <C>           <C>
SECURITIES AVAILABLE FOR SALE
  U.S. Treasury and U.S Government agencies.....  $ 70,123       $  261        $ (32)       $ 70,352
  Obligations of states and political
     subdivisions...............................    22,936        1,019           (5)         23,950
  Other securities..............................     3,258            0            0           3,258
  Mortgage-backed securities....................    45,628          360         (179)         45,809
                                                  --------       ------        -----        --------
          Total securities available for sale...  $141,945       $1,640        $(216)       $143,369
                                                  ========       ======        =====        ========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                   DECEMBER 31, 1997
                                                  ---------------------------------------------------
                                                                 GROSS         GROSS
                                                  AMORTIZED    UNREALIZED    UNREALIZED    ESTIMATED
                                                    COST         GAINS         LOSSES      FAIR VALUE
                                                  ---------    ----------    ----------    ----------
                                                                (DOLLARS IN THOUSANDS)
<S>                                               <C>          <C>           <C>           <C>
SECURITIES AVAILABLE FOR SALE
  U.S. Treasury and U.S Government agencies.....  $ 80,530       $  184        $(110)       $ 80,604
  Obligations of states and political
     subdivisions...............................    22,953        1,137           (2)         24,088
  Other securities..............................     3,157            0            0           3,157
  Mortgage-backed securities....................    34,818          338          (73)         35,083
                                                  --------       ------        -----        --------
          Total securities available for sale...  $141,458       $1,659        $(185)       $142,932
                                                  ========       ======        =====        ========
</TABLE>
 
     Substantially all mortgage-backed securities are backed by pools of
mortgages that are issued or guaranteed by the Federal National Mortgage
Association ("FNMA"), the Government National Mortgage Association ("GNMA") and
the Federal Home Loan Mortgage Corporation ("FHLMC").
 
     The amortized cost and estimated fair value of securities at June 30, 1998,
by contractual maturity, are shown below. Actual maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties. Securities not due at
a single maturity date, primarily mortgage-backed securities and other
securities, are shown separately.
 
<TABLE>
<CAPTION>
                                                              AMORTIZED    ESTIMATED
                                                                COST       FAIR VALUE
                                                              ---------    ----------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
SECURITIES AVAILABLE FOR SALE
  Due in one year or less...................................  $ 23,512      $ 23,537
  Due after one year through five years.....................    46,107        46,382
  Due after five years through ten years....................    17,972        18,804
  Due after ten years.......................................     5,468         5,579
                                                              --------      --------
          Total.............................................    93,059        94,302
  Other securities..........................................     3,258         3,258
  Mortgage-backed securities................................    45,628        45,809
                                                              --------      --------
          Total securities available for sale...............  $141,945      $143,369
                                                              ========      ========
</TABLE>
 
                                       F-9
<PAGE>   85
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                 JUNE 30, 1998
 
     No securities were sold during the six months ended June 30, 1998. Proceeds
from the sale of securities during the six months ended June 30, 1997 were
$3,000,000 with gross gains of $2,000 and gross losses of $0 included in
earnings.
 
     Securities with a carrying value of $54,759,000 and $51,400,000 at June
30,1998 and December 31, 1997, were pledged to secure public funds, repurchase
agreements or for other purposes.
 
NOTE 3 -- LOANS
 
     Loans, net of deferred fees and costs, were as follows:
 
<TABLE>
<CAPTION>
                                                              JUNE 30,    DECEMBER 31,
                                                                1998          1997
                                                              --------    ------------
                                                               (DOLLARS IN THOUSANDS)
<S>                                                           <C>         <C>
Commercial, financial and agricultural......................  $240,105      $220,010
Real estate construction....................................    45,449        46,327
Real estate mortgage loans held for sale....................     4,153         1,603
Residential real estate mortgage and home equity............   102,750       104,109
Consumer....................................................    32,595        32,587
                                                              --------      --------
          Total loans.......................................  $425,052      $404,636
                                                              ========      ========
</TABLE>
 
NOTE 4 -- ALLOWANCE FOR LOAN LOSSES
 
     A summary of the activity in the allowance for loan losses for the three
and six months ended June 30, 1998 and 1997 is as follows:
 
<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED    SIX MONTHS ENDED
                                                       JUNE 30,             JUNE 30,
                                                  ------------------    ----------------
                                                   1998       1997       1998      1997
                                                  -------    -------    ------    ------
                                                          (DOLLARS IN THOUSANDS)
<S>                                               <C>        <C>        <C>       <C>
Beginning balance...............................  $4,669     $4,367     $4,475    $4,100
Provision for loan losses.......................     264        264        528       528
Loans charged-off...............................     (50)      (154)      (150)     (202)
Recoveries of previous charge-offs..............      14         43         44        94
                                                  ------     ------     ------    ------
          Ending balance........................  $4,897     $4,520     $4,897    $4,520
                                                  ======     ======     ======    ======
</TABLE>
 
     Impaired loans were as follows:
 
<TABLE>
<CAPTION>
                                                              JUNE 30,    DECEMBER 31,
                                                                1998          1997
                                                              --------    ------------
                                                               (DOLLARS IN THOUSANDS)
<S>                                                           <C>         <C>
Impaired loans with no allowance for loan losses
  allocated.................................................   $    0        $    0
Impaired loans with allowance for loan losses allocated.....    1,193         1,619
Amount of the allowance allocated...........................      404           522
</TABLE>
 
                                      F-10
<PAGE>   86
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                 JUNE 30, 1998
 
<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED
                                                                  JUNE 30,
                                                              ----------------
                                                               1998      1997
                                                              ------    ------
<S>                                                           <C>       <C>
Average of impaired loans during the period.................  $1,322    $  912
Interest income recognized during impairment................       7         6
Cash-basis interest income recognized.......................       7         6
</TABLE>
 
NOTE 5 -- OTHER BORROWINGS
 
     The Bank has a cash management advance line of credit with the Federal Home
Loan Bank ("FHLB") whereby the Bank can borrow up to $25,000,000. The line of
credit must be renewed on an annual basis. Advances are collateralized by FHLB
stock and a blanket pledge of the residential mortgage loan portfolio.
Variable-rate advances with original maturities of less than 90 days totaling
$6,000,000 were outstanding under the line at June 30, 1998. The borrowing rate
was 6.02%. There were no amounts outstanding as of December 31, 1997.
 
     The Bank has a fixed-rate, mortgage-matched advance from the FHLB which
totaled $317,000 and $327,000 at June 30, 1998 and December 31, 1997. This
mortgage-matched advance is used to fund specific fixed-rate loans with certain
prepayment of principal permitted without penalty. The interest rate on the FHLB
advance is 6.00%. During 1998, the Bank borrowed $3,000,000 through the FHLB's
convertible fixed-rate advance offering. The advance carries a fixed-rate of
5.15% for ten years with interest payable monthly. Principal is due upon
maturity and is subject to penalties for early repayment. After the first year,
the FHLB has the option to convert the interest rate on the advance to a
variable, three-month LIBOR rate. If the advance is converted to LIBOR, the Bank
may prepay the advance without a penalty.
 
     At June 30, 1998, scheduled principal reductions on FHLB advances were as
follows:
 
<TABLE>
<CAPTION>
                    YEAR ENDED JUNE 30,
                    -------------------                         (DOLLARS IN THOUSANDS)
<S>                                                             <C>
     1999...................................................            $6,022
     2000...................................................                23
     2001...................................................                25
     2002...................................................                26
     2003...................................................                28
     Thereafter.............................................             3,193
                                                                        ------
          Total.............................................            $9,317
                                                                        ======
</TABLE>
 
     Other borrowings also consist of an open-end Treasury, Tax and Loan note.
The note, which has a $2,000,000 maximum borrowing, requires monthly interest
payments. Borrowings under this agreement totaled $2,000,000 at June 30, 1998
and $1,999,000 at December 31, 1997. The interest rate on this note was 5.68%
and 5.25% at June 30, 1998 and December 31, 1997.
 
NOTE 6 -- COMMITMENTS, OFF BALANCE SHEET RISK, AND CONTINGENCIES
 
     There are various contingent liabilities that are not reflected in the
financial statements, including claims and legal actions arising in the ordinary
course of business. In the opinion of management, after consultation with legal
counsel, the ultimate disposition of these matters is not expected to have a
material effect on financial condition or results of operations.
 
                                      F-11
<PAGE>   87
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                 JUNE 30, 1998
 
     Some financial instruments are used in the normal course of business to
meet the financing needs of customers. These financial instruments include
commitments to extend credit, standby letters of credit and financial
guarantees. These involve, to varying degrees, credit and interest-rate risk in
excess of the amount reported in the financial statements.
 
     Exposure to credit loss if the other party does not perform is represented
by the contractual amount for commitments to extend credit, standby letters of
credit, and financial guarantees written. The same credit policies are used for
commitments and conditional obligations as are used for loans. The amount of
collateral, if deemed necessary, upon extension of credit is based on
management's credit evaluation. Collateral varies but may include accounts
receivable, inventory, property, equipment, income-producing commercial
properties, residential real estate and consumer assets.
 
     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the commitment.
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 used, the total commitments does not necessarily represent
future cash requirements. Standby letters of credit and financial guarantees
written are conditional commitments to guarantee a customer's performance to a
third party.
 
     As of June 30, 1998 and December 31, 1997, commitments to extend credit
amounted to approximately $126,991,000 and $122,328,000. Of this amount,
$114,894,000 and $111,513,000 represent unused amounts on commercial lines of
credit, home equity lines of credit and credit cards as of June 30, 1998 and
December 31, 1997. Fixed-rate commitments represented $27,903,000 and
$21,474,000 of the respective commitment totals. The range of interest rates for
the fixed-rate commitments was 5.25% to 18.5% at June 30, 1998 and at December
31, 1997. Commitments under outstanding standby letters of credit amounted to
$12,097,000 and $10,815,000 at June 30, 1998 and December 31, 1997.
 
     At June 30, 1998 and December 1997, regulatory required cash reserves
totaled $500,000. These reserves do not earn interest.
 
NOTE 7 -- STOCK TRANSACTIONS AND EARNINGS PER SHARE
 
     The shares of Class A common and Class B common vote as a single class on
all matters. Each share of Class A common is entitled to one vote, and each
share of Class B common is entitled to twenty votes. Owners of Class A common
are entitled to receive such cash dividends as may be declared by the Board of
Directors out of funds legally available for that purpose. No cash dividend may
be declared and paid on shares of Class B common unless, simultaneously
therewith, there is declared and paid a cash dividend on each share of Class A
common stock of at least 110% of the cash dividend payable on each Class B
common share.
 
     Each share of Class B common stock is convertible into one share of Class A
common stock at such times as there are authorized shares of Class A common
stock available for issuance. Class A shares are not convertible into Class B
common stock. During 1997, 5,000 additional shares of Class A common stock were
authorized. Subsequently, 361 Class B shares were converted to Class A shares.
 
     Earnings per share computations are based on the weighted average number of
shares outstanding during the period. The weighted average number of shares
outstanding was 45,772 Class A and 37,228 Class B for the three and six months
ended June 30, 1998 and 45,411 Class A and 37,589 Class B for the three and six
months ended June 30, 1997.
 
                                      F-12
<PAGE>   88
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                 JUNE 30, 1998
 
     The equation for computing earnings per common share is as follows:
 
     Net income = [Class A (110% X EPS)] + [Class B (EPS)]
 
<TABLE>
<S>                                                         <C>    <C>
Assumptions:
Earnings per common share -- Class B                        =      EPS
Earnings per common share -- Class A                        =      110% X EPS
Weighted average number of shares -- Class B                =      Class B
Weighted average number of shares -- Class A                =      Class A
</TABLE>
 
NOTE 8 -- PENDING MERGER
 
     On July 22, 1998, the Bank signed a definitive agreement calling for the
Bank to affiliate with Citizens Bancshares, Inc. ("Bancshares"). The agreement
specifies that shareholders of the Bank will receive 63.25 Bancshares Common
Shares for each Bank Common Share owned. The merger is expected to be completed
during the fourth quarter of 1998 following approval by bank regulators and the
shareholders of both the Bank and Bancshares.
 
     In connection with the pending merger, the Bank granted Bancshares a
binding option to purchase up to 5.42% of the outstanding shares of the Bank at
an exercise price of $400.00 per share. The options are exercisable in certain
circumstances upon the occurrence of specific purchase events defined in the
stock option agreement.
 
                                      F-13
<PAGE>   89
 
                                 THE OHIO BANK
 
                              FINANCIAL STATEMENTS
 
                               DECEMBER 31, 1997
 
                                      F-14
<PAGE>   90
 
                         REPORT OF INDEPENDENT AUDITORS
 
Shareholders and Board of Directors
The Ohio Bank
Findlay, Ohio
 
     We have audited the accompanying balance sheets of The Ohio Bank as of
December 31, 1997 and 1996, and the related statements of income, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Bank'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 The Ohio Bank as of December
31, 1997 and 1996, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.
 
     As discussed in Note 1 to the financial statements, the Bank changed its
method of accounting for mortgage servicing rights in 1996 to comply with new
accounting guidance.
 
                                          /s/ Crowe, Chizek and Company LLP
                                          Crowe, Chizek and Company LLP
 
Columbus, Ohio
February 19, 1998
 
                                      F-15
<PAGE>   91
 
                                 THE OHIO BANK
 
                                 BALANCE SHEETS
 
                           DECEMBER 31, 1997 AND 1996
 
<TABLE>
<CAPTION>
                                                                1997             1996
                                                              --------         --------
                                                               (DOLLARS IN THOUSANDS)
                                                                EXCEPT SHARE AMOUNTS
<S>                                                           <C>              <C>
ASSETS
Cash and cash equivalents...................................  $ 15,893         $ 20,569
Federal funds sold..........................................     3,200              600
Securities available for sale, at fair value................   142,932          134,825
Loans
  Total loans...............................................   404,636          371,130
  Allowance for loan losses.................................    (4,475)          (4,100)
                                                              --------         --------
     Loans, net.............................................   400,161          367,030
Premises and equipment, net.................................     7,985            7,905
Accrued interest receivable and other assets................     9,234            8,102
                                                              --------         --------
          Total assets......................................  $579,405         $539,031
                                                              ========         ========
LIABILITIES
Noninterest-bearing demand deposits.........................  $ 59,851         $ 49,755
Interest-bearing demand deposits............................   103,359           85,502
Savings deposits............................................    77,291           78,644
Time deposits less than $100,000............................   206,686          208,372
Time deposits, $100,000 and over............................    75,129           64,200
                                                              --------         --------
          Total deposits....................................   522,316          486,473
Other borrowings............................................     2,326            3,927
Accrued interest, taxes and other expenses..................     4,912            4,101
                                                              --------         --------
          Total liabilities.................................   529,554          494,501
                                                              --------         --------
SHAREHOLDERS' EQUITY
Class A common stock: $50 par value, 50,411 and 45,411
  shares authorized in 1997 and 1996, 45,772 and 45,411
  shares outstanding in 1997 and 1996.......................     2,289            2,271
Class B common stock: $50 par value, convertible to Class A
  shares, 37,228 and 37,589 shares authorized and
  outstanding in 1997 and 1996..............................     1,861            1,879
Surplus.....................................................     7,417            7,417
Undivided profits...........................................    37,315           32,504
Unrealized gain on securities available for sale, net of
  tax.......................................................       969              459
                                                              --------         --------
          Total shareholders' equity........................    49,851           44,530
                                                              --------         --------
               Total liabilities and shareholders' equity...  $579,405         $539,031
                                                              ========         ========
</TABLE>
 
                See accompanying notes to financial statements.
                                      F-16
<PAGE>   92
 
                                 THE OHIO BANK
 
                              STATEMENTS OF INCOME
 
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                               1997       1996       1995
                                                              -------    -------    -------
                                                                 (DOLLARS IN THOUSANDS)
                                                                EXCEPT PER SHARE AMOUNTS
<S>                                                           <C>        <C>        <C>
INTEREST INCOME
  Loans, including fees.....................................  $36,449    $31,978    $28,757
  Securities
     Taxable................................................    6,776      6,804      4,112
     Tax-exempt.............................................    1,223      1,120      1,017
  Federal funds sold........................................      214        183        628
                                                              -------    -------    -------
          Total interest income.............................   44,662     40,085     34,514
                                                              -------    -------    -------
INTEREST EXPENSE
  Deposits..................................................   21,662     19,002     15,408
  Borrowed funds............................................      370        448        173
                                                              -------    -------    -------
          Total interest expense............................   22,032     19,450     15,581
                                                              -------    -------    -------
NET INTEREST INCOME.........................................   22,630     20,635     18,933
Provision for loan losses...................................    1,066        897        966
                                                              -------    -------    -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES.........   21,564     19,738     17,967
                                                              -------    -------    -------
NON-INTEREST INCOME
  Trust income..............................................    1,245        900        755
  Service charges on deposit accounts.......................    1,494      1,399      1,207
  Gain on sale of loans.....................................      718        608        241
  Other income..............................................    1,150      1,101        923
                                                              -------    -------    -------
          Total noninterest income..........................    4,607      4,008      3,126
                                                              -------    -------    -------
NON-INTEREST EXPENSE
  Salaries and employee benefits............................    9,038      8,152      6,712
  Occupancy, fixtures and equipment expense.................    2,883      2,678      2,247
  FDIC insurance............................................       62          2        410
  Data processing...........................................      983        927        824
  State franchise taxes.....................................      658        584        517
  Core deposit amortization.................................      594        500         38
  Other.....................................................    3,285      3,132      2,717
                                                              -------    -------    -------
          Total noninterest expense.........................   17,503     15,975     13,465
                                                              -------    -------    -------
INCOME BEFORE INCOME TAXES..................................    8,668      7,771      7,628
Provision for income taxes..................................    2,649      2,343      2,322
                                                              -------    -------    -------
NET INCOME..................................................  $ 6,019    $ 5,428    $ 5,306
                                                              =======    =======    =======
EARNINGS PER COMMON SHARE:
  CLASS A...................................................  $ 75.62    $ 68.20    $ 66.67
                                                              =======    =======    =======
  CLASS B...................................................  $ 68.74    $ 62.00    $ 60.61
                                                              =======    =======    =======
</TABLE>
 
                See accompanying notes to financial statements.
                                      F-17
<PAGE>   93
 
                                 THE OHIO BANK
 
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
 
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                                       UNREALIZED
                                                                                       GAIN/LOSS
                                                                                           ON
                                            COMMON    COMMON                           SECURITIES
                                             STOCK     STOCK              UNDIVIDED    AVAILABLE
                                            CLASS A   CLASS B   SURPLUS    PROFITS      FOR SALE      TOTAL
                                            -------   -------   -------   ---------   ------------   -------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                         <C>       <C>       <C>       <C>         <C>            <C>
BALANCES AT JANUARY 1, 1995...............  $2,271    $1,879    $7,417     $23,662       $(733)      $34,496
Net income................................                                   5,306                     5,306
Cash dividends -- $10.78 per Class A and
  $9.80 per share of Class B..............                                    (859)                     (859)
Change in fair value of securities
  available for sale, net of tax..........                                               1,747         1,747
                                            ------    ------    ------     -------       -----       -------
BALANCES AT DECEMBER 31, 1995.............   2,271     1,879     7,417      28,109       1,014        40,690
Net income................................                                   5,428                     5,428
Cash dividends -- $12.98 per share of
  Class A and $11.80 per share of Class
  B.......................................                                  (1,033)                   (1,033)
Change in fair value of securities
  available for sale, net of tax..........                                                (555)         (555)
                                            ------    ------    ------     -------       -----       -------
BALANCES AT DECEMBER 31, 1996.............   2,271     1,879     7,417      32,504         459        44,530
Conversion of 361 shares of Class B Common
  Stock to Class A Common Stock...........      18       (18)
Net income................................                                   6,019                     6,019
Cash dividends -- $15.18 per share of
  Class A and $13.80 per share of Class
  B.......................................                                  (1,208)                   (1,208)
Change in fair value of securities
  available for sale, net of tax..........                                                 510           510
                                            ------    ------    ------     -------       -----       -------
BALANCES AT DECEMBER 31, 1997.............  $2,289    $1,861    $7,417     $37,315       $ 969       $49,851
                                            ======    ======    ======     =======       =====       =======
</TABLE>
 
                See accompanying notes to financial statements.
                                      F-18
<PAGE>   94
 
                                 THE OHIO BANK
 
                            STATEMENTS OF CASH FLOWS
 
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                1997        1996        1995
                                                              --------    --------    --------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income................................................  $  6,019    $  5,428    $  5,306
  Adjustments to reconcile net income to net cash from
     operating activities
     Depreciation and amortization..........................     2,121       1,756       1,046
     Realized security gains, net...........................        (4)          0           0
     Federal Home Loan Bank stock dividends.................      (190)       (135)       (111)
     Gain on sale of loans..................................      (718)       (608)       (241)
     Loans originated for sale..............................   (45,751)    (43,281)    (34,115)
     Proceeds from sale of loans originated for sale........    53,184      38,354      31,153
     Provision for loan losses..............................     1,066         897         966
     Loss on sale of other real estate......................        44          28          12
     Provision for deferred income taxes....................      (188)        (64)       (282)
     Net amortization on securities.........................       166         257         274
     Changes in
       Interest receivable and other assets.................    (1,440)        602         136
       Interest payable and other liabilities...............       732         920         909
                                                              --------    --------    --------
     Net cash from operating activities.....................    15,041       4,154       5,053
                                                              --------    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES
  Securities available for sale Proceeds from sales.........     5,110           0           0
     Proceeds from maturities and repayments................    23,109      21,022       9,479
     Purchases..............................................   (35,521)    (44,281)    (41,918)
  Securities held to maturity
     Proceeds from maturities and repayments................         0           0       4,744
     Purchases..............................................         0           0        (250)
  Net change in federal funds sold..........................    (2,600)      5,100      (4,600)
  Net increase in loans.....................................   (42,967)    (62,762)     (6,575)
  Proceeds from loan sales..................................     1,361       1,462       2,851
  Proceeds from sale of other real estate...................       250         180         135
  Premises and equipment expenditures.......................    (1,493)     (1,343)     (1,445)
                                                              --------    --------    --------
       Net cash from investing activities...................   (52,751)    (80,622)    (37,579)
                                                              --------    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposit accounts..........................    35,843      27,627      49,675
  Net change in short-term borrowings.......................    (1,580)      3,191     (16,612)
  Principal payments on long-term Federal Home Loan Bank
     advances...............................................       (21)        (19)        (18)
  Dividends paid............................................    (1,208)     (1,033)       (859)
  Cash received from branch purchases.......................         0      51,116           0
                                                              --------    --------    --------
     Net cash from financing activities.....................    33,034      80,882      32,186
                                                              --------    --------    --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.....................    (4,676)      4,414        (340)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..............    20,569      16,155      16,495
                                                              --------    --------    --------
CASH AND CASH EQUIVALENTS AT END OF YEAR....................  $ 15,893    $ 20,569    $ 16,155
                                                              ========    ========    ========
</TABLE>
 
                See accompanying notes to financial statements.
                                      F-19
<PAGE>   95
 
                                 THE OHIO BANK
 
                         NOTES TO FINANCIAL STATEMENTS
 
                        DECEMBER 31, 1997, 1996 AND 1995
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     The following is a summary of significant accounting policies followed by
The Ohio Bank.
 
     NATURE OF OPERATIONS: The Bank's revenues, operating income, and assets are
primarily from the banking industry. The Bank operates seventeen offices in
Hancock, Putnam, Franklin, Seneca, Wyandot and Cuyahoga Counties. Loan customers
include a wide range of individuals, businesses, and other organizations. A
major portion of loans are secured by various forms of collateral including real
estate, business assets, consumer property, and other items, although borrower
cash flow may also be a primary source of repayment. The Bank also operates a
trust department and engages in mortgage banking operations.
 
     USE OF ESTIMATES: To prepare financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions based on available information. These estimates and assumptions
affect the amounts reported in the financial statements and the disclosures
provided, and future results could differ. The collectibility of loans, fair
values of financial instruments, and status of contingencies are particularly
subject to change.
 
     CASH FLOW REPORTING: Cash and cash equivalents are defined as cash on hand
and demand deposits with other financial institutions. Net cash flows are
reported for customer loan and deposit transactions, federal funds sold,
interest bearing deposits with other banks and short-term borrowing
transactions.
 
     For the years ended December 31, 1997, 1996, and 1995, the Bank paid
interest of $21,611,000, $19,260,000, and $14,993,000 and income taxes of
$2,920,000, $2,315,000, and $2,331,000.
 
     Significant noncash transactions included transfers from loans to other
real estate owned of $175,000, $150,000, and $343,000 in 1997 and 1996 and 1995.
 
     SECURITIES: Securities are classified as held to maturity and carried at
amortized cost when management has the positive intent and ability to hold them
to maturity. Securities are classified as available for sale when they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains and losses reported separately in shareholders'
equity, net of tax. Securities are classified as trading when held for
short-term periods in anticipation of market gains, and are carried at fair
value. Securities are written down to fair value when a decline in fair value is
not temporary. At December 31, 1997 and 1996, all securities were classified as
available for sale.
 
     Realized gains and losses are determined based on the amortized cost of the
specific security sold. Interest and dividend income, adjusted by amortization
of purchase premium or discount, is included in earnings.
 
     LOANS HELD FOR SALE: Certain residential mortgage loans are originated for
sale in the secondary mortgage loan market. These loans are included in real
estate mortgage loans and are carried at the lower of cost or estimated fair
value in the aggregate. Net unrealized losses are recognized through a valuation
allowance by charges to income. To mitigate the interest rate risk, fixed
commitments may be obtained at the time loans are originated or identified for
sale. Loans originated and held for sale were $1,603,000 and $8,877,000 as of
December 31, 1997 and 1996.
 
     LOANS RECEIVABLE: Loans are reported at the principal balance outstanding,
net of deferred loan fees and costs, the allowance for loan losses, and
charge-offs. Interest income is reported on the interest method and includes
amortization of net deferred loan fees and costs over the loan term.
 
     Interest income is not reported when management believes the collection of
interest is doubtful, typically when payments are past due over 90 days.
Payments received on such loans are reported as principal reductions.
 
                                      F-20
<PAGE>   96
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
     CONCENTRATIONS OF CREDIT RISK: The Bank grants commercial, real estate and
installment loans to clients primarily in Hancock, Putnam, Franklin, Seneca,
Wyandot, Cuyahoga and surrounding counties.
 
     Although the Bank has a diversified loan portfolio, a substantial portion
of the debtors' ability to honor their contracts is dependent upon the local and
State of Ohio economic conditions. Substantially all loans are secured by
specific items of collateral including business assets, consumer assets,
commercial real estate and residential real estate.
 
     Commercial loans made up approximately 68% of the loan portfolio at
December 31, 1997 and 64% at December 31, 1996 and are secured primarily by
commercial and multi-family real estate and business assets. Real estate
mortgage loans account for approximately 20% of the loan portfolio at December
31, 1997 and 23% at December 31, 1996 and are secured primarily by single-family
residential real estate. Consumer loans comprise approximately 12% of the loan
portfolio at December 31, 1997 and 13% at December 31, 1996 and are secured by
consumer assets including automobiles which account for 77% and 74%,
respectively, of the consumer loan portfolio.
 
     ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is a valuation
allowance, increased by the provision for loan losses and decreased by
charge-offs less recoveries. Management estimates the allowance balance required
based on past loan loss experience, known and inherent risks in the portfolio,
information about specific borrower situations and estimated collateral values,
economic conditions, and other factors. Allocations of the allowance may be made
for specific loans, but the entire allowance is available for any loan that, in
management's judgment, should be charged-off.
 
     Loan impairment is reported when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of similar
nature such as residential mortgage, consumer and credit card loans and on an
individual loan basis for other loans. In addition, loans held for sale are
excluded from consideration of impairment. If a loan is impaired, a portion of
the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loan's existing rate or at the
fair value of collateral if repayment is expected solely from the collateral.
Loans are evaluated for impairment when payments are delayed, typically 60 days
or more, or when it is probable that all principal and interest amounts will not
be collected according to the original terms of the loan.
 
     PREMISES AND EQUIPMENT: Asset cost is reported net of accumulated
depreciation. Depreciation expense is calculated on the straight-line method
over the estimated useful lives of the assets. These assets are reviewed for
impairment when events indicate the carrying amount may not be recoverable.
 
     OTHER REAL ESTATE: Real estate acquired in settlement of loans is initially
reported at estimated fair value at acquisition. After acquisition, a valuation
allowance reduces the reported amount to the lower of the initial amount or fair
value less costs to sell. Expenses, gains and losses on disposition, and changes
in the valuation allowance are reported in net gain or loss on other real
estate. Other real estate totaled $238,000 and $294,000 at December 31, 1997 and
1996 and is included in other assets.
 
     LOAN SERVICING: The Bank has sold various loans to the Federal Home Loan
Mortgage Corporation (FHLMC) while retaining the servicing rights. Gains and
losses on loan sales are recorded at the time of the sale.
 
     Under a new accounting standard adopted in 1996, mortgage servicing rights
are recorded as assets when the related loan is sold. These assets are amortized
in proportion to, and over the period of, estimated net servicing income and are
evaluated periodically for impairment. Impairment is evaluated based on the fair
value of the rights using groupings of underlying loans with similar
characteristics. Any impairment of a grouping is reported as a valuation
allowance. Mortgage servicing rights totaled $728,000 and $323,000 at December
31, 1997 and 1996, and are included in other assets.
                                      F-21
<PAGE>   97
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
     IDENTIFIED INTANGIBLES: Identified intangibles represent the value of
depositor relationships purchased and are expensed on accelerated methods over
their estimated lives of up to 15 years. Identified intangibles are assessed for
impairment based on estimated undiscounted cash flows, and written down if
necessary. The amortization charged to expense in 1997, 1996 and 1995 was
$594,000, $500,000, and $38,000.
 
     INCOME TAXES: Income tax expense is the sum of the current year income tax
due or refundable and the change in deferred tax assets and liabilities.
Deferred tax assets and liabilities are the expected future tax consequences of
temporary differences between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to the amount expected to be realized.
 
     EARNINGS PER SHARE: Earnings per common share is computed under the
provisions of Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share," which was retroactively adopted by the Bank on December
31, 1997. Adoption of SFAS 128 did not change the earnings per share amounts
previously reported by the Bank. Earnings per share computations are based on
the weighted average number of shares outstanding during the year. See Note 10
for an explanation of the calculation of earnings per common share.
 
     FAIR VALUES OF FINANCIAL INSTRUMENTS: Fair values of financial instruments
are estimated using relevant market information and other assumptions, as more
fully disclosed separately. Fair value estimates involve uncertainties and
matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates. The fair value estimates of existing on- and
off-balance sheet financial instruments do not include the value of anticipated
future business or the values of assets and liabilities not considered financial
instruments.
 
     RECLASSIFICATIONS: Certain reclassifications have been made to prior
financial statements to be comparable to the 1997 presentation.
 
NOTE 2 -- BRANCH ACQUISITION
 
     On March 11, 1996, the Bank acquired from Society National Bank of
Cleveland, Ohio, certain assets including cash, various loans, and premises and
equipment and assumed certain deposit and other liabilities of five branch
banking offices. Four of the offices are located in Putnam County and the fifth
is in Wyandot County. The transaction was accounted for as a purchase, and
accordingly, the acquired assets and liabilities have been recorded based on
their respective market values at the date of acquisition. Concurrent with the
acquisition, the Bank sold two of the offices located in Putnam County, along
with the related assets and liabilities, to other financial institutions. A
summary of the assets acquired and liabilities assumed, net of the assets and
liabilities sold, is as follows:
 
                                      F-22
<PAGE>   98
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                            (DOLLARS IN THOUSANDS)
<S>                                                         <C>
ASSETS
  Cash and cash equivalents...............................         $51,116
  Loans...................................................           5,320
  Premises and equipment..................................             837
  Identified intangible assets............................           4,138
                                                                   -------
     Total assets.........................................         $61,411
                                                                   =======
LIABILITIES
  Noninterest-bearing deposits............................         $12,691
  Interest-bearing deposits...............................          48,706
                                                                   -------
     Total deposits.......................................          61,397
  Other liabilities.......................................              14
                                                                   -------
     Total liabilities....................................         $61,411
                                                                   =======
</TABLE>
 
     The intangible assets from the acquisition and the previous acquisitions of
other branch banking facilities are included in other assets in the accompanying
balance sheets and are summarized as follows, net of accumulated amortization:
 
<TABLE>
<CAPTION>
                                                              1997          1996
                                                            ---------     ---------
                                                            (DOLLARS IN THOUSANDS)
<S>                                                         <C>           <C>
Core deposit premium.....................................    $3,145        $3,713
Other intangible assets..................................       146           172
                                                             ------        ------
     Total intangibles...................................    $3,291        $3,885
                                                             ======        ======
</TABLE>
 
NOTE 3 -- SECURITIES
 
     The amortized cost and estimated fair values of securities are as follows:
 
<TABLE>
<CAPTION>
                                                                         1997
                                                  --------------------------------------------------
                                                                 GROSS         GROSS       ESTIMATED
                                                  AMORTIZED    UNREALIZED    UNREALIZED      FAIR
                                                    COST         GAINS         LOSSES        VALUE
                                                  ---------    ----------    ----------    ---------
                                                                (DOLLARS IN THOUSANDS)
<S>                                               <C>          <C>           <C>           <C>
SECURITIES AVAILABLE FOR SALE
U.S. Treasury and U.S. Government agencies......  $ 80,530       $  184        $(110)      $ 80,604
Obligations of states and political
  subdivisions..................................    22,953        1,137           (2)        24,088
Other securities................................     3,157            0            0          3,157
Mortgage-backed securities......................    34,818          338          (73)        35,083
                                                  --------       ------        -----       --------
     Total securities available for sale........  $141,458       $1,659        $(185)      $142,932
                                                  ========       ======        =====       ========
</TABLE>
 
                                      F-23
<PAGE>   99
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                         1996
                                                  --------------------------------------------------
                                                                 GROSS         GROSS       ESTIMATED
                                                  AMORTIZED    UNREALIZED    UNREALIZED      FAIR
                                                    COST         GAINS         LOSSES        VALUE
                                                  ---------    ----------    ----------    ---------
                                                                (DOLLARS IN THOUSANDS)
<S>                                               <C>          <C>           <C>           <C>
SECURITIES AVAILABLE FOR SALE
U.S. Treasury and U.S Government agencies.......  $ 77,231       $  150        $(301)      $ 77,080
Obligations of states and political
  subdivisions..................................    21,458          780           (5)        22,233
Other securities................................     2,967            0            0          2,967
Mortgage-backed securities......................    32,474          253         (182)        32,545
                                                  --------       ------        -----       --------
     Total securities available for sale........  $134,130       $1,183        $(488)      $134,825
                                                  ========       ======        =====       ========
</TABLE>
 
     Substantially all mortgage-backed securities are backed by pools of
mortgages that are issued or guaranteed by the Federal National Mortgage
Association ("FNMA"), the Government National Mortgage Association ("GNMA") and
the Federal Home Loan Mortgage Corporation ("FHLMC").
 
     The amortized cost and estimated fair value of securities at December 31,
1997, by contractual maturity, are shown below. Actual maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties. Securities not
due at a single maturity date, primarily mortgage-backed securities and other
securities, are shown separately.
 
<TABLE>
<CAPTION>
                                                              AMORTIZED    ESTIMATED
                                                                COST       FAIR VALUE
                                                              ---------    ----------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
SECURITIES AVAILABLE FOR SALE
Due in one year or less.....................................  $ 27,453      $ 27,434
Due after one year through five years.......................    51,565        51,782
Due after five years through ten years......................    18,548        19,369
Due after ten years.........................................     5,917         6,107
                                                              --------      --------
     Total..................................................   103,483       104,692
Other securities............................................     3,157         3,157
Mortgage-backed securities..................................    34,818        35,083
                                                              --------      --------
     Total securities available for sale....................  $141,458      $142,932
                                                              ========      ========
</TABLE>
 
     Proceeds from sales of securities during 1997 were $5,110,000 with gross
gains of $6,000 and gross losses of $2,000 recognized in earnings. There were no
sales of securities during 1996 or 1995.
 
     Securities with a carrying value of $51,410,000 and $44,986,000 at December
31, 1997 and 1996, were pledged to secure public funds, repurchase agreements or
for other purposes.
 
     During 1995, $47,792,000 of securities were reclassified from held to
maturity to available for sale, based on new interpretations issued for SFAS No.
115. The unrealized gain at the time the securities were transferred was
approximately $744,000.
 
                                      F-24
<PAGE>   100
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
NOTE 4 -- LOANS
 
     Loans, net of deferred fees and costs, were as follows:
 
<TABLE>
<CAPTION>
                                                                1997         1996
                                                              ---------    ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
Commercial, financial and agricultural......................  $220,010     $196,764
Real estate construction....................................    46,327       35,472
Residential real estate mortgage and home equity............   104,109       95,040
Real estate mortgage loans held for sale....................     1,603        8,877
Consumer....................................................    32,587       34,977
                                                              --------     --------
     Total loans............................................  $404,636     $371,130
                                                              ========     ========
</TABLE>
 
NOTE 5 -- ALLOWANCE FOR LOAN LOSSES
 
     A summary of the activity in the allowance for loan losses is as follows:
 
<TABLE>
<CAPTION>
                                                          1997      1996      1995
                                                         ------    ------    ------
                                                           (DOLLARS IN THOUSANDS)
<S>                                                      <C>       <C>       <C>
Beginning balance......................................  $4,100    $3,600    $3,275
Provision for loan losses..............................   1,066       897       966
Loans charged-off......................................    (833)     (552)     (868)
Recoveries of previous charge-offs.....................     142       155       227
                                                         ------    ------    ------
  Ending balance.......................................  $4,475    $4,100    $3,600
                                                         ======    ======    ======
</TABLE>
 
     Impaired loans were as follows:
 
<TABLE>
<CAPTION>
                                                           1997      1996      1995
                                                          ------    ------    ------
                                                            (DOLLARS IN THOUSANDS)
<S>                                                       <C>       <C>       <C>
Year-end impaired loans with no allowance for loan
  losses allocated......................................  $    0    $    0    $    0
Year-end impaired loans with allowance for loan losses
  allocated.............................................   1,619     1,034     1,582
Amount of the allowance allocated.......................     522       314       473
Average of impaired loans during the year...............   1,263     1,080     1,072
Interest income recognized during impairment............      24        69        61
Cash-basis interest income recognized...................      24        69        61
</TABLE>
 
NOTE 6 -- LOAN SERVICING
 
     Mortgage loans serviced for others are not reported as assets. These loans
totaled $183,840,000 and $160,575,000 at year-end 1997 and 1996. Related escrow
deposit balances were $737,000 and $627,000 at year-end 1997 and 1996.
 
                                      F-25
<PAGE>   101
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
     Activity for capitalized mortgage servicing rights was as follows:
 
<TABLE>
<CAPTION>
                                                              1997    1996
                                                              ----    ----
                                                              (DOLLARS IN
                                                               THOUSANDS)
<S>                                                           <C>     <C>
Beginning of year...........................................  $323    $  0
Additions...................................................   519     378
Amortized to expense........................................  (114)    (55)
                                                              ----    ----
End of year.................................................  $728    $323
                                                              ====    ====
</TABLE>
 
     At December 31, 1997 and 1996 no valuation allowance for mortgage servicing
rights was considered necessary.
 
NOTE 7 -- PREMISES AND EQUIPMENT, NET
 
     Year-end premises and equipment were as follows:
 
<TABLE>
<CAPTION>
                                                                1997         1996
                                                              ---------    ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
Land........................................................   $   994      $   994
Buildings and improvements..................................     7,814        7,588
Furniture and equipment.....................................     8,129        7,307
                                                               -------      -------
     Totals.................................................    16,937       15,889
Accumulated depreciation....................................    (8,952)      (7,984)
                                                               -------      -------
     Total premises and equipment, net......................   $ 7,985      $ 7,905
                                                               =======      =======
</TABLE>
 
     Total depreciation expense was $1,413,000, $1,256,000, and $1,008,000 for
the years ending December 31, 1997, 1996 and 1995.
 
     The Bank leases certain equipment and space under operating leases. The
leases have original terms ranging from 3 to 25 years. All leases have renewal
options for an additional five years, except one building lease, which has a
renewal option for 25 years. Rental expense for the years ending December 31,
1997, 1996 and 1995 was $372,000, $348,000, and $310,000.
 
     Rental commitments under noncancelable operating leases are:
 
<TABLE>
<CAPTION>
                                                    (DOLLARS IN THOUSANDS)
<S>                                                 <C>
1998..............................................          $  373
1999..............................................             266
2000..............................................             173
2001..............................................             107
2002..............................................              90
Thereafter........................................             270
                                                            ------
     Total........................................          $1,279
                                                            ======
</TABLE>
 
NOTE 8 -- DEPOSITS
 
     At year-end 1997 scheduled maturities of time deposits were as follows:
 
                                      F-26
<PAGE>   102
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                    (DOLLARS IN THOUSANDS)
<S>                                                 <C>
1998..............................................         $191,132
1999..............................................           60,601
2000..............................................           21,327
2001..............................................            4,216
2002..............................................            2,554
Thereafter........................................            1,985
                                                           --------
     Total........................................         $281,815
                                                           ========
</TABLE>
 
NOTE 9 -- OTHER BORROWINGS
 
     The Bank has a cash management advance line of credit with the Federal Home
Loan Bank whereby the Bank can borrow up to $25,000,000. The line of credit must
be renewed on an annual basis. Federal Home Loan Bank advances are
collateralized by Federal Home Loan Bank stock and a blanket pledge of the
residential mortgage loan portfolio. There were no amounts outstanding as of
December 31, 1997. A $2,000,000 variable rate advance with an original maturity
of less than 90 days was outstanding under the line at December 31, 1996. The
borrowing rate was 7.15%.
 
     At December 31, 1997 and 1996, the Bank had a fixed-rate, mortgage-matched
advance from the Federal Home Loan Bank. This mortgage-matched advance is used
to fund specific fixed-rate loans with certain prepayment of principal permitted
without penalty. At December 31, 1997 and 1996, the interest rate on the FHLB
advance was 6.00%. At year-end 1997, scheduled principal reductions were as
follows:
 
<TABLE>
<CAPTION>
                                                    (DOLLARS IN THOUSANDS)
<S>                                                 <C>
1998..............................................           $ 21
1999..............................................             23
2000..............................................             24
2001..............................................             26
2002..............................................             27
Thereafter........................................            206
                                                             ----
     Total........................................           $327
                                                             ====
</TABLE>
 
     At year-end 1996, borrowings under this agreement totaled $347,000.
 
     Other borrowings also consist of an open-end Treasury, Tax and Loan note.
The note, which has a $2,000,000 maximum borrowing, requires monthly interest
payments. Borrowings under this agreement totaled $1,999,000 and $1,580,000 at
December 31, 1997 and 1996. The interest rate on this note was 5.25% and 5.15%
at December 31, 1997 and 1996.
 
NOTE 10 -- STOCK TRANSACTIONS AND EARNINGS PER SHARE
 
     The shares of Class A common and Class B common vote as a single class on
all matters. Each share of Class A common is entitled to one vote, and each
share of Class B common is entitled to twenty votes. Owners of Class A common
are entitled to receive such cash dividends as may be declared by the Board of
Directors out of funds legally available for that purpose. No cash dividend may
be declared and paid on shares of Class B common unless, simultaneously
therewith, there is declared and paid a cash dividend on each share of Class A
common stock of at least 110% of the cash dividend payable on each Class B
common share.
 
     Each share of Class B common stock is convertible into one share of Class A
common stock at such times as there are authorized shares of Class A common
stock available for issuance. Class A shares are not convertible
 
                                      F-27
<PAGE>   103
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
into Class B common stock. During 1997, 5,000 additional shares of Class A
common stock were authorized. Subsequently, 361 Class B shares were converted to
Class A shares.
 
     Earnings per share computations are based on the weighted average number of
shares outstanding during the year. The weighted average number of shares
outstanding was 45,579 Class A and 37,421 Class B for 1997 and 45,411 Class A
and 37,589 Class B for 1996 and 1995.
 
     The equation for computing earnings per common share is as follows:
 
     Net Income = [Class A (1.10 X EPS)] + [Class B (EPS)]
 
<TABLE>
<S>                                                           <C>    <C>
Assumptions:
Earnings per common share -- Class B                          =      EPS
Earnings per common share -- Class A                          =      1.10 X EPS
Weighted average number of shares -- Class B                  =      Class B
Weighted average number of shares -- Class A                  =      Class A
</TABLE>
 
NOTE 11 -- RETIREMENT PLAN
 
     The Bank provides a profit-sharing plan (the Plan) which covers
substantially all employees. Eligible employees may contribute up to 15% of
their compensation subject to a maximum statutory limitation.
 
     The Bank provides a matching contribution on behalf of participants who
make elective compensation deferrals, at the rate of 50% of the elective
deferral not to exceed 6% of the participant's compensation.
 
     In addition, the Bank may make an additional discretionary contribution
allocated to all eligible participants on the basis of compensation. Employee
contributions are always 100% vested. Employer matching and discretionary
contributions become 100% vested after the participant completes three years of
service. Contributions by the Bank were $460,000, $383,000, and $372,000 for the
years ended December 31, 1997, 1996 and 1995.
 
NOTE 12 -- RELATED PARTIES
 
     Certain officers, directors and principal shareholders of the Bank,
including their immediate families and companies with which they are affiliated,
have borrowed funds from the Bank. A summary of activity on these borrower
relationships is as follows:
 
<TABLE>
<CAPTION>
                                                               1997      1996
                                                              ------    ------
                                                                (DOLLARS IN
                                                                 THOUSANDS)
<S>                                                           <C>       <C>
Beginning Balance...........................................  $5,420    $6,835
New loans and advances......................................   3,787     2,133
Repayments..................................................  (2,395)   (3,548)
                                                              ------    ------
Ending Balance..............................................  $6,812    $5,420
                                                              ======    ======
</TABLE>
 
     In addition, certain directors and their related companies provide
professional services and lease office space to the Bank. Payments for these
services totaled $347,000, $329,000, and $294,000, in 1997, 1996 and 1995.
 
                                      F-28
<PAGE>   104
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
NOTE 13 -- INCOME TAXES
 
     The provision for income taxes consists of the following components:
 
<TABLE>
<CAPTION>
                                                           1997      1996      1995
                                                          ------    ------    ------
                                                            (DOLLARS IN THOUSANDS)
<S>                                                       <C>       <C>       <C>
Current expense.........................................  $2,837    $2,407    $2,604
Deferred (benefit)/expense..............................    (188)      (64)     (282)
                                                          ------    ------    ------
     Total provision for income taxes...................  $2,649    $2,343    $2,322
                                                          ======    ======    ======
</TABLE>
 
     The sources of gross deferred tax assets and gross deferred tax liabilities
for the years ended December 31 are as follows:
 
<TABLE>
<CAPTION>
                                                               1997      1996
                                                              ------    ------
                                                                (DOLLARS IN
                                                                 THOUSANDS)
<S>                                                           <C>       <C>
DEFERRED TAX ASSETS:........................................  $1,237    $1,028
  Allowance for loan losses in excess of tax reserve........     153        47
  Core deposit amortization.................................      83        68
  Nonaccrual loan interest income...........................      --         1
  Deferred loan fees and costs..............................       9        38
                                                              ------    ------
  Other.....................................................   1,482     1,182
DEFERRED TAX LIABILITIES:
  Unrealized gain on securities available for sale..........    (504)     (237)
  Depreciation..............................................    (217)     (196)
  Deferred loan fees and costs..............................     (56)       --
  Federal Home Loan Bank stock dividends....................    (186)     (119)
  Section 475 mark to market adjustment.....................      --      (169)
  Mortgage servicing rights.................................   ( 247)     (110)
                                                              ------    ------
                                                              (1,210)     (831)
                                                              ------    ------
  Net deferred tax asset....................................  $  272    $  351
                                                              ======    ======
</TABLE>
 
     The difference between the financial statement tax provision and amounts
computed by applying the statutory federal income tax rate of 34% to income
before taxes are as follows:
 
<TABLE>
<CAPTION>
                                                           1997      1996      1995
                                                          ------    ------    ------
                                                            (DOLLARS IN THOUSANDS)
<S>                                                       <C>       <C>       <C>
Income taxes computed at the statutory federal income
  tax rate..............................................  $2,948    $2,642    $2,593
Tax exempt income.......................................    (417)     (382)     (352)
Non-deductible expenses, net............................     102       101        86
Other...................................................      16       (18)       (5)
                                                          ------    ------    ------
     Total provision for income taxes...................  $2,649    $2,343    $2,322
                                                          ======    ======    ======
</TABLE>
 
NOTE 14 -- COMMITMENTS, OFF BALANCE SHEET RISK, AND CONTINGENCIES
 
     There are various contingent liabilities that are not reflected in the
financial statements, including claims and legal actions arising in the ordinary
course of business. In the opinion of management, after consultation with
 
                                      F-29
<PAGE>   105
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
legal counsel, the ultimate disposition of these matters is not expected to have
a material effect on financial condition or results of operations.
 
     Some financial instruments are used in the normal course of business to
meet the financing needs of customers. These financial instruments include
commitments to extend credit, standby letters of credit and financial
guarantees. These involve, to varying degrees, credit and interest-rate risk in
excess of the amount reported in the financial statements.
 
     Exposure to credit loss if the other party does not perform is represented
by the contractual amount for commitments to extend credit, standby letters of
credit, and financial guarantees written. The same credit policies are used for
commitments and conditional obligations as are used for loans. The amount of
collateral, if deemed necessary, upon extension of credit is based on
management's credit evaluation. Collateral varies but may include accounts
receivable, inventory, property, equipment, income-producing commercial
properties, residential real estate and consumer assets.
 
     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the commitment.
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 used, the total commitments does not necessarily represent
future cash requirements. Standby letters of credit and financial guarantees
written are conditional commitments to guarantee a customer's performance to a
third party.
 
     As of December 31, 1997 and 1996, commitments to extend credit amounted to
approximately $122,328,000 and $93,526,000. Of this amount, $111,513,000 and
$88,301,000 represent unused amounts on commercial lines of credit, home equity
lines of credit and credit cards as of December 31, 1997 and 1996. Fixed-rate
commitments represented $21,474,000 and $22,767,000 of the respective commitment
totals. The range of interest rates for the fixed-rate commitments was 5.25% to
18.5% at December 31, 1997 and 6.25% to 21% at December 31, 1996. Commitments
under outstanding standby letters of credit amounted to $10,815,000 and
$5,225,000 for the same period.
 
     At year-end 1997 and 1996, regulatory required cash reserves totaled
$500,000 and $6,101,000, respectively. These reserves do not earn interest.
 
NOTE 15 -- REGULATORY MATTERS
 
     The Bank is subject to regulatory capital requirements administered by
federal banking agencies. Capital adequacy guidelines and prompt corrective
action regulations involve quantitative measures of assets, liabilities, and
certain off-balance-sheet items calculated under regulatory accounting
practices. Capital amounts and classifications are also subject to qualitative
judgments by regulators about components, risk weightings, and other factors,
and the regulators can lower classifications in certain cases. Failure to meet
various capital requirements can initiate regulatory action that could have a
direct material effect on the financial statements.
 
     The prompt corrective action regulations provide five classifications,
including well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized, and critically undercapitalized, although these
terms are not used to represent overall financial condition. If adequately
capitalized, regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and
expansion, and plans for capital restoration are required.
 
                                      F-30
<PAGE>   106
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
     The minimum requirements are:
 
<TABLE>
<CAPTION>
                                                       CAPITAL TO RISK-
                                                        WEIGHTED ASSETS
                                                       -----------------     TIER 1 CAPITAL
                                                       TOTAL     TIER 1     TO AVERAGE ASSETS
                                                       ------    -------    -----------------
<S>                                                    <C>       <C>        <C>
Well capitalized.....................................    10%        6%              5%
Adequately capitalized...............................     8%        4%              4%
Undercapitalized.....................................     6%        3%              3%
</TABLE>
 
     At year-end, actual capital levels and minimum required levels were:
 
<TABLE>
<CAPTION>
                                                                ADEQUATELY             WELL
                                                               CAPITALIZED         CAPITALIZED
                                              ACTUAL           REQUIREMENT         REQUIREMENT
                                         ----------------    ----------------    ----------------
                                         AMOUNT     RATIO    AMOUNT     RATIO    AMOUNT     RATIO
                                         -------    -----    -------    -----    -------    -----
                                                          (DOLLARS IN THOUSANDS)
<S>                                      <C>        <C>      <C>        <C>      <C>        <C>
1997
Total capital (to risk weighted
  assets)..............................  $50,066    11.8%    $33,853     8.0%    $42,316    10.0%
Tier 1 capital (to risk weighted
  assets)..............................   45,591    10.8%     16,926     4.0%     25,390     6.0%
Tier 1 capital (to average assets).....   45,591     8.1%     22,419     4.0%     28,024     5.0%
1996
Total capital (to risk weighted
  assets)..............................  $44,286    11.8%    $30,138     8.0%    $37,672    10.0%
Tier 1 capital (to risk weighted
  assets)..............................   40,186    10.7%     15,069     4.0%     22,603     6.0%
Tier 1 capital (to average assets).....   40,186     7.9%     20,240     4.0%     25,300     5.0%
</TABLE>
 
     The Bank at year-end 1997 and 1996 was categorized as well capitalized.
Management is not aware of any matters subsequent to December 31, 1997 that
would cause the Bank's capital category to change.
 
     Under current banking regulations, the Bank is limited in the amount of
undivided profits available to be paid to shareholders. These restrictions
generally limit dividends to the current and prior two years earnings without
prior approval of the Ohio Division of Financial Institutions In addition to
these restrictions, as a practical matter, dividend payments cannot reduce
regulatory capital levels below minimum established guidelines. These
restrictions would not currently limit the Bank from paying normal dividends.
The amount of the Bank's retained earnings available for dividends without
approval from the Ohio Division of Financial Institutions was $13,653,000 at
December 31, 1997.
 
NOTE 16 -- DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The estimated fair value approximates carrying value for all financial
instruments except those described as follows:
 
     Securities: For securities available for sale and held to maturity, fair
value equals quoted market price, if available. If a quoted market price is not
available, fair value is estimated using quoted market prices for similar
instruments.
 
     Loans: Loans are grouped in homogeneous categories, such as commercial
loans, residential mortgages, credit card receivables, and other consumer loans.
The fair value of loans is estimated by discounting future cash flows using the
current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities and categories.
 
                                      F-31
<PAGE>   107
                                 THE OHIO BANK
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                        DECEMBER 31, 1997, 1996 AND 1995
 
     Deposits: The fair value of deposit liabilities with defined maturities is
estimated by discounting future cash flows using the rates currently offered for
deposits of similar remaining maturities.
 
     Other Borrowings: The fair value of fixed-maturity FHLB advances is
estimated by discounting future cash flows using the rates currently offered for
borrowings of similar remaining maturities.
 
     Commitments to Extend Credit, Standby Letters of Credit and Financial
Guarantees Written: The fair values of these items are not material and are
therefore not included on the following schedule.
 
     The estimated year-end fair values of financial instruments were as
follows:
 
<TABLE>
<CAPTION>
                                                        1997                      1996
                                               ----------------------    ----------------------
                                               CARRYING       FAIR       CARRYING       FAIR
                                                 VALUE        VALUE        VALUE        VALUE
                                               ---------    ---------    ---------    ---------
                                                            (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>          <C>          <C>
FINANCIAL ASSETS
  Cash and cash equivalents..................  $  15,893    $  15,893    $  20,569    $  20,569
  Federal funds sold.........................      3,200        3,200          600          600
  Securities available for sale..............    142,932      142,932      134,825      134,825
  Loans, net.................................    400,161      406,441      367,030      370,652
  Mortgage servicing rights..................        728          728          323          323
  Accrued interest receivable................      4,400        4,400        3,880        3,880
FINANCIAL LIABILITIES
  Deposits...................................   (522,316)    (536,089)    (486,473)    (502,195)
  Other borrowings...........................     (2,326)      (2,330)      (3,927)      (3,913)
  Accrued interest payable...................     (2,501)      (2,501)      (2,080)      (2,080)
</TABLE>
 
     While these estimates of fair value are based on management's judgment of
the most appropriate factors, no assurance can be given that, were the Bank to
have disposed of such items at year-end 1997 or 1996, the estimated fair values
would necessarily have been achieved since market values may differ depending on
various circumstances. The estimated fair values at year-end 1997, and 1996,
should not necessarily be considered to apply at subsequent dates.
 
     Nonfinancial instruments, such as property and equipment, may have value
but are not included in the above disclosures. Also, nonfinancial instruments
typically not recognized in these financial statements nevertheless may have
value, but are not included in the above disclosures. These include, among other
items, the estimated earnings power of core deposit accounts, the value of a
trained work force, customer goodwill and similar items.
 
                                      F-32
<PAGE>   108
 
                                   APPENDIX A
 
                          AGREEMENT AND PLAN OF MERGER
 
                                       A-1
<PAGE>   109
 
                          AGREEMENT AND PLAN OF MERGER
 
     THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is entered into as of the
22nd day of July, 1998, by and among CITIZENS BANCSHARES, INC. ("Bancshares"), a
corporation organized and existing under the laws of the State of Ohio and
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"), The Ohio Bank ("Bank"), a state banking association
organized and existing under the banking laws of the State of Ohio and an
interim bank to be formed by Bancshares as a state banking association under the
banking laws of the State of Ohio in connection with the transactions
contemplated by this Agreement ("Interim Bank"). NOW THEREFORE, in consideration
of the premises and mutual covenants herein contained, the parties hereto agree
as follows:
 
                              PLAN OF AFFILIATION
 
     Pursuant to this Agreement, Bancshares, Bank and Interim Bank have agreed
to a plan of affiliation intended to result in a tax-free plan of reorganization
pursuant to Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). Upon consummation of the transactions contemplated by this Agreement at
the Effective Time (as hereinafter defined), Interim Bank will be merged with
and into the Bank (the "Merger"), pursuant to the terms and conditions set forth
herein and in the Agreement of Merger substantially in the form attached as
Exhibit A hereto (the "Merger" and the "Agreement of Merger", respectively).
Upon consummation of the Merger, the separate existence of Interim Bank shall
cease and Bank shall continue as the Resulting Bank (as hereinafter described).
In addition, assuming the consummation of the merger of equals transaction
between Mid Am, Inc. and Bancshares previously disclosed to Bank (the "Mid Am
Transaction") and as soon as reasonably practicable after receipt of all
required regulatory approvals (i) certain banking affiliates of Bancshares,
specifically American Community Bank, N.A. and Amerifirst Bank, N.A., will be
merged with and into Bank and (ii) two (2) banking affiliates of Bancshares,
specifically, First National Bank of Northwest Ohio and Mid American National
Bank will be merged with one another, with Mid American National Bank as the
resulting bank.
 
                                   ARTICLE I
 
                THE MERGER; STATUS AND CONVERSION OF SECURITIES;
 
                            EXCHANGE OF CERTIFICATES
 
     Section 1.1.  EFFECTIVE TIME. As soon as practicable after each of the
conditions set forth in Article VIII of this Agreement and in the Agreement of
Merger have been satisfied or waived, Bancshares will file or cause to be filed
(i) a certificate of merger with the Secretary of State of the State of Ohio and
(ii) a certificate of merger with the Superintendent of the Division of
Financial Institutions (the "Division"), which shall in each case be in the form
required by and executed in accordance with applicable laws and regulations. The
Merger shall become effective at the time the certificate of merger, together
with a certificate of approval from the Division, shall be filed with the
Secretary of the State of Ohio (the "Effective Time").
 
     Section 1.2.  CONVERSION OF BANK COMMON SHARES INTO BANCSHARES COMMON
SHARES.
 
          (a) At the Effective Time, each issued and outstanding share of Bank
     common stock, consisting of Class A common shares par value $50 per share
     and Class B common shares, par value $50 per share (collectively, "Bank
     Common Shares"), other than treasury shares and Bank Common Shares as to
     which dissenters' rights have been exercised (collectively, "Excluded
     Stock"), thereupon and without further action shall be converted into 63.25
     Bancshares common shares, without par value ("Bancshares Common Shares").
     The foregoing conversion of Bank Common Shares into Bancshares Common
     Shares shall hereinafter be referred to as the "Share Exchange".
 
          (b) No certificates or scrip representing fractional Bancshares Common
     Shares shall be issued upon the surrender for exchange of Bank
     certificates, and such fractional share interests will not entitle the
     owner thereof to vote or to any rights of a shareholder of Bancshares.
     Notwithstanding any other provision of this
 
                                       A-2
<PAGE>   110
 
     Agreement, each holder of Bank Common Shares converted into Bancshares
     Common Shares in the Merger who would otherwise be entitled to receive a
     fraction of a Bancshares Common Share (after taking into account all Bank
     certificates delivered for exchange by such holder) shall receive, in lieu
     thereof, cash (without interest) in an amount equal to such fractional part
     of a Bancshares Common Share multiplied by the last reported sale price per
     share of Bancshares Common Shares on the trading day most recently
     preceding the Effective Time as reported on the Nasdaq National Market
     System (the "Nasdaq") (as published in The Wall Street Journal or, if not
     therein, in another authoritative source). Such purchases of fractional
     interests are merely intended as a mechanism for "rounding off" fractional
     shares and do not constitute separately bargained for consideration in
     connection with the transactions contemplated by this Agreement.
 
          (c) If after the date hereof and prior to the Effective Time,
     Bancshares or Bank shall declare a stock dividend or make distributions
     upon or subdivide, split-up, reclassify, or combine its common stock or
     preferred stock or declare a dividend or make a distribution on its common
     stock or preferred stock in any security convertible into or exchangeable
     for its common stock or preferred stock, then the Exchange Ratio shall be
     appropriately adjusted. Nothing contained in this Section 1.2(c) shall be
     deemed to permit any action which is otherwise prohibited by this
     Agreement.
 
     Section 1.3.  EXCHANGE OF CERTIFICATES. After the Effective Time, each
holder of an outstanding certificate or certificates for Bank Common Shares
converted to Bancshares Common Shares shall be entitled to receive a certificate
or certificates representing the number of whole Bancshares Common Shares into
which such holder's Bank Common Shares shall have been converted and, if
applicable, a cash payment in lieu of any fractional share determined in
accordance with this Agreement. In order to effect such surrender and exchange,
each such holder of Bank Common Shares shall surrender the outstanding
certificate(s) therefor to Bancshares' designated exchange agent (the "Exchange
Agent"). In connection with the proxy solicitation of Bank shareholders,
Bancshares shall mail, or cause to be mailed, to each holder of record of Bank
Common Shares (i) instructions for effecting the surrender of their Bank
certificates in exchange for certificates representing Bancshares common shares
and (ii) a letter of transmittal which may be used to surrender Bank
certificates to the Exchange Agent. Upon surrender of a Bank certificate(s) for
cancellation to the Exchange Agent, together with a properly completed and duly
executed letter of transmittal and such other documents as may reasonably be
requested, the holder of such Bank certificate shall be entitled to receive, and
the Exchange Agent shall promptly deliver as soon as reasonably practicable
after the consummation of the Merger, in exchange therefor a certificate
representing that number of whole Bancshares Common Shares which such holder has
the right to receive in respect of the Bank certificate(s) surrendered pursuant
hereto (after taking into account all Bank Common Shares then held by such
holder), and the Bank certificate(s) so surrendered shall forthwith be canceled.
In the event of a lost certificate, the Bank shareholder shall provide, in lieu
of the lost certificate, (i) a request for a replacement certificate(s); (ii) an
indemnity agreement and (iii) an affidavit requested by Bank in accordance with
Article VI, Section 3 of the Bank's Code of Regulations. Pending such surrender
and exchange, such holder's certificate(s) for Bank Common Shares shall be
deemed, for all corporate purposes (other than as set forth in Section 1.4 of
this Agreement), to evidence the number of whole Bancshares Common Shares into
which such Bank Common Shares shall have been converted pursuant to the Merger.
The Exchange Agent shall, upon receipt of the duly endorsed Bank certificate or
certificate with a duly endorsed separate assignment, issue the Bancshares'
Common Shares certificate to the surrendering Bank certificate holder, together
with any cash payment in lieu of fractional shares, as applicable. In the event
of a transfer of ownership of Bank Common Shares that is not registered in the
transfer records of Bank, a certificate representing the proper number of
Bancshares Common Shares may be issued to a transferee if the Bank certificate
representing such Bank Common Shares is presented to the Exchange Agent,
accompanied by all documents required by Bancshares to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid.
 
     Section 1.4.  PAYMENT OF DIVIDENDS. Unless and until any such outstanding
certificate(s) for Bank Common Shares shall be so surrendered, no dividend (cash
or stock) payable to holders of record of Bancshares Common Shares as of any
date subsequent to the Effective Time shall be paid to the holder of such
outstanding certificate(s). Upon the surrender of the Bank Common Share
certificate(s), Bancshares shall pay to the record
 
                                       A-3
<PAGE>   111
 
holder of Bancshares Common Shares issued in exchange therefor, the amount of
dividends, if any, but without interest, that have theretofore become payable to
such record holder.
 
     Section 1.5.  EFFECTS OF THE MERGER. At the Effective Time:
 
          (a) The Interim Bank shall be merged with and into Bank and the
     separate existence of the Interim Bank shall cease and Bank shall be the
     "Resulting Bank";
 
          (b) the Articles of Incorporation of Interim Bank, as in effect
     immediately prior to the Effective Time shall be the Articles of
     Incorporation of the Resulting Bank; and
 
          (c) the Code of Regulations of Interim Bank, as in effect immediately
     prior to the Effective Time shall be the Code of Regulations of the
     Resulting Bank.
 
                                   ARTICLE II
 
                  REPRESENTATIONS AND WARRANTIES BY BANCSHARES
 
     Bancshares hereby represents and warrants to Bank that, with respect to
Bancshares and its banking subsidiaries, as such banking subsidiaries exist as
of the date hereof and as of the Closing Date (collectively, the "Bank
Subsidiaries"), as applicable, except to the extent set forth in the Disclosure
Schedules delivered to Bank at the signing of this Agreement, which are attached
hereto and made a part hereof, the following are true and correct on the date of
this Agreement and shall be true and correct on the Closing Date (as hereinafter
defined):
 
     Section 2.1.  DUE ORGANIZATION AND GOOD STANDING. Bancshares is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio and is registered as a bank holding company under the
BHCA and has full corporate authority and power to carry on its business as it
is now being conducted. Citizens is a corporation duly organized, validly
existing, and in good standing as a state banking association under the banking
laws of the State of Ohio and is duly authorized to conduct the banking business
in which it is engaged. Century is a corporation duly organized, validly
existing and in good standing as a national banking association under the
banking laws of the United States and is duly authorized to conduct the banking
business in which it is engaged.
 
     Section 2.2.  AUTHORITY FOR TRANSACTION. The execution and performance of
this Agreement by Bancshares and its delivery to Bank have been duly authorized
by all requisite corporate action, other than approval by Bancshares'
shareholders (if such approval becomes necessary). This Agreement is valid and
binding upon Bancshares and enforceable against it in accordance with its terms.
The execution and performance of this Agreement by Interim Bank shall have been
duly authorized by all requisite corporate action and this Agreement, upon its
execution by Interim Bank, shall be valid and binding upon Interim Bank and
enforceable against it in accordance with its terms.
 
     Section 2.3.  BANCSHARES COMMON SHARES TO BE ISSUED. The Bancshares Common
Shares to be issued to Bank shareholders pursuant to this Agreement, have been
duly authorized and, when issued, will be validly issued by Bancshares and will
be fully paid and nonassessable.
 
     Section 2.4.  BANCSHARES COMMON SHARES OUTSTANDING.
 
     (a)  STOCK. The authorized capital stock of Bancshares consists of (i)
36,000,000 Bancshares Common Shares, without par value, of which, as of the date
of this Agreement 17,748,688 shares are issued and outstanding and 9,571 shares
are held in the treasury and (ii) 200,000 serial preferred shares, par value
$10.00 per share, none of which are issued and outstanding and none of which are
held in the treasury. Each outstanding Bancshares Common Share is duly
authorized, validly issued, fully paid and nonassessable. In connection with the
Mid Am Transaction, (i) Bancshares will be increasing the number of its
authorized shares of capital stock to 160,000,000 shares, consisting of
150,000,000 common shares and 10,000,000 preferred shares and (ii) Bancshares
will be issuing up to 17,987,138 Bancshares common shares to the shareholders of
Mid Am, Inc.
 
                                       A-4
<PAGE>   112
 
          (b)  OPTIONS AND OTHER SECURITIES. Except as set forth in Schedule
     2.4(b) hereto, no options, warrants or other rights to purchase, agreements
     or other obligations to issue, or other rights to convert any obligation
     into any shares of Bancshares Common Shares have been authorized, granted
     or entered into by Bancshares. Other than as set forth in Section 2.4(a),
     there are no Bancshares debt or equity securities authorized or
     outstanding.
 
     Section 2.5.  BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of Bancshares, all of which have been made
available to Bank, are complete and correct in all material respects and have
been maintained in accordance with sound business practices and the requirements
of Section 13(b)(2) of the Securities Exchange Act of 1934, as amended,
including the maintenance of an adequate system of internal controls. The minute
books of Bancshares contain accurate and complete records of all meetings held
of, and corporate action taken by, the shareholders, the Board of Directors, and
committees of the Board of Directors of Bancshares, and no meeting of any such
shareholders, Board of Directors, or committee has been held for which minutes
have not been prepared and are not contained in such minute books, except for
minutes of the Bancshares Board of Directors meeting held on July 21, 1998 to
approve this Agreement, which minutes have not yet been prepared.
 
     Section 2.6.  FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. Bancshares
has furnished or will furnish to Bank (a) consolidated balance sheets of
Bancshares and its subsidiaries as of December 31, 1993, 1994, 1995, 1996 and
1997, respectively, and consolidated statements of income, consolidated
statements of cash flows and consolidated statements of changes in shareholders'
equity for the years ended December 31, 1993, 1994, 1995, 1996 and 1997,
respectively, all as certified by Crowe, Chizek and Company LLP, Bancshares'
independent auditors, and (b) unaudited consolidated balance sheets and income
statements of Bancshares and its subsidiaries for the periods ended March 31,
1998 and June 30, 1998. The aforesaid financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis and present fairly the consolidated financial position of Bancshares as of
the dates thereof and for the periods covered thereby, except in the case of the
interim financial statements, normal year-end adjustments and the absence of
notes thereto. Since the date of the 1997 consolidated balance sheet (the
"Bancshares Balance Sheet"), there has not been any material adverse change in
the financial condition, results of operations, assets, or business of
Bancshares and its subsidiaries taken as a whole.
 
     2.7.  TITLE TO PROPERTIES; ENCUMBRANCES. A complete and accurate list of
all real property, leaseholds, or other interests therein other than as a
mortgagee or secured party owned by Bancshares and any of the Bank Subsidiaries
has been or will be made available to Bank. Bancshares has made or will make
available to Bank copies of the deeds and other instruments (as recorded) by
which Bancshares and the Bank Subsidiaries acquired such real property and
interests, and copies of all title insurance policies, opinions, abstracts, and
surveys in the possession of Bancshares and the Bank Subsidiaries and relating
to such property or interests. Bancshares and each of the Bank Subsidiaries own
(with good and marketable title in the case of real property, subject only to
the matters permitted by the following sentence) all the properties and assets
(whether real, personal, or mixed and whether tangible or intangible) that they
purport to own located in the facilities owned or operated by Bancshares, or one
of the Bank Subsidiaries (as the case may be), or reflected as owned in the
books and records of Bancshares, or one of the Bank Subsidiaries, including all
of the properties and assets reflected in the Bancshares Balance Sheet (except
for assets held under capitalized leases disclosed or not required to be
disclosed and personal property sold since the Bancshares Balance Sheet, as the
case may be, in the ordinary course of business), and all of the properties and
assets purchased or otherwise acquired by Bancshares, and each of the Bank
Subsidiaries since the date of the Bancshares Balance Sheet. Each property and
asset reflected on the Bancshares Balance Sheet having a fair market value of at
least $100,000 is free and clear of all encumbrances and is not, in the case of
real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any nature except, with
respect to all such properties and assets, (a) mortgages or security interests
shown on the Bancshares Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets (such mortgages and security interests being limited to the property or
assets so acquired), with respect to which no default (or event that, with
notice or lapse of time or both, would constitute a default) exists, (c) liens
for
 
                                       A-5
<PAGE>   113
 
current taxes not yet due, and (d) with respect to real property, (i) minor
imperfections of title, if any, none of which is substantial in amount,
materially detracts from the value or impairs the use of the property subject
thereto, or impairs the operations of Bancshares or the Bank Subsidiaries, (ii)
rights of way, easements, building use restrictions, exceptions, variances,
reservations and limitations that are a matter of public record; and (iii)
zoning laws and other land use restrictions that do not impair the present or
anticipated use of the property subject thereto. All buildings owned by
Bancshares and each of the Bank Subsidiaries lie wholly within the boundaries of
the real property owned by Bancshares, or one of the Bank Subsidiaries (as the
case may be), and do not encroach upon the property of, or otherwise conflict
with the property rights of, any other third party.
 
     Section 2.8.  LOANS AND INVESTMENTS. All loans and leases made or purchased
by Bancshares and the Bank Subsidiaries that are reflected on the Bancshares
Balance Sheet or on the accounting records of Bancshares, or any of the Bank
Subsidiaries as of the Closing Date (collectively, the "Loans") represent or
will represent valid obligations arising from loans actually made or purchased
by Bancshares and the Bank Subsidiaries in the ordinary course of business and,
to Bancshares' Knowledge, no loan with a principal balance in excess of $50,000
is subject to any defense or counterclaim. Unless paid prior to the Closing
Date, the Loans, on an aggregate basis, are and will be collectible net of the
aggregate reserves shown on the Bancshares Balance Sheet as of its date and on
such accounting records as of the Closing Date, as applicable (which reserves
are and will be adequate and calculated in a manner consistent with past
practice.) There is no contest or claim under any Loan relating to the amount or
validity of such Loan which is, or together with other such Loans, is, in the
aggregate, material to the business or financial condition of Bancshares. Except
as set forth in Schedule 2.8, there are no loans of Bancshares, or any of the
Bank Subsidiaries, the present principal balance of which is in excess of
$50,000, that have been classified orally or in writing by internal loan review
personnel as "Other Loans Specifically Mentioned," "Substandard," "Doubtful," or
"Loss," as of December 31, 1997. Except for pledges to secure public and trust
deposits, none of the investments reflected in the Bancshares Balance Sheet
under the heading "Investment Securities," and none of the investments made by
Bancshares and the Bank Subsidiaries since December 31, 1997, is subject to any
restriction, whether contractual or statutory, which impairs the ability of
Bancshares, or any of the Bank Subsidiaries (as applicable), freely to dispose
of such investment at any time. Except as set forth on Schedule 2.8, Bancshares
and the Bank Subsidiaries are not parties to any repurchase agreement. Schedule
2.8 contains a list of all securities held by Bancshares and the Bank
Subsidiaries (as applicable), delineating whether they are held in the
"available for sale" category, "held to maturity" category or in a trading
account.
 
     Section 2.9.  NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule
2.9, neither Bancshares nor any of the Bank Subsidiaries has any material
liability or obligation of any nature (whether known or unknown and whether
absolute, accrued, contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Bancshares Balance Sheet and
current liabilities incurred in the ordinary course of business since the date
thereof.
 
     Section 2.10.  ABSENCE OF CONFLICTS. To the best of Bancshares' Knowledge,
neither the execution, performance or delivery of this Agreement by Bancshares
nor the consummation of the transactions contemplated hereby will result in a
violation or breach of, or permit any third party to modify or rescind any term
or provision of, or constitute a default under, any indenture, mortgage, deed of
trust, promissory note or other contract, license or agreement to which
Bancshares, or any of the Bank Subsidiaries is a party or to which any of its
respective properties is subject or will result in a breach of Bancshares'
Articles of Incorporation or Regulations, which violation, breach, modification,
rescission or default would reasonably be expected to have a material adverse
effect on Bancshares and its subsidiaries taken as a whole. Except for the Board
of Governors of the Federal Reserve System, and, if applicable, the FDIC, the
Securities and Exchange Commission, the Ohio Secretary of State, the necessary
state Blue Sky approvals (collectively the "Approvals"), the consent of Mid Am,
Inc. (which has been obtained and delivered to Bank) and, if required, the
approval of this Agreement, the Agreement of Merger and the Merger by
Bancshares' shareholders, Bancshares is not and will not be required to make any
filings with, give any notice or obtain any consent from any third party in
connection with the execution and delivery of this Agreement or the consummation
of the Merger.
 
                                       A-6
<PAGE>   114
 
     Section  2.11  ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth
on Schedule  2.11, since the date of the Bancshares Balance Sheet, Bancshares
(including its Bank Subsidiaries), has conducted its business only in the
ordinary course of business and there has not been any:
 
          (a) change in Bancshares' authorized or issued capital stock; grant of
     any stock option or right to purchase shares of capital stock of
     Bancshares; issuance of any security convertible into such capital stock;
     grant of any registration rights; purchase, redemption, retirement, or
     other acquisition by Bancshares of any shares of any such capital stock; or
     declaration or payment of any dividend or other distribution or payment in
     respect of shares of such capital stock;
 
          (b)  amendment to Bancshares' Articles of Incorporation or
     Regulations;
 
          (c)  payment or increase by Bancshares, or by any of its Bank
     Subsidiaries of any bonuses, salaries, or other compensation to any
     shareholder, director, or (except in the ordinary course of business)
     officer or employee or entry into any employment, severance, or similar
     contract with any director, officer, or employee;
 
          (d)  adoption of, or increase in the payments to or benefits under,
     any profit sharing, bonus, deferred compensation, savings, insurance,
     pension, retirement, or other employee benefit plan for or with any
     employees of Bancshares or any of the Bank Subsidiaries;
 
          (e)  damage to or destruction or loss of any asset or property of
     Bancshares or any of the Bank Subsidiaries, whether or not covered by
     insurance involving a loss in excess of $25,000;
 
          (f)  entry into, termination of, or receipt of notice of termination
     of (i) any license, distributorship, dealer, sales representative, joint
     venture, credit, or similar agreement, or (ii)  any contract or transaction
     involving a total remaining commitment by or to Bancshares or any of the
     Bank Subsidiaries of at least $100,000;
 
          (g)  sale, lease, or other disposition of any material asset or
     property of Bancshares, or any of the Bank Subsidiaries or mortgage,
     pledge, or imposition of any lien or other encumbrance on any material
     asset or property of Bancshares, or any of the Bank Subsidiaries, other
     than in the ordinary course of business;
 
          (h)  cancellation or waiver of any claims or rights with a value to
     Bancshares or any of the Bank Subsidiaries in excess of $100,000;
 
          (i)  material change in the accounting methods used by Bancshares; or
 
          (j) agreement, whether oral or written, by Bancshares or any of the
     Bank Subsidiaries to do any of the foregoing. It is understood and agreed
     that nothing in this Section 2.11 or any other section of this Agreement
     shall be deemed to restrict the issuance of Bancshares common shares in
     connection with any acquisition of any entity between the date hereof and
     the Effective Time.
 
     Section 2.12.  COMPLIANCE WITH LAWS; LICENSES. Except as set forth in
Schedule 2.12 hereof, Bancshares and the Bank Subsidiaries are not engaged in or
a party to, (as a defendant), nor do they have any reasonable basis to
anticipate, any legal action, investigation, arbitration, or other proceeding
before any court, administrative agency, arbitrator or other forum, which either
individually or in the aggregate would have or could be reasonably expected to
have a material adverse effect on Bancshares and its subsidiaries taken as a
whole. None of Bancshares or any of the Bank Subsidiaries has been charged with
nor to its Knowledge is it under investigation with respect to, and none of
Bancshares or any of the Bank Subsidiaries has any basis to anticipate any
charge or investigation with respect to, any violation of any provision of
federal, state, or other applicable law or administrative regulation (including,
without limitation, the Bank Secrecy Act, the Community Reinvestment Act and
applicable consumer protection and disclosure laws, rules and regulations) which
may materially adversely affect the financial condition, results of operations,
assets, or business of Bancshares or any of the Bank Subsidiaries. There is no
litigation, proceeding, or governmental investigation pending or to Bancshares'
Knowledge, threatened (or which Bancshares, or any of the Bank Subsidiaries has
any reasonable basis to anticipate) which relates to any of the transactions
contemplated by this Agreement. Bancshares and the Bank Subsidiaries have
responded to and satisfied all exceptions, if any, arising out of any federal,
state or other
 
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regulatory examination. Bancshares and the Bank Subsidiaries possess all
material licenses, franchises, permits and other governmental authorizations and
all material patents, trademarks, service marks, trade names, copyrights or
rights thereto necessary for the continued conduct of Bancshares', or any of the
Bank Subsidiaries' banking business without material interference or
interruption.
 
     Section 2.13.  BROKERAGE AND FINDER'S FEES. Except for fees payable to its
financial advisor, Sandler O'Neill & Partners, L.P. ("Sandler O'Neill"),
Bancshares has not employed any broker, finder, or agent, or agreed to pay or
incurred any brokerage fee, finder's fee, commission or other similar form of
compensation in connection with this Agreement or the transactions contemplated
hereby.
 
     Section 2.14.  ACCOUNTING MATTERS. Neither Bancshares nor, to its best
Knowledge, any of its affiliates, has through the date of this Agreement taken
or agreed to take any action that would prevent Bancshares from accounting for
the business combination contemplated by this Agreement as a "pooling of
interests".
 
     Section 2.15.  COMPLIANCE WITH SECURITIES LAWS. To the best of its
Knowledge, Bancshares is in compliance with all federal and state securities
laws and regulations, including but not limited to all filing requirements,
except to the extent that additional filings will be required in connection with
the transactions contemplated by this Agreement. All information provided in
such filings is accurate and complete, in all material respects, to the extent
required by such laws and regulations.
 
     Section 2.16.  OWNERSHIP OF BANK COMMON SHARES. Except for Bancshares'
right to acquire shares of Bank common stock pursuant to that certain Stock
Option Agreement to be entered into on July 23, 1998, neither Bancshares, nor
any of its affiliates or associates beneficially owns, directly or indirectly,
more than 4.9% of the outstanding Bank Common Shares.
 
     Section 2.17.  INSURANCE OF DEPOSITS. The deposits of the Bank Subsidiaries
are insured by the Federal Deposit Insurance Corporation in accordance with the
Federal Deposit Insurance Act ("FDIA"). The Bank Subsidiaries have paid all
assessments and filed all reports required under the FDIA and are in compliance
with all regulatory requirements imposed in connection with the insurance of
their deposits.
 
     Section 2.18.  AUTHORIZATION FOR THIS AGREEMENT. Other than as contemplated
in Articles VI and VII hereof, no authorization, approval or consent of any
governmental department, bureau or agency, or other public board or authority is
required for the consummation by Bancshares of the transactions contemplated by
this Agreement.
 
     Section 2.19.  BOARD APPROVAL; SUBMISSION TO SHAREHOLDERS. The Board of
Directors of Bancshares has unanimously approved this Agreement, and, if
necessary, will direct that this Agreement be submitted to a vote of Bancshares
shareholders at a special meeting of the shareholders to be called for that
purpose, all in accordance with and as required by law and in accordance with
the Articles of Incorporation and Regulations of Bancshares.
 
     Section 2.20.  MATERIAL MISSTATEMENTS OR OMISSIONS. No representation or
warranty by Bancshares in this Agreement or any document, statement,
certificate, schedule or exhibit furnished or to be furnished to Bank by or on
behalf of Bancshares or the Bank Subsidiaries pursuant hereto contains, or will
when furnished contain, any untrue statement of material fact, or omits or will
then omit to state, a material fact necessary to make the statement(s) of facts
contained therein (in light of the circumstances under which they were made) not
misleading.
 
                                  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES BY BANK
 
     Bank hereby represents and warrants to Bancshares that, except to the
extent set forth in the Disclosure Schedules delivered to and accepted by
Bancshares pursuant to Section 5.13 of this Agreement (which, upon
 
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<PAGE>   116
 
acceptance will be attached hereto and made a part hereof), the following are
true and correct on the date of this Agreement and shall be true and correct on
the Closing Date:
 
     Section 3.1.  OUTSTANDING SECURITIES OF BANK.
 
          (a)  STOCK. The authorized capital stock of Bank consists solely of
     (i) 50,411 Class A common shares, par value $50 per share, of which 45,772
     shares are issued and outstanding and none are held in the treasury as of
     the date of this Agreement and (ii) 37,228 Class B common shares, par value
     $50 per share, of which 37,228 shares are issued and outstanding and none
     are held in the treasury as of the date of this Agreement. Each outstanding
     Bank Common Share is duly authorized, validly issued, fully paid, and
     nonassessable.
 
          (b)  OPTIONS AND OTHER SECURITIES. Except as set forth on Schedule
     3.1(b) hereto, no options, warrants or other rights to purchase, agreements
     or other obligations to issue, or other rights to convert any obligation
     into any shares of Bank Common Shares have been authorized, granted or
     entered into by Bank. Other than as set forth in Section 3.1(a), there are
     no Bank debt or equity securities authorized or outstanding. Except as set
     forth on Schedule 3.1(b), Bank does not have, nor will it have at any time
     from the execution of this Agreement through the time of Closing (as
     hereinafter defined), any obligations or commitments related to the Common
     Shares that may require Bank to issue or change the number of its issued or
     authorized Common Shares.
 
     Section 3.2.  DUE ORGANIZATION AND GOOD STANDING. Bank is a corporation
duly organized, validly existing, and in good standing under the banking laws of
the State of Ohio and is duly authorized to conduct the banking business in
which it is engaged. Except as set forth on Schedule 3.2, Bank does not have any
subsidiaries or affiliates (as such term is defined under Rule 405 of the
Securities Act of 1933, as amended).
 
     Section 3.3.  AUTHORITY FOR TRANSACTION. The execution of this Agreement
and its delivery to Bancshares have been authorized by all requisite corporate
action, other than approval by Bank shareholders. This Agreement is valid and
binding upon Bank, and enforceable against Bank in accordance with its terms.
 
     Section 3.4.  BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of Bank, all of which have been or will be made
available to Bancshares, are complete and correct in all material respects and
have been maintained in accordance with sound business practices and , in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the issuer, including the maintenance of an
adequate system of internal controls that is sufficient to provide reasonable
assurances that transactions are executed in accordance with management's
authorization, that transactions are recorded as necessary, that access to
assets is permitted only in accordance with management's authorization, and that
the recorded accountability for assets is compared at reasonable intervals and
appropriate action is taken with respect to any differences. The minute books of
Bank contain accurate and complete records of all meetings held of, and
corporate action taken by, the shareholders, the Board of Directors, and
committees of the Board of Directors of Bank, and no meeting of any such
shareholders, Board of Directors, or committee has been held for which minutes
have not been prepared and are not contained in such minute books, except for
the minutes of the meeting of Bank's Board of Directors held on July 22, 1998 to
approve this Agreement, which minutes have not yet been prepared.
 
     Section 3.5.  ABSENCE OF CONFLICTS. To the best of Bank's Knowledge, except
as set forth on Schedule 3.5 hereto, neither the execution, delivery or
performance of this Agreement by Bank, nor the consummation of the transactions
contemplated hereby will result in a violation or breach of, or permit any third
party to modify or rescind any term or provision of, or constitute a default
under, any indenture, mortgage, deed of trust, promissory note or other
contract, license or other agreement to which Bank is a party or to which any of
its properties is subject or will result in a breach of Bank's Articles of
Incorporation or Code of Regulations, which violation, breach, modification,
rescission or default would reasonably be expected to have a material adverse
effect on Bank. Except for the Approvals and the approval of this Agreement, the
Agreement of Merger and the Merger by the Bank shareholders, Bank is not or will
not be required to give any notice or to obtain any consent from any third party
in connection with the execution and delivery of this Agreement, the Agreement
of Merger or the consummation of the Merger.
 
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<PAGE>   117
 
     Section 3.6.  FINANCIAL STATEMENTS. Bank has delivered or will deliver to
Bancshares (a) financial statements for each of the fiscal years ended December
31, 1993, 1994, 1995, 1996 and 1997, respectively, consisting of balance sheets
and the related statements of income and retained earnings and cash flows for
the fiscal years ended on such date, all as certified by Crowe, Chizek, L.L.P.,
Bank's independent auditors, and (b) unaudited consolidated financial statements
for the interim periods ended March 31, 1998 and June 30, 1998 consisting of
balance sheets and the related statements of income. The aforesaid financial
statements, as of the dates thereof and for the periods covered thereby, have
been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods indicated, and fairly present the
financial position of Bank as of the dates thereof and the results of operations
and cash flows for the periods indicated, except in the case of the interim
financial statements, normal year-end adjustments and the absence of notes
thereto. Since the date of the 1997 Balance Sheet (the "Bank Balance Sheet"),
there has not been any material adverse change in the financial condition,
results of operations, assets or business of Bank.
 
     Section 3.7.  TITLE TO PROPERTIES; ENCUMBRANCES. Bank has previously
delivered a complete and accurate list, contained in the Information Memorandum
and Supplemental Appendices dated May, 1998 and prepared by Danielson
Associates, Inc. (the "Danielson Information Memorandum"), of all real property,
leaseholds, or other interests therein other than as a mortgagee or secured
party owned by Bank. Bank has made or will make available to Bancshares copies
of the deeds and other instruments (as recorded) by which Bank acquired such
real property and interests, and copies of all title insurance policies,
opinions, abstracts, and surveys in the possession of Bank and relating to such
property or interests. Bank owns (with good and marketable title in the case of
real property, subject only to the matters permitted by the following sentence)
all the properties and assets (whether real, personal, or mixed and whether
tangible or intangible) that it purports to own, located in the facilities owned
or operated by Bank or reflected as owned in the books and records of Bank,
including all of the properties and assets reflected in the Bank Balance Sheet
(except for assets held under capitalized leases disclosed in the Danielson
Information Memorandum and personal property sold since the Bank Balance Sheet,
as the case may be, in the ordinary course of business), and all of the
properties and assets purchased or otherwise acquired by Bank since the date of
the Bank Balance Sheet. Each property and asset reflected on the Bank Balance
Sheet having a fair market value of at least $50,000 is free and clear of all
encumbrances and is not, in the case of real property, subject to any rights of
way, building use restrictions, exceptions, variances, reservations, or
limitations of any nature except, with respect to all such properties and
assets, (a) mortgages or security interests shown on the Bank Balance Sheet as
securing specified liabilities or obligations, with respect to which no default
(or event that, with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred in connection with
the purchase of property or assets (such mortgages and security interests being
limited to the property or assets so acquired), with respect to which no default
(or event that, with notice or lapse of time or both, would constitute a
default) exists, (c) liens for current taxes not yet due, and (d) with respect
to real property, (i) minor imperfections of title, if any, none of which is
substantial in amount, materially detracts from the value or impairs the use of
the property subject thereto, or impairs the operations of Bank, (ii) rights of
way, easements, building use restrictions, exceptions, variances, reservations
and limitations that are a matter of public record, and (iii) zoning laws and
other land use restrictions that do not impair the present or anticipated use of
the property subject thereto. All buildings owned by Bank lie wholly within the
boundaries of the real property owned by Bank and do not encroach upon the
property of, or otherwise conflict with the property rights of, any third party.
 
     Section 3.8.  CONTRACTS.
 
     (a) Schedule 3.8(a) contains a complete and accurate list, and Bank has
delivered or will deliver to Bancshares true and complete copies, of:
 
            (i) each contract (other than Loans (as defined in Section 3.10)
     entered into by Bank in the ordinary course of business) that involves
     performance of services by Bank of an amount or value in excess of $25,000;
 
           (ii) each contract (other than Loans (as defined in Section 3.10)
     entered into by Bank in the ordinary course of business) that involves
     performance of services or delivery of goods or materials to Bank of an
     amount or value in excess of $25,000;
 
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<PAGE>   118
 
           (iii) each contract that was not entered into in the ordinary course
     of business and that involves expenditures or receipts of Bank in excess of
     $25,000;
 
           (iv) each lease, rental or occupancy agreement, license, installment
     and conditional sale agreement, and other contract affecting the ownership
     of, leasing of, title to, use of, or any leasehold or other interest in,
     any real or personal property (except personal property leases and
     installment and conditional sales agreements having a value per item or
     aggregate payments of less than $25,000 and with terms of less than one
     year);
 
            (v) each joint venture, partnership, and other contract (however
     named) involving a sharing of profits, losses, costs, or liabilities by
     Bank with any other person, third party or entity;
 
           (vi) each contract containing covenants that in any way purport to
     restrict the business activity of Bank or any affiliate of Bank or limit
     the freedom of Bank or any affiliate of Bank to engage in any line of
     business or to compete with any person, third party or entity;
 
           (vii) each power of attorney that is currently effective and
     outstanding;
 
          (viii) each contract entered into other than in the ordinary course of
     business that contains or provides for an express undertaking by Bank to be
     responsible for consequential damages;
 
           (ix) each contract for capital expenditures in excess of $25,000;
 
            (x) each written warranty, guaranty, and/or other similar
     undertaking with respect to contractual performance extended by Bank other
     than in the ordinary course of business; and
 
           (xi) each amendment, supplement, and modification (whether oral or
     written) in respect of any of the foregoing.
 
     (b) Except as set forth on 3.8(b), to Bank's Knowledge, no officer,
director, agent, employee, consultant, or contractor of Bank is bound by any
contract that purports to limit the ability of such officer, director, agent,
employee, consultant, or contractor to engage in or continue any conduct,
activity, or practice relating to the business of Bank.
 
     (c) Except as set forth on Schedule 3.8(c), each contract identified or
required to be identified on Schedule 3.8(a) is in full force and effect and is
valid and enforceable in accordance with its terms.
 
     (d) Except with respect to Loans (as defined in Section 3.10) and leases in
the ordinary course of business and except as set forth on Schedule 3.8(d):
 
           (i) Bank is, and at all times since December 31, 1993 has been, in
     full compliance with all applicable terms and requirements of each contract
     under which Bank has or had any obligation or liability or by which Bank or
     any of the assets owned or used by Bank are or were bound and the breach of
     which would reasonably be expected to have a material adverse effect on
     Bank;
 
           (ii) to Bank's Knowledge, each other person, third party or entity
     that has or had any obligation or liability under any such contract under
     which Bank has or had any rights is, and at all times since December 31,
     1993 has been, in full compliance with all applicable terms and
     requirements of such contract;
 
          (iii) to Bank's Knowledge, no event has occurred or circumstance
     exists that (with or without notice or lapse of time) may contravene,
     conflict with, or result in a violation or breach of, or give Bank or any
     other person, third party or entity the right to declare a default or
     exercise any remedy under, or to accelerate the maturity or performance of,
     or to cancel, terminate, or modify any such contract; and
 
           (iv) Bank has not given to or received from any other person, third
     party or entity, at any time since December 31, 1993, any notice or other
     communication (whether oral or written) regarding any actual, alleged,
     possible, or potential violation or breach of, or default under, any such
     contract.
 
     (e) Except with respect to Loans and leases in the ordinary course of
business, there are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to Bank,
as
 
                                      A-11
<PAGE>   119
 
applicable, under current or completed contracts with any person, third party or
entity and, to the Knowledge of Bank, no such person, third party or entity has
made written demand for such renegotiation.
 
     (f) The contracts relating to the provision of services by Bank have been
entered into in the ordinary course of business and have been entered into
without the commission of any act alone or in concert with any other person,
third party or entity, or any consideration having been paid or promised, that
is or would be in violation of any applicable federal, state or local law, rule,
regulation or statute.
 
     Section 3.9.  INSURANCE OF DEPOSITS. The deposits of Bank are insured by
the Federal Deposit Insurance Corporation in accordance with the FDIA. Bank has
paid all assessments and filed all reports required under the FDIA and is in
compliance with all regulatory requirements imposed in connection with the
insurance of its deposits.
 
     Section 3.10.  LOANS AND INVESTMENTS. All loans and leases made or
purchased by Bank that are reflected on the Bank Balance Sheet or on the
accounting records of Bank as of the Closing Date (collectively, the "Loans")
represent or will represent valid obligations arising from loans actually made
or purchased by Bank that are or will be collectible in the ordinary course of
business (net of the applicable reserve for loan and lease losses described in
this Section 3.10), and, to Bank's Knowledge, except as set forth on Schedule
3.10 hereto, no loan with a principal balance in excess of $25,000 is subject to
any defense or counterclaim. The reserve for possible loan and lease losses
shown on the statement of Bank as of June 30, 1998 is, and the reserves for
possible loan and lease losses on the balance sheets of Bank as of quarter ends
subsequent to the date of this Agreement will be, adequate in all material
respects under the requirements of generally accepted accounting principles to
provide for losses relating to the loan and lease portfolios of Bank, net of
recoveries relating to loans previously charged off, as of the respective dates
of such balance sheets. There is no contest or claim under any Loan relating to
the amount or validity of such Loan, which Loans are in the aggregate material
to the business or financial condition of Bank. Except as set forth in Schedule
3.10, there are no loans of Bank, the present principal balance of which is in
excess of $25,000, that have been classified orally or in writing by internal
loan review personnel as "Other Loans Specifically Mentioned," "Substandard,"
"Doubtful," or "Loss," as of June 30, 1998. Except for pledges to secure public
and trust deposits, none of the investments reflected in the Bank Balance Sheet
under the heading "Investment Securities," and none of the investments made by
Bank since December 31, 1997, is subject to any restriction, whether contractual
or statutory, which impairs the ability of Bank freely to dispose of such
investment at any time. Except as set forth on Schedule 3.10, Bank is not a
party to any repurchase agreement. Schedule 3.10 contains a list of all
securities held by Bank as of June 30, 1998 (to be updated at Closing),
delineating whether they are held in the "available for sale" category, "held to
maturity" category or in a trading account.
 
     Section 3.11.  INSURANCE POLICIES. All premiums due on all insurance
policies (copies of which have been or will be delivered to Bancshares), have
been paid, and such policies will continue to remain in force through the
Effective Time. Schedule 3.11 also contains a description of all claims in
excess of $25,000 currently pending under such insurance policies, together with
a list of all other claims in excess of $25,000 which have been filed during the
last three (3) years and a description of the disposition thereof.
 
     Section 3.12.  EMPLOYMENT CONTRACTS AND EMPLOYEE BENEFIT PLANS. Schedule
3.12 contains a complete list (as of July 1, 1998) of all employees of Bank,
their respective dates of hire, current monthly cash compensation, the value of
any allocation of benefits each has accrued or received under the Company Plans
(as defined in Section 3.13 hereof) for the plan years most recently ended, and
the amount of any indebtedness to Bank has been or will be delivered to
Bancshares. On or before the Closing Date, Bank shall fully accrue for (in
accordance with generally accepted accounting principles) all amounts payable
under any of the Plans. Bank will also deliver to Bancshares a list of all
employees as of July 1, 1998 who are currently entitled to perquisites
(including, but not limited to, automobiles and club memberships) as well as a
brief description of each such perquisite. Since July 1, 1998, no employment
contract or Plan has been instituted, agreed to, or changed by Bank, nor has
there been any increase in the compensation payable or to become payable by Bank
to any employee, whose total compensation for services rendered currently
exceeds $15,000 annually.
 
     Section 3.13.  COMPLIANCE OF EMPLOYEE BENEFIT PLANS WITH ERISA AND INTERNAL
REVENUE CODE.
 
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<PAGE>   120
 
     (a) As used in this Section 3.13, the following terms have the meanings set
forth below.
 
     "Company Other Benefit Obligation" means an Other Benefit Obligation owed,
adopted, or followed by Bank or an ERISA Affiliate of Bank.
 
     "Company Plan" means all Plans of which Bank or an ERISA Affiliate of Bank
is or was a Plan Sponsor, or to which Bank or an ERISA Affiliate of Bank
otherwise contributes or has contributed, or in which Bank or an ERISA Affiliate
of Bank otherwise participates or has participated. All references to Plans are
to Company Plans unless the context requires otherwise.
 
     "Company VEBA" means a VEBA whose members include employees of Bank or any
ERISA Affiliate of Bank.
 
     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations and rules revised pursuant to such Act.
 
     "ERISA Affiliate" means, with respect to Bank, any trade or business
(whether or not incorporated) that is part of the same controlled group, or
under common control with, or part of an affiliated service group that includes,
Bank within the meaning of IRC sec. 414 and or IRC sec. 4001(a)(14).
 
     "Multiemployer Plan" has the meaning given in ERISA sec.sec. 3(37)(A) and
4001(a)(3).
 
     "Other Benefit Obligations" means all obligations, arrangements, or
customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
officers, directors, employees, or agents, other than obligations, arrangements,
and practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of IRC sec. 132.
 
     "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
 
     "Pension Plan" has the meaning given in ERISA sec. 3(2)(A).
 
     "Plan" has the meaning given in ERISA sec. 3(3).
 
     "Plan Sponsor" has the meaning given in ERISA sec. 3(16)(B).
 
     "Qualified Plan" means any Plan that meets or purports to meet the
requirements of IRC sec. 401(a).
 
     "Title IV Plans" means all Plans that are subject to Title IV of ERISA, 29
U.S.C. sec. 1301 et seq., other than Multiemployer Plans.
 
     "VEBA" means a voluntary employees' beneficiary association under IRC sec.
501(c)(9).
 
     "Welfare Plan" has the meaning given in ERISA sec. 3(1).
 
     (b) (i) Schedule 3.13(b)(i) contains a complete and accurate list of all
Company Plans, Company Other Benefit Obligations, and Company VEBAs existing on
the date of this Agreement, and identifies as such all Company Plans that are
(A) Qualified Plans, (B) Title IV Plans, or (C) Multiemployer Plans.
 
     (ii) Schedule 3.13(b)(ii) contains a complete and accurate list of (A) all
ERISA Affiliates of Bank, (B) all Plans, other than Qualified Plans, of which
any such ERISA Affiliate is or, within the past five years, was a Plan Sponsor,
in which any such ERISA Affiliate participates or, within the past five years,
has participated, or to which any such ERISA Affiliate contributes or, within
the past five years, has contributed, and (C) all Qualified Plans of which any
such ERISA Affiliate is or was a Plan Sponsor, in which any ERISA Affiliate
participates or has participated, or to which any such ERISA Affiliate
contributes or has contributed.
 
                                      A-13
<PAGE>   121
 
     (iii) Schedule 3.13(b)(iii) sets forth, for each Multiemployer Plan, as of
its last valuation date, the amount of potential withdrawal liability of Bank
and the Bank's ERISA Affiliates, as of said valuation date.
 
     (iv) Schedule 3.13(b)(iv) sets forth a calculation of the liability of Bank
for post-retirement benefits other than pensions, made in accordance with
Financial Accounting Statement 106 of the Financial Accounting Standards Board,
regardless of whether Bank is required by said Statement to disclose such
information.
 
     (v) Schedule 3.13(b)(v) sets forth the annual cost for the immediately
preceding two (2) year period of all obligations owed under any Company Plan or
Company Other Benefit Obligation that is not subject to the disclosure and
reporting requirements of ERISA.
 
     (c) Bank has delivered to Bancshares, or will deliver to Bancshares within
ten days of the date of this Agreement:
 
             (i) all documents that set forth the current terms of each Company
     Plan, Company Other Benefit Obligation, or Company VEBA and of any related
     trust, including (A) all plan descriptions and summary plan descriptions of
     Company Plans for which Bank or any ERISA Affiliate of Bank is required to
     prepare, file, and distribute, and (B) all summaries and descriptions
     furnished to participants and beneficiaries regarding Company Plans,
     Company Other Benefit Obligations, and Company VEBAs for which a plan
     description or summary plan description is not required;
 
           (ii) all personnel, payroll, and employment manuals and policies in
     effect at any time after December 31, 1996;
 
           (iii) all collective bargaining agreements pursuant to which
     contributions have been made or obligations incurred (including both
     pension and welfare benefits) by Bank and the ERISA Affiliates of Bank, and
     all collective bargaining agreements pursuant to which contributions are
     being made or obligations are owed by such entities;
 
           (iv) a written description of any Company Plan or Company Other
     Benefit Obligation that otherwise is not in writing;
 
            (v) all insurance policies purchased by, or to provide benefits
     under, any Company Plan and any Company Other Benefit Obligation;
 
           (vi) all contracts with third party administrators, actuaries,
     investment managers, consultants, and other independent contractors to
     provide benefits or services under any Company Plan, Company Other Benefit
     Obligation, or Company VEBA;
 
           (vii) all reports submitted within the four years preceding the date
     of this Agreement by third party administrators, actuaries, investment
     managers, consultants, or other independent contractors with respect to any
     Company Plan, Company Other Benefit Obligation, or Company VEBA;
 
          (viii) copies of all forms of notifications currently being provided
     to employees of their rights under ERISA sec. 601 et seq. and IRC sec.
     4980B;
 
           (ix) the Form 5500 filed in each of the six plan years preceding the
     date of this Agreement with respect to each Company Plan and Company Other
     Benefit Obligation, including all schedules thereto and the opinions of
     independent accountants;
 
            (x) copies of all forms of non-individual specific notices that were
     given by Bank or any ERISA Affiliate of Bank or any Company Plan to the
     IRS, the U.S. Department of Labor, the PBGC, or any participant or
     beneficiary, pursuant to statute, regulation or otherwise within the four
     years preceding the date of this Agreement, including notices that are
     expressly mentioned elsewhere in this Section 3.13;
 
           (xi) copies of all forms of notices that were given by the IRS, the
     PBGC, or the U.S. Department of Labor to Bank, any ERISA Affiliate of Bank,
     or any Company Plan within the four years preceding the date of this
     Agreement;
 
                                      A-14
<PAGE>   122
 
           (xii) with respect to Qualified Plans and VEBAs, the most recent
     determination letter for each Plan of Bank that is a Qualified Plan and
     most recent exemption in response to the filing of IRS Form 1024 for each
     Company VEBA; and
 
          (xiii) with respect to Title IV Plans, the Form PBGC-1 filed for each
     of the three most recent plan years.
 
     (d) Except as set forth in Schedule 3.13(d):
 
           (i) Bank and Bank's ERISA Affiliates has performed all of their
     respective obligations under all Company Plans, Company Other Benefit
     Obligations, and Company VEBAs. Bank has made appropriate entries in its
     financial records and statements for all obligations and liabilities under
     such Company Plans, Company VEBAs, and Company Other Benefit Obligations
     that have been accrued but are not due.
 
           (ii) To the best knowledge of Bank as of the date of this Agreement,
     no statement, either written or oral, has been made by Bank to any Person
     with regard to any Company Plan or Company Other Benefit Obligation that
     was not in accordance with the Company Plan or Company Other Benefit
     Obligation and that could have an adverse economic consequence to Bank.
 
          (iii) Bank, with respect to all Company Plans, Company Other Benefits
     Obligations, and Company VEBAs, is, and each Company Plan, Company Other
     Benefit Obligation, and Company VEBA is, in substantial compliance with
     ERISA, the IRC, and other applicable Laws including the provisions of such
     Laws expressly mentioned in this Section 3.13, and with any applicable
     collective bargaining agreements.
 
             (A) To the best knowledge of Bank as of the date of this Agreement,
        no transactions prohibited by ERISA sec. 406 and no "prohibited
        transaction" under IRC sec. 4975(c) have occurred with respect to any
        Company Plan.
 
             (B) To the best knowledge of Bank as of the date of this Agreement,
        Bank has no liability to, and no ERISA Affiliate of Bank has any
        liability to, the IRS with respect to any Plan, including any liability
        imposed by Chapter 43 of the IRC.
 
             (C) Bank has no liability to, and no ERISA Affiliate of Bank has
        any liability to, the PBGC with respect to any Plan or has any liability
        under ERISA sec. 502 or sec. 4071.
 
             (D) All filings required by ERISA and the IRC as to each Company
        Plan, Company VEBA, and Company Other Benefit Obligation have been
        timely filed as of the date of this Agreement (taking into account any
        applicable extensions) and all notices and disclosures to participants
        required by either ERISA or the IRC have been timely provided, except
        where the failure to file or provide would not have a material adverse
        effect on Bank.
 
             (E) All contributions and payments made or accrued with respect to
        all Company Plans, Company Other Benefit Obligations, and Company VEBAs
        are deductible under IRC sec. 162 or sec. 404. No amount, or any asset
        of any Company Plan or Company VEBA, is subject to tax as unrelated
        business taxable income.
 
            (iv) Each Company Plan and Company Other Benefit Obligation can be
     terminated within thirty days, without payment of any additional
     contribution or amount and without the vesting or acceleration of any
     benefits promised by such Plan or Company Other Benefit Obligation except
     as expressly required by applicable law.
 
             (v) Since December 31, 1996, there has been no establishment or
     amendment of any Company Plan, Company VEBA, or Company Other Benefit
     Obligation.
 
            (vi) To the best knowledge of Bank as of the date of this Agreement,
     no event has occurred or circumstance exists that could result in a
     material increase in premium costs of Company Plans and Company Other
     Benefit Obligations that are insured, or a material increase in benefit
     costs of such Company Plans and Company Other Benefit Obligations that are
     self-insured.
 
                                      A-15
<PAGE>   123
 
            (vii) Other than claims for benefits submitted by participants or
     beneficiaries, no claim against, or legal proceeding involving, any Company
     Plan, Company Other Benefit Obligation, or Company VEBA is pending or, to
     Bank's Knowledge, is Threatened.
 
           (viii) Each Company Plan that is a Qualified Plan of Bank is
     qualified in form and operation under IRC sec. 401(a); each trust for each
     such Qualified Plan is exempt from federal income tax under IRC sec.
     501(a). Each Company VEBA is exempt from federal income tax and qualifies
     under IRC sec. 501(c)(9). No event has occurred or circumstance exists that
     can be expected to result in disqualification or loss of tax-exempt status
     of any such Qualified Plan or trust or Company VEBA.
 
            (ix) With respect to each Company Plan that is a Qualified Plan,
     Bank and each ERISA Affiliate of Bank has met the minimum funding standard,
     and has made all contributions required, under ERISA sec. 302 and IRC sec.
     412.
 
             (x) Bank has paid all amounts due to the PBGC pursuant to ERISA
     sec. 4007.
 
            (xi) Neither Bank nor any ERISA Affiliate of Bank has ceased
     operations at any facility or has withdrawn from any Title IV Plan or has
     engaged in a transaction in a manner that would subject to any entity or
     the [Surviving Corporation/Resulting Bank] to liability under ERISA sec.
     4062(e), sec. 4063, or sec. 4065.
 
           (xii) Except with respect to Bank's terminated Title IV Plan, neither
     Bank nor any ERISA Affiliate of Bank has filed a notice of intent to
     terminate any Plan or has adopted any amendment to terminate a Plan. The
     PBGC has not instituted proceedings to terminate any Company Plan. No event
     has occurred or circumstance exists that may constitute grounds under ERISA
     sec. 4042 for the termination of, or the appointment of a trustee to
     administer, any Company Plan.
 
           (xiii) No amendment has been made, or is reasonably expected to be
     made, to any Plan that has required or could require the provision of
     security under ERISA sec. 307 or IRC sec. 401(a)(29).
 
           (xiv) No accumulated funding deficiency, whether or not waived,
     exists with respect to any Company Plan; no event has occurred or
     circumstance exists that may result in an accumulated funding deficiency as
     of the last day of the current plan year of any such Company Plan.
 
            (xv) The actuarial report for each Company Plan that is a Title IV
     Plan of Bank and each ERISA Affiliate of Bank fairly presents the financial
     condition and the results of operations of each such Title IV Plan in
     accordance with GAAP.
 
           (xvi) Since the last valuation date for each Company Plan that is a
     Title IV Plan of Bank and each ERISA Affiliate of Bank, no event has
     occurred or circumstance exists that would increase the amount of benefits
     under any such Plan or that would cause the excess of Plan assets over
     benefit liabilities (as defined in ERISA sec. 4001) to decrease, or the
     amount by which benefit liabilities exceed assets to increase.
 
           (xvii) No reportable event (as defined in ERISA sec. 4043 and in
     regulations issued thereunder) has occurred.
 
           (xviii) Bank has no Knowledge of any facts or circumstances that may
     give rise to any liability of Bank, any ERISA Affiliate of Bank or the
     Surviving Corporation to the PBGC under Title IV of ERISA.
 
           (xix) Neither Bank nor any ERISA Affiliate of Bank has ever
     established, maintained, or contributed to or otherwise participated in, or
     had an obligation to maintain, contribute to, or otherwise participate in,
     any Multiemployer Plan or, since the termination of Bank's Title IV Plan,
     any Title IV Plans.
 
            (xx) Neither Bank nor any ERISA Affiliate of Bank has withdrawn from
     any Multiemployer Plan with respect to which there is any outstanding
     liability as of the date of this Agreement. No event has occurred or
     circumstance exists that presents a risk of the occurrence of any
     withdrawal from, or the participation, termination, reorganization, or
     insolvency of, any Multiemployer Plan that could result in any liability of
     either Bank or the Resulting Bank to a Multiemployer Plan.
 
           (xxi) Neither Bank nor any ERISA Affiliate of Bank has received
     notice from any Multiemployer Plan that it is in reorganization or is
     insolvent, that increased contributions may be required to avoid a
     reduction
                                      A-16
<PAGE>   124
 
     in plan benefits or the imposition of any excise tax, or that such
     Multiemployer Plan intends to terminate or has terminated.
 
           (xxii) No Multiemployer Plan to which Bank or any ERISA Affiliate of
     Bank contributes or has contributed is a party to any pending merger or
     asset or liability transfer or is subject to any proceeding brought by the
     PBGC.
 
          (xxiii) Except to the extent required under ERISA sec. 601 et seq. and
     IRC sec. 4980B, Bank provides no health or welfare benefits for any retired
     or former employee, officer, director, or any other person, or is obligated
     to provide health or welfare benefits to any active employee, officer,
     director, or any other person, following such employee's retirement or
     other termination of service.
 
           (xxiv) Bank has the right to modify and terminate benefits to
     retirees under the Company Plans and Company Other Benefit Obligations with
     respect to both retired and active employees.
 
           (xxv) Bank has complied with the provision of ERISA sec. 601 et seq.
     and IRC sec. 4980B.
 
           (xxvi) No payment is owed or may become due to any director, officer,
     employee, or agent of Bank subject to tax under IRC sec. 280G or sec. 4999;
     nor will Bank be required to "gross up" or otherwise compensate any such
     person because of the imposition of any excise tax on a payment to such
     person.
 
          (xxvii) The consummation of the Merger will not result in the payment,
     vesting, or acceleration of any benefit under any Company Plan or Company
     Other Benefit Obligation.
 
     Section 3.14.  NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule
3.14, Bank has no material liability or obligation of any nature (whether known
or unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the Bank Balance
Sheet and current liabilities incurred in the ordinary course of business since
the date thereof.
 
     Section 3.15.  ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth
on Schedule 3.15, since the date of the Bank Balance Sheet, the Bank has
conducted its business only in the ordinary course of business and there has not
been any:
 
          (a) change in Bank's authorized or issued capital stock; grant of any
     stock option or right to purchase shares of capital stock of Bank; issuance
     of any security convertible into such capital stock; grant of any
     registration rights; purchase, redemption, retirement, or other acquisition
     by Bank of any shares of any such capital stock; or declaration or payment
     of any dividend or other distribution or payment in respect of shares of
     capital stock;
 
          (b) amendment to the Articles of Incorporation or Code of Regulations
     of Bank;
 
          (c) any increase in the salary or bonus paid to employees of Bank,
     other than increases which, in the aggregate, were consistent with the
     increases awarded in prior years and which, individually, were consistent
     with management's reasonable evaluation of an individual's performance and
     management's determination of the market level of compensation for the
     individual's services; provided, however, that (i) the aggregate salary
     increases shall not exceed five percent (5%) of the aggregate payroll of
     Bank and (ii) aggregate bonuses shall be calculated based upon increases in
     core pre-tax net income consistent with past practices of the Bank.
 
          (d) adoption of, or increase in the contributions to any profit
     sharing, deferred compensation, savings, insurance, pension, retirement, or
     other employee benefit plan for or with any employees of Bank;
 
          (e) damage to or destruction or loss of any asset or property of Bank,
     whether or not covered by insurance, involving a loss in excess of $25,000;
 
          (f) entry into, termination of, or receipt of notice of termination of
     (i) any license, distributorship, dealer, sales representative, joint
     venture, credit, or similar agreement, or (ii) any contract or transaction
     (other than Loans entered into by Bank in the ordinary course of business)
     involving a total remaining commitment by or to Bank of at least $25,000;
 
                                      A-17
<PAGE>   125
 
          (g) sale, lease, or other disposition of any asset or property (other
     than OREO properties) of Bank or mortgage, pledge, or imposition of any
     lien or other encumbrance on any material asset or property of Bank, other
     than in the ordinary course of business;
 
          (h) cancellation or waiver of any claims or rights with a value to
     Bank in excess of $25,000;
 
          (i) material change in the accounting methods used by Bank; or
 
          (j) agreement, whether oral or written, by Bank to do any of the
     foregoing.
 
     Section 3.16.  TAXES.
 
          (a) Bank has filed or caused to be filed (on a timely basis since
     1993) all tax returns that are or were required to be filed by it (either
     separately or as a member of a group of corporations), pursuant to
     applicable federal, state and local laws. Bank (either separately or as a
     member of a group of corporations) has made or will make available to
     Bancshares copies of all such tax returns relating to income or franchise
     taxes filed since 1993. Bank has paid, or made provision for the payment of
     all taxes that have or may have become due pursuant to those tax returns or
     otherwise, or pursuant to any assessment received by Bank, except such
     taxes if any, as are listed on Schedule 3.16 and are being contested in
     good faith and as to which adequate reserves (determined in accordance with
     GAAP) have been provided in the Bank Balance Sheet.
 
          (b) The United States federal and state franchise tax returns of Bank
     have been audited by the IRS or relevant state tax authorities or are
     closed by the applicable statute of limitations for all taxable years
     through 1992. Schedule 3.16 contains a complete and accurate list of all
     audits since 1992 of all such tax returns, including a reasonably detailed
     description of the nature and outcome of each audit. All deficiencies
     proposed as a result of such audits have been paid, reserved against,
     settled, or, as described on Schedule 3.16, are being contested in good
     faith by appropriate proceedings. Schedule 3.16 describes all adjustments
     to the United States federal income tax returns filed by Bank for all
     taxable years since 1993, and the resulting deficiencies proposed by the
     IRS in excess of $5,000. Except as described on Schedule 3.16, Bank has not
     given or been requested to give waivers or extensions (or is or would be
     subject to a waiver or extension given by any other third party) of any
     statute of limitations relating to the payment of taxes of Bank or for
     which Bank may be liable.
 
          (c) The charges, accruals, and reserves with respect to taxes on the
     books of Bank are adequate (determined in accordance with GAAP) and are at
     least equal to Bank's liability for taxes. There exists no proposed tax
     assessment against Bank except as disclosed in the Bank's Balance Sheet or
     on Schedule 3.16. All taxes that Bank is or was required by applicable
     federal, state or local law to withhold or collect have been duly withheld
     or collected and, to the extent required, have been paid to the proper
     federal, state or local governmental authority.
 
          (d) All tax returns filed by Bank are true, correct, and complete, in
     all material respects.
 
     Section 3.17.  COMPLIANCE WITH LAWS; LICENSES. Except as set forth on
Schedule 3.17, Bank is not engaged in or a party to (as a defendant), nor does
it have any reasonable basis to anticipate, any legal action, investigation,
arbitration, or other proceeding before any court, administrative agency,
arbitrator or other forum, which individually or in the aggregate would
reasonably be expected to have a material adverse effect on Bank. Bank has not
been charged with nor to its Knowledge is it under investigation with respect
to, and Bank has no basis to anticipate any charge or investigation with respect
to, any violation of any provision of federal, state, or other applicable law or
administrative regulation (including, without limitation, the Bank Secrecy Act,
the Community Reinvestment Act and applicable consumer protection and disclosure
laws, rules and regulations) which may materially adversely affect the financial
condition, results of operations, assets, or business of Bank. There is no
litigation, proceeding, or governmental investigation pending or, to Bank's
Knowledge, threatened (or which Bank has any reasonable basis to anticipate)
which relates to any of the transactions contemplated by this Agreement or the
Agreement of Merger. Bank has responded to and satisfied all exceptions, if any,
arising out of any federal, state or other regulatory examination. Bank
possesses all material licenses, franchises, permits and other governmental
authorizations and all material patents, trademarks, service marks, trade names,
copyrights or
 
                                      A-18
<PAGE>   126
 
rights thereto necessary for the continued conduct of Bank's banking business
without material interference or interruption.
 
     Section 3.18.  NO BROKERAGE AND FINDER'S FEES. Except for the fees payable
to its financial advisor, Danielson & Associates, Inc. ("Danielson"), Bank has
not employed any broker, finder, or agent, or agreed to pay or incurred any
brokerage fee, finder's fee, commission or other similar form of compensation in
connection with this Agreement or the transactions contemplated hereby.
 
     Section 3.19.  AUTHORIZATION FOR THIS AGREEMENT. Other than as contemplated
in Articles VI and VII hereof, no authorization, approval, or consent of any
governmental department, bureau or agency, or other public board or authority is
required for the consummation by Bank of the transactions contemplated by this
Agreement.
 
     Section 3.20.  BOARD APPROVAL; SUBMISSION TO SHAREHOLDERS. The Board of
Directors of Bank has unanimously approved this Agreement, and will direct that
this Agreement be submitted to a vote of Bank's shareholders at a special
meeting of shareholders to be called for that purpose, all in accordance with
and as required by law and in accordance with the Articles of Incorporation and
Code of Regulations of Bank.
 
     Section 3.21.  CERTAIN TRANSACTIONS. Except as set forth in Schedule 3.21
or described in the Bank's financial statements, Bank has no business
relationships or business transactions (other than indebtedness incurred in the
ordinary course of business on credit and other terms generally available to
Bank customers which indebtedness is not "past due"), with or to any of its
Related Persons, its officers or directors, or any of such officers' or
directors' Related Persons. For the purposes of this Section 3.21, "Related
Person" shall mean, with respect to a particular individual, (a) each other
member of such individual's Family, (b) any Person that is directly or
indirectly controlled by such individual or one or more members of such
individual's Family, (c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest,
and (d) any Person with respect to which such individual or one or more members
of such individual's Family serves as a director, officer, partner, executor, or
trustee (or in a similar capacity). With respect to a specified Person other
than an individual, "Related Person" shall mean (a) any Person that directly or
indirectly controls, is directly or indirectly controlled by, or is directly or
indirectly under common control with such specified Person, (b) any Person that
holds a Material Interest in such specified Person, (c) each Person that serves
as a director, officer, partner, executor, or trustee of such specified Person
(or in a similar capacity), (d) any Person in which such specified Person holds
a Material Interest, (e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity), and (f) any
Related Person of any individual described in clause (b) or (c). For purposes of
the definition of "Related Person," (A) the "Family" of an individual includes
(i) the individual, (ii) the individual's spouse and former spouses, (iii) any
other natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, (B) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of voting securities or other voting interests representing at least
5% of the outstanding voting power of a Person or equity securities or other
equity interests representing at least 5% of the outstanding equity securities
or equity interests in a Person, and (C) "Person" means any individual,
corporation, general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or governmental entity.
 
     Section 3.22.  NO VIOLATION OF ENVIRONMENTAL LAWS. The business as
currently being conducted by Bank and all real property in which Bank has an
interest, comply in all material respects with any applicable law or regulation
relating to air, water, or noise pollution or the production, storage,
treatment, labeling, transportation, or disposition of wastes or hazardous or
toxic substances or waste materials.
 
     Section 3.23.  ACCOUNTING MATTERS. Neither Bank nor, to its best Knowledge,
any of Bank's affiliates, have through the date of this Agreement taken or
agreed to take any action that would prevent Bancshares from accounting for the
business combination contemplated by this Agreement as a "pooling of interests".
 
     Section 3.24.  COMPLIANCE WITH SECURITIES LAWS. To the best of its
Knowledge, Bank is in compliance with all federal and state securities laws and
regulations, including but not limited to all filing requirements, except to the
extent that additional filings will be required in connection with the
transactions contemplated by
 
                                      A-19
<PAGE>   127
 
this Agreement. All information provided in such filings is accurate and
complete, in all material respects, to the extent required by such laws and
regulations.
 
     Section 3.25.  MATERIAL MISSTATEMENTS OR OMISSIONS. No representation or
warranty by Bank in this Agreement or any document, statement, certificate,
schedule, or exhibit furnished or to be furnished to Bancshares by or on behalf
of Bank pursuant hereto contains, or will when furnished contain, any untrue
statement of a material fact, or omits, or will then omit to state, a material
fact necessary to make the statement(s) of facts contained therein (in light of
the circumstances under which they were made), not misleading.
 
                                   ARTICLE IV
 
                            COVENANTS OF BANCSHARES
 
     Bancshares covenants and agrees with Bank, as follows:
 
     Section 4.1.  NO BREACHES OF REPRESENTATIONS AND WARRANTIES. Between the
date of this Agreement and the Effective Time, without the written consent of
Bank, Bancshares will not do any act or suffer any omission of any nature
whatsoever which would cause any of the representations or warranties made in
Article II of this Agreement to become untrue or incorrect in any material
respect.
 
     Section 4.2.  INFORMATION REGARDING BANCSHARES. Bancshares shall furnish to
Bank all information concerning Bancshares and its subsidiaries required by
applicable securities or corporation laws to be set forth in the proxy materials
required to be delivered by Bank to its shareholders in connection with this
Agreement and the transactions contemplated hereby.
 
     Section 4.3.  CORRECTION OF INFORMATION. Bancshares shall promptly correct
and supplement any information furnished under this Agreement to Bank so that
such information shall be correct and complete in all material respects at all
times, and shall include all facts necessary to make such information correct
and complete in all material respects at all times.
 
     Section 4.4.  CONSENTS. Bancshares shall use its best efforts to obtain any
required consents to the transactions contemplated by this Agreement.
 
     Section 4.5.  ACCESS TO INFORMATION. Between the date of this Agreement and
the Closing Date, to the extent reasonable under the circumstances, the officers
of Bancshares will confer with the representatives of Bank and will furnish to
Bank either orally or by means of such records, documents, and memoranda as are
reasonably available or capable of preparation (all of which Bank will be
permitted to make copies of) and such information as Bank may reasonably
request. Bancshares will confer with representatives of Danielson, will
cooperate to the fullest extent reasonably possible with Danielson, and will
furnish such records, documents, memoranda and all such other information as
Danielson may reasonably request in order for Danielson to prepare and provide a
fairness opinion.
 
     Section 4.6.  ACCOUNTING AND TAX TREATMENT. Bancshares agrees not to take
any actions subsequent to the date of this Agreement that would adversely affect
the ability of Bancshares to treat the Merger as a "pooling-of-interests" in
accordance with GAAP or Bank or the shareholders of Bank to characterize the
Merger as a tax-free reorganization under Section 368(a) of the IRC, and
Bancshares agrees to take such action as may be reasonably required, if such
action may be reasonably taken to reverse the impact of any past actions which
would adversely impact the ability of Bancshares to treat the Merger as a
"pooling-of-interests" for accounting purposes or for the Merger to be
characterized as a tax-free reorganization under Section 368(a) of the IRC.
 
     Section 4.7.  NASDAQ LISTING. Bancshares will file a listing application,
or a NASDAQ Notification Form for Change in the Number of Shares Outstanding, as
required by NASDAQ, at the time prescribed by applicable rules and regulations.
In addition, Bancshares will use its best efforts to maintain its listing on the
NASDAQ National Stock Market.
 
     Section 4.8.  SHAREHOLDER APPROVAL. If approval by Bancshares shareholders
is required, Bancshares shall take all action necessary in accordance with
applicable law and its Articles of Incorporation and Regulations to duly call
and hold a meeting of its shareholders, to be held as promptly as practicable
after the Registration
 
                                      A-20
<PAGE>   128
 
Statement is declared effective by the SEC, to consider and vote on the adoption
and approval of the Merger. The Board of Directors of Bancshares shall recommend
that its shareholders adopt and approve the Merger and shall take all lawful
action (including the solicitation from shareholders of proxies in favor of such
adoption and approval) to secure the vote or consent of shareholders required to
adopt and approve the Merger unless otherwise required by the applicable
fiduciary duties of the directors of Bancshares as determined by such Board of
Directors in good faith after consultation with and based upon advice of
independent legal counsel.
 
     Section 4.9.  POST-AFFILIATION BANCSHARES BOARD STRUCTURE; DIRECTOR
NOMINEES.
 
          (a) Bancshares shall cause the Nominating Committee of its Board of
     Directors to nominate for election to Bancshares' Board of Directors three
     (3) members of Bank's Board of Directors (or in the event the Mid Am
     Transaction is not consummated, four (4) members of Bank's Board of
     Directors) to be recommended by Bank and to be selected by Bancshares
     (collectively, the "New Directors"). At the Effective Time, the New
     Directors will be elected/designated to fill vacancies and one of them
     shall have been designated by Bancshares for membership on the Executive
     Committee of the Board of Directors, if any such committee has been or is
     formed by the Board of Directors. In addition, a member of the Bank's
     management team shall be selected by Bancshares to serve on the Management
     Executive Committee to be formed following consummation of the Mid Am
     transaction.
 
          (b) At least two (2) of the New Directors shall have been nominated to
     serve on Bancshares' Board of Directors for terms of three (3) years.
 
     Section 4.10.  BANK BOARD OF DIRECTORS. At the Effective Time of the
Merger, the number of members of the Bank Board of Directors will be reduced and
certain of the current members shall continue to serve as directors of the Bank
and the Bank Board of Directors will be expanded to include members of the Board
of Directors of the Merged Banks, all as mutually agreed by Bancshares and Bank.
 
     Section 4.11.  DESIGNATION OF CERTAIN BANK OFFICERS. It is contemplated
that at and after the Effective Time, Jack Donaldson would remain as the
President and Chief Executive Officer of the Bank and that James Burwell will
serve as the Bank's Chief Operating Officer. It is further contemplated that Mr.
Burwell will become the Chief Executive Officer of the Bank upon Mr. Donaldson's
retirement.
 
     Section 4.12.  BANK NAME. Following the Closing Date, Bancshares would
anticipate, given the notable recognition associated with the "The Ohio Bank'
name, that it would continue to be featured in all Bank signage and literature.
 
     Section 4.13.  OPPORTUNITY OF EMPLOYMENT; EMPLOYEE BENEFITS. Bancshares
shall offer the existing employees of the Bank the opportunity to continue as
employees of Bank, on the Closing Date, for a minimum period of six (6) months;
subject, however, to the right to terminate any such employees for "cause". It
is understood and agreed that nothing in this Section 4.13 or elsewhere in this
Agreement shall be deemed to be a contract of employment or be construed to give
said employees any rights other than as employees at will under applicable law
and said employees shall not be deemed to be third-party beneficiaries of this
provision; provided, that employees shall have the right to enforce the first
sentence of Section 4.13 through the six (6) month anniversary of the Effective
Time. From and after the Effective Time, Bank employees shall continue to
participate in the Company Plans in effect on the Effective Time unless and
until Bancshares, in its sole discretion, shall determine that Bank employees
shall, subject to applicable eligibility requirements, participate in employee
benefit plans of Bancshares (including, without limitation, employee benefit
plans established by Bancshares after its merger with Mid Am, Inc.).
 
                                   ARTICLE V
 
                               COVENANTS OF BANK
 
     Bank hereby covenants and agrees with Bancshares as follows:
 
     Section 5.1.  NO BREACHES OF REPRESENTATIONS AND WARRANTIES. Between the
date of this Agreement and the Effective Time, without the written consent of
Bancshares, Bank will not do any act or suffer any omission of
 
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<PAGE>   129
 
any nature whatsoever which would cause any of the representations or warranties
made in Article III of this Agreement to become untrue or incorrect in any
material respect.
 
     Section 5.2.  CARRY ON BUSINESS IN NORMAL MANNER. From the date of this
Agreement to the Closing Date, Bank shall carry on its business in substantially
the same manner as heretofore and, without the written consent of Bancshares,
Bank shall not (a) do any of the things which they represent and warrant herein
have not been done since December 31, 1997 or the date hereof, as the case may
be, except as necessary to carry out this Agreement on the part of Bank; (b)
engage in any transaction which would be inconsistent with any other
representation or warranty of Bank set forth herein or which would cause a
breach of any such representation or warranty if made at or immediately
following such transaction; or (c) engage in any lending activities other than
in the ordinary course of business consistent with past practice. Bank shall
send to Bancshares via facsimile transmission a copy of all loan presentations
made to Bank's Board Loan Committee at the same time as such presentations are
transmitted to said committee, to enable one of Bancshares' senior loan
committee members to review, comment and make reasonable recommendations to the
loan committee with respect to such loan presentations. Bank shall consult with
Bancshares prior to hiring any full-time employees at an annual salary in excess
of $25,000, other than replacement employees for positions then existing. Bank
will use its reasonable best efforts to keep its business organizations intact,
to keep available the services of present employees, and to preserve the
goodwill of customers, suppliers, and others having business relations with
them.
 
     Section 5.3.  ACCESS TO INFORMATION. Between the date of this Agreement and
the Closing Date, to the extent reasonable under the circumstances, the officers
of Bank will confer with the representatives of Bancshares and will furnish to
Bancshares either orally or by means of such records, documents, and memoranda
as are reasonably available or capable of preparation (all of which Bancshares
will be permitted to make copies of) such information as Bancshares may
reasonably request. Bank will confer with the representatives of Sandler,
O'Neill, will cooperate to the fullest extent reasonably possible with Sandler
O'Neill and will furnish such records, documents, memoranda and all such other
information as Sandler O'Neill may reasonably request in order for Sandler,
O'Neill to prepare and provide a fairness opinion.
 
     Section 5.4.  CONSENTS. Bank shall use its best efforts to obtain any
required consents to the transactions contemplated by this Agreement.
 
     Section 5.5.  INSURANCE COVERAGE. Bank shall cause the policies of
insurance listed in the Disclosure Schedule to remain in effect between the date
of this Agreement and the Closing Date.
 
     Section 5.6.  COMPLIANCE WITH SECURITIES LAWS. Bank shall cooperate with
Bancshares in doing all things necessary to comply with the state and federal
securities laws applicable to the transactions contemplated by this Agreement.
 
     Section 5.7.  SHAREHOLDER APPROVAL. Bank shall take all action necessary in
accordance with applicable law and its Articles of Incorporation and Code of
Regulations to duly call and hold a meeting of its shareholders, to be held as
promptly as practicable after the Registration Statement is declared effective
by the SEC, to consider and vote on the adoption and approval of the Merger. The
Board of Directors of Bank shall recommend that its shareholders adopt and
approve the Merger and shall take all lawful action (including the solicitation
from shareholders of proxies in favor of such adoption and approval) to secure
the vote or consent of shareholders required to adopt and approve the Merger
unless otherwise necessary under the applicable fiduciary duties of the
directors of Bank as determined by such Board of Directors in good faith after
consultation with and based upon advice of independent legal counsel.
 
     Section 5.8.  CORRECTION OF INFORMATION. Bank shall promptly correct and
supplement any information furnished under this Agreement to Bancshares so that
such information shall be correct and complete in all material respects at all
times, and shall include all facts necessary to make such information correct
and complete in all material respects at all times.
 
     Section 5.9.  OTHER OFFERS. On and after the date hereof, except with the
written consent of Bancshares, Bank shall not directly or indirectly solicit or
encourage (nor shall Bank permit any of its officers, directors, employees or
agents directly or indirectly to solicit or encourage), including by way of
furnishing information, any inquiries or proposals for a merger, consolidation,
share exchange or similar transaction involving Bank or
                                      A-22
<PAGE>   130
 
for the acquisition of the shares or all or substantially all of the assets or
business of Bank, or discuss with or enter into conversations with any person,
other than Bank shareholders or employees, concerning any such merger,
consolidation, share exchange, acquisition or other transaction, other than the
share exchange with Bancshares', provided, that to the extent the Board of
Directors of Bank determines in good faith, after consultations with independent
legal counsel that it is required by its fiduciary duties to do so, Bank may
furnish to a third party, upon written request, the Danielson Information
Memorandum. Bank will promptly notify Bancshares orally (to be confirmed in
writing as soon as practicable thereafter) of all of the relevant details
relating to any inquiries or proposals that it may receive relating to any such
matters, including actions it intends to take with respect to such matters.
 
     Section 5.10.  DIVIDENDS. On and after the date hereof, Bank shall not
declare, set aside, pay or make any dividend or other distribution or payment
(whether in cash, stock or property) with respect to, or purchase or redeem, any
shares of its capital stock other than regular semi-annual cash dividends each
in an amount not to exceed the semi-annual cash dividend of 10.34 per Class A
common share and 9.30 per Class B common share declared on July 22, 1998;
provided, however, that in the event the transactions contemplated by this
Agreement are not consummated by the time of the next scheduled semi-annual
dividend in January, 1999, said Bank dividend may be in an amount equal to what
would have been received by Bank shareholders as a dividend from Bancshares with
respect to the period ending December 31, 1998. It is agreed by the parties
hereto that they will cooperate to assure that as a result of the Merger, during
any applicable period, there shall not be a payment of both a Bancshares and
Bank dividend. The parties further agree that if the Closing Date is at the end
of a fiscal six (6) month period, then they will cooperate to assure that the
Bank shareholders receive the dividend, if any, declared by Bank rather than the
dividend for that period, if any, declared by Bancshares.
 
     Section 5.11.  ACCOUNTING AND TAX TREATMENT. Bank agrees not to take any
actions subsequent to the date of this Agreement that would adversely affect the
ability of Bank to treat the Merger as a "pooling-of-interests" in accordance
with GAAP or of Bank or the shareholders of Bank to characterize the Merger as a
tax-free reorganization under Section 368(a) of the IRC, and Bank agrees to take
such action as may be reasonably required, if such action may be reasonably
taken to reverse the impact of any past actions which would adversely impact the
ability of Bank to treat the Merger as a "pooling-of-interests" for accounting
purposes or for the Merger to be characterized as a tax-free reorganization
under Section 368(a) of the IRC.
 
     Section 5.12.  LARGE DEPOSITS. Prior to the Closing, Bank will have
provided Bancshares with a list of (i) all certificates of deposit, checking,
savings or other deposits in excess of $100,000; and (ii) all customers with
aggregate deposits in excess of $500,000.
 
     Section 5.13.  DELIVERY OF DISCLOSURE SCHEDULES. Bank shall deliver to
Bancshares, within fifteen (15) days of execution of this Agreement, its
Disclosure Schedules pursuant to Article III hereof (the "Bank Schedules").
Thereafter, Bancshares will have fifteen (15) days to review the Bank Schedules
and advise Bank of its acceptance thereof, in whole or in part, all in
accordance with the procedures and standards set forth in Section 9.1(d) of this
Agreement. Upon receipt of notice of acceptance by Bancshares, the Bank
Schedules shall be attached to this Agreement and shall be deemed to be part of
this Agreement as of the date of execution hereof.
 
                                   ARTICLE VI
 
                     JOINT COVENANTS OF BANK AND BANCSHARES
 
     Section 6.1.  CONFIDENTIALITY. Except for the use of information in
connection with the Registration Statement described in Section 7.1 hereof and
any other governmental filings required in order to complete the transactions
contemplated by this Agreement, all information (collectively, the
"Information") received by each of Bank and Bancshares (which for purposes
hereof shall include Mid Am, Inc.), pursuant to the terms of this Agreement
shall be kept in strictest confidence; provided that, subsequent to the filing
of the Registration Statement with the Securities and Exchange Commission, this
Section 6.1 shall not apply to information included in the Registration
Statement or to be included in the official proxy/prospectus to be sent to the
shareholders of Bank and, if applicable, Bancshares under Section 7.1
(individually, a "Prospectus/Proxy Statement" and
 
                                      A-23
<PAGE>   131
 
collectively, the "Prospectus/Proxy Statements"). Bank and Bancshares agree that
the Information will be used only for the purpose of completing the transactions
contemplated by this Agreement and the Agreement of Merger. Bank and Bancshares
agree to hold the Information in strictest confidence and shall not use, and
shall not disclose directly or indirectly any of such Information except when,
after and to the extent such Information (i) is or becomes generally available
to the public other than through the failure of Bank or Bancshares to fulfill
its obligations hereunder, (ii) was already known to the party receiving the
Information on a nonconfidential basis prior to the disclosure or (iii) is
subsequently disclosed to the party receiving the Information on a
nonconfidential basis by a third party having no obligation of confidentiality
to the party disclosing the Information. It is agreed and understood that the
obligations of Bank and Bancshares contained in this Section 6.1 shall survive
the Closing. In the event the transactions contemplated by this Agreement are
not consummated, Bank and Bancshares agree to return all copies of the
Information provided to the other promptly.
 
     Section 6.2.  REGULATORY APPROVALS. As promptly as practicable after the
date hereof, each of Bancshares and Bank shall use its respective best efforts,
separately and jointly with the other party, in good faith to take or cause to
be taken all such steps as shall be necessary or advisable to obtain all
consents and approvals of governmental authorities as are required by law or
otherwise to effect the Merger, including without limitation the Approvals and
shall do any and all acts and things reasonably necessary or advisable in order
to cause the Merger to be completed on the terms provided in this Agreement as
soon as reasonably practicable thereafter. In furtherance of the foregoing
covenant, Bancshares and Bank agree to use their respective best efforts,
separately and jointly and in good faith to make all regulatory filings needed
to obtain the Approvals by October 1,1998. In addition, as promptly as
practicable after the consummation of the Mid Am Transaction, each of Bancshares
and Bank (as applicable), shall use its respective best efforts, separately and
jointly with the other party, in good faith to take or cause to be taken all
such steps as shall be necessary or advisable to obtain all consents and
approvals of governmental authorities as are required by law to effect the
various transactions described in items (i) and (ii) under "Plan of Affiliation"
on pages 1 and 2 of this Agreement.
 
     Section 6.3.  ANNOUNCEMENTS. Except as may be required by law or as
otherwise contemplated herein, no party shall make any public announcements or
filing or disclosure to third parties of the transaction contemplated herein or
the other party's involvement therein without the prior written approval of the
other party. The restrictions contained in this Section shall not apply to
disclosures made by either party to its shareholders, employees, suppliers or
customers to the extent appropriate to consummate the transactions contemplated
by this Agreement. Each party shall endeavor to give the other at least one (1)
business day's prior notice of announcements to the public, which notice shall
be accompanied by a copy of the text of the proposed disclosure.
 
                                  ARTICLE VII
 
                    REGISTRATION OF BANCSHARES COMMON SHARES
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
 
     Section 7.1.  REGISTRATION STATEMENT. Bancshares and Bank acknowledge that
the transactions contemplated hereby are subject to the provisions of the
Securities Act of 1933, as amended (the "Act") and Rule 145 thereunder.
Bancshares agrees to prepare and file, as soon as practicable after the
execution of this Agreement, a registration statement on Form S-4 (the
"Registration Statement") under and pursuant to the provisions of the Act for
the purposes of (i) filing the Prospectus/Proxy Statements to be used by Bank
(and if necessary Bancshares) to obtain the approval of their respective
shareholders of the transactions contemplated by this Agreement and (ii)
registering the Bancshares Common Shares to be issued in connection with the
transactions contemplated hereby. Bank agrees to provide promptly to Bancshares,
information concerning the business and financial condition and affairs of Bank
as may be required or appropriate for inclusion in the Registration Statement
and to cause its counsel and auditors to cooperate with Bancshares' counsel and
auditors in the preparation of such Registration Statement. Bancshares agrees to
use its best efforts to have such Registration Statement declared effective
under the Act as soon as may be practicable and Bancshares (if applicable), and
Bank agree to distribute its respective Prospectus/Proxy Statement contained in
such Registration Statement to its respective shareholders not less than twenty
(20) business days prior to the scheduled meeting of its shareholders that will
be held to consider approval of this Agreement. Except to the extent permitted
by Rule 145(b) under the
 
                                      A-24
<PAGE>   132
 
Act, Bancshares and Bank agree not to publish any communication other than the
Prospectus/Proxy Statement(s) in respect of this Agreement or the transactions
contemplated hereby. Any communication by either party under Rule 145(b) will be
made only upon the written approval of the other. Bancshares and Bank agree
that, between the date the Registration Statement becomes effective and the
Closing Date, they will keep each other advised on a current basis of material
developments concerning their respective businesses, including any event which
would cause their respective Prospectus/Proxy Statement to contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading. Bancshares shall not be required to
maintain the effectiveness of the Registration Statement for the purpose of
resale of Bancshares Common Shares by Bank shareholders who may be deemed to be
affiliates of Bank, as such term is defined in Rule 145 promulgated under the
Act (individually, an "Affiliate" and collectively, the "Affiliates").
 
     Section 7.2. AFFILIATES' CERTIFICATES. Each Affiliate of Bank shall furnish
to Bancshares a letter representing that such Affiliate will not sell, assign,
or transfer any of the Bancshares Common Shares received by such Affiliate as a
result of the transactions contemplated by this Agreement, except pursuant to
(a) registration under the Act or (b) a transaction permitted by Rule 145 under
the Act, or (c) a transaction in which, in the opinion of Squire, Sanders &
Dempsey L.L.P., Baker & Hostetler, LLP or other counsel satisfactory to
Bancshares, or in accordance with a "no action" letter from the staff of the
Securities and Exchange Commission, the Bancshares Common Shares are not
required to be registered under the Act; and in the event of sale or other
disposition pursuant to Rule 145 such Affiliate will supply reasonably
satisfactory evidence of compliance with such Rule to Bancshares. With respect
to such representations, each Affiliate shall agree to hold harmless and
indemnify Bancshares and Bancshares' officers and directors from and against any
losses, claims, damages, expenses (including reasonable attorneys' fees), or
liabilities to which Bancshares or any officer or director of Bancshares may
become subject under the Act or otherwise as a result of the untruth, breach, or
failure of such representations. Each Affiliate shall further agree that the
certificate or certificates representing the Bancshares Common Shares issued to
such Affiliate upon the consummation of the Share Exchange may bear the
following restrictive legend:
 
          The shares represented by this certificate have been issued or
     transferred to the registered holder as a result of a transaction to which
     Rule 145 under the Securities Act of 1933, as amended (the "Act"), applies.
     The shares represented by this certificate may not be sold, transferred or
     assigned, and the issuer shall not be required to give effect to any
     attempted sale, transfer or assignment, except pursuant to (i) an effective
     registration statement under the Act, (ii) a transaction permitted by Rule
     145 and as to which the issuer has received reasonable and satisfactory
     evidence of compliance with the provisions of Rule 145, or (iii) a
     transaction in which, in the opinion of Squire, Sanders & Dempsey L.L.P. or
     other counsel satisfactory to the issuer or in accordance with a "no
     action" letter from the staff of the Securities and Exchange Commission,
     such shares are not required to be registered under the Act.
 
     Bancshares covenants and agrees to remove the foregoing restrictive legend
from the certificate or certificates representing the Bancshares Common Shares
issued to an Affiliate and to cancel any stop order instructions with respect
thereto upon receipt of advice from its counsel that such actions are
appropriate under the then-existing circumstances. In addition, Bancshares
covenants and agrees to publish in a Form 8-K or otherwise, the combined
financial results of operation of Bank and Bancshares for the initial 30-day
period following consummation of the Merger as promptly as practicable after
such results are available.
 
     Section 7.3.  BLUE SKY REGISTRATION. Bancshares shall, to the extent
required by applicable state securities or "blue sky" laws, as promptly as
practicable after the furnishing by Bank of all information regarding Bank
required or desirable to be reflected therein, file with applicable state
securities or blue sky administrators, and use its best efforts to cause to
become effective or be approved, all registration statements or applications
required to be so filed with respect to the issuance of the Bancshares Common
Shares in connection with the Agreement of Merger.
 
     Section 7.4.  SUPPLEMENTAL ASSURANCES.
 
          (a) On the date the Registration Statement becomes effective and on
     the Closing Date, Bank shall deliver to Bancshares a certificate signed by
     its principal executive officer and its principal financial officer to the
     effect, to such officers' Knowledge, that the information contained in the
     Registration Statement
                                      A-25
<PAGE>   133
 
     relating to the business and financial condition and affairs of Bank, does
     not contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading.
 
          (b) On the date the Registration Statement becomes effective and on
     the Closing Date, Bancshares shall deliver to Bank a certificate signed by
     the chief executive officer and by the chief financial officer of
     Bancshares to the effect, to such officers' Knowledge, that the
     Registration Statement (other than the information contained therein
     relating to the business and financial condition and affairs of Bank) does
     not contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading.
 
                                  ARTICLE VIII
 
                                   CONDITIONS
 
     Section 8.1.  CONDITIONS TO BANCSHARES' OBLIGATIONS. The obligation of
Bancshares to consummate the transactions contemplated by this Agreement shall
be subject to the following conditions, except as Bancshares may waive the same
in writing:
 
          (a)   NO MATERIAL ADVERSE CHANGE. From December 31, 1997, to the
     Closing Date, there shall have been no material adverse change in the
     financial condition, results of operations, business, or assets of Bank,
     and there shall have been no occurrence or circumstances which would
     reasonably be expected to result in any such material adverse change.
 
          (b)  CONDUCT OF BUSINESS IN ORDINARY COURSE. From December 31, 1997,
     to the Closing Date, Bank will have conducted business only in the ordinary
     and usual course except for matters expressly referred to in this Agreement
     or the Disclosure Schedule, matters incident to carrying out this Agreement
     and such further matters as may be consented to in writing by Bancshares.
 
          (c)  OPINION OF BANK'S COUNSEL. Bank's counsel, Baker & Hostetler,
     LLP, shall have delivered to Bancshares its opinion, dated the Closing
     Date, to the effect that (i) Bank is a state banking association duly
     organized under the laws of the State of Ohio and is in good standing under
     the laws of the State of Ohio, (ii) each of this Agreement and the
     Agreement of Merger has been duly executed by Bank and constitutes a
     binding obligation of Bank, enforceable in accordance with its terms
     against Bank, (iii) the Bank Common Shares have been duly authorized,
     validly issued and are fully paid, (iv) assuming that the Merger is duly
     authorized by Bancshares, and, if required, approved by its shareholders
     and that Bancshares has taken all action required to be taken by it prior
     to the Effective Time, upon the filing of the Certificate of Merger with
     the Secretary of State of Ohio (accompanied by a certificate of approval
     from the Division), in accordance with Section 1.1., the Merger will become
     effective under Ohio law.
 
          (d)  ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
     COVENANTS ON CLOSING DATE. The representations and warranties made herein
     by Bank in Article III hereof shall be correct in all material respects on
     and as of the Closing Date, with the same force and effect as though such
     representations and warranties were being made on and as of the Closing
     Date (except for representations and warranties made as of an earlier date,
     which representations and warranties shall have been correct in all
     material respects as of such earlier date), and Bank shall have fully
     complied with all the terms and conditions hereof, and Bank shall have
     delivered to Bancshares a certificate to that effect, which certificate
     shall be signed by the President of Bank and shall be in a form reasonably
     satisfactory to Bancshares.
 
          (e)  AFFILIATES' CERTIFICATES. Bancshares shall have received from
     each Affiliate a certificate in the form specified in Section 7.2 hereof.
 
          (f)  OFFICERS' CERTIFICATES REGARDING REGISTRATION
     STATEMENT. Bancshares shall have received from Bank the officers'
     certificates required pursuant to Section 7.4(a) hereof.
 
          (g)  FAIRNESS OPINION. The receipt of a fairness opinion from Sandler
     O'Neill dated as of a date reasonably proximate to the Effective Date of
     the Registration Statement stating that as of the date of such
 
                                      A-26
<PAGE>   134
 
     opinion, the transactions contemplated by this Agreement fair to the
     Bancshares shareholders from a financial point of view.
 
          (h)  DISSENTERS' RIGHTS. Bank Common Shares, the holders of which
     shall have taken such actions as are required by Ohio Revised Code Section
     1701.85 to assert dissenters' rights, combined with fractional shares for
     which cash is paid and any shares that are deemed to be in contemplation of
     the combination when determining whether the pooling-of-interests method of
     accounting is appropriate under GAAP, may not exceed ten percent (10%) of
     the issued and outstanding Bank Common Shares.
 
          (i)  NO DEFAULT. There shall have occurred no event constituting a
     default under any material indenture, agreement, note, mortgage, guaranty
     or other writing which evidences or relates to any loan of money to, or
     indebtedness for money borrowed by Bank which materially adversely affects
     Bank's financial condition.
 
          (j)  ACCOUNTING TREATMENT. Bancshares shall have received from Crowe,
     Chizek and Company LLP, a letter dated the Closing Date, in substance
     reasonably acceptable to Bancshares, stating its opinion that based upon
     the information furnished that the transactions contemplated by this
     Agreement should be accounted for by Bancshares as a "pooling of interests"
     for financial statement reporting purposes and that such accounting
     treatment is in accordance with generally accepted accounting principles.
 
          (k)  OFFICER AGREEMENTS. Bancshares shall have entered into employment
     or severance agreements to take effect at the Effective Time with certain
     currenet officers of the Bank, all as mutually agreed upon by Bancshares
     and said officers (collectively, the "Officer Agreements").
 
     Section 8.2.  CONDITIONS TO BANK'S OBLIGATIONS. The obligation of Bank to
consummate the transactions contemplated by this Agreement shall be subject to
the following conditions, except as Bank may waive the same in writing:
 
          (a)  NO MATERIAL ADVERSE CHANGE. From December 31, 1997, through the
     Closing Date, there shall have been no material adverse change in the
     financial condition, results of operation, business or assets of Bancshares
     and there shall have been no occurrence or circumstance (whether arising
     heretofore or hereafter) which might reasonably be expected to result in
     any such material adverse change.
 
          (b)  OPINION OF BANCSHARES' COUNSEL. Bancshares' counsel, Squire,
     Sanders & Dempsey L.L.P., shall have delivered to Bank an opinion dated the
     Closing Date to the effect that (i) Bancshares is a corporation duly
     organized and in good standing under the State of Ohio, (ii) this Agreement
     and the Agreement of Merger have been duly executed by Bancshares and
     constitute the binding obligation of Bancshares, enforceable in accordance
     with their terms against Bancshares, (iii) the Bancshares Common Shares,
     when issued, shall be duly authorized, validly issued, fully paid and
     nonassessable, (iv) assuming that the Merger is duly authorized by Bank and
     its shareholders and that Bank has taken all action required to be taken by
     it prior to the Effective Time, upon the filing of the Certificate of
     Merger with the Secretary of State of the State of Ohio, accompanied by a
     certificate of approval from the Division in accordance with Section 1.1,
     the Merger will become effective and each Bank Common Share outstanding
     will be converted into Bancshares Common Shares in accordance with Section
     1.2 hereof.
 
          (c)  ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
     COVENANTS ON CLOSING DATE. The representations and warranties made herein
     by Bancshares shall be correct in all material respects on and as of the
     Closing Date, with the same force and effect as though such representations
     and warranties were being made on and as of the Closing Date (provided,
     however, that nothing herein contained shall be construed to place any
     limitations upon the issuance of additional shares or other securities of
     Bancshares) and Bancshares shall have fully complied with all the terms and
     conditions hereof, and Bancshares and Citizens shall have delivered to Bank
     a certificate to that effect, which certificate shall be signed by the
     President of Bancshares and shall be in a form reasonably satisfactory to
     Bank.
 
          (d)  OFFICERS' CERTIFICATES REGARDING REGISTRATION
     STATEMENT. Bancshares shall have furnished to Bank the officers'
     certificates required pursuant to Section 7.4(b) hereof.
 
                                      A-27
<PAGE>   135
 
          (e)  FAIRNESS OPINION. The receipt of a fairness opinion from
     Danielson dated as of a date reasonably proximate to the Effective Date of
     the Registration Statement stating that as of the date of such opinion, the
     transaction contemplated by this Agreement is fair to the Bank shareholders
     from a financial point of view.
 
          (f)  TAX OPINION. Bank shall have obtained an opinion of its counsel,
     Baker & Hostetler, LLP, reasonably satisfactory in form and substance to it
     and dated as of Closing, to the effect that (i) the Merger will constitute
     a tax-free reorganization within the meaning of Section 368(a) of the IRC,
     (ii) no gain or loss will be recognized by Bank as a consequence of the
     Merger, and (iii) no gain or loss will be recognized by the shareholders of
     Bank pursuant to the terms of the Merger (except for the effect of any cash
     received pursuant to dissenters' rights or paid in lieu of the issuance of
     fractional shares.)
 
          (g)  ACCOUNTING TREATMENT. Bancshares shall have received from Crowe,
     Chizek and Company LLP, a letter dated the Closing Date, in substance
     reasonably acceptable to Bancshares, stating its opinion that based upon
     the information furnished that the transactions contemplated by this
     Agreement should be accounted for by Bancshares as a "pooling of interests"
     for financial statement reporting purposes and that such accounting
     treatment is in accordance with generally accepted accounting principles.
 
          (h)  OFFICER AGREEMENTS. Bancshares and certain Bank officers shall
     have entered into the Officer Agreements.
 
     Section 8.3.  CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES. The respective
obligations of Bancshares and Bank to consummate the transactions contemplated
by this Agreement and the Agreement of Merger shall be subject to the following
conditions, except as any of them may waive the same in writing:
 
          (a)  ORDERS, INJUNCTIONS, ETC. No temporary restraining order,
     preliminary or permanent injunction or other order issued by any court of
     competent jurisdiction or other legal restraint or prohibition preventing
     the consummation of the Merger shall be in effect, nor shall any proceeding
     seeking any of the foregoing be pending.
 
          (b)  NO ADVERSE GOVERNMENTAL ACTION. On or before the Closing Date, no
     action shall have been taken or threatened by any governmental entity which
     makes consummation of the Merger illegal.
 
          (c)  COMMON SHARE REGISTRATION. The Bancshares Common Shares into
     which the Bank Common Shares are to be converted pursuant to this Agreement
     shall have been registered with the Securities and Exchange Commission and
     no stop order shall be threatened or in effect with respect thereto.
 
          (d) BLUE SKY LAWS. Pursuant to Section 7.3 hereof, Bancshares shall
     have filed such registration statements or applications as may be required
     under applicable blue sky laws and such registration statements or
     applications shall have become effective or approved and no stop order
     shall be threatened or in effect with respect thereto.
 
          (e)  SHAREHOLDER ACTION. Prior to the Closing Date, this Agreement
     shall have been approved by the affirmative vote of the holders of Bank
     Common Shares representing a majority of the voting power and, if required,
     the affirmative vote of 66  % of the outstanding Bancshares Common Shares
     (or such lesser percentage as the Bancshares Articles of Incorporation, as
     then in effect, require).
 
          (f)  REGULATORY APPROVALS. All Approvals necessary for the
     consummation of the transactions contemplated by this Agreement shall have
     been obtained and be in force and all statutory waiting periods in respect
     thereof shall have expired and no such Approvals shall contain any
     conditions, restrictions or requirements which either the Bank or the
     Bancshares Board of Directors reasonably determines would, following the
     Effective Time, have a Material Adverse Effect (as such term is defined in
     Article IX hereof) on Bancshares and its subsidiaries taken as a whole.
 
     Section 8.4.  CLOSING DATE. The closing ("Closing") of the transactions
contemplated by this Agreement shall occur on a date mutually agreed to by
Bancshares and Bank as soon as reasonably practicable after satisfaction of all
the conditions set forth in Sections 8.l, 8.2 and 8.3 hereof and the expiration
of all waiting periods imposed by any and all regulatory authorities (the
"Closing Date").
 
                                      A-28
<PAGE>   136
 
                                   ARTICLE IX
 
                          TERMINATION AND ABANDONMENT
 
     For purposes of this Article IX, the term "Material Adverse Effect" means
an effect which (A) is materially adverse to the business, properties, financial
condition or results of operations of Bank or Bancshares, as the context may
dictate, and its subsidiaries taken as a whole, (B) materially impairs the
ability of Bank or Bancshares, as the context may dictate to consummate the
Merger or (C) enables any Person to prevent the consummation of Bank or
Bancshares of the Merger; provided, however, that in determining whether a
Material Adverse Effect has occurred there shall be excluded any effect the
proximate cause of which is (i) any change in banking and similar laws of
general applicability or interpretations thereof by courts or governmental
authorities and (ii) any change in generally accepted accounting principles or
regulatory accounting requirements applicable to banks and bank holding
companies generally.
 
     Section 9.1.  RIGHT TO TERMINATION. This Agreement may be terminated and
the Merger abandoned prior to the Closing Date in the following manner:
 
          (a)  MUTUAL CONSENT. By mutual consent of Bank and Bancshares,
     authorized by their respective Boards of Directors; or
 
          (b)  BY BANK. If the Average NMS Closing Price (as defined below) of
     Bancshares Common Shares is less than $26.00, then Bank may, at its option,
     terminate this Agreement; provided however, that prior to Bank exercising
     any right of termination hereunder, Bancshares may, at its option, for a
     period of ten (10) business days, offer to distribute to Bank shareholders,
     in connection with the Share Exchange, an additional number of Bancshares
     Common Shares to (i) offset the amount by which the Average NMS Closing
     Price is below $26.00 plus (ii) some additional number of Bancshares Common
     Shares (the "Bancshares Offer). Thereafter, for a period of ten (10)
     business days, the Bank shall have the opportunity to accept or reject the
     Bancshares Offer. If the Bank rejects the Bancshares Offer, the Bank may
     terminate this Agreement in accordance with the provisions hereof. For
     purposes of this Section 9.1(b), the term "NMS Closing Price" shall mean
     the price per share of the last sale of Bancshares Common Shares reported
     on the NASDAQ National Market System at the close of the trading day by the
     National Association of Securities Dealers, Inc. The term "Average NMS
     Closing Price" shall mean the arithmetic mean of the NMS Closing Prices for
     the ten (10) trading days immediately preceding the fifth (5th) trading day
     prior to the consummation of the Merger.
 
          (c)  BY BANCSHARES OR BANK. By either Bancshares or Bank (i) in the
     event the transactions contemplated by this Agreement are not consummated
     on or before March 31, 1999 or (ii) in the event of a material breach by
     the other party (provided, however, that the terminating party is not in
     material breach of this Agreement), which breach is not cured after thirty
     (30) days written notice hereof to the breaching party.
 
          (d)  BY BANCSHARES. If Bancshares does not accept the Bank Schedules
     delivered pursuant to Section 5.13 hereof, then Bancshares, at its option,
     may terminate this Agreement in accordance with the standards set forth in
     this subsection (d). In addition, this Agreement may be terminated and the
     Merger may be abandoned by action of the Board of Directors of Bancshares
     as follows: (i) It is intended that Bancshares will continue its due
     diligence review of Bank for up to 30 days after the date hereof. In the
     event that Bancshares' due diligence investigation of Bank and its
     subsidiaries discloses one or more matters which either (i) Bancshares in
     good faith believes in the reasonable judgment of the Board of Directors of
     Bancshares to be inconsistent with any of the representations and
     warranties of Bank and which constitute or have had or are reasonably
     likely to have a Material Adverse Effect (as defined above) on Bank or (ii)
     in the reasonable judgment of the Board of Directors of Bancshares either
     (A) is of such significance as to constitute or have or be reasonably
     likely to have a Material Adverse Effect on Bank and its subsidiaries,
     taken as a whole, or (B) deviates materially and adversely from the
     financial statements for the year ended December 31, 1997, or the three
     months or six months ended March 31, 1998 or June 30, 1998, respectively,
     of Bank, the Board of Directors of Bancshares may elect to terminate this
     Plan by giving notice of termination to Bank within or at the end of the 30
     day period following the date hereof; or
 
                                      A-29
<PAGE>   137
 
          (e)  BY BANK. This Agreement may be terminated and the Merger may be
     abandoned by action of the Board of Directors of Bank as follows: (i) it is
     intended that Bank will continue its due diligence review of Bancshares for
     up to 30 days after the date hereof. In the event that Bank's due diligence
     investigation of Bancshares and its subsidiaries discloses one or more
     matters which either (A) Bank in good faith believes in the reasonable
     judgment of the Board of Directors of Bank to be inconsistent with any of
     the representations and warranties of Bancshares and which constitute or
     have had or are reasonably likely to have a Material Adverse Effect on
     Bancshares or (B) in the reasonable judgment of the Board of Directors of
     Bank either (1) is of such significance as to constitute or have or be
     reasonably likely to have a Material Adverse Effect on Bank and its
     subsidiaries, taken as a whole, or (2) deviates materially and adversely
     from the financial statements for the year ended December 31, 1997 or the
     three months or six months ended March 31, 1998 or June 30, 1998,
     respectively, of Bancshares, the Board of Directors of Bank may elect to
     terminate this Plan by giving notice of termination to Bancshares within or
     at the end of the 30 day period following the date hereof.
 
     Section 9.2.  EFFECT OF TERMINATION. If for any reason this Agreement and
the Agreement of Merger shall be terminated and the Merger abandoned as provided
in Section 9.1, this Agreement shall become null and void, without any further
action by the shareholders of either of the parties. In the event of any such
termination, the Directors of Bancshares and Bank shall each direct their
officers not to file this Agreement or a certificate of merger, in the offices
of the Secretary of State of the State of Ohio notwithstanding favorable action
by the shareholders of Bank and, if required, the shareholders of Bancshares. In
the event of any such termination, neither party hereto nor any of its
respective shareholders, directors, or officers shall have any obligation to the
other in damages or for costs, expenses, or otherwise in connection with this
Agreement or the transactions contemplated herein, other than (i) the return to
Bank, by Bancshares, of all such copies of Bank's records as may have been
provided to Bancshares, under Section 5.2 or other Sections of this Agreement,
and the return to Bancshares, by Bank, of all such copies of Bancshares' records
as may have been provided to Bank, under Section 5.2 or other Sections of this
Agreement or (ii) with respect to any liabilities or damages incurred or
suffered by a party as the result of a material breach by the other party of
this Agreement pursuant to Section 9.1(c)(ii) hereof.
 
                                   ARTICLE X
 
                                 MISCELLANEOUS
 
     Section 10.1.  NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in this Agreement and in any
certificate delivered hereunder, other than those contained in Section 2.3
hereof, shall expire on the Closing Date and thereafter neither Bancshares nor
Bank shall have any further liability or obligation with respect thereto.
 
     Section 10.2.  REPRESENTATIONS TO THE KNOWLEDGE OF A PARTY. Whenever a
representation or warranty is made herein as being "to the knowledge of" a party
hereto or the officers or directors thereof, it is understood that an officer
has made or caused to be made by personnel or representatives competent to
determine the accuracy thereof (and the results thereof reported to him) an
investigation which is appropriate to determine the accuracy of such
representation or warranty.
 
                                      A-30
<PAGE>   138
 
     Section 10.3.  NOTICES. Any notice required or permitted to be given under
this Agreement shall be in writing and mailed, first class postage prepaid and
addressed as follows:
 
     (a)  If to Bank:
 
        Richard R. Hollington, Jr.
        Chairman of The Ohio Bank
        Baker & Hostetler, LLP
        National City Center
        1900 E. 9th Street, Suite 3200
        Cleveland, Ohio 44114
 
        With copies to:
 
        William Appleton, Esq.
        Baker & Hostetler, LLP
        312 Walnut Street
        Cincinnati, Ohio 45202-4038
 
     (b)  If to Bancshares or Citizens:
 
        Citizens Bancshares, Inc.
        10 East Main Street
        Salineville, Ohio 43945
        Attention: Marty E. Adams
 
        With copies to:
 
        M. Patricia Oliver, Esq.
        Squire, Sanders & Dempsey L.L.P.
        4900 Key Tower
        127 Public Square
        Cleveland, Ohio 44114-1304
 
or at such other address or addresses as the party addressed may from time to
time designate in writing. Any such notice shall be deemed given when received.
 
     Section 10.4.  ENTIRE AGREEMENT AND MODIFICATIONS. This Agreement and all
exhibits and schedules attached thereto, together with that certain Stock Option
Agreement which Bancshares and Bank covenant and agree to enter into on July 23,
1998 (the "Option Agreement") and that certain voting agreement by and among
some of the Bank shareholders, an executed copy of which has been delivered to
Bancshares prior to the execution of this Agreement, constitute the entire
agreement among Bancshares, Bank, and when executed, Interim Bank with respect
to the subject matter hereof, and supersede any prior oral or written agreement
and any other written or oral representations, including but not limited to the
confidentiality agreement previously entered into between Bancshares and Bank.
Each of Bank and Bancshares shall have the right, with the prior consent of the
other, from time to time prior to the Closing Date, to supplement its respective
Disclosure Schedules with respect to any matter hereafter arising that, if
existing or known as of the date of this Agreement, would have been required to
be set forth or described in the Disclosure Schedules. This Agreement may be
amended only by instrument in writing executed by the parties hereto and thereto
and authorized as provided herein or therein. Except as provided in Section
10.5, nothing expressed or implied in this Agreement is intended, or shall be
construed, to confer upon or give any person, firm, or corporation other than
the parties hereto and their respective shareholders any rights or remedies
under or by reason of this Agreement. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.
 
     Section 10.5.  DIRECTORS' AND OFFICERS' INSURANCE. After the Effective
Time, Bancshares shall and shall cause the Resulting Bank to indemnify, defend
and hold harmless the present and former officers, directors, employees and
agents of Bank (each, an "Indemnified Party") after the Effective Time against
all losses,
 
                                      A-31
<PAGE>   139
 
expenses, claims damages or liabilities arising out of actions or omissions
occurring on or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the full extent then permitted
under Ohio law and by Bank's Articles of Incorporation and Code of Regulations
as in effect on the date hereof, including provisions relating to advances of
expenses incurred in the defense of any action or suit. In addition, Bancshares
shall maintain Bank's existing directors' and officers' liability insurance (the
"D&O Insurance") covering persons who are currently covered by Bank's D&O
Insurance for a period of three (3) years after the Effective Time on terms no
less favorable than those in effect on the date hereof; provided, however, that
Bancshares may substitute therefor policies providing at least comparable
coverage containing terms and conditions no less favorable than those in effect
on the date hereof.
 
     Section 10.6.  EXECUTION OF COUNTERPARTS; EXECUTION BY INTERIM BANK. For
the convenience of the parties and to facilitate any required filing, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
document. It is understood and agreed that upon its formation by Bancshares,
Interim Bank shall become a party to this Agreement and one or more of its
incorporators or authorized officers (as the case may be) shall execute this
Agreement and the Agreement of Merger without any further act required on the
part of Bancshares or Bank.
 
     Section 10.7.  EXPENSES. Except as otherwise provided in the Option
Agreement, the parties hereto each shall bear their own expenses incurred in
connection with this Agreement, including, without limitation, all fees of their
respective legal counsel, financial advisers and accountants.
 
     Section 10.8.  CONSTRUCTION. This Agreement shall be construed and enforced
in accordance with the laws of the State of Ohio.
 
     Section 10.9.  EXCHANGE AGENT. Citizens Bancshares, Inc., 10 East Main
Street, Salineville, Ohio, as transfer agent for the Bancshares Common Shares
(or such other bank or trust company as Bancshares selects) shall act as
Exchange Agent in respect of the conversion of Bank Common Shares into
Bancshares Common Shares.
 
     Section 10.10.  SUCCESSORS AND ASSIGNS. This Agreement shall not be
assignable by any party without the written consent of the other party (ies).
This Agreement shall inure to the benefit of the successors and permitted
assigns of the parties hereto. If Bancshares or any of its successors or assigns
shall consolidate with or merge into any other entity and shall not be the
continuing or surviving entity of such consolidation or merger or shall transfer
all or substantially all of its assets to any entity, then and in each case,
proper provision shall be made so that the successors and assigns of Bancshares
shall assume the obligations of Bancshares set forth in this Agreement and the
Agreement of Merger.
 
                                      A-32
<PAGE>   140
 
     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunder duly authorized, all as of the date
first above written.
 
<TABLE>
<S>                                                         <C>
Attest:                                                     CITIZENS BANCSHARES, INC.
 
By: /s/ TRACEY L. REEDER                                    By: /s/ MARTY E. ADAMS
- -----------------------------------------------------       -----------------------------------------------
                 Tracey L. Reeder                                            Marty E. Adams
                 Assistant Secretary                                         President and
                                                                             Chief Executive Officer
 
Attest:                                                     THE OHIO BANK
 
By: /s/ GARY COLE                                           By: /s/ RICHARD R. HOLLINGTON, JR.
- -----------------------------------------------------       -----------------------------------------------
                     Gary Cole                                         Richard R. Hollington, Jr.
                     Secretary                                         Chairman
 
Executed as of this   day of             , 1998
 
Attest:                                                     "INTERIM BANK"
 
By: /s/ TRACEY L. REEDER                                    By: /s/ MARTY E. ADAMS
- -----------------------------------------------------       -----------------------------------------------
                 Tracey L. Reeder                                            Marty E. Adams
                 Assistant Secretary                                         President and Chief Executive
                                                                             Officer
</TABLE>
 
                                      A-33
<PAGE>   141
 
                                                                     (EXHIBIT A)
 
                              AGREEMENT OF MERGER
 
     AGREEMENT OF MERGER ("Merger Agreement") dated as of           , 1998, by
and between INTERIM BANK, an Ohio bank having its principal office at 50 East
Main Street, Salineville, Ohio 43945 ("Interim Bank"), and                , an
Ohio bank having its principal office at                ,                , Ohio
               ("Bank") and joined in by Citizens Bancshares, Inc., an Ohio
corporation and registered bank holding company having its principal office at
               ,                , Ohio                ("Bancshares"), which is
the sole shareholder of Interim Bank. Interim Bank and Bank are hereinafter
sometimes referred to as the "Constituent Banks."
 
     The respective Boards of Directors of Interim Bank and Bancshares have
determined that it is advisable and in the best interests of each of the
respective Constituent Banks that Interim Bank merge with and into Bank upon the
terms and subject to the conditions herein provided and the Board of Directors
of Bank has determined that such action is fair to, and in the best interests
of, the Bank shareholders.
 
     The respective Boards of Directors of Interim Bank and Bank have, by
resolutions duly adopted, (i) authorized this Merger Agreement as part of the
plan of affiliation and merger set forth in an Agreement and Plan of Merger
dated as of July  , 1998 (the "Agreement") (collectively, the "Plan"), and (ii)
authorized that it be executed by the undersigned officers.
 
     The transactions contemplated by the Plan and this Merger Agreement have
been submitted to, and adopted and approved by, the shareholders of Bank.
 
     In consideration of the mutual agreements herein contained, the parties
agree that Interim Bank shall be merged with and into Bank and that the terms
and conditions of the merger, the mode of carrying the merger into effect, the
manner of converting the common shares of the Constituent Banks and certain
other provisions relating thereto shall be as hereinafter set forth.
 
                                   ARTICLE I
 
                                   THE MERGER
 
     1.01  RESULTING BANK. Subject to the terms and provisions of this Merger
Agreement, and in accordance with Chapters 1101, 1115 and 1701 of the Ohio
Revised Code, at the Effective Time (as defined in Section 1.07 hereof) Interim
Bank shall be merged with and into Bank (the "Merger"). The                shall
be the resulting bank (hereinafter called the "Resulting Bank") of the Merger
and shall continue its existence as a bank under the laws of the State of Ohio
under the name "               ". At the Effective Time, the separate existence
of Interim Bank shall cease. The principal place of business of the Resulting
Bank shall be                ,                County, Ohio.
 
     1.02  EFFECT OF THE MERGER. At the Effective Time, the Merger shall have
the effects provided for herein and in Sections 1115.11 and 1701.82 of the Ohio
Revised Code.
 
     1.03  ARTICLES OF INCORPORATION. As of the Effective Time, the Articles of
Incorporation of                , as in effect immediately prior to the
Effective Time, shall become the Articles of Incorporation of the Resulting Bank
until thereafter duly altered, amended, or repealed in accordance with the
provisions thereof and applicable law.
 
     1.04  CODE OF REGULATIONS. As of the Effective Time, the Code of
Regulations of                , as in effect immediately prior to the Effective
Time, shall become the Code of Regulations of the Resulting Bank until
thereafter duly altered, amended or repealed in accordance with the provisions
thereof, the Articles of Incorporation of the Resulting Bank and applicable law.
 
                                      A-34
<PAGE>   142
 
     1.05  DIRECTORS OF THE RESULTING BANK. At the Effective Time, [SPECIFICS
REGARDING BANK BOARD -- TO BE PROVIDED.] The names and address of the directors
of the Resulting Bank are as follows: [TO BE PROVIDED.]
 
     1.06  OFFICERS OF THE RESULTING BANK. At the Effective Time, each person
who is an officer of                immediately prior to the Effective Time
shall remain an officer of the Resulting Bank and hold the same office as he or
she held immediately prior to the Effective Time [CHECK AND UPDATE AS NEEDED].
At the Effective Time, the officers of Interim Bank will resign.
 
     1.07  EFFECTIVE TIME. The Merger shall become effective in accordance with
the provisions of Sections 1115.11 and 1701.81 of the Ohio Revised Code, upon
the filing of a certificate of merger, [together with a certificate of approval
from the Superintendent of the Division of Financial Institutions], with the
Secretary of State of the State of Ohio. The date and time when the Merger shall
become effective is herein referred to as the "Effective Time."
 
     1.08  ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Resulting Bank shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable to carry out the
purposes of this Merger Agreement, Interim Bank and its proper officers and
directors shall be deemed to have granted hereby to the Resulting Bank an
irrevocable power of attorney to execute and deliver any and all assignments and
assurances in law and to do all acts necessary or proper to carry out the
purposes of this Merger Agreement; and the proper officers and directors of the
Resulting Bank are hereby fully authorized in the name of Interim Bank or
otherwise to take any and all such action.
 
                                   ARTICLE II
 
                 CONVERSION AND EXCHANGE OF BANK COMMON SHARES;
                           FRACTIONAL SHARE INTERESTS
 
     2.01  CONVERSION AND EXCHANGE. At the Effective Time:
 
          (a) [SPECIFICS REGARDING INTERIM BANK COMMON SHARES HELD BY
     BANCSHARES -- TO COME.]
 
          (b) Other than Bank common shares as to which dissenters' rights have
     been exercised, all common shares of Bank that shall be issued and
     outstanding at the Effective Time (the "Bank Common Shares") shall
     thereupon and without further action be converted into and become 63.25
     Bancshares common shares having the same rights and privileges as all other
     Bancshares Common Shares (individually hereinafter referred to as a
     "Bancshares Common Share" and collectively, as the "Bancshares Common
     Shares").
 
          (c) Other than as provided for in Sections 2.01[(a)] and (b) hereof,
     at the Effective Time, all authorized but unissued shares of Bank Common
     Shares shall be canceled and no stock, cash or other property shall be
     delivered in exchange therefor.
 
          (d) No fractional Bancshares Common Share or certificate or scrip
     therefor shall be issued as a result of the conversion of Bank Common
     Shares into Bancshares Common Shares. To the extent an outstanding Bank
     Common Share would otherwise have become a fractional Bancshares Common
     Share, the holder thereof shall receive, in lieu thereof, an amount of cash
     (rounded to the nearest whole-cent) equal to the product of such fraction
     multiplied by the "NMS Closing Price" of Bancshares Common Shares on the
     date of the Effective Time [DOVETAIL WITH FINAL PLAN LANGUAGE]. Such
     purchases of fractional interests are merely intended as a mechanism for
     "rounding off" fractional shares and do not constitute separately bargained
     for consideration in connection with the transactions contemplated by the
     Plan and by this Merger Agreement.
 
                                      A-35
<PAGE>   143
 
          (f) At the Effective Time, the share transfer books of Bank shall be
     closed and no transfer of Bank Common Shares shall thereafter be made or
     recognized. Notwithstanding any other provision of this Merger Agreement,
     neither Bancshares or its agent nor any party hereto shall be liable to a
     holder of Bank Common Shares for any amount properly delivered in good
     faith to a public official pursuant to any applicable abandoned property,
     escheat or similar law.
 
          (g) No conversion under subsection (b) of this Section 2.01 shall be
     made in respect of any Bank Common Share as to which a Bank shareholder has
     elected to exercise dissenters' rights under applicable Ohio law, if any,
     until such time as such rights have been lost or extinguished.
 
                                  ARTICLE III
 
                                 MISCELLANEOUS
 
     3.01  AMENDMENT. Subject to applicable law, this Merger Agreement may be
amended, modified, or supplemented by written agreement of the Constituent Banks
and Bancshares at any time prior to the Effective Time.
 
     3.02  COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and the same
agreement.
 
                                      A-36
<PAGE>   144
 
     IN WITNESS WHEREOF, Interim Bank, Bank and Bancshares have caused this
Merger Agreement to be signed by their respective duly authorized officers as of
the date first above written.
 
<TABLE>
<C>                                                      <S>
 
Attest:                                                  INTERIM BANK, an Ohio bank
 
By                                                       By
   --------------------------------------------------       --------------------------------------------------
                     Tracey L. Reeder,                                       Marty E. Adams,
                    Assistant Secretary                                        President
 
Attest:                           
                                                         ' an Ohio bank
By                                                       By
   --------------------------------------------------          --------------------------------------------------
                   William McElwain
                      Secretary
 
Attest:                                                  CITIZENS BANCSHARES, INC., an Ohio corporation
 
By                                                       By
   --------------------------------------------------          --------------------------------------------------
                   Tracey L. Reeder                                          Marty E. Adams,
                 Assistant Secretary                                           President
</TABLE>
 
                                     A-37
<PAGE>   145
 
                                   APPENDIX B
 
       DISSENTERS' RIGHTS UNDER SECTION 1701.85 OF THE OHIO REVISED CODE
 
                                       B-1
<PAGE>   146
 
       DISSENTERS' RIGHTS UNDER SECTION 1701.85 OF THE OHIO REVISED CODE
 
1701.85  DISSENTING SHAREHOLDER'S DEMAND FOR FAIR CASH VALUE OF SHARES
 
     (A) (1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.
 
     (2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on the proposal was taken at the meeting of the shareholders,
the dissenting shareholder shall deliver to the corporation a written demand for
payment to him of the fair cash value of the shares as to which he seeks relief,
which demand shall state his address, the number and class of such shares, and
the amount claimed by him as the fair cash value of the shares.
 
     (3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 [1701.80.1] of the Revised Code shall be a
record holder of the shares of the corporation as to which he seeks relief as of
the date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 [1701.80.1] of the Revised Code, the dissenting
shareholder shall deliver to the corporation a written demand for payment with
the same information as that provided for in division (A)(2) of this section.
 
     (4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
entity, whether the demand is served before, on, or after the effective date of
the merger or consolidation.
 
     (5) If the corporation sends to the dissenting shareholder, at the address
specified in his demand, a request for the certificates representing the shares
as to which he seeks relief, the dissenting shareholder, within fifteen days
from the date of the sending of such request, shall deliver to the corporation
the certificates requested so that the corporation may forthwith endorse on them
a legend to the effect that demand for the fair cash value of such shares has
been made. The corporation promptly shall return such endorsed certificates to
the dissenting shareholder. A dissenting shareholder's failure to deliver such
certificates terminates his rights as a dissenting shareholder, at the option of
the corporation, exercised by written notice sent to the dissenting shareholder
within twenty days after the lapse of the fifteen-day period, unless a court for
good cause shown otherwise directs. If shares represented by a certificate on
which such a legend has been endorsed are transferred, each new certificate
issued for them shall bear a similar legend, together with the name of the
original dissenting holder of such shares. Upon receiving a demand for payment
from a dissenting shareholder who is the record holder of uncertificated
securities, the corporation shall make an appropriate notation of the demand for
payment in its shareholder records. If uncertificated shares for which payment
has been demanded are to be transferred, any new certificate issued for the
shares shall bear the legend required for certificated securities as provided in
this paragraph. A transferee of the shares so endorsed, or of uncertificated
securities where such notation has been made, acquires only such rights in the
corporation as the original dissenting holder of such shares had immediately
after the service of a demand for payment of the fair cash value of the shares.
A request under this paragraph by the corporation is not an admission by the
corporation that the shareholder is entitled to relief under this section.
 
     (B) Unless the corporation and the dissenting shareholder have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of the
county in which the principal office of the corporation that issued the shares
is located or was located when the proposal was adopted by the shareholders of
the corporation, or, if the proposal was not required to be
                                       B-2
<PAGE>   147
 
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within that three-month period, may join as plaintiffs or may be
joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts, including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such a complaint is required.
Upon the filing of such a complaint, the court, on motion of the petitioner,
shall enter an order fixing a date for a hearing on the complaint and requiring
that a copy of the complaint and a notice of the filing and of the date for
hearing be given to the respondent or defendant in the manner in which summons
is required to be served or substituted service is required to be made in other
cases. On the day fixed for the hearing on the complaint or any adjournment of
it, the court shall determine from the complaint and from such evidence as is
submitted by either party whether the dissenting shareholder is entitled to be
paid the fair cash value of any shares and, if so, the number and class of such
shares. If the court finds that the dissenting shareholder is so entitled, the
court may appoint one or more persons as appraisers to receive evidence and to
recommend a decision on the amount of the fair cash value. The appraisers have
such power and authority as is specified in the order of their appointment. The
court thereupon shall make a finding as to the fair cash value of a share and
shall render judgment against the corporation for the payment of it, with
interest at such rate and from such date as the court considers equitable. The
costs of the proceeding, including reasonable compensation to the appraisers to
be fixed by the court, shall be assessed or apportioned as the court considers
equitable. The proceeding is a special proceeding and final orders in it may be
vacated, modified, or reversed on appeal pursuant to the Rules of Appellate
Procedure and, to the extent not in conflict with those rules, Chapter 2505 of
the Revised Code. If, during the pendency of any proceeding instituted under
this section, a suit or proceeding is or has been instituted to enjoin or
otherwise to prevent the carrying out of the action as to which the shareholder
has dissented, the proceeding instituted under this section shall be stayed
until the final determination of the other suit or proceeding. Unless any
provision in division (D) of this section is applicable, the fair cash value of
the shares that is agreed upon by the parties or fixed under this section shall
be paid within thirty days after the date of final determination of such value
under this division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a holder
of uncertificated securities entitled to such payment. In the case of holders of
shares represented by certificates, payment shall be made only upon and
simultaneously with the surrender to the corporation of The certificates
representing the shares for which the payment is made.
 
     (C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as of
the day prior to the day on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 [1701.80.1] of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the particular subsidiary corporation.
The fair cash value of a share for the purposes of this section is the amount
that a willing seller who is under no compulsion to sell would be willing to
accept and that a willing buyer who is under no compulsion to purchase would be
willing to pay, but in no event shall the fair cash value of a share exceed the
amount specified in the demand of the particular shareholder. In computing such
fair cash value, any appreciation or depreciation in market value resulting from
the proposal submitted to the directors or to the shareholders shall be
excluded.
 
     (D) (1) The right and obligation of a dissenting shareholder to receive
such fair cash value and to sell such shares as to which he seeks relief, and
the right and obligation of the corporation to purchase such shares and to pay
the fair cash value of them terminates if any of the following applies:
 
          (a) The dissenting shareholder has not complied with this section,
     unless the corporation by its directors waives such failure;
 
          (b) The corporation abandons the action involved or is finally
     enjoined or prevented from carrying it out, or the shareholders rescind
     their adoption of the action involved;
 
          (c) The dissenting shareholder withdraws his demand, with the consent
     of the corporation by its directors;
 
                                       B-3
<PAGE>   148
 
          (d) The corporation and the dissenting shareholder have not come to an
     agreement as to the fair cash value per share, and neither the shareholder
     nor the corporation has filed or joined in a complaint under division (B)
     of this section within the period provided in that division.
 
     (2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
 
     (E) From the time of the dissenting shareholder's giving of the demand
until either the termination of the rights and obligations arising from it or
the purchase of the shares by the corporation, all other rights accruing from
such shares, including voting and dividend or distribution rights, are
suspended. If during the suspension, any dividend or distribution is paid in
money upon shares of such class or any dividend, distribution, or interest is
paid in money upon any securities issued in extinguishment of or in substitution
for such shares, an amount equal to the dividend, distribution, or interest
which, except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated other
than by the purchase of the shares by the corporation, all rights of the holder
shall be restored and all distributions which, except for the suspension, would
have been made shall be made to the holder of record of the shares at the time
of termination.
 
                                       B-4
<PAGE>   149
 
                                   APPENDIX C
 
                     OPINION OF DANIELSON ASSOCIATES, INC.
 
                                       C-1
<PAGE>   150
 
                   OPINION OF OHIO BANK'S FINANCIAL ADVISOR:
 
     Ohio Bank retained Danielson Associates Inc. ("Danielson Associates") to
advise the Ohio Bank Board of Directors as to its "fair" sale value and the
fairness to its shareholders of the financial terms of the offer to acquire Ohio
Bank. Danielson Associates is regularly engaged in the valuation of banks, bank
holding companies, and thrifts in the connection with mergers, acquisitions, and
other securities transactions; and has knowledge of, and experience with, the
Ohio banking markets and banking organizations operating in those markets.
Danielson Associates was selected by Ohio Bank because of its knowledge of,
expertise with, and reputation in the financial services industry.
 
     In such capacity, Danielson Associates reviewed the Merger Agreement with
respect to the pricing and other terms and conditions of the Merger, but the
decision as to accepting the offer was ultimately made by the Board of Directors
of Ohio Bank. Danielson Associates rendered its oral opinion to the Ohio Bank
Board of Directors, which it subsequently confirmed in writing, that as of the
date of such opinion, the financial terms of the Citizens offer were "fair" to
Ohio Bank and its shareholders. No limitations were imposed by the Ohio Bank
Board of Directors upon Danielson Associates with respect to the investigation
made or procedures followed by it in arriving at its opinion.
 
     In arriving at its opinion, Danielson Associates (a) reviewed certain
business and financial information relating to Ohio Bank and Citizens, including
annual reports for the fiscal year ended December 31, 1997 and call report data
from 1989 to 1997 including quarterly reports for 1998; (b) discussed the past
and current operations, financial condition and prospects of Ohio Bank with its
senior executives; (c) analyzed the pro forma impact of the merger on Citizens's
earnings per share, capitalization, and financial ratios; (d) reviewed the
reported prices and trading activity for the Ohio Bank and the Citizens Common
Stock and compared them to similar bank holding companies; (e) reviewed and
compared the financial terms, to the extent publicly available, with comparable
transactions; (f) reviewed the Merger Agreement and certain related documents;
and (g) considered such other factors as were deemed appropriate.
 
     Danielson Associates did not obtain any independent appraisal of assets or
liabilities of Ohio Bank or Citizens or their respective subsidiaries. Further,
Danielson Associates did not independently verify the information provided by
Ohio Bank or Citizens and assumed the accuracy and completeness of all such
information.
 
     In arriving at its opinion, Danielson Associates performed a variety of
financial analyses. Danielson Associates believes that its analyses must be
considered as a whole and that consideration of portions of such analyses and
the factors considered therein, without considering all the factors and
analyses, could create an incomplete view of the analyses and the process
underlying Danielson Associates' opinion. The preparation of a fairness opinion
is a complex process involving subjective judgements and is not necessarily
susceptible to partial analysis and summary description.
 
     In its analyses, Danielson Associates made certain assumptions with respect
to industry performance, business and economic conditions, and other matters,
many of which were beyond Ohio Bank's or Citizens's control. Any estimates
contained in Danielson Associates' analyses are not necessarily indicative of
the future results of value, which may be significantly more or less favorable
than such estimates. Estimates of values of companies do not purport to be
appraisals or necessarily reflect the prices at which companies or their
securities may actually be sold.
 
     The following is a summary of selected analyses considered by Danielson
Associates in connection with its opinion letter.
 
PRO FORMA MERGER ANALYSES
 
     Danielson Associates analyzed the changes in the amount of earnings and
book value represented by the receipt of about $191 million at the time of the
Merger Agreement for all of the outstanding shares of Ohio Bank Common Stock,
which will be paid in Citizens common stock. The analysis evaluated, among other
things, possible dilution in earnings and capital per share for Citizens Common
Stock.
 
                                       C-2
<PAGE>   151
 
COMPARABLE COMPANIES
 
     Danielson Associates compared Ohio Bank's (a) tangible capital of 7.87% of
assets as of April 30, 1998, (b) .44% of assets nonperforming as of April 30,
1998, and (c) net operating income of 1.78% of average assets for the trailing
twelve month period ending March 31, 1998, with the medians for selected Ohio
banks, which Danielson Associates deemed comparable. These banks included
Capital Holdings, Inc., CoBancorp, Inc., Farmers and Merchants Bancorp, Inc.,
Intercounty Bancshares, Inc., LNB Bancorp, Inc., Mahoning National Bancorp,
Inc., Peoples Bancorp, Inc., Rurban Financial Corp., Second Bancorp, Inc.,
Security Banc Corporation, UNB Corporation and Wayne Bancorp, Inc.. Their
medians were (a) tangible capital of 9.22% of assets, (b) .33% of assets
nonperforming, and (c) net operating income of 2.09% of average assets.
 
     Danielson Associates also compared Citizens's (a) stock price as of July
20, 1998 of 23.5 times adjusted earnings and 414% of book, (b) dividend yield
based on trailing four quarters as of March 31, 1998 and stock price as of July
20, 1998 of 1.78%, (c) tangible capital as of March 31, 1998 of 8.42% of assets,
(d) non-performing assets as of March 31, 1998 equal to .12% of total assets,
(e) return on average assets during the trailing four quarters ended March 31,
1998 of 1.39% and (f) return on average equity during the same period of 15.11%,
with the medians for selected banks and bank holding companies that Danielson
Associates deemed to be comparable to Citizens. The selected institutions
included BancFirst Ohio Corporation, First Financial Bancorp and Park National
Corporation in Ohio; Area Bancshares Corporation, Community Trust Bancorp, Inc.,
and Mid-America Bancorp in Kentucky; and 1st Source Corporation, CNB Bancshares,
Inc., First Financial Corporation, First Merchants Corporation and National City
Bancshares, Inc. in Indiana. The comparable medians were (a) stock price of 22.7
times earnings and 290% of book, (b) dividend yield of 1.81%, (c) tangible
capital of 8.68% of assets, (d) .36% of assets nonperforming, (e) return on
average assets of 1.27% and (f) return on average equity of 12.75%. Danielson
Associates also compared other income, expense, and balance sheet information of
such companies with similar information about Citizens.
 
COMPARABLE TRANSACTION ANALYSIS
 
     Danielson Associates compared the consideration to be paid in the merger to
the latest twelve months earnings and equity capital of Ohio Bank with earnings
and capital multiples paid in acquisitions of banks in Kentucky, Maryland, Ohio,
Pennsylvania and West Virginia through the opinion date. Of these, the most
applicable recent transactions included Citizens/Century, National City/Fort
Wayne National, Star/Trans Financial and First Commonwealth/Southwest. At the
time Danielson Associates made its analysis, the consideration to be paid in the
merger was 377% of Ohio Bank's March 31, 1998 book value and 28.7 times Ohio
Bank's adjusted earnings for the trailing four quarters as of March 31, 1998.
This compares to the median multiples of 270% of book value and 26.4 times
earnings for the comparable acquisitions.
 
OTHER ANALYSIS
 
     In addition to performing the analyses summarized above, Danielson
Associates also considered the general market for bank and thrift mergers, the
historical financial performance of Ohio Bank and Citizens, the deposit market
shares of both banks, and the general economic conditions and prospects of those
banks.
 
     No company or transaction used in this composite analysis is identical to
Ohio Bank or Citizens. Accordingly, an analysis of the results of the foregoing
is not mathematical; rather it involves complex consideration and judgements
concerning differences in financial and operating characteristics of the
companies and other factors that could affect the public trading values of the
company or companies to which they are being compared.
 
     The summary set forth above does not purport to be a complete description
of the analyses and procedures performed by Danielson Associates in the course
of arriving at its opinions. In payment for its services as the financial
advisor to Ohio Bank, Danielson Associates is to be paid an estimated fee of
about $560,000, all of which is payable upon the closing of the transaction.
 
     The full text of the opinion of Danielson Associates dated as of July 21,
1998, which sets forth assumptions made and matters considered, is attached
hereto as Exhibit      to this Proxy Statement/Prospectus. Ohio Bank
shareholders are urged to read this opinion in its entirety. Danielson
Associates' opinion is directed only to the consideration to be received by Ohio
Bank shareholders in the Merger and does not constitute a recommendation to any
Ohio Bank shareholder as to how such shareholder should vote at the Shareholders
Meeting.
 
                                       C-3
<PAGE>   152
 
                                   APPENDIX D
 
                             STOCK OPTION AGREEMENT
 
                                       D-1
<PAGE>   153
 
                             STOCK OPTION AGREEMENT
 
     This STOCK OPTION AGREEMENT ("Agreement"), effective as of this 23rd day of
July, 1998, by and between Citizens Bancshares, Inc. of Salineville, Ohio, an
Ohio corporation ("Grantee"); and The Ohio Bank, an Ohio bank ("Grantor");
 
                                  WITNESSETH:
 
     A. Grantor and Grantee have entered into an Agreement and Plan of Merger
dated of even date herewith (the "Merger Agreement"), providing for their
affiliation with one another.
 
     B. As further inducement for the parties to consummate the transactions
contemplated by the Merger Agreement, Grantor wishes to grant Grantee the Option
described herein.
 
     C. The Board of Directors of Grantor has approved the grant of the Option
and the Merger Agreement prior to the date hereof.
 
     NOW, THEREFORE, the parties agree as follows:
 
     1.  DEFINITIONS.
 
     "Applicable Price" shall mean the higher of (i) the highest price per share
of Grantor Common Stock paid for any such share by the person or groups
described in the definition of a Repurchase Event, or (ii) the price per share
of Grantor Common Stock received by holders of Grantor Common Stock in
connection with any merger or other business combination transaction which is a
Purchase Event. If the consideration to be offered, paid or received pursuant to
either of the foregoing clauses (i) or (ii) shall be other than in cash, the
value of such consideration shall be determined in good faith by an independent
nationally recognized investment banking firm selected by Grantee and reasonably
acceptable to Grantor, which determination shall be conclusive for all purposes
of this Agreement.
 
     "Burdensome Condition" shall mean, in connection with the grant of a
requisite regulatory approval or otherwise, imposition by a governmental entity
of any condition or restriction upon the party or one of its Subsidiaries (as
defined herein) which would reasonably be expected to either (i) have a material
adverse effect after the effective time of the Merger Agreement on the present
or prospective consolidated financial condition, business or operating results
of the party, or (ii) prevent the parties from realizing the major portion of
the economic benefits of the transactions contemplated by the Merger Agreement
that they currently anticipate obtaining.
 
     "Commission" shall mean the Securities and Exchange Commission.
 
     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
 
     "Grantee" shall mean Citizens Bancshares, Inc.
 
     "Grantor" shall mean The Ohio Bank.
 
     "Grantor Common Stock" shall mean Class A Common Shares, $50 par value per
share.
 
     "Merger Agreement" shall mean the definitive agreement executed by Citizens
Bancshares, Inc. and The Ohio Bank on July 22, 1998, pursuant to which the
parties hereto intend to affiliate.
 
     "Option" shall mean the option granted by Grantor to Grantee under this
Agreement.
 
     "Person" shall have the meanings specified in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act.
 
     "Purchase Event" shall mean any of the following events or transactions
occurring after the date of this Agreement with respect to the Grantor:
 
           (i) the Grantor or any of its Subsidiaries (as defined in Rule 1-02
     of Regulation S-X promulgated by the Securities and Exchange Commission
     (the "SEC") (each hereinafter individually referred to as a "Subsidiary"
     and collectively, as the "Subsidiaries")), without having received the
     Grantee's prior written
 
                                       D-2
<PAGE>   154
 
     consent, shall have entered into an agreement with, or the Board of
     Directors of Grantor shall have recommended that the shareholders of
     Grantor approve or accept a transaction with, any person (x) to merge or
     consolidate, or enter into any similar transaction, except as contemplated
     by the Merger Agreement, (y) to purchase, lease or otherwise acquire all or
     substantially all of the assets of the Grantor or any of its Subsidiaries,
     or (z) to purchase or otherwise acquire (including by way of merger,
     consolidation, share exchange or any similar transaction) securities
     representing 20% or more of the voting power of such Grantor or any of its
     Subsidiaries (other than pursuant to this Agreement);
 
           (ii) any person (other than the Grantor in a fiduciary capacity, or
     Grantee or one of its subsidiaries in a fiduciary capacity) shall have
     acquired beneficial ownership or the right to acquire beneficial ownership
     of securities representing 20% or more of the voting power of Grantor after
     the date of this Agreement (the term "beneficial ownership" for purposes of
     this Agreement having the meaning assigned thereto in Section 13(d) of the
     Exchange Act and the rules and regulations promulgated thereunder);
 
           (iii) Grantor shall have breached this Agreement in any material
     respect, which breach shall not have been cured within fifteen (15) days
     after notice thereof is given by Grantee to Grantor;
 
           (iv) any person other than Grantee shall have made a bona fide
     Takeover Proposal to the Grantor by public announcement or written
     communication that is or becomes the subject of public disclosure, and
     following such bona fide Takeover Proposal, the shareholders of the Grantor
     vote not to adopt the Merger Agreement;
 
           (v) Grantor shall have breached the Merger Agreement following a bona
     fide Takeover Proposal to such Grantor or any of its Subsidiaries, which
     breach would entitle Grantee to terminate the Merger Agreement and such
     breach shall not have been cured prior to the Notice Date (as defined
     below);
 
           (vi) the shareholders of Grantor shall have voted and failed to
     approve the Merger Agreement and the Merger at a meeting which has been
     held for that purpose or any adjournment or postponement thereof, or such
     meeting shall not have been held in violation of the Merger Agreement or
     shall have been canceled prior to termination of the Merger Agreement if,
     prior to such meeting (or if such meeting shall not have been held or shall
     have been canceled, prior to such termination), it shall have been publicly
     announced that any person (other than Grantee or any of its Subsidiaries)
     shall have made, or disclosed an intention to make, a Takeover Proposal; or
 
          (vii) the Grantor Board of Directors shall have withdrawn or modified
     (or publicly announced its intention to withdraw or modify) in any manner
     adverse in any respect to Grantee, its recommendation that the shareholders
     of Grantor approve the transactions contemplated by the Merger Agreement,
     or Grantor or any Grantor Subsidiary or group of Grantor Subsidiaries that
     is, or would on an aggregate basis constitute, a Significant Subsidiary
     shall have authorized, recommended, proposed (or publicly announced its
     intention to authorize, recommend or propose) an agreement to engage in a
     Takeover Proposal with any person other than Grantee or a Grantee
     Subsidiary.
 
     If more than one of the transactions giving rise to a Purchase Event under
this Agreement is undertaken or effected, then all such transactions shall be
deemed to give rise only to one Purchase Event with respect to the Option, which
Purchase Event shall be deemed continuing for all purposes hereunder until all
such transactions are abandoned.
 
     "Repurchase Event" shall mean if (i) any person (other than the Grantee or
any Subsidiary of the Grantee) shall have acquired actual ownership or control,
or any "group" (as such term is defined under the Exchange Act) shall have been
formed which shall have acquired actual ownership or control, of securities
representing 35% or more of the voting power of Grantor, or (ii) any Acquisition
Proposal shall be consummated.
 
     "Takeover Proposal" shall mean any tender or exchange offer, proposal for a
merger, consolidation or other business combination involving Grantor or any of
its Subsidiaries or any proposal or offer to acquire securities representing 20%
or more of the voting power of Grantor or 15% or more of the assets of Grantor,
other than the transactions contemplated by the Merger Agreement. If Grantor
receives an unsolicited Takeover Proposal, it
 
                                       D-3
<PAGE>   155
 
shall notify Grantee promptly of the receipt of such Takeover Proposal, it being
understood, however, that the giving of such notice by Grantor shall not be a
condition to the right of Grantee to exercise the Option.
 
     2.  GRANT OF OPTION.
 
     Subject to the terms and conditions set forth herein, Grantor hereby grants
to Grantee an unconditional, irrevocable Option to purchase up to 5.42% (i.e.,
4500) shares as of the date of this Agreement) of Grantor Common Stock at an
exercise price of $400 per share payable in cash as provided in Section 4. In
the event the Grantor issues or agrees to issue any shares of Grantor Common
Stock (other than as permitted under the Merger Agreement) at a price less than
the exercise price per share set forth in this section (as adjusted pursuant to
Section 6), the exercise price of the Option shall be such lesser price.
 
     3.  EXERCISE OF OPTION.
 
          (a) Unless the Grantee shall have breached in any material respect any
     material covenant, representation or warranty contained in this Agreement
     or the Merger Agreement and such breach shall not have been cured, the
     Grantee may exercise the Option, in whole or part, at any time or from time
     to time if a Purchase Event shall have occurred with respect to the Grantor
     and be continuing; provided that to the extent the Option shall not have
     been exercised, it shall terminate and be of no further force and effect
     (i) on the effective date of the transaction contemplated by the Merger
     Agreement, or (ii) upon termination of the Merger Agreement in accordance
     with the provisions thereof (other than a termination resulting from a
     willful breach by the Grantor of the Merger Agreement or, following the
     occurrence of a Purchase Event, failure of the Grantor's shareholders to
     approve the Merger Agreement by the vote required under applicable law or
     under the Grantor's articles), or (iii) 12 months after termination of the
     Merger Agreement due to a willful breach by the Grantor of the Merger
     Agreement or, following the occurrence of a Purchase Event, failure of the
     Grantor's shareholders to approve the Merger Agreement by the vote required
     under applicable law or under the Grantor's articles. Any exercise of the
     Option shall be subject to compliance with applicable provisions of law.
 
          (b) In the event the Grantee wishes to exercise the Option, it shall
     send to the Grantor a written notice (the date of which being herein
     referred to as the "Notice Date") specifying (i) the total number of shares
     it will purchase pursuant to such exercise, and (ii) a place and date not
     earlier than three (3) business days nor later than 60 business days after
     the Notice Date for the closing of such purchase ("Closing Date"). If prior
     notification to or approval of any federal or state regulatory agency is
     required in connection with such purchase, the Grantee shall promptly file
     the required notice or application for approval and shall expeditiously
     process the same and the period of time that otherwise would run pursuant
     to this section shall run instead from the date on which any required
     notification period has expired or been terminated or any requisite
     approval has been obtained and any requisite waiting period shall have
     passed.
 
     4.  PAYMENT AND DELIVERY OF CERTIFICATES.
 
          (a) At the closing referred to in Section 3, the Grantee shall pay to
     the Grantor the aggregate purchase price for the shares of Grantor Common
     Stock purchased pursuant to the exercise of the Option in immediately
     available funds by a wire transfer to a bank account designated by the
     Grantor. Grantor shall pay all expenses, and any and all United States
     federal, state and local taxes and other charges that may be payable in
     connection with the preparation, issue and delivery of stock certificates
     under this Section 4 in the name of the Grantee or its assignee, transferee
     or designee.
 
          (b) At such closing, simultaneously with the delivery of funds as
     provided in Section 4(a), the Grantor shall deliver to the Grantee a
     certificate or certificates representing the number of shares of Grantor
     Common Stock purchased by the Grantee, and the Grantee shall deliver to the
     Grantor a letter agreeing that Grantee will not offer to sell or otherwise
     dispose of such shares in violation of applicable law or the provisions of
     this Agreement.
 
                                       D-4
<PAGE>   156
 
          (c) Certificates for Grantor Common Stock delivered at a closing
     hereunder shall be endorsed with a restrictive legend which shall read
     substantially as follows:
 
        The transfer of the shares represented by this certificate is subject to
        certain provisions of a Stock Option Agreement
        dated                    , 1998, between the registered holder hereof
        and [Grantor] (a copy of which agreement is on file at the principal
        office of [Grantor]). A copy of such agreement will be provided to the
        holder hereof without charge within five days after receipt by [Grantor]
        of a written request therefor. The shares evidenced by this certificate
        have not been registered under the Securities Act of 1933 and may not be
        sold, pledged, transferred, or hypothecated except pursuant to an
        opinion of counsel satisfactory to the corporation that such transfer is
        lawful.
 
     The above legend shall be removed or modified as appropriate by delivery of
substitute certificate(s) without such legend if the Grantee shall have
delivered to the Grantor a copy of a letter from the staff of the Commission, or
an opinion of counsel, in form and substance satisfactory to Grantor, to the
effect that such legend is not required for purposes of the Securities Act of
1933, as amended.
 
     5.  REPRESENTATIONS.
 
     The Grantor represents, warrants and covenants to the Grantee as follows:
 
          (a) Grantor agrees: (i) that it shall at all times maintain, free from
     preemptive rights, sufficient authorized but unissued or treasury shares of
     Common Stock so that the Option may be exercised without additional
     authorization of Common Stock after giving effect to all other options,
     warrants, convertible securities and other rights to purchase Common Stock;
     (ii) that it will not, by charter amendment or through reorganization,
     consolidation, merger, dissolution or sale of assets, or by any other
     voluntary act, avoid or seek to avoid the observance or performance of any
     of the covenants, stipulations or conditions to be observed or performed
     hereunder by Grantor; (iii) promptly to take all action as may from time to
     time be required (including (x) complying with all applicable premerger
     notification, reporting and waiting period requirements specified in 15
     U.S.C. Section 18a and regulations promulgated thereunder and (y) in the
     event, under the Bank Holding Company Act of 1956, as amended (the "BHCA"),
     or the Change in Bank Control Act of 1978, as amended, or any state or
     other federal banking law, prior approval of or notice of the Federal
     Reserve Board or to any state or other federal regulatory authority is
     necessary before the Option may be exercised, cooperating fully with the
     Grantee in preparing such applications or notices and providing such
     information to the Federal Reserve Board or such state or other federal
     regulatory authority as they may require) in order to permit the Grantee to
     exercise the Option and Grantor duly and effectively to issue shares of
     Grantor Common Stock pursuant thereto; and (iv) promptly to take all action
     provided herein to protect the rights of the Grantee against dilution.
 
          (b) The shares to be issued upon due exercise, in whole or in part, of
     the Option, when paid for as provided herein, will be duly authorized,
     validly issued and fully paid.
 
          (c) Grantor has full corporate power and authority to execute, deliver
     and perform this Agreement and all corporate action necessary for
     execution, delivery and performance of this Agreement has been duly taken
     by it.
 
          (d) Neither the execution and delivery of this Agreement nor
     consummation of the transactions contemplated hereby (assuming all
     appropriate shareholder and regulatory approvals) will violate or result in
     any violation of or be in conflict with or constitute a default under any
     term of the articles, regulations or by-laws of Grantor or any agreement,
     instrument, judgment, decree, statute, rule or order applicable to Grantor.
 
     6.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
 
     The Grantor agrees that, in the event of any change in its Grantor Common
Stock by reason of stock dividends, split-ups, mergers, recapitalizations,
combinations, exchanges of shares or the like, the type and number of shares
subject to the Option, and the purchase price per share, as the case may be,
shall be adjusted appropriately. The Grantor agrees that, in the event that any
additional shares of its Grantor Common Stock are issued or otherwise become
outstanding after the date of this Agreement (other than pursuant to this
Agreement), the number of shares of its Grantor Common Stock subject to the
Option shall be adjusted so that, after such
                                       D-5
<PAGE>   157
 
issuance, it equals the same percentage (as that on the date of this Agreement)
of the number of shares of Grantor Common Stock then issued and outstanding
without giving effect to any shares subject to or issued pursuant to the Option.
Nothing contained in this Section 6 shall be deemed to authorize the Grantor to
breach any provision of the Merger Agreement.
 
     7.  TERMINATION.
 
     This Agreement may be terminated at any time prior to the effective date of
the transaction set forth in the Merger Agreement, by action taken or authorized
by the Board of Directors of the terminating party or parties, whether before or
after approval by the stockholders of the matters presented in connection with
the Merger Agreement:
 
          (a) by mutual consent of Grantee and Grantor;
 
          (b) by either Grantee or Grantor if the Federal Reserve Board shall
     have issued an order denying approval of the transaction set forth in the
     Merger Agreement or if any governmental entity of competent jurisdiction
     shall have issued a final permanent order enjoining or otherwise
     prohibiting the consummation of the transactions contemplated by this
     Agreement or the Merger Agreement, or imposing a Burdensome Condition, and
     in any such case the time for appeal or petition for reconsideration of
     such order shall have expired without such appeal or petition being
     granted;
 
          (c) by either Grantee or Grantor if the transactions contemplated by
     the Merger Agreement shall not have been consummated on or before March 31,
     1999, unless such date is extended by mutual consent of the parties hereto;
 
          (d) by either Grantee or Grantor if no Purchase Event has occurred and
     if any approval of their shareholders required for the consummation of the
     transactions set forth in the Merger Agreement shall not have been obtained
     by reason of the failure to obtain the required vote at a duly called and
     held meeting of shareholders or at any adjournment thereof.
 
          (e) by Grantor, if, on or prior to August   , 1998, Grantor terminates
     the Merger Agreement pursuant to the provisions of Section 9.1(e) thereof;
     or
 
          (f) by Grantor, if, on or prior to August   , 1998, Grantee terminates
     the Merger Agreement pursuant to the provisions of Section 9.1(d) thereof.
 
     8.  EFFECT OF TERMINATION.
 
          (a) In the event of termination of this Agreement by any party as
     provided in Section 7, this Agreement shall forthwith become void and there
     shall be no liability or obligation on the part of any party or their
     respective officers or directors except (i) Sections 9 and 10 of this
     Agreement shall survive the termination and (ii) with respect to any
     liabilities or damages incurred or suffered by a party as a result of the
     breach by another party of any of its representations, warranties,
     covenants or agreements set forth in this Agreement.
 
          (b) If a Purchase Event occurs with respect to the Grantor, then in
     such event Grantor shall pay to the Grantee, within five business days
     after a termination of this Agreement following such an event, the
     reasonable expenses of Grantee incurred in connection with this Agreement
     and the transactions set forth in the Merger Agreement, but not more than
     $75,000.
 
     9.  CONFIDENTIALITY.
 
     Except as and to the extent required by law, no party will disclose or use,
and will direct its representatives not to disclose or use, any Confidential
Information (as defined below) with respect to the other parties furnished or to
be furnished by such other parties, or their respective representatives to the
party or its representatives at any time or in any manner other than in
connection with its evaluation of the transaction proposed in this Agreement.
For purposes of this section, "Confidential Information' means any information
about the Merger Agreement and this Agreement as well as any information about a
party stamped "confidential" or identified in writing as such promptly following
its disclosure, unless (i) such information is already known to the party or its
representatives or to others not bound by a duty of confidentiality or such
information becomes publicly available through no
 
                                       D-6
<PAGE>   158
 
fault of the party or its representatives, (b) the use of such information is
necessary in making any filing or obtaining any consent or approval required for
the consummation of the transactions set forth in the Merger Agreement, or (c)
the furnishing or use of such information is required by or necessary in
connection with legal proceedings. Upon the written request of a party, each of
the other parties will promptly return or destroy any Confidential Information
in its possession and certify in writing to the disclosing party that it has
done so.
 
     10.  COSTS.
 
     Except as otherwise expressly agreed, each party will be responsible for
and bear all of its own costs and expenses (including any broker's or finder's
fees and the expenses of its representatives) incurred at any time in connection
with this Agreement and in pursuing or consummating the Merger Agreement.
 
     11.  SEVERABILITY.
 
     If any term, provision, covenant or restriction contained in this Agreement
is held by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions contained in this Agreement shall remain
in full force and effect, and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines that
applicable law will not permit the Grantee to acquire the full number of shares
of Grantor Common Stock provided in Section 2 (as adjusted pursuant to Section
6), it is the express intention of the Grantor to allow the Grantee to acquire
such lesser number of shares as may be permissible, without any amendment or
modification hereof.
 
     12.  MISCELLANEOUS.
 
          (a) Third Parties. Nothing in this Agreement, expressed or implied, is
     intended to confer upon any party, other than the parties hereto, and their
     respective permitted successors and assigns, any rights, remedies,
     obligations or liabilities under or by reason of this Agreement, except as
     expressly provided herein.
 
          (b) Entire Agreement. Except as otherwise expressly provided herein,
     this Agreement contains the entire agreement among the parties with respect
     to the transactions contemplated hereunder and supersedes all prior
     arrangements or understandings with respect thereto, written or oral. The
     terms and conditions of this Agreement shall inure to the benefit of and be
     binding upon the parties hereto and their respective permitted successors
     and assigns.
 
          (c) Assignment. Neither of the parties hereto may assign any of its
     rights or obligations under this Agreement or the Option created hereunder
     to any other person, without the express written consent of the other
     party, except that in the event a Purchase Event shall have occurred and be
     continuing, the Grantee may assign in whole or in part its rights and
     obligations hereunder; provided, however, that Grantee may not assign its
     rights under the Option except in (i) a widely dispersed public
     distribution, (ii) a private placement in which no one party acquires the
     right to purchase in excess of 2% of the Grantor Common Stock, (iii) an
     assignment to a single party (e.g., a broker or investment banker) for the
     purpose of conducting a widely dispersed public distribution on the
     Grantee's behalf, or (iv) any other manner approved by applicable
     regulatory authorities.
 
          (d) Notices. All notices or other communications which are required or
     permitted hereunder shall be in writing and sufficient if delivered by
     registered or certified mail, postage prepaid, express service, personal
     delivery, telecopy or telefacsimile to the following addresses:
 
       If to Bancshares, to:
 
        10 East Main Street
        P.O. Box 247
        Salineville, Ohio 43940
        Attn: Marty E. Adams, President & CEO
 
                                       D-7
<PAGE>   159
 
       If to Ohio Bank, to:
 
       Richard R. Hollington, Jr., Esq.
        Baker & Hostetler, LLP
        National City Center
        1900 E. 9th Street, Suite 3200
        Cleveland, Ohio 44114
        Attn: Richard R. Hollington, Jr., Chairman
 
          (e) Counterparts. This Agreement may be executed in any number of
     counterparts, and each such counterpart shall be deemed to be an original
     instrument, but all such counterparts together shall constitute but one
     agreement.
 
          (f) Specific Performance. The parties agree that damages would be an
     inadequate remedy for a breach of the provisions of this Agreement by any
     party hereto and that this Agreement may be enforced by a party hereto
     through injunctive or other equitable relief.
 
          (g) Governing Law. This Agreement shall be governed by and construed
     in accordance with the laws of Ohio applicable to agreements made and
     entirely to be performed within such state and such federal laws as may be
     applicable.
 
     13.  REPURCHASE AT THE OPTION OF GRANTEE.
 
          (a) At the request of the Grantee at any time commencing upon the
     first occurrence of a Repurchase Event and ending 12 months immediately
     thereafter, Grantor shall repurchase from Grantee (i) the Option and (ii)
     all shares of Grantor Common Stock purchased by Grantee pursuant hereto
     with respect to which Grantee then has beneficial ownership. The date on
     which Grantee exercises its rights under this Section 17 is referred to as
     the "Request Date." Such repurchase shall be at an aggregate price (the
     "Repurchase Consideration") equal to the sum of:
 
              (i) the aggregate purchase price paid by Grantee for any shares of
        Grantor Common Stock acquired pursuant to the Option with respect to
        which Grantee then has beneficial ownership;
 
              (ii) the excess, if any, of (x) the Applicable Price for each
        share of Grantor Common Stock over (y) the exercise price (subject to
        adjustment pursuant to Section 6 hereof), multiplied by the number of
        shares of Grantor Common Stock with respect to which the Option has not
        been exercised; and
 
             (iii) the excess, if any, of the Applicable Price over the purchase
        price (subject to adjustment pursuant to Section 6 hereof) paid (or, in
        the case of Option Shares with respect to which the Option has been
        exercised but the Closing Date has not occurred, payable) by Grantee for
        each share of Grantor Common Stock with respect to which the Option has
        been exercised and with respect to which Grantee then has beneficial
        ownership, multiplied by the number of such shares.
 
          (b) If Grantee exercises its rights under this section, Grantor shall,
     within 10 business days after the Request Date, pay the Grantor Repurchase
     Consideration to Grantee in immediately available funds, and
     contemporaneously with such payment Grantee shall surrender to Grantor the
     Option and the certificates evidencing the shares of Grantor Common Stock
     purchased thereunder with respect to which Grantee then has beneficial
     ownership, and Grantee shall warrant that it has sole record and beneficial
     ownership of such shares and the Option and that the same are then free and
     clear of all liens, claims, charges and encumbrances of any kind
     whatsoever. Notwithstanding the foregoing, to the extent that prior
     notification to or approval of the Federal Reserve Board or other
     regulatory authority is required in connection with the repayment of all or
     any portion of the Repurchase Consideration Grantee shall have the ongoing
     option to revoke its request for repurchase pursuant to this section, in
     whole or in part, or to require that Grantor deliver from time to time that
     portion of the Repurchase Consideration that it is not then so prohibited
     from paying and promptly file the required notice or application for
     approval and expeditiously process the same (and each party shall cooperate
     with the other in the filing of any such notice or application and the
     obtaining of any such approval). If the Federal Reserve Board or any other
     regulatory authority disapproves of any part of Grantor's proposed
     repurchase pursuant to the section, Grantor shall promptly give notice of
                                       D-8
<PAGE>   160
 
     such fact to Grantee. If the Federal Reserve Board or other agency
     prohibits the repurchase in part but not in whole, then Grantee shall have
     the right (i) to revoke the repurchase request, or (ii) to the extent
     permitted by the Federal Reserve Board or other agency, determine whether
     the purchase should apply to the Option and or Option shares and to what
     extent to each, and Grantee shall thereupon have the right to exercise the
     Option as to the number of Option shares for which the Option was
     exercisable at the Request Date less the sum of the number of shares
     covered by the Option in respect of which payment has been made pursuant to
     this section and the number of shares covered by the portion of the Option
     (if any) that has been repurchased. Grantee shall notify Grantor of its
     determination under the preceding sentence within five (5) business days of
     receipt of notice of disapproval of the purchase.
 
     Notwithstanding anything herein to the contrary, all of Grantee's rights
under this section shall terminate on the date of termination of this Option.
 
     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
to be effective as of the day and year set forth in the first paragraph above.
 
                                          CITIZENS BANCSHARES, INC.
 
                                          By: /s/ MARTY E. ADAMS
 
                                            ------------------------------------
                                            Marty E. Adams, President & CEO
 
                                          THE OHIO BANK
 
                                          By: /s/ RICHARD R. HOLLINGTON, JR.
 
                                            ------------------------------------
                                            Richard R. Hollington, Jr., Chairman
 
                                       D-9
<PAGE>   161
 
                                   APPENDIX E
 
                                VOTING AGREEMENT
 
                                       E-1
<PAGE>   162
 
                                VOTING AGREEMENT
 
     This Voting Agreement is entered into on July 22, 1998 (this "Agreement")
by and among Citizens Bancshares, Inc. ("Bancshares") and Mary H. Chandler,
Annett H. Guglielmi, Marcia H. Kehres, Richard R. Hollington, Jr., Richard R.
Hollington, III, Lorie H. Smith, and EKH Company, a general partnership formed
under the laws of Ohio (collectively, the "Control Shareholders").
 
     WHEREAS, the Control Shareholders own 17,784 Class A Common Shares, par
value $50 per share (the "Class A Shares"), and 19,288 Class B Common Shares,
par value $50 per share (the "Class B Shares") of The Ohio Bank, a state banking
association organized and existing under the banking laws of the State of Ohio
(the "Bank") (all shares of such stock now owned and which may hereafter be
acquired by the Control Shareholders prior to the termination of this Agreement
shall be referred to herein as the "Control Shares");
 
     WHEREAS, Bancshares and Bank propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, that an interim bank )which will be a wholly-owned
subsidiary of Bancshares) will merge with and into Bank pursuant to the Merger
(this and other capitalized terms used and not defined herein shall have the
meanings given to such terms in the Merger Agreement);
 
     WHEREAS, it is a condition to the willingness of Bancshares to enter into
the Merger Agreement that the Control Shareholders agree, and in order to induce
Bancshares to enter into the Merger Agreement, the Control Shareholders have
agreed, to enter into this Agreement; and
 
     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereby agree as follows:
 
                                   ARTICLE 1
 
                            VOTING OF CONTROL SHARES
 
     1.1  VOTING AGREEMENT. The Control Shareholders hereby agree that during
the time this Agreement is in effect, any meeting of the shareholders of Bank,
however called, and in any action by consent of the shareholders of Bank, they
shall vote their Control Shares: (i) in favor of the Merger and the Merger
Agreement (as amended from time to time) and (ii) against any proposal for any
recapitalization, merger, sale of assets or other business combination between
Bank and any person or entity other than Bancshares, or any other action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Bank under the Merger Agreement
or that would result in any of the conditions to the obligations of Bank under
the Merger Agreement not being fulfilled.
 
                                   ARTICLE 2
 
                         REPRESENTATIONS AND WARRANTIES
 
     The Control Shareholders hereby represent and warrant to Bancshares as
follows:
 
     2.1  AUTHORITY RELATIVE TO THIS AGREEMENT. Each of them has all necessary
power and authority or capacity, as the case may be, to execute and deliver this
Agreement, to perform his, her or its obligations hereunder and to consummate
the transaction contemplated hereby. The general partners of EKH are Mary H.
Chandler, Annett H. Guglielmi, Marcia H. Kehres, and Richard R. Hollington, Jr.
This Agreement has been duly and validly executed and delivered by the Control
Shareholders and constitutes a legal, valid and binding obligation of them,
enforceable against them in accordance with its terms. Richard R. Hollington,
Jr., as a general partner of EKH, is hereby authorized to sign this Agreement on
behalf of EKH.
 
     2.2  MAJORITY VOTING POWER. The Control Shares collectively represent a
majority of the voting power of the outstanding shares of all classes of capital
stock of the Bank. Class A Shares have one vote per share, and Class B Shares
have 20 votes per share, pursuant to the Articles of Incorporation of the Bank.
 
                                       E-2
<PAGE>   163
 
     2.3  NO CONFLICT.
 
          (a) The execution and delivery of this Agreement by the Control
     Shareholders do not, and the performance of this Agreement by them will not
     (i) conflict with or violate any law, rule, regulation, order, judgment or
     decree applicable to them or by which the Control Shares are bound, or (ii)
     result in any breach of or constitute a default (or event that with notice
     or lapse of time or both would become a default) under, or give to others
     any rights of termination, amendment, acceleration or cancellation of, or
     result in the creation of a lien or encumbrance on any of the Control
     Shares pursuant to, any note, bond, mortgage, indenture, contract,
     agreement, lease, license, permit, franchise or other instrument or
     obligation to which any such Control Shareholder is a party or by which any
     such Control Shareholder or any Control Shares are bound, except, in the
     case of clauses (i) and (ii), for any such conflicts, violations, breaches,
     defaults or other occurrences which would not prevent or delay the
     performance by any Control Shareholder of his, her or its obligations under
     this Agreement.
 
          (b) The execution and delivery of this Agreement by the Control
     Shareholders do not, and the performance of this Agreement by them will
     not, require any consent, approval, authorization or permit of, or filing
     with or notification to, any federal, state, local or foreign regulatory
     body.
 
     2.4  TITLE TO THE CONTROL SHARES. Each Control Shareholder is the owner of
the number and class of Control Shares specified on Exhibit A hereto, free and
clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on voting rights, charges and other
encumbrances of any nature whatsoever. No Control Shareholder has appointed or
granted any proxy, which appointment or grant is still effective, with respect
to the Control Shares. Each Control Shareholder has sole voting power with
respect to his, her or its Control Shares.
 
                                   ARTICLE 3
 
                                 MISCELLANEOUS
 
     3.1  TERMINATION. This Agreement shall terminate on the earlier to occur of
(i) the date of consummation of the Merger and (ii) the date of the termination
of the Merger Agreement.
 
     3.2  SPECIFIC PERFORMANCE. The Control Shareholders agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that Bancshares shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
 
     3.3  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings with
respect to the subject matter hereof.
 
     3.4  AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed by all the parties hereto.
 
     3.5  SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
 
     3.6  GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Ohio.
 
     3.7  COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall constitute on
and the same agreement.
 
     3.8  ASSIGNMENTS. This Agreement shall not be assigned by operation of law
or otherwise.
 
                                       E-3
<PAGE>   164
 
     3.9  PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
 
     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day first written above.
 
                                             CITIZENS BANCSHARES, INC.
 
                                             By: /s/ Mct E.R
                                             Its: Pres CEO
 
<TABLE>
<S>                                                          <C>
 
MARY H. CHANDLER                                             EKH COMPANY
/s/ Mary H. Chandler                                         By: /s/ Richard R. Hollington, Jr.
                                                             Richard R. Hollington, Jr.
ANNETT H. GUGLIELMI                                          General Partner
/s/ Annett H. Guglielmi
                                                             RICHARD R. HOLLINGTON, JR.
MARCIA H. KEHRES                                             /s/ Richard R. Hollington, Jr.
/s/ Marcia H. Kehres
                                                             LORIE H. SMITH
RICHARD R. HOLLINGTON III                                    /s/ Lorie H. Smith
/s/ Richard R. Hollington III
</TABLE>
 
                                       E-4
<PAGE>   165
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     Section 1701.13(E) of the Ohio Revised Code grants corporations broad
powers to indemnify directors, officers, employees and agents. Section
1701.13(E) provides:
 
          (E)(1) A corporation may indemnify or agree to indemnify any person
     who was or is a party, or is threatened to be made a party, to any
     threatened, pending, or completed action, suit, or proceeding, whether
     civil, criminal, administrative, or investigative, other than an action by
     or in the right of the corporation, by reason of the fact that he is or was
     a director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against expenses,
     including attorney's fees, judgments, fines, and amounts paid in settlement
     actually and reasonably incurred by him in connection with such action,
     suit, or proceeding, if he acted in good faith and in a manner he
     reasonably believed to be in or not opposed to the best interests of the
     corporation and, with respect to any criminal action or proceeding, if he
     had no reasonable cause to believe his conduct was unlawful. The
     termination of any action, suit, or proceeding by judgment, order,
     settlement, or conviction, or upon a plea of nolo contenders or its
     equivalent, shall not, of itself, create a presumption that the person did
     not act in good faith and in a manner he reasonably believed to be in or
     not opposed to the best interests of the corporation, and, with respect to
     any criminal action or proceeding, he had reasonable cause to believe that
     his conduct was unlawful.
 
          (2) A corporation may indemnify or agree to indemnify any person who
     was or is a party, or is threatened to be made a party, to any threatened,
     pending, or completed action or suit by or in the right of the corporation
     to procure a judgment in its favor, by reason of the fact that he is or was
     a director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against expenses,
     including attorney's fees, actually and reasonably incurred by him in
     connection with the defense or settlement of such action or suit, if he
     acted in good faith and in a manner he reasonably believed to be in or not
     opposed to the best interests of the corporation, except that no
     indemnification shall be made in respect of any of the following:
 
             (a) Any claim, issue, or matter as to which such person is adjudged
        to be liable for negligence or misconduct in the performance of his duty
        to the corporation unless, and only to the extent that, the court of
        common pleas or the court in which such action or suit was brought
        determines, upon application, that, despite the adjudication of
        liability, but in view of all the circumstances of the case, such person
        is fairly and reasonably entitled to indemnity for such expenses as the
        court of common pleas or such other court shall deem proper;
 
             (b) Any action or suit in which the only liability asserted against
        a director is pursuant to section 1701.95 of the Revised Code.
 
          (3) To the extent that a director, trustee, officer, employee, member,
     manager, or agent has been successful on the merits or otherwise in defense
     of any action, suit, or proceeding referred to in division (E)(1) or (2) of
     this section, or in defense of any claim, issue, or master therein, he
     shall be indemnified against expenses, including attorney's fees, actually
     and reasonably incurred by him in connection with the action, suit, or
     proceeding.
 
          (4) Any indemnification under division (E)(1) or (2) of this section,
     unless ordered by a court, shall be made by the corporation only as
     authorized in the specific case, upon a determination that indemnification
     of the director, trustee, officer, employee, member, manager, or agent is
     proper in the circumstances because he has met the applicable standard of
     conduct set forth in division (E)(1) or (2) of this section. Such
     determination shall be made as follows:
                                      II-1
<PAGE>   166
 
             (a) By a majority vote of a quorum consisting of directors of the
        indemnifying corporation who were not and are not parties to or
        threatened with the action, suit, or proceeding referred to in division
        (E)(1) or (2) of this section;
 
             (b) If the quorum described in division (E)(4)(a) of this section
        is not obtainable or if a majority vote of a quorum of disinterested
        directors so directs, in a written opinion by independent legal counsel
        other than an attorney, or a firm having associated with it an attorney,
        who has been retained by or who has performed services for the
        corporation or any person to be indemnified within the past five years;
 
             (c) By the shareholders;
 
             (d) By the court of common pleas or the court in which the action,
        suit, or proceeding referred to in division (E)(1) or (2) of this
        section was brought.
 
     Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and, within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.
 
          (5)(a) Unless at the time of a director's act or omission that is the
     subject of an action, suit, or proceeding referred to in division (E)(1) or
     (2) of this section, the articles or the regulations of a corporation
     state, by specific reference to this division, that the provisions of this
     division do not apply to the corporation and unless the only liability
     asserted against a director in an action, suit, or proceeding referred to
     in division (E)(1) or (2) of this section is pursuant to section 1701.95 of
     the Revised Code, expenses, including attorney's fees, incurred by a
     director in defending the action, suit, or proceeding shall be paid by the
     corporation as they are incurred, in advance of the final disposition of
     the action, suit, or proceeding upon receipt of an undertaking by or on
     behalf of the director in which he agrees to do both of the following:
 
             (i) Repay such amount if it is proved by clear and convincing
        evidence in a court of competent jurisdiction that his action or failure
        to act involved an act or omission undertaken with deliberate intent to
        cause injury to the corporation or undertaken with reckless disregard
        for the best interests of the corporation;
 
             (ii) Reasonably cooperate with the corporation concerning the
        action, suit, or proceeding.
 
          (b) Expenses, including attorney's fees, incurred by a director,
     trustee, officer, employee, member, manager, or agent in defending any
     action, suit, or proceeding referred to in division (E)(1) or (2) of this
     section, may be paid by the corporation as they are incurred, in advance of
     the final disposition of the action, suit, or proceeding, as authorized by
     the directors in the specific case, upon receipt of an undertaking by or on
     behalf of the director, trustee, officer, employee, member, manager, or
     agent to repay such amount, if it ultimately is determined that he is not
     entitled to be indemnified by the corporation.
 
          (6) The indemnification authorized by this section shall not be
     exclusive of, and shall be in addition to, any other rights granted to
     those seeking indemnification under the articles, the regulations, any
     agreement, a vote of shareholders or disinterested directors, or otherwise,
     both as to action in their official capacities and as to action in another
     capacity while holding their offices or positions, and shall continue as to
     a person who has ceased to be a director, trustee, officer, employee,
     member, manager, or agent and shall inure to the benefit of the heirs,
     executors, and administrators of such a person.
 
          (7) A corporation may purchase and maintain insurance or furnish
     similar protection, including, but not limited to, trust funds, letters of
     credit, or self-insurance, on behalf of or for any person who is or was a
     director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against any
     liability asserted against him and incurred by him in any such capacity, or
     arising out of his status as such, whether or not the corporation would
     have the power to indemnify him against such
 
                                      II-2
<PAGE>   167
 
     liability under this section. Insurance may be purchased from or maintained
     with a person in which the corporation has a financial interest.
 
          (8) The authority of a corporation to indemnify persons pursuant to
     division (E)(1) or (2) of this section does not limit the payment of
     expenses as they are incurred, indemnification, insurance, or other
     protection that may be provided pursuant to divisions (E)(5), (6), and (7)
     of this section. Divisions (E)(1) and (2) of this section do not create any
     obligation to repay or return payments made by the corporation pursuant to
     division (E)(5), (6), or (7).
 
          (9) As used in division (E) of this section, "corporation" includes
     all constituent entities in a consolidation or merger and the new or
     surviving corporation, so that any person who is or was a director,
     officer, employee, trustee, member, manager, or agent of such a constituent
     entity, or is or was serving at the request of such constituent entity as a
     director, trustee, officer, employee, member, manager, or agent of another
     corporation, domestic or foreign, nonprofit or for profit, a limited
     liability company, or a partnership, joint venture, trust, or other
     enterprise, shall stand in the same position under this section with
     respect to the new or surviving corporation as he would if he had served
     the new or surviving corporation in the same capacity.
 
          Section 33 of the Code of Regulations of Citizens Bancshares, Inc.
     states as follows:
 
          Section 33.  Indemnification. The Corporation shall indemnify any
     director or officer and any former director or officer of the Corporation
     and any such director or officer who is serving or has served at the
     request of the Corporation as a director, officer or trustee of another
     corporation, partnership, joint venture, trust or other enterprise (and his
     heirs, executors and administrators) against expenses, including attorney's
     fees, judgment fines, and amounts paid in settlement, actually and
     reasonably incurred by him by reason of the fact that he is or was such
     director, officer or trustee in connection with any threatened, pending or
     completed action, suit or proceeding, whether civil, criminal,
     administrative or investigative to the full extent permitted by applicable
     law. The indemnification provided for herein shall not be deemed to
     restrict the power of the Corporation (i) to indemnify employees, agents
     and others to the extent not prohibited by law, (ii) to purchase and
     maintain insurance or furnish similar protection on behalf of or for any
     person who is or was a director, officer or employee of the Corporation, or
     any person who is or was serving at the request of the Corporation as a
     director, officer, trustee, employee or agent of another corporation,
     partnership, joint venture, trust or other enterprise against any liability
     asserted against him or incurred by him in any such capacity or arising out
     of his status as such, and (iii) to enter into agreements with persons of
     the class identified in clause (ii) above indemnifying them against any and
     all liabilities (or such lesser indemnification as may be provided in such
     agreements) asserted against or incurred by them in such capacities.
 
     In addition, Bancshares has entered into indemnification agreements with
each of its directors and executive officers which expand the indemnities'
rights in the event that Ohio law and Bancshares' Code of Regulations are
further changed. Pursuant to the agreements, indemnities receive the highest
available of the following: (i) the benefits provided by Bancshares' Code of
Regulations as of the date of the agreement; (ii) the benefits provided by
Bancshares' Code of Regulations in effect at the time that indemnification
expenses are incurred; (iii) the benefits allowable under Ohio law which is in
effect on the date of the agreement; (iv) the benefits allowable under the law
of the jurisdiction under which Bancshares exists at the time indemnifiable
expenses are incurred; (v) the benefits available under liability insurance
obtained by Bancshares; (vi) the benefits which would have been available to the
indemnitee under a Bancshares insurance policy which was in effect prior to and
expired on May 8, 1986; or (vii) such other benefits are or may be otherwise
available to the indemnitee. The indemnification rights available under the
agreements are subject to certain exclusions, including a provision that no
indemnification shall be made if a court determines by clear and convincing
evidence that the indemnitee has acted or failed to act with deliberate intent
to cause injury to, or with reckless disregard for the best interests of,
Bancshares.
 
                                      II-3
<PAGE>   168
 
ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
EXHIBIT NO.                             EXHIBIT
- -----------                             -------
<C>           <S>
  2           Amended and Restated Agreement and Plan of Merger, dated as
              of July 22, 1998, between Citizens Bancshares, Inc., The
              Ohio Bank and Interim Bank (included as Appendix A to the
              Proxy Statement/Prospectus)
  3.1         Registrant's Fifth Amended Articles of Incorporation
              (incorporated by reference to Exhibit 3(1) of Form S-4
              Registration Statement No. 333-60741)
  3.2         Registrant's Code of Regulations, as amended (incorporated
              by reference to Exhibit 3(2) of Form S-4 Registration
              Statement No. 0-18209 of the Registrant)
  3.3         Amendment to the Registrant's Fifth Amended and Restated
              Articles of Incorporation of the Registrant (incorporated by
              reference to Exhibit 3(3) of Form S-4 Registration Statement
              No. 333-60741)
  3.4         Amendment to the Code of Regulations of the Registrant
              (incorporated by reference to Exhibit 3(4) of Form S-4
              Registration Statement No. 333-60741)
  5           Opinion of Squire, Sanders & Dempsey L.L.P. regarding
              legality
  8           Opinion of Baker & Hostetler, LLP regarding tax matters [to
              be filed by amendment]
  9           Voting Agreement, dated as of July 22, 1998, by and among
              Citizens Bancshares, Inc. and Mary H. Chandler, Annett H.
              Guglielmi, Marcia H. Kehres, Richard R. Hollington, Jr.,
              Richard R. Hollington III, Lorie H. Smith and EKH Company
              (included as Appendix E to the Proxy Statement/Prospectus)
 10           Stock Option Agreement, dated as of July 23, 1998, by and
              between Citizens Bancshares, Inc. and the Ohio Bank
              (included as Appendix D to the Proxy Statement/Prospectus)
 23.1         Consent of Squire, Sanders & Dempsey L.L.P. (included in
              Exhibit 5)
 23.2         Consent of Baker & Hostetler, LLP [to be filed by amendment]
 23.3         Consent of Danielson Associates, Inc.
 23.4         Consent of PricewaterhouseCoopers LLP
 23.5         Consent of Crowe, Chizek and Company LLP
 23.6         Consent of Crowe, Chizek and Company LLP
 23.7         Consent of SR Snodgrass
 99           Proxy card of The Ohio Bank
</TABLE>
 
ITEM 22. UNDERTAKINGS.
 
     (a) The undersigned Registrant hereby undertakes:
 
          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration Statement;
 
             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act of 1933;
 
             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the Registration Statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the Registration Statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high and of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Securities and Exchange Commission pursuant to Rule 424(b) if,
        in the aggregate, the changes in volume and price represent no more than
        a 20 percent change in the maximum aggregate offering price set forth in
        the "Calculation of Registration Fee" table in the effective
        registration statement; and
 
                                      II-4
<PAGE>   169
 
             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the Registration Statement
        or any material change to such information in the Registration
        Statement.
 
          (2) That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment will be deemed
     to be a new registration statement relating tot he securities offered
     therein, and the offering of such securities at that time will be deemed to
     be the initial bona fide offering thereof.
 
          (3) To remove from registration by means of a post-effective amendment
     any of the securities which remain unsold at the termination of the
     offering;
 
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3; and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
 
     (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement will be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
will be deemed to be the initial bona fide offering thereof.
 
     (c)(1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
 
     (2) The undersigned registrant hereby undertakes that every prospectus (i)
that is filed pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the Registration Statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment will be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to be
the initial bona fide offering thereof.
 
     (d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
     (e) The undersigned registrant hereby undertakes to respond to request for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
 
     (f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
 
                                      II-5
<PAGE>   170
 
                                   SIGNATURES
 
     Pursuant to the requirements of the 1933 Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Salineville, Ohio on September 15,
1998.
 
                                          CITIZENS BANCSHARES, INC.
 
                                          By: /s/ MARTY E. ADAMS
 
                                            ------------------------------------
                                                       Marty E. Adams
                                               President and Chief Executive
                                                           Officer
 
     Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
 
<TABLE>
<S>                                                      <C>
 
/s/ MARTY E. ADAMS                                                      September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Marty E. Adams                                             Date
President, Chief Executive Officer and Director
 
/s/ WILLIAM L. WHITE, III                                               September 15, 1998
- -----------------------------------------------------      --------------------------------------------
William L. White, III                                      Date
Chief Financial Officer and Principal Accounting
Officer
 
/s/ JAMES C. MCBANE                                                     September 15, 1998
- -----------------------------------------------------      --------------------------------------------
James C. McBane                                            Date
Director
 
/s/ FRED H. JOHNSON, III                                                September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Fred H. Johnson, III                                       Date
Director
 
/s/ KEITH D. BURGETT                                                    September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Keith D. Burgett                                           Date
Director
 
/s/ WILLARD L. DAVIS                                                    September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Willard L. Davis                                           Date
Director
 
/s/ FRED H. JOHNSON                                                     September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Fred H. Johnson                                            Date
Director
 
/s/ KENNETH E. MCCONNELL                                                September 15, 1998
- -----------------------------------------------------      --------------------------------------------
Kenneth E. McConnell                                       Date
Director
</TABLE>
 
                                      II-6
<PAGE>   171
 
<TABLE>
<S>                                                     <C>
 
/s/ GLENN F. THORNE                                     September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Glenn F. Thorne                                           Date
Director
 
/s/ GERARD P. MASTROIANNI                               September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Gerard P. Mastroianni                                     Date
Director
 
/s/ ELDEN L. SURBEY                                     September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Elden L. Surbey                                           Date
Director
 
/s/ DEL E. GOEDEKER                                     September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Del E. Goedeker                                           Date
Director
 
/s/ CHARLES J. HOMAN                                    September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Charles J. Homan                                          Date
Director
 
/s/ JOSEPH W. TOSH, II                                  September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Joseph W. Tosh, II                                        Date
Director
 
/s/ H. LEE KINNEY                                       September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
H. Lee Kinney                                             Date
Director
 
/s/ LEE A. SMITH                                        September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Lee A. Smith                                              Date
Director of The Citizens Banking Company
 
/s/ JONATHAN A. LEVY                                    September 15, 1998
- ------------------------------------------------------  -------------------------------------------------------
Jonathan A. Levy                                          Date
Director of The Citizens Banking Company
</TABLE>
 
                                      II-7
<PAGE>   172
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                    PAGE
   NO.                             DESCRIPTION                              NO.
 -------                           -----------                              ----
<C>        <S>                                                          <C>
   2       Amended and Restated Agreement and Plan of Merger, dated as
           of July 22, 1998, between Citizens Bancshares, Inc., The
           Ohio Bank and Interim Bank (included as Appendix A to the
           Proxy Statement/Prospectus)
   3.1     Registrant's Fifth Amended Articles of Incorporation
           (incorporated by reference to Exhibit 3(1) of Form S-4
           Registration Statement No. 333-60741)
   3.2     Registrant's Code of Regulations, as amended (incorporated
           by reference to Exhibit 3(2) of Form S-4 Registration
           Statement No. 0-18209 of the Registrant)
   3.3     Amendment to the Registrant's Fifth Amended and Restated
           Articles of Incorporation of the Registrant (incorporated by
           reference to Exhibit 3(3) of Form S-4 Registration Statement
           No. 333-60741)
   3.4     Amendment to the Code of Regulations of the Registrant
           (incorporated by reference to Exhibit 3(4) of Form S-4
           Registration Statement No. 333-60741)
   5       Opinion of Squire, Sanders & Dempsey L.L.P. regarding
           legality
   8       Opinion of Baker & Hostetler, LLP regarding tax matters [to
           be filed by amendment]
   9       Voting Agreement, dated as of July 22, 1998, by and among
           Citizens Bancshares, Inc. and Mary H. Chandler, Annett H.
           Guglielmi, Marcia H. Kehres, Richard R. Hollington, Jr.,
           Richard R. Hollington III, Lorie H. Smith and EKH Company
           (included as Appendix E to the Proxy Statement/Prospectus)
  10       Stock Option Agreement, dated as of July 23, 1998, by and
           between Citizens Bancshares, Inc. and the Ohio Bank
           (included as Appendix D to the Proxy Statement/Prospectus)
  23.1     Consent of Squire, Sanders & Dempsey L.L.P. (included in
           Exhibit 5)
  23.2     Consent of Baker & Hostetler, LLP [to be filed by amendment]
  23.3     Consent of Danielson Associates, Inc.
  23.4     Consent of PricewaterhouseCoopers LLP
  23.5     Consent of Crowe, Chizek and Company LLP
  23.6     Consent of Crowe, Chizek and Company LLP
  23.7     Consent of SR Snodgrass
  99       Proxy card of The Ohio Bank
</TABLE>

<PAGE>   1



                                                                      EXHIBIT 5



                [SQUIRE, SANDERS & DEMPSEY L.L.P. LETTERHEAD]



                              September 16, 1998



Citizens Bancshares, Inc.
10 East Main Street
Salineville, Ohio  43945

Ladies and Gentlemen:

        Reference is made to the Registration Statement on Form S-4
("Registration Statement") to be filed by Citizens Bancshares, Inc.
("Bancshares") in connection with the issuance of up to 5,249,750 of its common
shares, no par value (the "Bancshares Common Shares"), upon the terms and
conditions set forth in the Agreement and Plan of Merger, dated as of July 22,
1998, by and between Bancshares and The Ohio Bank, providing for the merger of
an interim bank subsidiary of Bancshares with and into The Ohio Bank (the 
"Merger Agreement").  We have examined the Merger Agreement, and such documents
and matters of law as we have deemed necessary or appropriate for the purpose of
rendering this opinion.

        Based upon the foregoing, we are of the opinion that the Bancshares
Common Shares, when issued by Bancshares as contemplated in the Merger Agreement
and the Registration Statement, will be legally issued, fully paid and
nonassessable.

        We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of our firm under the caption
"Legal Opinions" in the prospectus/proxy statement contained therein.

                                                Respectfully submitted,

                                                SQUIRE, SANDERS & DEMPSEY L.L.P.

<PAGE>   1
                                                                    Exhibit 23.3


                          DANIELSON ASSOCIATES INC.

                           6110 EXECUTIVE BOULEVARD
                                  SUITE 504
                        ROCKVILLE, MARYLAND 20852-3903
                             TEL: (301) 468-4884
                             FAX: (301) 468-0013


                                                            PITTSBURGH OFFICE
                                                            -----------------

                                                           TEL: (412) 262-3207

                     CONSENT OF DANIELSON ASSOCIATES INC.

        We hereby consent to the inclusion in the Proxy Statement/Prospectus
forming a part of this Registration Statement of our opinion to the Board of
Directors of The Ohio Bank, attached as Appendix C to such Proxy
Statement/Prospectus, and the references to such opinion contained therein.  In
giving such consent, we do not admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Securities
Act"), and we do not thereby admit that we are experts with respect to any part
of this Registration Statement within the meaning of the term "expert" as used
in the Securities Act.


                                                DANIELSON ASSOCIATES INC.

                                                By /s/ Arnold G. Danielson
                                                  -----------------------------
                                                  Arnold G. Danielson
                                                  Chairman

Rockville, Maryland
September 15, 1998

<PAGE>   1
                                                                    Exhibit 23.4




                       CONSENT OF INDEPENDENT ACCOUNTANTS
                       ----------------------------------


We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of Citizens Bancshares, Inc. of our report dated January 19, 1998, which
appears on page S-27 of Mid Am, Inc.'s 1997 Annual Report Supplement to
Shareholders, which is incorporated by reference in its Annual Report on Form
10-K for the year ended December 31, 1997. We also consent to the reference to
us under the heading "Experts" in such Proxy Statement/Prospectus.




/s/ PricewaterhouseCoopers LLP

Memphis, Tennessee
September 15, 1998




<PAGE>   1


                                                                    Exhibit 23.5




                       CONSENT OF INDEPENDENT ACCOUNTANTS


We consent to the incorporation in the registration statement of Citizens
Bancshares, Inc. on Form S-4, of our report dated February 19, 1998 on the
financial statements of The Ohio Bank as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997. We also consent
to the reference to our firm under the heading "Experts" in the prospectus
which is also a part of the registration statement.




                                               /s/ Crowe, Chizek and Company LLP

                                               Crowe, Chizek and Company LLP
Columbus, Ohio
September 14, 1998




<PAGE>   1
                                                                   Exhibit 23.6




                         CONSENT OF INDEPENDENT AUDITORS


We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of Citizens Bancshares, Inc. ("the Corporation") of our report dated
January 16, 1998 on the Corporation's consolidated balance sheets of as of
December 31, 1997 and 1996 and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1997, which report is incorporated by reference in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997,
and of our report dated May 12, 1998 on the Corporation's supplemental
consolidated balance sheets as of December 31, 1997 and 1996, and the related
supplemental consolidated statements of income, changes in shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1997, which report is included in the Corporation's Current Report on Form 8-K
filed on June 25, 1998.

We also consent to the reference to us under the heading "Experts" in such Proxy
Statement/Prospectus.




                                               /s/ Crowe, Chizek and Company LLP

                                               Crowe, Chizek and Company LLP
Columbus, Ohio
September 14, 1998






<PAGE>   1
                                                                   Exhibit 23.7




                         CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in the Joint Proxy Statement/
Prospectus which is part of this Registration Statement of Citizens Bancshares,
Inc. on Form S-4 of our report dated January 16, 1998 (relating to the
consolidated financial statements of Century Financial Corporation as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997) which is incorporated by reference in Form 8-K/A filed by
Citizens Bancshares, Inc. dated June 25, 1998.

We also consent to the reference to us under the heading "Experts" in such Joint
Proxy Statement/Prospectus.


                                                SR SNODGRASS

Wexford, PA
September 14, 1998



<PAGE>   1
                                                                      Exhibit 99
                                  THE OHIO BANK

              PROXY FOR SPECIAL MEETING OF SHAREHOLDERS CALLED FOR
                          _______________________, 1998

       The undersigned having received, together with the Proxy
Statement/Prospectus dated as of ____________, 1998, notice of the Special
Meeting of Shareholders of The Ohio Bank, Findlay, Ohio, to be held on
_____________, 1998 at ____ p.m., hereby designates and appoints
________________________ and ______________________ as proxies for the
undersigned, with full power of substitution, to exercise all the powers that
the undersigned would have if personally present to act and to vote all of the
shares that the undersigned is entitled to vote at the Special Meeting of
Shareholders, unless revoked, and at any adjournment or postponement thereof,
such proxies being directed to vote as specified below on the following
proposal:

MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL 1.

Proposal 1:       To approve and adopt the Agreement and Plan of Merger by
                  and among Citizens Bancshares, Inc., Citizens Bancshares
                  Interim Bank, a wholly-owned subsidiary of Citizens
                  Bancshares, Inc., and The Ohio Bank, providing for the merger
                  of Citizens Bancshares Interim Bank with and into The Ohio
                  Bank.

                          FOR [ ]        AGAINST [ ]        ABSTAIN [ ]

Proposal 2:       To transact such other business as may properly come before
                  the Special Meeting, or any adjournment or postponements
                  thereof in order to allow the further solicitation of proxies.

                          FOR [ ]        AGAINST [ ]        ABSTAIN [ ]

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR PROPOSAL 1 AND FOR PROPOSAL
2. ALL PROXIES PREVIOUSLY GIVEN ARE HEREBY REVOKED. RECEIPT OF THE ACCOMPANYING
PROXY STATEMENT AND PROSPECTUS IS HEREBY ACKNOWLEDGED.

         The aforesaid proxies are hereby authorized to vote on any other matter
that may properly come before the meeting at their discretion. An executed proxy
may be revoked at any time prior to its exercise by submitting another proxy
with a later date, by appearing in person at The Ohio Bank Special Meeting and
advising the Secretary of the shareholder's intent to vote the share(s) or by
sending a written, signed and dated revocation that clearly identifies the proxy
being revoked to the principal executive offices of The Ohio Bank at 236 South
Main Street, Findlay, Ohio, 45855, attention: Gary L. Cole, Secretary. A
revocation may be in any written form validly signed by the record holder so
long as it clearly states that the proxy previously given is no longer
effective.

Dated:
        --------------------------          -----------------------------------
                                            Signature

                                            -----------------------------------
                                            Signature

Please sign exactly as your name appears on your stock certificate(s) and return
this proxy promptly in the accompanying envelope. If the share(s) are issued in
the names of two or more persons, all persons should sign the proxy. If the
shares are issued in the name of a corporation or partnership, please sign in
the corporate name, by the president or other authorized officer, or in the
partnership name, by an authorized person. When signing as attorney, executor,
administrator, trustee, guardian or in any other representative capacity, please
give your full title as such.

PLEASE DATE, SIGN AND MAIL THIS PROXY TO THE OHIO BANK, ATTENTION GARY L. COLE,
SECRETARY, 236 SOUTH MAIN STREET, FINDLAY, OHIO 45840. AN ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE.



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