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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended June 30, 2003

For the transition period from                      to                      .

Commission File No. 1-13652

First West Virginia Bancorp, Inc.

(Exact name of registrant as specified in its charter)

1701 Warwood Avenue

Wheeling, West Virginia 26003

(Address of principal executive offices)

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

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check-mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    ¨  Yes    x  No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     ¨  Yes    ¨  No    x  N/A

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practible date.

The number of shares outstanding of the issuer’s common stock as of August 8, 2003:

Common Stock, $5.00 Par Value, shares outstanding 1,538,443 shares

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FORM 10-Q INDEX

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First West Virginia Bancorp Inc.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of the financial statements

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First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

The accompanying notes are an integral part of the financial statements

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First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

The accompanying notes are an integral part of the financial statements

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First West Virginia Bancorp Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of the financial statements

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First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated interim financial statements of First West Virginia Bancorp, Inc. (the “Company”) and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. The accounting and reporting policies followed are consistent with those used in preparation of the corporation’s 2002 Annual Report. In the opinion of management, adjustments ( all of which are normal and recurring in nature) necessary to present fairly the financial position and the results of operations were made. The notes to the financial statements contained in the Annual Report for December 31, 2002, should be read in conjunction with these financial statements.

Income Taxes

The provision for income taxes is at a rate which management believes will approximate the effective rate for the year.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2003 presentation.

Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”)No. 143, “Accounting for Asset Retirement Obligations,” which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement requires an entity to recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. This statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. Initial application of this statement is as of the beginning of an entity’s fiscal year. The adoption of SFAS No. 143 did not have a material impact on the Company.

The FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value when the liability is incurred. This statement nullifies Emerging Issues Task Force Issue No. 94-3, which required the recognition of a liability for an exit cost at the date of an entity’s commitment to an exit plan. The effective date of this statement is for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The adoption of this Statement did not have a material impact on the Company.

The FASB issued SFAS No. 147, “Acquisitions of Certain Financial Institutions.” Except for transactions between two or more mutual enterprises, this Statement removes acquisitions of financial institutions from the scope of both SFAS No. 72, “Accounting for Certain Acquisitions of Banking and Thrift Institutions” and FASB Interpretation No. 9, “Applying APB Opinions No. 16 and 17 When a Savings and Loan Association or Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase Method.” SFAS No. 147 requires that these transactions be accounted for in accordance with FASB Statements No. 141, “Business Combinations” and No. 142, “Goodwill and Other Intangible Assets.” This statement also amends SFAS No. 144 to include in its scope long-term customer-relationship intangible assets of financial institutions such as depositor- and borrower- relationship intangible assets and credit cardholder intangible assets. The effective date of this Statement is generally for activities on or after October 1, 2002.

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First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Accounting Policies (Continued)

As a result of adopting FASB No. 147, the Company reclassified approximately $1.6 million of previously unidentifiable intangible assets to goodwill and ceased the regularly scheduled amortization expense of those intangible assets. The transition provisions of this pronouncement required the Company to adjust all interim and annual financial statements issued after January 1, 2002, the date of initial adoption of SFAS No. 142, “Goodwill and Other Intangible Assets.” As such, the following table illustrates the effect of the adoption of SFAS No. 147 on net income for the three and six months ended June 30, 2002 presented in the preceding interim financial statement:

On December 31, 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”, which amends SFAS No. 123, “Accounting for Stock-Based Compensation”. SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require more prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. Under the provisions of SFAS No. 123, companies that adopted the preferable, fair value based method were required to apply that method prospectively for new stock option awards. This contributed to a “ramp-up” effect on stock-based compensation expense in the first few years following adoption, which caused concern for companies and investors because of the lack of consistency in reported results. To address that concern, SFAS No. 148 provides two additional methods of transition that reflect an entity’s full complement of stock-based compensation expense immediately upon adoption, thereby eliminating the ramp-up effect. SFAS No. 148 also improves the clarity and prominence of disclosures about the pro forma effects of using the fair value based method of accounting for stock-based compensation for all companies—regardless of the accounting method used—by requiring that the data be presented more prominently and in a more user-friendly format in the footnotes to the financial statements. In addition, the statement improves the timeliness of those disclosures by requiring that this information be included in interim as well as annual financial statements. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002, with earlier application permitted in certain circumstances. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The adoption of SFAS No. 148 did not have a material impact on the Company.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. This interpretation clarifies that a guarantor is required to disclose (a) the nature of the guarantee, including the approximate term of the guarantee, how the guarantee arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments under the guarantee; (c) the carrying amount of the liability, if any, for the guarantor’s obligations

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First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Accounting Policies (Continued)

under the guarantee; and (d) the nature and extent of any recourse provisions or available collateral that would enable the guarantor to recover the amounts paid under the guarantee. This interpretation also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the obligations it has undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. The objective of the initial measurement of that liability is the fair value of the guarantee at its inception. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year end. The disclosure requirements in this interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. Adoption did not have a material impact on the Company.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” which addresses whether certain types of entities, referred to as variable interest entities (“VIE”), should be consolidated in a company’s financial statements. A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns), or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. An entity should consolidate a VIE if it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns. The Company adopted the Interpretation for relationships with VIE’s that begin on or after February 1, 2003. The implementation of the consolidation guidance did not have a material effect on the Company.

On April 30, 2003, the FASB issued SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” The statement amends and clarifies accounting for derivative instruments embedded in other contracts, and for hedging activities under Statement 133. The amendments improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. The statement also clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative. In addition, it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. The statement is generally effective for contracts entered into or modified after June 30, 2003. Management does not believe the adoption of SFAS No. 149 will have a material impact on the Company.

In May 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” The statement improves the accounting for certain financial instruments that, under previous guidance, could be accounted for as equity and requires that those instruments be classified as liabilities. This statement affects accounting for three types of freestanding financial instruments. One type is mandatorily redeemable shares, which the issuing company is obligated to buy back in exchange for cash or other assets. A second type, which includes put options and forward purchase contracts, involves instruments that do or may require the issuer to buy back some of its shares in exchange for cash or other assets. The third type, are instruments whose obligations can be settled with shares, the monetary value is fixed , tied solely or predominately to a variable such as a market index, or varies inversely with the value of the isuuers’ shares. SFAS No. 150 does not apply to features embedded in a financial instrument that is not a derivative in its entirety. Most of the guidance is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Management does not believe the adoption of SFAS No. 150 will have a material impact on the Company.

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First West Virginia Bancorp, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Accounting Policies (Continued)

Forward-Looking Information

Certain information contained in this report, which are not historical facts, may be forward-looking statements that involve risks and uncertainties. These statements are subject to important factors that could cause action results to differ materially from those contemplated by such statements, including without limitation, the effect of changing economic conditions, changes in interest rates, changes in lending activities, changes in state and federal regulations, and other external factors which may materially impact the Company’s operational and financial performance.

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

First West Virginia Bancorp, Inc., a West Virginia corporation headquartered in Wheeling, West Virginia, has one wholly-owned subsidiary: Progressive Bank, N.A., which operates in Wheeling, Wellsburg, Moundsville, New Martinsville, Buckhannon and Weston, West Virginia and Bellaire, Ohio. Following is a discussion and analysis of the significant changes in the financial condition and results of operations of First West Virginia Bancorp, Inc., (the Holding Company), and its subsidiary for the three months and six months ended June 30, 2003 and 2002. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, Notes, and tables contained in this report, as well as with the Holding Company’s Annual Report contained on Form 10-K for the year ended December 31, 2002.

Results of Operations

The Holding Company reported net income of $1,310,200 or $.85 per share for the six months ended June 30, 2003 compared to $1,284,027 or $.84 per share for the same period during 2002. The increase of $26,173 or 2.0% in earnings was primarily due to the increase in noninterest income and the decrease in the provision for loan losses, offset in part by increased operating expenses and the decrease in net interest income for the six months ended June 30, 2003 as compared to the same period in 2002. The Holding Company’s return on average assets (ROA) was .98% for the first six months of 2003 as compared to 1.07% for the same period in 2002. The annualized return on average equity (ROE) was 12.28% for the first six months of 2003 as compared to 13.00% for the same period in 2002.

For the second quarter of 2003, net income was $690,729 or $.45 per share as compared to $673,063 or $.44 per share for the same period in 2002. The increase in earnings of $17,666 or 2.6% was primarily due to the increase in noninterest income and the decrease in the provision for loan losses, offset in part by the increase in noninterest expense and the decrease in net interest income. The ROA was 1.01% for the three months ended June 30, 2003 as compared to 1.07% for the same period of the prior year. For the three months ended June 30, 2003 compared to June 30, 2002, the ROE was 12.78% and 13.44%, respectively.

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

Net Interest Income

Net interest income, which is the difference between interest earned on loans and investments and interest paid on deposits and other liabilities, is the primary source of earnings for the Holding Company. Changes in the volume and mix of earning assets and interest bearing liabilities combined with changes in market rates of interest greatly effect net interest income. Tables Two and Three present the average balance sheet and interest rate analysis for the three and six months ended June 30, 2003 and 2002.

For the six months ended June 30, 2003, net interest income was $4,352,715, a decrease of $175,367 or 3.9%, from the same period in 2002. The decrease in net interest income was primarily due to the decrease in the interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit liabilities.

Interest income decreased $374,566 or 5.3% for the first six months of 2003 compared to the same period of the prior year. Interest and fees on loans decreased $194,284 or 4.0% for the six month period ended June 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans declined .56%, from 7.86% at December 31, 2002 to 7.30% at June 30, 2003. The decline in the taxable equivalent yield was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan volume. Interest income on investment securities decreased $94,924 or 4.7% during the six months ended June 30, 2003 over 2002. The taxable equivalent average yield on investment securities decreased .88%, from 4.79% at December 31, 2002 to 3.91% at June 30, 2003. The decline in the taxable equivalent yield was primarily attributable to the decrease in the interest rates paid on investment securities, offset in part by an increase in the average volume of investment securities.

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Table One

SELECTED FINANCIAL DATA

(Unaudited, figures in thousands, except per share data)

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Net Interest Income—Continued

During the six months ended June 30, 2003, interest expense decreased $199,199 or 7.7% as compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .32%, from 2.45% at December 31, 2002 to 2.13% at June 30, 2003. The decrease in the interest rates paid on interest bearing liabilities, which were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the first six months of 2003.

The changes in the volume and mix of earning assets and interest bearing liabilities combined with the changes in the market rates of interest resulted in taxable equivalent net interest yields on average earning assets of 3.74% for the six month period ended June 30, 2003 as compared to 4.15% at December 31, 2002.

For the three months ended June 30, 2003, net interest income was $2,160,943, a decrease of $198,290 or 8.4%, from the same period in 2002. The decrease in net interest income was primarily due to the decrease in the interest earned on loans and investment securities, offset in part by a decline in interest rates paid on deposit liabilities.

Interest income decreased $328,550 or 9.0% during the second quarter of 2003 as compared to the same period of the prior year. Interest and fees on loans decreased $181,837 or 7.2% for the three months ended June 30, 2003 as compared to the same period in 2002. The taxable equivalent yield on loans declined .63%, from 7.86% at December 31, 2002 to 7.23% at June 30, 2003. The decline in the taxable equivalent yield was largely due to the decrease in the interest rates earned on loans offset in part by an increase in the average loan volume. Interest income on investment securities decreased $108,450 or 10.3% during the three months ended June 30, 2003 over 2002. The taxable equivalent average yield on investment securities decreased 1.11%, from 4.79% at December 31, 2002 to 3.68% at June 30, 2003. The decline in the taxable equivalent yield was primarily attributable to the decrease in the interest rates paid on investment securities, offset in part by an increase in the average volume of investment securities.

During the three months ended June 30, 2003, interest expense decreased $130,260 or 10.0% as compared to the same period in 2002. The average yield paid on interest bearing liabilities decreased .39%, from 2.45% at December 31, 2002 to 2.06% at June 30, 2003. The decrease in the interest rates paid on interest bearing liabilities, which were offset in part by the increase in the average volume of interest bearing liabilities primarily contributed to the decline in interest expense during the second quarter of 2003.

The taxable equivalent net interest yields on average earning assets was 3.64% for the three month period ended June 30, 2003 as compared to 4.15% at December 31, 2002.

Noninterest Income

Noninterest income increased $152,358 or 31.6% for the six months ended June 30, 2003 as compared to the same period of the prior year. The increase in noninterest income was primarily due to gains on sales of investment securities available for sale and the increase in service charge income for the first six months of 2003.

Sales of investment securities for the six months ended June 30, 2003 were primarily the result of sales by the Holding Company and its subsidiary bank. The Holding Company accounted for securities gains of $1,712 and securities losses of $13,849 during the period ended June 30, 2003 and securities gains of $1,344 and securities losses of $1,107 during the period ended June 30, 2002 and those sales were attributable to sales of marketable equity securities. The subsidiary bank accounted for securities gains of $118,944 and securities losses of $1,607 during the period ended June 30, 2003 and securities gains of $28,341 and securities losses of $16,075 during the period ended June 30, 2002 and those sales were attributable to sales of securities available for sale.

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Noninterest Income—Continued

Service charges increased $40,853 during the six months ended June 30, 2003, up 13.3%, from the same period in 2002. Service charges and other fees represent the major component of noninterest income. These charges are earned from assessments made on checking and savings accounts.

During the six months ended June 30, 2003, other operating income increased $18,808 or 11.6% compared to the same period in 2002. Other operating income represents fees from safe deposit box rentals, sales of checkbooks, sales of cashiers’ checks and money orders, utility collections, ATM charges and card fees, home equity credit line fees, credit life commissions, credit card fees and commissions and various other charges and fees related to normal customer banking relationships. The increase in other operating income primarily resulted from increases in checkbook sales and ATM fees, and were offset in part by a decrease in other credit card income for the first six months of 2003 as compared to the same period in 2002.

For the second quarter of 2003, noninterest income increased $133,776 or 56.7% as compared to the same period of the prior year. The increase in noninterest income was primarily due to gains on sales of investment securities available for sale by the Holding Company’s subsidiary bank for the second quarter of 2003 as compared to the prior year.

For the second quarter of 2003, sales of investment securities were primarily the result of sales by the Holding Company and its subsidiary bank. The Holding Company accounted for securities gains of $1,712 and securities losses of $13,849 during the second quarter of 2003 and securities losses of $11 during the second quarter of 2002 and those sales were attributable to sales of marketable equity securities. The subsidiary bank accounted for securities gains of $118,944 and securities losses of $1,607 during the second quarter of 2003 and securities gains of $10,624 and securities losses of $15,587 during the second quarter of 2002 and those sales were attributable to sales of securities available for sale.

Service charges increased $12,620 during the second quarter of 2003, up 7.4%, from the same period in 2002. These charges are earned from assessments made on checking and savings accounts.

During the second quarter of 2003, other operating income increased $10,982 or 15.5% compared to the same period in 2002. The increase in other operating income primarily resulted from increases in checkbook sales and ATM fees for the second quarter of 2003 as compared to the same period in 2002.

For the six months ended June 30, 2003, noninterest expense increased $159,065 or 5.4% as compared to the same period of the prior year. Salary and employee benefits increased $104,016 or 7.0% for the six months ended June 30, 2003 as compared to the same period in the prior year. The increase was primarily attributable to the hiring of additional loan personnel combined with normal annual merit adjustments. A loan administration department was established at the subsidiary bank in order to centralize operations which required the hiring of additional personnel in the lending area. Other operating expenses increased $53,499 or 5.6%, for the six month period ended June 30, 2003 as compared to the same period in the prior year. Increased service expense, regulatory assessment and deposit insurance, other taxes and other operating expenses, offset in part by decreased directors’ fees, postage and transportation expense, advertising expense, and stationery and supplies expense primarily contributed to the increase in other operating expenses for the six months ended June 30, 2003 as compared to the same period in the prior year.

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Non-Interest Expense

For the three months ended June 30, 2003 as compared to the same period of the prior year, noninterest expense increased $29,947 or 2.0% and was primarily due to the increase in other operating expenses and salary and employee benefits, offset in part by the decrease in occupancy expenses. Other operating expenses increased $50,844, or 11.4%, for the three month period ended June 30, 2003 as compared to the same period in the prior year. Increases in directors’ fees, other taxes, service expense, postage and transportation expense, regulatory assessment and deposit insurance, stationery and supplies expense and other operating expenses, offset in part by the decrease in advertising expense primarily contributed to the increase in other operating expenses during the three month period ended June 30, 2003. During the quarter ended June 30, 2003, salary and employee benefits increased $6,251 or .8%. The increase was primarily due to normal annual merit adjustments in salaries. Occupancy expenses decreased $27,148 or 10.4% during the second quarter of 2003 compared to the same period in 2002.

Income Taxes

For the six months ended June 30, 2003, income tax expense was $431,567, a decrease of 14.5% compared to the same period in 2002. Income tax expense decreased primarily due to an increase in tax exempt income of $77,298 combined with the decrease in pre-taxable income of $47,074 during the first six months of 2003 over the same period in 2002. Components of the income tax expense for June 30, 2003 were $346,727 for federal taxes and $84,840 for West Virginia corporate net income taxes.

Income tax expense for the three months ended June 30, 2003 was $233,564, a decrease of 13.7% over the same period in 2002. Income tax expense decreased primarily due to an increase in tax exempt income of $41,470 combined with the decrease in pre-taxable income of $19,461 during the second quarter of 2003 as compared to the same period in 2002.

For federal income tax purposes, tax-exempt income is based on qualified state, county, and municipal bonds and loans. Tax-exempt income was $322,753 and $281,283 for the three month periods ended June 30, 2003 and 2002, respectively. For the six months ended June 30, 2003 and 2002, tax exempt income was $638,063 and $560,765, respectively.

Federal income tax rates and West Virginia corporate net income tax rates remain consistent at 34% and 9%, for the three and six months ended June 30, 2003 and 2002 and for the year ended December 31, 2002.

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First West Virginia Bancorp, Inc.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Table Two

Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential

The following table presents an average balance sheet, interest earned on interest bearing assets, interest paid on interest bearing liabilities, average interest rates and interest differentials for the six months ended June 30, 2003 and June 30, 2002 and the year ended December 31, 2002. Average balance sheet information as of June 30, 2003 and June 30, 2002 and the year ended December 31, 2002 was compiled using the daily average balance sheet. Loan fees and unearned discounts were included in income for average rate calculation purposes. Average yields on investment securities available for sale have been calculated based on amortized costs. Non-accrual loans were included in the average balance computations; however, no interest was included in income subsequent to the non-accrual status classification. Average rates were annualized for the six month periods ended June 30, 2003 and 2002.